F-3

INTEGRATED ENERGY SOLUTIONS, INC.

Formerly Amerilithium Corp.

Notes to Financial Statements

September 30, 2014

Note 1 - Organization and summary of significant accounting policies:

Following is a summary of the Company’s organization and significant accounting policies:

Organization and nature of business – Integrated Energy Solutions, Inc. formerly Amerilithium Corp., (“We,” or “the Company”) is a Nevada corporation incorporated on February 2, 2004.  The Company is primarily engaged in the acquisition and exploration of mining properties.

On September 26, 2014, the Financial Industry Regulatory Authority (FINRA) effected in the marketplace the change of the corporate name of Integrated Energy Solutions, Inc. (the “Company”) from Amerilithium Corp. (the “Name Change”), and effective on such date, the Company trades under its new name, Integrated Energy Solutions, Inc. The Company filed an amendment to its Articles of Incorporation with the State of Nevada regarding the Name Change.

On August 4, 2014, the Company entered into a Letter of Intent to purchase Orbit Oil, Inc., an Indiana Corporation whereby the Company will purchase the seller for the purchase price of $275,000.

The Company has been in the exploration stage since its formation and has not yet realized any revenues from its planned operations.  Upon the location of commercially mineable reserves, the Company plans to prepare for mineral extraction and enter the development stage.  

Basis of presentation - The accompanying unaudited interim financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information, and in accordance with the rules and regulations of the United States Securities and Exchange Commission (the “SEC”) with respect to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The balance sheet at December 31, 2013 was derived from audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America. The unaudited interim financial statements furnished reflect all adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented. Interim results are not necessarily indicative of the results for the full year. These unaudited interim financial statements should be read in conjunction with the audited financial statements of the Company for the year ended December 31, 2013 and notes thereto contained in the Company’s annual report on Form 10-K for the year ended December 31, 2013, as filed with the SEC April 25, 2014.

Use of estimates - The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.  

Cash and cash equivalents - The Company maintains a cash balance in a non-interest-bearing account that currently does not exceed federally insured limits. For the purpose of the statements of cash flows, all highly liquid investments with an original maturity of three months or less are considered to be cash equivalents. There were no cash equivalents as of September 30, 2014 and December 31, 2013.

Property and Equipment - The Company values its investment in property and equipment at cost less accumulated depreciation.  Depreciation is computed primarily by the straight line method over the estimated useful lives of the assets ranging from three to five years. For the nine months ended September 30, 2014, the Company recognized $1,677 depreciation expense.

Mineral Property Acquisition and Exploration Costs - The Company is primarily engaged in the business of the acquisition, exploration, development, mining, and production of domestic strategic energy and mineral properties, with emphasis on lithium carbonate and additional strategic minerals. Mineral claim and other property acquisition

F-4

INTEGRATED ENERGY SOLUTIONS, INC.

Formerly Amerilithium Corp.

Notes to Financial Statements

September 30, 2014

costs are capitalized as incurred. Such costs are carried as an asset of the Company until it becomes apparent through exploration activities that the cost of such properties will not be realized through mining operations. Mineral exploration costs are expensed as incurred, and when it becomes apparent that a mineral property can be economically developed as a result of establishing proven or probable reserve, the exploration costs, along with mine development cost, are capitalized. The costs of acquiring mineral claims, capitalized exploration costs, and mine development costs are recognized for depletion and amortization purposes under the units-of-production method over the estimated life of the probable and proven reserves. If mineral properties, exploration, or mine development activities are subsequently abandoned or impaired, any capitalized costs are charged to operations in the current period.

The Company conducted an impairment analysis on the carrying value of its mining properties and the related lease acreage for the period ended December 31, 2012 and determined an impairment in the amount of $2,046,120 was necessary. An additional analysis was prepared for the period ending December 31, 2013 and determined that an additional impairment in the amount $5,070,452 was necessary.  For the period from inception through September 30, 2014, the Company has recognized a total impairment of $7,116,572.  Key indicators were evaluated to determine that sufficient progress had been made over the last 12 months including maintaining the commitment of our geologist, significant progress in evaluating the properties program which is very complex and continued resources for financing for third parties.

Asset retirement obligations - The Company has adopted the provisions of FASB ASC 410-20 “Asset Retirement and Environmental Obligations," which requires the fair value of a liability for an asset retirement obligation to be recognized in the period in which it is incurred if a reasonable estimate of fair value can be made. The associated asset retirement costs are capitalized as part of the carrying amount of the related mining properties. As of September 30, 2014 and December 31, 2013, there have been no asset retirement obligations recorded.

Income Taxes - The Company accounts for its income taxes in accordance with Income Taxes Topic of the FASB ASC 740, which requires recognition of deferred tax assets and liabilities for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date.

Net loss per share calculation - Net loss per share is provided in accordance with FASB ASC 260-10, “Earnings per Share”. Basic net loss per common share ("EPS") is computed by dividing income available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted earnings per share is computed by dividing net income by the weighted average shares outstanding, assuming all dilutive potential common shares were issued, unless doing so is anti-dilutive. The weighted-average number of common shares outstanding for computing basic EPS for the period ending September 30, 2014 and 2013 was 445,674,039 and 156,171,028, respectively.  

Convertible Debentures:

Beneficial Conversion Features – If the conversion features of conventional convertible debt provides for a rate of conversion that is below market value, this feature is characterized as a beneficial conversion feature (“BCF”).  A BCF is recorded as a debt discount pursuant to FASB ASC Topic 470-20 “Debt with Conversion and Other Options.”  In those circumstances, the convertible debt is recorded net of the discount related to the BCF and the Company amortizes the discount to interest expense over the life of the debt using the effective interest method.

Debt Discount – The Company determines of the convertible debenture should be accounted for as liability or equity under FASB ASC 480, Liabilities – Distinguishing Liabilities from Equity.  FASB ASC 480, applies to certain contract involving a company’s own equity, and requires that issuers classify the following freestanding financial instruments as liabilities.  Mandatorily redeemable financial instruments, Obligations that require or may

F-5

INTEGRATED ENERGY SOLUTIONS, INC.

Formerly Amerilithium Corp.

Notes to Financial Statements

September 30, 2014

require repurchase of the issuer’s equity shares by transferring assets (e.g., written put options and forward purchase contracts), and Certain obligations where at inception the monetary value of the obligation is based solely or predominantly on:

-

A fixed monetary amount known at inception, for example, a payable settleable with a variable number of the issuer’s equity shares with an issuance date fair value equal to a fixed dollar amount.

-

Variations in something other than the fair value of the issuer’s equity shares for example, a financial instrument indexed to the S&P 500 and settleable with a variable number of the issuer’s equity shares, or

-

Variations inversely related to changes in fair value of the issuer’s equity shares, for example, a written put that could be net share settled.

Derivative Financial Instruments – as defined by FASB ASC 815, “Accounting for Derivative Financial Instruments and Hedging Activities”, consist of financial instruments or other contracts that contain a notional amount and one or more underlying (e.g. interest rate, security price of other variable), require no initial net investment and permit net settlement.  Derivative financial instruments may be free-standing or embedded in other financial instruments.  Further, derivative financial instruments are initially, and subsequently, measured at fair value and recorded as liabilities or, in rare instances assets.  

The Company does not use derivative financial instruments to hedge exposures to cash-flow, market or foreign-currency risks.  However, the Company has issued financial instruments including senior convertible notes payable and freestanding stock purchase warrants with features that are either (i) not afforded equity classification, (ii) embody risks not clearly and closely related to host contracts, or (iii) may be net-cash settled by the counterparty.  As required by FASB ASC 815, in certain circumstances, these instruments are required to be carried as derivative liabilities, at fair value, in our financial statements.

Fair value of financial instruments – The Company estimates the fair value of financial instruments using the available market information and valuation methods.  Considerable judgment is required in estimating fair value.  Accordingly, the estimates of fair value may not be indicative of the amounts the Company could realize in a current market exchange.  As of September 30, 2014 and December 31, 2013, the carrying values of the Company’s financial instruments approximated fair value due to the short-term nature and maturity of these instruments.

Determination of fair value – The Company’s financial instruments consist of convertible notes payable and derivative liability.  The Company believes all of the financial instruments’ recorded values approximate their fair values because of their nature and respective durations.

The Company complies with the provisions of FASB ASC 820-10, “Fair Values Measurements and Disclosures.”  FASB ASC 820-10 relates to financial assets and financial liabilities.  FASB ASC 820-10 defines fair value, establishes a framework for measuring fair value in accounting principles generally accepted in the Unites States of America (GAAP), and expands disclosures about fair value measurements.  The provisions of this standard apply to other accounting pronouncements that require or permit fair value measurements and are to be applied prospectively with limited exceptions.

FASB ASC 820*-10 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.  FASB ASC 820-10 establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions, about market participant assumptions, that are developed based on the best information available in the circumstances (unobservable inputs).  The fair value hierarchy consist of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level) and the lowest priority to unobservable inputs (Level 3).  

F-6

INTEGRATED ENERGY SOLUTIONS, INC.

Formerly Amerilithium Corp.

Notes to Financial Statements

September 30, 2014

Stock Based Compensation - The Company recognizes stock-based compensation in accordance with ASC Topic 718 “Stock Compensation”, which requires the measurement and recognition of compensation expense for all share-based payment awards made to employees and directors including employee stock options and employee stock purchases related to an Employee Stock Purchase Plan based on the estimated fair values.

For non-employee stock-based compensation, we have adopted ASC Topic 505 “Equity-Based Payments to Non-Employees”, which requires stock-based compensation related to non-employees to be accounted for based on the fair value of the related stock or options or the fair value of the services on the grant date, whichever is more readily determinable in accordance with ASC Topic 718.

Carrying Value, Recoverability and Impairment of long-lived assets - The Company has adopted paragraph 360-10-35-17 of the FASB Accounting Standards Codification for its long-lived assets. The Company’s long-lived assets, which include property and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

The Company assesses the recoverability of its long-lived assets by comparing the projected undiscounted net cash flows associated with the related long-lived asset or group of long-lived assets over their remaining estimated useful lives against their respective carrying amounts. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets. Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable. If long-lived assets are determined to be recoverable, but the newly determined remaining estimated useful lives are shorter than originally estimated, the net book values of the long-lived assets are depreciated over the newly determined remaining estimated useful lives.

The Company considers the following to be some examples of important indicators that may trigger an impairment review: (i) significant under-performance or losses of assets relative to expected historical or projected future operating results; (ii) significant changes in the manner or use of assets or in the Company’s overall strategy with respect to the manner or use of the acquired assets or changes in the Company’s overall business strategy; (iii) significant negative industry or economic trends; (iv) increased competitive pressures; and (v) regulatory changes. The Company evaluates acquired assets for potential impairment indicators at least annually and more frequently upon the occurrence of such events.

The impairment charges, if any, are included in operating expenses in the accompanying statements of operations.

Recently Issued Accounting Pronouncements

In August 2014, the Financial Accounting Standards Board issued Accounting Standards Update 2014-15, Presentation of Financial Statements- Going Concern.  The Update provides U.S. GAAP guidance on management’s responsibility in evaluating whether there is substantial doubt about a company’s ability to continue as a going concern and about related footnote disclosures. For each reporting period, management will be required to evaluate whether there are conditions or events that raise substantial doubt about a company’s ability to continue as a going concern within one year from the date the financial statements are issued.  This Accounting Standards Update is the final version of Proposed Accounting Standards Update 2013-300—Presentation of Financial Statements (Topic 205): Disclosure of Uncertainties about an Entity’s Going Concern Presumption, which has been deleted. The amendments in this Update are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. The Company is currently evaluating the effects of ASU 2014-15 on the consolidated financial statements.

Note 2 - Going concern:

The Company’s financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs to allow it to continue as a going concern. As of September 30, 2014, the

F-7

INTEGRATED ENERGY SOLUTIONS, INC.

Formerly Amerilithium Corp.

Notes to Financial Statements

September 30, 2014

Company had an accumulated deficit of $13,617,327.  The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.

In order to continue as a going concern, the Company will need, among other things, additional capital resources. The Company is contemplating conducting an offering of its debt or equity securities to obtain additional operating capital. The Company is dependent upon its ability, and will continue to attempt, to secure equity and/or debt financing. There are no assurances that the Company will be successful and without sufficient financing it would be unlikely for the Company to continue as a going concern.

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty.

Note 3 – Stockholder's Equity:

On January 3, 2014, CareBourn Capital converted part of their convertible debentures.  The Company issued 10,000,000 shares to reduce the note payable by $17,370.

On January 9, 2014, CareBourn Capital converted part of their convertible debentures.  The Company issued 10,000,000 shares to reduce the note payable by $8,430.

On January 14, 2014, CareBourn Capital converted part of their convertible debentures.  The Company issued 13,171,000 shares to reduce the note payable by $11,195.

On January 23, 2014, The Company issued 12,000,000 shares at $0.001440 to JMJ Financial to settle a previous conversion dated December 9, 2013.

On February 10, 2014, CareBourn Capital converted part of their convertible debentures.  The Company issued 16,126,543 shares to reduce the note payable by $9,500.

On February 10, 2014, 2013, JMJ Financial converted part of their convertible debentures, for a total of 10,607,142 shares to reduce the note payable by $11,880.

On February 21, 2014, CareBourn Capital converted part of their convertible debentures.  The Company issued 17,394,578 shares to reduce the note payable by $10,500.

On March 4, 2014, CareBourn Capital converted part of their convertible debentures.  The Company issued 19,006,945 shares to reduce the note payable by $26,538.

On March 6, 2014, CareBourn Capital converted part of their convertible debentures.  The Company issued 16,678,031 shares to reduce the note payable by $31,846.

On March 6, 2014 The Company issued 3,851,603 shares as payment for professional services.  The Company recognized an expense of $34,279.

On March 11, 2014, CareBourn Capital converted part of their convertible debentures.  The Company issued 525,979 shares to reduce interest on the note payable by $2,084.

On April 7, 2014, The Company amended its articles of incorporation to increase authorized common shares from 500,000,000 to 1,000,000,000.

F-8

INTEGRATED ENERGY SOLUTIONS, INC.

Formerly Amerilithium Corp.

Notes to Financial Statements

September 30, 2014

On May 20, 2014, LG Capital Funding LLC converted part of their convertible debentures.  The Company issued 5,434,782 shares to reduce interest on the note payable by $1,250.

On June 3, 2014, LG Capital Funding LLC converted part of their convertible debentures.  The Company issued 19,597,728 shares to reduce interest on the note payable by $4,000.

On June 16, 2014, LG Capital Funding LLC converted part of their convertible debentures.  The Company issued 21,922,127 shares to reduce interest on the note payable by $3,700.

On June 17, 2014, GEL Properties, LLC converted part of their convertible debentures.  The Company issued 11,764,706 shares to reduce interest on the note payable by $2,000.

On June 26, 2014, GEL Properties LLC converted part of their convertible debentures.  The Company issued 21,818,182 shares to reduce interest on the note payable by $2,400.

On July 8, 2014, LG Capital converted part of their convertible debentures. The Company issued 23,783,300 shares of common stock and reduced their note payable by $2,350.

On July 17, 2014, LG Capital converted part of their convertible debentures. The Company issued 21,729,158 shares of common stock and reduced their note payable by $1,500.

On July 21, 2014, The Company amended its articles of incorporation to increase authorized common shares from 1,000,000,000 to 2,000,000,000.

On July 28, 2014, LG Capital converted part of their convertible debentures. The Company issued 22,869,863 shares of common stock and reduced their note payable by $1,575.

On August 1, 2014, LG Capital part of their convertible debentures. The Company issued converted 26,886,183 shares of common stock and reduced their note payable by $1,850.

On August 8, 2014, LG Capital converted part of their convertible debentures. The Company issued 28,382,230 shares of common stock and reduced their note payable by $1,950.

On August 14, 2014, LG Capital converted part of their convertible debentures. The Company issued 28,874,657 shares of common stock and reduced their note payable by $1,700.

On September 15, 2014, GEL Properties LLC converted part of their convertible debentures.  The Company issued 22,727,273 shares to reduce interest on the note payable by $1,250.

On September 30, 2014, LG Capital converted part of their convertible debentures. The Company issued 33,647,857 shares of common stock and reduced their note payable by $16,487.

Note 4 – Preferred Stock:

On June 20, 2013, The Company authorized a Series A preferred stock offering.  The Company was authorized and issued 51 shares with a par value of $0.001.  Initially, these shares will not accrue or receive dividends and will have no liquidation rights.  These shares shall rank senior to the Corporation’s common stock and any other class or series of capital stock.  Each one (1) share shall have voting rights equal to (x) 0.019607 multiplied by the total issued and outstanding shares of Common Stock eligible to vote at the time of the respective vote (the “Numerator”), divided by (y) 0.49, minus (z) the Numerator.  For purposes of illustration only, if the total issued and outstanding shares of Common Stock eligible to vote at the time of the respective vote is 5,000,000, the voting rights of one share of the Series A Preferred shall be equal to 102,036 (0.019607 x 5,000,000) / 0.49) – (0.019607 x 5,000,000) = 102,036).

F-9

INTEGRATED ENERGY SOLUTIONS, INC.

Formerly Amerilithium Corp.

Notes to Financial Statements

September 30, 2014

So long as any shares of Series A Preferred are outstanding, the Corporation shall not, without first obtaining the unanimous written consent of the holders of Series A Preferred, (i) alter or change the rights, preferences or privileges of the Series A Preferred so as to affect adversely the holders of Series A Preferred or (ii) create Pari Passu Shares or Senior Shares.

Note 5 - Warrants:

For the period ending March 31, 2014, the Company had 83,333 warrants that were exercisable and outstanding.  These warrants expired and were not exercised.  There are no outstanding warrants as of September 30, 2014.

Note 6 - Employment and Consulting Agreements:

On January 28, 2014, the Company entered into consulting agreements with Mr. Worrall and Mr. Remo.  Mr. Worrall’s agreement calls for monthly payments of $8,500 for six months.  The Company has the ability to pay this with cash or stock.  Mr. Remo’s contract calls for $5,000 per month up to $20,000 total.  

On January 28, 2014, the Company entered into an agreement with Mr. Worrall for back pay and expenses.  The Company has agreed to pay Mr. Worrall back pay of $25,000 plus his personal laptop computer.

Note 7 - Mining Rights:

In September 2008, the Company purchased the Kodiak Lode Mining Claim for $7,500.  The mining claim is in the Sunset Mining District in the extreme southern portion of the State of Nevada.  The claim is on 20.66 acres and includes gold, silver, copper and lead. The full mining claim was recorded as a period expense.

On March 2, 2010, the Company entered into an agreement to purchase 100% net revenue in assets of Power Mining Ventures, Inc.  The purchase was funded by restricted common stock shares.  The total purchase price was $2,280,000.

On March 12, 2010, the Company entered into an agreement to purchase 78 mining claims comprising of nearly 6,000 acres with GeoXplor Corporation.  The total purchase price was $1,678,000.

On March 22, 2010, the Company entered into an agreement to purchase 100% net revenue in assets of Power Mining Ventures, Inc located in southwestern Australia.  The purchase was funded by restricted common shares and cash.  The total purchase price was $2,340,000.

On April 26, 2010, the Company entered into an agreement to purchase from Nevada Alaska Mining Company, Inc., the Clayton Deep and Full Monty properties situated in Nevada, USA, and comprising 138 claims. The purchase was funded by restricted common stock and cash. The total purchase price was $813,000.

On September 23, 2011, the Company entered into an agreement to purchase from Nevada Alaska Mining Company, Inc., an extension to its Clayton Deep property situated in Nevada, USA, comprising 17 claims. The purchase was funded by restricted common stock and cash. The total purchase price was $42,000.

On September 23, 2011, the Company entered into an agreement to purchase from Robert Craig and Barbara Anne Craig the Jackson Wash property situated in Nevada, USA, comprising 66 claims. The purchase was funded by restricted common stock. The total purchase price was $72,000.

For the year ended December 31, 2012, the Company, determined that an impairment loss should be recorded against the mining rights and properties.  The Company has determined that the amount of the impairment to be $2,046,120.

For the year ended December 31, 2013, the Company determined that an impairment loss should be recorded against

F-10

INTEGRATED ENERGY SOLUTIONS, INC.

Formerly Amerilithium Corp.

Notes to Financial Statements

September 30, 2014

the mining rights and properties.  The Company has determined that the amount of the impairment to be $5,070,452.

Note 8 - Convertible Notes:

The Company had the following notes payable outstanding as of September 30, 2014 and December 31, 2013:

JMJ Financial #2

On July 7, 2012, the Company entered into an agreement with JMJ Financial, whereby JMJ Financial will loan the Company the aggregate principal amount up to $540,000, less $40,000 for original issue discount, together with interest at the rate of eight percent (8%) per annum, until the maturity date of three years from the effective date of

F-11

INTEGRATED ENERGY SOLUTIONS, INC.

Formerly Amerilithium Corp.

Notes to Financial Statements

September 30, 2014

July 7, 2012. The original issue discount note, as described in ASC 480-55, may not be prepaid in whole or in part. If the Note is not paid in full with interest on the maturity date, JMJ Financial has the right to convert this Note into restricted common shares of the Company. The Company at its option may elect to convert all or part of the principal and any accrued unpaid interest on these notes at any time or times on or before the maturity based on a conversion price. The conversion price (subject to equitable adjustments for stock splits, stock dividends or rights offerings by the Borrower) shall equal to 80% multiplied by the lowest trading price during the twenty-five (25) trading days prior to conversion notice.

During the year ended December 31, 2011, the Company received a total of $50,000 in cash, which represented principal amount total of $54,400 (original issue discount of $4,400), and valued at $68,000 based on the 80% conversion rate. For the year ended December 31, 2011, $2,910 discount and $3,298 interest had been amortized and expensed. As of December 31, 2012, the Company has unamortized discount of $15,090 and accrued interest of $3,298.  

During the year ended December 31, 2012, the Company received a total of $355,000 in cash, which represented principal amount total of $386,240 (original issue discount of $31,240), and valued at $482,800 based on the 80% conversion rate. During the year ended December 31, 2012, the Company converted a total of $349,552 principal amount of JMJ Note to 23,240,385 shares of common stock, which reduced $436,940 from the value of the note.

As of December 31, 2013, the Company has converted $263,648 principal amount and discount of $65,912 with 74,765,774 shares of common stock. As of December 31, 2013, the Company received a total of $125,000 in cash, which represented principal amount total of $136,000 (original issue discount of $20,000), and valued at $170,000 based on the 80% conversion rate. As of December 31, 2013, the Company was charged additional interest expense by JMJ of $31,875, which valued at $52,618 based on the 80% conversion rate. For the year ended December 31, 2013, $41,942 discount and $33,227 interests had been amortized and expensed. These notes were fully paid at December 31, 2013.

TCA Global

On January 30, 2012, the Company entered into an agreement with TCA Global Credit Master Fund, LP, a Cayman Islands Limited Partnership, whereby TCA Global loaned the Company the aggregate principal amount of $250,000, less $73,175 for loan related costs, together with interest at the rate of twelve percent (12%) per annum, until the maturity date of January 30, 2013. The original issue discount note, as described in ASC 480-55, may not be prepaid in whole or in part.

If the Note is not paid in full with interest on the maturity date, TCA Global has the right to convert this Note into restricted common shares of the Company. The Company at its option may elect to convert all or part of the principal and any accrued unpaid interest on these notes at any time or times on or before the maturity based on a conversion price. The conversion price (subject to equitable adjustments for stock splits, stock dividends or rights offerings by the Borrower) shall equal to 95% multiplied by the lowest daily volume weighted average price during the five (5) trading days prior to conversion notice.

As of December 31, 2013, the original issue discount note was valued at $84,514, consisting of principal of $78,788 and a discount of $4,147 which was valued based on the 95% conversion rate. For the year ended December 31, 2013, $7,951 discount and $72,829 interest had been amortized and expensed.

As of March 31, 2014, the original issue discount note was valued at $84,514.  For the period ended March 31, 2014, $7,951 discount and $75,182 interest had been amortized and expensed.   

On May 14, 2014 the Company negotiated with TCA Global and replaced this note with a new note to LG Capital Funding LLC.  Upon completion of this transaction, the Company fully settled the outstanding balance of $220,229 due to TCA Global and recognized an additional $64,690 in interest expense.

F-12

INTEGRATED ENERGY SOLUTIONS, INC.

Formerly Amerilithium Corp.

Notes to Financial Statements

September 30, 2014

JMJ Financial #3

On June 29, 2012, the Company entered into an agreement with JMJ Financial, whereby JMJ Financial will loan the Company the aggregate principal amount up to $540,000, less $40,000 for original issue discount, together with interest at the rate of eight percent (8%) per annum, until the maturity date of three years from the effective date of June 29, 2012. The original issue discount note, as described in ASC 480-55, may not be prepaid in whole or in part.

If the Note is not paid in full with interest on the maturity date, JMJ Financial has the right to convert this Note into restricted common shares of the Company. The Company at its option may elect to convert all or part of the principal and any accrued unpaid interest on these notes at any time or times on or before the maturity based on a conversion price. The conversion price (subject to equitable adjustments for stock splits, stock dividends or rights offerings by the Borrower) shall equal to 80% multiplied by the lowest trading price during the twenty-five (25) trading days prior to conversion notice.

During the year ended December 31, 2012, the Company received a total of $25,000 in cash, which represented principal amount total of $27,200 (original issue discount of $2,200), and valued at $34,000 based on the 80% conversion rate.

As of December 31, 2013, the original issue discount note was valued at $11,813, consisting of principal of $9,650 and a discount of $961. As of December 31, 2013, $5,251 discount and $4,233 interests had been amortized and expensed. As of December 31, 2013, the Company has unamortized discount of $961 and accrued interest of $2,163.

As of March 31, 2013, the note had been fully paid off by conversion of common stock.  The company recorded an additional $108 in interest and a $40 gain on conversion of this convertible note.  

CareBourn Capital

On June 13, 2013, the Company entered into an agreement with Carebourn Capital LP, whereby Carebourn Capital will loan the Company the aggregate principal amount up to $50,000, with interest at the rate of eight percent (8%) per annum, until the maturity date of one year.

If the Note is not paid in full with interest on the maturity date, Carebourn Capital has the right to convert this Note into restricted common shares of the Company. The Company at its option may elect to convert all or part of the principal and any accrued unpaid interest on these notes at any time or times on or before the maturity based on a conversion price. The conversion price (subject to equitable adjustments for stock splits, stock dividends or rights offerings by the Borrower) shall equal to 55% multiplied by the three (3) lowest trading price during the ten day (10) trading days prior to conversion notice.

As of December 31, 2013, the note was valued at $45,782 and $2,208 interests had been amortized and expensed. As of December 31, 2013, the Company has unamortized discount of $15,115 and accrued interest of $3,273.  

As of March 31, 2013, the note had been fully paid off by conversion of common stock.  The company recorded an additional $142 in interest and a $17,868 gain on conversion of this convertible note.  

Other Convertible Notes

On August 9, 2013 the Company issued 3 notes (the “Notes”) in the principal aggregate amount of $75,000 for professional services rendered.  The Notes have an interest rate of 12% per annum and are payable on demand.

At any time while these Notes are outstanding, the holder may convert all or any portion of the outstanding principal and accrued and unpaid interest (such total amount, the “Conversion Amount”) into shares of Common Stock of the Company (the “Conversion Shares”) at a price equal to the Conversion Amount (the numerator) divided by (y) the average five (5) trading day closing bid price of the Company’s Common Stock during the five (5) trading days immediately prior to the Conversion Date (as defined in the Notes) as indicated in the conversion notice  (the denominator) multiplied by (z) 2.75 (the “Conversion Price”).

F-13

INTEGRATED ENERGY SOLUTIONS, INC.

Formerly Amerilithium Corp.

Notes to Financial Statements

September 30, 2014

As of December 31, 2013, the series of notes are valued at $211,058, consisting of principal of $75,000 and a discount of $132,532. As of December 31, 2013, the Company has accrued interest of $3,526.

As of March 31, 2013, the note had been fully paid off by conversion of common stock.  The company recorded an additional $1,750 in interest and a $132,365 gain on conversion of this convertible note.  

LG Capital Funding LLC

On March 11, 2014, the Company entered into an agreement with LG Capital Funding LLC, whereby LG Capital will loan the Company the aggregate principal amount up to $50,000, with interest at the rate of ten percent (10%) per annum, until the maturity date of one year.

If the Note is not paid in full with interest on the maturity date, LG Capital has the right to convert this Note into unrestricted common shares of the Company. The Company at its option may elect to convert all or part of the principal and any accrued unpaid interest on these notes after 180 days or times on or before the maturity based on a conversion price. The conversion price (subject to equitable adjustments for stock splits, stock dividends or rights offerings by the Borrower) shall equal to 50% multiplied by the lowest closing bid price during the ten (10) trading days prior to conversion notice.

The relative fair value of the debt conversion feature as of September 30, 2014 was estimated using Level 3 inputs at $83,900 using a Black-Scholes model with the following assumptions:  expected volatility of 220.17%, risk free interest rate of 0.03%, expected life of 6 months and no dividends.  Expected volatility was based on the historical volatility of the Company.

As of September 30, 2014, the note was valued at $50,000 and $3,212 discount interest had been amortized and expensed. As of September 30, 2014, the Company has unamortized discount of $39,077 and accrued interest of $2,781.  

JMJ Funding

On April 23, 2014, the Company entered into an agreement with JMJ Financial, whereby JMJ Financial will loan the Company the aggregate principal amount up to $500,000, less $50,000 for original issue discount, together with interest at one time rate of twelve percent (12%) after three months. The maturity date is two years from the effective date of each payment. The original issue discount note, as described in FASB ASC 480-55, may not be prepaid in whole or in part.

If the Note is not paid in full with interest on the maturity date, JMJ has the right to convert this Note into unrestricted common shares of the Company. The Company at its option may elect to convert all or part of the principal and any accrued unpaid interest on these notes after 180 days or times on or before the maturity based on a conversion price. The conversion price (subject to equitable adjustments for stock splits, stock dividends or rights offerings by the Borrower) shall equal to the lessor of $0.008 or 60% of the lowest trade price in the twenty five (25) trading days pervious to the conversion.

The relative fair value of the debt conversion feature as of September 30, 2014 was estimated using Level 3 inputs at $87,200 using a Black-Scholes model with the following assumptions:  expected volatility of 220.17%, risk free interest rate of 0.58%, expected life of 1 year and no dividends.  Expected volatility was based on the historical volatility of the Company.

As of September 30, 2014, the Company had received a total of $83,334 which comprised of cash of $75,000 and original issue discount of $8,334.  As of September 30, 2014, the Company has unamortized discount of $73,172.  

F-14

INTEGRATED ENERGY SOLUTIONS, INC.

Formerly Amerilithium Corp.

Notes to Financial Statements

September 30, 2014

CareBourn Capital

On April 25, 2014, the Company entered into an agreement with CareBourn Capital, whereby CareBourn will loan the Company the aggregate principal amount up to $100,000, with interest at the rate of eight percent (8%) per annum, until the maturity date of one year.

If the Note is not paid in full with interest on the maturity date, CareBourn has the right to convert this Note into unrestricted common shares of the Company. The Company at its option may elect to convert all or part of the principal and any accrued unpaid interest on these notes on or before the maturity based on a conversion price. The conversion price (subject to equitable adjustments for stock splits, stock dividends or rights offerings by the Borrower) shall equal to 58% multiplied by the lowest closing bid price during the twenty (20) trading days prior to conversion notice.

The relative fair value of the debt conversion feature as of September 30, 2014 was estimated using Level 3 inputs at $146,700 using a Black-Scholes model with the following assumptions:  expected volatility of 220.17%, risk free interest rate of 0.13%, expected life of 1 year and no dividends.  Expected volatility was based on the historical volatility of the Company.

As of September 30, 2014, the note was valued at $100,000 and $13,000 discount interest had been amortized and expensed. As of September 30, 2014, the Company has unamortized discount of $87,000 and accrued interest of $3,485.  

LG Capital Funding LLC

On May 8, 2014, the Company entered into a convertible note agreement with LG Capital Funding LLC, whereby LG Capital will loan the Company the aggregate principal amount up to $94,500, with interest at the rate of eight percent (8%) per annum, until the maturity date of one year.

If the Note is not paid in full with interest on the maturity date, LG Capital has the right to convert this Note into unrestricted common shares of the Company. The Company at its option may elect to convert all or part of the principal and any accrued unpaid interest on these notes after 180 days or times on or before the maturity based on a conversion price. The conversion price (subject to equitable adjustments for stock splits, stock dividends or rights offerings by the Borrower) shall equal to 40% multiplied by the lowest closing bid price during the eighteen (18) trading days prior to conversion notice.

The relative fair value of the debt conversion feature as of September 30, 2014 was estimated using Level 3 inputs at $219,000 using a Black-Scholes model with the following assumptions:  expected volatility of 220.17%, risk free interest rate of 0.13%, expected life of 1 year and no dividends.  Expected volatility was based on the historical volatility of the Company.

As of September 30, 2014, the note was valued at $94,500 and $10,177 discount had been amortized and expensed. As of September 30, 2014, the Company has unamortized discount of $84,323 and accrued interest of $3,003.  

LG Capital Funding LLC

On May 14, 2014, the Company entered into an agreement with TCA Global and LG Capital Funding LLC, whereby TCA Global assigned an existing loan to LG Capital for the aggregate principal amount of $220,229, with interest at the rate of eight percent (8%) per annum, until the maturity date of one year.

On May 28, 2014 the LG Capital Funding assigned $55,000 of this convertible note to GEL Properties, LLC with the same terms and conditions.

If the Note is not paid in full with interest on the maturity date, LG Capital has the right to convert this Note into unrestricted common shares of the Company. The Company at its option may elect to convert all or part of the principal and any accrued unpaid interest on these notes after 180 days or times on or before the maturity based on a conversion price. The conversion price (subject to equitable adjustments for stock splits, stock dividends or rights

F-15

INTEGRATED ENERGY SOLUTIONS, INC.

Formerly Amerilithium Corp.

Notes to Financial Statements

September 30, 2014

offerings by the Borrower) shall equal to 60% multiplied by the lowest trading price during the eighteen (18) trading days prior to conversion notice.

The relative fair value of the debt conversion feature as of September 30, 2014 was estimated using Level 3 inputs at $399,800 using a Black-Scholes model with the following assumptions:  expected volatility of 200.06%, risk free interest rate of 0.13%, expected life of 1 year and no dividends.  Expected volatility was based on the historical volatility of the Company.

During the quarter ending September 30, 2014, both LG and GEL converted 208,930,521 shares and reduced their note payable by $28,841.  These conversions were computed using a 95% discount factor as they believed the Company was in default.  The Company has negotiated an agreement with LG Capital and both parties have agreed to operate at the original terms of the contract but to keep the conversions completed during the quarter at the 95% discount.  Due to this discount rate the Company recorded a $382,173 interest charge for the beneficial conversion.

As of September 30, 2014, the note was valued at $178,704 and $21,760 discount had been amortized and expensed. As of September 30, 2014, the Company has unamortized discount of $178,704 and accrued interest of $7,194.  

ADAR Bays LLC

On May 14, 2014, the Company entered into an agreement with ADAR Bays LLC, whereby ADAR will loan the Company the aggregate principal amount up to $31,500, with interest at the rate of eight percent (8%) per annum, until the maturity date of one year.

If the Note is not paid in full with interest on the maturity date, ADAR has the right to convert this Note into unrestricted common shares of the Company. The Company at its option may elect to convert all or part of the principal and any accrued unpaid interest on these notes on or before the maturity based on a conversion price. The conversion price (subject to equitable adjustments for stock splits, stock dividends or rights offerings by the Borrower) shall equal to 40% multiplied by the lowest trading price during the eighteen (18) trading days prior to conversion notice. If the Company does not fulfill certain financial statement disclosure requirements as defined in the agreement with ADAR, the conversion price will be equal to 95% of the lowest trading price during the eighteen (18) trading days prior to conversion notice.

The relative fair value of the debt conversion feature as of September 30, 2014 was estimated using Level 3 inputs at $73,700 using a Black-Scholes model with the following assumptions: expected volatility of 220.17%, risk free interest rate of 0.13%, expected life of 1 year and no dividends.  Expected volatility was based on the historical volatility of the Company.

As of September 30, 2014, the note was valued at $31,500 and $3,112 discount interest had been amortized and expensed. As of June 30, 2014, the Company has unamortized discount of $28,388 and accrued interest of $960.

Beaufort Capital Partners LLC

On August 14, 2014, the Company entered into an agreement with Beaufort Capital Partners LLC, whereby Beaufort purchased an Original Issue Discount Convertible Promissory Note from the Company with a Face Amount of $40,000 for a purchase price of $30,000, hereinafter referred to as (“Purchase Price” or “Principal”). The purchase price of $30,000 is due on February 14, 2015 (“Maturity Date”).  

If the Note is not paid in full, inclusive of the Original Issue Discount for an aggregate of $40,000 on November 14, 2014, Beaufort will have the right to convert this Note into unrestricted common shares of the Company. Beaufort, at its option may elect to convert all or part of the principal ($30,000) on these notes on or before the maturity based on a conversion price. The conversion price (subject to equitable adjustments for stock splits, stock dividends or rights offerings by the Borrower) shall equal to 40% multiplied by the lowest trading price during the fifteen (15) trading days prior to conversion notice with a floor conversion price of $0.0001.

F-16

INTEGRATED ENERGY SOLUTIONS, INC.

Formerly Amerilithium Corp.

Notes to Financial Statements

September 30, 2014

The relative fair value of the debt conversion feature as of September 30, 2014 was estimated using Level 3 inputs at $65,300 using a Black-Scholes model with the following assumptions: expected volatility of 220.17%, risk free interest rate of 0.58%, expected life of 2 years and no dividends.  Expected volatility was based on the historical volatility of the Company.

As of September 30, 2014, the note was valued at $31,500 and $1,457 discount interest had been amortized and expensed. As of September 30, 2014, the Company has unamortized discount of $28,543 and accrued interest of $1,052.

Metrowest Capital LLC

On August 20, 2014, the Company entered into an agreement with Metrowest Capital LLC, whereby Metrowest will loan the Company the aggregate principal amount up to $56,000, less $6,000 for original issue discount, with interest at the rate of twelve percent (12%) per annum, until the maturity date of nine months.

If the Note is not paid in full with interest on the maturity date, Metrowest has the right to convert this Note into unrestricted common shares of the Company. The Company at its option may elect to convert all or part of the principal and any accrued unpaid interest on these notes on or before the maturity based on a conversion price. The conversion price (subject to equitable adjustments for stock splits, stock dividends or rights offerings by the Borrower) shall equal to 55% multiplied by the lowest trading price during the twenty (20) trading days prior to conversion notice.

The relative fair value of the debt conversion feature as of September 30, 2014 was estimated using Level 3 inputs at $85,000 using a Black-Scholes model with the following assumptions:  expected volatility of 220.17%, risk free interest rate of 0.58%, expected life of 2 years and no dividends.  Expected volatility was based on the historical volatility of the Company.

As of September 30, 2014, the note was valued at $56,000 and $932 discount interest had been amortized and expensed. As of September 30, 2014, the Company has unamortized discount of $49,068 and accrued interest of $674.

Note 9 – Share Exchange Agreement:

On May 19, 2014, the Company entered into an extended Memorandum of Understanding with Patten Energy, Inc, a California corporation.  Pursuant to the terms of this agreement, the Company agreed to acquire all the issued and outstanding shares of Patten Energy, Inc., make a cash infusion of $1,000,000 and provide a line of credit for the purchase of product in the minimum of $1,000,000 and not to exceed $2,000,000.  As of September 30, 2014, the Company has paid $107,000 as an earnest money deposit.

Note 10 – Subsequent Events:

On October 10, 2014, The Company amended its articles of incorporation to increase authorized common shares from two billion (2,000,000,000) to four billion (4,000,000,000).

On October 2, 2014, GEL Properties LLC converted part of their convertible debentures.  The Company issued 16,666,667 shares to reduce interest on the note payable by $7,000.

On October 20, 2014, LG Capital converted part of their convertible debentures.  The Company issued 35,253,857 shares of common stock and reduced their note payable by $7,403.

On October 23, 2014, LG Capital converted part of their convertible debentures.  The Company issued 38,200,000 shares of common stock and reduced their note payable by $6,685.

F-17

INTEGRATED ENERGY SOLUTIONS, INC.

Formerly Amerilithium Corp.

Notes to Financial Statements

September 30, 2014

On October 27, 2014, CareBourne Capital converted part of their convertible debentures.  The Company issued 30,000,000 shares to reduce interest on the note payable by $8,250.

On October 27, 2014, LG Capital converted part of their convertible debentures.  The Company issued 36,717,600 shares of common stock and reduced their note payable by $6,426.

On October 28, 2014, JMJ Financial converted 38,000,000 shares of common stock and reduced their note payable by $9,120.

On October 30, 2014, GEL Properties LLC converted part of their convertible debentures.  The Company issued 25,000,000 shares to reduce interest on the note payable by $2,625.

On November 4, 2014, LG Capital converted part of their convertible debentures.  The Company issued 38,559,428 shares of common stock and reduced their note payable by $2,699.

On November 4, 2014, GEL Properties LLC converted part of their convertible debentures.  The Company issued 46,600,000 shares to reduce interest on the note payable by $3,262.

On November 7, 2014, LG Capital converted part of their convertible debentures.  The Company issued 40,809,714 shares of common stock and reduced their note payable by $2,857.

On November 11, 2014, JMJ Financial converted part of their convertible debentures.  The Company issued 52,800,000 shares to reduce interest on the note payable by $6,336.

On November 12, 2014, GEL Properties LLC converted part of their convertible debentures.  The Company issued 55,500,000 shares to reduce interest on the note payable by $3,885.

On November 14, 2014, LG Capital converted part of their convertible debentures.  The Company issued 54,977,285 shares of common stock and reduced their note payable by $3,848.

F-18

Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations.

This report and other reports filed by our Company from time to time with the SEC contain or may contain forward-looking statements and information that are based upon beliefs of, and information currently available to, our management as well as estimates and assumptions made by our management.  Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof.  When used in the filings, the words “anticipate,” “believe,” “estimate,” “expect,” “future,” “intend,” “plan,” or the negative of these terms and similar expressions as they relate to us or our management identify forward-looking statements. Such statements reflect our current view with respect to future events and are subject to risks, uncertainties, assumptions, and other factors. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended, or planned.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

Our financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”).  These accounting principles require us to make certain estimates, judgments and assumptions. We believe that the estimates, judgments and assumptions upon which we rely are reasonable based upon information available to us at the time that these estimates, judgments and assumptions are made.  These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities as of the date of the financial statements as well as the reported amounts of revenues and expenses during the periods presented.  Our financial statements would be affected to the extent there are material differences between these estimates and actual results.  In many cases, the accounting treatment of a particular transaction is specifically dictated by GAAP and does not require management’s judgment in its application.  There are also areas in which management’s judgment in selecting any available alternative would not produce a materially different result. The following discussion should be read in conjunction with our unaudited consolidated financial statements and notes thereto appearing elsewhere in this report.

Description of Business and Plan of Operation

Integrated Energy Solutions, Inc. formerly Amerilithium Corp., (“We,” or “the Company”) is a Nevada corporation incorporated on February 2, 2004.  The Company is primarily engaged in the acquisition and exploration of mining properties.

The Company has amassed a portfolio of properties covering approximately 31,020 acres in the USA and Australia.

During 2011, the Company completed both Gravity and CSAMT (controlled source audio-frequency magnetotellurics) on the Company’s Full Monty, Clayton Deep and Jackson Wash Assets in Nevada, USA.  During 2012 the Company processed this acquired data to complete proposed drill programs for the Company’s Full Monty, Clayton Deep and the Jackson Wash Assets.  The Company initially submitted the relevant documentation to BLM (Bureau of Land Management) in Nevada and received approval.

The company’s current primary focus during 2014 is as follows:

(1) The continued evaluation, exploration and development of the Company’s U.S. properties;

(2) The continued evaluation, exploration and development of the Company’s Australian properties;

(3) Establish an economically viable lithium resource;

(4) To strengthen the Company’s management with the recruitment of strategic employees and advisors; and

(5) Evaluate and implement additional streams of revenue to strengthen the Company’s financial position.

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It is the Company’s intention to implement a staged drilling program focusing on the Company’s Lithium Brine Assets in Nevada, USA once the Company is able to raise the required funds in order to do so. There can be no assurance that the Company will be able to raise additional capital on favorable terms to the Company or at all. Additionally, the permits associated with this assets require an amendment due to changes in claims currently held.

The Company is still to finalize its exploration program for its Australian assets, specifically related to the potential for both lithium and gold discoveries.  The work shall be conducted under the supervision of an appointed strategic partner due to the properties’ geographical location.  The initial work and exploration has incorporated the following elements:

• Geophysical review and data acquisition;

• EIS (Exploration Incentive Scheme) application; (Re-applied for 2013)

• Geomorphology interpretation;

• Review tenement status and opportunities;

• Develop GIS (Geographic Information Systems) layer of assets and surrounding projects; and

• On-site visit:

• Initial water and solid sampling.

The Company intends to fund the intended exploration with additional funding from the Company’s current financing agreements, and additional supplementary agreements.  The Company believes that it will require an additional $1.5 million over the next 12 months to achieve these goals.  Our ability to continue in existence is dependent on our ability to secure additional funding and commence full scale operations. There is no assurance that additional funding will be available or if available, that such additional funding will be on terms acceptable to the Company.

During the past quarter, the Company has begun to explore the possibility of entering the integrated energy business through the acquisition of certain businesses and assets.  Under this strategy, the Company’s operations would include collecting, processing and distributing waste oil and other petroleum products.  The Company will continue to evaluate the merits of this strategy through the remainder of 2014.

Results of Operations

For the three months ended September 30, 2014 Compared to three months ended September 30, 2013

We are an exploration stage company and have not yet commenced material operations.  As of September 30, 2014, we have not generated any revenue or profit.

For the three months ended September 30, 2014 and 2013, respectively, total operating expenses decreased from $1,825,152 to $72,606 primarily due to higher salaries and impairment losses recorded in the prior year.

Our operating expenses for the three months ended September 30, 2014, consisted of: General and administrative expenses of $3.413 and, professional fees of $69,193.

5

Comparatively, for the three months ended September 30, 2013, our operating expenses consisted of:  General and administrative expenses of $8,985, exploration expenses of $1,231, salaries of $34,500; and, professional fees of $139,984. Based on an impairment analysis performed during the three months ended September 30, 2013, the Company recorded an impairment loss of $1,640,452.

The decrease between periods was attributed to the impairment loss recorded in the prior year as well as a significant decrease in salaries and professional fees during the current period.

Other income (expense) consisted of loss on derivative of $159,673 and interest expense of $173,533 on the convertible notes payable and related debt discount during the three months ended September 30, 2014. During the comparable period in 2013, other income (expense) consisted of interest expense of $175,204 on notes payable.

Results of Operations

For the nine months ended September 30, 2014 Compared to nine months ended September 30, 2013

We are an exploration stage company and have not yet commenced material operations.  As of September 30, 2014, we have not generated any revenue or profit.

For the nine months ended September 30, 2014 and 2013, respectively, total operating expenses decreased from $2,154,522 to $442,766 primarily due to higher salaries, exploration expenses and impairment losses recorded in the prior year.

Our operating expenses for the nine months ended September 30, 2014, consisted of: General and administrative expenses of $27,160, salaries of $32,500; and, professional fees of $383,106.

Comparatively, for the nine months ended September 30, 2013, our operating expenses consisted of:  General and administrative expenses of $64,436, exploration expenses of $49,415, salaries of $103,500; and, professional fees of $296,719.  Based on an impairment analysis performed during the nine months ended September 30, 2013, the Company recorded an impairment loss of $1,640,452.   

The decrease between periods was due to higher salaries, exploration expenses and impairment losses recorded in the prior year.

Liquidity and Capital Resources

The following table summarizes total current assets, liabilities and working capital at September 30, 2014 and December 31, 2013.

6

At September 30, 2014, we had working deficit of $1,300,608, as compared to working capital deficit of $452,678, at December 31, 2013, an increase of $847,930.  The increase is primarily related to an increase in the current portion of the derivative liability related to convertible notes which was offset by the reduction in the current portion of the convertible notes payable, net of discount.

The Company expects its current resources to be sufficient for a period of approximately 1 month unless additional financing is received.  Management has determined that additional capital will be required in the form of equity or debt securities.  In addition, if we cannot raise additional short-term capital we will be forced to continue to further accrue liabilities due to our limited cash reserves.  There are no assurances that management will be able to raise capital on terms acceptable to the Company.  If we are unable to obtain sufficient amounts of additional capital, we may be required to reduce the scope of our planned development, which could harm our business, financial condition and operating results.  If we obtain additional funds by selling any of our equity securities or by issuing common stock to pay current or future obligations, the percentage ownership of our stockholders will be reduced, stockholders may experience additional dilution, or the equity securities may have rights preferences or privileges senior to the common stock.  If adequate funds are not available to us when needed on satisfactory terms, we may be required to cease operating or otherwise modify our business strategy.

Net cash used in operating activities for the nine months ended September 30, 2014 and 2013, was ($325,507) and ($380,812), respectively.  The net loss for the nine months ended September 30, 2014 and 2013, was ($1,755,280) and ($2,535,655), respectively.  Cash used in operating activities for the nine months ended September 30, 2014 and 2013, was primarily attributable to non-cash items such as shares issued for services, interest expense, loss on derivative liability offset by the gain on conversion of convertible notes.

Net cash used in investing activities for the nine months ended September 30, 2014 and 2013, was $107,000 and $1,898, respectively. The current period activity is related to the deposits paid pursuant to the share exchange agreement with Patten Energy, Inc.

Net cash obtained through all financing activities for the nine months ended September 30, 2014 and 2013, was $431,000 and $175,000, respectively. During the nine months ended September 30, 2014 and 2013, the Company received net proceeds of $431,000 and $175,000, respectively, from convertible notes.

Our auditors have expressed their substantial doubt about our ability to continue as a going concern.  Our ability to continue as a going concern is dependent upon our ability to generate future profitable operations and/or to obtain the necessary financing to meet our obligations and repay our liabilities arising from normal business operations when they come due.  Our management has no formal plan in place to address this concern but considers that we will be able to obtain additional funds by equity financing and/or related party advances; however there is no assurance of additional funding being available.

Going Concern

As of September 30, 2014, we were engaged in business operations and had suffered losses from exploration stage activities to date.  In addition, we have minimal operating funds. Although management is currently attempting to identify business opportunities and is seeking additional sources of equity or debt financing, there is no assurance these activities will be successful. Accordingly, we must rely on our officers to perform essential functions without compensation until a business operation can be commenced.  No amounts have been recorded in the accompanying financial statements for the value of officers’ services, as it is not considered material.

These factors raise substantial doubt about the ability of the Company to continue as a going concern.  The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Off Balance Sheet Arrangements:

We do not have any off-balance sheet arrangements, financings, or other relationships with unconsolidated entities or other persons, also known as “special purpose entities” (SPEs).

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Critical Accounting Policies

We prepare our consolidated financial statements in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements require the use of estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Our management periodically evaluates the estimates and judgments made. Management bases its estimates and judgments on historical experience and on various factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates as a result of different assumptions or conditions.

The methods, estimates, and judgment we use in applying our most critical accounting policies have a significant impact on the results we report in our financial statements. The SEC has defined “critical accounting policies” as those accounting policies that are most important to the portrayal of our financial condition and results, and require us to make our most difficult and subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain. Based upon this definition, our most critical estimates relate to the fair value of warrant liabilities. We also have other key accounting estimates and policies, but we believe that these other policies either do not generally require us to make estimates and judgments that are as difficult or as subjective, or it is less likely that they would have a material impact on our reported results of operations for a given period. For additional information see Note 2, “Summary of Significant Accounting Policies” in the notes to our reviewed financial statements appearing elsewhere in this report. Although we believe that our estimates and assumptions are reasonable, they are based upon information presently available, and actual results may differ significantly from these estimates.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk.

We do not hold any derivative instruments and do not engage in any hedging activities.

Item 4.  Controls and Procedures.

(a) Evaluation of Disclosure Controls and Procedures.

In connection with the preparation of this amended quarterly report on Form 10-Q for the quarter ended September 30, 2014, our Principal Executive Officer (“PEO”) and Principal Financial Officer (“PFO”) evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, our PEO and PFO concluded that our disclosure controls and procedures as of the end of the period covered by this report were not effective such that the information required to be disclosed by us in reports filed under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to our Principal Executive Officer and Principal Financial Officer, as appropriate to allow timely decisions regarding disclosure. A controls system cannot provide absolute assurance, however, that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.

(b) Changes in Internal Control over Financial Reporting.

In October 2014, the Partnership engaged Brio Financial Group (“Brio”), an outsourced financial reporting firm to accommodate our continued growth and to leverage a deeper base of experience from multiple professionals in public company reporting, GAAP and tax accounting, financial modeling and general audit preparation services.

Other than the engagement of Brio, there were no additional material changes in our internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

We are currently not involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our companies or our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.

Item 1A. Risk Factors.

The Company is not required to file Current and Periodic Reports with the U.S. Securities and Exchange Commission and other reports required of filers pursuant to the Securities Exchange Act of 1934, as amended, nor is the Company required to file proxy statements or information statements. Furthermore, the Company is not subject to the going private rules and certain tender offer regulations, and the beneficial holders of the Company’s securities do not need to report on acquisitions or depositions of the Company’s securities or their plans regarding their influence and control over the Company. Therefore the Company’s status as a voluntary filer reduces investors’ rights to access significant information regarding the Company and its controlling shareholders. The Company’s voluntary filer status may lead to its removal from the over-the-counter bulletin board, as Rule 6530 of the Financial Industry Regulatory Authority provides that issuers must be required to file reports pursuant to Section 13 or 15(d) of the Securities and Exchange Act of 1934 in order to remain listed.

Except for the above disclosure, we believe there are no changes that constitute material changes from the risk factors previously disclosed in our annual report on Form 10-K for the year ended December 31, 2013, filed with the SEC on April 24, 2014.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

On July 8, 2014, LG Capital converted part of their convertible debentures. The Company issued 23,783,300 shares of common stock and reduced their note payable by $2,350.

On July 17, 2014, LG Capital converted part of their convertible debentures. The Company issued 21,729,158 shares of common stock and reduced their note payable by $1,500.

On July 28, 2014, LG Capital converted part of their convertible debentures. The Company issued 22,869,863 shares of common stock and reduced their note payable by $1,575.

On August 1, 2014, LG Capital part of their convertible debentures. The Company issued converted 26,886,183 shares of common stock and reduced their note payable by $1,850.

On August 8, 2014, LG Capital converted part of their convertible debentures. The Company issued 28,382,230 shares of common stock and reduced their note payable by $1,950.

On August 14, 2014, LG Capital converted part of their convertible debentures. The Company issued 28,874,657 shares of common stock and reduced their note payable by $1,700.

On September 15, 2014, GEL Properties LLC converted part of their convertible debentures.  The Company issued 22,727,273 shares to reduce interest on the note payable by $1,250.

On September 30, 2014, LG Capital converted part of their convertible debentures. The Company issued 33,647,857 shares of common stock and reduced their note payable by $16,487.

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Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

On July 21, 2014, The Company amended its articles of incorporation to increase authorized common shares from 1,000,000,000 to 2,000,000,000.

Item 6. Exhibits.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

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