10-Q 1 ambra10q_sept2001.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-Q (x) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2001 ------------------ ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________ to ________ Commission File number O-11695 --------------------- AMBRA RESOURCES GROUP, INC. -------------------------------------------------------------------- (Exact name of registrant as specified in charter) UTAH 87-0403828 ------------------------------- ------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 610-800 West Pender Street, Vancouver., Canada, V6C 2V6 ------------------------------------------------- ------------------ (Address of principal executive offices) (Zip Code) 1-604-669-2723 ----------------------------------------------- Registrant's telephone number, including area code ----------------------------------------------- (Former name, former address, and former fiscal year, if changed since last report.) Indicate by check mark whether the registrant (1) has filed all reports required to be filed 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), Yes [x ] No [ ] and (2) has been subject to such filing requirements for the past 90 days. Yes [x] No [ ] APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the last practicable date. Class Outstanding as of September 30, 2001 --------------------- -------------------------------------- Common Stock, $0.001 160,238,322 -1-

INDEX Page Number ------ PART I. ITEM 1. Financial Statements (unaudited)................................~~.................~~3 Balance Sheets..................................................~~.................~~4 ~~March~~September 3130, 2001 and June 30, ~~2000~~2001 Statements of Operations Three ~~and nine~~ months ended ~~March~~September 3130, 2001 and 2000.............5 and the period ~~from~~ January 27, 1984 to ~~March~~September 3130, 2001~~..............5~~ Statements of Cash Flows ~~Nine~~Three months ended ~~March~~September 3130, 2001 and 2000..............~~.......................~~6 and the period ~~from~~ January 27, 1984 to ~~March~~September 3130, 2001 Notes to Financial Statements...................................~~.................8~~7 ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations................~~.................13~~11 PART II. Other Information..............................................~~.................15~~12 Signatures.....................................................~~.................16 -2-~~13

-2- PART I - FINANCIAL INFORMATION -------------------------------------------------------------------------------- This filing contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. For this purpose any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, words such as "may," "will," "expect," "believe," anticipate," "estimate" or "continue" or comparable terminology are intended to identify forward-looking statements. These statements by their nature involve substantial risks and uncertainty, and actual results may differ materially depending on a variety of factors, many of which are not within the Company's control. These factors include but are not limited to economic conditions generally and in the industries in which the Company and its customers participate; competition within the Company's industry, including competition from much larger competitors; technological advances which could render the Company's products less competitive or obsolete; failure by the Company to successfully develop new products or to anticipate current or prospective customers' product needs; price increase or supply limitations for components purchased by the Company for use in its products; and delays, reductions, or cancellations of orders previously placed with the Company. ITEM 1. FINANCIAL STATEMENTS -------------------------------------------------------------------------------- The accompanying balance sheets of Ambra Resources Group, Inc. ( development stage company) at September 30, 2001 and June 30, 2001, and the statements of operations and cash flows for the three months ended September 30, 2001 and 2000 and the period January 27, 1984 to September 30, 2001, have been prepared by the Company's management and they do not include all information and notes to the financial statements necessary for a complete presentation of the financial position, results of operations, cash flows, and stockholders' equity in conformity with generally accepted accounting principles. 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 quarter ended September 31, 2001, are not necessarily indicative of the results that can be expected for the year ending June 30, 2002. -3-

AMBRA RESOURCES GROUP, INC. ( Development Stage Company) BALANCE SHEETS ~~March~~September 3130, 2001 and June 30, ~~2000~~2001 --------------------------------------------------------------------------------------------~~-------------~~ ASSETS ~~Mar~~Sept 2001 June ~~2000~~2001 ----------- ----------- CURRENT ASSETS Cash ....................................................... $ ~~864~~850,~~525~~284 $ 1,~~086~~517,~~224~~209 Accounts receivable - income tax refund 1................... 162,~~337~~994 166,~~603~~012 --Accounts receivable ....................................... 8,000 8,000 ----------- ----------- Total Current Assets 2................................... 1,~~202~~021,~~128~~278 1,~~086~~691,~~224~~221 ----------- ----------- PROPERTY AND EQUIPMENT - net of accumulated depreciation - Note 2 ~~248~~.................................. 233,~~035~~783 ~~144~~236,~~330~~304 ----------- ----------- OTHER ASSETS ~~Mining claims - Note 3 -- --~~ Advance deposits 34.......................................... 250,~~014~~000 -- ~~Accounts~~Account receivable - related party ~~8,000~~........................ 151,~~116~~296 ~~Oil~~Mining ~~leases~~claims - Note 43 ~~67,913~~.................................... ~~419,519~~-- ~~Equitable~~-- ~~securities~~Oil leases - Note 54 ~~255~~...................................... 243,~~000~~202 ~~235~~67,~~000~~913 ~~Gas~~Other ~~lines~~assets -.............................................. ~~Note~~9,645 ~~4 -- 290~~9,~~000~~645 ----------- ----------- Total Other Assets ~~364~~..................................... 504,~~927~~143 ~~959~~77,~~635~~558 ----------- ----------- $ 21,~~815~~759,~~090~~204 $ 2,~~190~~005,~~189~~083 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable 17- related parties ........................ $ 7,~~822~~889 $ 8618,~~763~~952 Accounts payable -.......................................... ~~related~~$ ~~parties~~31,388 1521,~~222~~046 -- ----------- ----------- Total Current Liabilities 33.............................. 39,~~044~~277 8639,~~763~~998 ----------- ----------- STOCKHOLDERS' EQUITY Common stock 400,000,000 shares authorized, at $.001 par value; ~~149~~160,~~138~~238,322 shares issued and outstanding aton ~~March~~September 3130; ~~137~~160,~~448~~238 158,138 158,138,322 aton June 30 ~~149,138 137,448~~ Capital in excess of par value 6............................ 7,~~780~~102,821 7,041,922 6Stock subscriptions receivable ............................ (110,~~283~~265) (110,~~112~~265) Deficit accumulated during the development stage .......... (45,~~148~~432,~~014~~867) (45,~~317~~124,~~134~~710) ----------- ----------- Total Stockholders' Equity 2............................. 1,~~782~~719,~~046~~927 21,~~103~~965,~~426~~085 ----------- ----------- $ 21,~~815~~759,~~090~~204 $ 2,~~190~~005,~~189~~083 =========== =========== ~~The accompanying notes are an integral part of these financial statements. -4-~~

The accompanying notes are an integral part of these financial statements -4-

AMBRA RESOURCES GROUP, INC. ( Development Stage Company) STATEMENTS OF OPERATIONS For the Three ~~and Nine~~ Months Ended ~~March~~September 3130, 2001 and 2000 and the Period ~~From~~ January 27, 1984 (date of inception) to ~~March~~September 3130, 2001 ------------------------------------------------------------------------------------~~-----------------------~~ ~~Three~~January ~~Months~~27, ~~Nine~~1984 ~~Months~~Sept ~~Mar~~30, ~~Mar~~Sept ~~Mar Mar Jan 27~~30, ~~1984~~(Date toof ~~2001~~Inception) ~~2000~~ 2001 2000 ~~Mar~~to 31Sept 30, 2001 ------------ -~~-----------~~ ------------- ------------ ----~~--------~~ REVENUES ~~Sale~~Rents ofand ~~oil~~interest ~~leases~~........ ~~- net~~ $ 18,~~520,216~~139 $ ~~-- $ 1~~12,~~520,216~~826 -- $ 1291,~~520,216~~616 ~~Sale of gas line~~ - ~~net~~- -- -- ~~208,320~~ -- ~~208,320 Rents and interest 8,905 1,350 26,816 4,709 281,943~~ -----~~-------~~ ------------ -~~-----------~~ ------------ ----~~--------~~ 1EXPENSES Exploration,~~529~~ development,~~121~~ 1.. 310,~~350~~296 1142,~~755~~908 7,~~352~~036,785 4and promotion Depreciation ............... 6,~~709~~000 2,~~010~~186 42,~~479~~453 ~~------------~~316,296 145,094 7,079,238 ------------- ------------- ------------ ----~~--------~~ ~~EXPENSES~~NET ~~Exploration~~LOSS ~~23,047~~ -- ~~603,575~~before --other ~~648,105~~income ~~Administrative 501~~(308,~~906~~157) ~~282~~(132,~~321~~268) ~~968~~(6,~~718 517~~787,~~672~~622) ~~5,479,216~~GAIN ~~Depreciation~~FROM ~~5,600~~SALE --OF ~~13,939~~ASSETS --..... ~~31,172~~ --~~----------~~ ~~------------ ------------ ------------ ------------ 530~~193,~~553~~860 ~~282,321~~ 1,~~586~~354,~~232~~755 ~~517,672 6,158,493~~ ------------ -~~-----------~~ ------------- ------------ ----~~--------~~ NET PROFIT ( LOSS) $............ ~~998,568~~ $ (~~280~~308,~~971~~157) $ ~~169~~61,~~120~~592 $ (~~512~~5,~~963) $ (4~~432,~~148,014~~867) ============ =~~===========~~ ============= ============ ====~~========~~ LOSS PER COMMON SHARE Basic $ .01................ $ -- $ -- $ -- ------------ ------------ -~~-----------~~ ~~------------~~ AVERAGE OUTSTANDING SHARES Basic ~~147~~................. 160,~~458~~238,322 98158,~~643~~138,~~072 147,458,~~322 ~~98,643,072~~ ------------ -~~-----------~~ ------------ -~~----------- The accompanying notes are an integral part of these financial statements. -5-~~

The accompanying notes are an integral part of these financial statements. -5-

AMBRA RESOURCES GROUP, INC. ( Development Stage Company) STATEMENTS OF CASH FLOWS For the ~~Nine~~Three Months Ended ~~March~~September 3130, 2001 and 2000 and the Period January 27, 1984 (Date of Inception) to ~~March~~September 3130, 2001 ------------------------------------------------------------------------------------------------------ January 27, 1984 ~~Mar~~Sept ~~Mar~~Sept (Date of Inception) 2001 2000 to ~~Mar~~Sept 3130, 2001 ----------- ----------- -------------- CASH FLOWS FROM OPERATING ACTIVITIES Net profit (loss) ............................... $ ~~169~~(308,~~120~~157) $ ~~(512~~61,~~963)~~592 $ (45,~~148~~432,~~014~~867) Adjustments to reconcile net loss to net cash provided by operating activities: ~~Depletion,~~Depreciation ~~depreciation~~............................. ~~and amortization 13~~6,~~939~~000 2,~~700~~186 3142,~~172~~453 Common capital stock issued for services & expenses ~~509,500~~................ ~~233~~63,~~500~~000 -- 4,~~360~~260,~~668~~264 Gain from sale of assets ................. -- -- (1,354,755) (Increase) decrease in accounts receivable (1,721 (330,~~487~~728) -- (1172,~~345,603~~291) Increase (decrease) in liabilities ....... (~~53,719~~721) 48(60,~~543~~589) 3339,~~044~~277 ----------- ----------- -------------- Net Cash Used By Operations ............ (~~691~~238,~~647~~157) (~~228~~327,~~220~~539) (12,~~068~~617,~~733~~919) ----------- ----------- -------------- CASH FLOWS FROM INVESTING ACTIVITIES ~~Security~~Advance deposits ................................ (34250,~~014~~000) -- (34250,~~014~~000) Purchase of ~~equitable~~other ~~securities~~assets ~~(20,000)~~........................ ~~(20,000)~~-- -- (~~255~~9,~~000~~645) Purchase of property & equipment ~~(117,644)~~................ (173,~~254~~479) -- (~~279~~276,~~207~~236) Purchase of ~~web~~oil ~~site~~& -gas ~~note~~leases 6................... -- (62175,~~330~~289) -- ~~Change~~(243,202) inNet ~~oil~~sales &of ~~gas~~assets ~~leases~~............................. ~~and gas line 641,606~~ -- (671,~~913~~140) 1,638,159 ----------- ----------- -------------- ~~469,948~~ (99428,~~584~~768) (~~636~~1,~~134~~140) 859,076 ----------- ----------- -------------- CASH FLOWS FROM FINANCING ACTIVITIES Net proceeds from sale of capital stock ......... -- ~~1,391,421~~-- 2,~~569~~609,~~392~~127 ----------- ----------- -------------- Net increase (decrease) in cash ................. (~~221~~666,~~699~~925) 1(328,~~063,617~~679) ~~864~~850,~~525~~284 Cash at beginning of year ....................... 1,517,209 1,086,224 ~~140,482~~ -- ----------- ----------- -------------- Cash at end of year ............................. $ ~~864~~850,~~525~~284 $ 1757,~~204,099~~545 $ ~~864~~850,~~525~~284 =========== =========== =========== ~~The accompanying notes are an integral part of these financial statements. -6-~~===

The accompanying notes are an integral part of these financial statements. -6- AMBRA RESOURCES GROUP, INC. ( Development Stage Company) NOTES TO FINANCIAL STATEMENTS -------------------------------------------------------------------------------- 1. ORGANIZATION The Company was incorporated under the laws of the State of Utah on January 27, 1984 with authorized capital stock of 50,000,000 shares at a par value of $0.001 and on May 17, 1999 the authorized was increased to 100,000,000 shares and on March 3, 2000 the authorized was increased to 400,000,000 shares with the same par value. The company has been in the development stage since inception and has been primarily engaged in the business of the acquisition and development of mining and oil properties. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Accounting Methods ------------------ The Company recognizes income and expenses based on the accrual method of accounting. Dividend Policy --------------- The Company has not yet adopted any policy regarding payment of dividends. Cash and Cash Equivalents ------------------------- The Company considers all highly liquid instruments purchased with a maturity, at the time of purchase, of less than three months, to be cash equivalents. Property and Equipment ---------------------- The Company's property and equipment consists of the following: Office equipment $ 143,359 Residential rentals 132,877 Less accumulated depreciation (42,453) --------- 233,783 --------- Office equipment and computers are depreciated on the straight line method over five years and the residential rentals are depreciated on the straight line method over forty years. Earnings Per Share ------------------ Earnings (loss) per share amounts are computed based on the weighted average number of shares actually outstanding. -7- AMBRA RESOURCES GROUP, INC. ( Development Stage Company) NOTES TO FINANCIAL STATEMENTS (Continued) -------------------------------------------------------------------------------- 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Capitalization of Mining Claim Costs ------------------------------------- Costs of acquisition, exploration, carrying, and retaining unproven properties are expensed as incurred. Costs incurred in proving and developing a property ready for production are capitalized and amortized over the life of the mineral deposit or over a shorter period if the property is shown to have an impairment in value. Expenditures for mine equipment are capitalized and depreciated over their useful lives. Capitalization of Oil Lease Costs ------------------------------------ The Company uses the successful efforts cost method for recording its oil lease interests, which provides for capitalizing the purchase price of the project and the additional costs directly related to proving the properties and amortizing these amounts over the life of the reserve when operations begin or a shorter period if the property is shown to have an impairment in value or expensing the remaining balance if proven of no value. Expenditures for oil well equipment are capitalized and depreciated over their useful lives. Environmental Requirements -------------------------- At the report date environmental requirements related to the mineral claims and the oil leases acquired are unknown and therefore an estimate of any future cost cannot be made. Income Taxes ------------ At September 30, 2001, the Company had a net operating loss carry forward of $5,432,867. The tax benefit of approximately $1,629,860 from the loss carry forward has been fully offset by a valuation reserve because the use of the future tax benefit is doubtful since the Company is unable to establish a predictable projection of operating profits for future years. The net operating loss carryovers will expire beginning in the years 2000 through 2021. Foreign Currency Translation ---------------------------- Part of the transactions of the Company were completed in Canadian dollars and have been translated to US dollars as incurred, at the exchange rate in effect at the time, and therefore, no gain or loss from the translations is recognized. US dollars are considered to be the functional currency. -8- AMBRA RESOURCES GROUP, INC. ( Development Stage Company) NOTES TO FINANCIAL STATEMENTS (Continued) -------------------------------------------------------------------------------- 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Financial Instruments --------------------- The carrying amounts of financial instruments, including cash, accounts receivable, advance deposits, and accounts payable, are considered by management to be their estimated fair values. Estimates and Assumptions ------------------------- Management uses estimates and assumptions in preparing financial statements in accordance with generally accepted accounting principles. Those estimates and assumptions affect the reported amounts of the assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could vary from the estimates that were assumed in preparing these financial statements. Concentration of Credit Risk ---------------------------- Financial instruments that potentially subject the Company to significant concentration of credit risk consists primarily of cash and account receivables. Cash balances are maintained in accounts that are not federally insured for amounts over $100,000 but are other wise in financial institutions of high credit quality. Accounts receivable are unsecured however management considers them to be currently collectable. Comprehensive Income -------------------- The Company has adopted Statement of Financial Accounting Standards No. 130. The adoption of this standard had no impact on the total stockholder's equity. Other Recent Accounting Pronouncements -------------------------------------- The Company does not expect that the adoption of other recent accounting pronouncements to have any material impact on its financial statements. 3. MINING CLAIMS On June 20, 1994 the Company purchased three unproven mineral claims, from a related party, and are identified as Marathon, Marathon 1 and Marathon 2, containing a total of 32 units, with expiration dates during 2006, which are located near Cowichan Lake in the Province of British Columbia, Canada. The claims are located within the Sicker Volcanic Belt on Vancouver Island in an active gold mining area. The claims have not been proven to have a commercially minable ore reserve and therefore all costs for acquisition exploration and retaining the properties have been expensed. -9- AMBRA RESOURCES GROUP, INC. ( Development Stage Company) NOTES TO FINANCIAL STATEMENTS (Continued) -------------------------------------------------------------------------------- 4. OIL LEASES BEAUFORT SEA PROJECT - cost $67,913 ---------------------- On June 9, 1997 the Company purchased a 3.745% working interest in the Beaufort Sea well Esso Pex Home et al Itiyok I-27 consisting of 640 acres and is located at Latitude 70-00', Longitude 134-00', Sections 7, 8, 17, 18, 27, 28, and 37, License No. 55, dated April 22, 1987. During 1982 and 1983 a consortium of companies participated in the drilling, casing, and testing the area to a depth of 12,980 feet. A review of the well data and geological prognosis indicates that the area would contain proven recoverable gas reserves of 108 Bscf and proven recoverable oil reserves of 8,976 MSTB. The other partners in the project are controlled by Exxon Oil Corporation, however there is no immediate plans to develop the area. HUGHES PROSPECT, Robertson County, Texas - cost $175,289 ---------------------------------------- During July 2001 the Company purchased a 50% interest in oil, gas, and mineral leases containing net mineral 6340 net mineral acres in the final stages of leasing all having 3 to 4 year terms. The acreage will support a possible 150 net wells with a potential 600 BCF recoverable. -10- ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION -------------------------------------------------------------------------------- General ------- The Company is a development stage company engaged in the acquisition of interests in gas and oil properties. The Company has been engaged in the gas and oil business since 1995. During July 2001 the Company purchased a 50% interest in oil, gas, and mineral leases containing net mineral 6340 net mineral acres in the final stages of leasing all having 3 to 4 year terms. The acreage will support a possible 150 net wells with a potential 600 BCF recoverable. Liquidity and Capital Resources ------------------------------- During the quarter ended September 30, 2001, the Company funded its operations primarily with cash on hand and funds raised during 2000 in Regulation S offerings. The Company's material commitments for capital expenditures are limited to the Company's obligation under the Operating Agreement with Kebo Oil and Gas, Inc., to pay one percent of the costs associated with the ten well drilling program. The Company has a limited operating history and can only estimate the future needs for capital based on the current status of the Company's operations, its current plans and current economic condition. The Company expects that its existing cash reserves, cash flows from operations and financing, will be sufficient to cover the Company's cash requirements for the next twelve months. The Registrant has plans to further develop its properties which will require part of its current working capital. Results of Operations Comparison of the quarter ended September 30, 2001 and the quarter ended September 30, 2000 The Company sustained a net loss of $308,157 in the quarter ended September 30, 2001, compared to a profit of $61,592 for the quarter ended September 30, 2000. The $369,749 change from a profit to a loss was largely effected by the sale of part of the Company's interest in oil and gas leases in Alberta, Canada and Billings, Montana during the quarter ended September 30, 2000. -11- A comparison of the principal operating expenses for each quarter follows: September 30, 2001 September 30, 2000 ------------------ ------------------ Exploration ................ $ 6,878 $ 17,202 Office supplies and expenses 21,724 5,589 Consultants ................ 83,616 33,284 Travel and entertainment ... 72,088 38,894 PART II - OTHER INFORMATION -------------------------------------------------------------------------------- ITEM 1. LEGAL PROCEEDINGS -------------------------------------------------------------------------------- None. -------------------------------------------------------------------------------- ITEM 2. CHANGES IN SECURITIES -------------------------------------------------------------------------------- During the quarter ended September 30, 2001 the Company issued 2,100,000 shares of its common stock at $.03 for services and expenses. -------------------------------------------------------------------------------- ITEM 3. DEFAULTS UPON SENIOR SECURITIES -------------------------------------------------------------------------------- None. -------------------------------------------------------------------------------- ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS -------------------------------------------------------------------------------- None -------------------------------------------------------------------------------- ITEM 5. OTHER INFORMATION -------------------------------------------------------------------------------- None. -------------------------------------------------------------------------------- ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K -------------------------------------------------------------------------------- None. -12- SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized AMBRA RESOURCES GROUP, INC. (Registrant) Dated: November 6, 2001 By /s/ John M. Hickey --------------------------- John M. Hickey, President -13-

AMBRA RESOURCES GROUP, INC. ( Development Stage Company) STATEMENTS OF CASH FLOWS (Continued) For the Period January 27, 1984 (Date of Inception) to March 31, 2001 ------------------------------------------------------------------------------------- SCHEDULE OF NONCASH OPERATING, INVESTING, AND FINANCING ACTIVITIES Issuance of 122,086 shares in exchange for royalty interests in oil and gas leases - 1984 $ 19,560 -------- Issuance of 900,000 shares for services - 1993 9,000 -------- Issuance of 200,000 shares for land - 1993 - (Note 1) -- -------- Issuance of 50,000 shares for mining claims - 1994 500 -------- Issuance of 300,000 shares for services - 1994 3,000 -------- Issuance of 50,000 shares for option on property - 1994 500 -------- Issuance of 150,000 shares for mining claims - 1995 1,500 -------- Issuance of 22,000 shares for expenses - 1995 220 -------- Issuance of 137,979 shares for expenses - 1995 68,988 -------- Issuance of 1,173,897 shares for equipment and expenses - 1995 - Note 1 -- -------- Issuance of 20,000 shares for expenses - 1996 4,000 -------- Issuance of 118,115 shares for expenses - 1996 23,623 -------- Issuance of 62,500 shares for expenses - 1996 12,500 -------- Issuance of 200,000 shares for oil leases - 1996 2,000 -------- Issuance of 300,000 shares for expenses - 1996 60,000 -------- Issuance of 1,028,600 shares for accounts payable and commissions - 1996 49,759 -------- Issuance of 100,000 shares for mining claims - 1996 5,000 -------- Issuance of 2,425,200 shares for services and expenses - 1996 125,490 -------- Issuance of 425,000 shares for services -1997 21,250 -------- Issuance of 1,774,506 shares for services and expenses - 1997 88,727 -------- Issuance of 600,000 shares for oil leases - 1997 30,000 -------- Issuance of 2,550,000 shares for services and expenses - 1997 127,500 -------- Issuance of 1,240,000 shares for oil leases - 1997 62,000 -------- Issuance of 640,000 shares for services - 1997 31,500 -------- Issuance of 100,000 shares for mining claims - 1997 5,000 -------- Issuance of 930,000 shares for oil leases - 1997 93,000 -------- Issuance of 1,134,480 shares for payment of debt - 1997 113,448 -------- Issuance of 700,000 shares for two residential lots - 1997 70,000 -------- Issuance of 1,199,710 shares for services and payment of debt - 1997 119,971 -------- Issuance of 100,000 shares for installment payment on mining claims - 1997 10,000 -------- Issuance of 549,000 shares for expenses - 1998 54,900 -------- Issuance of 2,274,000 shares for expenses - 1998 113,700 -------- Issuance of 1,500,000 shares for expenses - 1998 142,000 -------- Issuance of 100,000 shares for installment payment on mining claims 10,000 -------- Issuance of 100,000 shares for installment payment on mining claims - 1998 8,000 -------- Issuance of 295,000 shares for payment of expenses - 1998 29,500 -------- Issuance of 457,500 shares for services - 1998 36,600 -------- Issuance of 6,000,000 shares for services and expenses - 1999 60,000 -------- Issuance of 8,060,000 shares for services and expenses - 2000 328,000 -------- Issuance of 3,630,000 shares for services and expenses - 2000 181,500 -------- The accompanying notes are an integral part of these financial statements. -7-

Filing Compare · APEX RESOURCES GROUP INC