10-Q 1 ambra10q_dec2001.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 December 31, 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 December 31, 2001 --------------------- ----------------------------------- Common Stock, $0.001 160,238,322 -1- INDEX Page Number PART I. ------ ITEM 1. Financial Statements (unaudited)..............................3 Balance Sheets................................................4 December 31, 2001 and June 30, 2001 Statements of Operations Three and six months ended December 31, 2001 and 2000 ....5 and the period January 27, 1984 to December 31, 2001 Statements of Cash Flows Six months ended December 31, 2001 and 2000...............6 and the period January 27, 1984 to December 31, 2001 Notes to Financial Statements.................................7 ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations..............11 PART II. Other Information............................................12 Signatures...................................................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 December 31, 2001 and June 30, 2001, and the statements of operations and cash flows for the three and six months ended December 31, 2001 and 2000 and the period January 27, 1984 to December 31, 2001, have been prepared by the Company's management in conformity with accounting principles generally accepted in the United States of America. 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 December 31, 2001, are not necessarily indicative of the results that can be expected for the year ending June 30, 2002. -3-

~~INDEX~~AMBRA ~~Page~~RESOURCES ~~Number~~GROUP, INC. ( Development Stage Company) BALANCE SHEETS December 31, 2001 and June 30, 2001 ------------------------------------------------------------------------------------------- ~~PART~~ASSETS I.Dec ~~ITEM~~2001 June 2001 ----------- ----------- CURRENT ASSETS Cash $ 586,305 $ 1.,517,209 ~~Financial~~Accounts ~~Statements~~receivable ~~(unaudited)................................~~- income tax refund 158,566 166,012 Accounts receivable 8,000 8,000 ----------- ----------- Total Current Assets 752,871 1,691,221 ----------- ----------- PROPERTY AND EQUIPMENT - net of accumulated depreciation - Note 2 229,545 236,304 ----------- ----------- OTHER ASSETS Advance deposits 250,000 -- Account receivable - related party 16,228 Mining claims - Note 3 ~~Balance~~-- ~~Sheets..................................................~~-- Oil leases - Note 4 ~~September~~243,202 3067,913 ~~2001~~Other ~~and~~assets ~~June~~9,645 309,645 ~~2001~~----------- ~~Statements~~----------- ofTotal ~~Operations~~Other ~~Three~~Assets ~~months~~519,075 ~~ended~~77,558 ~~September~~----------- 30----------- $ 1,501,491 ~~2001~~$ ~~and~~2,005,083 ~~2000.............5~~=========== ~~and~~=========== ~~the~~LIABILITIES ~~period~~AND ~~January~~STOCKHOLDERS' 27EQUITY CURRENT LIABILITIES Accounts payable - related parties $ 7,889 ~~1984~~$ to18,952 ~~September~~Accounts 30payable 11,652 ~~2001~~21,046 ~~Statements~~----------- of----------- ~~Cash~~Total ~~Flows~~Current ~~Three~~Liabilities ~~months~~19,541 ~~ended~~39,998 ~~September~~----------- 30----------- STOCKHOLDERS' EQUITY Common stock 400,000,000 ~~2001~~shares ~~and~~authorized, ~~2000~~at $.~~.............6~~001 par value; 160,238,322 shares issued and ~~the~~outstanding ~~period~~on ~~January~~December 2731; 160,238 ~~1984~~158,138 to158,138,322 ~~September~~on June 30, ~~2001~~Capital ~~Notes~~in toexcess ~~Financial~~of ~~Statements...................................~~par value 7,102,821 ~~ITEM~~7,041,922 2.Stock ~~Management~~subscriptions receivable (110,265) (110,265) Deficit accumulated during the development stage (5,670,844) (5,124,710) ----------- ----------- Total Stockholders's ~~Discussion~~Equity ~~and~~1,481,950 ~~Analysis~~1,965,085 of----------- ~~Financial~~----------- ~~Condition~~$ ~~and~~1,501,491 ~~Results~~$ of2,005,083 ~~Operations................11~~=========== ~~PART~~=========== ~~II.~~The ~~Other~~accompanying ~~Information..............................................12~~notes ~~Signatures.....................................................13~~are an integral part of these financial statements -4-

AMBRA RESOURCES GROUP, INC. ( Development Stage Company) ~~BALANCE~~STATEMENTS ~~SHEETS~~OF ~~September~~OPERATIONS 30Forthe Three and Six Months Ended December 31, 2001 and ~~June~~2000 30and the Period January 27, 1984 (date of inception) to December 31, 2001 -------------------------------------------------------------------------------------------- ~~ASSETS Sept 2001 June 2001~~ ----------- ------------- ~~CURRENT~~Three ~~ASSETS~~Months ~~Cash~~Six ~~.......................................................~~Months $Dec ~~850,284~~Dec $Dec 1Dec Jan 27,~~517,209~~ ~~Accounts~~1984 ~~receivable~~to -2001 ~~income~~2000 ~~tax~~2001 ~~refund~~2000 ~~...................~~Dec ~~162~~31,~~994~~ ~~166,012~~2001 ~~Accounts~~------------- ~~receivable~~------------- ~~.......................................~~------------- ~~8,000 8,000~~ ------------- ------------- ~~Total~~REVENUES ~~Current~~Rents ~~Assets~~and ~~...................................~~interest 1$ 13,~~021~~768 $ 5,~~278~~085 1$ 21,~~691~~907 $ 17,~~221~~911 $ 305,384 ------------- ------------- ~~PROPERTY~~------------- ~~AND~~------------- ~~EQUIPMENT~~ ------------- ~~net~~EXPENSES ofExploration ~~accumulated~~41,051 ~~depreciation~~655,528 -41,051 ~~Note~~655,528 2696,579 ~~..................................~~Administrative ~~233~~204,~~783~~694 ~~236~~323,~~304~~904 514,990 466,812 6,585,951 Depreciation 6,000 6,153 12,000 8,339 48,453 ------------- ------------- ~~OTHER~~------------- ~~ASSETS Advance deposits .......................................... 250,000~~ ------------- ~~Account receivable~~ ------------- ~~related~~251,745 ~~party~~985,585 ~~........................~~568,041 1,~~296~~130,679 ~~Mining~~7,330,983 ~~claims~~------------- ------------- ~~Note~~------------- ~~3 ....................................~~ ------------- ------------- ~~Oil~~NET ~~leases~~LOSS - ~~Note~~before 4other ~~......................................~~income ~~243~~(237,~~202~~977) 67(980,~~913~~500) ~~Other~~(546,134) (1,112,768) (7,025,599) Gain on sale of assets ~~..............................................~~-- 989,~~645~~460 9-- 283,~~645~~320 1,354,755 ------------- ------------- ~~Total~~------------- ~~Other Assets ..................................... 504,143 77,558~~ ------------- ------------- NET LOSS $ 1(237,~~759~~977) $ (891,~~204~~040) $ 2(546,~~005~~134) $ (829,~~083~~448) $ (5,670,844) ============= ============= ~~LIABILITIES~~============= ~~AND~~============= ~~STOCKHOLDERS'~~============= ~~EQUITY~~LOSS ~~CURRENT~~PER ~~LIABILITIES~~COMMON ~~Accounts~~SHARE ~~payable~~Basic ~~- related parties ........................~~ $ ~~7,889~~-- $ ~~18,952 Accounts payable~~ (.~~.........................................~~01) $ ~~31,388~~-- ~~21,046~~$ -- ------------- ------------- ~~Total Current Liabilities .............................. 39,277 39,998~~ ------------- ------------- ~~STOCKHOLDERS'~~AVERAGE ~~EQUITY~~OUTSTANDING ~~Common~~SHARES ~~stock~~Basic ~~400~~160,~~000~~238,~~000~~322 ~~shares authorized~~145, ~~at $.001 par value; 160~~508,~~238,~~322 ~~shares issued and outstanding on September 30;~~ 160,238 ~~158~~,~~138~~322 ~~158~~145,~~138~~508,322 on June 30 Capital in excess of par value ............................ 7,102,821 7,041,922 Stock subscriptions receivable ............................ (110,265) (110,265) Deficit accumulated during the development stage .......... (5,432,867) (5,124,710) ------------- ------------- ~~Total Stockholders' Equity ............................. 1,719,927 1,965,085~~ ------------- ------------- $The ~~1,759,204~~accompanying $notes ~~2,005,083~~are ~~===========~~an ~~===========~~integral part of these financial statements. -5-

AMBRA RESOURCES GROUP, INC. ( Development Stage Company) STATEMENTS OF ~~OPERATIONS~~CASH FLOWS For the ~~Three~~Six Months Ended ~~September~~December 3031, 2001 and 2000 and the Period January 27, 1984 (~~date~~Date of ~~inception~~Inception) to ~~September~~December 3031, 2001 --------------------------------------------------------------------------------------------------- January 27, 1984 ~~Sept~~Dec ~~30,~~Dec ~~Sept 30,~~ (Date of Inception) 2001 2000 to ~~Sept~~Dec 3031, 2001 ------------- ------------- ---------------- ~~REVENUES~~CASH ~~Rents~~FLOWS ~~and~~FROM ~~interest~~OPERATING ~~........~~ACTIVITIES Net profit (loss) $ 8(546,~~139~~134) $ 12(829,~~826~~448) $(5,670,844) ~~291~~Adjustments to reconcile net loss to net cash provided by operating activities Depreciation 12,~~616~~000 8,339 48,453 Common capital stock issued for services & expenses 63,000 328,000 4,260,264 Gain from sale of assets -- -- (1,354,755) (Increase) decrease in accounts receivable (8,782) 9,412 (182,794) Increase (decrease) in liabilities (20,458) (67,570) 19,540 --------- -- ----------- -----------~~-----~~ ~~EXPENSES~~Net ~~Exploration,~~Cash ~~development,~~Used ..By ~~310,296~~Operations ~~142~~(500,~~908~~374) 7(551,~~036,785~~267) ~~and promotion Depreciation ............... 6,000~~ (2,~~186 42~~880,~~453~~136) ~~316,296 145,094 7,079,238~~ ------------- ------------- ----------- CASH FLOWS FROM INVESTING ACTIVITIES Advance deposits (250,000) (34,014) (250,000) Purchase of other assets -- --- ~~NET~~(9,645) ~~LOSS~~Purchase -of ~~before~~property ~~other~~& ~~income~~equipment (~~308~~5,~~157~~241) (~~132~~79,~~268~~340) (6277,~~787~~998) Purchase of oil & gas leases (175,~~622~~289) ~~GAIN~~(151,014) ~~FROM~~(243,202) ~~SALE~~Net OFsales ~~ASSETS~~of ~~.....~~assets -- ~~193~~280,~~860~~480 1,~~354~~638,~~755~~159 ----------- ----------- ----------- (430,530) 16,112 857,314 ----------- ----------- ----------- ~~NET~~CASH ~~PROFIT~~FLOWS ~~(LOSS)~~FROM ~~............~~FINANCING $ACTIVITIES ~~(308,157)~~Net $proceeds ~~61,592~~from $sale ~~(5,432,867)~~of ~~=============~~capital ~~=============~~stock ~~================~~-- ~~LOSS PER COMMON SHARE Basic ................. $~~ -- $2,609,127 -- --------- ---- ------- ----------- ~~AVERAGE~~Net ~~OUTSTANDING~~increase ~~SHARES~~(decrease) ~~Basic~~in ~~.................~~cash ~~160~~(930,~~238~~904) (535,~~322~~155) ~~158~~586,~~138~~305 Cash at beginning of year 1,~~322~~517,209 1,086,224 -- ----------- ----------- ----------- Cash at end of year $ 586,305 $ 551,069 $ 586,305 =========== =========== =========== 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 $ 145,121 Residential rentals 132,877 Less accumulated depreciation (48,453) --------- 229,545 --------- 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 December 31, 2001, the Company had a net operating loss carry forward of $5,670,844. The tax benefit of approximately $1,701,253 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 2022. 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 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 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 December 31, 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 December 31, 2001 and the quarter ended December 31, 2000 The Company sustained a net loss of $237,977 in the quarter ended December 31, 2001, compared to a net loss of $891,040 for the quarter ended December 31, 2000. The $653,063 decrease in the loss was largely effected by a decrease in the exploration activity. A comparison of the principal operating expenses for each quarter follows: -11- December 31, 2001 December 31, 2000 --------------- --------------- Exploration $ 41,051 $ 655,528 Administrative 36,700 72,991 Consultants 107,856 167,291 Travel and entertainment 60,138 83,622 Depreciation 6,000 6,163 --------------- --------------- $ 251,745 $ 985,585 --------------- --------------- PART II - OTHER INFORMATION -------------------------------------------------------------------------------- ITEM 1. LEGAL PROCEEDINGS -------------------------------------------------------------------------------- None. -------------------------------------------------------------------------------- ITEM 2. CHANGES IN SECURITIES -------------------------------------------------------------------------------- No new shares were issued during the quarter ended December 31, 2001 -------------------------------------------------------------------------------- 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: February 13, 2002 By /s/ John M. Hickey -------------------------------- John M. Hickey, President -13-

AMBRA RESOURCES GROUP, INC. ( Development Stage Company) STATEMENTS OF CASH FLOWS For the Three Months Ended September 30, 2001 and 2000 and the Period January 27, 1984 (Date of Inception) to September 30, 2001 ---------------------------------------------------------------------------------------------------- January 27, 1984 Sept Sept (Date of Inception) 2001 2000 to Sept 30, 2001 ----------- ----------- -------------- CASH FLOWS FROM OPERATING ACTIVITIES Net profit (loss) ............................... $ (308,157) $ 61,592 $ (5,432,867) Adjustments to reconcile net loss to net cash provided by operating activities Depreciation ............................. 6,000 2,186 42,453 Common capital stock issued for services & expenses ................ 63,000 -- 4,260,264 Gain from sale of assets ................. -- -- (1,354,755) (Increase) decrease in accounts receivable 1,721 (330,728) (172,291) Increase (decrease) in liabilities ....... (721) (60,589) 39,277 ----------- ----------- -------------- Net Cash Used By Operations ............ (238,157) (327,539) (2,617,919) ----------- ----------- -------------- CASH FLOWS FROM INVESTING ACTIVITIES Advance deposits ................................ (250,000) -- (250,000) Purchase of other assets ........................ -- -- (9,645) Purchase of property & equipment ................ (3,479) -- (276,236) Purchase of oil & gas leases ................... (175,289) -- (243,202) Net sales of assets ............................. -- (1,140) 1,638,159 ----------- ----------- -------------- (428,768) (1,140) 859,076 ----------- ----------- -------------- CASH FLOWS FROM FINANCING ACTIVITIES Net proceeds from sale of capital stock ......... -- -- 2,609,127 ----------- ----------- -------------- Net increase (decrease) in cash ................. (666,925) (328,679) 850,284 Cash at beginning of year ....................... 1,517,209 1,086,224 -- ----------- ----------- -------------- Cash at end of year ............................. $ 850,284 $ 757,545 $ 850,284 =========== =========== ==============

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