UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

Sx QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES ACT OF 1934

For the quarterly period ended ~~March~~September 3130, 2013

£o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES ACT OF 1934

For the transition period from ___________to ____________

Commission File Number: ~~333~~001-~~123465~~36134

UNIVERSAL BIOENERGY, INC.

(Exact name of Registrant as specified in its charter)

Nevada 20-1770378

State of Incorporation IRS Employer Identification No.

19800 Mac Arthur Blvd., Suite 300

Irvine, CA 92612

(Address of principal executive offices)

(949) 559-5017

(Issuer’s telephone number)

Indicate by check mark whether the Registrant (1) has filed all reports required by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days: Yes ~~S No~~ £ No £

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes £ No S£

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, or a non–accelerated filer. See definition of “accelerated filer large accelerated filer” and “smaller reporting company” in Rule 12b–2 of the Exchange Act. (Check one):

Large accelerated filer £ Accelerated filer £ Non–Accelerated filer £

Smaller reporting company S£

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b–2 of the Exchange Act). Yes £ No S£

Transitional Small Business Disclosure Format (check one): Yes £ No S£

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class		Outstanding at ~~May~~November 2019, 2013
Common stock, $0.001 par value		2,~~538~~681,~~903~~340,~~268~~081

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Table of Contents

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This report includes “forward-looking statements.” The words “may,” “will,” “anticipate,” “estimate,” “expect,” “intend,” “plan,” “aim,” “seek” and similar expressions as they relate to us or our management are intended to identify these forward-looking statements. All statements by us regarding our expected financial position, revenues, cash flows and other operating results, business strategy, legal proceedings and similar matters are forward-looking statements. Our expectations expressed or implied in these forward-looking statements may not turn out to be correct. Our results could be materially different from our expectations because of various risks, including the risks discussed in “Part I - Item 1A - Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended June 30, 2013. Any forward-looking statement speaks only as of the date as of which such statement is made, and, except as required by law, we undertake no obligation to update any forward-looking statement to reflect events or circumstances, including unanticipated events, after the date as of which such statement was made.

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Table of Contents

UNIVERSAL BIOENERGY INC.

INDEX TO FORM 10-Q FILING

FOR THE THREE ~~AND NINE~~ MONTHS ENDED ~~MARCH 31~~SEPTEMBER 30, 2013 AND 2012

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION		PAGE #
Item 1.	Condensed Consolidated Financial Statements	35
	Condensed Consolidated Balance Sheets	46
	Condensed Consolidated Statements of Income	57
	Condensed Consolidated Statements of Cash Flows	68
	Notes to Condensed Consolidated Financial Statements	79
Item 2.	Management Discussion & Analysis of Financial Condition and Results of Operations	1417
Item 3	Quantitative and Qualitative Disclosures About Market Risk	2223
Item 4.	Controls and Procedures	2223
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	2324
Item 1A.	Risk Factors	23
Item 1A	Risk Factors	24
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	2324
Item 3.	Defaults Upon Senior Securities	24
Item 4.	Mine Safety Disclosures	24
Item 5	Other information	24
Item 6.	Exhibits	2425

CERTIFICATIONS

Exhibit 3.1 – Management Certification……………………………………………………... 2425

Exhibit 3.2 – Sarbanes-Oxley Act……………………………………….………………….. 2425

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Table of Contents

PART I — CONSOLIDATED FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

The accompanying reviewed interim consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q. Therefore, they do not include all information and footnotes necessary for a complete presentation of financial position, results of operations, cash flows, and stockholders' equity in conformity with generally accepted accounting principles. Except as disclosed herein, there has been no material change in the information disclosed in the notes to the financial statements included in the Company's annual report on Form 10-K for the year ended December 31, 2012. In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature. Operating results for the three months ended March 31, 2013 are not necessarily indicative of the results that can be expected for the year ending December 31, 2013.

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Table of Contents

~~UNIVERSAL~~PART ~~BIOENERGY,~~I ~~INC.~~ — CONSOLIDATED ~~BALANCE~~FINANCIAL ~~SHEETS AS OF:~~INFORMATION

ASSETS:
	March 31, 2013			December 31, 2012
CURRENT ASSETS:
Cash	$	2,675		$	2,274
Accounts receivable		3,819,006			4,800,967
Other loans		600			600
Total current assets		3,822,281			4,803,841
PROPERTY AND EQUIPMENT - net		6,335			6,989
OTHER ASSETS:
Accounts receivable - other		52,639			10,050
Investments		2,919,500			2,919,500
Intangible assets		250,000			250,000
Deposit		7,453			7,452
Total other assets		3,229,591			3,187,002
TOTAL ASSETS	$	7,058,207		$	7,997,832
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT):
CURRENT LIABILITIES:
Accounts payable	$	4,016,833		$	4,983,318
Other accounts payable and accrued expenses		395,922			185,422
Accrued interest payable		530,155			468,572
Line of credit		6,618			7,942
Current portion of long term debt		2,281,123			248,395
Derivative liability		225,393			350,237
Advances from affiliates		4,250			4,250
Total current liabilities		7,460,295			6,248,136
Long-term Debt
Notes payable		655,705			2,261,406
Notes payable - related parties		568,059			934,728
Total Long-term Debt		1,223,764			3,196,134
Principal reductions of notes payable and line of credit
TOTAL LIABILITIES		8,684,059			9,444,270
STOCKHOLDERS' EQUITY (DEFICIT):
Preferred stock, $.001 par value, 1,000,000 shares
authorized. Preferred stock Series A, zero issued and outstanding shares		—			—
March 31, 2013 and December 31, 2012, respectively.
Preferred stock Series B, 232,080 issued and outstanding shares
March 31, 2013 and December 31, 2012, respectively		232			232
Common stock, $.001 par value, 3,000,000,000 shares authorized;
852,950,389 and 673,521,813 issued and outstanding as of
March 31, 2013 and December 31, 2012, respectively		852,950			673,522
Additional paid-in capital		20,936,246			20,546,023
Noncontrolling interest		(268,773	)		(263,836	)
Accumulated deficit		(23,146,507	)		(22,402,379	)
Total stockholders' deficit		(1,625,853	)		(1,446,438	)
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)	$	7,058,207		$	7,997,832
The accompanying notes are an integral part of these consolidated financial statements.

ITEM 1. FINANCIAL STATEMENTS

~~(4)~~The accompanying reviewed interim consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q. Therefore, they do not include all information and footnotes necessary for a complete presentation of financial position, results of operations, cash flows, and stockholders' equity in conformity with generally accepted accounting principles. Except as disclosed herein, there has been no material change in the information disclosed in the notes to the financial statements included in the Company's annual report on Form 10-K for the fiscal year ended June 30, 2013. In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature. Operating results for the three months ended September 30, 2013 are not necessarily indicative of the results that can be expected for the fiscal year ending June 30, 2014.

~~Table of Contents~~(4)

~~UNIVERSAL~~Table ~~BIOENERGY,~~of ~~INC. CONSOLIDATED STATEMENTS OF OPERATIONS~~Contents

	For The Quarters Ending
	3/31/13			3/31/12
REVENUES	$	12,400,975		$	13,007,160
COST OF SALES		12,382,523			12,989,939
GROSS PROFIT		18,452			17,221
OPERATING EXPENSES:
General and administrative		291,346			430,385
Sales and marketing		292			9,502
Depreciation and amortization expense		654			654
Total operating expenses		292,293			440,541
LOSS FROM OPERATIONS		(273,840	)		(423,320	)
OTHER INCOME (EXPENSE):
Other income		1,109			4,295
Initial (loss) on embedded derivatives issued		(17,929	)		—
Change in fair value of derivative liabilities		(106,176	)		—
Interest (expense), including amortization of beneficial conversion feature		(352,229	)		(277,557	)
Total other expense		(475,225	)		(273,262	)
(LOSS) FROM CONTINUING OPERATIONS		(749,066	)		(696,582	)
(LOSS) FROM DISCONTINUED OPERATIONS
Loss on sale of bio-diesel plant equipment		—			—
Net (Loss)		(749,066	)		(696,582	)
Net income (loss) attributable to noncontrolling interest		(4,937	)		(41,952	)
NET (LOSS) ATTRIBUTABLE TO UNIVERSAL	$	(744,128	)	$	(654,630	)
Principal reductions of notes payable and line of credit
Basic and diluted loss per share	$	(0.00	)*	$	(0.01	)
Weighted average of shares outstanding		184,927,248			57,398,748
* Less than $0.01 per share
The accompanying notes are an integral part of these consolidated financial statements.

UNIVERSAL BIOENERGY, INC.
CONSOLIDATED BALANCE SHEETS

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ASSETS:
	September 30, 2013			June 30, 2013
CURRENT ASSETS:
Cash	$	0		$	2,130
Accounts receivable		3,829,979			9,173,462
Other loans		—			600
Total current assets		3,829,979			9,176,192

PROPERTY AND EQUIPMENT - net		4,341			6,335

OTHER ASSETS:
Accounts receivable - other		600			10,050
Investments		2,929,550			2,919,500
Intangible assets		250,000			250,000
Deposit		6,516			7,452
Total other assets		3,186,666			3,187,002

TOTAL ASSETS	$	7,020,986		$	12,369,529

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT):

CURRENT LIABILITIES:
Accounts payable	$	3,994,231		$	9,333,980
Other accounts payable and accrued expenses		468,922			363,922
Accrued interest		140,497			124,949
Line of credit		7,272			6,618
Current portion of long term debt		441,785			150,821
Derivative liability		316,343			212,683
Advances from affiliates		3,313			4,250
Total current liabilities		5,372,363			10,197,223

Long term debt
Notes payable		370,653			352,150
Notes payable - related parties		342,900			624,098
Total long-term debt		713,553			976,248

TOTAL LIABILITIES		6,085,916			11,173,471

STOCKHOLDERS' EQUITY (DEFICIT):
Preferred stock, $.001 par value, 10,000,000 shares
authorized. Preferred stock Series A,1,000,000 issued and -0- outstanding shares September 30, 2013 and June 30, 2013		1,000			—
respectively.
Preferred stock Series B, 232,080 issued and outstanding shares
September 30, 2013 and June 30, 2012, respectively		232			232
Common stock, $.001 par value, 3,000,000,000 shares authorized;
2,478,570,850 and 2,660,594,986 issued and outstanding as of
September 30, 2013 and June 30, 2012, respectively		2,478,571			2,660,595
Additional paid-in capital		21,118,833			20,884,031
Noncontrolling interest		(279,110	)		(270,979	)
Accumulated deficit		(22,383,457	)		(22,077,821	)
Total stockholders' equity (deficit)		935,070			1,196,058

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)	$	7,020,986		$	12,369,529

~~Table~~ The accompanying notes are an integral part of ~~Contents~~these consolidated financial statements.

~~UNIVERSAL BIOENERGY, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS~~(5)

	For The Quarters Ended
	3/31/13			3/31/12
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (Loss)	$	(749,066	)	$	(696,582	)
Adjustments to reconcile net (loss) to net cash
(used in) operating activities:
Depreciation expense		654			654
Common stock issued for dividend		—			—
Common stock issued for services		—			5,000
Amortization of Beneficial conversion features		726,466			146,666
Loss from sale of equipment		—			—
Loss on embedded derivatives		—			—
Changes in assets and liabilities:
Accounts receivable		981,961			7,957,044
Prepaid expenses and other assets		(42,589	)		39,063
Accrued expenses and other liabilities		270,760			191,592
Accounts payable		(966,485	)		(7,934,972	)
Net cash provided by (used) in operating activities		221,701			(291,535	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in participation agreement - see note 10		—			—
Net cash provided by (used in) investing activities		—			—
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal reductions of notes payable and line of credit		(285,500	)		(316,884	)
Proceeds from notes payable issued and line of credit		64,200			626,864
Net cash provided by (used) in financing activities		(221,300	)		309,980
INCREASE (DECREASE) IN CASH		401			18,445
CASH, BEGINNING OF YEAR		2,274			3,706
CASH, END OF YEAR	$	2,675		$	22,151
SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid	$	—		$	—
Taxes paid	$	—		$	—
Investment in membership acquisition by issuing notes payable				$	2,000,000
Issuance of common stock for the conversion of debt	$	285,500		$	485,138
Common stock issued for intangible assets in acquisition	$	—		$	—
Convertible notes issued for accrued liabilities	$	13,580		$	18,764
Beneficial conversion feature of convertible notes payable	$	1,138,941		$	2,565,787
The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

~~(6)~~UNIVERSAL BIOENERGY, INC. CONSOLIDATED STATEMENTS OF OPERATIONS

Table of Contents


	For The 3 Months Ending September 30,
	2013			2012

REVENUES	$	13,872,602		$	15,562,860

COST OF SALES		13,859,787			15,538,855

GROSS PROFIT		12,815			24,005

OPERATING EXPENSES:
General and administrative		155,885			345,457
Sales and marketing		—			15,447
Depreciation and amortization expense		654			654
Total operating expenses		156,539			361,558

LOSS FROM OPERATIONS		(143,724	)		(337,553	)

OTHER INCOME (EXPENSE):
Other income		7,355			5,963
Initial (loss) on embedded derivatives issued		(92,168	)		(27,589	)
Change in fair value of derivative liabilities		152,797			(430,658	)
Interest (expense), including amortization of
beneficial conversion feature		(238,028	)		(933,331	)
Total other expense		(170,044	)		(1,385,615	)

(LOSS) FROM CONTINUING OPERATIONS		(313,768	)		(1,723,168	)

(LOSS) FROM DISCONTINUED OPERATIONS
Loss on sale of bio-diesel plant equipment		—			—

Net (Loss)		(313,768	)		(1,723,168	)

Net (loss) attributable to noncontrolling interest		(8,131	)		(30,092	)

NET (LOSS) ATTRIBUTABLE TO UNIVERSAL	$	(305,637	)	$	(1,693,076	)

NET (LOSS) PER SHARE:
Basic and diluted loss per share		*			*

Weighted average of shares outstanding		2,511,296,738			487,211,246

* Less than $0.01 per share

~~UNIVERSAL BIOENERGY,~~ The ~~INC~~accompanying notes are an integral part of these consolidated financial statements.

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~(6)

~~FOR THE~~Table ~~THREE~~of ~~MONTHS ENDED MARCH 31, 2013 AND 2012~~Contents

~~NOTE 1~~UNIVERSAL -BIOENERGY, ~~DESCRIPTION~~INC. CONSOLIDATED STATEMENTS OF ~~BUSINESS~~CASH FLOWS

Overview of the Company


	For Period Ended September 30,
	2013			2012

CASH FLOWS FROM OPERATING ACTIVITIES:
Net (Loss)	$	(313,768	)	$	(4,432,535	)
Adjustments to reconcile net (loss) to net cash
(used in) and provided by operating activities:
Depreciation expense		654			1,962
Common stock issued for services		—			118,280
Amortization of Beneficial conversion features		297,722			973,879
Loss (Gain) on embedded derivatives		60,629			1,330,276
Changes in assets and liabilities:
Accounts recievable		1,660,096			5,801,464
Prepaid expenses and other assets		12,186			37,263
Accrued expenses and other liabilities		(110,874	)		574,176
Accounts payable		(1,585,746	)		(5,781,086	)
Net cash (used in) operating activities		20,900			(1,376,321	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in participation agreement - see note 10		(40,050	)		—
Net cash provided by (used in) investing activities		(40,050	)		—

CASH FLOWS FROM FINANCING ACTIVITIES:
Advances from affiliate		—			—
Principal payments on notes payable and line of credit		(184,243	)		(318,948	)
Proceeds from notes payable issued and line of credit		202,200			1,697,722
Net cash provided by financing activities		17,020			1,378,774

INCREASE (DECREASE) IN CASH		(2,130	)		2,453

CASH, BEGINNING OF PERIOD		2,130			3,706

CASH, END OF PERIOD	$	0		$	6,159

SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid	$	—		$	—
Taxes paid	$	—		$	—
Invetment in membership acquistion by issuing notes payable	$	—		$	2,000,000
Issuance of common stock for the conversion of debt	$	88,043		$	1,296,268
Common stock issued for intangible assets in acquisition	$	—		$	—
Convertible notes issued for accrued liabilities	$	—		$	366,090
Beneficial conversion feature of convertible notes payable	$	72,265		$	1,145,883

~~Universal Bioenergy~~ The ~~Inc.~~accompanying ~~(the~~notes ~~“Company”)~~are is an ~~independent~~integral ~~diversified~~part energy company, headquartered in Irvine, California. Our common stock is presently listed on the OTC Markets Group trading systems under the trading symbol “UBRG”. Universal Bioenergy Inc. was incorporated on August 13, 2004, in the State of ~~Nevada,~~these ~~under~~consolidated ~~the~~financial ~~name of Palomine Mining Inc~~statements. ~~On October 24, 2007, the Company changed its name from Palomine Mining Inc. to Universal Bioenergy Inc. to better reflect its new business plan and strategic direction.~~

The Company’s primary business focus is the production, marketing, and sales of natural gas, petroleum, coal, propane, refined petroleum products, electricity, and alternative energy. Through its 49% owned subsidiary, NDR Energy Group LLC, the Company presently sells natural gas to 30 of the largest public utilities, electric power producers, and local gas distribution companies that serve millions of commercial, industrial, and residential customers throughout the United States. The Company is also engaged in the acquisition of oil and gas fields, lease acquisitions, development of newly discovered or recently discovered oil and gas fields, re-entering existing wells, and transmission and marketing of the products to our customer base. The Company intends to continue its growth through an ongoing series of acquisitions.(7)

~~Our principal~~Table ~~and~~of ~~administrative offices are located at 19800 MacArthur Blvd., Suite 300, Irvine, California, 92612. Our telephone number is 949-559-5017.~~Contents

~~Universal Bioenergy~~UNIVERSAL ~~files or furnishes various reports with the Securities and Exchange Commission (“SEC”). These reports~~BIOENERGY, including Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and any amendments to those reports filed or furnished pursuant to Sections 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (“1934 Act”), are available free of charge on Universal Bioenergy’s corporate website, wwwINC.universalbioenergy.com, as promptly as practicable after they are filed with, or furnished to, the SEC. The information contained on this website is not incorporated by reference into this Quarterly Report on Form 10-Q and should not be considered part of this report. Reports filed with the SEC are also made available on its website at www.sec.gov.

~~Whitesburg Friday~~NOTES ~~Branch~~TO ~~Mine~~CONDENSED ~~LLC~~CONSOLIDATED FINANCIAL STATEMENTS

~~On February~~FOR ~~20,~~THE ~~2012,~~THREE ~~the~~MONTHS ~~Company~~ENDED ~~expanded~~SEPTEMBER ~~into the coal energy market by the acquisition of forty percent (40%) of the Member Interests of Whitesburg Friday Branch Mine LLC~~30, ~~“Whitesburg”, a Kentucky limited liability company. “Whitesburg”~~ is2013 ~~engaged~~AND in the business of coal mining, operations, and coal production, at a coal mining property known as the Whitesburg Friday Branch Mine, located at Friday Branch Road, in Whitesburg, Letcher County, Kentucky, for the marketing of “Thermal/Steam” non-coking coal in the United States of America. The Whitesburg Mine operates, mines, and markets thermal coal for sale to electric utilities for use in coal fired power plant electric generation. The Whitesburg mining operations are the surface and high wall mining type and do not include any underground mining. 2012

~~Company History~~NOTE 1 - DESCRIPTION OF BUSINESS

~~Universal Bioenergy,~~Overview ~~Inc. (UBRG) was incorporated on August 13, 2004, under the laws~~ of the ~~State of Nevada.~~Company

Universal Bioenergy ~~North America,~~ Inc. (the “~~UBNA~~Company”), is ~~our~~an ~~wholly~~independent ~~owned~~diversified ~~subsidiary~~energy company, headquartered in Irvine, California. Our common stock is presently listed on the OTC Markets Group trading systems under the trading symbol “UBRG”. Universal Bioenergy Inc. was incorporated on August 13, 2004, in the State of Nevada, onunder ~~January 23~~the name of Palomine Mining Inc. On October 24, 2007, the Company changed its name from Palomine Mining Inc. ~~This~~to ~~corporation~~Universal ~~has~~Bioenergy ~~been~~Inc. ~~inactive~~to ~~since~~better ~~January~~reflect ~~2009~~its new business plan and strategic direction.

InThe Company’s primary business focus ~~October~~is ~~2007~~the production, ~~UBNA~~marketing, ~~entered~~and ~~into~~sales aof ~~Purchase~~natural ~~Agreement~~gas, ~~with~~petroleum, ~~UBRG~~coal, inliquefied ~~which~~natural ~~UBNA~~gas ~~became~~(LNG), apropane, refined petroleum products, electricity, and alternative energy. Through its 49% owned subsidiary, NDR Energy Group LLC, the Company has contracts to sells natural gas to 31 of ~~UBRG~~the largest public utilities, electric power producers, and local gas distribution companies that serve millions of commercial, industrial, and residential customers throughout the United States. The ~~purchase~~Company ~~was~~is ~~consummated~~also engaged in onthe ~~December~~acquisition 6of oil and gas fields, ~~2007~~lease acquisitions, development of newly discovered or recently discovered oil and gas fields, re-entering existing wells, and transmission and marketing of the products to our customer base. The Company intends to continue its growth through an ongoing series of acquisitions.

~~On October~~Our ~~24,~~principal ~~2007,~~and ~~the~~administrative ~~Company~~offices ~~changed~~are located ~~its~~at ~~name~~19800 ~~from~~MacArthur ~~Palomine Mining Inc~~Blvd., toSuite ~~Universal~~300, ~~Bioenergy~~Irvine, ~~Inc~~California, 92612. toOur ~~better~~telephone ~~reflect~~number ~~its~~is ~~business plan~~949-559-5017.

OnUniversal Bioenergy ~~March~~files 7or furnishes various reports with the Securities and Exchange Commission (“SEC”). These reports, ~~2008~~including Annual Reports on Form 10-K, ~~the~~Quarterly ~~Board~~Reports ofon ~~Directors~~Form ~~approved~~10-Q, Current Reports on Form 8-K, and any amendments to those reports filed or furnished pursuant to Sections 13(a) ~~change~~or in15(d) of the ~~Company~~Securities Exchange Act of 1934, as amended (“1934 Act”), are available free of charge on Universal Bioenergy’s ~~fiscal~~corporate ~~year~~website, ~~end~~www.universalbioenergy.com, ~~from~~as ~~January~~promptly 31as practicable after they are filed with, or furnished to, ~~December~~the 31SEC. The information contained on this website is not incorporated by reference into this Quarterly Report on Form 10-Q and should not be considered part of this report. Reports filed with the SEC are also made available on its website at www.sec.gov.

~~On April 12, 2010, Universal Bioenergy and~~ NDR Energy Group,’s ~~LLC, a Maryland limited liability company, entered into a Member~~Wholesale ~~Interest~~Electric ~~Purchase~~Power ~~Agreement in which Universal Bioenergy purchased a 49% Member Interest NDR Energy Group. NDR Energy Group markets energy and fuel such as natural gas, and propane.~~Division

On February 2012, ~~2012~~2013, ~~the~~our ~~Company~~subsidiary, NDR ~~acquired~~Energy ~~forty~~Group ~~percent~~received ~~(40%)~~approval offrom the ~~Member~~Federal ~~Interests~~Energy ofRegulatory ~~Whitesburg~~Commission ~~Friday~~(FERC) ~~Branch~~to ~~Mine~~market ~~LLC,~~wholesale aand ~~Kentucky limited~~retail ~~liability company~~electric power. ~~Whitesburg~~NDR ~~Friday~~Energy ~~Branch~~Group’s ~~Mine~~electric ~~LLC~~power division is ~~engaged~~ now in ~~the~~full ~~business of coal mining~~operation, ~~operations,~~and ~~production,~~is ~~and~~prepared ~~marketing~~to ofsell ~~“Thermal/Steam”~~electric ~~non-coking~~power. ~~coal~~We atbelieve awe ~~coal~~should ~~mining~~start ~~property~~selling ~~known~~electric aspower during the ~~Whitesburg~~next ~~Friday~~30 ~~Branch~~to ~~Mine,~~90 ~~located~~days into ~~Letcher~~begin ~~County,~~additional ingenerating ~~Whitesburg, Kentucky~~revenues.

OnUniversal ~~February 27,~~Bioenergy ~~2013,~~Launches ~~the Company announced it had established a new division that will focus on the sales of coal for export to the international~~International ~~market.~~Coal ~~The~~Division ~~new division will take advantage of the growing demand~~ for ~~coal~~Export ~~in countries whose economies, and infrastructure are experiencing high growth, have a greater demand for energy, electric power and coal~~ to ~~produce~~Foreign ~~electricity and to manufacture steel. These countries include China, India, South Korea, Mexico and some European countries, including Germany, England, Ireland and Poland.~~Markets

~~NOTE~~On February 222, -2013, ~~BASIS~~the OFCompany ~~PRESENTATION~~announced that it established a new division that will focus on the sales of coal for export to the international market to generate additional revenues, higher margins, and potential profits. The new division will take advantage of the growing demand for coal in countries whose economies and infrastructure are experiencing high growth, have a greater demand for energy, electric power, and coal, to produce electricity, and to manufacture steel. These countries include China, India, and South Korea, Mexico, and some European countries; including Germany, England, Ireland, and Poland.

~~Interim~~Global ~~Financial~~Energy ~~Statements~~Group LLC

~~The accompanying~~Global ~~interim,~~Energy ~~unaudited~~Group, ~~condensed,~~LLC ~~consolidated~~“GEG”, our ~~financial~~primary ~~statements~~shareholder, ~~have~~is ~~been~~a ~~prepared~~holding incompany ~~accordance~~whose ~~with~~primary ~~generally accepted~~business ~~accounting~~is ~~principles~~the ~~for~~acquisition ~~interim~~of ~~financial~~strategic ~~information~~business assets, companies and, ~~with~~investment ~~the~~or ~~instructions~~joint toventures ~~Form~~in ~~10-Q~~both private and ~~Article~~public 8companies. ofOn ~~Regulation S-X.~~April ~~Accordingly~~10, ~~they~~2013, doGlobal ~~not~~Energy ~~include~~Group ~~all~~LLC, (“GEG”), converted its portfolio of ~~the~~Convertible ~~information~~Promissory ~~and~~Notes ~~footnotes~~into ~~required~~common byshares ~~generally~~of ~~accepted~~UBRG ~~accounting~~stock; ~~principles~~and was issued 1,568,630,000 common shares for ~~complete~~that ~~financial statements~~conversion. InThe ~~our opinion~~1,568,630,000 ~~all~~shares ~~adjustments~~was ~~(consisting~~the equivalent of ~~normal~~61.78% ~~recurring~~of ~~accruals)~~UBRG’s ~~considered~~2,538,903,268 ~~necessary for~~outstanding ashares ~~fair~~of common ~~presentation~~stock ~~have~~that ~~been~~were ~~included.~~issued ~~Operating~~and ~~results~~outstanding ~~for~~on ~~the~~May ~~three~~20, ~~months~~201. ~~period~~As ~~ended~~of ~~March~~June 3130, 2013, ~~are~~GEG’s ~~not~~holdings ~~necessarily indicative~~were of the ~~results~~equivalent ~~that~~of 58.95% ~~may~~of ~~be expected for~~ the ~~year~~issued ~~ending~~and ~~December~~outstanding ~~31,~~shares ~~2013~~of UBRG.

~~While management of the~~ Company believes that the disclosures presented herein and adequate and not misleading, these interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements, and the footnotes thereto for the fiscal year ended December 31, 2012, as filed with the Securities and Exchange Commission.History

Universal Bioenergy, Inc. (7UBRG) was incorporated on August 13, 2004, under the laws of the State of Nevada.

~~Table~~On ofOctober ~~Contents~~24, 2007, the Company changed its name from Palomine Mining Inc., to Universal Bioenergy, Inc. to better reflect its business plan.

~~NOTE~~On February 327, –2013, ~~SUMMARY~~the OFCompany ~~SIGNIFICANT~~announced ~~ACCOUNTING~~it ~~POLICIES~~had established a new division that will focus on the sales of coal for export to the international market. The new division will take advantage of the growing demand for coal in countries whose economies, and infrastructure are experiencing high growth, have a greater demand for energy, electric power and coal to produce electricity and to manufacture steel. These countries include China, India, and South Korea, Mexico and some European countries, including Germany, England, Ireland and Poland.

~~The Company~~On ~~prepares~~July ~~its~~15, ~~financial~~2013, ~~statements~~the inBoard ~~accordance~~of ~~with~~Directors ~~accounting~~approved a ~~principles~~change ~~generally accepted~~ in the ~~United~~Company’s ~~States~~fiscal ~~of America.~~year ~~Significant~~end ~~accounting~~from ~~policies~~December ~~are~~31 asto ~~follows:~~June 30.

~~Principle of Consolidation~~(8)

~~The consolidated~~Table ~~financial statements include the accounts~~ of ~~Universal Bioenergy, Inc., Universal Bioenergy North America, Inc., and NDR Energy Group, LLC. Intercompany accounts and transactions have been eliminated in the consolidated financial statements.~~Contents

~~On April~~NOTE 12, 2010, the Company acquired a direct 49% financial interest in NDR Energy Group LLC (“NDR”). Additionally, through Varlos Energy Holdings LLC, an entity owned by officers of the Company, it acquired an additional control of 2% ~~financial interest~~- inBASIS ~~NDR~~OF for a total direct and indirect financial interest and control of 51% of NDR. The operating agreement of NDR provides for voting in proportion to ownership. The Company directly has 51% voting control of NDR through its 49% member interest, and through a Voting Trust which the Company has the 2% voting interest of Varlos Energy Holdings LLC, and has accordingly consolidated its financial position, results of operations, and cash flows into these financial statements.PRESENTATION

~~Use of~~Interim ~~Estimates~~Financial ~~and~~Statements ~~Assumptions~~

The ~~preparation~~ ofaccompanying interim, unaudited, condensed, consolidated, financial statements inhave ~~conformity~~been ~~with~~prepared ~~accounting~~in ~~principles~~accordance with generally accepted inaccounting ~~the~~principles ~~United~~for ~~States~~interim ~~(“GAAP”)~~financial ~~requires~~information, ~~management~~and with the instructions to ~~make~~Form ~~estimates~~10-Q and ~~assumptions~~Article ~~that~~8 ~~affect~~of ~~(i) the~~Regulation ~~reported~~S-X. ~~amounts~~Accordingly, ofthey ~~assets~~do ~~and~~not ~~liabilities,~~include ~~(ii) the disclosure~~all of ~~contingent~~the information ~~assets~~ and ~~liabilities~~footnotes ~~known~~required toby ~~exist~~generally asaccepted ofaccounting ~~the~~principles ~~date~~for ~~the~~complete financial statements. ~~are~~In ~~published~~our opinion, all ~~and~~adjustments (~~iii) the reported~~consisting ~~amount~~ of ~~net~~normal ~~sales~~recurring ~~and~~accruals) ~~expenses~~considered ~~recognized~~necessary ~~during~~for ~~the~~a ~~periods~~fair ~~presented.~~presentation ~~Adjustments~~have ~~made~~been ~~with~~included. ~~respect~~Operating results tofor the ~~use~~three ~~of estimates~~months ~~often~~period ~~relate~~ended toSeptember ~~improved~~30, ~~information~~2013, are not ~~previously~~necessarily ~~available.~~indicative ~~Uncertainties~~of ~~with~~the ~~respect~~results tothat ~~such~~may ~~estimates~~be ~~and assumptions~~expected ~~are~~for ~~inherent in~~ the ~~preparation~~fiscal ofyear ~~financial~~ending ~~statements;~~June ~~accordingly~~30, ~~actual results could differ from these estimates~~2014.

~~Revenue~~While management of the Company believes that the disclosures presented herein and ~~Cost~~adequate ~~Recognition~~and not misleading, these interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements, and the footnotes thereto for the fiscal year ended June 30, 2013, as filed with the Securities and Exchange Commission.

~~Revenue includes~~NOTE ~~product~~3 ~~sales.~~– ~~The~~SUMMARY ~~Company~~OF ~~recognizes~~SIGNIFICANT ~~the majority of its consolidated revenue and cash flow from the sale of natural~~ACCOUNTING gas and related energy products at the time title to the product transfers, the amount is fixed and determinable, evidence of an agreement exists, and the customer bears the risk of loss, net of provision for rebates, and sales allowances in accordance with ASC Topic 605 “Revenue Recognition in Financial Statements”.POLICIES

~~Management has~~The considered the various factors discussed in ASC 605-45-14-4-c and ASC 605-45-45 and believe that our natural gas purchase and sale transactions are appropriately reported gross rather than net. Generally the Company isprepares ~~the~~its ~~primary~~financial ~~obligor in the arrangement,~~statements ~~and the Company has latitude~~ in ~~establishing~~accordance ~~price,~~with ~~discretion~~accounting inprinciples ~~supplier~~generally ~~selection,~~accepted ~~and credit risk~~ in the ~~event~~United ~~our~~States ~~customer defaults~~of ~~on the transaction~~America. ~~Additionally,~~Significant ~~the~~accounting ~~Company’s~~policies ~~supplier is not the primary obligor in the arrangement, and the~~are ~~amount the Company earns is not fixed. Those transactions where the Company operates~~ as ~~an agent or broker for either the supplier or the customer at a fixed fee are reported net.~~follows:

~~Cash and~~Principle ~~Cash~~of ~~Equivalents~~Consolidation

The ~~Company~~ ~~considers~~consolidated ~~all~~financial ~~highly~~statements ~~liquid~~include the ~~investments~~accounts ~~with an original maturity~~ of ~~three~~Universal ~~months~~Bioenergy, orInc., ~~less~~and toNDR beEnergy ~~cash~~Group, ~~equivalents~~LLC. ~~At March~~ ~~31,~~Intercompany ~~2013~~accounts and ~~December~~ ~~31,~~transactions ~~2012~~have ~~the~~been ~~Company~~eliminated in ~~had~~the noconsolidated ~~cash~~financial ~~equivalents~~statements.

~~Property~~On April 12, 2010, the Company acquired a direct 49% financial interest in NDR Energy Group LLC (“NDR”). Additionally, through Varlos Energy Holdings LLC, an entity owned by officers of the Company, it acquired an additional control of 2% financial interest in NDR for a total direct and ~~Equipment~~indirect financial interest and control of 51% of NDR. The operating agreement of NDR provides for voting in proportion to ownership. The Company directly has 51% voting control of NDR through its 49% member interest, and through a Voting Trust which the Company has the 2% voting interest of Varlos Energy Holdings LLC, and has accordingly consolidated its financial position, results of operations, and cash flows into these financial statements.

~~Property and~~Use ~~equipment is recorded at cost, and depreciated over the estimated useful lives~~ of ~~the~~Estimates ~~assets using principally the straight-line method. When items are retired, or otherwise disposed of, income is charged or credited for the difference between net book value~~ and ~~proceeds realized. Ordinary maintenance and repairs are charged to expense as incurred, and replacements and betterments are capitalized.~~Assumptions

The preparation of financial statements in ~~range~~conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions that affect (i) the reported amounts of ~~estimated~~assets ~~useful~~and ~~lives~~liabilities, ~~used~~(ii) the disclosure of contingent assets and liabilities known to ~~calculated~~exist ~~depreciation~~as ~~for~~of ~~principal~~the ~~items~~date the financial statements are published, and (iii) the reported amount of ~~property~~net sales and ~~equipment~~expenses recognized during the periods presented. Adjustments made with respect to the use of estimates often relate to improved information not previously available. Uncertainties with respect to such estimates and assumptions are asinherent in ~~follows:~~the preparation of financial statements; accordingly, actual results could differ from these estimates.

Asset Category			Depreciation/Amortization Period
Building			40 Years
Plant Equipment			15 Years
Furniture and Fixture			3 Years
Office Equipment			3 Years
Leasehold improvements			5 Years

Revenue and Cost Recognition

~~Goodwill~~Revenue includes product sales. The Company recognizes the majority of its consolidated revenue and ~~Other~~cash ~~Intangible~~flow ~~Assets~~from the sale of natural gas and related energy products at the time title to the product transfers, the amount is fixed and determinable, evidence of an agreement exists, and the customer bears the risk of loss, net of provision for rebates, and sales allowances in accordance with ASC Topic 605 “Revenue Recognition in Financial Statements”.

~~The Company~~Management ~~adopted~~has ~~Statement~~considered ofthe ~~Financial~~various ~~Accounting~~factors discussed ~~Standard~~in ~~(“FASB”) Accounting Standards Codification (“~~ASC~~”) Topic~~ ~~350~~605-45-14-4-c ~~Goodwill~~ and ~~Other Intangible Assets, effective July 1, 2002. In accordance with (“~~ASC ~~Topic~~605-45-45 ~~350”) "Goodwill~~ and ~~Other~~believe ~~Intangible~~that ~~Assets",~~our ~~goodwill~~natural ~~represents~~gas ~~the excess of the~~ purchase ~~price~~ and ~~related~~sale ~~costs~~transactions ~~over~~are appropriately ~~the~~reported ~~value~~gross ~~assigned~~rather tothan net. ~~tangible~~Generally ~~and identifiable intangible assets of businesses acquired, and accounted for, under~~ the ~~purchase method~~Company ~~acquired in business combinations~~ is ~~assigned to reporting units that are expected to benefit from~~ the ~~synergies~~primary ofobligor ~~the combination~~in ~~as of~~ the ~~acquisition date. Under this standard~~arrangement, ~~goodwill~~ and ~~intangibles~~the ~~with indefinite useful lives are no longer amortized. The~~ Company ~~assesses~~has ~~goodwill~~latitude ~~and indefinite-lived intangible assets for impairment annually during the fourth quarter;~~in orestablishing ~~more~~price, ~~frequently~~discretion ifin ~~events~~supplier selection, and ~~circumstances~~credit ~~indicate~~risk ~~impairment may have occurred~~ in ~~accordance~~the ~~with~~event ~~ASC~~our ~~Topic~~customer ~~350.~~defaults Ifon the ~~carrying~~ ~~value~~transaction. ~~of a reporting unit's goodwill exceeds its implied fair value~~Additionally, the Company’s ~~records~~supplier anis ~~impairment~~not ~~loss equal to~~ the ~~difference.~~primary ~~ASC~~obligor ~~Topic~~in ~~350~~the ~~also~~arrangement, ~~requires~~and ~~that~~ the ~~fair~~amount ~~value~~the ofCompany ~~indefinite-lived~~earns ~~purchased~~is ~~intangible~~not ~~assets~~fixed. ~~be estimated and~~Those ~~compared~~transactions towhere the ~~carrying~~Company ~~value.~~operates ~~The~~as ~~Company~~an ~~recognizes~~agent anor ~~impairment~~broker ~~loss~~for ~~when~~either the ~~estimated~~supplier ~~fair~~or ~~value of~~ the ~~indefinite-lived purchased~~customer ~~intangible~~at ~~assets~~a isfixed ~~less~~fee ~~than~~are ~~the carrying value~~reported net.

~~Impairment of~~Cash ~~Long-Lived~~and ~~Assets~~Cash Equivalents

~~In accordance~~The ~~with~~Company ~~ASC Topic 365, long-lived assets, such as property, plant, equipment, and purchased intangibles, are reviewed~~considers ~~for~~all ~~impairment~~highly ~~whenever~~liquid ~~events~~investments orwith ~~changes~~an inoriginal ~~circumstances~~maturity ~~indicate that the carrying amount~~ of anthree ~~asset~~months ~~may~~or ~~not~~less ~~be recoverable. Goodwill and other intangible assets are tested for impairment. Recoverability of assets~~ to be ~~held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future~~ cash ~~flows expected to be generated by the asset~~equivalents. If At ~~the~~September ~~carrying amount of an asset exceeds its estimated future cash flows~~30, ~~an impairment charge is recognized by the amount by~~2013 ~~which~~and ~~the~~June ~~carrying~~30, ~~amount~~2013 of the ~~asset~~Company ~~exceeds~~had ~~the fair value of the asset. There were~~ no ~~events~~cash ~~or changes in circumstances that necessitated an impairment of long-lived assets~~equivalents.

~~Income Taxes~~Property and Equipment

~~Deferred income~~Property ~~taxes~~and ~~are~~equipment ~~provided~~is ~~based~~recorded onat ~~the provisions of ASC Topic 740~~cost, and ~~"Accounting~~depreciated ~~for~~over ~~Income Taxes", to reflect~~ the ~~tax~~estimated ~~consequences~~useful inlives ~~future years~~ of ~~differences between~~ the ~~tax~~assets ~~bases~~using ofprincipally ~~assets~~the ~~and~~straight-line ~~liabilities,~~method. ~~and~~When ~~their~~items ~~financial~~are ~~reporting~~retired, ~~amounts~~or ~~based~~otherwise ondisposed ~~enacted~~of, ~~tax~~income ~~laws~~is ~~and~~charged ~~statutory~~or ~~tax~~credited ~~rates~~for ~~applicable to~~ the ~~periods~~difference inbetween ~~which~~net ~~the~~book ~~differences~~value ~~are~~and ~~expected~~proceeds torealized. ~~affect~~Ordinary ~~taxable~~maintenance ~~income.~~and ~~Valuation~~repairs ~~allowances~~ are ~~established~~charged ~~when necessary~~ to ~~reduce~~expense ~~deferred~~as ~~tax~~incurred, ~~assets~~and toreplacements ~~the~~and ~~amount~~betterments ~~expected~~are ~~to be realized~~capitalized.

The ~~Company~~ ~~adopted~~range ~~the provisions~~ of ~~ASC~~estimated ~~Topic~~useful ~~740;~~lives ~~"Accounting~~used ~~For Uncertainty In Income Taxes-An Interpretation Of ASC Topic 740 ("ASC Topic 740"). ASC Topic 740 contains a two-step approach~~ to ~~recognizing and measuring uncertain tax positions.~~ ~~The~~calculated ~~first~~depreciation ~~step is to evaluate the tax position~~ for ~~recognition~~principal byitems ~~determining if the weight~~ of ~~available~~property ~~evidence~~and ~~indicates~~equipment ~~it is~~are ~~more likely than not that the position will be sustained on audit; including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit~~ as the largest amount; which is more than 50% likely of being realized upon ultimate settlement. The Company considers many factors when evaluating and estimating the Company's tax positions and tax benefits; which may require periodic adjustments. At September 30, 2011, the Company did not record any liabilities for uncertain tax positions.follows:

Share-Based Compensation

Asset Category		Depreciation/Amortization Period
Building		40 Years
Plant Equipment		15 Years
Furniture and Fixture		3 Years
Office Equipment		3 Years
Leasehold improvements		5 Years

~~The Company~~Goodwill ~~applies~~and ~~Topic~~Other ~~718 “Share-Based Payments” (“Topic 718”) to share-based compensation; which requires~~Intangible ~~the~~Assets measurement of the cost of services received in exchange for an award of an equity instrument based on the grant-date fair value of the award. Compensation cost is recognized when the event occurs. The Black-Scholes option-pricing model is used to estimate the fair value of options granted.

~~Concentration~~The Company adopted Statement of Financial Accounting Standard (“FASB”) Accounting Standards Codification (“ASC”) Topic 350 Goodwill and Other Intangible Assets, effective July 1, 2002. In accordance with (“ASC Topic 350”) "Goodwill and Other Intangible Assets", goodwill represents the excess of ~~Credit~~the ~~Risk~~purchase price and related costs over the value assigned to net tangible and identifiable intangible assets of businesses acquired, and accounted for, under the purchase method acquired in business combinations is assigned to reporting units that are expected to benefit from the synergies of the combination as of the acquisition date. Under this standard, goodwill and intangibles with indefinite useful lives are no longer amortized. The Company assesses goodwill and indefinite-lived intangible assets for impairment annually during the fourth quarter; or more frequently if events and circumstances indicate impairment may have occurred in accordance with ASC Topic 350. If the carrying value of a reporting unit's goodwill exceeds its implied fair value, the Company records an impairment loss equal to the difference. ASC Topic 350 also requires that the fair value of indefinite-lived purchased intangible assets be estimated and compared to the carrying value. The Company recognizes an impairment loss when the estimated fair value of the indefinite-lived purchased intangible assets is less than the carrying value.

~~The Company~~Impairment ~~maintains~~of ~~its~~Long-Lived ~~operating cash balances in banks located in Irvine, California, and Charlotte, North Carolina. The Federal Depository Insurance Corporation (FDIC) insures accounts at each institution up to $250,000.~~Assets

~~Earnings~~In accordance with ASC Topic 365, long-lived ~~Per~~assets, ~~Share~~such as property, plant, equipment, and purchased intangibles, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Goodwill and other intangible assets are tested for impairment. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. There were no events or changes in circumstances that necessitated an impairment of long-lived assets.

~~Basic income~~Income (loss) per share is computed by dividing net income (loss) available to common shareholders by the weighted average number of common shares outstanding during the reporting period. Diluted earnings per share reflects the potential dilution that could occur if stock options, warrants, and other commitments to issue common stock, were exercised; or equity awards vest resulting in the issuance of common stock that could share in the earnings of the Company. Diluted loss per share is the same as basic loss per share because the effects of the additional securities, a result of the net loss would be anti-dilutive. Taxes

~~The~~Deferred income taxes are provided based on ~~Company's financial instruments consist~~the ~~primarily~~provisions of ~~cash~~ASC Topic 740, "Accounting for Income Taxes", to reflect the tax consequences in future years of differences between the tax bases of assets and ~~accounts payable~~liabilities, and their financial reporting amounts based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.

~~Fair~~The ~~Value~~Company adopted the provisions of ~~Financial~~ASC ~~Instruments~~Topic 740; "Accounting For Uncertainty In Income Taxes-An Interpretation Of ASC Topic 740 ("ASC Topic 740"). ASC Topic 740 contains a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not that the position will be sustained on audit; including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount; which is more than 50% likely of being realized upon ultimate settlement. The Company considers many factors when evaluating and estimating the Company's tax positions and tax benefits; which may require periodic adjustments. At September 30, 2011, the Company did not record any liabilities for uncertain tax positions.

The Company's financial instruments consist primarily of cash, accounts payable and accrued expenses, and debt. The carrying amounts of such financial instruments approximate their respective estimated fair value due to the shortShare-~~term maturities~~Based and approximate market interest rates of these instruments. The estimated fair value is not necessarily indicative of the amounts the Company would realize in a current market exchange, or from future earnings or cash flows.Compensation

The Company ~~adopted~~applies ~~ASC~~ Topic ~~820,~~718 ~~Fair Value~~“Share-Based ~~Measurements~~Payments” (“~~ASC~~ Topic ~~820~~718”); ~~which~~to ~~defines~~share-based ~~fair~~compensation; ~~value,~~which ~~establishes~~requires athe ~~framework~~measurement ~~for~~of ~~measuring~~the ~~fair~~cost ~~value,~~of ~~and~~services ~~expands~~received ~~disclosures~~in ~~about~~exchange ~~fair~~for ~~value~~an ~~measurements. The~~award ~~standard provides a consistent definition~~ of ~~fair value; which focuses on~~ an ~~exit~~equity ~~price~~instrument ~~that~~based ~~would~~on bethe ~~received~~grant-date ~~upon~~fair ~~sale~~value of anthe ~~asset,~~award. Compensation orcost ~~paid~~is ~~to transfer a liability in an orderly transaction between~~recognized ~~market~~when ~~participants at~~ the ~~measurement~~event ~~date~~occurs. The ~~standard~~Black-Scholes ~~also~~option-pricing ~~prioritizes,~~model ~~within~~is ~~the~~used ~~measurement~~to ofestimate ~~fair value,~~ the ~~use~~ ~~of market-based information over entity specific information; and establishes a three-level hierarchy for~~ fair value ~~measurements based on the nature~~ of ~~inputs~~options ~~used in the valuation of an asset or liability as of the measurement date~~granted.

~~The three-level hierarchy for fair value measurements~~Concentration isof ~~defined~~Credit ~~as follows:~~Risk

Level 1	Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.
Level 2	Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable or the asset or liability other than quoted prices, either directly or indirectly including inputs in markets that are not considered to be active.
Level 3	Inputs to the valuation methodology are unobservable and significant to the fair value

The Company maintains its operating cash balances in banks located in Irvine, California, and Charlotte, North Carolina. The Federal Depository Insurance Corporation (FDIC) insures accounts at each institution up to $250,000.

~~Reclassification~~(9)

~~Certain prior~~Table ~~period~~of ~~amounts have been reclassified to conform to current year presentations.~~Contents

~~Recently Issued~~Earnings ~~Accounting~~Per ~~Standards~~Share

~~The~~Basic income (loss) per share is computed by ~~Company~~dividing ~~has~~net ~~reviewed~~income ~~all~~(loss) ~~recently~~available ~~issued~~to common shareholders by the weighted average number of common shares outstanding during the reporting period. Diluted earnings per share reflects the potential dilution that could occur if stock options, ~~but~~warrants, ~~not~~and other ~~yet~~commitments ~~effective~~to issue common stock, ~~accounting~~were ~~pronouncements~~exercised; ~~and~~or ~~does~~equity ~~not~~awards ~~believe~~vest resulting in the ~~future~~issuance ~~adoption~~of common stock that could share in the earnings of ~~any~~the ~~such~~Company. ~~pronouncements~~Diluted ~~may~~loss beper ~~expected~~share tois ~~cause~~the asame ~~material~~as ~~impact~~basic onloss ~~its~~per ~~consolidated~~share ~~financial~~because ~~condition,~~the oreffects of the ~~consolidated~~additional ~~results~~securities, a result of ~~its~~the ~~operations~~net loss would be anti-dilutive.

~~In July~~The ~~2012, the FASB issued ASU No.~~Company's ~~2012-02, “Testing Indefinite-Lived Intangible Assets for Impairment”.~~financial instruments consist ~~The~~primarily ~~guidance allows companies to perform a “qualitative” assessment to determine whether further impairment testing~~ of ~~indefinite-lived intangible assets is necessary~~cash, ~~similar~~and ~~in approach to the goodwill impairment test~~accounts payable.

~~ASU 2012-02~~Fair ~~allows~~Value companies the option to first assess qualitatively whether it is more likely than not that an indefinite-lived intangible asset is impaired before determining whether it is necessary to perform the quantitative impairment test. An entity is not required to calculate the fair value of anFinancial indefinite-lived intangible asset and perform the quantitative impairment test unless the entity determines that it is more likely than not that the asset is impaired. Companies can choose to perform the qualitative assessment on none, some, or all, of its indefinite-lived intangible assets; or choose to only perform the quantitative impairment test for any indefinite-lived intangible in any period.Instruments

~~In August~~The ~~2012,~~Company's ~~the~~financial ~~FASB~~instruments ~~issued~~consist primarily ~~ASU~~of ~~2012-03~~cash, ~~“Technical~~accounts ~~Amendments~~payable and ~~Corrections~~accrued toexpenses, ~~SEC~~and ~~Sections:~~debt. ~~Amendments~~The carrying amounts toof ~~SEC Paragraphs~~such financial instruments approximate ~~Pursuant~~their torespective estimated ~~SEC~~fair ~~Staff~~value ~~Accounting~~due ~~Bulletin (SAB) No. 114. , Technical Amendments Pursuant~~ to ~~SEC~~the ~~Release No. 33~~short-~~9250,~~term maturities and ~~Corrections Related~~approximate tomarket ~~FASB~~interest ~~Accounting~~rates ~~Standards Update 2010-22 (SEC Update)” in Accounting Standards Update No~~of these instruments. The ~~2012-03.~~estimated ~~This~~fair ~~update amends~~value ~~various~~is ~~SEC~~not ~~paragraphs~~necessarily ~~pursuant~~indicative toof the ~~issuance~~amounts ofthe ~~SAB~~Company ~~No.~~would ~~114.~~realize ~~The~~in ~~adoption of ASU 2012-03 is not expected to have~~ a ~~material~~current market exchange, ~~impact~~or onfrom ~~our~~future ~~financial~~earnings ~~position~~ or ~~results~~cash ~~of operations~~flows.

~~In October~~The ~~2012,~~Company ~~the~~adopted ~~Financial~~ASC ~~Accounting~~Topic ~~Standards~~820, ~~Board~~Fair Value Measurements (~~FASB~~“ASC Topic 820”); ~~issued~~which ~~Accounting~~defines ~~Standards~~fair ~~Update~~value, ~~(ASU)~~establishes ~~2012-04~~a framework for measuring fair value, ~~“Technical~~and expands ~~Corrections~~disclosures ~~and~~about ~~Improvements”~~fair value measurements. The standard provides a consistent definition of fair value; which focuses on an exit price that would be received upon sale of an asset, or paid to transfer a liability in ~~Accounting~~an ~~Standards~~orderly ~~Update~~transaction Nobetween market participants at the measurement date. The ~~2012~~standard also prioritizes, within the measurement of fair value, the use of market-~~04.~~based ~~The~~information ~~amendments~~over inentity ~~this~~specific ~~update~~information; ~~cover~~and establishes a ~~wide~~three-level ~~range~~hierarchy for fair value measurements based on the nature of ~~Topics~~inputs used in the ~~Accounting~~valuation ~~Standards~~of ~~Codification~~an asset or liability as of the measurement date.

~~These amendments~~The ~~include~~three-level ~~technical~~hierarchy ~~corrections~~for ~~and improvements to the Accounting Standards Codification and conforming amendments related to~~ fair value measurements~~. The amendments in this update will be effective for fiscal periods beginning after December 15, 2012.~~ ~~The adoption of ASU 2012-04~~ is ~~not~~defined ~~expected~~as ~~to have a material impact on our financial position or results of operations.~~follows:

~~No other~~Level ~~accounting~~1 ~~standards~~– orInputs ~~interpretations~~to ~~issued~~the ~~recently~~valuation methodology are ~~expected~~quoted toprices a(unadjusted) ~~have~~for aidentical ~~material~~assets ~~impact~~or onliabilities ~~the~~in ~~Company’s consolidated~~active ~~financial position, operations, or cash flows~~markets.

~~(8)~~Level 2 – Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable or the asset or liability other than quoted prices, either directly or indirectly including inputs in markets that are not considered to be active.

~~Table~~Level of3 ~~Contents~~– Inputs to the valuation methodology are unobservable and significant to the fair value

~~NOTE 4 - NET LOSS PER SHARE~~Reclassification

~~The net~~Certain ~~loss~~prior ~~per~~period ~~common~~amounts ~~share~~have isbeen ~~calculated~~reclassified to byconform ~~dividing~~to ~~the~~current ~~income~~year ~~and loss by the weighted average number of shares outstanding during the periods~~presentations.

~~The following~~Recently ~~table~~Issued ~~represents~~Accounting ~~the computation of basic and diluted income and losses per share:~~Standards

		For the Three Months Ended
		March 31, 2013		March 31, 2012
Net Loss for common shareholders	$	(744,128)	$	(654,630)
Weighted average common shares outstanding	$	184,927,248	$	57,398,748
Basic and fully diluted net loss per share	$	(.00)	$	(.01)
Net loss per share is based upon the weighted average shares of common stock outstanding

The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and does not believe the future adoption of any such pronouncements may be expected to cause a material impact on its consolidated financial condition, or the consolidated results of its operations.

~~The~~In July 2012, the FASB issued ASU No. 2012-02, ~~effect~~“Testing ofIndefinite-Lived ~~common~~Intangible ~~shares~~Assets ~~issuable~~for ~~under~~Impairment”. ~~convertible~~The ~~notes~~guidance isallows ~~Anti~~companies to perform a “qualitative” assessment to determine whether further impairment testing of indefinite-~~Dilutive~~lived ~~and~~intangible ~~not~~assets ~~included~~is necessary, similar in ~~diluted~~approach to ~~net~~the ~~loss~~goodwill ~~per~~impairment ~~share~~test.

~~NOTE~~ASU 2012-02 allows companies the option to 5first assess qualitatively whether it is more likely than not that an indefinite-lived ~~EQUITY~~intangible asset is impaired before determining whether it is necessary to perform the quantitative impairment test. An entity is not required to calculate the fair value of an indefinite-lived intangible asset and perform the quantitative impairment test unless the entity determines that it is more likely than not that the asset is impaired. Companies can choose to perform the qualitative assessment on none, some, or all, of its indefinite-lived intangible assets; or choose to only perform the quantitative impairment test for any indefinite-lived intangible in any period.

~~On December~~In ~~26,~~August 2012, the ~~Company~~FASB ~~amended~~issued ~~its~~ASU ~~Articles of Incorporation~~2012-03, “Technical Amendments and ~~increased~~Corrections ~~the~~to ~~authorized~~SEC ~~shares~~Sections: ofAmendments ~~common~~to ~~stock~~SEC ~~from~~Paragraphs ~~1,000,000,000~~Pursuant to 3SEC Staff Accounting Bulletin (SAB) No. 114. ,~~000,000,000~~ ~~shares~~Technical atAmendments $Pursuant to SEC Release No.~~001~~ ~~par~~33-9250, ~~value~~and Corrections Related to FASB Accounting Standards Update 2010-22 (SEC Update)” in Accounting Standards Update No. ~~There~~2012-03. This update amends various SEC paragraphs pursuant ~~are~~to ~~852,950,389~~the ~~shares~~issuance of ~~common~~SAB ~~stock~~No. ~~issued~~114. ~~and~~The ~~outstanding as~~adoption of ~~March~~ASU ~~31,~~2012-03 ~~2013~~is not expected to have a material impact on our financial position or results of operations.

~~On June~~In 6,October 2012, ~~our~~the ~~Board~~Financial ofAccounting ~~Directors~~Standards Board ~~passed~~(FASB) aissued ~~resolution,~~Accounting ~~and~~Standards ~~declared~~Update a(ASU) ~~stock~~2012-04, ~~dividend~~“Technical toCorrections ~~distribute~~and toImprovements” ~~all~~in ~~registered shareholders~~Accounting ofStandards ~~record~~Update onNo. ~~or before July 13,~~ 2012~~, on a 10 for 2 basis~~-04. The ~~Company issued~~amendments ~~two~~in ~~(2)~~this ~~shares~~update ofcover ~~common~~a ~~stock~~wide ~~for~~range ~~every ten (10) shares~~ of ~~common~~Topics ~~stock~~in ~~held by~~ the ~~shareholders~~Accounting ofStandards ~~record~~Codification.

~~The Company~~These ~~has~~amendments ~~authorized~~include atechnical ~~total~~corrections and ofimprovements ~~10,000,000~~to ~~shares~~the ofAccounting ~~Preferred~~Standards ~~Stock~~Codification ~~with~~and aconforming ~~par~~amendments ~~value~~related ofto ~~$0.001~~fair ~~per~~value ~~share~~measurements. OnThe ~~September 29,~~amendments ~~2008,~~in ~~the~~this ~~Company~~update ~~authorized~~will ~~100,000~~be ~~Series~~effective Afor ~~Preferred~~fiscal ~~shares,~~periods ~~and~~beginning ~~232,080~~after ~~Series~~December B15, ~~Preferred Shares of stock~~2012. AsThe adoption of ~~September 30,~~ASU 2012,-04 ~~there~~is ~~were~~not noexpected to ~~Series~~have Aa ~~preferred~~material ~~shares~~impact ~~issued~~on ~~and~~our ~~outstanding,~~financial ~~and~~position aor ~~total~~results of ~~232,080 Series B preferred shares issued and outstanding~~operations.

~~RECENT~~In April 2013, the FASB issued ASU No. 2013-07, ~~SALES~~Presentation OFof ~~UNREGISTERED~~Financial ~~SECURITIES~~Statements (Topic 205): Liquidation Basis of Accounting (“ASU 2013-07"). With ASU 2013-07, the FASB amends the guidance in the FASB Accounting Standards Codification [FASB ASC] Topic 205, entitled Presentation of Financial Statements. The amendments serve to clarify when and how reporting entities should apply the liquidation basis of accounting. The guidance is applicable to all reporting entities, whether they are public or private companies or not-for-profit entities. The guidance also provides principles for the recognition of assets and liabilities and disclosures, as well as related financial statement presentation requirements. With the new guidance, reporting entities in liquidation are required to prepare financial statements using a basis of accounting that communicates information to users of the financial statements to enable those users to develop expectations about how much the reporting entities will have available for distribution to investors after disposing of its assets and settling its obligations. The requirements in ASU 2013-07 are effective for annual reporting periods beginning after December 15, 2013, and interim reporting periods within those annual periods. Reporting entities are required to apply the requirements in ASU 2013-07 prospectively from the day that liquidation becomes imminent. Early adoption is permitted.

~~Common~~No other accounting standards or interpretations ~~Stock~~issued ~~Issued~~recently are expected to a have a material impact on the Company’s consolidated financial position, operations, or cash flows.

~~For First Quarter Period Ending March 31, 2013~~(10)

~~At March~~Table 3,of ~~2013, there were no outstanding stock options or warrants.~~Contents

~~On January~~NOTE ~~29,~~4 ~~2013,~~- ~~the~~NET ~~Company~~LOSS ~~completed~~PER the final, and full, conversion of one of its Notes payable, dated July 9, 2012, for a Note with a principle amount of $42,500, and a total of 20,723,759 common shares were issued. The final conversion of the Note included $42,500 in principal and $1,700 in accrued interest that was due on the Note upon conversion. This leaves a remaining balance of $0.00 on this Note. This conversion of debt reduced the Company’s Notes Payables by a principal amount of $42,500.SHARE

~~On January~~The ~~31,~~net ~~2013,~~loss ~~the~~per ~~Company~~common ~~completed~~share ~~the~~is ~~final, and full, conversion of one of its Notes payable dated March 7, 2012, for a~~calculated ~~Note~~by ~~with~~dividing ~~a principle amount of $30,000, and a total of 20,909,090 common shares were issued. The final conversion of~~ the ~~Note included~~income ~~$30,000 in principal~~ and ~~$4,500~~loss inby ~~accrued interest that was due on~~ the ~~Note~~weighted ~~upon~~average ~~conversion.~~number ~~This leaves a remaining balance~~ of ~~$0.00~~shares onoutstanding ~~this~~during ~~Note. This conversion of debt reduced~~ the ~~Company’s Notes Payables by a principal amount of $30,000~~periods.

~~On February~~The ~~13,~~following ~~2013,~~table ~~the~~represents ~~Company completed~~ the ~~final, and full, conversion of one of its Notes, payable dated May 21, 2012, for~~computation ~~a Note with a principle amount~~ of ~~$45,000,~~basic and adiluted ~~total~~income ~~of 37,111,112 common shares were issued. The final conversion of the Note included $45,000 in principal~~ and ~~$5,100~~losses inper accrued interest that was due on the Note upon conversion. This leaves a remaining balance of $0.00 on this Note. This conversion of debt reduced the Company’s Notes Payables by a principal amount of $45,000.share:

On February 15, 2013, the Company completed a partial conversion one of its Notes payable, dated March 30, 2012, with a principal amount of $123,600. A total of $29,500 worth of the Note was converted, and 29,500,000 common shares were issued for that part of the conversion; which leaves a remaining balance of $69,100 of the principal of the Note. No accrued interest was due on the Note upon conversion. This conversion of debt reduced the Company’s Notes Payables by $29,500. The conversion rate was reduced from $0.005 to $0.001 by resolution of Board of Directors to offset declines in the stock price. The stock closing price was $0.0045 on the issue date.

		For the Three Months Ended September 30, 2013		For the Three Months Ended September 30, 2012

Net Loss for common shareholders	$	(313,768)	$	(1,723,168)

Weighted average common shares outstanding		2,511,296,738		487,211,246

Basic and fully diluted net loss per share	$	*	$	*

Net loss per share is based upon the weighted average shares of common stock outstanding

On*Net ~~March~~Loss ~~14,~~per ~~2013,~~share ~~the~~is ~~Company~~less ~~converted~~than ~~one of its Notes payable, dated August 9, 2012, with a principle amount of~~ $38,000, and issued 30,984,615 common shares for that conversion. The final conversion of the Note included $38,000 in principal and $2,280 in accrued interest that was due on the Note upon conversion. This leaves a remaining balance of $(0.~~00 on this Note. This conversion of debt reduced the Company’s Notes Payables by a principal amount of $38,000.~~01)

~~On March~~The ~~14,~~effect ~~2013, the Company converted one~~ of ~~its Notes payable, dated December 31, 2011, with a principle amount of $40,500, and issued 16,200,000~~ common shares ~~for~~issuable ~~that~~under convertible ~~conversion.~~notes ~~The~~is ~~final~~Anti-Dilutive ~~conversion~~and ofnot ~~the Note~~ included ~~$40,500~~ in ~~principal~~diluted ~~and~~net ~~$0.00 in~~loss ~~accrued~~per ~~interest that was due on the Note upon conversion~~share. This leaves a remaining balance of $0.00 on this Note. This conversion of debt reduced the Company’s Notes Payables by a principal amount of $40,500. The conversion rate was reduced from $0.02 to $0.025 by resolution of Board of Directors to offset declines in the stock price. The stock closing price was $0.0029 on the issue date.

~~On March~~NOTE ~~15,~~5 ~~2012, the Company completed a partial conversion of one of its Notes Payables, dated December 31, 2010, with a Note amount of $136,000. A total of $60,000 worth of the Note was converted by a non~~-~~affiliate~~ assignee, and 24,000,000 common shares were issued for that conversion. No accrued interest was due on the Note upon conversion. This leaves a remaining balance of $76,000 on this Note. This conversion of debt reduced the Company’s Notes Payables by $60,000. The conversion rate was reduced from $0.015 to $0.025 by resolution of Board of Directors to offset declines in the stock price. The stock closing price was $0.0029 on the issue date.EQUITY

~~Issuance~~On December 26, 2012, the Company amended its Articles of ~~Preferred~~Incorporation, ~~Shares~~and increased the authorized shares of common stock from 1,000,000,000 to 3,000,000,000 shares at $.001 par value. There are 2,478,570,850 shares of common stock issued and outstanding as of September 30, 2013.

~~More detailed~~On ~~information~~December ~~about~~26, 2012, the ~~issuance~~ Board of ~~preferred~~Directors ~~shares~~increased ~~was~~the ~~discussed~~total innumber ~~our~~of ~~Annual~~authorized ~~Report~~shares onof ~~Form~~Preferred ~~10-K/A~~Stock ~~for~~to ~~the~~10,000,000 ~~fiscal~~shares ~~year ended~~with ~~December~~a ~~31,~~par ~~2011~~value of $0.001 ~~The~~per ~~information~~share. isAs ~~fully~~of ~~discussed~~September in30, ~~Part II~~2013, ~~Item~~there 8.were ~~– Note 4 – Equity~~1, ~~“Preferred Stock”~~000,000 ~~pages~~Series 41A ~~through~~Preferred ~~42.~~Shares ~~There~~issued ~~have~~and ~~been~~outstanding, noand ~~material~~a ~~changes~~total of ~~from~~232,080 ~~the~~Series ~~information~~B ~~previously~~preferred ~~disclosed~~shares inissued ~~that~~and ~~Form 10-K/A~~outstanding.

~~NOTE 6~~RECENT -SALES ~~PROPERTY~~OF ~~AND~~UNREGISTERED ~~EQUIPMENT~~SECURITIES

~~The Company~~Common ~~has~~Stock ~~property and equipment as of March 31, 2013 and December 31, 2012 as follows:~~ Issued

		March 31, 2013		December 31, 2012
Equipment	$	13,094	$	13,094
Land		-		-
Building		-		-
Accumulated depreciation		(6,759)		(6,105)
Total	$	6,335	$	6,989

For First Quarter Period Ending September 30, 2013

~~There was~~At ~~$654~~September ~~and~~30, ~~$654~~2013, ~~depreciation expense~~there ~~for~~were ~~the~~no ~~three~~outstanding stock ~~months~~options ~~ended~~or ~~March 3, 2013 and 2012 respectively~~warrants.

~~(9)~~On July 15, 2013 the Company completed the final and full conversion of one of its Notes payable dated December 31, 2012, for a Note with a principle amount of $32,500, and a total of 34,634,967 common shares were issued. The final conversion of the Note included $32,500 in principal and $1,300 in accrued interest that was due on the Note upon conversion. This leaves a remaining balance of $0.00 on this Note. This conversion of debt reduced the Company’s Notes Payables by a principal amount of $32,500.

~~Table~~On July 25, 2013, the Company approved a Stock Purchase Agreement between the Company and an affiliated party, whereby the Company re-purchased 300,000,000 shares of ~~Contents~~the Company’s common stock from that party in a private transaction. The Company subsequently cancelled the shares of common stock and returned them to the Corporate treasury. The 300 million shares represented 12% of the Company’s 2,538,903,268 outstanding shares of common stock that were indicated in our Form 10-Q Report for the period ended March 31, 2013. The affliliated party was Global Energy Group LLC. The purchase price for the 300,000,000 million shares included 1,000,000 restricted Series A Preferred shares of stock and $37,000 in cash consideration.

~~NOTE~~On September 11, 2013, the Company completed 7a –partial ~~NOTES~~conversion ~~PAYABLE~~one of its amended Notes payable dated July 18, 2013 with a principal amount of $130,000. This was the third in a series of conversions for this Note, including one on July 31, 2013, one on August 15, 2013, and one on September 11, 2013. A total of $55,543 worth of the Note was converted, and 83,340,897 common shares were issued for these three partial conversions. Previously, on July 18, 2013, a non-affiliated party purchased four existing Notes in a private non-public transaction from a non-related creditor. An amended Note for $130,000 dated July 18, 2013 at 12% interest was issued to the new Note Holder. The amended Note consolidated the four original Notes, which included $96,200 in principal, $19,049 in accrued interest and a $14,751 premium. This conversion of debt reduced the Company’s Notes Payables by $55,543. A balance of $74,457 of principal remains on the modified Note.

	March 31, 2013			December 31, 2012
On August 30, 2010 the Company entered into a two (2) year convertible Promissory Note with a non-related creditor for $25,300 at 10% interest. The holder has the right to convert the note to common stock at $.05.		25,300			25,300
On August 30, 2010 the Company entered into a two (2) year convertible Promissory Note with a non-related creditor for $25,200 at 10% interest. The holder has the right to convert the note to common stock at $.05.		25,200			25,200
On December 3, 2010 the Company entered into a two (2) year convertible Promissory Note with a non-related creditor for $4800 at 10% interest. The holder has the right to convert the note to common stock at $.005. Conversion price changed to $0.002 by Board.		4,800			4,800
On December 31, 2010 the Company entered into a two (2) year convertible Promissory Note with its President and CEO, Vince M. Guest for $136,000 at 10% interest for the accrued compensation owed to him for the fiscal year 2010 in accordance with his Employment Agreement. The holder has the right to convert the note to common stock at $015. Conversion price change to $0.0025 by Board. On March 15, 2013, $60,000 worth of the Note was converted by a non-affliate assignee, leaving a balance of $76,000.		76,000			136,000
On December 31, 2010 the Company entered into a two (2) year convertible Promissory Note with its Vice President Solomon Ali, for $165,000 at 10% interest for the accrued compensation owed to him for the fiscal year 2010 in accordance with his Employment Agreement. The holder has the right to convert the note to common stock at $015. On July 12, 2012, $100,000 worth of the Note was converted by non-affliates (assignees) to stock, leaving a balance of $65,000. Conversion price was changed to $0.005 by Board Resolution. Converion price changed to $0.015 by Board.		65,000			65,000
On January 18, 2011 the Company entered into a two (2) year convertible Promissory Note with a non-related creditor for $10,000 at 10% interest. The holder has the right to convert the note to common stock at $.005. *See note below.		10,000			10,000
On January 19. 2011 the Company entered into a two (2) year convertible Promissory Note with a non-related creditor for $10,000 at 10% interest. The holder has the right to convert the note to common stock at $.005. *See note below.		10,000			10,000
On March 14. 2011 the Company entered into a two (2) year convertible Promissory Note with a non-related creditor for $25,000 at 10% interest. The holder has the right to convert the note to common stock at $005.		25,000			25,000
On March 14. 2011 the Company entered into a two (2) year convertible Promissory Note with a non-related creditor for $25,000 at 10% interest. The holder has the right to convert the note to common stock at $005.		25,000			25,000
On October 2, 2011 the Company entered into a three (3) year convertible Promissory Note with a non-related creditor for $202,200 at 10% interest. The holder has the right to convert the note to common stock at $0.005. Conversion price changed to $0.002 by Board.		202,200			202,200
On October 23, 2011 the Company entered into a one (1) year convertible Promissory Note with a non-related creditor for $125,000 at 12% interest. The holder has the right to convert the note to common stock at a 30% discount to the market price. This Note was sold on May 11, 2012 to another creditor, and an additional late fee of $5,000 was added to the principal of the note. Conversion price changed to $0.002 by Board.		130,000			125,000
On December 31, 2011 the Company entered into a two (2) year convertible Promissory Note with its Vice President, Solomon Ali for $151,400 at 10% interest for the accrued compensation owed to him for the fiscal year 2011 in accordance with his Employment Agreement. The holder has the right to convert the note to common stock at $0.01. Conversion price changed to $0.0025 by Board.		151,400			151,400
On December 31, 2011 the Company entered into a two (2) year convertible Promissory Note with its Manager of Business Development, Don Deluna, for $40,500 at 10% interest for the accrued compensation owed to him for the fiscal year 2011 in accordance with his Employment Agreement. The holder has the right to convert the note to common stock at $0.02. Conversion price changed to $0.0025 On March 14, 2013 this Note was converted to stock.		—			40,500
On December 31, 2011 the Company entered into a two (2) year convertible Promissory Note with its President and CEO, Vince M. Guest for $162,175 at 10% interest for the accrued compensation owed to him for the fiscal year 2011 in accordance with his Employment Agreement. The holder has the right to convert the note to common stock at $0.01. Conversion price changed to $0.0025 by Board.		162,175			162,175
On December 31, 2011 the Company entered into a two (2) year convertible Promissory Note with a non-related creditor for $14,407.92 at 12% interest for consulting services provided to the Company in accordance with their Consulting Agreement. The holder has the right to convert the note to common stock on July 1, 2012 at $0.01.		14,407			14,407
On February 20, 2012 the Company entered into a two (2) year Promissory Note with a non-related creitor for $2,000,000 at 12% interest. The holder has the right to convert the note to common stock at a 30% discount to market at the time of conversion. Conversion price changed to $0.002 by Board.		2,000,000			2,000,000
On February 29, 2012 the Company entered into a three (3) year convertible Promissory Note with a non-related creditor for $122,800 at 12% interest. The holder has the right to convert the note to common stock at $0.005. Conversion price changed to $0.002 by Board.		122,800			122,800
On March 7, 2012 the Company entered into a one (1) year convertible Promissory Note with a non-related creditor for $30,000 at 12% interest. The holder has the right to convert the note to common stock at a 50% discount to the market price. On January 31, 2013, this Note was converted to stock.		—			30,000
On March 15, 2012 the Company entered into a two (2) year convertible Promissory Note with a non-related creditor for $70,000 at 12% interest. The holder has the right to convert the note to common stock at $0.008. Conversion price changed to $0.002 by Board.		70,000			70,000
On March 30, 2012 the Company entered into a three (3) year convertible Promissory Note with a non-related creditor for $123,600 at 12% interest. The holder has the right to convert the note to common stock at $0.005. On November 20, 2012, $25,000 worth of the Note was converted leaving a $98,600 balance. On February 15, 2013, $29,500 worth of the Note was converted leaving a $69,100 balance.		69,100			98,600
On April 30, 2012 the Company entered into a three (3) year Promissory Note with a non-related creditor for $75,000 at 12% interest. The holder has the right to convert the note to common stock at a fixed conversion price of $0.005 per share. Conversion price changed to $0.002 by Board.		75,000			75,000
On May 21, 2012 the Company entered into a eight (8) month convertible Promissory Note with a non-related creditor for $45,000 at 12% interest. The holder has the right to convert the note to common stock at a variable conversion price at 50% discount to the market price at the time of conversion. On February 13, 2013, this Note was converted to stock.		—			45,000
On May 30, 2012 the Company entered into a three (3) year Promissory Note with a non-related creditor for $31,100 at 12% interest. The holder has the right to convert the note to common stock at a fixed conversion price of $0.005 per share. Conversion price changed to $0.002 by Board.		31,100			31,100
On June 30, 2012 the Company entered into a three (3) year Promissory Note with a non-related creditor for $50,200 at 12% interest. The holder has the right to convert the note to common stock at a fixed conversion price of $0.005 per share. Conversion price changed to $0.002 by Board.		50,200			50,200
On July 2, 2012 the Company entered into a two (2) year Promissory Note with its Vice President, Solomon Ali for $174,000 at 10% interest for a “special performance bonus” awarded him in accordance with his Employment Agreement. The Holder has the right to convert the Note to common stock at $0.005. Conversion price changed to $0.0025 by Board.		174,000			174,000
On July 2, 2012 the Company entered into a two (2) year Promissory Note with its President, Vince M. Guest for $174,000 at 10% interest for a “special performance bonus” awarded him in accordance with his Employment Agreement. The Holder has the right to convert the Note to common stock at $0.005. Conversion price changed to $0.0025 by Board.		174,000			174,000
On July 2, 2012 the Company entered into a two (2) year Promissory Note with its Manager of Business Development, Donald DeLuna for $35,250 at 10% interest for a “special performance bonus” awarded him in accordance with his Employment Agreement. The Holder has the right to convert the Note to common stock at $0.005. Conversion price changed to $0.0025 by Board.		35,250			35,250
On July 9, 2012 the Company entered into a nine (9) month convertible Promissory Note with a non-related creditor for $42,500 at 8% interest. The Holder has the right to convert the Note to common stock after six months at a variable conversion price at 50% discount to the market price at the time of conversion. Conversion price changed to $0.002 by Board. On January 29, 2013, this Note was converted to stock.		—			42,500
On July 12, 2012 the Company entered into a three (3) year Promissory Note with a non-related creditor for $36,000 at 10% interest. The Holder has the right to convert the Note to common stock at a fixed conversion price of $0.005 per share.		36,000			36,000
On July 30, 2012 the Company entered into a three (3) year Promissory Note with a non-related creditor for $52,600 at 12% interest. The Holder has the right to convert the Note to common stock at a fixed conversion price of $0.005 per share. Conversion price changed to $0.002 by Board.		52,600			52,600
On August 9, 2012 the Company entered into an eight (8) month convertible Promissory Note with a non-related creditor for $38,000 at 12% interest. The Holder has the right to convert the Note to common stock after six months at a variable conversion price at 50% discount to the market price at the time of conversion. Conversion price changed to $0.002 by Board. On March 13, 2013, this Note was converted to stock.		—			38,000
On August 30, 2012 the Company entered into a three (3) year Promissory Note with a non-related creditor for $21,000 at 12% interest. The Holder has the right to convert the Note to common stock at a fixed conversion price of $0.005 per share. Conversion price changed to $0.002 by Board.		21,000			21,000
On September 30, 2012 the Company entered into a three (3) year Promissory Note with a non-related creditor for $57,500 at 12% interest. The Holder has the right to convert the Note to common stock at a fixed conversion price of $0.005 per share. Conversion price changed to $0.002 by Board.		57,500			57,500
On October 10, 2012 the Company entered into a nine (9) month convertible Promissory Note with a non-related creditor for $42,500 at 8% interest. The Holder has the right to convert the Note to common stock after six months at a variable conversion price at 50% discount to the market price at the time of conversion.		42,500			42,500
On October 30, 2012 the Company entered into a three (3) year Promissory Note with a non-related creditor for $15,403 at 12% interest. The Holder has the right to convert the Note to common stock at a fixed conversion price of $0.002 per share.		15,403			15,403
On November 30, 2012 the Company entered into a three (3) year Promissory Note with a non-related creditor for $135,100 at 12% interest. The Holder has the right to convert the Note to common stock at a fixed conversion price of $0.002 per share.		135,100			135,100
On December 5, 2012 the Company entered into an seven (7) month convertible Promissory Note with a non-related creditor for $51,500 at 12% interest. The Holder has the right to convert the Note to common stock after six months at a variable conversion price at 50% discount to the market price at the time of conversion.		51,500			51,500
On December 30, 2012 the Company entered into a three (3) year Promissory Note with a non-related creditor for $121,150 at 12% interest. The Holder has the right to convert the Note to common stock at a fixed conversion price of $0.002 per share.		121,150			121,150
On December 31, 2012 the Company entered into an eight (8) month convertible Promissory Note with a non-related creditor for $42,500 at 8% interest. The Holder has the right to convert the Note to common stock after six months at a variable conversion price at 50% discount to the market price at the time of conversion.		42,500			42,500
On December 31, 2012 the Company entered into a two (2) year convertible Promissory Note with its Vice President, Solomon Ali for $162,500 at 10% interest for the accrued compensation owed to him for the fiscal year 2012 in accordance with his Employment Agreement. The holder has the right to convert the Note to common stock at $0.0025.		162,500			162,500
On December 31, 2012 the Company entered into a two (2) year convertible Promissory Note with its Manager of Business Development, Don Deluna, for $50,400 at 10% interest for the accrued compensation owed to him for the fiscal year 2012 in accordance with his Employment Agreement. The holder has the right to convert the Note to common stock at $0.0025.		50,400			50,400
On December 31, 2012 the Company entered into a two (2) year convertible Promissory Note with its President and CEO, Vince M. Guest for $130,000 at 10% interest for the accrued compensation owed to him for the fiscal year 2012 in accordance with his Employment Agreement. The holder has the right to convert the Note to common stock at $0.0025.		130,000			130,000
On December 31, 2012 the Company entered into a two (2) year convertible Promissory Note with a non-related creditor for $39,851.60 at 12% interest for consulting services provided to the Company in accordance with their Consulting Agreement. The holder has the right to convert the Note to common stock at $0.0025.		39,851			39,851
On February 28, 2013 the Company entered into a three (3) year Promissory Note with a non-related creditor for $18,000 at 12% interest. The Holder has the right to convert the Note to common stock at a fixed conversion price of $0.002 per share.		18,000			—
On March 18, 2013 the Company entered into a nine (9) month convertible Promissory Note with a non-related creditor for $42,500 at 8% interest. The Holder has the right to convert the Note to common stock after six months at a variable conversion price at 50% discount to the market price at the time of conversion. (Asher Enterprises)		42,500			—
On March 30, 2013 the Company entered into a three (3) year Promissory Note with a non-related creditor for $950.00 at 12% interest. The Holder has the right to convert the Note to common stock at a fixed conversion price of $0.002 per share.		950			—
Total long-term note payable	$	4,747,386		$	4,966,436
Less Current portion		(2,281,123	)		(248,395	)
Less Debt discount		(106,309	)		(125,091	)
Less Beneficial Conversion Feature		(1,138,941	)		(1,401,908	)
Long-term portion of notes payable	$	1,221,013		$	3,191,042

Issuance of Preferred Shares

On July 23, 2013, the Company issued One Million (101,000,000) restricted shares of its Series A Preferred Stock to an affiliated party, with each share having a stated value of One Dollar and Sixty Cents ($1.60), which shares have a total stated value equal to the sum of One Million Six Hundred Thousand Dollars ($1,600,000).The preferred shares granted to the shareholder are irrevocable and the shareholder is granted full rights, title and interests in the “shares”, on July 23, 2013. The preferred shares pay an annual cash dividend in the amount of fifteen percent (15%) or twenty four cents ($0.24) for each preferred share of stock held by the shareholder. The dividend payments shall be paid on a quarterly basis beginning on the last day of the first calendar quarter. In the event the Company cannot pay, or elects not to pay the dividend in cash, then the dividend will be paid in common stock, of which stock shall have a holding period that will begin and tack back to the date of the start of the holding period of the original preferred shares.

~~Table~~More detailed information about the issuance of ~~Contents~~preferred shares was discussed in our Annual Report on Form 10-K/A for the fiscal year ended December 31, 2011. The information is fully discussed in Part II, Item 8. – Note 4 – Equity, “Preferred Stock”, pages 41 through 42. There have been no material changes from the information previously disclosed in that Form 10-K/A.

~~Principal~~More ~~maturities~~detailed ofinformation ~~notes~~about ~~payable~~the asissuance of ~~March~~preferred ~~31,~~shares ~~2013,~~was discussed in our Annual Report on Form 10-K for the ~~next~~fiscal ~~five~~year ended ~~years~~June ~~and~~30, ~~thereafter~~2013. The information is asfully ~~follows:~~discussed in Part II, Item 8. – Note 4 – Equity, “Preferred Stock”. There have been no material changes from the information previously disclosed in that Form 10-K.

2013	$903,283
2014	$2,875,702
2015	$786,953
2016	$21,700
2017	$ -0-
Total	$4,750,138

NOTE 6 - PROPERTY AND EQUIPMENT

~~For the~~The ~~above~~Company ~~convertible~~has property ~~notes,~~and ~~pursuant~~equipment toas ~~ASC~~of ~~Topic~~September ~~470~~30, ~~the~~2013 ~~Company reviewed~~ and ~~determined~~June ~~that~~30, in2013 ~~most~~as ~~cases~~follows: a beneficial conversion feature existed since the conversion price was less than market price at the date the notes were issued. The beneficial conversion feature is amortized over the life of the note using the interest method.

* For more information on the Convertible Notes see Part II - Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations under “Debt”, and Item 8 - Note 7, “Notes Payable”, and Part I – Item 1A, “Risk Factors”, in our Annual Report on Form 10-K for the fiscal year ended December 31, 2011.

	September 30, 2013			June 30, 2013
Equipment		13,094		$	13,094
Land		—			—
Building		—			—
Accumulated depreciation		(8,753	)		(6,759	)
Total		4,341		$	6,335

~~(11)~~There was $654 and $654 depreciation expense for the three months ended September 30, 2013 and 2012 respectively.

~~Table of Contents~~(11)

~~Embedded Derivatives~~Table of Contents

~~Notes that~~NOTE ~~are~~7 ~~convertible~~– atNOTES ~~a discount to market are considered embedded derivatives. For more information on the Notes affected, refer to Management’s Discussion and analysis, and the above list.~~PAYABLE

Under Financial Accounting Standard Board (“FASB”), U.S. GAAP, Accounting Standards Codification, “Derivatives and Hedging”, ASC Topic 815 (“ASC 815”) requires that all derivative financial instruments be recorded on the balance sheet at fair value. Fair values for exchange traded securities and derivatives are based on quoted market prices. Where market prices are not readily available, fair values are determined using market based pricing models incorporating readily observable market data; requiring judgment and estimates.

		September 30,2013		June 30, 2013

On August 30, 2010 the Company entered into a two (2) year convertible Promissory Note with a non-related creditor for $25,200 at 10% interest. The holder has the right to convert the note to common stock at $.05. Note sold to non-related party and incorporated into Amended Note. See Amended Note dated July 18, below.*		-		25,200

On December 31, 2010 the Company entered into a two (2) year convertible Promissory Note with its President and CEO, Vince M. Guest for $136,000 at 10% interest for the accrued compensation owed to him for the fiscal year 2010 in accordance with his Employment Agreement. The holder has the right to convert the note to common stock at $015. Conversion price change to $0.0025 by Board. On March 15, 2013, $60,000 worth of the Note was converted by a non-affliate assignee, leaving a balance of $76,000.		76,000		76,000

On December 31, 2010 the Company entered into a two (2) year convertible Promissory Note with its Vice President Solomon Ali, for $165,000 at 10% interest for the accrued compensation owed to him for the fiscal year 2010 in accordance with his Employment Agreement. The holder has the right to convert the note to common stock at $015. On July 12, 2012, $100,000 worth of the Note was converted by non-affliates (assignees) to stock, leaving a balance of $65,000. Converion price changed to $0.015 by Board.		65,000		65,000

On January 19. 2011 the Company entered into a two (2) year convertible Promissory Note with a non-related creditor for $10,000 at 10% interest. The holder has the right to convert the note to common stock at $.005. See note below. Note sold to non-related party and incorporated into Amended Note. See Amended Note dated July 18, below.		-		10,000

On March 14. 2011 the Company entered into a two (2) year convertible Promissory Note with a non-related creditor for $25,000 at 10% interest. The holder has the right to convert the note to common stock at $005. Note sold to non-related party and incorporated into Amended Note. See Amended Note dated July 18, below.*		-		25,000

On December 31, 2011 the Company entered into a two (2) year convertible Promissory Note with a non-related creditor for $14,407.92 at 12% interest for consulting services provided to the Company in accordance with their Consulting Agreement. The holder has the right to convert the note to common stock on July 1, 2012 at $0.01.		14,407		14,407

On March 15, 2012 the Company entered into a two (2) year convertible Promissory Note with a non-related creditor for $70,000 at 12% interest. The holder has the right to convert the note to common stock at $0.008. Conversion price changed to $0.002 by Board. Partial conversion of $25,000 on April 24, 2013, leaving a balance of $45,000.		45,000		45,000

On July 2, 2012 the Company entered into a two (2) year Promissory Note with its President, Vince M. Guest for $174,000 at 10% interest for a “special performance bonus” awarded him in accordance with his Employment Agreement. The Holder has the right to convert the Note to common stock at $0.005. Conversion price changed to $0.0025 by Board.		174,000		174,000

On July 2, 2012 the Company entered into a two (2) year Promissory Note with its Manager of Business Development, Donald DeLuna for $35,250 at 10% interest for a “special performance bonus” awarded him in accordance with his Employment Agreement. The Holder has the right to convert the Note to common stock at $0.005. Conversion price changed to $0.0025 by Board.		35,250		35,250

On July 12, 2012 the Company entered into a three (3) year Promissory Note with a non-related creditor for $36,000 at 10% interest. The Holder has the right to convert the Note to common stock at a fixed conversion price of $0.005 per share. Note sold to non-related party and incorporated into Amended Note. See Amended Note dated July 18, below.*		-		36,000

On November 30, 2012 the Company entered into a three (3) year Promissory Note with a non-related creditor for $135,100 at 12% interest. The Holder has the right to convert the Note to common stock at a fixed conversion price of $0.002 per share.		135,100		135,100

On December 30, 2012 the Company entered into a three (3) year Promissory Note with a non-related creditor for $121,150 at 12% interest. The Holder has the right to convert the Note to common stock at a fixed conversion price of $0.002 per share.		121,150		121,150

On December 31, 2012 the Company entered into an eight (8) month convertible Promissory Note with a non-related creditor for $32,500 at 8% interest. The Holder has the right to convert the Note to common stock after six months at a variable conversion price at 50% discount to the market price at the time of conversion. Note converted to stock on July 15, 2013.		-		32,500

On December 31, 2012 the Company entered into a two (2) year convertible Promissory Note with its Vice President, Solomon Ali for $162,500 at 10% interest for the accrued compensation owed to him for the fiscal year 2012 in accordance with his Employment Agreement. The holder has the right to convert the Note to common stock at $0.0025.		162,500		162,500

On December 31, 2012 the Company entered into a two (2) year convertible Promissory Note with its Manager of Business Development, Don Deluna, for $50,400 at 10% interest for the accrued compensation owed to him for the fiscal year 2012 in accordance with his Employment Agreement. The holder has the right to convert the Note to common stock at $0.0025.		50,400		50,400

On December 31, 2012 the Company entered into a two (2) year convertible Promissory Note with its President and CEO, Vince M. Guest for $130,000 at 10% interest for the accrued compensation owed to him for the fiscal year 2012 in accordance with his Employment Agreement. The holder has the right to convert the Note to common stock at $0.0025.		130,000		130,000

On December 31, 2012 the Company entered into a two (2) year convertible Promissory Note with a non-related creditor for $39,851.60 at 12% interest for consulting services provided to the Company in accordance with their Consulting Agreement. The holder has the right to convert the Note to common stock at $0.0025.		39,851		39,851

On February 28, 2013 the Company entered into a three (3) year Promissory Note with a non-related creditor for $18,000 at 12% interest. The Holder has the right to convert the Note to common stock at a fixed conversion price of $0.002 per share.		18,000		18,000

On March 18, 2013 the Company entered into a nine (9) month convertible Promissory Note with a non-related creditor for $42,500 at 8% interest. The Holder has the right to convert the Note to common stock at a variable conversion price at 50% discount to the market price at the time of conversion.		42,500		42,500

On March 30, 2013 the Company entered into a three (3) year Promissory Note with a non-related creditor for $950.00 at 12% interest. The Holder has the right to convert the Note to common stock at a fixed conversion price of $0.002 per share.		950		950

On April 1, 2013, a non-afilliated party purchased $49,000 of the principal of a $123,600 Note dated March 20, 2012, in a private non-public transaction. The Holder paid $7,000 as a premium for $49,000 of principal. A modified Note for $56,000 was issued to the new Note Holder. On April 23, 2013, the Company completed a partial conversion one of its amended Notes payable. A total of $49,000 worth of the Note was converted to common shares at a 50% discount to market prices. That part of the conversion this debt reduced the Company’s Notes Payables by $49,000. A Balance of $7,000 remains on the modified Note.		7,000		7,000

On April 1, 2013 the Company entered into a nine (9) month convertible Promissory Note with a non-related creditor for $19,500 at 12% interest. The Holder has the right to convert the Note to common stock at a variable conversion price at 50% discount to the market price at the time of conversion.		19,500		19,500

On April 30, 2013 the Company entered into a three (3) year convertible Promissory Note with a non-related creditor for $44,500 at 12% interest. The Holder has the right to convert the Note to common stock at $0.002.		44,500		44,500

On June 12, 2013 the Company entered into a nine (9) month convertible Promissory Note with a non-related creditor for $53,000 at 8% interest. The Holder has the right to convert the Note to common stock at a variable conversion price at 50% discount to the market price at the time of conversion.		53,000		53,000

*On July 18, 2013 the Company issued an Amended twelve (12) month Convertible Promissory Note with a non-related creditor for $130,000 at 12% interest. The Holder purchased four existing Promissory Notes from another Note Holder in a private non-public transaction. The Amended Note consolidated the four original Notes, which included $96,200 in principal, $19,049 in accrued interest and a $14,751 premium. The Holder has the right to convert the Promissory Note to common stock at a variable conversion price at 50% discount to the market price at the time of conversion. As of September 30, 2013, a total of $55,543 worth of the Note was converted to stock.		74,457		-

On July 18, 2013 the Company entered into a twelve (12) month convertible Promissory Note with a non-related creditor for $43,500 at 12% interest. The Holder has the right to convert the Note to common stock at a variable conversion price at 50% discount to the market price at the time of conversion.		43,500		43,500

On September 30, 2013, the Company entered into a three (3) year Promissory Note with a non-related creditor for $28,700 at 12% interest. The Holder has the right to convert the Note to common stock at a fixed conversion price of $0.00115 per share.		28,700		28,700

Total long-term note payable	$	1,380,767	$	1,362,810
Less Current portion		(441,785)		(150,821)
Less Debt discount		(56,773)		(104,685)
Less Convertible notes, net		(88,092)		(131,056)
Less Beneficial Conversion Feature		(80,564)		(131,056)
Long-term portion of notes payable	$	713,553	$	976,248

The Company issued convertible Notes, and has evaluated the terms and conditions of the conversion features contained in the Notes to determine whether they represent embedded or freestanding derivative instruments under the provisions of ASC 815. The Company determined that the conversion features contained in the Notes represent freestanding derivative instruments that meet the requirements for liability classification under ASC 815. As a result, the fair value of the derivative financial instruments in the Notes is reflected in the Company’s balance sheet as a liability. The fair value of the derivative financial instruments of the convertible Notes and warrants was measured at the inception date of the Notes and warrants, and each subsequent balance sheet date. Any changes in the fair value of the derivative financial instruments are recorded as non-operating, non-cash income, or expense at each balance sheet date.(12)

~~The Company~~Table ~~valued the conversion features in its convertible Notes using the Black-Scholes model. The Black-Scholes model values the embedded derivatives based on a risk-free rate~~ of return ranging from 0.14% to 0.15%, grant dates of Notes, the term of the Notes, conversion prices ranging from 30% to 50% of current stock prices on the measurement date ranging from $0.0013 to $0.0022, and the computed measure of the Company’s stock volatility, ranging from 185.15% to 186.83%.Contents

~~Included~~Principal inmaturities ~~the March 31, 2013, is a derivative liability in the amount~~ of ~~$225,393~~notes ~~to account~~payable ~~for this transaction. This liability arose in the second quarter of 2012, and the balance was $350,237~~ as of ~~December~~September 3130, ~~2012. It will be revalued quarterly henceforth~~2013, ~~and~~for ~~adjusted as a gain or loss to~~ the ~~statements~~next offive ~~operations~~years ~~depending~~and onthereafter ~~its~~is ~~value~~as ~~at that time.~~follows:

Included in our Statements of Operations for the three months ended March 31, 2013 and March 31, 2012, are $124,105 and $0 respectively in non-cash charges pertaining to the derivative liability as it pertains to change in derivative liability and amortization of debt discount, respectively.

2013	$	204,907
2014	$	827,459
2015	$	256,250
2016	$	18,950
2017	$	73,200
Total	$	1,380,766

~~NOTE~~For the above convertible notes, 8pursuant -to ~~INCOME~~ASC ~~TAXES~~Topic 470, the Company reviewed and determined that in most cases a beneficial conversion feature existed since the conversion price was less than market price at the date the notes were issued. The beneficial conversion feature is amortized over the life of the note using the interest method.

~~The Company~~* ~~adopted~~For ~~ASC~~more ~~Topic~~information ~~740 which requires~~ on the ~~recognition~~Convertible ofNotes ~~deferred~~see ~~tax~~Part ~~liabilities~~II ~~and~~- ~~assets~~Item ~~for~~7, ~~the~~Management’s ~~expected~~Discussion ~~future~~and ~~tax consequences~~Analysis of ~~events~~Financial ~~that~~Condition ~~have~~and ~~been~~Results ~~included~~of inOperations under ~~the financial statement or tax returns. Under this method~~“Debt”, ~~deferred tax liabilities~~ and ~~assets~~Note ~~are determined based on the difference between financial statements~~7, ~~tax~~“Notes ~~bases of assets~~Payable”, and ~~liabilities,~~Part ~~using~~I ~~enacted tax~~– ~~rates~~Item in1A, ~~effect~~“Risk ~~for~~Factors”, ~~the year~~ in ~~which~~our Annual ~~the~~Report ~~differences~~on ~~are~~Form ~~expected~~10-K ~~to reverse. Temporary differences between taxable income reported~~ for ~~financial~~the ~~reporting~~fiscal ~~purposes~~year ~~and~~ended ~~income~~June ~~tax~~30, ~~purposes are insignificant~~2013.

~~For income~~Embedded tax reporting purposes, the Company’s aggregate unused net operating losses approximate $6,500,000; which expire in various years through 2028, subject to limitations of Section 382 of the Internal Revenue Code, as amended. The Company has provided a valuation reserve against the full amount of the net operating loss benefit because, in the opinion of management, based upon the earning history of the Company it is more likely than not that the benefits will not be realized.Derivatives

~~Under the~~Notes ~~Tax~~that ~~Reform~~are ~~Act~~convertible ofat ~~1986,~~a ~~the~~discount ~~benefits~~to market ~~from~~are ~~net~~considered ~~operating~~embedded ~~losses~~derivatives. ~~carried~~For ~~forward~~more ~~may~~information ~~be impaired or limited~~ on ~~certain circumstances. Events which may cause limitations in~~ the ~~amount~~Notes ~~of net operating losses that the Company may utilize in any one year include~~affected, ~~but~~ ~~are~~refer ~~not limited~~ to, aManagement’s ~~cumulative ownership change of more than 50% over a three-year period. The impact of any limitations~~Discussion ~~that~~and ~~may be imposed for future issuances of equity securities~~analysis, ~~including~~and ~~issuances~~the ~~with~~above ~~respect to acquisitions have not been determined~~list.

~~The~~Under Financial ~~provision~~Accounting Standard Board (~~benefit~~“FASB”), ~~for~~U.S. ~~income~~GAAP, ~~taxes~~Accounting ~~from~~Standards ~~continued~~Codification, ~~operations~~“Derivatives and ~~for~~Hedging”, ASC Topic 815 (“ASC 815”) requires that all derivative financial instruments be recorded on the balance ~~three~~sheet ~~months~~at ~~ended~~fair ~~March~~value. ~~31,~~Fair ~~2013~~values for exchange traded securities and ~~2012~~derivatives ~~consist~~are ofbased ~~the~~on quoted market prices. Where ~~following:~~market prices are not readily available, fair values are determined using market based pricing models incorporating readily observable market data; requiring judgment and estimates.

		March 31, 2013		March 31, 2012
Current:
Federal	$	-	$	-
State		-		-
Deferred:
Federal	$	2,210,000	$	1,538,000
State		585,000		402,000
		2,795,000		1,940,000
Valuation allowance		(2,795,000)		(1,940,000)
(Benefit) provision for income taxes, net	$	-	$	-

The Company valued the conversion features ~~difference~~in ~~between~~its ~~income~~convertible ~~tax~~Notes ~~expense~~using ~~computed~~the byBlack-Scholes ~~applying~~model. The Black-Scholes model values the ~~federal~~embedded ~~statutory~~derivatives ~~corporate~~based ~~tax~~on a risk-free rate of return ranging from 0.10% to 0.11%, grant dates of Notes, the term of the Notes, conversion prices are 50% of current stock prices on the measurement date ranging from $0.00075 to $0.00115, and ~~actual~~the ~~income~~computed ~~tax~~measure ~~expense~~of the Company’s stock volatility, isranging asfrom ~~follows:~~188.50% to 195.07%.

	March 31, 2013	March 31, 2012
Statutory federal income tax rate	34.0%	34.0%
State income taxes and other	9.0%	9.0%
Valuation allowance	(43.0%)	(43.0%)
Effective tax rate	-	-

Included in the September 30, 2013, is a derivative liability in the amount of $316,343 to account for this transaction. This liability arose in the second quarter of 2012, and the balance was $212,683 as of June 30, 2012. It will be revalued quarterly henceforth, and adjusted as a gain or loss to the statements of operations depending on its value at that time.

~~Deferred~~Included in ~~income~~our ~~taxes~~Statements ~~result~~of ~~from~~Operations ~~temporary~~for ~~differences in~~ the ~~recognition~~three ofmonths ~~income~~ended ~~and~~September ~~expenses~~30, ~~for~~2013 ~~the~~was ~~financial~~$152,796.62 ~~reporting purposes~~ and $0 ~~for~~in ~~tax~~non-cash ~~purposes.~~charges ~~The~~pertaining ~~tax~~to ~~effect~~the ofderivative ~~these~~liability ~~temporary~~as ~~differences~~it ~~representing~~pertains ~~deferred~~to ~~tax~~change in ~~asset~~derivative liability and ~~liabilities~~amortization ~~result~~of ~~principally from~~debt ~~the~~discount, ~~following:~~ respectively.

		March 31, 2013		March 31, 2012
Total deferred tax asset	$	2,795,000	$	1,940,000
Valuation allowance		(2,795,000)		(1,940,000)
Net deferred tax asset	$	-	$	-

NOTE 8 - INCOME TAXES

The Company ~~has~~adopted aASC ~~net~~Topic ~~operating~~740 ~~loss~~which ~~carry~~requires the ~~forward~~recognition of ~~approximately~~deferred ~~$13,265,000;~~tax ~~however,~~liabilities inand ~~accordance with~~assets ~~IRC~~for ~~382~~ the ~~loss~~expected isfuture ~~limited~~tax toconsequences ~~49%~~ of events that have been included in the ~~loss~~financial ~~carry~~statement ~~forward~~or tax returns. ~~The~~Under ~~loss~~this ismethod, ~~limited~~deferred ~~due~~tax toliabilities ~~the~~and ~~change~~assets inare ~~control~~determined ofbased aton ~~least~~the difference ~~50%;~~between ~~therefore~~financial statements, ~~this~~tax ~~loss~~bases of ~~approximately~~assets, $6and liabilities,~~500,000~~ isusing ~~available~~enacted tax rates in effect for the year in which the differences are expected to ~~offset~~reverse. ~~future~~Temporary differences between taxable income ~~through~~reported ~~2028~~for financial reporting purposes and income tax purposes are insignificant.

~~During~~For income tax reporting purposes, the ~~three~~Company’s ~~months~~aggregate ~~ended~~unused ~~March~~net 31operating losses approximate $6,500,000; ~~2013~~which expire ~~and~~in ~~2012~~various years through 2028, subject to limitations of Section 382 of the Internal Revenue Code, as amended. The Company has provided a valuation ~~allowance~~reserve ~~increased~~against bythe $1full amount of the net operating loss benefit because,~~140~~ in the opinion of management,~~000~~ ~~and~~based ~~$250,000,~~upon ~~respectively~~the earning history of the Company it is more likely than not that the benefits will not be realized.

~~NOTE~~Under the Tax Reform Act of 1986, the benefits 9from –net ~~RELATED~~operating ~~PARTY~~losses ~~TRANSACTION~~carried forward may be impaired or limited on certain circumstances. Events which may cause limitations in the amount of net operating losses that the Company may utilize in any one year include, but are not limited to, a cumulative ownership change of more than 50% over a three-year period. The impact of any limitations that may be imposed for future issuances of equity securities, including issuances with respect to acquisitions have not been determined.

~~Related party~~The ~~transactions~~provision ~~reported~~(benefit) for ~~this~~income ~~period~~taxes ~~are~~from continued asoperations ~~follows~~for the three months ended September 30, 2013 and 2012 consist of the following:

There are no Related Party Transactions to report for this period.

	September 30, 2013			September 30, 2012
Current:
Federal	—		$	—
State	—			—

Deferred:
Federal	2,210,000		$	2,822,000
State	585,000			747,000
	2,795,000			3,569,000
Valuation allowance	(2,795,000	)		(3,569,000	)
(Benefit) provision for income taxes, net	—		$	—

~~Departure~~The difference between income tax expense computed ofby ~~Directors~~applying orthe ~~Certain~~federal ~~Officers;~~statutory ~~Election~~corporate oftax ~~Directors;~~rate ~~Appointment~~and ofactual ~~Certain~~income ~~Officers;~~tax expense is as follows:

There are no changes to report in our Board of Directors, Officers, or compensation arrangements for our Officers, during for the period ending March 31, 2013. The situation regarding these matters has not changed materially from the description in the Annual Report on Form 10-K for the period ended December 31, 2012.

	September 30, 2013	September 30, 2012

Statutory federal income tax rate	34.0%	34.0%
State income taxes and other	9.0%	9.0%
Valuation allowance	(43.0%)	(43.0%)
Effective tax rate	-	-

~~(12)~~Deferred income taxes result from temporary differences in the recognition of income and expenses for the financial reporting purposes and for tax purposes. The tax effect of these temporary differences representing deferred tax asset and liabilities result principally from the following:

Table of Contents

		September 30, 2013		September 30, 2012

Total deferred tax asset	$	2,795,000	$	3,569,000
Valuation allowance		(2,795,000)		(3,569,000)

Net deferred tax asset	$	-	$	-

~~NOTE~~The Company 10has –a ~~ACQUISTION~~net operating loss carry forward of approximately $13,265,000; however, in accordance with IRC 382 the loss is limited to 49% of the loss carry forward. The loss is limited due to the change in control of at least 50%; therefore, this loss of approximately $6,500,000 is available to offset future taxable income through 2028.

~~Entry~~During the three ~~into~~months aended ~~Material~~September ~~Definitive~~30, ~~Agreement~~2013 and 2012 the valuation allowance increased by $1,140,000 and $1,906,000 respectively.

~~Whitesburg Friday Branch Mine LLC~~(13)

~~On February~~Table 20, 2012, Universal Bioenergy Corporation, a Nevada corporation (the “Company”), and Whitesburg Friday Branch Mine LLC, a Kentucky limited liability company (“WFBM” or “Whitesburg”), with its principal offices at 1541 Downtown West Boulevard, Knoxville, Tennessee 37919, entered into a Member Interest Exchange Agreement (the “Agreement”), dated October 17, 2011. Pursuant to the Agreement, and subject to the terms and conditions set forth therein, and the subsequent amendment to the Agreement dated February 20, 2012, (the “Amendment”), the Company acquired forty percent (40%) of the Member Interests of Whitesburg, from JLP and Partners LLC, a Kentucky Limited Liability Company (“JLP”), in exchange for consideration consisting of two million, seven hundred thousand dollars ($2,700,000) payable in cash, debt instrument and/or common stock of the Company pursuant to the terms and conditions set forth in the Agreement.Contents

~~Pursuant to~~NOTE ~~the~~9 ~~Agreement,~~– ~~and~~RELATED ~~following~~PARTY the execution of the Amendment, the parties properly and timely performed all terms and conditions as required pursuant to the Agreement, and therefore the transaction contemplated by the “Member Interest Purchase Agreement” (Agreement); and the Amendment was “closed” on February 20, 2012.TRANSACTION

~~The completion~~Related ofparty ~~the~~transactions ~~acquisition~~reported for ~~was~~this ~~approved~~period byare ~~the~~as ~~Board of Directors of the Company.~~follows:

~~“Whitesburg” is~~There ~~engaged~~are inno ~~the~~Related ~~business~~Party ofTransactions ~~coal mining, operations, and coal production at a coal mining property known as the Whitesburg Friday~~to ~~Branch~~report ~~Mine, located at Friday Branch Road, in Whitesburg, Kentucky,~~ for ~~the~~this ~~marketing of “Thermal/Steam” non-coking coal in the United States of America~~period.

~~Thermal/Steam coal~~Departure ~~is used as a primary source~~ of ~~energy~~Directors ~~for~~or ~~coal~~Certain ~~fired powered plant electric generation. The Whitesburg Mine operates, mines,~~Officers; ~~and~~Election ~~markets~~of ~~thermal~~Directors; ~~coal~~Appointment in Letcher County in eastern Kentucky for sale to electric utilities for use in coal fired power plant electric generation. The Whitesburg mining operations are the surface and high wall mining type and do not include any underground mining. Whitesburg’s management has represented that it owns the leases for the coal mineral rights, and has the requisite mining permits from the State of ~~Kentucky.~~Certain ~~Whitesburg~~Officers; ~~Friday Branch Mine started full mining production in March 2012, and currently has coal on the ground ready to be delivered to its customers.~~

~~Universal’s~~There are no changes to report in our Board ~~management~~of ~~believes~~Directors, ~~that~~Officers, ~~the~~or ~~association~~compensation ~~with~~arrangements ~~Whitesburg~~for our Officers, during for the ~~production~~period ~~and~~ending ~~marketing~~September of30, ~~high~~2013. ~~grade~~The ~~thermal~~situation regarding ~~coal~~these ~~should~~matters ~~give it~~has anot ~~high~~changed ~~margin~~materially ~~energy~~from ~~product~~the todescription ~~sell~~in tothe ~~its~~Annual ~~electric~~Report ~~utility~~on ~~and~~Form ~~coal~~10-K ~~production~~for ~~customers~~the period ended June 30, 2013.

~~Additional Summary~~NOTE of10 ~~the~~– ~~Purchase Agreement~~ACQUISTION

~~The Company~~There ~~was~~are ~~granted~~no ~~the~~acquisitions ~~right, but not the obligation,~~ to ~~conduct~~report ~~exploration,~~for ~~drill and develop the real property, to produce~~this and market any and all Petroleum and Natural Gas (methane) and related hydrocarbons produced from the development the real property owned, managed or controlled by Whitesburg Friday Branch Mine, and from all geological formations under the property, and Leases, and/or from any new and/or existing gas wellsperiod.

~~The Company~~NOTE ~~shall~~11 be- granted One (1) Seat on “Whitesburg’s” Board of Directors, or appointed as a Managing Member to represent the interests of the Company and its shareholders, according to Whitesburg’s Operating Agreement.CONTINGENCIES

~~Management~~There ~~determined~~are ~~that~~no ~~the~~Commitments ~~Company~~and ~~was~~Contingencies the acquirer in the business combination in accordance with FASB codification Topic 805, "Business Combinations", based on the following factors: (i) there was not a change in control of the Company since neither Whitesburg, nor any of the sellers obtained a controlling financial interest (ownership either directly or indirectly of more than 50 percent of the outstanding voting shares of the Company), or the power to ~~control~~report ~~the~~for Company through a lesser percentage of ownership by contract, lease, agreement with other stockholders, or by court decree; (ii) the Company was the entity in the transaction that issued its equity instruments (if any); and in a business combination, the acquirer usually is the entity that issues its equity interests; (iii) the Company’s pre-transaction directors retained the largest relative voting rights of the Company post-transaction; (iv) the composition of the Company’s current board of directors and management has not changed during this ~~acquisition~~period. ~~The Company had no pre-existing relationship with Whitesburg.~~

NOTE 1112 – ~~COMMITMENTS~~SUBSEQUENT ~~AND CONTINGENCIES~~EVENTS

~~There~~The ~~are~~following noevents ~~Commitments~~occurred ~~and~~subsequent ~~Contingencies~~ to the ~~report~~period ~~for~~covered by this Form 10-Q Quarterly Report for the period ended September 30, 2013.

~~NOTE~~NDR Energy Group Awarded 12Contract –with ~~SUBSEQUENT~~Southern ~~EVENTS~~California Gas Company for $11.38 Million

~~The~~On October ~~following~~23, ~~events~~2013, ~~occurred~~the ~~subsequent~~Company announced that NDR Energy Group was awarded a contract to supply natural gas to Southern California Gas Company (SoCal), one of the ~~period~~largest ~~covered~~natural bygas ~~this~~distribution ~~Form~~utilities ~~10-Q~~in ~~Quarterly~~the ~~Report~~country. ~~for~~Under the ~~period~~terms ~~ended~~of the contract NDR Energy Group is to SoCal with an estimated 3.0 billion cubic feet (bcf) of natural gas for five months, from November through March, 31with an estimated value of $11,385,000. ~~2013~~According to SoCal, they supply and deliver natural gas to over 20 million customers on the west coast. Its parent company, a Fortune 500 company, traded on the New York Stock Exchange, reported revenues of approximately $10.0 billion in its 2012 annual report.

OnUniversal Bioenergy ~~April~~Announces 1,November ~~2013~~Sales ~~the~~Up ~~Company~~108% ~~entered into an seven (9) month convertible Promissory Note with a non~~-~~related~~ ~~creditor~~Sales ~~for~~Increase ~~$19,500 at 12% interest. The Holder has the right~~ to ~~convert the Note to common stock after six months at a variable conversion price at 50% discount to the market price at the time of conversion~~$9.78 Million

On ~~April~~ 12October 28, 2013, the Company ~~completed~~announced athat ~~partial~~NDR ~~conversion~~Energy ~~one~~Group, ofhad ~~its~~sold ~~Notes~~an ~~payable~~estimated ~~dated~~2.63 ~~March~~billion ~~30,~~cubic ~~2012,~~feet ~~with~~(Bcf) aof ~~principal~~natural ~~amount~~gas for the month of ~~$123,600~~November. AThis ~~total~~is NDR Energy’s highest volume of ~~$20,100~~gas ~~worth~~sold and revenues generated for the month of November in the last ~~Note~~four ~~was~~years. ~~converted,~~The ~~and~~natural ~~20,100,000~~gas ~~common~~sold ~~shares~~is ~~were~~expected ~~issued~~to generate an estimated $9.78 million in revenues for ~~that~~the ~~part~~month of ~~the~~November ~~conversion,~~alone. ~~which~~The ~~leaves~~$9.78 million in gas sales booked for November is a ~~remaining~~108.38% ~~balance~~jump, or an increase of $005.0008 million in sales over the $4.69 million of gas sold in November, 2012. The $9.78 million in sales for the ~~principal~~month of November 2013, represents 16.23%, of the ~~Note~~$60.22 Nomillion ~~accrued~~in ~~interest~~sales ~~was~~the ~~due~~Company ongenerated for the ~~Note~~entire ~~upon~~fiscal year of 2013. ~~conversion~~The 2.63 ~~This~~(Bcf) ~~conversion~~of sales of ~~debt~~gas ~~reduced~~for November represents a 99.81% jump, or an increase of 1.316 billion cubic feet (Bcf), over the 1.318 ~~Company~~(Bcf) of gas sold during the month of November in 2012. The volume of 85,000 MMBtu per day of natural gas sold is one of the highest in NDR Energy’s ~~Notes~~history ~~Payables~~for bythe ~~$20,100~~month of November. Additional sales of gas may be forthcoming for the month of November.

On ~~April~~ 10October 28, 2013, the Company ~~converted~~ completed a ~~portfolio~~partial conversion one of 14its ~~Promissory~~amended Notes ~~payables~~payable dated July 18, 2013 with a ~~principle~~principal amount of $3130,~~234,775~~000. ~~into~~This was the sixth ~~common~~in ~~shares~~a series of ~~stock~~conversions ~~and~~for ~~issued~~this 1Note,~~568~~ which included separate conversions on July 31,~~630~~ 2013,~~000~~ ~~common~~on ~~shares~~August ~~for~~15, ~~that~~2013, ~~conversion.~~on ~~Previously~~September 11, on2013, ~~January~~October 11, 2013, aOctober ~~non-affliliated party~~16, ~~purchased~~2013 aand ~~portfolio~~October 28, 2013. A total of 14$66,000 worth of the ~~Company’s~~Note ~~Promissory~~was ~~Notes~~converted, inand a76,483,517 common ~~private~~shares ~~transaction~~were ~~directly~~issued ~~from~~for ~~the~~these ~~individual Note~~three ~~Holders~~partial ~~with~~conversions afor ~~total~~the ~~principal~~month ~~amount~~ of $3October. Previously,~~234~~ on July 18,~~775.~~ ~~The~~2013, ~~final~~a ~~conversion~~non-affiliated party ofpurchased ~~these~~four existing Notes ~~included~~in a private non-public transaction from a non-related creditor. An amended Note for $3130,~~234,775~~000 dated inJuly ~~principal and~~18, ~~$0.00~~2013 inat ~~accrued~~12% interest ~~that~~ was ~~due~~issued onto the ~~Notes~~new ~~upon~~Note ~~conversion~~Holder. ~~This~~The ~~leaves~~amended aNote ~~remaining~~consolidated ~~balance~~the offour original Notes, which included $~~0.00~~96,200 onin ~~these~~principal, ~~Notes~~$19,049 in accrued interest and a $14,751 premium. This conversion of debt reduced the Company’s Notes Payables by a$66,000. ~~principal~~A ~~amount~~balance of $314,~~234,775. The 1,568,630,~~000 ~~shares is the equivalent~~ of ~~61.78%~~principal ofremains on the ~~Company’s~~modified ~~outstanding shares of common stock~~Note.

On ~~April~~ 15October 31, 2013, the Company ~~converted~~completed the final, and full, conversion of one of its Notes payable, dated ~~August~~March 3018, ~~2010~~2013, for a Note with a principle amount of $2542,~~300~~500, ~~and~~ ~~issued~~and 22a total of 126,~~000~~285,~~000~~714 common shares ~~for~~were ~~that conversion~~issued. The final conversion of the Note included $2542,~~300~~500 in principal and $~~00.00~~1,700 in accrued interest that was due on the Note upon conversion. This leaves a remaining balance of $~~59,100~~0.00 on this Note. This conversion of debt reduced the Company’s Notes Payables by a principal amount of $2542,~~300~~500.

~~On April~~NOTE ~~16,~~13 ~~2013,~~- ~~the~~GOING ~~Company~~CONCERN ~~completed~~ISSUES the final, and full, conversion of one of its Notes payable, dated October 10, 2012, for a Note with a principle amount of $42,500, and a total of 35,923,077 common shares were issued. The final conversion of the Note included $42,500 in principal and $1,700 in accrued interest that was due on the Note upon conversion. This leaves a remaining balance of $0.00 on this Note. This conversion of debt reduced the Company’s Notes Payables by a principal amount of $42,500.

OnThe accompanying ~~April~~financial ~~24,~~statements ~~2013,~~have ~~the~~been ~~Company~~prepared ~~completed~~in aconformity ~~partial conversion one of its Notes payable dated March 30, 2012,~~ with aaccounting ~~principal~~principles ~~amount of~~generally ~~$123,600.~~accepted Ain ~~total of $49,000 worth of~~ the ~~Note~~United ~~was~~States ~~converted, and 39,299,802 common shares were issued for that part~~ of ~~the~~America ~~conversion.~~which Nocontemplate ~~accrued~~continuation ~~interest was due on the Note upon conversion. This conversion~~ of ~~debt reduced~~ the Company’s ~~Notes Payables~~as bya ~~$49,000~~going concern. AThe ~~$49,000~~Company ~~portion~~has ofaccumulated ~~the~~losses ~~original~~totaling ~~Note for~~ $~~123~~(22,~~600 was acquired~~ 383,457) from ~~the~~its ~~Note~~inception ~~Holder~~to bySeptember a30, ~~non-related party~~2013. ~~The~~ ~~$49~~Furthermore,~~000~~ ~~portion of~~ the Company ~~Note~~has ~~was~~consistently ~~purchased~~had ~~for~~to ~~$56,000,~~raise ~~(for~~debt ~~a premium of $7,000),~~ and aequity ~~modified~~capital ~~note~~to ~~was~~fund ~~issued~~cash ~~for~~used ~~$56,000. This~~in ~~leaves a remaining balance of $7,000 of the principal of the Note~~operations.

~~On April~~These ~~30,~~factors ~~2013~~raise doubt about the ability of the Company ~~entered~~to ~~into~~continue as a ~~three~~going ~~(3)~~concern ~~year~~if ~~Promissory~~the ~~Note~~Company ~~with~~does anot ~~non-related~~continue ~~creditor~~to ~~for~~raise ~~$44,500~~sufficient atamounts ~~12%~~of ~~interest~~capital. The ~~Holder~~financial statements ~~has~~do ~~the~~not ~~right~~include toany ~~convert~~adjustments that might result from the ~~Note~~outcome of these uncertainties. The Company's ability to ~~common~~meet its ~~stock~~obligations atand continue as a ~~fixed~~going ~~conversion~~concern ~~price~~is dependent upon its ability to obtain additional financing, achievement of ~~$0.002~~profitable operations, ~~per~~and/or ~~share~~the discovery, distribution, and marketing of its supplies of natural gas, propane, and coal reserves.

~~(13)~~The negative working capital at September 30, 2013, is a condition experienced by many high-growth companies similar to ours, and has not had a significant negative effect on our operations. This is due to our ability to raise capital; the contracts we have with our utility customers, their strong S&P credit ratings, and their consistent payment of our invoices on schedule. Due to the timing of the transactions we are able to maximize the efficiency of the billing and payment cycles, thereby minimizing the impact of any occasional periods of negative working capital. Additionally, our ability to purchase gas at the wellhead, from other independent producers at the producer’s price, and obtain lines of credit and accounts receivable facilities, should enable us to greatly improve our cash flow and increase our working capital.

~~Table~~Our ofability ~~Contents~~to implement our growth plans will depend primarily on our ability to obtain additional private or public equity or debt financing. We are currently seeking additional capital from our current investors and creditors to achieve our goals and objectives. However, such financing from these investors and creditors may not be available at all, or we may be unable to locate and secure additional capital on terms and conditions that are acceptable to us. Our failure to obtain additional capital may have a material adverse effect on our business. We believe, although we cannot guarantee, and remain confident, that we will be able to raise capital in sufficient amounts to execute the business strategies, plans, and decisions that have been made by the Company, and to meet the potential challenges.

~~NOTE~~The Company, in association with its investors 13and -creditors, ~~GOING~~was ~~CONCERN~~able ~~ISSUES~~to raise sufficient amounts of capital to meet its operating expenses and working capital needs for the period ending September 30, 2013. We were also able to proceed with the acquisition of the ownership interest in a coal mining company; which management believes, but cannot guarantee, will generate additional revenue, positive working capital, and net earnings for the Company in the fiscal year 2014 and beyond.

~~The accompanying~~NOTE ~~financial~~14 ~~statements~~- have been prepared in conformity with accounting principles generally accepted in the United States of America which contemplate continuation of the Company as a going concern. The Company has accumulated losses totaling $23,146,507 from its inception to March 31, 2013. Furthermore, the Company has consistently had to raise debt and equity capital to fund cash used in operations. CONCENTRATIONS

~~These factors~~At ~~raise~~September ~~doubt~~30, ~~about~~2013, 100% ~~the ability~~ of the Company's toaccounts ~~continue~~receivable aswas adue ~~going~~from ~~concern~~three ifcustomers during the ~~Company~~three ~~does~~months ~~not~~ended ~~continue~~September to30, ~~raise~~2013, ~~sufficient~~and ~~amounts~~94% of ~~capital.~~total ~~The~~revenue ~~financial~~was ~~statements~~generated ~~do not include any adjustments that might result~~ from ~~the~~four ~~outcome of these uncertainties. The Company's ability to meet its obligations and continue as a going concern is dependent upon its ability to obtain additional financing~~customers, ~~achievement~~for ~~of profitable operations, and/or~~ the ~~discovery,~~three ~~distribution,~~months ~~and~~ended ~~marketing~~September ~~of its supplies of natural gas~~30, ~~propane, and coal reserves~~2012.

The negative working capital at March 31, 2013, is a condition experienced by many high-growth companies similar to ours, and has not had a significant negative effect on our operations. This is due to our ability to raise capital; the contracts we have with our utility customers, their strong S&P credit ratings, and their consistent payment of our invoices on schedule. Due to the timing of the transactions we are able to maximize the efficiency of the billing and payment cycles, thereby minimizing the impact of any occasional periods of negative working capital. Additionally, our ability to purchase gas at the wellhead, from other independent producers at the producer’s price, and obtain lines of credit and accounts receivable facilities, should enable us to greatly improve our cash flow and increase our working capital. (14)

~~Our ability~~Table toof implement our growth plans will depend primarily on our ability to obtain additional private or public equity or debt financing. We are currently seeking additional capital from our current investors and creditors to achieve our goals and objectives. However, such financing from these investors and creditors may not be available at all, or we may be unable to locate and secure additional capital on terms and conditions that are acceptable to us. Our failure to obtain additional capital may have a material adverse effect on our business. We believe, although we cannot guarantee, and remain confident, that we will be able to raise capital in sufficient amounts to execute the business strategies, plans, and decisions that have been made by the Company, and to meet the potential challenges.Contents

~~The Company,~~NOTE in15 ~~association~~- ~~with its investors and creditors, was able to raise sufficient amounts of capital to meet its operating~~INVESTMENTS IN PARTNERSHIPS AND LLC'S expenses and working capital needs for the period ending March 31, 2013. We were also able to proceed with the acquisition of the ownership interest in a coal mining company; which management believes, but cannot guarantee, will generate additional revenue, positive working capital, and net earnings for the Company in the fiscal year 2013 and beyond.

~~NOTE~~Universal Bioenergy, Inc., is a limited partner in Progas 14Energy -Services, ~~CONCENTRATIONS~~and is a minority member of Whitesburg Friday Branch Mine, LLC.

~~At March 31~~In 2011, ~~2013, 94% of~~ the Company's acquired a 7.5 percent interest in Progas Energy ~~accounts~~Services. The fair ~~receivable~~market value of which has ~~was~~not ~~due~~been ~~from~~established. Also ~~a single customer~~in 2011, ~~during~~ the Company acquired ~~three~~a ~~months~~40 percent interest in ~~ended~~Whitesburg ~~March~~Friday ~~31,~~Branch ~~2013~~Mine, ~~and~~LLC. ~~85%~~The offair ~~total~~market ~~revenue~~value ~~was generated~~of ~~from~~which ahas ~~single~~not ~~customer,~~been ~~for the three months ended March 31, 2012~~established.

NOTE 15 - INVESTMENTS IN PARTNERSHIPS AND LLC'S

Partnership	Percentage of Ownership	Book Equity 6/30/13	Partnership Contributions (Distributions)	Share of Net Income (Loss)	Book Equity 9/30/13
Progas Energy Services	7.5%	$197,631	$0	$8,513	$198,013
Whitesburg Friday Branch Mine, LLC	40%	$2,700,000	$0	$0	$2,700,000
Totals		$2,897,630	$0	$8,513	$2,898,013

~~Universal Bioenergy, Inc., is a limited partner in Progas Energy Services, and is a minority member of Whitesburg Friday Branch Mine, LLC.~~(15)

InTable ~~2011, the Company acquired a 7.5 percent interest in Progas Energy Services. The fair market value~~ of ~~which has not been established. Also in 2011, the Company acquired a 40 percent interest in Whitesburg Friday Branch Mine, LLC. The fair market value of which has not been established~~Contents

Partnership	Percentage of Ownership			Book Equity 12/31/11		Partnership Contributions (Distributions)		Share of Net Income (Loss)		Book Equity 3/31/13
Progas Energy Services		7.5	%	$	189,500	$	0	$	5,564	$	195,064
Whitesburg Friday Branch Mine, LLC		40	%	$	700,000	$	2,000,000	$	0	$	2,700,000
Totals	$	889,500		$	2,000,000	$	5,564	$	2,895,064

* * * * * *

*In this Quarterly Report on Form 10-Q, “Company,” *“our *company,” *“us,” *and *“our” refer to Universal Bioenergy, Inc. and its subsidiaries, unless the context requires otherwise.

~~In this~~ITEM ~~Quarterly~~2. ~~Report~~MANAGEMENT'S onDISCUSSION ~~Form~~AND ~~10-Q,~~ANALYSIS ~~“Company,”~~OF ~~“our~~FINANCIAL ~~company,”~~CONDITION ~~“us,”~~AND ~~and~~RESULTS ~~“our” refer~~OF ~~to Universal Bioenergy, Inc. and its subsidiaries, unless the context requires otherwise.~~OPERATIONS

~~(14)~~The following discussion and analysis presents management’s perspective of our business, financial condition, and overall performance. This information is intended to provide investors with an understanding of our past performance, current financial condition, and outlook for the future; and should be read in conjunction with the financial statements presented herein and our reports filed with the Securities and Exchange Commission.

~~Table~~Included in this annual report are "forward-looking" statements within the meaning of ~~Contents~~the Private Securities Litigation Reform Act of 1995 ("PSLRA") as well as historical information.

~~ITEM~~Management’s Discussion and Analysis 2contains various “forward looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, regarding future events or the future financial performance of the Company that involve risks and uncertainties. ~~MANAGEMENT'S~~Certain statements ~~DISCUSSION~~included ~~AND~~in ~~ANALYSIS~~this OFForm ~~FINANCIAL~~10Q, ~~CONDITION~~including, ~~AND~~without ~~RESULTS~~limitation, OFstatements ~~OPERATIONS~~related to anticipated cash flow sources and uses, and words including but not limited to “anticipates”, “believes”, “plans”, “expects”, “future”, and similar statements or expressions, identify forward looking statements. Any forward-looking statements herein are subject to certain risks and uncertainties in the Company’s business, including but not limited to, reliance on key customers and competition in its markets, market demand, technological developments, maintenance of relationships with key suppliers, difficulties of hiring or retaining key personnel, and any changes in current accounting rules, planned capital expenditures, potential increases in prospective production costs, future cash flows and borrowings, pursuit of potential acquisition opportunities, the possibility that the industry may be subject to future regulatory or legislative actions (including additional taxes, changes in environmental regulation, and disclosure requirements under the Dodd-Frank Wall Street Reform and the Jobs Act of 2012 ), our financial position, business strategy and other plans, objectives for future operations, difficulties of hiring or retaining key personnel, and any changes in current accounting rules, all of which may be beyond the control of the Company. The Company adopted, at management’s discretion, the most conservative recognition of revenue based on the most astringent guidelines of the SEC in terms of recognition of software licenses and recurring revenue. Management will elect additional changes to revenue recognition to comply with the most conservative SEC recognition on a forward going accrual basis as the model is replicated with other similar markets (i.e. SBDC). The Company’s actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including those set forth therein.

~~The following~~We ~~discussion~~claim ~~and~~the ~~analysis~~protection ~~presents~~afforded ~~management’s~~by ~~perspective~~the ~~of our business, financial condition, and overall performance.~~safe ~~This~~harbor ~~information is intended to provide investors with an understanding of our past performance, current financial condition, and outlook~~ for ~~the~~forward-looking ~~future; and should be read in conjunction with the financial~~ statements ~~presented~~provided ~~herein~~by ~~and our reports filed with~~ the ~~Securities and Exchange Commission~~PSLRA.

~~Included~~Forward-looking statements involve risks, uncertainties, inand ~~this~~other ~~annual~~factors, ~~report~~which ~~are~~may "cause our actual results, performance, or achievements, to be materially different from those expressed or implied by such forward-looking" statements. ~~within~~Factors ~~the~~and ~~meaning~~risks ofthat could affect our results and achievements and cause them to materially differ from those contained in the ~~Private~~forward-looking ~~Securities~~statements ~~Litigation~~include ~~Reform~~those identified in the section titled “Risk ~~Act~~Factors” ofin ~~1995~~the ~~("PSLRA")~~Company’s Annual Report on Form 10-K for the year ended June 30, 2013, as well as ~~historical~~other ~~information~~factors that we are currently unable to identify or quantify but that may exist in the future.

~~Management’s Discussion~~We ~~and~~based ~~Analysis~~the ~~contains various “~~forward -looking statements” ~~within the meaning of Section 21E of the Securities~~on ~~Exchange~~our ~~Act~~current ~~of 1934~~expectations, ~~as amended~~estimates, ~~regarding~~and ~~future~~projections ~~events~~about orourselves ~~the~~and ~~future financial performance of~~ the ~~Company~~industries ~~that~~in ~~involve~~which ~~risks and~~we ~~uncertainties.~~operate ~~Certain statements included~~ in ~~this~~general. ~~Form~~We ~~10Q~~caution you, ~~including,~~these ~~without limitation,~~ statements ~~related~~are tonot ~~anticipated cash~~guarantees ~~flow~~of ~~sources~~future ~~and~~performance ~~uses,~~as ~~and~~they ~~words~~involve ~~including~~assumptions ~~but~~that, ~~not~~while ~~limited~~made toin ~~“anticipates”,~~good ~~“believes”~~faith, ~~“plans”,~~may ~~“expects”,~~prove ~~“future”,~~to ~~and~~be ~~similar statements or expressions~~incorrect, ~~identify~~and ~~forward~~involve ~~looking statements. Any forward-looking statements herein are subject to certain~~ risks and uncertainties inwe ~~the~~cannot ~~Company’s~~predict. ~~business,~~In ~~including but not limited to~~addition, ~~reliance~~ onwe ~~key~~based ~~customers~~many ~~and competition in its markets, market demand, technological developments, maintenance~~ of ~~relationships with~~these ~~key suppliers, difficulties of hiring or retaining key personnel, and any changes in current accounting rules, planned capital~~forward-looking ~~expenditures,~~statements ~~potential~~on ~~increases~~assumptions inabout ~~prospective production costs,~~ future ~~cash~~events ~~flows and borrowings, pursuit of potential acquisition opportunities, the possibility~~ that ~~the industry~~ may beprove ~~subject~~ to ~~future~~be ~~regulatory~~inaccurate. ~~or legislative actions (including additional taxes~~Accordingly, ~~changes in environmental regulation, and disclosure requirements under the Dodd-Frank Wall Street Reform and the Jobs Act of 2012 ),~~ our ~~financial~~actual ~~position,~~outcomes ~~business strategy~~ and ~~other~~results ~~plans, objectives for future operations, difficulties of hiring or retaining key personnel, and any changes in current accounting rules, all of which~~ may ~~be beyond the control of the Company.~~ ~~The~~differ ~~Company~~materially ~~adopted,~~from atwhat ~~management’s~~we ~~discretion,~~have ~~the~~expressed ~~most~~or ~~conservative~~forecast ~~recognition of revenue based on the most astringent guidelines of the SEC~~ in ~~terms of recognition of software licenses and recurring revenue. Management will elect additional changes to revenue recognition to comply with~~ the ~~most conservative SEC recognition on a~~ forward-looking ~~going accrual basis as the model is replicated with other similar markets (i~~statements.e. ~~SBDC).~~Any ~~The~~differences ~~Company’s actual results~~ could ~~differ~~result ~~materially~~ from ~~those anticipated in these~~ ~~forward-looking statements as~~ a ~~result~~variety of ~~certain~~ factors, including ~~those~~the ~~set forth therein.~~following:

~~We claim~~Fluctuations ~~the~~in ~~protection~~crude ~~afforded~~oil, bynatural ~~the~~gas ~~safe~~and ~~harbor~~natural ~~for~~gas ~~forward-looking~~liquids ~~statements~~prices, ~~provided~~refining byand marketing ~~the PSLRA~~margins.
~~Forward-looking statements~~Potential ~~involve~~failures ~~risks,~~or ~~uncertainties,~~delays ~~and~~in ~~other~~achieving ~~factors,~~expected ~~which~~reserve ~~may cause our actual results, performance,~~ or ~~achievements,~~production tolevels ~~be materially different~~ from ~~those~~existing ~~expressed or implied by such forward-looking statements. Factors~~ and ~~risks~~future ~~that~~oil ~~could affect our results~~ and ~~achievements~~gas ~~and~~development ~~cause~~projects ~~them~~due to ~~materially~~operating ~~differ~~hazards, ~~from~~drilling ~~those~~risks, ~~contained~~and in the ~~forward-looking~~inherent ~~statements include~~uncertainties ~~those identified~~ in ~~the~~predicting ~~section~~oil ~~titled~~and ~~“Risk~~gas ~~Factors”~~reserves inand ~~the~~oil ~~Company’s~~and ~~Annual~~gas ~~Report~~reservoir ~~on Form 10-K for the year ended December 31, 2012, as well as other factors that we are currently unable to identify or quantify but that may exist in the future~~performance.
~~We based~~Failure the forward-looking statements on our current expectations, estimates, and projections about ourselves and the industries in which we operate in general. We caution you, these statements are not guarantees of ~~future~~new ~~performance~~products ~~as they involve assumptions that, while made in good faith, may prove to be incorrect,~~ and ~~involve~~services ~~risks and uncertainties we cannot predict. In addition, we based many of these forward-looking statements on assumptions about future events that may prove~~ to beachieve ~~inaccurate.~~market ~~Accordingly, our actual outcomes and results may differ materially from what we have expressed or forecast in the forward-looking statements~~acceptance. ~~Any differences could result from a variety of factors, including the following:~~
~~Fluctuations~~Unexpected intechnological ~~crude~~or ~~oil,~~commercial ~~natural gas~~difficulties ~~and~~in ~~natural gas liquids prices~~manufacturing, refining, ~~and~~or ~~marketing~~transporting our ~~margins~~products.
~~Potential failures~~Lack of, or ~~delays~~disruptions in, ~~achieving~~adequate ~~expected~~and ~~reserve~~reliable ortransportation ~~production~~for ~~levels~~our ~~from~~crude ~~existing and future~~ oil, natural ~~and~~ gas, ~~development~~natural ~~projects due~~gas ~~to operating hazards~~liquids, ~~drilling~~liquefied ~~risks,~~natural ~~and the inherent uncertainties in predicting oil and~~ gas ~~reserves~~(LNG) and ~~oil~~refined ~~and gas reservoir performance~~products.
~~Failure~~Inability ofto ~~new~~timely ~~products~~obtain ~~and~~or maintain permits, including those necessary for construction ~~services~~projects; or to ~~achieve~~comply ~~market~~with ~~acceptance~~government regulations; or make capital expenditures required to maintain compliance.
~~Unexpected~~Failure ~~technological~~to ~~or commercial~~complete ~~difficulties~~definitive inagreements ~~manufacturing~~and feasibility studies for, ~~refining~~and to timely complete construction of, orannounced ~~transporting~~and ~~our~~future ~~products~~exploration and production, LNG, and transportation projects.
~~Lack~~Potential ~~of,~~disruption or ~~disruptions~~interruption ~~in, adequate~~of ~~and~~our ~~reliable~~operations ~~transportation~~due ~~for~~to ~~our~~accidents, ~~crude~~extraordinary weather ~~oil~~events, ~~natural~~civil ~~gas~~unrest, ~~natural~~political ~~gas liquids~~events, ~~liquefied natural~~or ~~gas (LNG) and refined products~~terrorism.
~~Inability~~International tomonetary ~~timely~~conditions ~~obtain~~and ~~or maintain~~exchange ~~permits, including those necessary for construction projects; or to comply with government regulations; or make capital expenditures required to maintain compliance~~controls.
~~Failure~~Substantial toinvestment ~~complete~~or ~~definitive agreements~~reduced ~~and~~demand ~~feasibility studies~~ for, ~~and~~products toas ~~timely~~a ~~complete~~result ~~construction~~ of, ~~announced~~existing ~~and~~or future environmental ~~exploration~~rules and ~~production, LNG, and transportation projects~~regulations.
~~Potential~~Liability ~~disruption~~resulting orfrom ~~interruption of our operations due to accidents, extraordinary weather events, civil unrest, political events, or terrorism~~litigation.
~~International~~General ~~monetary~~domestic ~~conditions~~and international economic and political developments, including armed hostilities; expropriation of assets; changes in governmental policies relating to crude oil, natural gas, natural gas liquids or refined product pricing, regulation or taxation; other political, economic or diplomatic developments; and ~~exchange~~international ~~controls~~monetary fluctuations.
~~Substantial~~Changes ~~investment~~in ortax ~~reduced demand~~and ~~for~~other ~~products~~laws, asregulations a(including ~~result~~alternative ofenergy ~~existing~~ mandates), or ~~future~~royalty ~~environmental~~ rules ~~and~~applicable ~~regulations~~to our business.
~~Liability~~Limited ~~resulting~~access ~~from~~to ~~litigation~~capital or significantly higher cost of capital related to uncertainty in the domestic or international financial markets.
~~General~~Inability ~~domestic and international economic and political developments, including armed hostilities; expropriation of assets; changes in governmental policies relating~~ to ~~crude~~obtain ~~oil,~~economical ~~natural~~financing ~~gas,~~for ~~natural gas liquids or refined product pricing~~projects, ~~regulation or taxation; other political~~construction, ~~economic~~ or modification ~~diplomatic~~of ~~developments;~~facilities and ~~international~~general ~~monetary~~corporate ~~fluctuations~~purposes.

~~Changes~~In inaddition, ~~tax~~the ~~and~~foregoing ~~other~~factors ~~laws~~may affect generally our business, results of operations, and financial position. Forward-looking statements speak only as of the date the ~~regulations~~statement ~~(including~~was ~~alternative~~made. ~~energy~~We ~~mandates)~~do not undertake, orand ~~royalty~~specifically ~~rules~~decline, ~~applicable~~any obligation to ~~our~~update ~~business~~any forward-looking statements.

~~Limited~~Overview ~~access to capital or significantly higher cost~~ of ~~capital~~Our ~~related~~Company ~~to uncertainty in the domestic or international financial markets.~~

~~Inability~~Universal toBioenergy Inc. ~~obtain~~is ~~economical~~an independent diversified energy company, headquartered in Irvine, California. Our common stock is presently listed on ~~financing~~the ~~for~~OTC ~~projects~~Markets Group under the trading symbol “UBRG”. Our Company was incorporated on August 13, ~~construction~~2004, orin ~~modification~~the State of ~~facilities~~Nevada, ~~and~~under ~~general~~the ~~corporate~~name ~~purposes~~of Palomine Mining Inc. On October 24, 2007, we changed our name from Palomine Mining Inc. to Universal Bioenergy Inc. to better reflect our new business plan and strategic direction.

InOur primary business focus is the production, ~~addition~~marketing, ~~the~~and ~~foregoing~~sales ~~factors~~of ~~may~~natural ~~affect~~gas, ~~generally~~propane, coal, oil, and alternative energy. Through our ~~business~~subsidiary NDR Energy Group, ~~results~~located ofin ~~operations~~Charlotte, ~~and~~North ~~financial~~Carolina, ~~position~~we presently sell natural gas. ~~Forward-looking~~Through ~~statements~~NDR ~~speak~~Energy ~~only~~Group, aswe ofhave ~~the~~contracts ~~date~~signed with 31 major utility companies in the ~~statement~~United ~~was~~States ~~made~~with strong Standard & Poor’s credit ratings. WeNDR doEnergy ~~not~~Group ~~undertake~~markets and distributes natural gas and propane to 30 of the largest public utilities, electric power producers, and ~~specifically~~local ~~decline~~gas distribution companies that serve millions of commercial, ~~any~~industrial, ~~obligation~~and toresidential customers ~~update~~throughout ~~any~~the ~~forward-looking~~country. ~~statements~~Our customers include Southern California Gas Company, Pacific Gas & Electric, CenterPoint Energy Resources, Baltimore Gas & Electric, Memphis Light Gas & Water, Duke (Ohio & Kentucky), Michigan Consolidated, and National Grid. Our gas suppliers include EDF Trading, Conoco Phillips, Chesapeake Energy Marketing, and Anadarko.

~~Overview~~We are also engaged in the acquisition of oil and gas fields, lease acquisitions, development of ~~Our~~newly ~~Company~~discovered or recently discovered oil and gas fields, re-entering existing wells, and transmission and marketing of the products to our customer base. We are continuing our growth through an ongoing series of acquisitions.

Universal Bioenergy Inc. is an independent diversified energy company, headquartered in Irvine, California. Our common stock is presently listed on the OTC Markets Group under the trading symbol “UBRG”. Our Company was incorporated on August 13, 2004, in the State of Nevada, under the name of Palomine Mining Inc. On October 24, 2007, we changed our name from Palomine Mining Inc. to Universal Bioenergy Inc. to better reflect our new business plan and strategic direction.(16)

~~Our primary~~Table ~~business focus is the production, marketing, and sales~~ of natural gas, propane, coal, oil, and alternative energy. Through our subsidiary NDR Energy Group, located in Charlotte, North Carolina, we presently sell natural gas. Through NDR Energy Group, we have contracts signed with 30 major utility companies in the United States with strong Standard & Poor’s credit ratings. NDR Energy Group markets and distributes natural gas and propane to 30 of the largest public utilities, electric power producers, and local gas distribution companies that serve millions of commercial, industrial, and residential customers throughout the country. Our customers include Southern California Gas Company, Pacific Gas & Electric, CenterPoint Energy Resources, Baltimore Gas & Electric, Memphis Light Gas & Water, Duke (Ohio & Kentucky), Michigan Consolidated, and National Grid. Our gas suppliers include EDF Trading, Chevron Texaco, Conoco Phillips, Chesapeake Energy Marketing, and Anadarko.Contents

~~We are~~Recent ~~also~~Developments ~~engaged in the acquisition of oil~~ and ~~gas~~Significant fields, lease acquisitions, development of newly discovered or recently discovered oil and gas fields, re-entering existing wells, and transmission and marketing of the products to our customer base. We are continuing our growth through an ongoing series of acquisitions.Accomplishments

~~Recent~~On July 25, 2013, the Company approved a Stock ~~Developments~~Purchase Agreement between the Company and ~~Significant~~an ~~Accomplishments~~affiliated party, whereby the Company re-purchased 300,000,000 shares of the Company’s common stock from that party in a private transaction. The Company subsequently cancelled the shares of common stock and returned them to the Corporate treasury. The 300 million shares represented 12% of the Company’s 2,538,903,268 outstanding shares of common stock that were indicated in our Form 10-Q Report for the period ended March 31, 2013. The repurchase demonstrates our strong confidence in the long-term growth prospects of the Company, and our commitment to return value to our shareholders. The affliliated party was Global Energy Group LLC. The purchase price for the 300,000,000 million shares included 1,000,000 restricted Series A Preferred shares of stock and $37,000 in cash consideration.

NDR Energy ~~Signs~~Awarded ~~MOU~~Gas Supply Contract with ~~Sacred~~Nicor ~~Power to Market Solar and Wind Systems~~ Gas

On ~~January~~ 3August 19, 2013, the Company announced that NDR Energy Group ~~signed~~ was awarded a ~~Memorandum~~contract ofto ~~Understanding~~supply ~~(MOU)~~natural ~~with~~gas ~~Sacred~~Nicor ~~Power~~gas ~~Corporation~~Company. InNicor ~~the joint venture Sacred Power will provide clean energy~~provides ~~products~~natural ~~and~~gas ~~equipment,~~to ~~and~~more ~~NDR~~than ~~Energy~~2.2 ~~will~~million ~~market~~customers ~~their~~in ~~solar~~a ~~and~~service ~~wind~~territory ~~power~~that ~~products~~encompasses ~~and~~a ~~technologies,~~large toportion ~~its growing base~~ of ~~commercial,~~ ~~industrial,~~the ~~and~~upper ~~municipal customers~~Midwest. ~~Sacred Power Corporation is located in~~In ~~New Mexico~~2012, ~~and~~Nicor’s ~~provides~~parent ~~renewable and distributive energy and telecommunications solutions~~company, ~~remote~~traded ~~power~~on ~~systems, and grid tie photovoltaic power generators, to~~ the ~~government and commercial customers; including the U.S. Military~~NYSE, ~~Department~~reported ofrevenues ~~Defense, Department~~ of ~~Energy,~~over U$3.S.9 ~~Forest Service~~billion, and ~~NASA.~~over ~~Sacred~~$14 ~~Power~~billion ~~provides~~in ~~government, commercial, and residential customers with~~assets ~~Photovoltaic~~in ~~(PV),~~its ~~Renewable~~Annual ~~& Distributive Energy systems~~Report. ~~These include PV polycrystalline and thin-film, wind turbines, solar hot water systems, solar hot air systems, and other distributive energy systems.~~

~~Universal Bioenergy~~NDR ~~Reports~~Energy ~~Firms~~Group ~~Seeking~~signs Contract to ~~Acquire~~sell Electric anPower ~~Operating~~to ~~Interest~~San inDiego ~~the~~Gas ~~Company~~and Electric

On ~~January~~ 08September 27, 2013, the Company announced ~~that~~NDR itEnergy ~~started~~Group ~~preliminary discussions~~signed ~~with~~an ~~several~~agreement ~~companies~~to ~~that~~supply ~~have~~electric ~~expressed~~power anSan ~~interest~~Diego inGas ~~acquiring~~and anElectric ~~operating interest~~(SDG&E), ~~or acquiring a significant~~ ~~equity~~one ~~stake,~~of in the ~~Company.~~largest ~~The~~electric ~~interest~~power ~~has~~utilities ~~come~~on ~~from companies that include~~ the ~~Company’s~~west ~~creditors,~~coast. ~~investors,~~SDG&E ~~and~~is ~~other~~a ~~firms.~~public ~~The~~utility ~~Company~~that ~~has~~provides ~~entertained~~energy ~~preliminary~~service ~~discussions~~to ~~with these firms~~3.4 tomillion ~~determine~~people. ~~the~~SDG&E’s ~~validity~~parent ofcompany, ~~the~~Sempra ~~offers~~Energy ~~and~~is ~~the strength of the companies expressing an interest in~~ a ~~potential~~Fortune ~~acquisition,~~500 ~~or acquiring~~energy anservices ~~operating~~company ~~interest in the Company. There can be no assurance~~ that ~~the~~provides ~~preliminary~~electricity and ~~discussions~~natural ~~between~~gas ~~Universal~~services, and ~~these~~ ~~firms~~reported ~~regarding~~revenues ~~their~~of ~~proposals~~approximately ~~will~~$9.6 ~~ultimately~~billion ~~lead to a formal offer being made; or if a formal offer is made, that it will result~~ in aits ~~completed~~2012 ~~transaction~~Annual Report.

~~NDR~~Global Energy Group ~~Signs Major Contract With Rainbow Energy Marketing to Market Electric Power~~LLC

~~On January~~Global ~~22, 2013, the Company announced that NDR~~ Energy Group, ~~signed~~LLC ~~a Master Power Purchase and Sale Agreement with Rainbow Energy Marketing Corporation to sell wholesale electric~~“GEG”, ~~power.~~our ~~NDR~~primary Energy has been engaged in negotiations with several large electric power producers and marketers to purchase their bulk wholesale electric power. NDR Energy will sell the electric power to its electric utility customers to assist them in meeting the base load requirements of their customersshareholder, ~~and also sell power to large commercial and industrial customers. Rainbow Energy Marketing~~ is a ~~subsidiary~~holding ofcompany awhose ~~large~~primary ~~diversified~~business ~~energy~~is ~~industry leader in acquiring, drilling, producing, and reworking oil and gas properties; as well as~~ the ~~wholesale~~acquisition ~~buying and selling~~ of ~~natural~~strategic ~~gas~~business ~~and~~assets, ~~electricity throughout the United States~~companies and, ~~Canada.~~investment ~~The~~or ~~company~~joint ~~has~~ventures ~~been~~ in ~~the~~both ~~deregulated~~private ~~electric power industry since 1994,~~ and ~~has~~public ~~been focused on balancing supply and demand needs for electric utilities, independent power producers, and other market participants~~companies.

~~NDR~~On January 11, 2013, Global Energy Group ~~Announces~~LLC, ~~Approval~~(“GEG”), purchased a portfolio of ~~FERC~~14 ~~License~~of tothe ~~Market~~Company’s ~~Electric~~Promissory ~~Power~~Notes, in a private transaction directly from the individual Note Holders, with a total principal amount of $3,234,775. On April 10, 2013, the Company, at the direction of “GEG”, converted this portfolio of 14 Promissory Notes into common shares of stock; and issued 1,568,630,000 common shares for that conversion. The Promissory Notes were converted into common stock at the market price at the time of conversion. The 1,568,630,000 shares was the equivalent of 61.78% of the Company’s 2,538,903,268 outstanding shares of common stock that were issued and outstanding on May 20, 2013, as reported in the Company’s Form 10-Q Report for the period ended March 31, 2013. Global Energy Group is now deemed an affiliate.

~~On February~~The ~~12,~~shares ~~2013,~~issued ~~the~~to ~~Company~~Global ~~announced~~Energy ~~that~~Group ~~NDR~~are restricted ~~Energy~~securities. ~~Group~~Restricted ~~received~~securities ~~final~~are ~~approval~~securities ~~for~~acquired ~~its~~in ~~“Power~~unregistered, ~~Marketing~~private ~~License”~~ sales from the ~~Federal~~issuer ~~Energy~~or ~~Regulatory~~from ~~Commission~~an affiliate ~~(FERC)~~of inthe aissuer. ~~move~~Investors ~~that~~typically ~~positions~~receive ~~the~~restricted ~~Company~~securities tothrough ~~engage~~private inplacement ~~the~~offerings ~~buying~~pursuant ~~and~~to ~~selling~~Regulation ofD, ~~wholesale~~employee ~~and~~stock ~~retail~~benefit ~~electricity.~~plans, ~~NDR~~as ~~Energy~~compensation ~~Group~~for ~~intends~~professional toservices, ~~market~~or ~~and~~in ~~distribute~~exchange ~~bulk~~for ~~wholesale~~providing ~~and~~"seed ~~retail~~money" or ~~electric~~start-up ~~power~~ capital to ~~its~~the ~~current~~company. ~~electric~~Rule ~~utility~~144(a)(3) ~~customer~~identifies ~~base,~~what ~~and~~sales ~~its~~result ~~expanding~~in ~~customer~~restricted ~~base;~~securities. ~~which~~Pursuant ~~will~~to ~~include~~Rule ~~federal~~144 of ~~and~~the ~~state~~Securities ~~agencies~~Act of 1933, control securities are those held by an affiliate of the Uissuing company.S. ~~military,~~An ~~cities~~affiliate is a person, such ~~municipalities~~as an officer, ~~and~~director or large ~~commercial~~shareholder, ~~and~~(e.g. ~~industrial~~owning ~~companies.~~10% ~~NDR Energy~~of ~~will~~a becompany’s ~~able~~outstanding toshares), ~~offer~~in ~~integrated~~a ~~energy~~relationship of ~~solutions~~control ~~that~~with ~~will~~the ~~assist~~issuer. ~~its~~Control ~~growing~~means ~~customer~~the ~~base~~power to ~~buy,~~direct ~~manage,~~the management and ~~use~~policies of the company in question, ~~electricity~~whether through ~~and~~the ~~natural~~ownership ~~gas~~of voting securities, by contract, or otherwise.

Therefore, Global Energy Group is subject to the limitations of Rule 144 on sales of any of its stock. The restrictions on the sales of restricted stock per Rule 144 include holding the stock for a minimum of six months after issuance, and it would therefore be limited to selling an amount equal to 1% of the Company’s issued and outstanding shares every 90 days. When and if it did decide to sell any of its stock, the federal securities laws require them to file a Form 144, (15Notice of Proposed Sale of Securities), notifying the SEC of their intent to sell any of its stock in accordance with the Rule 144 guidelines and limitations.

~~Table~~Financial ofRestructuring ~~Contents~~Plan to Reduce Debt and Improve Balance Sheet

~~NDR~~Management ~~Energy~~believes ~~Awarded~~it ~~Gas~~has ~~Supply~~improved ~~Contract~~our ~~with~~financials ~~Southern~~and ~~California~~restructured ~~Gas~~our Balance Sheet, by reducing our long-term debt and converting $3,234,775 in outstanding debt on the Balance Sheet to shares of common stock and issued the shares to our creditor. We believe the benefit to our company was to eliminate this $3,234,775 of outstanding long-term debt and liabilities owed by us, reduce our interest expenses, enhance our financial position and strengthen the Balance Sheet. Our long-term liabilities are $976,248 for the period ending June 30, 2013. and $0,000,000 for the period ended September 30, 2013.

~~On February~~Business 13, 2012, the Company announced that NDR Energy Group was awarded a contract to supply natural gas to Southern California Gas Company, a subsidiary of Sempra Energy. According to Southern California Gas Company, Southern California Gas Company is the nation’s largest natural gas distribution utility with 20.9 million customers. Under the terms of the contract NDR Energy Group is to supply the customer with an estimated 20,000 mcf per day, or a total of 560 million cubic feet (bcf) of natural gas for the month of February.Strategy

~~Universal~~Our primary objective is be one ~~Bioenergy~~of ~~Launches~~the ~~International~~top ~~Coal~~independent ~~Division~~energy companies in the U.S., and to deliver maximum value to our shareholders, and generate increasing revenues and solid earnings for ~~Export~~the long-term growth of our Company. By building on our successes in fiscal 2013 we plan, although we cannot provide assurances as to ~~Foreign~~timing ~~Markets~~and attainment, to achieve these future objectives by pursuing the following strategies:

~~On February~~Our ~~22,~~primary ~~2013,~~objective ~~the Company announced that it~~ is ~~planning~~ to ~~establish~~exploit achanges in ~~new~~the ~~division~~energy ~~that~~market, ~~will~~with ~~focus on~~ the ~~sales~~intent ~~of coal for export~~ to ~~the~~propel ~~international~~our ~~market~~Company to ~~generate~~a ~~additional~~prominent ~~revenues,~~market ~~higher margins~~position, and ~~potential~~be ~~profits.~~one ~~The new division will take advantage~~ of the ~~growing~~top ~~demand~~independent ~~for~~energy companies ~~coal~~ in ~~countries~~the ~~whose~~United ~~economies~~States. ~~and~~Another ~~infrastructure~~major ~~are~~objective ~~experiencing~~in ~~high~~our ~~growth, have~~revised abusiness ~~greater~~plan ~~demand~~is ~~for energy, electric power, and coal,~~ to ~~produce~~finding ~~electricity,~~new ~~and~~ways to ~~manufacture~~create ~~steel.~~more ~~These countries~~value ~~include~~for ~~China,~~our ~~India,~~shareholders and ~~South~~investors. ~~Korea,~~Our ~~Mexico,~~management ~~and~~intends ~~some~~to ~~European~~deliver ~~countries;~~greater ~~including~~value ~~Germany,~~to ~~England,~~our ~~Ireland,~~shareholders and ~~Poland.~~investors ~~Executives~~by generating ofincreasing ~~Universal~~revenues, ~~Bioenergy~~producing ~~have~~solid ~~engaged~~earnings, inand ~~direct~~improving ~~meetings~~returns ~~with~~on ~~representatives~~invested ofcapital for the ~~U.S.~~long-term ~~Department~~growth of ~~Commerce~~our ~~in Irvine, California, to assist the~~ Company ~~in its efforts to export coal and other energy products to the international market~~. We ~~The~~believe ~~Company~~this ~~will~~is ~~also be working~~ the ~~U.S.~~ultimate ~~Department~~measure of ~~Commerce’s~~our ~~offices in those targeted countries to facilitate the export of energy products to companies in those countries~~success.

~~NDR Energy~~Mergers ~~Awarded~~and ~~Gas Supply Contract with Ameren Illinois~~Acquisitions

~~In April~~We ~~2013~~plan ~~NDR~~to ~~Energy~~continue ~~was~~our ~~awarded~~growth aby ~~contract~~means toof mergers ~~supply~~and ~~natural~~acquisitions ~~gas~~of toother ~~Ameren~~companies ~~Illinois,~~in the ~~third largest~~ natural gas, ~~distribution utility~~propane, inpetroleum, ~~Illinois. The parent company~~coal, ~~Ameren~~and ~~Corporation~~alternative isenergy ~~one~~industries. ~~of the largest investor~~This ~~owned~~may ~~utilities~~also ininclude ~~the~~liquefied ~~nation, and provides~~ natural gas ~~and~~(LNG), ~~electric~~compressed ~~service to approximately 2.4 million electric customers and nearly one million~~ natural gas ~~customers.~~(CNG), ~~Its~~biofuels, ~~parent~~syngas, ~~company~~and isacquisitions ~~traded~~of onpatented ~~the NYSE~~energy technologies.

~~NDR Energy~~Vertical ~~Signs MOA with JSG Solar to Build a $167 Million Solar Power Farm~~Integration

~~On May~~We 6,have ~~2013,~~adapted ~~NDR~~our ~~Energy~~business ~~Group~~strategy ~~signed a Memorandum of Agreement (MOA) with JSG Solar Inc.,~~ to ~~build~~ become a ~~solar~~more ~~power~~vertically ~~farm~~integrated incompany ~~eastern North Carolina, with an estimated cost of $167 million. The solar power facility would be owned by NDR Energy Group and built~~ to ~~generate~~give ~~100MW~~us ~~(megawatts)~~greater ofmanagement ~~electricity~~control ~~for~~over ~~sale~~our tosupply ~~public~~chain ~~utilities in~~from the ~~North~~producer, ~~Carolina~~through ~~service area. NDR Energy Group is in discussion with an investment group in Ireland to obtain the required~~marketing, ~~capital to build the facility. NDR Energy is also in discussions one of the largest electric power companies in the United States~~distribution, ~~that supplies~~ and ~~delivers~~directly ~~energy~~ to ~~approximately~~our ~~4 million customers to sell them the electric power via a 25 year term Power Purchase Agreement (PPA)~~customer. ~~The project is projected to generate an estimated $301 million in revenues over 25 years.~~

~~The final~~Oil ~~terms~~ and ~~conditions~~Gas ofField the transaction are being negotiated, and will be determined in the definitive agreement. No assurances can be provided that a definitive agreement will be executed. Execution of a definitive agreement is subject to among other things, confirming due diligence by Universal, NDR Energy Group, standard regulatory approvals, and other conditions and approvals by both companies’ management and board of directors. The Company and NDR Energy Group can provide no assurances that the project will be constructed, and that if it is constructed it will be profitable for Universal.Development

~~NDR~~We intend to pursue the acquisition of more ~~Energy~~oil ~~Group~~and ~~Sets~~gas ~~New~~properties ~~Natural~~and ~~Gas~~assets. ~~Sales~~This ~~Record~~includes existing oil and gas fields, development of newly discovered or recently discovered oil and gas fields, re-entering existing capped wells, and lease acquisitions. We especially have a high level of interest in the development of existing fields whereby we can re-enter previously drilled capped wells to extract the oil and gas using new drilling/extraction methods and techniques. Fields with previously drilled capped wells would be of highest priority for ~~April~~us, since they had been “proven wells” before, and would therefore have lower development costs and lower associated financial risks.

~~In April~~Own ~~2013,~~Our ~~NDR~~Oil Energy Group sold an estimated 1.51 billion cubic feet (Bcf) of natural gas, setting a new record for the month April. The volume of natural gas sold by NDR Energy set a new record for April, is the highest in the Company’s history for April, and ~~tops~~Gas the previous record sales of 1.4 billion cubic feet of gas in April 2010. The 1.51 billion cubic feet of natural gas sold in April is a 8% increase over the 1.4 billion cubic feet of natural gas sold for the month of April 2010. The 1.51 billion cubic feet of natural gas sold in April also represents a 103% increase over the 0.74 billion cubic feet of gas sold for April of 2012.Supply

~~Business~~We plan to own and/or control our own natural ~~Strategy~~gas supply by obtaining the gas at the wellhead from supplies with large reserves and inventories to market and distribute directly to our growing customer base.

~~Our primary~~Increase ~~objective~~Operating is be one of the top independent energy companies in the U.S., and to deliver maximum value to our shareholders, and generate increasing revenues and solid earnings for the long-term growth of our Company. By building on our successes in 2012 we plan, although we cannot provide assurances as to timing and attainment, to achieve these future objectives by pursuing the following strategies:Income

~~In the~~We ~~year~~intend ~~2010,~~to ~~management~~increase ~~totally~~our ~~re-organized~~operating ~~and re-structured the Company with a new strategic direction and business plan,~~income ~~of which these strategies were implemented in 2011~~ and ~~are~~earnings ~~ongoing.~~by ~~Our~~obtaining ~~primary~~our ~~objective~~gas isat ~~to exploit changes in~~ the ~~energy market,~~wellhead ~~with~~at the ~~intent~~producers’ toprice; ~~propel the Company to a dominant market position,~~ and beaggregating ~~one of~~ the ~~top~~purchase ~~independent~~of ~~energy companies in the United States. Another major objective in~~ our ~~revised~~gas ~~business plan is to finding new ways to create more value for our~~supply ~~shareholders~~through ~~and~~a ~~investors.~~large ~~Our~~number ~~management~~of ~~intends~~independent toproducers ~~deliver~~with ~~greater value to our shareholders and investors by generating increasing revenues, producing solid earnings, and improving returns on invested capital for the~~ long-term ~~growth~~purchase ofagreements ~~our~~to ~~Company.~~supply Weto ~~believe this is the ultimate measure of~~ our ~~success~~customers.

~~Mergers and Acquisitions~~(17)

~~We plan~~Table ~~to continue our growth by means~~ of mergers and acquisitions of other companies in the natural gas, propane, petroleum, coal, and alternative energy industries. This may also include liquefied natural gas (LNG), compressed natural gas (CNG), biofuels, syngas, and acquisitions of patented energy technologies.Contents

~~Vertical Integration~~CORPORATE FINANCE

~~We have~~The ~~adapted~~Company’s ~~our~~Capital business strategy to become a more vertically integrated company to give us greater management control over our supply chain from the producer, through marketing, distribution, and directly to our customer.Structure

~~Oil~~In management’s efforts to grow and ~~Gas~~expand ~~Field~~our ~~Development~~Company we must obtain the necessary capital to achieve those objectives, decide on the best methods to obtain that capital, and the capital structure of our Company. The primary ways a company will raise capital is either through debt financing (borrowing money), or equity financing (selling a portion of the company via shares of stock), or a combination of both. The type of capital chosen (debt or equity), and methods of raising the capital, depend on a number of factors including; the company’s life cycle stage, e.g., start-up, development, high-growth or maturity, future growth prospects, strength of the national economy, and the credit markets.

~~We intend~~Potential toinvestors ~~pursue~~in ~~the~~any ~~acquisition~~company, ofincluding ours, ~~more~~will ~~oil~~consider those factors and ~~gas~~the ~~properties~~relative ~~and~~risks ~~assets.~~to ~~This~~their ~~includes~~investment ~~existing~~capital. ~~oil~~To ~~and~~limit ~~gas~~their ~~fields~~risks, ~~development~~these investors may limit the size of ~~newly~~their ~~discovered~~investment, or ~~recently~~provide ~~discovered~~it ~~oil~~to ~~and~~the ~~gas~~company ~~fields,~~in ~~re-entering~~stages ~~existing~~that ~~capped~~is ~~wells~~contingent upon the company reaching stated goals, ~~and~~e.g., ~~lease~~production, ~~acquisitions~~marketing, distribution and revenues. WeThe ~~especially have~~ultimate aquestion ~~high~~for ~~level~~management ofis: ~~interest~~How indo you get the ~~development~~investors to ofcommit ~~existing~~to ~~fields~~making ~~whereby~~what wecould ~~can~~be ~~re-enter~~a ~~previously~~high ~~drilled~~risk ~~capped~~investment ~~wells~~for ~~to extract~~them, although one that would correspondingly benefit the ~~oil~~Company; however, ~~and~~one ~~gas~~that ~~using~~the ~~new~~investor ~~drilling/extraction~~could ~~methods~~lose ~~and~~if ~~techniques.~~the ~~Fields~~Company ~~with~~were ~~previously~~to ~~drilled~~fail? ~~capped~~Management ~~wells~~considered ~~would be~~both ofthe ~~highest~~equity ~~priority~~and ~~for~~the ~~us,~~debt ~~since~~financing options ~~they~~based ~~had~~on ~~been~~our ~~“proven~~life ~~wells”~~cycle ~~before~~stage, economy, credit markets, and ~~would~~other ~~therefore~~circumstances ~~have~~at ~~lower~~the ~~development costs~~time, and ~~lower~~reached ~~associated~~the ~~financial risks.~~following conclusions:

~~Own~~Based on the reasons above, and since we required ~~Our~~immediate ~~Oil~~capital to rapidly expand, grow, restructure its operations, enter new markets, finance new acquisitions, and ~~Gas~~execute our ~~Supply~~marketing plans; raising capital through debt financing was our best alternative. This strategy resulted, we believe, in our gaining a greater share of the energy market, increased revenues, increased assets, market capitalization value, and our shareholders owning a portion of a much larger and more valuable company. As we continue to advance and develop through the different stages of our business life cycle, management will evaluate options, alternatives, and make strategic decisions for the best investment opportunities, financing, and capital structure at that time.

~~We plan~~Terminated ~~to own and/or control our own natural gas supply by obtaining the gas at the wellhead from supplies with large reserves and inventories to market and distribute directly to our growing customer base.~~Agreements

~~Increase~~There are no terminated agreements ~~Operating~~to ~~Income~~report for this reporting period.

~~We intend~~THE ~~to increase our operating income and earnings by obtaining our gas at the wellhead at the producers~~COMPANY’S ~~price;~~FUTURE ~~and~~PLANS ~~aggregating~~AND ~~the purchase of our gas supply through a large number of independent producers with long-term purchase agreements to supply to our customers.~~OUTLOOK

~~CORPORATE FINANCE~~Stock Dividends and Distributions

~~The Company~~Due to management’s ~~Capital~~strong ~~Structure~~confidence in the current and future growth and expansion of the Company, it is considering additional ways to bring more value to our shareholders. We are considering, but can provide no assurances as to implementation, the following proposals for dividends and distributions:

~~In management’s~~A ~~efforts~~special todividend ~~grow~~in ~~and expand~~ the ~~Company,~~form ~~we must obtain the necessary capital to achieve those objectives, and decide on the best methods to obtain that capital and the capital structure~~ of ~~the~~common ~~Company. The primary ways a company will raise capital is either through debt financing (borrowing money), or equity financing (selling a portion of the company via shares of~~ stock), or a combination of both. The type of capital chosen (debt or equity), and methods of raising the capital depend on a number of factors including the company’s life cycle stage, e.g., start-up, development, high-growth or maturity, future growth prospects, strength of the national economy, and the credit markets.;
~~Potential investors~~Regular individends ~~any~~issued ~~company,~~in ~~including~~stock ~~ours, will consider those factors and the relative risks to their investment capital. To limit their risks, these investors may limit the size of their investment,~~ or ~~provide~~cash it(subject to the company in stages, that is contingent upon the company reaching stated goals e.g., production, marketing, distribution, and revenues. The ultimate question for management is: How do you get the investors to commit to making what could be a high risk investment for them, although one that would correspondingly benefit the Company~~; however, one that the investor could lose if the Company were to fail?. Management considered both the equity and the debt financing options based on the Company~~’s ~~life~~future ~~cycle stage, economy, credit, markets, and other circumstances~~earnings ~~at the time,~~ and ~~reached~~availability ~~the~~of ~~following conclusions:~~funds);
~~(16)~~A dividend in the form of Preferred stock, or Preferred stock with the option to convert them to common stock. The issuance of any options or its exercise at a cost would be subject to SEC guidelines and a possible registration of an offering.
~~Table~~The issuance of ~~Contents~~warrants or options to buy additional shares from the Company, (subject to SEC guidelines).

~~Equity Financing~~In -addition ~~Management~~to ~~decided~~potential ~~not~~price toappreciation of ~~raise~~the ~~capital~~common ~~through~~stock, anthis ~~equity~~could ~~offering~~provide inthe ~~its~~shareholders ~~initial~~with ~~start-up~~additional current income, cash flow, and ~~development~~(although we cannot guarantee ~~stage~~it) ~~for~~the apotential ~~variety~~to ofearn ~~reasons~~higher returns from these stock dividends and distributions than they might earn on their other investments.

~~(1)~~ The Company’s ~~would~~management ~~have~~is ~~had~~currently evaluating the above proposals, and others in this regard, and its potential benefits to gothe ~~through~~shareholders and impacts on the ~~process~~Company. However, ofno ~~filing~~decisions have been made regarding this matter. We believe this will reward our loyal shareholders for their ongoing support, and to give them a ~~registration~~greater ~~statement~~stake in our Company.

~~(2) The~~Universal ~~direct~~Bioenergy ~~and~~– ~~indirect~~Considers ~~flotation~~Options for ~~costs of the issuance of an equity capital raise could have run $250~~Merger,~~000~~ Acquisition or ~~more;~~Consolidation ~~and the Company did not have those funds available.~~

~~(3)~~Our management is considering the possibility Itof ~~would~~completing ~~have~~a ~~been~~merger ~~very~~or ~~difficult~~consolidation with another company to ~~get~~increase anits ~~investment~~market ~~banker~~share, toshare ~~underwrite~~price, amarket ~~new~~value, ~~issuance~~expand horizontally into other national or international geographical markets, expand vertically and create more value for its shareholders. Our Company’s management is currently evaluating the possibility of a ~~development~~merger ~~stage~~or ~~company~~consolidation ~~with~~and its potential benefits and impacts on our Company; ahowever, ~~limited~~no ~~operating~~decisions ~~history~~have been made regarding this matter. Any final proposals regarding this matter would be presented to the Board of Directors and ~~revenues~~the shareholders for approval as required by Federal and State laws, guidelines, and our corporate By-Laws.

~~(4) Many~~The ~~investors~~issues ~~did~~and ~~not~~benefits ~~want to take an equity position in the Company at~~ that ~~time,~~would ~~and~~have ~~the~~to be ~~corresponding~~considered ~~risks of ownership.~~include:

~~(5)~~ The ~~issuance~~potential value of ~~equity to these investors, after resolving~~ the ~~potential~~synergies ~~regulatory hurdles, legal issues, time constraints,~~ and ~~costs,~~ ~~would~~strategic ~~have~~fit ~~resulted~~of ~~in immediate dilution for~~ the ~~other~~target ~~shareholders;~~or ~~giving~~acquiring ~~them only limited hopes that value would be created~~company.
~~Therefore~~The financial, ~~due~~ ~~to the above stated reasons~~accounting, ~~the economic climate~~tax, and ~~the~~legal ~~Company’s circumstances at that time, management elected not to pursue raising capital through an equity offering at that time~~effects.
~~Debt Financing~~The –acquisition ~~Management~~or ~~elected~~sell toof ~~raise~~stock ~~capital~~and/or ~~for~~assets ~~the~~of ~~Company~~either ~~through debt financing for the following reasons:~~company.
~~(1) Due~~Consideration toof ~~the~~a ~~Companies~~merger ~~rapid~~or ~~growth,~~consolidation itwith ~~had~~another ~~immediate~~company to ~~and~~create ~~continuous~~a ~~need~~new ~~for~~stronger ~~capital~~more valuable company.
~~(2) The~~Completion ~~investors~~of ~~were more willing to invest funds more expeditiously, and take~~ a ~~creditor’s~~horizontal ~~position~~acquisition ~~instead~~ of asa ancompetitor ~~owner by~~or ~~taking~~other ancompany ~~equity~~in ~~position~~our industry.
~~(3) With~~Completion ~~those~~of ~~immediately~~a ~~available~~vertical ~~funds~~acquisition ~~management~~with ~~could~~another ~~grow~~company ~~the~~either ~~Company~~upstream ~~rapidly,~~or ~~and~~downstream in ~~create~~our ~~short-term~~industry ~~economic~~that ~~value~~may toinclude ~~the Company~~exploration bycompanies, ~~closing~~producers, ondistributors, ~~several target mergers~~ and ~~acquisitions prior to any equity dilution taking place~~marketers.
~~(4) The~~Consideration ~~investors~~of ~~were~~a ~~issued~~triangular, ~~Promissory~~or ~~Notes~~a ~~that~~reverse ~~were~~triangular, ~~unsecured~~merger ~~without~~with ~~any~~a ~~collateral~~strong ~~(taking~~operating company aon ~~high~~another ~~risk)~~exchange such as the NASDAQ, NYSE/AMEX or OTCBB.
~~(5) The~~Potential ~~Notes~~increase ~~required~~in nothe ~~monthly~~price ~~payments~~of ~~which allowed us to use that free cash flow for operating expenses; reduced~~ our ~~cash~~common ~~outlays, interest payments, and improve our budget plans, and forecast our cash flow~~stock.
~~(6) The~~Economies ~~investor received the potential upside~~ of ~~conversion~~scale offrom the ~~Notes~~two ~~into~~companies ~~equity~~combined ~~while protecting our downside with the use of the cash flow~~resources.
~~(7) Should~~Potential ~~the~~reductions investors decide to convert their respective Notes into common stock, then the corresponding debt represented by that Note would be eliminated from the Company’s balance sheet. The respective investors typically will convert the principal balance on their Notes in ~~25%~~operating ~~to 33% portions, and usually will not convert their Notes into more than 4~~costs.~~99% of the Company’s outstanding shares of stock at any time.~~
~~(8) The~~Potential ~~tax~~to ~~benefits~~increase ~~of debt financing are that it’s less expensive while~~ the ~~Company~~earnings isand ~~taxed on~~ earnings, itper isshare ~~not~~of ~~generally taxed on borrowed money, and~~ the ~~interest on the Notes is tax deductible~~Company.
~~(9) Since~~The ~~the~~potential ~~investors~~to docreate ~~not~~more ~~have~~value ~~any~~for ~~equity~~our ~~interests in the Company, they also have no voting rights or other control over the management of the Company, its operations, and no claim to its future earnings~~shareholders.

(1018) If the Company ever suffers a negative financial situation, it is much easier to re-negotiate the terms of the Notes with the individual investors than with a bank, or a group of investors, through an equity or bond offering.

~~Based on~~Table the reasons above, and since the Company required immediate capital to rapidly expand, grow, restructure its operations, enter new markets, finance new acquisitions, and execute its marketing plans; raising capital through debt financing was our best alternative. This strategy resulted in our gaining a greater share of the energy market, increased revenues, increased assets, market capitalization value, and our shareholders owning a portion of a much larger and more valuable company. As the Company continues to advance and develop through the different stages of its business life cycle management will evaluate options, alternatives, and make strategic decisions for the best investment opportunities, financing, and capital structure at that time.Contents

~~Accounts Receivables~~Consideration of Reverse Stock Split

~~We are~~As ~~currently~~an ~~seeking~~additional requirement to ~~obtain~~qualify ~~additional~~to be ~~accounts~~listed ~~receivable~~on ~~financing~~one ~~and~~of ~~commercial~~the ~~letters~~major ofnational ~~credit~~stock toexchanges, ~~significantly~~management, ~~improve our~~in ~~revenues~~consultation ~~and~~with ~~profits~~its ~~for~~accountants, ~~the~~auditors, ~~purchase~~investment advisors, and ~~sale~~securities ofcounsel, ~~natural~~is ~~gas.~~considering Wethe ~~currently~~options ~~invoice~~of ~~our~~the ~~customers~~benefits ~~between~~of ~~the~~implementing ~~10th~~a ~~and~~reverse ~~15th~~ split of ~~the~~its ~~month~~common ~~for~~stock. If ~~the~~a ~~previous~~reverse ~~month’s~~stock ~~gas~~split ~~sales.~~were ~~The customer~~affected, it would result in ~~accordance~~a ~~with~~reduction ~~our~~in ~~“Purchase~~the ~~Agreement”, sends~~number usof ~~full~~the ~~payment~~Company’s ~~via~~outstanding ~~wired~~shares, and ~~funds~~a bycorresponding increase in the ~~25th~~price of ~~the~~our ~~month,~~stock or 10its ~~to15~~earnings ~~days~~per ~~after~~share. ~~receipt~~Some of ~~our~~the ~~invoice.~~factors under consideration are:

~~Presently NDR~~Improving ~~Energy Group turns over its accounts receivables for~~ the ~~sale~~liquidity ofand ~~natural~~marketability ~~gas about 7 to 12 times per year or every 30 to 40 days. We are currently in the process~~ of ~~re-negotiating our agreements with our electric utility customers to change~~ the ~~invoicing and~~stock ~~payment terms from 30~~ to ~~40 days to invoicing them on~~ a ~~weekly~~more ~~basis.~~popular ~~While~~trading ~~there can be no guarantees, management believes~~range ~~that~~to ifmake ~~implemented,~~it ~~this~~more ~~will~~attractive ~~increase the accounts receivables turnover times~~ to 52institutional ~~times per year,~~ and ~~will~~other ~~shorten~~major ~~the collection time that we receive payment on our customer’s invoices~~investors. This change coupled with the use of an accounts receivables factoring line will give NDR Energy the ability to purchase gas from our suppliers at larger discounts; thereby increasing the overall profit margin to as much as $0.07 to $0.20 per mcf (MMBtu) in the sale of gas to our existing customers.
~~The growth~~Increase ~~and position of NDR Energy Group will be further enhanced once~~ the ~~Company~~price ~~is able~~ to ~~sell off its account receivables. NDR Energy Group will then have the ability to purchase and sell gas more often; for example, on~~ a ~~daily~~range ~~and weekly basis instead of just on a monthly basis or longer. We believe this would also allow us~~ to ~~generate~~reflect ~~more accounts receivables, and purchase even larger quantities of gas. The profit margins for~~ the ~~sales of gas on the daily “Spot Market” and the weekly sales of gas is~~revenues, ~~in our estimation~~growth, significantly higher by as much $1.00 to $5.00 or more in the winter months than the margins on the NYMEX futures market. Therefore, it is critical that NDR Energy Group have access to accounts receivables (AR) funding line and ~~Letters~~stability of ~~Credit so it may take advantage of opportunities and discounts to sell gas on~~ the ~~daily and weekly time frames.~~ ~~It will also enable NDR Energy Group to develop new gas supplier relationships and agreements with better terms, conditions, and less restrictive repayment policies~~Company. ~~There can be no assurances that these objectives can be attained.~~
~~Our~~Increase the price to qualify for the minimum share price requirements to qualify for ~~Utility~~a ~~Customers~~major stock exchange such as NASDAQ or NYSE/AMEX.
~~All of~~The ~~our~~Company ~~utility~~may ~~customers~~consider ~~are~~purchasing typically multi-million and multi-billion dollar municipally owned, or Fortune 500 investor owned publicly traded utilities with strong Standard & Poor’s credit ratings. We generally enter into a purchase or sales agreement with the ~~customer~~shares ~~and/or supplier using the North American Energy Standards Board (“NAESB”) “Base Contract for Sale and Purchase~~ of ~~Natural Gas”; which is the standard agreement used in the natural gas industry. The contract terms are usually 1 to 5 years to supply gas to its customers; however, in~~ some ~~cases shorter terms~~ of ~~1 to 6 months will be considered for some customers. We will invoice~~ the ~~customers~~minority between the 10th and 15th of each month for the previous month’s gas sales; and the customer, in accordance with our “Purchase Agreement”, sends us full payment via wired funds by the 25th of the month, or 10 to15 days after receipt of the invoice. The customers have paid all of the invoices for the delivery of gas for the last 5 to 7 years without fail. This further reduces the risk to our Company and our shareholders.
~~Terminated Agreements~~Allow the Company to raise more capital for its growth and expansion.

~~There~~Management believes that the current stock ~~are~~price nois ~~terminated~~currently ~~agreements~~undervalued, the share price does not fully reflect its true value in proportion to ~~report~~its operating fundamentals, and is not based on the Company’s rapid growth, revenues, acquisitions, and plans for expansion. Many institutional investors and investment funds have guidelines that prevent them from investing in our common stock at the current prices that the stock trades at. With a high stock price, it is possible that many institutional investors, larger private equity firms, hedge funds, pensions, and trusts that were previously prohibited from acquiring our shares could then purchase our shares. The reverse stock split of our shares of common stock may also help to create greater investor interest in the Company by producing a share price the common stock for our Company that is more consistent with other high growth companies of our size in our in the market place. If a reverse stock split was implemented it would reduce the amount of outstanding shares, increase our share price, and help the Company qualify to up-list to a major stock exchange such as NASDAQ, or NYSE/AMEX. Management believes this ~~reporting~~would ~~period~~be beneficial to our shareholders.

~~(17)~~Our management is currently evaluating the possibility of a reverse stock split and its potential benefits and impacts on our Company; however, no decisions have been made regarding this matter. Any final proposals regarding this matter would be presented to the Board of Directors and the shareholders for approval as required by Federal and State laws, guidelines, and our corporate By-Laws.

~~Table~~New Business ofModel ~~Contents~~

~~THE COMPANY’S~~Mergers ~~FUTURE~~and ~~PLANS AND OUTLOOK~~Acquisitions

~~Stock~~Management ~~Dividends~~has determined that it is in our best interests to chart a strategic course for the Company to grow faster by more mergers and acquisitions. ~~Distributions~~Management is planning for expansion, by additional mergers and acquisitions to generate greater revenues and profits, and by shifting our focus to invest in far more profitable natural and alternative energy technologies. We anticipate, but can provide no assurances, of acquiring 5 to 10 acquisitions of additional new companies with revenues in the $10 million to $80 million range with stable cash flows and EBITDA’s in the $1 million to $8 million range in the next 1 to 3 years. The potential target’s profile will primarily include companies with well-established marketing and distribution channels, a defensible competitive position, and strong growth opportunities. This will also include companies that have a strong asset base with hard or fixed assets, property, plant, equipment, proprietary technologies, patents, and exclusive licenses. We are aggressively seeking potential acquisition targets to meet these objectives.

~~Due~~Some companies being targeted are, tooil ~~management’s~~producers, ~~strong~~oil ~~confidence~~drilling incompanies, refined oil product producers, natural gas producers, gas marketers, pipeline companies, pipeline construction companies, gas storage facilities, propane producers, high wall surface coal mines, refined oil product producers, and the ~~current~~acquisition of energy technology patents and ~~future~~licenses. ~~growth~~We’re also looking at acquiring producing petroleum and gas wells, assets/properties, and related energy companies. Acquiring interests in properties in these areas will work very well with our strategic plans for the expansion of ~~the~~our ~~Company,~~subsidiary itTexas isGulf ~~considering~~Oil ~~additional~~& Gas Inc. We ~~ways~~have adapted our business strategy to ~~bring~~become a more ~~value~~vertically integrated company, to give us greater management control over our supply ~~shareholders~~chain from the producer, through marketing, distribution, and directly to the customer. We ~~are considering~~believe, but can provide no assurances as, tothat ~~implementation,~~this ~~the~~will ~~following~~bring ~~proposals~~even greater revenues for ~~dividends~~our Company, solid earnings, and ~~distributions:~~bring more value to our shareholders.

~~A special dividend in the form~~Termination of ~~common~~Acquisitions ~~stock;~~

~~Regular~~As ~~dividends~~part of ~~issued~~our inbusiness strategy we review acquisition and strategic investment prospects that we believe would complement our current ~~stock~~product offerings, augment our market coverage, or ~~cash~~enhance ~~(subject~~our technological capabilities, or otherwise offer growth opportunities. From time to ~~the~~time ~~Company’s~~we review investments in new businesses and we expect to make investments in, and to acquire, businesses, products, or technologies in the future. ~~earnings~~We expect to continue pursuing selective acquisitions of businesses. Very often during the acquisition and ~~availability~~due diligence process management will not be able to consummate the transaction because we cannot close it on terms and conditions acceptable to us, or because of ~~funds);~~other negative factors as described below.

AIn ~~dividend~~the event inthat ~~the~~management ~~form~~and its acquisitions team have identified a strong potential target company, we will issue a Letter of ~~Preferred~~Intent ~~stock~~to start the due diligence process to acquire that company. Afterwards, orour ~~Preferred~~legal ~~stock~~counsel will prepare a definitive agreement with all of the ~~option~~final toterms ~~convert~~and ~~them~~conditions to ~~common~~complete ~~stock~~the acquisition. ~~The~~Proper ~~issuance~~due ofdiligence ~~any~~for ~~options~~proper ortechnical, financial, and legal review can be very expensive and time consuming. Often during the due diligence process we discover that the representations and warranties made by the target company regarding its ~~exercise~~business, atoperations, aassets, ~~cost~~financials, books, records, properties, contracts, ~~would~~liabilities, pending litigation, permits, licenses, and business status are not accurate or complete; there may be ~~subject~~misrepresentations, or there is an adverse material change in the business prior to ~~SEC~~the ~~guidelines~~closing of the acquisition. In that event, management will elect to terminate that acquisition to avoid any negative impacts on our operations, avoid any adverse legal and afinancial ~~possible~~exposure to ~~registration~~the ofCompany, anand ~~offering~~to protect our shareholders. Due to these factors we, and other companies that pursue other companies as acquisition targets, do not expect that they will close on every potential acquisition target.

~~The~~Forecast ~~issuance~~ of ~~warrants or~~Projected ~~options~~Revenues toand ~~buy~~Earnings ~~additional~~and ~~shares~~Market ~~from~~Value ~~the Company, (subject to SEC guidelines).~~

InOur primary objective is to exploit changes ~~addition~~in the energy market to ~~potential~~propel ~~price~~the ~~appreciation~~Company to a dominant market position, and be one of the ~~common~~top ~~stock,~~independent ~~this~~energy ~~could~~companies ~~provide~~in the United States. Another major goal is to finding new ways to create more value for, and maximize the wealth of our shareholders; and ~~with~~bring ~~additional~~increased ~~current~~value ~~income~~to our stakeholders and the investment community. The financial projections presented below are estimates based on Management’s analysis of the present targeted market segments of the energy industry we are involved in, future ~~cash~~industry ~~flow~~trends, our current and ~~(although~~growing wecustomer ~~cannot~~base, ~~guarantee~~our ~~it)~~strategic ~~the~~joint ~~potential~~ventures, tostrategic ~~earn~~alliances, ~~higher~~and ~~returns~~other ~~from~~capital ~~these~~development projects ~~stock~~we ~~dividends~~are pursuing. The financial plan is intended for rapid but controlled growth and ~~distributions than~~required ~~they~~our ~~might~~management ~~earn~~to onmake ~~their~~certain assumptions ~~other~~and ~~investments~~estimates.

~~The Company’s~~Focus ~~management is currently evaluating the above proposals, and others in this regard, and its potential benefits to the shareholders and impacts~~ on ~~the Company. However, no decisions have been made regarding this matter. We believe this will~~Earnings ~~reward our loyal shareholders for their ongoing support, and to give them a greater stake in our Company.~~

~~Universal~~We ~~Bioenergy~~achieved ~~Considers~~sales ~~Changing~~revenue ~~Its~~of ~~Name~~$13,872,602 for the three months ending September 30, 2013, as compared to $15,562,860 for the same period in 2012. Our cost of sales was $13,859,787 for the three months ending September 30, 2013, as compared to $15,538,855 for the same period in 2012.

~~Our management~~A ismajor ~~presently~~goal ~~considering~~for ~~changing~~the ~~its~~fiscal ~~name~~2014 toyear ~~reflect its current business model~~ and ~~its future growth as it continues~~beyond is to ~~expand~~begin ~~its marketing of natural gas, propane, petroleum, and thermal coal. The name Universal Bioenergy, reflected our original plans~~ to ~~produce~~generate ~~and~~earnings market “green” energy technologies; such as biodiesel fuel, solar, wind, wave, and other technologies. In December 2009, after conducting its business summit in Las Vegas, Nevada, on January 12, 2010, we announced that it was charting a bold new course for our Company. We ~~shut~~intend ~~down~~to ~~our~~increase ~~biodiesel refinery in Nettleton, Mississippi in 2010, and later on March 31, 2011, we completed the dismantling of the facilities structures and plant equipment at the biodiesel refinery. This marked~~ our ~~exit~~ ~~from~~operating ~~green~~income ~~energy technologies,~~ and toearnings ~~grow~~through ~~and~~current ~~expand into more profitable conventional energy products~~ and ~~technologies.~~future ~~The~~acquisitions ~~name “Universal Bioenergy” has also caused some confusion~~ in the ~~minds~~energy ofindustry, ~~potential shareholders~~ and ~~investors because~~high weprofit nocenters; ~~longer~~which ~~market and produce “green energy” products. We believe a strategic name change~~ will ~~help~~include usgas ~~to build a better “brand”~~storage, ~~improve~~physical ~~our image, attract more shareholders~~ and ~~investors,~~financial ~~and~~gas ~~more fully reflect the emphasis~~trading, oftransportation, ~~our~~management; ~~current~~ and ~~future~~higher ~~business~~sales ~~trends in the marketplace. On June 18th 2010, the majority~~ of ~~the~~natural ~~shareholders~~gas, ~~and~~ ~~the Board of Directors each approved separate Resolutions to amend the Articles of Incorporation granting the Board of Directors the right to change our Company’s name. On May 9~~propane, ~~2011~~oil, weelectric ~~filed~~power, arefined ~~Certificate~~energy ~~of Amendment with the Nevada Secretary of State~~products, ~~to amend our Articles of Incorporation; which granted the Board of Directors the full right~~ and ~~authority to change the name of the Company at a future date without any shareholder action or approval~~coal.

~~Universal Bioenergy~~Our –management’s ~~Considers~~plans ~~Options~~ for ~~Merger,~~increasing earnings ~~Acquisition~~include orthe ~~Consolidation~~ following:

~~Our management~~• ~~is considering the possibility of completing a merger or consolidation with another company to increase its market share~~First, ~~share~~we ~~price,~~have ~~market~~expanded ~~value,~~our ~~expand~~sales ~~horizontally into other national or international geographical markets, expand vertically and create more value for its shareholders. Our Company’s management is currently evaluating the possibility~~ of ~~a merger~~ ornatural ~~consolidation~~gas ~~and~~beyond ~~its~~just ~~potential~~base ~~benefits~~load ~~and~~transactions ~~impacts~~to oninclude ~~our~~monthly ~~Company;~~term ~~however~~transactions, nospot ~~decisions~~market ~~have~~sales, ~~been made regarding this matter. Any final proposals regarding this matter would be presented to the Board of Directors~~ and ~~the~~sales ~~shareholders~~gas for ~~approval as required~~electric bypower ~~Federal and State laws, guidelines, and our corporate By-Laws~~generation.

~~The~~• Second, we are negotiating with independent ~~issues~~oil and ~~benefits~~gas ~~that~~producers ~~would~~to ~~have~~obtain our supplies at the wellhead, and aggregating the supply under long-term supply agreements to bemarket to ~~considered~~our ~~include:~~customers.

~~The~~• ~~potential~~Third, ~~value~~we ofare ~~the~~attempting ~~synergies~~to obtain more ~~and~~bank ~~strategic~~funding, ~~fit~~lines of credit, and Letters of Credit, as opposed to using the ~~target~~suppliers or“trade ~~acquiring~~credit” ~~company~~to purchase the gas.

~~The~~• ~~financial~~Forth, ~~accounting~~we will be re-negotiating our existing supplier agreements to purchase the gas in larger quantities with greater economies of scale, ~~tax~~on better terms, at lower purchase costs, and ~~legal~~reduce ~~effects~~the high financing costs. This should drive our costs down, and potentially produce higher profit margins for our company.

~~The~~• ~~acquisition~~Fifth, our management has decided orto ~~sell~~expand into the coal energy sector of ~~stock~~the ~~and~~energy industry. Thermal/orSteam ~~assets~~non-coking coal is used as a primary source of ~~either~~energy for ~~company~~coal fired powered plant electric generation. Universal plans to mine, produce, and market “Thermal/Steam” coal to sale to other major coal producers and electric utility customers for power generation.

~~Consideration~~• Sixth, our Company, through NDR ofEnergy aGroup ~~merger~~LLC, orhas ~~consolidation~~expanded ~~with~~its ~~another~~product ~~company~~mix to ~~create~~include athe ~~new~~sales ~~stronger~~and ~~more~~distribution ~~valuable~~of ~~company~~propane due to the higher profit margins.

~~Completion~~• ofSeventh, awe ~~horizontal~~intend ~~acquisition~~to expand ofinto agas ~~competitor~~storage, orphysical ~~other~~and ~~company~~financial ingas ~~our~~trading, ~~industry~~transportation, and gas management.

~~Completion~~Management ofIncentive ~~a vertical acquisition with another company either upstream or downstream in our industry that may include exploration companies, producers, distributors, and marketers.~~Programs

~~Consideration~~We ofhave aan ~~triangular~~incentive program for the Officers, orin aaccordance ~~reverse~~with ~~triangular~~their Employment Agreements, ~~merger~~whereby ~~with~~they amay ~~strong~~receive ~~operating~~bonuses and equity awards based on the added “economic value” that they bring to our company. This may include increases in revenues, earnings, cash flow, debt reduction, return on ~~another~~net ~~exchange~~assets, ~~such~~return ason ~~the~~stockholders ~~NASDAQ~~equity, ~~NYSE/AMEX~~return on assets, return on capital, stockholder returns, return on sales, gross or ~~OTCBB~~net profit margin, productivity, expense, margins, operating efficiency, objective measures of customer satisfaction, working capital, financing, earnings per share, market share, inventory turns, acquisitions or strategic transactions, or other means of bringing additional value to our Company. Since management has deferred most or all of their compensation, provisions have been made to issue them long-term Promissory Notes for their salary, with the option to convert the Notes into to common stock of our company.

~~Potential~~Discontinued ~~increase in the price of our common stock.~~Operations

~~Economies~~There ofare no ~~scale~~Discontinued ~~from~~Operations ~~the two~~to ~~companies~~report ~~combined~~for ~~resources~~this period.

Potential reductions in operating costs.

Net Loss as adjusted for non-recurring and/or non-cash expenses

		Three Months Ended		Three Months Ended
		September 30,		September 30,
		2013		2012

Losses available for common shareholders	$	($313,768)	$	($1,723,168)

Other non-cash expenses		654		654
Stock issued for services		-0-		5,000

Losses available for common shareholder, as adjusted	$	($313,114)	$	($1,722,514)

~~Potential to increase the earnings and earnings per share of the Company.~~(19)

~~The~~Table ~~potential~~of ~~to create more value for our shareholders.~~Contents

~~Plans to~~RESULTS ~~Up-List~~OF ~~to NASDAQ or other National Stock Exchange~~ OPERATIONS

~~Based on~~Three ~~our~~Months ~~growth~~Ended bySeptember ~~mergers~~30, ~~acquisitions, revenues, and future plans for expansion, our management is evaluating and positioning~~2013 ~~our~~compared ~~Company~~ to potentially qualify, and apply to up-list, to a major national stock exchange; which stock exchanges list similarly situated energy technology companies such as NASDAQ, NYSE Amex Equities, or others. Our management has already been in discussions with several investment bankers, advisory firms, and our securities counsel to review the ~~exchange~~Three ~~requirements,~~Months ~~legal~~Ended ~~issues involved,~~September ~~improving our capital structure~~30, procedural guidelines, and other related issues to qualify to be listed on one of the major national exchanges. Management believes that if we can successfully position our company to qualify to meet the listing requirements for one of the stock exchanges it would greatly increase our market value, and should make it attractive to more retail and institutional investors. We also feel this would be of great benefit to our shareholders. No assurances can be provided that this aspect of our long-term business plan will be achieved.2012

~~Consideration~~ Review and Analysis of ~~Reverse~~Current ~~Stock~~Results ~~Split~~of Operations

As an additional requirement to qualify to be listed on one of the major national stock exchanges, management, in consultation with its accountants, auditors, investment advisors, and securities counsel, is considering the options of the benefits of implementing a reverse split of its common stock. If a reverse stock split were affected, it would result in a reduction in the number of the Company’s outstanding shares, and a corresponding increase in the price of our stock or its earnings per share. Some of the factors under consideration are:Revenues

~~Improving~~Our ~~the liquidity and~~revenues ~~marketability~~for of the ~~stock~~three tomonths aperiod ~~more~~ended ~~popular~~September ~~trading~~30, ~~range~~2013, todecreased; ~~make~~compared itto ~~more~~for ~~attractive~~the tothree ~~institutional~~months ~~and~~period ~~other~~ended ~~major~~September ~~investors~~30, 2012.

~~Increase~~Our ~~the~~primary ~~price~~revenues from tothis aperiod ~~range to~~are ~~reflect~~from the sale of natural gas and propane. Our revenues for the three months ended September 30, ~~growth~~2013 were $13,872,602 ~~and~~as ~~stability~~compared to $15,562,860 for the same period in 2012. This resulted in a decrease of $1,690,258 in revenues or 10.86% over the ~~Company~~previous year. Our Cost of Sales for this period was $13859,787. This has resulted in a gross profit margin for this period of $12,815.

~~Increase~~The high proportionate cost of sales relative to the ~~price~~gross revenues reflected in this period is due to ~~qualify~~purchasing the gas from some of the suppliers ~~for~~at near retail cost, and high financing costs added to the ~~minimum~~gas ~~share~~by ~~price~~the ~~requirements~~suppliers. Management plans are to ~~qualify~~reduce ~~for~~the apurchasing cost ~~major~~of ~~stock~~the ~~exchange~~gas, ~~such~~and asthe ~~NASDAQ~~financing orcost, ~~NYSE/AMEX~~by obtaining our own credit facility and lines of credit and obtaining our gas at the wellhead. We believe this will allow us to purchase the gas in larger quantities, with greater economies of scale, on better terms, at lower costs, and reduce the high financing costs; thereby significantly increasing our gross profit.

~~The~~We ~~Company~~incurred ~~may~~losses of ~~consider~~$313,768 ~~purchasing~~ for the three months ended September 30, 2013; and $1,723,168 for the same period in 2012. Our accumulated deficit since our inception through September 30, 2013 amounts to 22,383,457. We did not issue any common shares for services for this period which had an aggregate fair value of ~~some~~approximately $0.00 that was included in the $156,539 in general and administrative expenses for the three month period ended September 30, 2013. We also incurred interest expenses of $238,028. Excluding the ~~minority~~value of ~~shareholders~~the common stock that was issued for services and interest expenses, which together totaled $238,028, would correspondingly reduce our net loss of $313,768 to an adjusted net loss of $75,740 for the period ending September 30, 2013. Based on an adjusted net loss of $75,740, this loss equals only 0.5% of our total revenues of 13,872,602 for the period ended September 30, 2013, as compared to 6.69% for the same period ended 2012.*

~~Allow~~*The ~~the~~disclosure ~~Company~~of tothis ~~raise~~information ~~more~~statement, ~~capital~~is ~~for~~a ~~its~~“non-GAAP ~~growth~~financial accounting measure”, and ~~expansion~~is a supplemental measure of our performance, which information is derived from our consolidated financial information, although it is not included in our consolidated financial statements which were prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). These financial measures are considered “non-GAAP financial measures” under SEC rules.

~~Management~~Regarding ~~believes~~Increase ~~that~~in ~~the~~Expenses ~~current~~and ~~stock~~Losses. ~~price~~This isincrease ~~currently undervalued, the share price does not fully reflect its true value~~ in ~~proportion to its~~ operating ~~fundamentals~~expenses, and ~~is not based on~~ the ~~Company’s~~resulting ~~rapid~~net ~~growth~~loss, ~~revenues,~~was ~~acquisitions,~~primarily ~~and plans for expansion.~~due ~~Many~~to ~~institutional~~increases ~~investors and investment funds have guidelines that prevent them from investing~~ in ~~our~~accrued ~~common stock at the current prices that the stock trades at. With a high stock price~~interest, it is possible that many institutional investors, larger private equity firms, hedge funds, pensions, and trusts that were previously prohibited from acquiring our shares could then purchase our shares. The reverse stock split of our shares of common stock may also help to create greater investor interest in the ~~Company by~~current ~~producing~~portion ~~a share price the common stock for our Company that is more consistent with other high growth companies~~ of ~~our~~long ~~size in~~term ~~our in the market place. If a reverse stock split was implemented it would reduce the amount of outstanding shares~~debt, ~~increase our share price,~~ and ~~help~~in ~~the~~embedded ~~Company~~derivative ~~qualify~~liability tocosts ~~up-list to a major stock exchange such~~ as ~~NASDAQ, or NYSE/AMEX. Management believes~~indicated ~~this would be beneficial to our shareholders~~below.

~~Our~~The Company issued convertible Promissory Notes, ~~management~~and isdetermined ~~currently~~that ~~evaluating~~the conversion features contained in the ~~possibility~~Notes ofrepresent afreestanding ~~reverse~~derivative ~~stock~~instruments ~~split~~that ~~and~~meet ~~its~~the requirements ~~potential~~for ~~benefits~~liability ~~and~~classification ~~impacts~~under onFinancial ~~our~~Accounting ~~Company; however~~Standard Board (“FASB”), noU.S. ~~decisions~~GAAP, ~~have~~Accounting Standards ~~been~~Codification, ~~made~~Derivatives ~~regarding~~and ~~this~~Hedging ~~matter~~(Topic ASC 815). ~~Any~~As ~~final~~a ~~proposals~~result, ~~regarding~~the ~~this~~fair ~~matter~~value ~~would~~of bethe ~~presented~~derivative tofinancial instruments in the Promissory Notes is reflected in the Company’s balance sheet as a liability. The fair value of the derivative financial ~~Board~~instruments of ~~Directors~~the convertible Notes and warrants was measured at the ~~shareholders~~inception ~~for~~date ~~approval~~of asthe ~~required~~Promissory byNotes ~~Federal~~and warrants, and each ~~State~~subsequent ~~laws~~balance sheet date. Any changes in the fair value of the derivative financial instruments are recorded as non-operating, non-cash ~~guidelines~~income, ~~and~~or ~~our~~expense, ~~corporate~~at ~~By-Laws~~each balance sheet date.

~~(18)~~The Company valued the conversion features in its convertible Promissory Notes using the Black-Scholes model. Included in our Statements of Operations for the three ended September 30, 2013, are 316,343 in non-cash charges pertaining to the derivative liability as it pertains to change in derivative liability and amortization of debt discount, respectively.

~~Table~~Operating ofCosts ~~Contents~~and Expenses

~~Interest~~Our Cost of Sales ~~from~~for ~~Companies~~the ~~Wanting~~three months ended September 30, 2013 were $13,859,787 as compared to ~~Acquire~~$15,538,855 ~~Universal~~for ~~Bioenergy~~the same period in 2012. This was a decrease of $1,679,068 or ~~its~~10.81% ~~Assets~~in our Cost of Sales. Our primary operation is the marketing of natural gas, propane and coal to our customers. Our total operating expenses for the three months ended September 30, 2013 were $156,539 as compared to $361,558 for the same period in 2012. We pay our employees and consultants largely in common shares as our cash availability is currently limited.

~~Management has~~We ondecreased ~~occasion~~our total ~~received~~operating ~~unsolicited~~expenses ~~letters of interest~~ from ~~several~~$361,558 ~~companies~~for ~~over~~ the ~~past~~period ~~few~~ending ~~months that have expressed an interest in acquiring the Company~~2012, ~~acquiring~~by a ~~large~~total ~~equity stake in the Company, or in purchasing some~~ of ~~its assets; such as our outstanding corporate debt~~$205,019, or ~~electric~~by ~~utility customer contracts~~56. ~~These have come from companies that include~~70%, ~~but are not limited~~ to, ~~our creditors~~$156,539 ~~our~~for ~~investors, and other parties. The offers have been made either directly from those companies or through their representatives; in which case some of~~ the ~~companies have desired to remain anonymous for a~~ period ending ofSeptember ~~time~~30, 2013.

~~Management cannot~~Based ~~initially~~on ~~determine~~our ~~the~~plans ~~validity~~for ofgrowth ~~the~~and ~~offer~~expansion, and ~~the~~increasing ~~strength~~revenues ofthrough ~~the~~sales ~~companies~~of ~~expressing~~natural anand ~~interest~~other ~~in a potential acquisition~~products, ~~without~~we ~~opening~~believe ~~some~~we ~~exploratory discussions and some reasonable measure of preliminary due diligence. Management~~ will ~~typically~~soon ~~review~~reduce ~~all~~our ofnet ~~these~~losses ~~potential~~down ~~inquiries, or expressed interest.~~ to ~~ascertain if the offer is genuine, their true~~zero; ~~motivations,~~ and ~~attempt~~then tomove ~~gauge~~our ~~the~~company ~~real~~toward ~~level~~solid ~~of interest of the offer, prior to presenting it to the Board of Directors~~profitability. ~~In the~~Since ~~event~~we ~~that~~are ~~management~~a ~~determines~~high ~~that~~growth ~~an offer is serious~~company, itgrowing ~~may~~by ~~open~~mergers ~~discussions~~ and ~~sign appropriate non-disclosure documents~~acquisitions, ~~obtain a Letter of Intent or Term Sheet from the offeror, and begin its due diligence. Some of the factors that~~ we ~~will~~generally ~~consider will~~expect beto ~~the~~have ~~financial~~corresponding ~~strength~~increases ofin ~~the~~costs ~~company~~reflected ~~making~~in ~~the offer, obtaining the “best price” for the acquisition or the assets, the potential economic benefit to~~ our ~~shareholders,~~operating ~~tax liability, legal issues, accounting and financial impacts, and the potential synergies and strategic fit of the acquiring company~~expenses.

Acquisitions can take up a great deal of time and expense, and require that we engage our mergers and acquisitions (M&A) team of experts; including our experienced investment bankers, accountants, auditors, lawyers, and other technical personnel, to assist in the due diligence and closing the potential transaction. Control of, and proper disclosure of, factual information in these matters are critical; and unfounded rumors can have a potential negative impact on the Company and the transaction. Although we review and consider all unsolicited offers, no decisions have been made on any of these offers, and furthermore, we can provide no assurances that we would pursue, or otherwise enter into, a formal agreement for any of these transactions.Assets

~~Therefore,~~Our ~~when~~“total ~~these~~assets” ~~potential~~have ~~transactions~~decreased ~~elevate~~by to$5,348,543, aor ~~situation~~43.24%, ~~whereby~~to ~~the~~$7,020,986 ~~Company~~for ~~either~~the ~~engages~~period inending ~~serious~~September ~~discussions~~30, ~~negotiations~~2013, compared ~~executes~~to ~~a Term Sheet~~$12,369,529 ~~Letter~~for ofthe ~~Intent,~~same orperiod itin ~~otherwise~~2012. isThis ~~deemed~~was due to bean aincrease ~~material~~in ~~event,~~ the ~~Company~~amount ~~will~~of ~~take the appropriate~~our ~~steps~~Accounts toReceivables ~~timely~~from ~~disclose~~ the ~~information~~sales toof ~~the~~natural ~~public and its shareholders in its regulatory filings.~~gas

~~New Business~~Liquidity ~~Model~~and Capital Resources

~~Mergers~~Our management looks to a variety of funding sources to meet our short and ~~Acquisitions~~long-term liquidity requirements. We currently generate the majority of our consolidated revenues and cash flow from the marketing and sale of natural gas and propane to its 31 electric utility customers through NDR Energy. Our revenues, profits, and future growth, depend to a great extent on the prevailing prices of natural gas. Our revenue, profitability, and future growth, are largely dependent on a number of factors; including the prevailing and future prices for natural gas, which is also dependent or influenced by numerous factors beyond our control; such as regulatory developments, changing economic conditions, and competition from other energy sources.

~~Management has~~Working determined that it is in our best interests to chart a strategic course for the Company to grow faster by more mergers and acquisitions. Management is planning for expansion, by additional mergers and acquisitions to generate greater revenues and profits, and by shifting our focus to invest in far more profitable natural and alternative energy technologies. We anticipate, but can provide no assurances, of acquiring 5 to 10 acquisitions of additional new companies with revenues in the $10 million to $80 million range with stable cash flows and EBITDA’s in the $1 million to $8 million range in the next 1 to 3 years. The potential target’s profile will primarily include companies with well-established marketing and distribution channels, a defensible competitive position, and strong growth opportunities. This will also include companies that have a strong asset base with hard or fixed assets, property, plant, equipment, proprietary technologies, patents, and exclusive licenses. We are aggressively seeking potential acquisition targets to meet these objectives.Capital

~~Some companies being~~Our ~~targeted~~working ~~are,~~capital requirements ~~oil producers~~increased, ~~oil~~and ~~drilling~~we ~~companies,~~incurred ~~refined~~significant ~~oil~~fluctuations ~~product~~in ~~producers,~~our ~~natural~~working ~~gas~~capital ~~producers,~~for ~~gas~~this ~~marketers, pipeline companies,~~period. ~~pipeline~~This ~~construction~~resulted ~~companies,~~in ~~gas~~a ~~storage~~working capital ~~facilities,~~deficit ~~propane~~of ~~producers~~($1, ~~high wall surface coal mines~~542,384) ~~refined~~for ~~oil product producers, and~~ the ~~acquisition~~period ofending ~~energy~~September ~~technology~~30, ~~patents~~2013, ~~and~~as ~~licenses.~~compared ~~We’re~~to ~~also~~a ~~looking~~working atcapital ~~acquiring~~deficit ~~producing petroleum~~of ~~and gas wells~~($1, ~~assets/properties~~021,031) for ~~and~~the ~~related~~period ~~energy~~ending ~~companies.~~September ~~Acquiring~~30, ~~interests~~2012. inThis ~~properties~~increased ~~in these areas will work very well with~~ our ~~strategic~~working ~~plans~~capital ~~for~~deficit ~~the~~by ~~expansion~~$521,353 ofor ~~our~~by ~~subsidiary~~51.06%. ~~Texas~~The ~~Gulf~~working ~~Oil & Gas Inc. We~~capital ~~have~~deficit ~~adapted~~was ~~our~~primarily ~~business~~due ~~strategy~~ to ~~become~~the acosts ~~more~~of ~~vertically~~pursuing ~~integrated company~~acquisitions, tofunding ~~give~~of usNDR ~~greater~~Energy’s ~~management~~operating ~~control~~expenses, ~~over~~the amount ~~our~~of ~~supply~~funds ~~chain~~borrowed from ~~the~~our ~~producer~~creditors, ~~through~~purchase ~~marketing,~~of ~~distribution,~~natural ~~and~~gas ~~directly to the customer. We believe~~inventories, ~~but~~our ~~can~~capital ~~provide no~~spending ~~assurances,~~exceeding ~~that this will bring even greater revenues for~~ our ~~Company,~~cash ~~solid~~flows ~~earnings~~from operations, and ~~bring~~from ~~more~~the ~~value~~increase toin ~~our~~accrued ~~shareholders~~expenses.

~~Termination~~We typically have positive cash flow and working capital each month to meet our capital requirements. The negative working capital for the period ending September 30, 2013, is an occasional event experienced by many companies, and has not had a significant negative effect on our operations. This is due to our ability to raise capital, the contracts we have with our utility customers, their strong S&P credit ratings, and their consistent payment of ~~Acquisitions~~our invoices on schedule. Due to the timing of the transactions, we are able to maximize the efficiency of the billing and payment cycles; thereby minimizing the impact of any occasional periods of negative working capital. Additionally, as we purchase gas at the wellhead, obtain lines of credit and accounts receivable facilities, this should enable us to greatly improve our cash flow and increase our working capital.

~~As part~~Cash of our business strategy we review acquisition and strategic investment prospects that we believe would complement our current product offerings, augment our market coverage, or enhance our technological capabilities, or otherwise offer growth opportunities. From time to time we review investments in new businesses and we expect to make investments in, and to acquire, businesses, products, or technologies in the future. We expect to continue pursuing selective acquisitions of businesses. Very often during the acquisition and due diligence process management will not be able to consummate the transaction because we cannot close it on terms and conditions acceptable to us, or because of other negative factors as described below.Flows

~~In the~~The ~~event~~prices ~~that management~~ and ~~its~~margins ~~acquisitions~~in ~~team have identified a strong potential target company, we will issue a Letter of Intent to start~~ the ~~due~~energy ~~diligence process to acquire that company. Afterwards, our legal counsel will prepare a definitive~~industry ~~agreement~~are ~~with~~normally ~~all of the final terms and conditions to complete the acquisition. Proper due diligence for proper technical~~volatile, ~~financial,~~ and ~~legal~~are ~~review~~driven ~~can~~to bea ~~very~~great ~~expensive~~extent ~~and~~by ~~time~~market ~~consuming.~~forces ~~Often~~over ~~during~~which ~~the due diligence process~~ we ~~discover~~have ~~that~~no ~~the~~control. ~~representations and~~Taking ~~warranties~~into ~~made by the target company regarding its business, operations, assets, financials, books, records, properties,~~consideration ~~contracts,~~other ~~liabilities,~~extenuating ~~pending litigation~~factors, ~~permits,~~as ~~licenses,~~these prices and ~~business~~margins ~~status are not accurate or complete; there may be misrepresentations~~fluctuate, orthis ~~there~~would isresult anin ~~adverse~~a ~~material~~corresponding change in ~~the business prior to the closing of the acquisition. In that event, management will elect to terminate that acquisition to avoid any negative impacts on~~ our ~~operations,~~revenues ~~avoid any adverse legal~~ and ~~financial~~operating ~~exposure~~cash toflows. ~~the~~Our ~~Company,~~cash ~~and~~flows tofor ~~protect~~the ~~our~~three ~~shareholders.~~months ~~Due~~ended toSeptember ~~these factors we~~30, 2013 and ~~other~~2012 ~~companies~~were ~~that pursue other companies~~ as ~~acquisition targets, do not expect that they will close on every potential acquisition target.~~follows:

~~Market Expansion~~ Cash Flows from Operating Activities

~~Management believes~~Our ~~that~~cash, ~~there~~provided by ~~are~~operating ~~currently 3~~activities,~~240~~ ~~utilities~~for in the ~~United~~three ~~States.~~months ~~Through~~ended ~~NDR~~September ~~Energy Group~~30, ~~we have firm contracts signed with 30 of these major utilities~~2013, ~~and~~was ~~are in discussions~~$20,900, ~~with~~as ~~another~~compared ~~14 utility companies~~ to ~~obtain~~cash ~~contracts~~used ~~from~~in ~~them~~operating ~~also.~~activities ~~Our plans are to develop an aggressive sales force, to obtain agreements with a total~~ of ~~100 utilities and other customers; including Federal and State Departments and Agencies~~$(1, ~~Cities~~376, ~~Municipalities, and large~~321) ~~commercial~~for ~~and industrial corporate clients, in~~ the ~~next~~three 12months toended September 2430, ~~months~~2012. ~~This~~The ~~will~~decrease ~~give~~was usprimarily aattributable ~~much~~to ~~greater market~~amortization ~~share,~~of ~~and~~beneficial ~~more~~conversion ~~customers~~feature, ~~for~~the ~~our~~accruing ~~gas~~certain ~~supply~~management ~~division;~~salaries, ~~thereby further increasing our revenues~~ and ~~profits.~~a Noreduction ~~assurances~~of ~~can be~~prepaid ~~provided that such plans will come to fruition or be profitable~~expenses.

~~Forecast of~~Cash ~~Projected~~Flows ~~Revenues~~from ~~and~~Investing ~~Earnings and Market Value~~ Activities

~~Our primary~~Cash ~~objective~~used ~~is to exploit changes~~ in ~~the~~investing ~~energy~~activities ~~market~~for ~~to propel~~ the ~~Company~~three months toended aSeptember ~~dominant market position~~30, ~~and~~2013 bewas ~~one~~$(40,500) ~~of the~~as ~~top~~compared ~~independent energy companies in the United States. Another major goal is~~ to ~~finding~~cash ~~new~~provided ~~ways~~by toinvesting ~~create~~activities ~~more value for, and maximize the wealth~~ of ~~our shareholders; and bring increased value to our stakeholders and the investment community~~$0.00 ~~The~~for ~~financial projections presented below are estimates based on Management’s analysis of~~ the ~~present~~three ~~targeted~~months ~~market segments of the~~ended ~~energy~~September ~~industry we are involved in~~30, ~~future industry trends, our current and growing customer base, our strategic joint ventures, strategic alliances, and other capital development projects we are pursuing~~2012. ~~The financial plan is intended for rapid but controlled growth and required our management to make certain assumptions and estimates.~~

~~Focus on Earnings~~ (20)

~~We achieved~~Table ~~sales revenue~~ of $12,400,975 for the three months year ending March 31, 2013, as compared to $13,007,160 for the same period in 2012. Our cost of sales was $ 12,382,523 for the three months ending March 3, 2013, as compared to $12,989,939 for the same period in 2012. While building our business, we focused on generating substantial sales revenues, a broad customer base, and gaining the greatest share of the market in the shortest period of time. That strategy affected how we obtained our supplies, their relative cost, and how we priced our products for sell to our customers. To gain a great market share in a short period of time, initially resulted in higher cost of goods sold, and selling the product, at or slightly below our costs, and that directly impacted our profitability. This caused almost negligible gross profit and negative earnings. This strategy was only a temporary measure while we were building greater market share, last year. Contents

~~A major~~Cash ~~goal~~Flows ~~for~~from ~~the~~Financing fiscal 2013 year and beyond is to begin to generate earnings for the Company. We intend to increase our operating income and earnings through current and future acquisitions in the energy industry, and high profit centers; which will include gas storage, physical and financial gas trading, transportation, management, and higher sales of natural gas, propane, oil and coal. We also plan to obtain our natural gas supplies at the wellhead, and aggregating the purchase of our gas supply through a large number of independent producers with long-term purchase agreements to supply to our customers.Activities

Our cash, provided ~~management’s~~by ~~plans~~operating activities, for ~~increasing~~the ~~earnings~~three ~~include~~months ended September 30, 2013, was $17,020, as compared to cash used in operating activities of $1,378,774 for the ~~following:~~three months ended September 30, 2012. The decrease was primarily attributable to amortization of beneficial conversion feature, the accruing certain management salaries, and a reduction of prepaid expenses.

~~• First,~~Liabilities we/ ~~are changing our strategy for obtaining our supplies of natural gas.~~Indebtedness

•Current ~~Second~~liabilities decreased to $5,372,363 wefor ~~are~~the ~~negotiating~~three ~~with~~months ~~independent~~ended ~~oil~~September ~~and~~30, ~~gas~~2013, ~~producers~~compared to ~~obtain~~$10,197,223 ~~our~~for ~~supplies~~the atsame ~~the~~period in ~~wellhead~~2012. This 47.32% decrease was primarily due to a $5,339,749 ~~and~~decrease ~~aggregating~~in accounts payable from the purchasing costs and supplies ~~supply~~of ~~under~~natural gas. Our long- term ~~supply~~liabilities ~~agreements~~are to$713,553 ~~market~~for the period ending September 30, 2013, compared to ~~our~~$976,248 ~~customers~~for the three months ending September 30, 2012.

• Third, we engaged in a joint venture with Progas Energy Services to develop the Northwest Premont oil and gas field in Texas. We will obtain our share of the oil and gas from that field from the wellhead at the producer’s price.DEBT

~~• Forth,~~Debt ~~we are attempting to obtain more bank funding, lines of credit,~~ and ~~Letters~~Debt ~~of Credit, as opposed to using the suppliers “trade credit”, to purchase the gas.~~Financing

•Long-Term Debt and Promissory Notes ~~Fifth~~- In its efforts to expand and grow, we ~~will~~borrowed bedirect ~~re-negotiating~~cash ~~our~~funds ~~existing~~from ~~supplier~~various ~~agreements~~investors to ~~purchase~~raise ~~the~~capital, ~~gas~~and we issued them debt instruments in ~~larger~~the ~~quantities,~~form of Promissory Notes to evidence that debt. These are long-term Notes with ~~greater~~various ~~economies~~rates and maturities that grant the Note Holder the right (but not the obligation) to convert them into shares of ~~scale,~~our oncommon ~~better~~stock ~~terms,~~in atlieu ~~lower~~of ~~purchase~~receiving payment ~~costs,~~in ~~and~~cash. ~~reduce~~The ~~the~~issued ~~high~~Promissory ~~financing~~Notes ~~costs~~are primarily unsecured obligations. ~~This~~The ~~should~~principal ~~drive~~amount ~~our~~of ~~costs~~the ~~down,~~Promissory ~~and~~Notes ~~potentially~~may ~~produce~~be ~~higher~~prepaid ~~profit~~at ~~margins~~the ~~for~~option ~~our~~of ~~company~~Maker, in whole or part at any time, together with all accrued interest upon written notice to Holder.

~~• Sixth,~~Many ~~our management has decided to expand into the coal energy sector~~ of ~~the~~these ~~energy~~Promissory ~~industry.~~Notes ~~Thermal/Steam~~have ~~non-coking~~above ~~coal~~market isinterest ~~used~~rates, asand ahigh ~~primary~~price ~~source~~conversion ofdiscounts ~~energy~~rates ~~for coal fired powered plant electric generation. We plan~~ to ~~mine, produce, and~~ market. ~~“Thermal/Steam” coal~~Management toissued ~~sale~~the toPromissory ~~other~~Notes ~~major~~primarily ~~coal producers and electric utility customers~~ for ~~power~~the ~~generation.~~following reasons:

~~• Seventh,~~a. ~~our~~Universal ~~Company,~~was ~~through~~considered ~~NDR~~a ~~Energy~~development ~~Group,~~stage company ~~has~~with ~~expanded~~a ~~its~~limited ~~product~~operating ~~mix~~history, toand ~~include~~had ~~the~~limited ~~sales~~revenues and ~~distribution of propane due to the higher profit margins~~earnings.

•b. The investors that accepted a Promissory ~~Eighth~~Note, wewith ~~intend~~deferred payments, with the option to ~~expand~~convert ~~into~~the ~~gas~~Promissory ~~storage,~~Note ~~physical~~to ~~and~~high ~~financial~~risk ~~gas~~penny ~~trading~~stock, ~~transportation~~for the cash obligation, felt ~~and~~they ~~gas~~were ~~management~~taking an extremely high risk.

~~(19)~~c. The investors’ concern about the historically high inherent risks in penny stocks.

~~Table~~d. The investors’ concern about the lack of ~~Contents~~liquidity and limited trading volume in the Company’s stock.

~~New~~e. The investors’ concern about the volatility ~~Profit~~of ~~Centers~~the stock price at that time.

~~We also plan to increase our revenues and profits by engaging in some, or all, of the services indicated below~~f. ~~These~~A ~~services~~significant ~~are~~price discount ~~currently~~to ~~being~~market ~~provided~~was torequired us by ~~our~~them ~~natural gas suppliers and the cost for these services are charged~~ to ~~us,~~offset ~~and~~declines ~~are included~~ in the stock price ~~of the gas that we purchase from them. We believe implementing these new profit centers may generate an additional $0.05~~ to ~~$0.25 in revenue per mcf of natural gas that we sell to our customers. These services include:~~

~~1. Scheduling~~cover -the ~~tracking~~risk ~~nominations,~~of ~~confirmations~~partial, ~~product~~or ~~movement~~even total, ~~and verification~~loss.

2g. ~~Gas~~ ~~Nominations~~The -investors ~~delivery~~had ofvery alimited, ~~specified~~or ~~volume~~no, ~~over~~collateral for atheir ~~defined~~investments ~~period~~or ofloans ~~time~~to the Company.

3h. ~~Capacity~~ ~~Releases~~Many -of ~~release~~the ofNotes ~~transportation~~were ~~capacity~~issued onwhen ~~interstate~~the ~~natural~~Company’s stock ~~gas~~was ~~pipelines~~trading in the 2 cent to 3 cent range.

4i. ~~Gas~~ ~~Transmission~~The -loans ~~Delivery~~were ~~via~~made on the ~~interstate~~best possible ~~pipeline~~terms ~~system~~we tocould get from the ~~Local~~investors ~~Utility~~at ~~and~~that ~~customers~~time because

~~5. Pipeline~~of ~~Balancing~~the -high ~~matching~~risks, ~~customer's~~the ~~daily~~recessionary ~~usage~~economy, and ~~with~~tight ~~the~~credit ~~customer's~~lending ~~confirmed~~market ~~pipeline~~at ~~delivery~~that time.

6j. Due to these inherent risk factors ~~Risk~~and ~~Management~~their –potential ~~developing~~effect ~~supply~~on ~~pricing~~the ~~strategy~~investors, ~~options,~~the ~~demand~~Board of Directors initially approved the conversion prices for the Notes in a range of $.005 to $.05 per share, ~~daily~~or ~~and~~at ~~futures~~a ~~contracts~~30% to 50% discount to market.

7.The investors have ~~Gas~~provided ~~Storage~~us with critical short and long-term ~~match~~funds ~~seasonal~~that ~~load~~we ~~variations~~have used for operations, working capital, and ~~production~~investment capital for our business acquisitions, to expand and grow our company. These investors invested funds in our company when it was still a development stage company with a limited operating history, limited revenues, negative earnings, and limited stock liquidity. They accepted Promissory Notes with the option to convert them to shares of common stock, and were taking what was considered to be a high risk investment at that time. We retain the right to re-negotiate the terms and conditions of the Promissory Notes, including adjusting the conversion prices if the stock price rises or falls considerably and consistently over ~~periods~~time, on terms that would be more favorable to us and our shareholders or the Note Holder. It could take several years to convert all of ~~fluctuating~~the ~~demand~~Promissory Notes to stock if all of the investors requested it. It is possible that some may never convert their Promissory Notes to stock and may take cash only when we are in the best position to settle the obligation on a cash basis. No additional consideration was paid to convert any Promissory Note.

8Most of the Promissory Notes that the investors elected to convert, were converted at the market price of the stock at the time of conversion. Some ~~Gas~~of the notes ~~Trading~~were -converted ~~physical~~at ~~trading~~a ~~and~~30% ~~financial~~to ~~trading,~~50% ~~and~~discount ~~hedging~~to the market price at the time of ~~gas~~conversion ~~futures~~to reflect a conversion price due to a modification of the terms of the Promissory Note.

~~Value~~Should the investors decide to convert their respective Promissory Notes into common stock then the corresponding debt represented by that Promissory Note would be eliminated from the Company’s balance sheet. The respective investors typically will convert the principal balance on their Promissory Notes in 25% to 33% portions, and usually will not convert their Promissory Notes into more than 4.99% of ~~Our~~the Company’s ~~Customer~~outstanding ~~Contracts~~shares of stock at any time. In the past twelve months the Company has significantly reduced its borrowings from its creditors to further reduce its short and long-term debt.

~~Our customer~~LIST ~~contracts~~OF ~~are~~PROMISSORY a very valuable asset for us. Through NDR Energy Group we presently sell natural gas to 30 of the largest public utilities, electric power producers, and local gas distribution companies, which serve millions of commercial, industrial, and residential, customers throughout the United States. Since they are regulated by various Federal and/or State agencies, they must guarantee a constant uninterruptible supply of natural gas and electricity to their customers; which include private homes, commercial and industrial users, medical facilities, educational facilities, federal/ state buildings, the military, and many more. Therefore, the public gas and electric utility companies have very stringent guidelines about the suppliers and vendors they do business with. The pursuit and acquisition of new customers by us can be time consuming and very costly, especially when you are attempting to transact business with large national and multinational companies with very strict guidelines. They usually require us and NDR Energy to respond to a very rigorous Request for Qualifications (RFQ) or Request for Proposals (RFP) process; which includes extensive background information on the company, its officers, operations staff, financial stability, credit worthiness, track record, and our ability to furnish them with a firm, reliable, uninterruptible supply of natural gas. We are responsible for transportation of the gas to their contracted delivery points, any shortages, and the gas must meet certain standards in terms of quality, pressure, and heat content. There can also be substantial legal and monetary damages to us for failure to pay our suppliers for the gas, and for failure to deliver the gas to the utilities because they could not supply electricity and gas to the general public. NOTES

~~Management believes,~~List ~~but cannot guarantee, each~~ of ~~our~~Notes ~~customer~~from ~~contracts~~July ~~would~~1, ~~have a potential to generate an estimated $12+ million annually~~2013 inthrough ~~natural~~September ~~gas~~30, sales. We believe the retail value of each of these contracts could be very significant if someone were to purchase one or more these contracts based on their potential sales value over a period of 5 to 10 years or more.2013

~~Future~~On July 18, 2013 the Company issued an amended ~~Capital~~twelve ~~Funding~~(12) month convertible Promissory Note with a non-related creditor for $130,000 at 12% interest. The Holder purchased four existing Promissory Notes from another Note Holder in a private non-public transaction. The amended Note consolidated the four original Notes, which included $96,200 in principal, $19,049 in accrued interest and a $14,751 premium. The Holder has the right to convert the Promissory Note to common stock at a variable conversion price at 50% discount to the market price at the time of conversion.

~~To ensure~~On ~~our~~September ~~ability to remain as a going concern~~30, ~~and develop a long-term profitable business~~2013, ~~management~~the isCompany ~~planning~~entered into toa ~~raise additional~~three ~~funds~~(3) inyear ~~debt~~Promissory orNote ~~equity~~with ~~capital~~a tonon-related ~~fund~~creditor ~~the~~for ~~growth~~$28,700 ofat ~~our~~12% ~~company~~interest. WeThe ~~anticipate~~Holder ~~using~~has the ~~proceeds~~right to ~~purchase some~~convert of the ~~companies~~Note weto ~~have~~common ~~targeted~~stock ~~for~~at ~~future~~a ~~acquisitions,~~fixed ~~and~~conversion ~~some~~price ~~for~~of ~~working capital~~$0.00115 ~~Management~~per ~~believes, although we cannot guarantee, that we can be successful in raising additional capital to fund our plans for growth and expansion~~share.

~~The raising~~If all of ~~additional~~these ~~capital~~Notes ~~through~~were converted to common stock it could take several years; and the ~~sale~~amount of ~~equity~~stock ~~may~~that could be issued cannot be determined. This would result in a dilution of the ~~current~~proportional, ~~shareholders~~or ~~interests.~~percentage ~~However~~of ownership of the shareholders; however, ~~management~~ ~~anticipates~~we ~~that~~do not believe the value of the shareholders stock would ~~likely~~be ~~receive~~adversely ~~greater~~affected. In ~~potential~~an ~~financial~~effort ~~rewards~~to bybuild ~~means~~a ofstrong aoperating ~~significant~~company the officers ~~increase~~and insome ~~the~~our ~~price~~employees ofhave not taken their salaries for the ~~stock~~last few years, ~~greater~~and ~~market~~have ~~value~~become creditors of the Company,. ~~and~~The ~~more~~accrued compensation ~~liquidity.~~due ~~Since~~them ~~our~~by ~~management~~the Company has ~~re-engineered our~~become ~~company~~a bydebt ~~creating~~or ~~more~~liability ~~value~~on tothe ~~it,~~books. ~~through~~We ~~its~~have ~~recent~~issued ~~acquisitions,~~them ~~and~~Promissory isNotes ~~positioning~~that itinclude an option to ~~qualify/apply~~convert the notes to beshares ~~listed on~~of ~~another~~common stock ~~exchange,~~to wereflect ~~believe~~these ~~this~~liabilities. ~~should~~This ~~make~~has itreduced ~~attractive~~some toof ~~more~~the ~~retail~~need ~~and~~to ~~institutional~~borrow from ~~investors~~outside creditors. WeThey ~~feel~~have ~~this~~also taken on the very same risks upon themselves as the outside lenders and creditors. The officers would prefer to be ofpaid ~~great~~in ~~benefit~~cash as opposed to ~~our~~shares ~~shareholders~~of common stock. If the officers ever elect to convert their Notes into shares of common stock the shares will be subject to Rule 144 restrictions as control securities when selling them into the market.

~~Corporate Governance~~Off-Balance ~~and~~Sheet ~~Management~~Arrangements

~~Amendment~~We have no off-balance sheet arrangements; toincluding ~~Company’s~~arrangements ~~Articles~~that ofwould ~~Incorporation~~affect the liquidity, capital resources, market risk support, and credit risk support or other benefits.

On December 26, 2012, the Company filed with the Nevada Secretary of State a Certificate of Amendment to the Company’s Articles of Incorporation. The Amendment was approved by a Unanimous Written Consent of all the Directors of Universal Bioenergy, Inc., on December 19, 2012, pursuant to the authority granted them by a “Written Consent Of The Holders Of A Majority Of The Voting Shares Of Universal Bioenergy, Inc.”, dated June 18, 2010; which granted to the Board of Directors the full right and authority to increase or otherwise change the authorized shares of Common Stock and Preferred Stock. The information regarding this issue was fully disclosed in the Company’s Form 8-K Report, filed on December 28, 2012. The information regarding this issue was originally fully disclosed in the Company’s Form 10-Q Reports that were filed for the quarterly periods ending June 30, 2011 and September 30, 2011, and the Form 8-K Report filed on May 19, 2011. A complete copy of the Amendment is attached as Exhibit 99.1. The Amendment incorporated the following changes:(21)

~~a. Increased~~Table ~~the number~~ of ~~authorized shares of the Corporation’s common stock from 1,000,000,000 to a total of 3,000,000,000 shares.~~Contents

~~b. The~~WHERE ~~total~~YOU ~~number~~CAN ofFIND ~~shares~~MORE ~~of "Preferred Stock" that the Corporation is authorized to issue is 10,000,000 shares with a par value of $0.001 per share.~~INFORMATION

~~Our~~You are advised to read this Form 10-Q Report ~~Beneficial~~in ~~Shareholders~~conjunction with other reports and documents that we file from time to time with the SEC. In particular, please read our Quarterly Reports on Form 10-Q, Annual Report on Form 10-K, and Form 10-K/A, and Current Reports on Form 8-K, including all amendments that we file from time to time. You may obtain copies of these reports directly from us or from the SEC at the SEC’s Public Reference Room at 100 F. Street, N.E. Washington, D.C. 20549, and you may obtain information about obtaining access to the Reference Room by calling the SEC at 1-800-SEC-0330. In addition, the SEC maintains information for electronic filers at its website http://www.sec.gov.

~~At March~~ITEM ~~31, 2013, there were 852,950,389 shares of our Common Stock issued and outstanding, and there were approximately 69 shareholders of record of our common stock on the records of our transfer agent~~3. ~~The~~QUANTITATIVE ~~shareholder~~AND ofQUALITATIVE ~~record~~DISCLOSURES isABOUT ~~the~~MARKET name of an individual or entity that an issuer or transfer agent carries in its records as the registered holder (not necessarily the beneficial owner) of the issuer's securities. Dividends and other distributions are paid only to shareholders of record.RISK

~~The actual~~We ~~“Beneficial~~are ~~Shareholder”~~exposed ~~(the~~to ~~true~~risks ~~owner~~associated ofwith ~~the shares) will generally have their shares held in the “street~~commodity ~~name”~~prices ~~of their nominee, within a brokerage account, a mutual fund, or a custodian bank for safety~~ and ~~convenience~~interest ~~of trading, with the bank or broker holding title to the shares~~rates. ~~The~~Commodity ~~Depository~~price ~~Trust~~risk ~~Company (DTC), through its partnership nominee CEDE & Company,~~ is the ~~largest~~potential ~~shareholder~~loss ofthat ~~record~~we ofmay ~~our~~incur ~~shares of Common Stock. CEDE & Company,~~ as ~~nominee,~~a ~~holds~~result ~~over 554.38 million shares~~ of ~~our~~changes ~~common~~in ~~stock~~the ~~for~~fair ~~its Broker Dealers and other members on behalf of their beneficial shareholders.~~value ~~Management believes based on its tracking~~ of ~~the~~a ~~transactional~~particular ~~record~~instrument ~~data~~or ofcommodity. ~~OTCMarkets~~Interest-rate /risk ~~Pink~~results ~~Sheets~~from ofour ~~the~~portfolio ~~total volume~~ of ~~stock~~ ~~trades~~debt and ~~number~~equity ofinstruments ~~executed trades~~ that ~~the~~we ~~estimated~~issue to ~~amount~~provide offinancing ~~beneficial~~and ~~shareholders~~liquidity offor our ~~stock~~business ~~is in the range of 3000 to 5000 or more~~activities.

~~Management Incentive~~Commodity ~~Programs~~Price Risk

~~We have~~Our anmost ~~incentive~~significant ~~program~~market ~~for~~risk ~~the~~relates ~~Officers, in accordance with their Employment Agreements, whereby they may receive bonuses and~~to ~~equity awards based on~~ the ~~added~~prices ~~“economic~~we ~~value”~~receive ~~that~~for ~~they bring to~~ our ~~company.~~oil ~~This~~and ~~may~~natural ~~include~~gas ~~increases~~production. inRealized ~~revenues, earnings,~~pricing ~~cash~~is ~~flow,~~primarily ~~debt~~driven ~~reduction,~~by ~~return~~the onprevailing ~~net assets, return on stockholders equity, return on assets, return on capital,~~worldwide ~~stockholder~~price ~~returns,~~for ~~return~~crude ~~on sales~~oil, ~~gross~~and orspot ~~net profit margin, productivity, expense, margins, operating efficiency, objective measures of customer satisfaction, working capital, financing, earnings per share,~~ market ~~share,~~prices ~~inventory~~applicable ~~turns,~~to ~~acquisitions or~~the ~~strategic~~production ~~transactions, or other means~~ of ~~bringing~~oil ~~additional~~and ~~value~~gas toin the our ~~Company~~U.S. ~~Since~~and ~~management~~Canada. ~~has~~Pricing ~~deferred most or all~~for ofoil ~~their~~and ~~compensation,~~gas ~~provisions~~production ~~have~~has been ~~made~~volatile toand ~~issue~~unpredictable ~~them long-term Promissory Notes~~ for ~~their~~ ~~salary,~~several ~~with the option to convert the Notes into to common stock of our company~~years.

~~Discontinued Operations~~ Interest Rate Risk

~~There~~ We are nosubject ~~Discontinued~~to ~~Operations~~interest rate risk on our long-term fixed and variable interest rate borrowings. Fixed rate debt, where the interest rate is fixed over the life of the instrument, exposes us to ~~report~~(i) ~~for~~changes ~~this~~in ~~period~~market interest rates reflected in the fair value of the debt, and (ii) the risk that we may need to refinance maturing debt with new debt at a higher rate. Variable rate debt, where the interest rate fluctuates, exposes us to short-term changes in market interest rates as our interest obligations on these instruments are periodically re-determined based on prevailing market interest rates.

Net Loss as adjusted for non-recurring and/or non-cash expenses
		Three Months Ended		Three Months Ended
		March 31, 2013		March 31, 2012
Losses available for common shareholders	$	(744,128)	$	($654,630)
Other non-cash expenses		654		654
Stock issued for services		0		5000
Losses available for common shareholder, as adjusted	$	(743,474)	$	($648,976)

As of September 30, 2013, we were not engaged in any other activities that would cause exposure to the risk of material earnings or cash flow loss due to changes in interest rates or market commodity prices.

~~(20)~~ITEM 4. CONTROLS AND PROCEDURES

~~Table~~Evaluation of ~~Contents~~Disclosure Controls and Procedures

~~RESULTS~~We maintain disclosure controls and procedures OFthat ~~OPERATIONS~~are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized, and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Our disclosure controls and procedures were designed to provide reasonable assurance that the controls and procedures would meet their objectives. As required by SEC Rule 13a-15(b), our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based on the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level.

~~Three~~Our principal executive officer and our principal ~~Months~~financial ~~Ended~~officer, ~~March~~are 31responsible for establishing and maintaining adequate internal control over financial reporting, ~~2013~~as ~~compared~~such term is defined in Exchange Act Rules 13a-15(f). Management is required to base its assessment of the ~~Three~~effectiveness ~~Months~~of ~~Ended~~our internal ~~March~~control 31over financial reporting on a suitable, recognized control framework, such as the framework developed by the Committee of Sponsoring Organizations (COSO). The COSO framework, published in Internal Control-Integrated Framework, is known as the COSO Report. Our principal executive officer and our principal financial officer, have has chosen the COSO framework on which to base its assessment. Based on this evaluation, we have concluded that, as of September 30, 2013, internal controls and procedures were not effective to detect the inappropriate application of US GAAP rules as described below.

~~Review~~The matters involving internal controls and procedures that the Company’s management considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board were: (1) inadequate segregation of duties consistent with control objectives; (2) lack of a majority of independent directors on the Company’s board of directors, resulting in ineffective oversight in the establishment and ~~Analysis~~monitoring of required ~~Current~~internal ~~Results~~controls and procedures; (3) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of ~~Operations~~US GAAP and SEC disclosure requirements; and (4) ineffective controls over period end financial disclosure and reporting processes that resulted in certain filings being delayed or late.

~~Revenues~~Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving their control objectives. Furthermore, smaller reporting companies, like ours, face additional limitations. Smaller reporting companies employ fewer individuals and find it difficult to properly segregate duties. Often, only a few individuals control every aspect of the Company's operation and are in a position to override any system of internal control. Additionally, smaller reporting companies tend to utilize general accounting software packages that lack a rigorous set of software controls.

~~Our~~It should be noted that any system of controls, ~~revenues~~however ~~for~~well designed and operated, can provide only reasonable and not absolute assurance that the ~~three~~objectives ~~months~~of ~~period~~the ~~ended~~system ~~March~~are met. ~~31,~~In ~~2013~~addition, ~~decreased;~~the ~~they~~design ~~also~~of ~~decreased~~any control system is based in part upon certain assumptions about the likelihood of certain events. ~~for~~However, as noted, when the ~~three~~size ~~months~~of ~~period~~our ~~ended~~Company ~~March~~and 31its finance department is materially increased,~~2012~~ the deficiencies can be addressed. Once increased, ~~due~~we intend to create a new finance and accounting position that will allow for proper segregation of duties consistent with control objectives, and will increase our personnel resources and technical accounting expertise within the ~~following~~accounting ~~conditions~~function; and inwe will prepare and implement appropriate written policies and checklists which set forth procedures for accounting and financial reporting with respect to the Urequirements and application of US generally accepted accounting principles and SEC disclosure requirements.S. Because ~~energy~~of ~~market;~~these and other inherent limitations of control systems, there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote or when the size of our Company and our finance department will materially increase to address these issues.

~~According to~~Changes ~~the Energy Information Administration, the warm weather this winter has resulted~~ in ~~natural~~Internal ~~gas~~Control ~~working~~over ~~inventories~~Financial that continue to set new record seasonal highs. EIA’s average 2012 Henry Hub natural gas spot price forecast is $3.17 per million British thermal units (MMBtu); a decline of about $0.83 per MMBtu from the 2011 average spot price. EIA expects that Henry Hub spot prices will average $3.96 per MMBtu in 2013.Reporting

~~According to~~During ~~Bloomberg~~the /fiscal ~~Business week, “The price of natural gas is at a 10-~~year ~~low~~ended ~~after~~September ~~a surprising jump in supplies. But the~~30, ~~government~~2013, ~~says~~no ~~natural~~changes ~~gas~~were ~~inventories~~made ~~expanded~~to ~~more~~our ~~than~~internal ~~expected~~control ~~following~~over afinancial ~~recent~~reporting that ~~production~~have ~~boom.~~materially ~~Supplies~~affected, or are ~~currently~~reasonably 59likely ~~percent~~to ~~above~~materially ~~the five-year average~~affect, ~~and~~our ~~they're~~internal ~~expected~~control ~~to keep growing~~ over ~~the~~financial ~~next few months~~reporting.”

Our primary revenues from this period are from the sale of natural gas and propane. Our revenues for the three months ended March 31, 2013 were $12,400,975 as compared to $13,007,160 for the same period in 2012. This resulted in an decrease of $606,185 in revenues or 4.89% over the previous year. Our Cost of Sales for this period was $12,382,943. This has resulted in a gross profit margin for this period of $18,452. (22)

~~The high~~Table ~~proportionate cost~~ of sales relative to the gross revenues reflected in this period is due to purchasing the gas from some of the suppliers at near retail cost, and high financing costs added to the gas by the suppliers. Management plans are to reduce the purchasing cost of the gas, and the financing cost, by obtaining our own credit facility and lines of credit and obtaining our gas at the wellhead. We believe this will allow us to purchase the gas in larger quantities, with greater economies of scale, on better terms, at lower costs, and reduce the high financing costs; thereby significantly increasing our gross profit.Contents

~~Additionally, in~~PART ~~2012,~~II ~~while~~– ~~building~~OTHER our business, we focused on generating substantial sales revenues, a broad customer base, and gaining the greatest share of the market in the shortest period of time. That strategy affected how we obtained our supplies, their relative cost, and how we priced our products for sell to our customers. To gain a great market share in a short period of time initially resulted in higher cost of goods sold, and selling the product at or slightly below our costs; which directly impacted our profitability. This caused almost negligible gross profit and negative earnings in 2012; which continued in the second and third quarter of 2012. This strategy was only a temporary measure while we were building greater market share last year. INFORMATION

~~We incurred~~ITEM losses of $744,128 for the three months ended March 31, 2013 and $654,630 for the same period in 2012. Our accumulated deficit since our inception through March 31, 2013 amounts to $23,146,507. We did not issue any common shares for services for this period which had an aggregate fair value of approximately $0.00 that was included in the $292,293 in general and administrative expenses for the three month period ended March 31, 2013. We also incurred interest expenses of $352,229. Excluding the value of the common stock that was issued for services, and interest expenses which together totaled $352,229, would correspondingly reduce our net loss of $744,128 to an adjusted net loss of $391,899 for the period ending March 31, 2013. Based on an adjusted net loss of $391,899, this loss equals only 3.16% of our total revenues of $12,400,975 for the period ended March 31, 2012, as compared to 1.~~13%~~ ~~for~~LEGAL the same period ended 2012.*PROCEEDINGS

*This disclosureThere ofhave been no material changes to the information asincluded ~~presented~~in Item 3, “Legal Proceedings” in our 2013 Annual Report on Form 10-K. There is ano ~~non~~action, suit, proceeding, inquiry, or investigation before, or by, any court, public board, government agency, self-~~GAAP~~regulatory ~~accounting~~organization, or ~~measure~~body pending or, ~~and~~to isthe ~~not~~knowledge ~~based~~of onthe ~~GAAP~~executive ~~accounting~~officers ~~principles~~of our company or ~~guidelines.~~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; with the exception of the legal proceeding indicated below;

~~Note! Regarding~~ITEM 1A ~~Increase~~- inRISK Expenses and Losses. This increase in operating expenses, and the resulting net loss, was primarily due to increases in accrued interest, the current portion of long term debt, and in embedded derivative liability costs as indicated below.FACTORS

~~The Company~~In ~~issued~~addition ~~convertible~~to ~~Promissory~~the ~~Notes,~~other ~~and~~information ~~determined~~set ~~that~~forth in ~~the~~this ~~conversion~~Report, ~~features~~the ~~contained~~factors discussed in ~~the~~"Part ~~Notes~~I ~~represent~~— ~~freestanding derivative~~Item ~~instruments~~1A ~~that~~— ~~meet~~Risk ~~the~~Factors" ~~requirements~~in ~~for~~our ~~liability~~Annual ~~classification~~Report ~~under~~on ~~Financial~~Form ~~Accounting~~10-K for ~~Standard~~the ~~Board~~fiscal ~~(“FASB”), U.S.~~year ~~GAAP,~~ended ~~Accounting~~June ~~Standards~~30, ~~Codification~~2013, ~~Derivatives~~could ~~and~~materially ~~Hedging~~affect ~~(Topic~~our ~~ASC~~business, ~~815).~~financial Ascondition, aor ~~result,~~operating ~~the~~results. ~~fair~~The ~~value~~risks described ofin ~~the~~our ~~derivative financial~~Annual ~~instruments~~Report inon ~~the~~Form ~~Promissory~~10-K ~~Notes~~and isour ~~reflected~~subsequent inSEC ~~the~~reports ~~Company’s~~are ~~balance~~not ~~sheet~~the asonly arisks ~~liability~~facing us. ~~The~~There ~~fair~~are ~~value~~additional ofrisks ~~the~~and ~~derivative~~uncertainties ~~financial~~not ~~instruments~~currently ofknown ~~the~~to ~~convertible~~us, ~~Notes~~or ~~and~~that ~~warrants~~we ~~was~~currently ~~measured~~deem atto ~~the~~be ~~inception~~immaterial ~~date~~that ofmay ~~the~~also ~~Promissory~~materially adversely ~~Notes~~affect ~~and~~our ~~warrants~~business, ~~and~~financial ~~each~~condition, ~~subsequent~~or ~~balance~~operating ~~sheet date~~results. ~~Any~~While ~~changes~~not inrequired ~~the~~for ~~fair~~smaller ~~value~~reporting ofcompanies, ~~the~~we ~~derivative financial instruments~~include ~~are~~the ~~recorded~~following aspreviously ~~non-operating,~~disclosed ~~non-cash~~risk ~~income,~~factors orin ~~expense,~~addition atto ~~each~~the ~~balance~~risk ~~sheet~~factors ~~date.~~previously provided:

~~The Company~~ITEM ~~valued the conversion features in its convertible Promissory Notes using the Black-Scholes model~~2. ~~Included~~UNREGISTERED inSALES ~~our~~OF ~~Statements of~~EQUITY ~~Operations~~SECURITIES ~~for~~AND ~~the~~USE ~~three~~OF ~~ended March 31, 2013, are $124,105 in non-cash charges pertaining to the derivative liability as it pertains to change in derivative liability and amortization of debt discount, respectively.~~PROCEEDS

~~Operating Costs~~Period ~~and~~July ~~Expenses~~1, 2013 through September 30, 2013

~~Our Cost~~There ofwere ~~Sales~~no ~~for~~sales ~~the~~of ~~three~~unregistered ~~months ended March 31, 2013 were $12,382,523~~senior assecurities ~~compared~~during ~~to $12,989,939 for~~ the ~~same~~fiscal period ~~in 2012. Our primary operation is the marketing of natural gas and propane to our major customers nationwide. Our operating expenses for the three months~~ ended ~~March~~ 31September 30, 2013 ~~were~~except ~~$292,293~~ as ~~compared~~follows ~~to $440,541~~ for ~~the~~ ~~same~~certain ~~period~~Promissory inNotes ~~2012. We pay our employees~~ (“Note”) and ~~consultants~~issuances ~~largely~~of inequity ~~common~~at ~~shares~~the asinitiation ~~our~~and ~~cash~~request ~~availability~~of isthe ~~currently~~Note ~~limited.~~holders:

WeOn July 15, 2013 the Company completed the ~~decreased~~final ~~our~~and ~~total~~full ~~operating~~conversion ~~expenses~~of ~~from~~one ~~$440,541~~of ~~for~~its ~~the~~Notes ~~period~~payable ~~ending~~dated December 31, 2012, byfor a ~~total~~Note with a principle amount of $~~148~~32,~~248~~500, and ora bytotal 33of 34,634,967 common shares were issued.~~65%~~ The final conversion of the Note included $32,500 toin principal and $~~292~~1,~~293~~300 ~~for~~in accrued interest that was due on the ~~period~~Note ~~ending~~upon conversion. This leaves a remaining balance of $0.00 on this Note. This conversion of debt ~~March~~reduced ~~31,~~the ~~2013~~Company’s Notes Payables by a principal amount of $32,500.

~~Based on~~On ~~business~~July ~~our~~25, ~~plans~~2013, ~~for~~the ~~growth~~Company approved a Stock Purchase Agreement between the Company and ~~expansion~~an affiliated party, ~~and~~whereby ~~increasing~~the ~~revenues~~Company ~~through~~re-purchased ~~sales~~300,000,000 shares of ~~natural~~the Company’s common stock from that party in a private transaction. The Company subsequently cancelled the shares of common stock and ~~other~~returned them ~~products~~to the Corporate treasury. The 300 million shares represented 12% of the Company’s 2,538,903,268 weoutstanding ~~believe~~shares weof ~~will~~common ~~reduce~~stock that were indicated in our ~~net~~Form ~~losses~~10-Q ~~down~~Report tofor ~~zero~~the period ended March 31, ~~and~~2013. ~~then~~The ~~move~~affliliated ~~our~~party ~~company~~was ~~toward~~Global Energy ~~solid~~Group ~~profitability~~LLC. The purchase price for the 300,000,000 million shares included 1,000,000 restricted Series A Preferred shares of stock and $37,000 in cash consideration.

~~Assets~~On September 11, 2013, the Company completed a partial conversion one of its amended Notes payable dated July 18, 2013 with a principal amount of $130,000. This was the third in a series of conversions for this Note, including one on July 31, 2013, one on August 15, 2013, and one on September 11, 2013. A total of $55,543 worth of the Note was converted, and 83,340,897 common shares were issued for these three partial conversions. Previously, on July 18, 2013, a non-affiliated party purchased four existing Notes in a private non-public transaction from a non-related creditor. An amended Note for $130,000 dated July 18, 2013 at 12% interest was issued to the new Note Holder. The amended Note consolidated the four original Notes, which included $96,200 in principal, $19,049 in accrued interest and a $14,751 premium. This conversion of debt reduced the Company’s Notes Payables by $55,543. A balance of $74,457 of principal remains on the modified Note.

~~Our “total~~Item ~~assets” have increased by $1,823,678, or~~ 3.~~84%~~ toDefaults ~~$7,058,207~~upon ~~for~~Senior ~~the period ending March 31, 2013, compared to $5,234,529 for the same period in 2013. This was due to an increase in the amount of our Accounts Receivables from the sales of natural gas.~~Securities

~~Liquidity~~There were no defaults upon senior securities ~~and~~during ~~Capital~~the ~~Resources~~period ended September 30, 2013.

~~Our management~~Item ~~looks to a variety of funding sources to meet our short and long-term liquidity requirements~~4. WeMine ~~currently~~Safety generate the majority of our consolidated revenues and cash flow from the marketing and sale of natural gas and propane to its 30 electric utility customers through NDR Energy. Our revenues, profits, and future growth, depend to a great extent on the prevailing prices of natural gas. Our revenue, profitability, and future growth, are largely dependent on a number of factors; including the prevailing and future prices for natural gas, which is also dependent or influenced by numerous factors beyond our control; such as regulatory developments, changing economic conditions, and competition from other energy sources.Disclosure

~~Working Capital~~Not applicable.

~~Our working~~Item ~~capital requirements increased significantly, and we incurred significant fluctuations in our working capital for this period~~5. ~~This~~Other resulted in a working capital deficit of ($638,014) for the period ending March 31, 2013, as compared to a working capital deficit of ($922,031) for the period ending March 31, 2012. This increased our working capital deficit by $2,715,983 or by 200.95%. The working capital deficit was due to the amount of funds borrowed from our creditors, purchase of natural gas inventories and our capital spending exceeding our cash flows from operations.Information

~~We typically~~There ~~have positive cash flow and working capital each month to meet our capital requirements. The negative working capital for the period ending March 31, 2013,~~ is anno ~~occasional~~other ~~event~~information ~~experienced by many companies, and has not had a significant negative effect on our operations. This is due~~ to ~~our~~report ~~ability to raise capital, the contracts we have~~ with ~~our utility customers, their~~ ~~strong~~respect ~~S&P credit ratings, and their consistent payment of our invoices on schedule. Due~~ to ~~the~~which ~~timing~~information ofis ~~the~~not ~~transactions, we~~otherwise ~~are~~called ~~able~~for toby ~~maximize~~this ~~the~~form ~~efficiency~~except ~~of the billing and payment cycles; thereby minimizing the impact of any occasional periods of negative working capital. Additionally,~~ as ~~we purchase gas at the wellhead, obtain lines of credit and accounts receivable facilities, this should enable us to greatly improve our cash flow and increase our working capital.~~follows:

~~Cash Flows~~Changes in Control

~~The~~On ~~prices~~January ~~and~~11, ~~margins~~2013, Global Energy Group LLC, purchased a portfolio of 14 of the Company’s Promissory Notes, in a private transaction directly from the ~~energy~~individual ~~industry~~Note ~~are~~Holders, ~~normally~~with ~~volatile~~a total principal amount of $3,234,775. ~~and~~On ~~are~~April ~~driven~~10, to2013, athe Company, ~~great~~(at ~~extent~~the byrequest ~~market~~of ~~forces~~the ~~over~~Note ~~which~~Holder), converted this portfolio of 14 Promissory Notes into common shares of stock; weand ~~have~~issued no1,568,630,000 ~~control~~common shares for that conversion. ~~Taking~~The Promissory Notes were converted into ~~consideration~~market ~~other~~price ~~extenuating~~of ~~factors,~~the stock asat ~~these~~the ~~prices~~time ~~and~~of ~~margins~~conversion. ~~fluctuate~~The 1,568,630,000 ~~this~~shares ~~would~~is ~~result~~the equivalent of 61.78% of the Company’s 2,538,903,268 inoutstanding ashares ~~corresponding~~of ~~change~~common instock ~~our~~that ~~revenues~~were issued and ~~operating~~outstanding ~~cash~~on ~~flows.~~May ~~Our~~20, ~~cash~~2013, ~~flows~~as ~~for~~reported in the ~~nine~~Company’s ~~months~~Form 10-Q Report for the period ended March 31, 2013. The purchasing party was Global Energy Group LLC, and its controlling entity ~~2012~~is ~~were~~Rainco Management LLC and the control person for Rainco Management LLC is Nicole C Singletary. Solomon Ali, our Senior Vice President of Corporate Finance and Investor Relations, previously served as ~~follows:~~CEO of Rainco Industries, parent company of Rainco Management LLC and currently serves as an outside consultant (with no affiliation) and Rainco Industries serves us in the capacity as a consultant. Global Energy Group is now deemed an affiliate.

~~Cash~~The shares issued to Global Energy Group are ~~Flows~~restricted securities. Restricted securities are securities acquired in unregistered, private sales from ~~Operating~~the ~~Activities~~issuer or from an affiliate of the issuer. Investors typically receive restricted securities through private placement offerings pursuant to Regulation D, employee stock benefit plans, as compensation for professional services, or in exchange for providing "seed money" or start-up capital to the company. Rule 144(a)(3) identifies what sales result in restricted securities. Pursuant to Rule 144 of the Securities Act of 1933, control securities are those held by an affiliate of the issuing company. An affiliate is a person, such as an officer, director or large shareholder, (e.g. owning 10% of a company’s outstanding shares), in a relationship of control with the issuer. Control means the power to direct the management and policies of the company in question, whether through the ownership of voting securities, by contract, or otherwise.

~~Our~~Therefore, Global Energy Group is subject to ~~cash provided~~the bylimitations ~~operating~~of ~~activities~~Rule ~~for~~144 on sales of any of its stock. The restrictions on the ~~three~~sales ~~months~~of ~~ended~~restricted ~~March~~stock ~~31,~~per ~~2013~~Rule ~~was~~144 $include ~~221~~holding the stock for a minimum of six months after issuance,~~701~~ asand ~~compared~~it would therefore be limited to ~~cash~~selling ~~used~~an inamount ~~operating~~equal ~~activities~~to 1% of ~~$291,535~~the ~~for~~Company’s ~~the~~issued ~~three~~and ~~months~~outstanding ~~ended~~shares ~~March~~every ~~31,~~90 ~~2012~~days. ~~The~~When ~~decrease~~and if it did decide to sell any of its stock, the federal ~~was~~securities ~~primarily~~laws ~~attributable~~require them to ~~amortization~~file a Form 144, (Notice of ~~beneficial~~Proposed ~~conversion~~Sale ~~feature~~of ~~and~~Securities), notifying the ~~accruing~~SEC of their intent to ~~certain~~sell ~~management~~any ~~salaries.~~of its stock in accordance with the Rule 144 guidelines and limitations.

~~Cash Flows from Investing Activities~~(23)

~~Cash used~~Table ~~in investing activities for the three months ended March 31, 2013 was $0.00 as compared to cash provided by investing activities~~ of ~~$0.00 for the three months ended March 31, 2012.~~Contents

~~Cash Flows~~Item ~~from~~6. ~~Financing Activities~~Exhibits

Our cash used in financing activities for the three months ended March 31, 2013 was as compared to $221,300 for the three months ended March 31, 2012. The net cash used in financing activities is primarily attributable to our Notes Payables.

Exhibit No.		Exhibit
3.1		Articles of Incorporation (1)
3.2		Bylaws
3.3		Amendment to Articles of Incorporation (2)
3.3(a)		Amendment to Articles of Incorporation (7)
10.5		Employment Agreement by and between Universal Bioenergy and Dr. Richard Craven (3)
10.6		Employment Agreement by and between Universal Bioenergy and Vince M. Guest (4)
10.7		Employment Agreement by and between Universal Bioenergy and Solomon Ali (4)
14.1		Code of Ethics (5)
31.1	*	Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act. (2)(6)
31.2	*	Certification of Principal Financial and Accounting Officer Pursuant to Section 906 of the Sarbanes-Oxley Act.
32.1	*	Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act.
32.2	*	Certification of Chief Accounting Officer Pursuant to Section 906 of the Sarbanes-Oxley Act.

~~Liabilities /~~*filed ~~Indebtedness~~herewith

Current liabilities increased to $7,460,295 for the three months ended March 31, 2013, compared to $2,991,261 for the same period in 2012. This 149% increase was primarily due to a $1,978,420 increase in current portion of long term debt and an increase of $ 1,852,304 in accounts payable from the purchasing costs and supplies of natural gas. Our long term liabilities are $1,223,764 for the period ending March 31, 2013, compared to $1,392,487 for the three months ending March 2012. This increase was primarily due to the conversion of the accrued compensation and expenses of certain officers and employees into long term notes payable.

(1)	Incorporated by reference to the registration statement on Form SB-2 as filed on March 21, 2005
(2)	Incorporated by reference to the Current Report on Form 8-K as filed on October 31, 2007.
(3)	Incorporated by reference to the Current Report on Form 8-K as filed on February 29, 2008
(4)	Incorporated by reference to the Form 10K for year ended December4 31, 2009 as filed on August 12, 2010
(5)	Incorporated by reference to the 2nd amended Form 10K/A for year ended December 31, 2007 as filed on January 4, 2010.
(6)	Incorporated by reference to the 2^nd amended Form 10K/A for year ended December 31, 2007 as filed on January 4, 2010.
(7)	Incorporated by reference to the Current Report on Form 8-K as filed on December 28, 2012

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Table of Contents

~~DEBT~~SIGNATURES

~~Debt~~Pursuant to the requirements of the Securities and ~~Debt~~Exchange ~~Financing~~Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Long-Term Debt and Promissory Notes - In its efforts to expand and grow, we borrowed direct cash funds from various investors to raise capital, and we issued them debt instruments in the form of Promissory Notes to evidence that debt. These are long-term Notes with various rates and maturities that grant the Note Holder the right (but not the obligation) to convert them into shares of our common stock of the Company in lieu of receiving payment in cash. The issued Notes are primarily unsecured obligations. The principal amount of the Notes may be prepaid at the option of Maker, in whole or part at any time, together with all accrued interest upon written notice to Holder.

	UNIVERSAL BIOENERGY, INC.


Dated: November 19, 2013		By	/s/ *Vince M. Guest*
			Vince M. Guest
		President and Chief Executive Officer, Principle Financial Officer, Principal Accounting Officer and Director

Many of these Notes have above market interest rates, and high price conversion discounts rates to market. Management issued the Note primarily for the following reasons.

a. Universal was considered a development stage company, with a limited operating history, and had limited revenues and earnings.

b. The investors that accepted a Note, with deferred payments, with the option to convert the Note to high risk penny stock, for the cash obligation, felt they were taking an extremely high risk.

c. The investors’ concern about the historically high inherent risks in penny stocks.

d. The investors’ concern about the lack of liquidity and limited trading volume in our stock.

e. The investors’ concern about the volatility of the stock price at that time.

f. A significant price discount to market was required by them to offset declines in the stock price to cover the risk of partial or even total loss.

g. The investors had very limited or no collateral for their investments or loans to the Company.

h. Many of the Notes were issued when our common stock was trading in the 2 cent to 3 cent range.

i. The loans were made on the best possible terms we could get from the investors at that time, because of the high risks, the recessionary economy and tight credit lending market at that time.

j. Due to these inherent risk factors, and their potential effect on the investors, the Board of Directors approved the conversion prices for the Notes in a range of $.005 to $.05 per share, or at a 30% to 50% discount to market.

The investors have provided us with critical short and long-term funds that we have used for operations, working capital, and investment capital, for our business acquisitions to expand and grow our Company. These investors invested funds in our Company when it was still a development stage company with a limited operating history, limited revenues, negative earnings, and limited stock liquidity. They accepted Promissory Notes with the option to convert them to shares of common stock, and were taking what was considered to be a high risk investment at that time. We retain the right to re-negotiate the terms and conditions of the Notes; including increasing the conversion prices if the stock price rises considerably and consistently over time, on terms that would be more favorable to us and our shareholders. It could take several years to convert all of the Notes to stock if all of the investors requested it. It is possible that some may never convert their Notes to stock and may take cash only when we are is in the best position to settle the obligation on a cash basis. No additional consideration was paid to convert any Note.

Most of the Notes that some of the investors elected to convert were not converted at the stated amount in the Note, (such as $0.005 in some cases), but were converted at a 30% to 50% discount to the market price at the time of conversion to reflect a re-negotiated conversion price due to a modification of the terms of the Note.

Should the investors decide to convert their respective Notes into common stock then the corresponding debt represented by that Note would be eliminated from the Company’s balance sheet. The respective investors typically will convert the principal balance on their Notes in 25% to 33% portions, and usually will not convert their Notes into more than 4.99% of the Company’s outstanding shares of stock at any time.

LIST OF PROMISSORY NOTES

List of Notes from January 1, 2013 through March 31, 2013

On February 28, 2013 the Company entered into a three (3) year Promissory Note with a non-related creditor for $18,000 at 12% interest. The Holder has the right to convert the Note to common stock at a fixed conversion price of $0.002 per share.

On March 18, 2013 the Company entered into a nine (9) month convertible Promissory Note with a non-related creditor for $42,500 at 8% interest. The Holder has the right to convert the Note to common stock after six months at a variable conversion price at 50% discount to the market price at the time of conversion.

On March 30, 2013 the Company entered into a three (3) year Promissory Note with a non-related creditor for $950.00 at 12% interest. The Holder has the right to convert the Note to common stock at a fixed conversion price of $0.002 per share.

If all of these Notes were converted to common stock it could take several years; and the amount of stock that could be issued cannot be determined. This would result in a dilution of the proportional, or percentage of ownership of the shareholders; however, we do not believe the value of the shareholders stock would be adversely affected. In an effort to build a strong operating company the officers and some our employees have not taken their salaries for the last few years, and have become creditors of the Company. The accrued compensation due them by the Company has become a debt or liability on the books. We have issued them Promissory Notes that include an option to convert the notes to shares of common stock to reflect these liabilities. This has reduced some of the need to borrow from outside creditors. They have also taken on the very same risks upon themselves as the outside lenders and creditors. The officers would prefer to be paid in cash as opposed to shares of common stock. If the officers ever elect to convert their Notes into shares of common stock the shares will be subject to Rule 144 restrictions as control securities when selling them into the market.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements; including arrangements that would affect the liquidity, capital resources, market risk support, and credit risk support or other benefits.

WHERE YOU CAN FIND MORE INFORMATION

You are advised to read this Form 10-Q Report in conjunction with other reports and documents that we file from time to time with the SEC. In particular, please read our Quarterly Reports on Form 10-Q, Annual Report on Form 10-K, and Form 10-K/A, and Current Reports on Form 8-K, including all amendments that we file from time to time. You may obtain copies of these reports directly from us or from the SEC at the SEC’s Public Reference Room at 100 F. Street, N.E. Washington, D.C. 20549, and you may obtain information about obtaining access to the Reference Room by calling the SEC at 1-800-SEC-0330. In addition, the SEC maintains information for electronic filers at its website http://www.sec.gov.

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Table of Contents

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to risks associated with commodity prices and interest rates. Commodity price risk is the potential loss that we may incur as a result of changes in the fair value of a particular instrument or commodity. Interest-rate risk results from our portfolio of debt and equity instruments that we issue to provide financing and liquidity for our business activities.

Commodity Price Risk

Our most significant market risk relates to the prices we receive for our oil and natural gas production. Realized pricing is primarily driven by the prevailing worldwide price for crude oil, and spot market prices applicable to the production of oil and gas in the our U.S. and Canada. Pricing for oil and gas production has been volatile and unpredictable for several years.

Interest Rate Risk

We are subject to interest rate risk on our long-term fixed and variable interest rate borrowings. Fixed rate debt, where the interest rate is fixed over the life of the instrument, exposes us to (i) changes in market interest rates reflected in the fair value of the debt, and (ii) the risk that we may need to refinance maturing debt with new debt at a higher rate. Variable rate debt, where the interest rate fluctuates, exposes us to short-term changes in market interest rates as our interest obligations on these instruments are periodically re-determined based on prevailing market interest rates.

As of March 31, 2013, we were not engaged in any other activities that would cause exposure to the risk of material earnings or cash flow loss due to changes in interest rates or market commodity prices.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our principal executive officer, and our principal financial officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures as such term is defined under Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended (Exchange Act), as of the last day of the fiscal period covered by this report, March 31, 2013. The term disclosure controls and procedures means our controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to management; including our principal executive and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Based on this evaluation our principal executive officer and our principal financial officer concluded that our disclosure controls and procedures were effective as of March 31, 2013.

(b) Changes in Internal Control Over Financial Reporting

During the nine months ended March 31, 2013, there were no changes in our internal control over financial reporting 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

There have been no material changes to the information included in Item 3, “Legal Proceedings” in our 2012 Annual Report on Form 10-K. 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; with the exception of the legal proceeding indicated below;

On April 10, 2013, Modern Branding Solutions, (Plaintiff) filed a claim against the Company (Defendant) in the amount of $21,533.78 for unpaid services in the Superior Court of California, County of San Diego, for services provided to the Company. The Company is disputing and reviewing this Claim, and both parties are in negotiations to settle the dispute amicably outside of court.

ITEM 1A - RISK FACTORS

In addition to the other information set forth in this report the factors discussed in "Part I — Item 1A — Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2012, could materially affect our business, financial condition, or operating results. The risks described in our Annual Report on Form 10-K and our subsequent SEC reports are not the only risks facing us. There are additional risks and uncertainties not currently known to us, or that we currently deem to be immaterial that may also materially adversely affect our business, financial condition, or operating results. While not required for smaller reporting companies, we include the following previously disclosed risk factors in addition to the risk factors previously provided:

THE MARKET PRICE OF OUR COMMON STOCK MAY LIMIT ITS ELIGIBILITY FOR CLEARING HOUSE DEPOSIT.

We are advised that if the market price for shares of our common stock is less than $0.10 per share, Depository Trust Company and other securities clearing firms may decline to accept our shares for deposit and refuse to clear trades in our securities. This would materially and adversely affect the marketability and liquidity of our shares, and accordingly may materially and adversely affect the value of an investment in our common stock.

WE ARE AN “EMERGING GROWTH COMPANY” AND WE CANNOT BE CERTAIN IF THE REDUCED DISCLOSURE REQUIREMENTS APPLICABLE TO EMERGING GROWTH COMPANIES WILL MAKE OUR COMMON STOCK LESS ATTRACTIVE TO INVESTORS.

We are an “emerging growth company,” as defined in the Jumpstart our Business Startups Act of 2012 or JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies”; including not being required to comply with the auditor attestation requirements of section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.

In addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. An “emerging growth company” can therefore delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.

WE WILL INCUR INCREASED COSTS AND DEMANDS UPON MANAGEMENT AS A RESULT OF COMPLYING WITH THE LAWS AND REGULATIONS THAT AFFECT PUBLIC COMPANIES, WHICH COULD MATERIALLY ADVERSELY AFFECT OUR RESULTS OF OPERATIONS, FINANCIAL CONDITION, BUSINESS AND PROSPECTS.

As a public company, and particularly after we cease to be an “emerging growth company,” we will incur significant legal, accounting, and other expenses, that we did not incur as a private company; including costs associated with public company reporting and corporate governance requirements. These requirements include compliance with Section 404 and other provisions of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, as well as rules implemented by the SEC.

The increased costs associated with operating as a public company will decrease our net income, or increase our net loss, and may require us to reduce costs in other areas of our business. Additionally, if these requirements divert our management’s attention from other business concerns they could have a material adverse effect on our results of operations, financial condition, business, and prospects.

However, for as long as we remain an “emerging growth company” as defined in the JOBS Act, we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. We may take advantage of these reporting exemptions until we are no longer an “emerging growth company.”

If the market value of our common stock that is held by non-affiliates exceeds $700 million as of any June 30, we would cease to be an “emerging growth company” as of the following June 30, or if we issue more than $1 billion in non-convertible debt in a three-year period, we would cease to be an “emerging growth company” immediately.

SHOULD ONE OR MORE OF THE FOREGOING 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.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

There were no sales of unregistered senior securities during the period ended March 31, 2013, except as follows for certain Promissory Notes (“Note”) and issuances of equity:

On January 29, 2013, the Company completed the final, and full, conversion of one of its Notes payable, dated July 9, 2012, for a Note with a principle amount of $42,500, and a total of 20,723,759 common shares were issued. The final conversion of the Note included $42,500 in principal and $1,700 in accrued interest that was due on the Note upon conversion. This leaves a remaining balance of $0.00 on this Note. This conversion of debt reduced the Company’s Notes Payables by a principal amount of $42,500.

On January 31, 2013, the Company completed the final, and full, conversion of one of its Notes payable dated March 7, 2012, for a Note with a principle amount of $30,000, and a total of 20,909,090 common shares were issued. The final conversion of the Note included $30,000 in principal and $4,500 in accrued interest that was due on the Note upon conversion. This leaves a remaining balance of $0.00 on this Note. This conversion of debt reduced the Company’s Notes Payables by a principal amount of $30,000.

On February 13, 2013, the Company completed the final, and full, conversion of one of its Notes, payable dated May 21, 2012, for a Note with a principle amount of $45,000, and a total of 37,111,112 common shares were issued. The final conversion of the Note included $45,000 in principal and $5,100 in accrued interest that was due on the Note upon conversion. This leaves a remaining balance of $0.00 on this Note. This conversion of debt reduced the Company’s Notes Payables by a principal amount of $45,000.

On March 14, 2013, the Company converted one of its Notes payable, dated August 9, 2012, with a principle amount of $38,000, and issued 30,984,615 common shares for that conversion. The final conversion of the Note included $38,000 in principal and $2,280 in accrued interest that was due on the Note upon conversion. This leaves a remaining balance of $0.00 on this Note. This conversion of debt reduced the Company’s Notes Payables by a principal amount of $38,000.

On March 14, 2013, the Company converted one of its Notes payable, dated December 31, 2011, with a principle amount of $40,500, and issued 16,200,000 common shares for that conversion. The final conversion of the Note included $40,500 in principal and $0.00 in accrued interest that was due on the Note upon conversion. This leaves a remaining balance of $0.00 on this Note. This conversion of debt reduced the Company’s Notes Payables by a principal amount of $40,500. The conversion rate was reduced from $0.02 to $0.025 by resolution of Board of Directors to offset declines in the stock price. The stock closing price was $0.0029 on the issue date.

On March 15, 2013, the Company completed a partial conversion of one of its Notes Payables, dated December 31, 2010, with a Note amount of $136,000. A total of $60,000 worth of the Note was converted by a non-affiliate assignee, and 24,000,000 common shares were issued for that conversion. No accrued interest was due on the Note upon conversion. This leaves a remaining balance of $76,000 on this Note. This conversion of debt reduced the Company’s Notes Payables by $60,000. The conversion rate was reduced from $0.015 to $0.025 by resolution of Board of Directors to offset declines in the stock price. The stock closing price was $0.0029 on the issue date.

The offer and sale of such shares of our common stock were effected in reliance on the exemptions for sales of securities not involving a public offering, as set forth in Rule 506 promulgated under the Securities Act of 1933 (the “Securities Act”) and in Section 4(2) of the Securities Act, based on the following: (a) the investors confirmed to us that they were “accredited investors,” as defined in Rule 501 of Regulation D promulgated under the Securities Act and had such background, education, and experience, in financial and business matters as to be able to evaluate the merits and risks of an investment in the securities; (b) there was no public offering or general solicitation with respect to the offering; (c) the investors were provided with certain disclosure materials and all other information requested with respect to our company; (d) the investors acknowledged that all securities being purchased were “restricted securities” for purposes of the Securities Act, and agreed to transfer such securities only in a transaction registered under the Securities Act or exempt from registration under the Securities Act; and (e) a legend was placed on the certificates representing each such security stating that it was restricted and could only be transferred if subsequent registered under the Securities Act, or transferred in a transaction exempt from registration under the Securities Act.

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Item 3. Defaults Upon Senior Securities

There were no defaults upon senior securities during the period ended March 31, 2013.

Item 4. Mine Safety Disclosure

Not applicable.

Item 5. Other Information

There is no other information to report with respect to which information is not otherwise called for by this form except as follows:

On April 10, 2013, the Company converted a portfolio of 14 Promissory Notes payables, with a principle amount of $3,234,775 into common shares of stock and issued 1,568,630,000 common shares for that conversion. Previously, on January 11, 2013, a non-affiliated party purchased a portfolio of 14 of the Company’s Promissory Notes, in a private transaction directly from the individual Note Holders with a total principal amount of $3,234,775. The final conversion of these Notes included $3,234,775 in principal and $0.00 in accrued interest that was due on the Notes upon conversion. This leaves a remaining balance of $0.00 on these Notes. This conversion of debt reduced the Company’s Notes Payables by a principal amount of $3,234,775. The 1,568,630,000 shares is the equivalent of 61.78% of the Company’s outstanding shares of common stock. The purchasing party was Global Energy Group, and its controlling person have not been disclosed to us and is undetermined at this time. The purchasing party is now deemed an affiliate.

Item 6. Exhibits

Exhibit No.	Exhibit
3.1	Articles of Incorporation (1)
3.2	Bylaws (1)
3.3	Amendment to Articles of Incorporation (2)
3.3(a)	Amendment of Articles of Incorporation (7)
10.5	Employment Agreement by and between Universal and Dr. Richard Craven (3)
10.6	Employment Agreement by and between Universal and Vince M. Guest (4)
10.7	Employment Agreement by and between Universal and Solomon Ali (4)
14.1	Code of Ethics (5)
31.1	*Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes- Oxley Act.
31.2	*Certification of Principal Financial and Accounting Officer Pursuant to Section 906 of the Sarbanes-Oxley Act.
32.1	*Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act.
32.2	*Certification of Chief Accounting Officer Pursuant to Section 906 of the Sarbanes-Oxley Act.

___________________________________________________________________

*filed herewith

(1) Incorporated by reference to the registration statement on Form SB-2 as filed on March 21,

2005.

(2) Incorporated by reference to the Current Report on Form 8-K as filed on October 31, 2007.

(3) Incorporated by reference to the Current Report on Form 8-K as filed on February 29, 2008.

(4) Incorporated by reference to the Form 10K for year ended December 31, 2009 as filed on

August 12, 2010.

(5) Incorporated by reference to the 2nd amended Form 10K/A for year ended December 31,

2007 as filed on January 4, 2010.

(6) Incorporated by reference to the 2nd amended Form 10K/A for year ended December 31, 2007 as filed on January 4, 2010.

(7) Incorporated by reference to the Current Report on Form 8-K as filed on December 28, 2012.

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SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	UNIVERSAL BIOENERGY, INC.
Dated: May 20, 2013		By: /s/ Vince M. Guest
		Vince M. Guest
		President and Chief Executive Officer, Principle Financial Officer, Principal Accounting Officer and Director

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