UNITED
STATES SECURITIES AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM 10-KSB/A
(Amendment
No. 1)
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ANNUAL
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934
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For
the fiscal year ended December 31, 2007
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TRANSITION
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF
1934
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Commission
File Number 0-22723
AMERICAN
PETRO-HUNTER, INC.
(Name
of
small business issuer as specified in its charter)
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Nevada
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98-0171619
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(State
or Other Jurisdiction of
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(I.R.S.
Employer
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Incorporation
or Organization)
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Identification
Number)
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225
Marine Drive, Suite 210
Blaine,
Washington, USA
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98230
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(Address
of Principal Executive Offices)
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(Zip
Code)
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(360)
332-0905
(Issuer’s
telephone number)
Securities
registered pursuant to Section 12(b) of the Act:
None.
Securities
registered pursuant to Section 12(g) of the Act:
COMMON
STOCK, PAR VALUE $0.001
(Title
of
Class)
Indicate
by checkmark whether the Issuer (1) filed all reports required to be filed
by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for
such
shorter period that the issuer was required to file such reports), and (2)
has
been subject to such filing requirements for the past 90 days. Yes x
No
o
Indicate
by checkmark if there is no disclosure of delinquent filers in response to
Item
405 of Regulation S-B contained in this form, and no disclosure will be
contained, to the best of registrant’s knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-KSB
or any amendment to this Form 10-KSB. x
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). Yes o
No
x
Net
revenues for the most recent fiscal year ending December 31, 2007 were
$0.
The
aggregate market value of voting stock held by non-affiliates of the registrant
was $661,202 as of April 14, 2008, 2008
(computed by reference to the average bid and ask price of a share of the
registrant’s common stock on that date as reported by the Over the Counter
Bulletin Board). For purposes of this computation, it has been assumed that
the
shares beneficially held by directors and officers of registrant were “held by
affiliates”; this assumption is not to be deemed to be an admission by such
persons that they are affiliates of registrant.
Number
of
shares of issuer’s common stock outstanding as of
April 14, 2008:
8,265,019
Transitional
Small Business Disclosure Format (check one). Yes o
No
x
Explanatory
Note
We
are
filing this Form 10-KSB/A to reflect corrections in the 10-KSB Original Filing
filed with the Securities and Exchange Commission on April 15, 2008 in response
to a comment letter received from the Commission on September 8, 2008. We
are
making revisions to the following sections: “Front Cover Page,” “Description of
Business,” “Controls and Procedures,” “Financial Statements,” “Exhibit 31.1” and
“Exhibit 31.2.”
TABLE
OF CONTENTS
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Page
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PART
I
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1
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ITEM
1 — DESCRIPTION OF BUSINESS
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7
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ITEM
2 — DESCRIPTION OF PROPERTY
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7
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ITEM
3 — LEGAL PROCEEDINGS
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7
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ITEM
4 — SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
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PART
II
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ITEM
5 — MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
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7
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ITEM
6 — MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATION
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8
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ITEM
7 — FINANCIAL STATEMENTS
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11
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ITEM
8 — CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
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11
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ITEM
8A — CONTROLS AND PROCEDURES
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11
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ITEM
8B — OTHER INFORMATION
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12
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PART
III
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ITEM
9 — DIRECTORS AND EXECUTIVE OFFICERS
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12
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ITEM
10 — EXECUTIVE COMPENSATION
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13
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ITEM
11 — SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
AND
RELATED STOCKHOLDER MATTERS
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14
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ITEM
12 — CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
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15
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ITEM
13 — EXHIBITS
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16
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ITEM
14 — PRINCIPAL ACCOUNTANT FEES AND SERVICES
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17
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SIGNATURES
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18
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INDEX
TO EXHIBITS
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F-1
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EXHIBIT
10.10
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EXHIBIT
23.1
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EXHIBIT
31.1
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EXHIBIT
31.2
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EXHIBIT
32
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i
PART
I
ITEM
1 —
DESCRIPTION OF BUSINESS
Background
American
Petro-Hunter Inc. (the “Company,” “we,” “us,” “our”) was formed on January 24,
1996 pursuant to the laws of the State of Nevada under the name Wolf
Exploration, Inc. with a business plan to acquire properties for precious metal
exploration in the western United States. However, after considering several
properties, we determined the properties identified were not suitable to fully
implement an exploration and development project in the United States. In August
1996, we changed our management team and developed a new business plan to sell
chemical products to the oil and gas industry.
In
October 1996, we entered into an agreement to acquire two numbered companies
that were combined with 714674 Alberta Ltd. continuing in operation. The
business operated as Calgary Chemical, selling chemical products to the oil
and
gas industry.
In
March
1997, we changed our name to Wolf Industries Inc. to reflect these
developments.
Effective
June 30, 1998, we sold our subsidiary, 714674 Alberta Ltd. ("Calgary Chemical")
to Gorda Technology Holdings Limited, a Turks and Caicos Islands corporation
("Gorda"). The terms of the sale were as follows:
(a)
forgiveness of the inter-company debt owed by Calgary Chemical to us in the
amount of $82,289 (Canadian);
(b)
payment by Gorda to us of fifteen percent of Calgary Chemical's after-tax profit
(as determined by generally accepted accounting principles) for the fiscal
year
ended December 31, 1998 payable on or before March 31, 1999 and completion
of an
audit of the financial statements of Calgary Chemical for such
period;
(c)
indemnification by Gorda to hold us harmless from any and all liability arising
from the debt guarantees of Calgary Chemical;
(d)
agreement by Gorda to hire Mr. Blair Coady as the President and Chief Executive
Officer of Calgary Chemical; and
(e)
receipt from Mr. Coady of his resignation as our President and Chief Executive
Officer, Secretary, and Director and the surrender of Mr. Coady's options to
acquire 700,000 shares of our common stock.
The
sale
of Calgary Chemical was subject to approval of our shareholders, which was
received at our annual general meeting of July 24, 1998.
On
April
8, 1998, we entered into a license agreement with Andrew Engineering Inc.
("Andrew") a British Columbia corporation, Andrew Rawicz Ph.D., and Ivan Melnyk,
Ph.D., whereby we acquired a world-wide license to manufacture and market a
patent pending device for the color matching of dentures to a dental patient's
existing tooth color. Drs. Rawicz and Melnyk hold the patent pending for
the color analyzer and Andrew developed and/or acquired the techniques and
other
proprietary information related to the device. The license agreement
required us and Andrew to develop a business plan for manufacturing and
marketing the device, including obtaining financing of $1,500,000 US. The
license agreement required the issuance of 4,800,000 shares of restricted stock
to Andrew with registration rights on 600,000 of those shares, and also required
that Mr. Patrick McGowan to be appointed President and Chief Executive Officer.
Mr. McGowan signed a management agreement with us, and at a meeting of our
Board of Directors held on April 16, 1998, Mr. McGowan and Mr. A. Schwabe were
appointed to our Board of Directors. They were also appointed interim President
and CEO, and Secretary, Treasurer respectively, pending the approval of the
shareholders of the Gorda transaction wherein Mr. Coady would resign from all
positions. The license agreement also obligated us to pay a royalty to
Andrew in the amount of ten percent (10%) of gross profit on sales if we
manufactured the product itself or a royalty of seven percent (7%) of gross
revenues if manufacturing was done by an independent third
party.
1
In
September 1998, 4,800,000 shares of our common stock were issued to Andrew
in
accordance with the terms of the license agreement. As a result of settlement
of
the litigation with AEI Trucolor Inc. ("Trucolor"), the license agreement was
cancelled and the 4,800,000 shares were returned to our treasury in 1999. This
action was settled by the execution of two agreements, the effect of which
was
that we acquired a 40% interest in Trucolor, an arm's length company. As a
result of the agreement, Trucolor became the owner of the rights to the device.
During 2006, Trucolor was dissolved.
Pursuant
to an agreement dated June 14, 2000, we purchased a 100% interest in a private
company owned by our former director called Travelport Media Inc. ("TPI").
TPI was a Nevada private internet e-commerce technology and content
development company specializing in the travel and hospitality industry. The
agreement required us to issue 3,000,000 share purchase warrants in exchange
for
a 100% interest in TPI. The share purchase warrants allowed the holder to
purchase 3,000,000 shares of our common stock for $0.27 per share. Before
the end of December 31, 2000, our relationship with the consultant and former
shareholder of TPI became strained, resulting in the consultant resigning as
our
director on September 11, 2000.
In
November, 2000, we received shareholder and regulatory approval to change our
name to "Travelport Systems Inc." in anticipation of our new strategic
direction.
Subsequent
to December 31, 2000, we entered into a settlement agreement whereby we would
give our interest in the shares of TPI back to the original owner on the
condition that the original owner and our former director would assume a
liability of $86,000 which we incurred. In addition, subsequent to
December 31, 2000 we cancelled 150,000 share purchase options exercisable at
$0.15 per share until October 11, 2005, and we cancelled 200,000 share purchase
options exercisable at $0.25 per share until October 19, 2005 issued to
employees of TPI. After settling that action, in August 2001, we changed our
name to “American Petro-Hunter Inc.” and our focus to the exploration and
eventual exploitation of oil and gas.
Our
Business
During
1998, we sold Calgary Chemical and acquired the worldwide manufacturing and
marketing rights to a dental color analyzer (the “Product"). This
technology was developed to assist the dental industry in determining the shades
and colors of dental materials used in replacement and/or restorative work,
by
precisely matching these shades to the original teeth of patients. The dental
color analyzer discriminates between the minutest differences in tooth shading
and determines the best shade match for partial or total restorative material.
It does so by taking into account the differences in color of spectrally
unmatched materials when illuminated with different light sources such as
sunlight, incandescent lamps, and fluorescent lamps. Since acquiring the rights
in April 1998, our efforts have been directed towards research, development
and
business plans for manufacturing and marketing the product. This has involved
manufacturing a small quantity of the product for testing and demonstration
purposes; engaging technical experts and firms to evaluate the product;
attendance at dental conventions and shows to demonstrate the product;
attendance at various dental firms and laboratories to demonstrate and evaluate
the product; and work on both the product and related software to perfect its
operation. We have also engaged the assistance of consultants to develop
marketing plans for the product. This has resulted in us incurring
substantial research and development expenditures in 1998.
We
have
also held discussions with companies involved in the distribution of dental
products in Canada, the United States and Europe regarding marketing of the
product.
We
developed preliminary business plans to proceed with manufacture and sale of
the
units, but were delayed in proceeding pending completion of this research and
development, and by the action brought against us by AEI Trucolor
As
a
result of settlement of the Trucolor action, Trucolor became the owner of the
dental color analyzer. The manufacturing/distribution agreement was not
consummated with a third party, as anticipated by the settlement agreement,
and
as a result we own a 40% interest in Trucolor, and GPT owns a 60% interest.
During 2006, Trucolor was dissolved.
2
Our
Strategy
Our
focus
is currently in locating and assessing potential acquisition targets, including
real property, oil and gas rights and oil and gas companies. We will focus
primarily on oil and gas properties within the U.S. and Canada including
exploration, secondary recovery and development projects. Each project will
be
evaluated by our management based on sound geology, acceptable risk levels
and
total capital requirements to develop. Our officers and directors expect to
travel to different locations throughout North America to evaluate potential
acquisitions. Further, our management will participate in a variety of different
conferences throughout 2008 to increase our exposure to potential
opportunities.
Our
ability to execute our strategy as outlined above is dependent on several
factors including but not limited to: (i) identifying potential acquisitions
of
either assets or operational companies with prices, terms and conditions
acceptable to us; (ii) additional financing for capital expenditures,
acquisitions and working capital either in the form of equity or debt with
terms
and conditions that would be acceptable to us; (iii) our success in developing
revenue, profitability and cash flow; (iv) the development of successful
strategic alliances or partnerships; and (v) the extent and associated efforts
and costs of federal, state and local regulations in each of the industries
in
which we currently or plan to operate in. There are no assurances that we will
be successful in implementing our strategy as any negative result of one of
the
factors alone or in combination could have a material adverse effect on our
business.
Customers
As
of
December 31, 2007, we had no customers.
Dividends
We
have
not, and currently do not intend to, pay dividends. Any change in this current
intention is in the discretion of the Board of Directors.
Employees
As
of
December 31, 2007, we had no full time employees. We currently utilize temporary
contract labor throughout the year to address business and administrative
needs.
Factors,
Risks and Uncertainties That May Affect our Business
With
the exception of historical facts stated herein, the matters discussed
in this report on Form 10-KSB are “forward looking” statements
that
involve risks and uncertainties that could cause actual results to
differ
materially from projected results. Such “forward looking” statements
include,
but
are not necessarily limited to statements regarding anticipated levels
of
future revenues and earnings from the operations of American
Petro-Hunter,
Inc.
and its subsidiaries, (the “Company,” “we,” “us” or “our”), projected costs and
expenses related to our operations, liquidity,
capital resources, and availability of future equity capital on
commercially
reasonable terms. Factors that could cause actual results to differ
materially
are
discussed below. We disclaim any intent or obligation to publicly
update
these “forward looking” statements, whether as a result of new
information,
future events or otherwise.
Risks
Relating to Our Business
We
have a history of losses which may continue, which may negatively impact our
ability to achieve our business objectives.
We
incurred net losses of $3,585,517 for the period from January 24, 1996
(inception) to December 31, 2007, and $156,585 for the year ended December
31,
2007. We cannot be assured that we can achieve or sustain profitability on
a
quarterly or annual basis in the future. Our operations are subject to the
risks
and competition inherent in the establishment of a business enterprise. There
can be no assurance that future operations will be profitable. We may not
achieve our business objectives and the failure to achieve such goals would
have
an adverse impact on us.
3
If
we are unable to obtain additional funding our business operations will be
harmed and if we do obtain additional financing our then existing shareholders
may suffer substantial dilution
.
We
will
require additional funds to initiate our oil and gas exploration activities,
and
to take advantage of any available business opportunities. Historically, we
have
financed our expenditures primarily with proceeds from the sale of debt and
equity securities, and bridge loans from our officers and stockholders. In
order
to meet our obligations or acquire an operating business, we will have to raise
additional funds. Obtaining additional financing will be subject to market
conditions, industry trends, investor sentiment and investor acceptance of
our
business plan and management. These factors may make the timing, amount, terms
and conditions of additional financing unattractive or unavailable to us. If
we
are not successful in achieving financing in the amount necessary to further
our
operations, implementation of our business plan may fail or be
delayed.
Our
independent auditors have expressed substantial doubt about our ability to
continue as a going concern, which may hinder our ability to obtain future
financing
.
In
their
report dated April 3, 2008, our independent auditors stated that our financial
statements for the fiscal year ended December 31, 2007 were prepared assuming
that we would continue as a going concern. Our ability to continue as a going
concern is an issue raised as a result of recurring losses from operations.
We
continue to experience net operating losses. Our ability to continue as a going
concern is subject to our ability to obtain necessary funding from outside
sources, including obtaining additional funding from the sale of our securities.
Our continued net operating losses increase the difficulty in meeting such
goals
and there can be no assurances that such methods will prove
successful.
We
have a limited operating history and if we are not successful in growing our
business, then we may have to scale back or even cease our ongoing business
operations
.
We
have
yet to generate positive earnings from our current business strategy and there
can be no assurance that we will ever operate profitably. Our company has a
limited operating history in the business of oil and gas exploration and must
be
considered in the development stage. Our success is significantly dependent
on a
successful reorganization or acquisition of an existing business. Our operations
will be subject to all the risks inherent in the establishment of a developing
enterprise and the uncertainties arising from the absence of a significant
operating history. We may be unable to locate recoverable reserves or operate
on
a profitable basis. We are in the development stage and potential investors
should be aware of the difficulties normally encountered by enterprises in
the
development stage. If our business plan is not successful, and we are not able
to operate profitably, investors may lose some or all of their investment in
our
company.
Our
compliance with the Sarbanes-Oxley Act and SEC rules concerning internal
controls may be time-consuming, difficult and costly for
us.
It
may be
time consuming, difficult and costly for us to maintain, improve and implement
our internal controls and reporting procedures policy as required by the
Sarbanes-Oxley Act. We may need to hire additional financial reporting, internal
controls and other finance staff in order to further develop and implement
appropriate internal controls and reporting procedures as we grow our business.
If we are unable to comply with the internal controls requirements of the
Sarbanes-Oxley Act, we may not be able to obtain the independent accountant
certifications that the Sarbanes-Oxley Act requires publicly-traded companies
to
obtain, and this would impact our ability to comply with SEC regulations
governing public companies.
Risks
Related to our Oil and Gas Exploration
If
we are unable to successfully recruit qualified managerial and field personnel
having experience in oil and gas exploration, we may not be able to execute
on
our business plan.
In
order
to successfully implement and manage our business plan, we will be dependent
upon, among other things, successfully recruiting qualified managerial and
field
personnel having experience in the oil and gas exploration business. Competition
for qualified individuals is intense. There can be no assurance that we will
be
able to find, attract and retain existing employees or that we will be able
to
find, attract and retain qualified personnel on acceptable terms.
We
may not be insured against all of the operating risks to which our business
is
exposed.
Our
business is subject to all of the operating risks normally associated with
the
exploration for and production of oil and gas, any of which could result in
damage to, or destruction of, property and injury to persons. As protection
against financial loss resulting from these types of operating hazards, we
maintain insurance coverage. However, because we are in the exploratory stage
and have not identified for reorganization, an operating business, we are not
fully insured against all these risks. The occurrence of a significant event
against which we are not fully insured could have a material adverse effect
on
our financial position.
4
Even
if we are able to, the potential profitability of oil and gas ventures depends
upon factors beyond the control of our company.
The
potential profitability of oil and gas properties is dependent upon many factors
beyond our control. For instance, world prices and markets for oil and gas
are
unpredictable, highly volatile, potentially subject to governmental fixing,
pegging, controls or any combination of these and other factors, and respond
to
changes in domestic, international, political, social and economic environments.
Additionally, due to worldwide economic uncertainty, the availability and cost
of funds for production and other expenses have become increasingly difficult,
if not impossible, to project. These changes and events may materially affect
our future financial performance. These factors cannot be accurately predicted
and the combination of these factors may result in our company not receiving
an
adequate return on invested capital.
Competition
in the oil and gas industry is highly competitive and there is no assurance
that
we will be successful in acquiring the leases.
The
oil
and gas industry is intensely competitive. We compete with numerous individuals
and companies, including many major oil and gas companies which have
substantially greater technical, financial and operational resources and staffs.
Accordingly, there is a high degree of competition for desirable oil and gas
leases, suitable properties for drilling operations and necessary drilling
equipment, as well as for access to funds. We cannot predict if the necessary
funds can be raised or that any projected work will be completed.
The
marketability of natural resources will be affected by numerous factors beyond
our control which may result in us not receiving an adequate return on invested
capital to be profitable or viable
.
The
marketability of natural resources which may be acquired or discovered by us
will be affected by numerous factors beyond our control. These factors include
market fluctuations in oil and gas pricing and demand, the proximity and
capacity of natural resource markets and processing equipment, governmental
regulations, land tenure, land use, regulation concerning the importing and
exporting of oil and gas and environmental protection regulations. The exact
effect of these factors cannot be accurately predicted, but the combination
of
these factors may result in us not receiving an adequate return on invested
capital to be profitable or viable.
Oil
and gas operations are subject to comprehensive regulation which may cause
substantial delays or require capital outlays in excess of those anticipated
causing an adverse effect on our company
.
Oil
and
gas operations are subject to country-specific federal, state, and local laws
relating to the protection of the environment, including laws regulating removal
of natural resources from the ground and the discharge of materials into the
environment. Oil and gas operations are also subject to country-specific
federal, state, and local laws and regulations which seek to maintain health
and
safety standards by regulating the design and use of drilling methods and
equipment. Various permits from government bodies are required for drilling
operations to be conducted; no assurance can be given that such permits will
be
received. Environmental standards imposed by federal, state, provincial, or
local authorities may be changed and any such changes may have material adverse
effects on our activities. Moreover, compliance with such laws may cause
substantial delays or require capital outlays in excess of those anticipated,
thus causing an adverse effect on us. Additionally, we may be subject to
liability for pollution or other environmental damages. To date, we have not
been required to spend any material amount on compliance with environmental
regulations. However, we may be required to do so in the future and this may
affect our ability to expand or maintain our operations.
Exploration
and production activities are subject to certain environmental regulations
which
may prevent or delay the commencement or continuation of our
operations.
In
general, our exploration and production activities are subject to certain
country-specific federal, state and local laws and regulations relating to
environmental quality and pollution control. Such laws and regulations increase
the costs of these activities and may prevent or delay the commencement or
continuation of a given operation. Compliance with these laws and regulations
has not had a material effect on our operations or financial condition to date.
Specifically, we are subject to legislation regarding emissions into the
environment, water discharges and storage and disposition of hazardous wastes.
In addition, legislation has been enacted which requires well and facility
sites
to be abandoned and reclaimed to the satisfaction of U.S. state authorities.
However, such laws and regulations are frequently changed and we are unable
to
predict the ultimate cost of compliance. Generally, environmental requirements
do not appear to affect us any differently or to any greater or lesser extent
than other companies in the industry. We believe that our operations comply,
in
all material respects, with all applicable environmental regulations. Our
operating partners maintain insurance coverage customary to the industry;
however, we are not fully insured against all possible environmental
risks.
5
Exploratory
drilling involves many risks and we may become liable for pollution or other
liabilities which may have an adverse effect on our financial
position
.
Drilling
operations generally involve a high degree of risk. Hazards such as unusual
or
unexpected geological formations, power outages, labor disruptions, blow-outs,
sour gas leakage, fire, inability to obtain suitable or adequate machinery,
equipment or labor, and other risks are involved. We may become subject to
liability for pollution or hazards against which it cannot adequately insure
or
which it may elect not to insure. Incurring any such liability may have a
material adverse effect on our financial position and operations.
Risk
Related to Seeking Other Business Opportunities
Exploring
and entering into business opportunities could be very time consuming and costly
and could adversely affect our financial condition.
We
have
not identified and have no commitments to enter into or acquire a specific
business opportunity such as a merger, joint venture or acquisition of a private
or public entity. There can be no assurance we will be successful in identifying
and evaluating suitable business opportunities or in concluding a business
combination. However, if we entered into a potential business opportunity our
participation in a business opportunity may be highly illiquid and could result
in a total loss to us and our stockholders if the business or opportunity proved
to be unsuccessful. Due to the special risks inherent in the investigation,
acquisition,
Even
if we were to enter into a business opportunity there is no assurance of success
or profitability.
There
is
no assurance that we will acquire a favorable business opportunity. Moreover,
even if we become involved in a business opportunity because of the unforeseen
costs, expenses, and difficulties involved with a new business opportunity,
there is no assurance that it will generate revenues or profits, or that the
market price of our common stock will increase.
SEC
reporting requirements may be too costly for us to take advantage of any
potential business opportunities.
The
Securities Exchange Act of 1934 (the "Exchange Act"), require companies to
provide certain information about significant acquisitions, including certified
financial statements for the company acquired, covering one, two or three years,
depending on the relative size of the acquisition. The time and additional
costs
that may be incurred by some prospective entities to prepare such statements
may
preclude consummation of an otherwise desirable acquisition by us. Acquisition
prospects that do not have or are unable to obtain the required audited
financial statements may not be appropriate for acquisition.
Risk
Relating To Our Common Stock
A
limited public trading market exists for our common stock, which makes it more
difficult for our stockholders to sell their common stock in the
public.
Although
our common stock is quoted on the OTCBB under the symbol “AAPH,” there is a
limited public market for our common stock. No assurance can be given that
an
active market will develop or that a stockholder will ever be able to liquidate
its shares of common stock without considerable delay, if at all. Many brokerage
firms may not be willing to effect transactions in the securities. Even if
a
purchaser finds a broker willing to effect a transaction in these securities,
the combination of brokerage commissions, state transfer taxes, if any, and
any
other selling costs may exceed the selling price
6
Our
common stock may be subject to the penny stock rules which may make it more
difficult to sell our common stock.
The
Securities and Exchange Commission has adopted regulations which generally
define a “penny stock” to be any equity security that has a market price, as
defined, less than $5.00 per share or an exercise price of less than $5.00
per
share, subject to certain exceptions. Our securities may be covered by the
penny
stock rules, which impose additional sales practice requirements on
broker-dealers who sell to persons other than established customers and
accredited investors such as, institutions with assets in excess of $5,000,000
or an individual with net worth in excess of $1,000,000 or annual income
exceeding $200,000 or $300,000 jointly with his or her spouse. For transactions
covered by this rule, the broker-dealers must make a special suitability
determination for the purchase and receive the purchaser’s written agreement of
the transaction prior to the sale. Consequently, the rule may affect the ability
of broker-dealers to sell our securities and also affect the ability of our
stockholders to sell their shares in the secondary market.
Our
management and stockholders may lose control of the Company as a result of
a
merger or acquisition.
We
may
consider an acquisition in which we would issue as consideration for the
business opportunity to be acquired an amount of our authorized but unissued
common stock that would, upon issuance, represent the great majority of the
voting power and equity of the Company. As a result, the acquiring company's
stockholders and management would control the Company, and our current
management may be replaced by persons unknown at this time. Such a merger would
result in a greatly reduced percentage of ownership of the Company by its
current stockholders.
We
have historically not paid dividends and do not intend to pay
dividends.
We
have
historically not paid dividends to our stockholders and management does not
anticipate paying any cash dividends on our common stock to our stockholders
for
the foreseeable future. We intend to retain future earnings, if any, for use
in
the operation and expansion of our business
ITEM
2 —
DESCRIPTION OF PROPERTY
Effective
December 2007 we moved our offices to 225 Marine Drive, Suite 210, Blaine,
Washington, under a consulting agreement with our President. We do not pay
rent
for the use of its office but may be responsible for certain telephone charges
and miscellaneous office expenses. We share this office space with other
companies, and occupy approximately 750 square feet.
ITEM
3 —
LEGAL PROCEEDINGS
None.
ITEM
4 —
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
PART
II
ITEM
5 —
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Market
Information
Our
common stock is traded on the Over the Counter Bulletin Board under the symbol
AAPH.
The
following is the range of high and low bid prices for our common stock for
the
periods indicated. The quotations reflect inter-dealer prices, without retail
mark-up, mark-down or commissions and may not represent actual
transactions.
|
Fiscal 2007
|
High
|
Low
|
|||||
|
First
Quarter (March 31, 2007)
|
$
|
.25
|
$
|
.14
|
|||
|
Second
Quarter (June 30, 2007)
|
$
|
.14
|
$
|
.125
|
|||
|
Third
Quarter (September 30, 2007)
|
$
|
.128
|
$
|
.125
|
|||
|
Fourth
Quarter (December 31, 2007)
|
$
|
.15
|
$
|
.08
|
|||
7
|
Fiscal 2006
|
High
|
Low
|
|||||
|
First
Quarter (March 31, 2006)
|
$
|
.20
|
$
|
.12
|
|||
|
Second
Quarter (June 30, 2006)
|
$
|
.20
|
$
|
.12
|
|||
|
Third
Quarter (September 30, 2006)
|
$
|
.29
|
$
|
.12
|
|||
|
Fourth
Quarter (December 31, 2006)
|
$
|
.24
|
$
|
.13
|
|||
The
closing price for our common stock on December 31, 2007 was $0.09.
Stockholders
As
of
December 31, 2007, there were 8,265,019 shares of common stock issued and
outstanding held by 67 stockholders of record (not including street name
holders).
Dividends
We
have
not paid dividends to date and do not anticipate paying any dividends in the
foreseeable future. Our Board of Directors intends to follow a policy of
retaining earnings, if any, to finance our growth. The declaration and payment
of dividends in the future will be determined by our Board of Directors in
light
of conditions then existing, including our earnings, financial condition,
capital requirements and other factors.
Equity
Compensation Plan Information
In
November 1996, by resolution of our board of directors, we adopted the Wolf
Exploration Inc. 1996 Directors and Officers Stock Option Plan ("the Plan"),
for
our officers and directors, whereby 1,000,000 shares of our common stock was
reserved for issuance. The plan permitted us to grant nonqualified stock
options within five years of the date of establishing the Plan. By
resolution of our directors dated May 28, 1998, we reserved an additional one
million shares of common stock for the Plan bringing the total shares reserved
to 2,000,000 and renamed the Plan "The Wolf Industries Inc. 1998 Directors
and
Officers Stock Option Plan” (the “Revised Plan”) with all other terms and
conditions of the Plan remaining in full force and effect.
In
September 1998, by resolution of our board of directors, we established the
"1998 Key Personnel Compensation Plan" ("Key Plan"), for our key
personnel, whereby 1,000,000 shares of our common stock was reserved for
issuance. The Key Plan permitted us to grant nonqualified stock options within
five years of the date of establishing the Plan. By resolution of our
directors dated November, 1998, a further 1,000,000 shares of common stock
was
authorized to be reserved for issuance, bringing the total issuable under the
Key Plan to 2,000,000 shares of common stock.
In
October, 2000, by resolution of our board of directors, we established the
2000
Stock Option Plan ("2000 Plan"), for our officers, directors, employees,
consultants and advisors, whereby 5,000,000 of our common stock was reserved
for
issuance. The 2000 Plan permitted us to grant nonqualified stock options within
five years of the date of establishing the Plan.
In
September, 2001, by resolution of our board of directors, we established the
2001 Stock Option Plan ("2001 Plan"), for our officers, directors, employees,
consultants and advisors, whereby 1,500,000 of our common stock was reserved
for
issuance. The 2001 Plan permitted us to grant incentive and nonqualified stock
options, restricted stock, stock bonuses, stock appreciation rights, reload
options. Options under the 2001 Plan are exercisable subject to continued
employment and other conditions.
There
are
no options currently outstanding under any of the aforementioned
plans.
ITEM
6 —
MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The
following discussion should be read in conjunction with our consolidated
financial statements and notes thereto included elsewhere in this Report.
Forward looking statements are statements not based on historical information
and which relate to future operations, strategies, financial results or other
developments. Forward-looking statements are based upon estimates, forecasts,
and assumptions that are inherently subject to significant business, economic
and competitive uncertainties and contingencies, many of which are beyond our
control and many of which, with respect to future business decisions, are
subject to change. These uncertainties and contingencies can affect actual
results and could cause actual results to differ materially from those expressed
in any forward-looking statements made by us, or on our behalf. We disclaim
any
obligation to update forward-looking statements.
8
The
discussion and financial statements contained herein are for our fiscal year
ended December 31, 2007 and December 31, 2006. The following discussion
regarding our financial statements should be read in conjunction with our
financial statements included herewith. Revenue and expense transactions in
Canadian dollars are converted to U.S. dollars at the average rates in effect
when the transactions occurred. Asset and liability accounts are converted
at
year-end closing rates, which were US$1.0194 for one Canadian dollar at December
31, 2007 and US$0.8619 at December 31, 2006.
Financial
Condition as of December 31, 2007
We
reported total current assets of $8,691 at December 31, 2007 consisting of
cash
of $6,207, and taxes recoverable totaling $2,484. Total current liabilities
reported of $489,815 consisted of accounts payables of $255,695, amounts payable
to related parties of $105,896, note payable of $25,000, and a loan guarantee
of
$103,224. The Company had a working capital deficit of $481,124 at December
31,
2007.
Stockholders'
Deficiency increased from $384,539 at December 31, 2006 to $481,124 at December
31, 2007. This increase is due to net losses of approximately $107,554 and
other
comprehensive losses of approximately $49,031. Additionally, we received $60,000
in advance for shares of our common stock to be issued.
We
are
currently a development stage company focused on the oil and gas industry,
and
evaluating opportunities for expansion within that industry through acquisition
or other strategic relationships.
Plan
of Operation
Background
We
were
formed on January 24, 1996 pursuant to the laws of the State of Nevada under
the
name Wolf Exploration, Inc. with a business plan to acquire properties for
precious metal exploration in the western United States. However, after
considering several properties, we determined the properties identified were
not
suitable to fully implement an exploration and development project in the United
States. In August 1996, we changed our management team and developed a new
business plan to sell chemical products to the oil and gas industry. In 1998,
we
sold that business and developed a new business plan for the manufacturing
and
marketing of a dental color analyzer. Our plans to manufacture and sell the
analyzer were delayed pending completion of research and development and by
an
action brought against us by AEI Trucolor. After settling that action, in August
2001, we changed our name to “American Petro-Hunter Inc.” and our focus to the
exploration and eventual exploitation of oil and gas.
We
have
had no revenues since 2004. The accompanying financial statements have been
prepared assuming that we will continue as a going concern. Having no sources
of
income, substantial doubt is raised about our ability to continue as a going
concern.
Our
plan
of operations for the next fiscal year is to seek out a privately held business
with whom we can reorganize so as to take advantage of our status as a publicly
held corporation. As of the date of this report, our management has
evaluated several potential reorganizations but deemed them unsuitable.
However as of the date of this report, there has been no decision to
proceed on any reorganization nor has any agreement been reached on even
principal terms of such reorganization. We also intend to investigate the
acquisition and development of natural resource projects without necessarily
reorganizing with another party.
Cash
and Cash Equivalents
As
of
December 31, 2007, we had cash of $6,207 and did not have any cash equivalents.
We anticipate that a substantial portion shall be used as working capital and
to
execute our reorganization strategy and business plan. As such, we further
anticipate that we will have to raise additional capital through debt or equity
financings to fund our operations during the next 6 to 12
months.
9
Results
of Operations
For
the Fiscal Year Ended December 31, 2007
For
the
fiscal year ended December 31, 2007, we incurred a net loss of
$107,554.
Administration
expenses for the fiscal year end amounted to $92,554 compared to $61,523 in
2006. Executive compensation for the fiscal year end is $15,000 compared to
$10,000 in 2006.
For
the Fiscal Year Ended December 31, 2006
For
the
fiscal year ended December 31, 2006, we incurred a net loss of
$72,397.
Administration
expenses for the fiscal year end amounted to $61,523 compared to $42,329 in
2005. Executive compensation for the fiscal year end is $10,000 compared to
$26,268 in 2005.
Period
from inception, January 24, 1996 to December 31, 2007
We
have
incurred losses in each period since inception and have an accumulated deficit,
consisting of deficit and accumulated comprehensive losses, of $3,585,517 at
December 31, 2007. We expect to continue to incur losses as a result of
expenditures for general and administrative activities while we remain in the
development stage.
Liquidity
and Capital Resources
We
are
experiencing illiquidity and has been dependent upon shareholders and directors
to provide funds to maintain its activities. At fiscal year ended December
31,
2007, the balance of amounts owing to related parties amounted to $105,896.
There are no specific terms of repayment for amounts owing to related
parties.
We
had a
working capital deficiency of $481,124 at December 31, 2007.
As
a
development stage company, we currently have limited operations, principally
directed at evaluating potential acquisition targets and revenue-generating
opportunities.
Our
management believes that we will be able to generate sufficient revenue or
raise
sufficient amounts of working capital through debt or equity offerings, as
may
be required to meet our short-term and long-term obligations. In order to
execute on our business strategy, we will require additional working capital,
commensurate with the operational needs of the target companies we may pursue.
Such working capital will most likely be obtained through equity or debt
financings until such time as acquired operations are integrated and producing
revenue in excess of operating expenses. There are no assurances that we will
be
able to raise the required working capital on terms favorable, or that such
working capital will be available on any terms when needed.
Off-Balance
Sheet Transactions
There
are
no off balance sheet items.
Capital
Expenditures
We
did
not make any capital expenditures in the fiscal year ending December 31,
2007.
The
following table outlines payments due under our significant contractual
obligations over the periods shown, exclusive of interest:
|
|
Payments Due by Period
|
|||||||||||||||
|
Contract Obligations
At December 31, 2007
|
Total
|
Less than
1 Year
|
1-3 years
|
3-5 years
|
More than
5 years
|
|||||||||||
|
Total
Short Term Debt
|
$
|
25,000
|
$
|
$
|
|
$
|
—
|
|||||||||
10
The
above
table outlines our obligations as of December 31, 2007 and does not reflect
any
changes in our obligations that have occurred after that date.
ITEM
7 —
FINANCIAL STATEMENTS
The
Financial Statements that constitute Item 7 are included at the end of this
report beginning on Page F-1.
ITEM
8 —
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND
FINANCIAL DISCLOSURE
On
March
27, 2008, Morgan & Company (“Morgan”) resigned as our independent
accountant.
Morgan’s
report on our financial statements for the fiscal years ended December 31,
2006
and 2005 contained a modified opinion on our uncertainty to continue as a going
concern because of recurring losses from operations, negative cash flows,
stockholders’ deficiency and dependence upon obtaining adequate financing to
fulfill our exploration activities.
Our
Board
of Directors approved the decision to change independent accountants on March
27, 2008.
During
the last two fiscal years ended December 31, 2005 and 2006, and further through
the subsequent interim periods ended March 31, 2007, June 30, 2007 and September
30, 2007 and the date of resignation of Morgan, there have been no disagreements
with Morgan on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure, which disagreement if
not
resolved to the satisfaction of Morgan, would have caused them to make reference
to the subject matter of the disagreement(s) in connection with their report
as
required by Item 304(a)(1)(iv) of Regulation S-K.
During
the last two fiscal years ended December 31, 2005 and 2006, and further through
the subsequent interim periods ended March 31, 2007, June 30, 2007 and September
30, 2007, Morgan did not advise us on any matter set forth in Item
304(a)(1)(v)(A) through (D) of Regulation S-K.
On
March
27, 2008, we engaged Berkovits & Company, LLP (“Berkovits”) as our new
independent accountants to audit our financial statements for the fiscal year
ending December 31, 2007. During the last two fiscal years ended December 31,
2005 and 2006, and further through the subsequent interim periods ended March
31, 2007, June 30, 2007 and September 30, 2007, we did not consult with
Berkovits regarding (i) the application of accounting principles to a specific
transaction, either completed or proposed, or the type of audit opinion that
might be rendered on our financial statements, and no written report or oral
advice was provided to us by Berkovits concluding there was an important factor
to be considered by us in reaching a decision as to an accounting, auditing
or
financial reporting issue; or (ii) any matter that was either the subject of
a
disagreement, as that term is defined in Item 304 (a)(1)(iv) of Regulation
S-K
or a reportable event, as that term is described in Item 304 (a)(1)(v) of
Regulation S-K.
ITEM
8A —
CONTROLS AND PROCEDURES
We
carried out an evaluation, under the supervision and with the participation
of
our management, including our Principal Executive Officer along with our
Principal Financial Officer, of the effectiveness of the design of the our
disclosure controls and procedures (as defined by Exchange Act
Rule 13a-15(e) and 15a-15(e)) as of the end of our fiscal year pursuant to
Exchange Act Rule 13a-15. Based upon that evaluation, our Principal
Executive Officer along with our Principal Financial Officer concluded that
our
disclosure controls and procedures are effective in ensuring that information
required to be disclosed by us in reports that we file or submit under the
Exchange Act 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 management,
including our Principal Executive Officer and Principal Financial Officer,
as
appropriate, to allow timely decisions regarding required
disclosure.
Management’s
Report on Internal Control over Financial Reporting
Our
management is responsible for establishing and maintaining adequate internal
control over financial reporting as defined in Rules 13a-15(f) and
15d-15(f) under the Exchange Act. Under the supervision and with the
participation of our management, including our Chief Executive Officer and
Chief
Financial Officer, we conducted an evaluation of the effectiveness of our
internal control over financial reporting based on criteria established in
the
framework in
Internal Control – Integrated Framework
issued
by the Committee of Sponsoring Organizations of the Treadway Commission. Based
on this evaluation, our management concluded that our internal control over
financial reporting was effective as of December 31, 2007.
11
Because
of its inherent limitations, internal control over financial reporting may
not
prevent or detect misstatements. Projections of any evaluation of effectiveness
to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate. All internal control systems, no matter
how well designed, have inherent limitations. Therefore, even those systems
determined to be effective can provide only reasonable assurance with respect
to
financial statement preparation and presentation.
This
annual report does not include an attestation report of our registered public
accounting firm regarding internal control over financial reporting. Our
management’s report was not subject to attestation by our registered public
accounting firm pursuant to temporary rules of the Securities and Exchange
Commission that permit us to provide only our management’s report in this annual
report.
Changes
in Internal Control over Financial Reporting
We
have
had very limited operations and there were no changes in our internal controls
over financial reporting that occurred during the three months ended December
31, 2007 that have materially affected, or are reasonably likely to materially
affect, our internal controls over financial reporting. We believe that a
control system, no matter how well designed and operated, cannot provide
absolute assurance that the objectives of the control system are met, and no
evaluation of controls can provide absolute assurance that all control issues
and instances of fraud, if any, within any company have been
detected.
ITEM
8B —
OTHER INFORMATION
One
December 1, 2007, we entered into a Management and Governance Consultant
Agreement with Sound Energy Advisors, LLC, an affiliated entity of our President
(the “Consultant”), whereby it was agreed that the Consultant would provide us
with management and consulting services for a monthly fee of $2,500. The
agreement was effective on December 1, 2007 and expires on November 30, 2009
and
is subject to termination upon 30-day prior written notice by either
party.
Subsequent
to year end, we completed an equity financing for 600,000 units at $0.05 per
unit for total proceeds of $30,000 to foreign accredited investors. Each unit
is
comprised of one share of our common stock and a warrant to purchase one share
of our common stock at a price per share of $0.15 for a period of 3 years from
the date of issuance. We offered and sold our securities in reliance
on Section 506 of Regulation D and/or Regulation S of the
Securities Act, and comparable exemptions for sales to “accredited” investors
under state securities laws.
PART
III
ITEM
9 —
DIRECTORS AND EXECUTIVE OFFICERS
Directors
and Executive Officers
The
following table sets forth the names and ages of our current directors and
executive officers, the principal offices and positions held by each
person:
|
Person
|
|
Age
|
|
Position
|
|
|
|
|
|
|
|
Gregory
Leigh Lyons
|
|
49
|
|
Chairman
of the Board; President, Chief Financial Officer and
Secretary
|
Gregory
Leigh Lyons
Mr.
Lyons
was appointed as our President, Secretary and Treasurer effective December
5,
2007. Prior to joining us, Mr. Lyons founded Sound Energy Advisors LLC,
which provides corporate governance and management consulting services to
start-up and small cap companies. In addition, Mr. Lyons spent over 23 years
working in a variety of upper management and executive positions for small
and
large, publicly-traded and private, foreign and domestic companies, and in
many
foreign countries including Venezuela, Ecuador, Bolivia, Argentina, Colombia
and
Iran. From August 2005 to May 2006, Mr. Lyons was the Chief Executive Officer
and a director of Digital Ecosytems Corp. (OTC BB: DGEO), a global oil and
gas
exploration company specializing in acquiring unconventional oil and gas
prospects in North America and Australia. From 2000 to 2005, Mr. Lyons was
Chief
Operating Officer and Project Director for Gas TransBoliviano S.A., a
Shell/Enron controlled gas transmission company headquartered in Bolivia. Mr.
Lyons currently serves on the Board of Directors of Radial Energy Inc. (OTCBB:
RENG). Mr. Lyons received his Bachelor of Arts (BA) in Earth Science from the
University of California, Santa Cruz in 1984 and is an Alumnus of the Harvard
Business School having completed the Advanced Management Program (AMP) in
2004.
12
Audit
Committee Financial Expert
Our
Board
of Directors has not established a separate audit committee within the meaning
of Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). Instead, the entire Board of Directors acts as the audit
committee within the meaning of Section 3(a)(58)(B) of the Exchange Act. In
addition, Gregory Leigh Lyons currently meets the definition of an "audit
committee financial expert" within the meaning of Item 407(d)(5) of Regulation
SB. Mr Lyons is not an independent director. We are seeking candidates for
outside directors and for a financial expert to serve on a separate audit
committee when we establish one. Due to our small size and limited operations
and resources, it has been difficult to recruit outside directors and financial
experts.
Compliance
with Section 16(a) of the Securities Exchange Act of 1934
Based
solely upon a review of Forms 3, 4 and 5 delivered to us as filed with the
Securities Exchange Commission, our President and Director, Gregory Leigh Lyons
failed to file on a timely basis a Form 3 as required pursuant to Section
16(a) of the Securities Exchange Act. Mr. Lyons had one late report during
the
fiscal year ended December 31, 2007.
Except
as
set forth above, and based solely upon a review of Forms 3, 4 and 5 delivered
to
us as filed with the Securities Exchange Commission, our executive officers
and
directors, and persons who own more than 10% of our Common Stock timely filed
all required reports pursuant to Section 16(a) of the Securities Exchange
Act.
Code
of Ethics
Given
our
limited operations and resources and because we are in the development stage,
we
have not yet adopted a code of ethics. Upon commencement of significant
operations and hiring other executive officers, we intend to adopt a code of
ethics that will apply to all our employees.
ITEM
10 —
EXECUTIVE COMPENSATION
Summary
Compensation
The
summary compensation table below shows certain compensation information for
services rendered in all capacities to us by our principal executive officer
and
by each other executive officer whose total annual salary and bonus exceeded
$100,000 during the fiscal periods ended December 31, 2007 and December 31,
2006. Other than as set forth below, no executive officer’s total annual
compensation exceeded $100,000 during our last fiscal period.
Summary
Compensation Table
|
Name and Principal Position (a)
|
Year
(b)
|
Salary
($)
(c)
|
Bonus
($)
(d)
|
Stock
Awards
($)
(e)(2)
|
Option
Awards
($)
(f)
|
Non
Equity
Incentive
Plan
Compensation
($)
(g)
|
Non-qualified
Deferred
Compensation
Earnings
($)
(h)
|
All Other
Compensaion
($)
(i)
|
Total
($)
(j)
|
|||||||||||||||||||
|
Patrick
McGowan,
|
2007
|
$
|
-0-
|
$
|
-0-
|
$
|
-0-
|
$
|
-0-
|
-0-
|
-0-
|
$
|
15,000
|
$
|
15,000
|
|||||||||||||
|
Former
Chairman of the Board, President, and Chief Financial
Officer(1)
|
2006
|
$
|
-0-
|
$
|
-0-
|
$
|
-0-
|
$
|
-0-
|
-0-
|
-0-
|
$
|
10,000
|
$
|
10,000
|
|||||||||||||
|
Gregory
Leigh Lyons
|
2007
|
$
|
-0-
|
$
|
-0-
|
$
|
-0-
|
$
|
-0-
|
-0-
|
-0-
|
$
|
2,500
|
$
|
2,500
|
|||||||||||||
|
Chairman
of the Board, President, and Chief Financial Officer
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
|
Mike
Veldhuis, Director
|
2007
|
$
|
-0-
|
$
|
-0-
|
$
|
-0-
|
$
|
-0-
|
-0-
|
-0-
|
$
|
19,406
|
$
|
19,406
|
|||||||||||||
|
|
2006
|
$
|
-0-
|
$
|
-0-
|
$
|
-0-
|
$
|
-0-
|
-0-
|
-0-
|
$
|
8,079
|
$
|
8,079
|
|||||||||||||
|
Barry
Whelan, Director
|
2007
|
$
|
-0-
|
$
|
-0-
|
$
|
-0-
|
$
|
-0-
|
-0-
|
-0-
|
$
|
0
|
$
|
0
|
|||||||||||||
|
|
2006
|
$
|
-0-
|
$
|
-0-
|
$
|
-0-
|
$
|
-0-
|
-0-
|
-0-
|
$
|
579
|
$
|
579
|
|||||||||||||
13
| (1) |
Mr.
McGowan, Mr. Veldhius and Mr. Whelan resigned all their positions
with us
on December 7, 2007.
|
Mr.
Lyons
billed a total of $2,500 for the fiscal year ended December 31, 2007 in
accordance with a consulting agreement approved by the board of directors on
December 21, 2007, whereby Mr. Lyons, through his affiliate, Sound Energy
Advisors, LLC (“SEA”), agreed to provide us with management and governance
consulting services, including of liaising with our officers and employees
concerning matters relating to the management and corporate governance of our
day to day operations, accounting, regulatory compliance, marketing and investor
relations issues. In consideration of services rendered, we agreed to pay SEA
a
fee in the amount of $2,500 per month, together with applicable taxes and
out-of-pocket expenses for specialized services. The agreement is for a two
year
term commencing December 1, 2007 and continuing until November 30, 2009 and
is
subject to termination upon 30 day prior written notice by either
party.
Mr.
McGowan billed a total of $15,000 and $10,000 in management fess for the fiscal
years ended December 31, 2007 and 2006 respectively in accordance with a
management agreement approved by the board of directors on April 1, 1998 at
a
rate of Cnd $7,000 per month, which was subsequently reduced to Cnd $5,000
per
month effective August 1999, and in 2002, to Cnd $2,500 retroactive to October
1, 2001. The management agreement was further reduced to $833.33 per month
effective January 1, 2006.
Two
private companies owned by Mr. Veldhuis were paid a total of $19,406 and $7,500
of consulting fees for the fiscal years ended December 31, 2007 and 2006,
respectively.
Mr.
Whelan was paid a total of $0 and $579 of consulting fees for the fiscal years
ended December 31, 2007 and 2006, respectively.
Director
Compensation
Our
board
of directors are reimbursed for actual expenses incurred in attending Board
meetings. There are no other compensation arrangement with directors, and the
directors did not receive any compensation in the fiscal years ending December
31, 2007 and 2006.
ITEM
11 —
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
The
following table sets forth, as of April 14, 2008, the number and percentage
of
outstanding shares of our common stock owned by (i) each person known to us
to
beneficially own more than 5% of our outstanding common stock, (ii) each
director, (iii) each named executive officer, and (iv) all executive officers
and directors as a group. Share ownership is deemed to include all shares that
may be acquired through the exercise or conversion of any other security
immediately or within the next sixty days. Such shares that may be so acquired
are also deemed outstanding for purposes of calculating the percentage of
ownership for that individual or any group of which that individual is a member.
Unless otherwise indicated, the stockholders listed possess sole voting and
investment power with respect to the shares shown.
14
|
Name and Address
of Beneficial Owner
|
Title of Class
|
Amount and Nature
of Beneficial
Ownership of
Common Stock(1)
|
Percentage of
Common Stock
Outstanding(1)
|
|||||||
|
|
|
|
|
|||||||
|
Patrick
A. McGowan
211-1148
Westwood Street
Coquitlam,
B.C., Canada
V3B
4S4
|
Common
|
225,438
|
2.73
|
%
|
||||||
|
|
||||||||||
|
Gregory
Leigh Lyons
Suite
225 - 225 Marine Drive
Blaine,
WA 98230
|
Common
|
-
|
-
|
|||||||
|
|
||||||||||
|
Mike
Veldhuis
Suite
2 – 2072 West 3rd
Ave
Vancouver,
B.C., Canada
V6J
1L5
|
Common
|
-
|
-
|
|||||||
|
|
||||||||||
|
Barry
L. Whelan
1250 –
800 West Pender Street
Vancouver,
B.C., Canada
V6C
2V6
|
Common
|
-
|
-
|
|||||||
|
|
||||||||||
|
All
Executive Officers and Directors as a Group (4 persons)
|
Common
|
225,438
|
2.73
|
%
|
||||||
| (1) |
Based
upon information furnished to us by the directors and executive officers
or obtained from our stock transfer books showing 8,265,019 shares
of
common stock outstanding as of April 14, 2008. We are informed that
these
persons hold the sole voting and dispositive power with respect to
the
common stock except as noted herein. For purposes of computing “beneficial
ownership” and the percentage of outstanding common stock held by each
person or group of persons named above as of April 14, 2008, any
security
which such person or group of persons has the right to acquire within
60
days after such date is deemed to be outstanding for the purpose
of
computing beneficial ownership and the percentage ownership of such
person
or persons, but is not deemed to be outstanding for the purpose of
computing the percentage ownership of any other
person.
|
In
December 2007, we entered into a Management and Governance Consultant Agreement
with Sound Energy Advisors, LLC, an affiliated entity of our President (the
“Consultant”), whereby it was agreed that the Consultant would provide us with
management and consulting services for a monthly fee of $2,500. The agreement
was effective on December 1, 2007 and expires on November 30, 2009 and is
subject to termination upon 30-day prior written notice by either
party.
Mr.
McGowan billed us a total of $15,000 during 2007 and $10,000 during 2006 for
services rendered.
Mr.
Veldhuis, one of our directors, is an owner of Endurven Management Inc. and
0758445 BCLTD which were paid a total of $19,406 and $8,079 of consulting fees
for the fiscal years ended December 31, 2007 and 2006,
respectively.
Mr.
Whelan, one of our directors, was paid a total of $579 of consulting fees for
the fiscal year ended December 31, 2006.
15
ITEM
13 —
EXHIBITS
|
Exhibit Number
|
|
Name
|
|
|
3.1(1)
|
|
Amended
and Restated Articles of Incorporation
|
|
|
|
|
|
|
|
4.1(2)
|
|
1998
Directors and Officers Option Plan
|
|
|
|
|
|
|
|
4.2(3)
|
|
Amended
1998 Key Personnel Compensation Plan
|
|
|
|
|
|
|
|
4.3(4)
|
|
2000
Stock Option Plan
|
|
|
|
|
|
|
|
4.4(5)
|
|
2001
Stock Option Plan
|
|
|
|
|
|
|
|
10.1(6)
|
|
Sale
Agreement between Wolf Industries Inc. and Gorda Technology Holdings
Limited
|
|
|
|
|
|
|
|
10.2(6)
|
|
License
Agreement between Wolf Industries Inc. and Andrew Engineering Inc.,
et
al
|
|
|
|
|
|
|
|
10.3(7)
|
|
Asset
Purchase Agreement between Wolf Industries Inc. and Andrew Engineering
Inc.
|
|
|
|
|
|
|
|
10.4(7)
|
|
Agreement
between Wolf Industries Inc., Andrew Engineering Inc., Andrew Rawicz
and
GPT Management
|
|
|
|
|
|
|
|
10.5(8)
|
|
Letter
of Intent with Galloway Financial Services
|
|
|
|
|
|
|
|
10.6(8)
|
|
Letter
Agreement with Dancing Star Resources
|
|
|
|
|
|
|
|
10.7(8)
|
|
Assignment
of Lease with Exor Oil Company, LLC
|
|
|
|
|
|
|
|
10.8(9)
|
|
Loan
Agreement with VCF Capital Corp.
|
|
|
|
|
|
|
|
10.9(9)
|
|
Form
of Securities Purchase Agreement
|
|
|
|
|
|
|
|
10.10
|
|
Management
and Governance Consultant Agreement
|
|
|
|
|
|
|
|
16(10)
|
|
Letter
from Morgan and Company
|
|
|
|
|
|
|
|
23.1
|
|
Consent
of Morgan and Company
|
|
|
|
|
|
|
|
31.1
|
|
Rule
13(a) — 14(a)/15(d) — 14(a) Certification (Principal Executive
Officer)
|
|
|
|
|
|
|
|
31.2
|
|
Rule
13(a) — 14(a)/15(d) — 14(a) Certification (Principal Financial
Officer)
|
|
|
|
|
|
|
|
32
|
|
Section
1350 Certifications
|
|
16
Footnotes
to Exhibits Index
| (1) |
Incorporated
by reference to Form 10-SB12G dated June 19,
1997.
|
| (2) |
Incorporated
by reference to Form S-8 dated September 10,
1998.
|
| (3) |
Incorporated
by reference to Form S-8 dated December 9,
1998.
|
| (4) |
Incorporated
by reference to Form S-8 dated October 20,
2000.
|
| (5) |
Incorporated
by reference to Form S-8 dated October 2,
2001.
|
| (6) |
Incorporated
by reference to Form 10-QSB for the period ended March 31,
1998.
|
| (7) |
Incorporated
by reference to Form 10-QSB for the period ended June 30,
1999.
|
| (8) |
Incorporated
by reference to Form 10-QSB for the period ended September 30,
2001.
|
| (9) |
Incorporated
by reference to Form 10-KSB for the year ended December 31,
2006.
|
| (10) |
Incorporated
by reference to Form 8-K/A dated April 14,
2008.
|
The
following table shows the fees paid or accrued by us for the audit and other
services provided Morgan and Company for the fiscal periods
shown.
|
|
December 31, 2007
|
December 31, 2006
|
|||||
|
Audit
Fees
|
$
|
22,064
|
$
|
34,840
|
|||
|
Audit
— Related Fees
|
—
|
—
|
|||||
|
Tax
Fees
|
—
|
—
|
|||||
|
All
Other Fees
|
——
|
—
|
|||||
|
Total
|
$
|
22,064
|
$
|
34,840
|
|||
Audit
fees consist of fees billed for professional services rendered for the audit
of
our financial statements and review of the interim financial statements included
in quarterly reports and services that are normally provided by the above
auditors in connection with statutory and regulatory fillings or
engagements
In
the
absence of a formal audit committee, the full Board of Directors pre-approves
all audit and non-audit services to be performed by the independent registered
public accounting firm in accordance with the rules and regulations promulgated
under the Securities Exchange Act of 1934, as amended. The Board of Directors
pre-approved 100% of the audit, audit-related and tax services performed by
the
independent registered public accounting firm in fiscal 2007. The percentage
of
hours expended on the principal accountant’s engagement to audit the Company’s
financial statements for the most recent fiscal year that were attributed to
work performed by persons other than the principal accountant’s full-time,
permanent employees was 0%.
17
SIGNATURES
In
accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934,
as
amended (the “Exchange Act”) the Registrant caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
AMERICAN
PETRO-HUNTER, INC.
|
Dated:
September 19, 2008
|
/s/
Gregory Leigh Lyons
|
|
|
By:
Gregory Leigh Lyons
|
|
|
Its:
President, Chief Financial Officer and Chairman of the
|
|
|
Board
(Principal Executive Officer)
|
|
|
|
|
Dated:
September 19, 2008
|
/s/
Gregory Leigh Lyons
|
|
|
By:
Gregory Leigh Lyons
|
|
|
Its:
President, Chief Financial Officer and Chairman of
|
|
|
the Board (Principal Financial Officer and Principal Accounting
Officer)
|
Pursuant
to requirements of the Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the registrant and in the
capacities and on the dates indicated:
|
Signature
|
|
Capacity
|
|
Date
|
|
|
|
|
|
|
|
/s/
Gregory Leigh Lyons
|
|
Director
|
|
September 19, 2008
|
|
Gregory
Leigh Lyons
|
|
|
|
|
18
AMERICAN
PETRO-HUNTER INC.
(A
Development Stage Company)
FINANCIAL
STATEMENTS
DECEMBER
31, 2007 AND 2006
(Stated
in U.S. Dollars)
Index
to Financial Statements
December
31, 2007
INDEX
|
|
Page
|
|
|
Independent
Registered Public Accounting Firms’ Reports
|
F-2
to F-3
|
|
|
Financial
Statements
|
|
|
|
Balance
Sheets as of December 31, 2007 and 2006
|
F-4
|
|
|
Statements
of Operations for the years ended December 31, 2007 and 2006 and
for the
period from January 24, 1996 (inception) to December 31,
2007
|
F-5
|
|
|
Statements
of Changes in Stockholders’ Deficit for the period from January 24, 1996
(inception) through December 31, 2007
|
F-6
|
|
|
Statements
of Cash Flows for the years ended December 31, 2007 and 2006 and
for the
period from January 24, 1996 (inception) to December 31,
2007
|
F-7
|
|
|
Notes
to Financial Statements
|
F-8 to F-14
|
F-1
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We
have
audited the accompanying balance sheet of American Petro-Hunter, Inc. (“the
Company”) (a development stage company) as of December 31, 2007 and the related
statements of operations, changes in stockholders’ deficit and cash flows for
the year then ended. These financial statements are the responsibility of the
Company’s management. Our responsibility is to express an opinion on these
financial statements based on our audit. Our opinion on the statements of
operations, changes in stockholders’ deficit and cash flows for the period from
January 24, 1996 (inception) to December 31, 2007 insofar as it relates to
amounts for periods prior to January 1, 2007 is based on the reports of other
auditors.
We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Company is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company’s internal control over financial
reporting. Accordingly, we express no such opinion. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit provides
a
reasonable basis for our opinion.
In
our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of American Petro-Hunter, Inc. as
of
December 31, 2007, and the results of its operations and its cash flows for
the
year then ended in conformity with accounting principles generally accepted
in
the United States.
The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern. As discussed in Note 1 to the financial
statements, the Company’s dependence on outside financing, lack of sufficient
working capital, and recurring losses raise substantial doubt about the
Company’s ability to continue as a going concern. Management’s plans are
described in Note 1 to the financial statements. The financial statements do
not
include any adjustments that might result from the outcome of this
uncertainty
/s/
Berkovits & Company, LLP
Ft.
Lauderdale, Florida
April
3,
2008
F-2
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To
the
Stockholders and Directors of
American
Petro-Hunter Inc.
(A
Development Stage Company)
We
have
audited the accompanying balance sheets of American Petro-Hunter Inc. (a
development stage company) as of December 31, 2006 and 2005, and the related
statements of operations, cash flows, and stockholders’ deficiency for each of
the two years in the period ended December 31, 2006 and for the period from
inception, January 24, 1996 to December 31, 2006. These financial statements
are
the responsibility of the Company’s management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining,
on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In
our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of the Company as of December 31,
2006
and 2005, and the results of its operations and its cash flows for the years
ended December 31, 2006 and 2005, and the period from inception, January 24,
1996 to December 31, 2006, in conformity with accounting principles generally
accepted in the United States of America.
The
Company is not required to have, nor were we engaged to perform, an audit of
its
internal control over financial reporting. Our audits included consideration
of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose
of
expressing an opinion on the effectiveness of the Company’s internal control
over financial reporting. Accordingly, we express no such opinion.
The
accompanying financial statements have been prepared assuming the Company will
continue as a going concern. As discussed in Note 1 to the financial statements,
the Company has suffered recurring losses from operations, has negative cash
flows, has a stockholders’ deficiency and is dependent upon obtaining adequate
financing to fulfill its exploration activities. These factors raise substantial
doubt about its ability to continue as a going concern. Management’s plans in
regard to these matters are also described in Note 1. The financial statements
do not include any adjustments that might result from the outcome of this
uncertainty.
|
Vancouver,
Canada
|
“Morgan
& Company”
|
|
March
21, 2007
|
Chartered
Accountants
|
|
Tel:
(604) 687-5841
Fax:
(604) 687-0075
www.morgan-cas.com
|
|
 |
|
P.O.
Box 10007 Pacific Centre
Suite
1488 - 700 West Georgia Street
Vancouver,
B.C. V7Y 1A1
|
F-3
American
Petro-Hunter Inc.
(A
Development Stage Company)
Balance
sheets
(Expressed
in U.S. Dollars)
As
of December 31,
|
|
2007
|
2006
|
|||||
|
|
|
|
|||||
|
Assets
|
|
|
|||||
|
|
|
|
|||||
|
Cash
|
$
|
6,207
|
$
|
20,783
|
|||
|
Taxes
recoverable
|
2,484
|
1,905
|
|||||
|
|
|||||||
|
Total
Current Assets
|
$
|
8,691
|
$
|
22,688
|
|||
|
|
|||||||
|
Liabilities
and Stockholders’ Deficit
|
|||||||
|
|
|||||||
|
Accounts
payable and accrued liabilities
|
$
|
255,695
|
$
|
219,531
|
|||
|
Due
to related parties
|
105,896
|
74,166
|
|||||
|
Loan
guarantee
|
103,224
|
88,530
|
|||||
|
Note
payable
|
25,000
|
25,000
|
|||||
|
|
|||||||
|
Total
Current Liabilities
|
489,815
|
407,227
|
|||||
|
|
|||||||
|
Common
stock 200,000,000 voting shares, par value $0.001 authorized; 8,265,019
shares issued and outstanding
|
8,265
|
8,265
|
|||||
|
Common
stock to be issued
|
60,000
|
-
|
|||||
|
Additional
paid-in capital
|
3,036,128
|
3,036,128
|
|||||
|
Accumulated
comprehensive loss
|
(89,260
|
)
|
(40,229
|
)
|
|||
|
Deficit
accumulated during the development stage
|
(3,496,257
|
)
|
(3,388,703
|
)
|
|||
|
|
|||||||
|
Total
Stockholders’ Deficit
|
(481,124
|
)
|
(384,539
|
)
|
|||
|
|
|||||||
|
Total
Liabilities and Stockholders’ Deficit
|
$
|
8,691
|
$
|
22,688
|
|||
The
accompanying notes are an integral part of these financial
statements.
F-4
American
Petro-Hunter Inc.
(A
Development Stage Company)
Statements
of Operations
(Expressed
in U.S. Dollars)
|
|
For the year
ended
December 31,
2007
|
For the year
ended
December 31,
2006
|
For the
period from
January 24,
1996
(inception) to
December 31,
2007
|
|||||||
|
|
|
|
|
|||||||
|
Revenues
|
$
|
-
|
$
|
-
|
$
|
-
|
||||
|
|
||||||||||
|
Expenses:
|
||||||||||
|
General
and administrative
|
92,554
|
61,523
|
1,634,868
|
|||||||
|
Executive
compensation
|
15,000
|
10,000
|
399,488
|
|||||||
|
Finders’
fees
|
-
|
-
|
48,000
|
|||||||
|
Rent
|
-
|
874
|
61,698
|
|||||||
|
Research
and development
|
-
|
-
|
566,875
|
|||||||
|
Total
expenses
|
107,554
|
72,397
|
2,710,929
|
|||||||
|
|
||||||||||
|
Loss
before other expenses
|
(107,554
|
)
|
(72,397
|
)
|
(2,710,929
|
)
|
||||
|
|
||||||||||
|
Other
expenses:
|
||||||||||
|
Write-off
loans and advances
|
-
|
-
|
(327,451
|
)
|
||||||
|
Loss
from discontinued operations
|
-
|
-
|
(365,519
|
)
|
||||||
|
Loss
from loan guarantee
|
-
|
-
|
(84,858
|
)
|
||||||
|
Write-down
of investments
|
-
|
(1
|
)
|
(7,500
|
)
|
|||||
|
Total
other expenses
|
-
|
(1
|
)
|
(785,328
|
)
|
|||||
|
|
||||||||||
|
Net
loss
|
(107,554
|
)
|
(72,398
|
)
|
(3,496,257
|
)
|
||||
|
|
||||||||||
|
Other
comprehensive loss
|
||||||||||
|
Foreign
currency translation loss
|
(49,031
|
)
|
(6,380
|
)
|
(89,260
|
)
|
||||
|
|
||||||||||
|
Comprehensive
loss
|
$
|
(156,585
|
)
|
$
|
(78,778
|
)
|
$
|
(3,585,517
|
)
|
|
|
|
||||||||||
|
Basic
and diluted loss per common share
|
$
|
(0.013
|
)
|
$
|
(0.008
|
)
|
||||
|
|
||||||||||
|
Weighted
average number of common shares used in per share
calculations
|
8,265,019
|
8,265,019
|
||||||||
The
accompanying notes are an integral part of these financial
statements.
F-5
American
Petro-Hunter Inc.
(A
Development Stage Company)
Statements
of Changes in Stockholders’ Deficit
(Expressed
in U.S. Dollars)
|
|
Common Stock
|
|
|
|
Deficit
accumulated
|
|
|
||||||||||||||||||
|
|
Number of
shares
issued
|
Par Value
|
Additional
paid-in
capital
|
Deferred
compensation
|
Common
stock to
be issued
|
during the
development
stage
|
Accumulated
comprehensive
loss
|
Stockholders’
Equity
(Deficit)
|
|||||||||||||||||
|
Share
issue for cash, net of issue costs
|
10,497,300
|
$
|
10,497
|
$
|
296,833
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
307,330
|
||||||||||
|
Net
income
|
-
|
-
|
-
|
-
|
-
|
4,856
|
-
|
4,856
|
|||||||||||||||||
|
Balance
at December 31, 1996
|
10,497,300
|
10,497
|
296,833
|
-
|
-
|
4,856
|
-
|
312,186
|
|||||||||||||||||
|
|
|
||||||||||||||||||||||||
|
Share
issued for cash, net of issue cost
|
187,416
|
187
|
46,850
|
-
|
-
|
-
|
-
|
47,037
|
|||||||||||||||||
|
Net
loss
|
-
|
-
|
-
|
-
|
-
|
(96,386
|
)
|
-
|
(96,386
|
)
|
|||||||||||||||
|
Unrealized
foreign exchange gain
|
-
|
-
|
-
|
-
|
-
|
-
|
8,258
|
8,258
|
|||||||||||||||||
|
Balance
at December 31, 1997
|
10,684,716
|
10,684
|
343,683
|
-
|
-
|
(91,530
|
)
|
8,258
|
271,095
|
||||||||||||||||
|
|
|
||||||||||||||||||||||||
|
Stock
reverse split 3:1
|
(7,123,094
|
)
|
(7,123
|
)
|
7,123
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
|
Shares
issued
|
7,773,026
|
7,773
|
1,980,833
|
-
|
-
|
-
|
-
|
1,988,606
|
|||||||||||||||||
|
Unrealized
foreign exchange loss
|
-
|
-
|
-
|
-
|
-
|
-
|
(8,258
|
)
|
(8,258
|
)
|
|||||||||||||||
|
Net
loss
|
-
|
-
|
-
|
-
|
-
|
(1,798,830
|
)
|
-
|
(1,798,830
|
)
|
|||||||||||||||
|
Balance
at December 31, 1998
|
11,334,648
|
11,334
|
2,331,639
|
-
|
-
|
(1,890,360
|
)
|
-
|
452,613
|
||||||||||||||||
|
|
|
||||||||||||||||||||||||
|
1998
issuance cancelled
|
(4,800,000
|
)
|
(4,800
|
)
|
(1,339,200
|
)
|
-
|
-
|
-
|
-
|
(1,344,000
|
)
|
|||||||||||||
|
Share
issue costs
|
500,000
|
500
|
85,000
|
-
|
-
|
-
|
-
|
85,500
|
|||||||||||||||||
|
Net
loss
|
-
|
-
|
-
|
-
|
-
|
(307,331
|
)
|
-
|
(307,331
|
)
|
|||||||||||||||
|
Balance
at December 31, 1999
|
7,034,648
|
7,034
|
1,077,439
|
-
|
-
|
(2,197,691
|
)
|
-
|
(1,113,218
|
)
|
|||||||||||||||
|
|
|
||||||||||||||||||||||||
|
Share
issued
|
4,435,570
|
-
|
1,083,791
|
-
|
-
|
-
|
-
|
1,083,791
|
|||||||||||||||||
|
Finders’
fees
|
-
|
-
|
48,000
|
-
|
-
|
-
|
-
|
48,000
|
|||||||||||||||||
|
Share
purchase warrants
|
-
|
-
|
80,000
|
-
|
-
|
-
|
-
|
80,000
|
|||||||||||||||||
|
Net
loss
|
-
|
-
|
-
|
-
|
-
|
(547,097
|
)
|
-
|
(547,097
|
)
|
|||||||||||||||
|
Balance
at December 31, 2000
|
11,470,218
|
7,034
|
2,289,230
|
-
|
-
|
(2,744,788
|
)
|
-
|
(448,524
|
)
|
|||||||||||||||
|
|
|
||||||||||||||||||||||||
|
Stock
reverse split 10:1
|
(10,323,196
|
)
|
(5,887
|
)
|
5,887
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
|
Share
issued
|
4,253,617
|
4,254
|
552,106
|
-
|
-
|
-
|
-
|
556,360
|
|||||||||||||||||
|
Net
loss
|
-
|
-
|
-
|
-
|
-
|
(297,352
|
)
|
-
|
(297,352
|
)
|
|||||||||||||||
|
Balance
at December 31, 2001
|
5,400,639
|
5,401
|
2,847,223
|
-
|
-
|
(3,042,140
|
)
|
-
|
(189,516
|
)
|
|||||||||||||||
|
|
|
||||||||||||||||||||||||
|
Share
issued
|
220,000
|
220
|
21,780
|
-
|
-
|
-
|
-
|
22,000
|
|||||||||||||||||
|
Net
loss
|
-
|
-
|
-
|
-
|
-
|
(29,664
|
)
|
-
|
(29,664
|
)
|
|||||||||||||||
|
Balance
at December 31, 2002
|
5,620,639
|
5,621
|
2,869,003
|
-
|
-
|
(3,071,804
|
)
|
-
|
(197,180
|
)
|
|||||||||||||||
|
|
|
||||||||||||||||||||||||
|
Share
issued
|
430,000
|
430
|
25,370
|
-
|
-
|
-
|
-
|
25,800
|
|||||||||||||||||
|
Other
comprehensive loss
|
-
|
-
|
-
|
-
|
-
|
17,920
|
(17,920
|
)
|
-
|
||||||||||||||||
|
Net
loss
|
-
|
-
|
-
|
-
|
-
|
(57,652
|
)
|
-
|
(57,652
|
)
|
|||||||||||||||
|
Balance
at December 31, 2003
|
6,050,639
|
6,051
|
2,894,373
|
-
|
-
|
(3,111,536
|
)
|
(17,920
|
)
|
(229,032
|
)
|
||||||||||||||
|
|
|
||||||||||||||||||||||||
|
Share
issued for services rendered
|
475,000
|
475
|
56,525
|
(3,226
|
)
|
-
|
-
|
-
|
53,774
|
||||||||||||||||
|
Other
comprehensive loss
|
-
|
-
|
-
|
-
|
-
|
-
|
(9,773
|
)
|
(9,773
|
)
|
|||||||||||||||
|
Net
loss
|
-
|
-
|
-
|
-
|
-
|
(134,058
|
)
|
-
|
(134,058
|
)
|
|||||||||||||||
|
Balance
at December 31, 2004
|
6,525,639
|
6,526
|
2,950,898
|
(3,226
|
)
|
-
|
(3,245,594
|
)
|
(27,693
|
)
|
(319,089
|
)
|
|||||||||||||
|
|
|
||||||||||||||||||||||||
|
Shares
issued for services rendered
|
-
|
-
|
-
|
3,226
|
-
|
-
|
-
|
3,226
|
|||||||||||||||||
|
Share
issued for cash
|
1,739,380
|
1,739
|
85,230
|
-
|
-
|
-
|
-
|
86,969
|
|||||||||||||||||
|
Other
comprehensive loss
|
-
|
-
|
-
|
-
|
-
|
-
|
(6,156
|
)
|
(6,156
|
)
|
|||||||||||||||
|
Net
loss
|
-
|
-
|
-
|
-
|
-
|
(70,711
|
)
|
-
|
(70,711
|
)
|
|||||||||||||||
|
Balance
at December 31, 2005
|
8,265,019
|
8,265
|
3,036,128
|
-
|
-
|
(3,316,305
|
)
|
(33,849
|
)
|
(305,761
|
)
|
||||||||||||||
|
|
|
||||||||||||||||||||||||
|
Other
comprehensive loss
|
-
|
-
|
-
|
-
|
-
|
-
|
(6,380
|
)
|
(6,380
|
)
|
|||||||||||||||
|
Net
loss
|
-
|
-
|
-
|
-
|
-
|
(72,398
|
)
|
-
|
(72,398
|
)
|
|||||||||||||||
|
Balance
at December 31, 2006
|
8,265,019
|
8,265
|
3,036,128
|
-
|
-
|
(3,388,703
|
)
|
(40,229
|
)
|
(384,539
|
)
|
||||||||||||||
|
|
|
||||||||||||||||||||||||
|
Other
comprehensive loss
|
-
|
-
|
-
|
-
|
-
|
-
|
(49,031
|
)
|
(49,031
|
)
|
|||||||||||||||
|
Share
subscription received in advance
|
-
|
-
|
-
|
-
|
60,000
|
-
|
-
|
60,000
|
|||||||||||||||||
|
Net
loss
|
-
|
-
|
-
|
-
|
-
|
(107,554
|
)
|
-
|
(107,554
|
)
|
|||||||||||||||
|
Balance
at December 31, 2007
|
8,265,019
|
$
|
8,265
|
$
|
3,036,128
|
$
|
-
|
$
|
60,000
|
$
|
(3,496,257
|
)
|
$
|
(89,260
|
)
|
$
|
(481,124
|
)
|
|||||||
The
accompanying notes are an integral part of these financial
statements.
F-6
American
Petro-Hunter Inc.
(A
Development Stage Company)
Statements
of Cash Flows
(Expressed
in U.S. Dollars)
|
|
For the year
ended
December 31,
2007
|
For the year
ended
December 31,
2006
|
For the
period from
January 24,
1996
(inception) to
December 31,
2007
|
|||||||
|
|
|
|
|
|||||||
|
Cash
flows from operating activities
|
|
|
|
|||||||
|
Net
loss
|
$
|
(107,554
|
)
|
$
|
(72,398
|
)
|
$
|
(3,130,738
|
)
|
|
|
Adjustments
to reconcile net loss to net cash used in operating
activities:
|
||||||||||
|
Accrued
interest on note payable
|
2,959
|
600
|
3,559
|
|||||||
|
Stock
purchase warrants issued
|
-
|
-
|
80,000
|
|||||||
|
Loss
from loan guarantee
|
14,694
|
3,672
|
103,224
|
|||||||
|
Shares
issued for services rendered
|
-
|
-
|
992,558
|
|||||||
|
Stock
purchase warrants issued for finders’ fee
|
-
|
-
|
48,000
|
|||||||
|
Write
down of investment in AEI Trucolor
|
-
|
1
|
7,500
|
|||||||
|
Changes
in operating assets and liabilities:
|
||||||||||
|
Increase
in taxes recoverable
|
(579
|
)
|
(1,531
|
)
|
(2,484
|
)
|
||||
|
Increase
in accounts payable and accrued liabilities
|
33,205
|
22,268
|
1,835,969
|
|||||||
|
Increase
in accounts payable to related parties
|
31,730
|
-
|
31,730
|
|||||||
|
|
||||||||||
|
Net
cash used in operating activities
|
(25,545
|
)
|
(47,388
|
)
|
(30,682
|
)
|
||||
|
|
||||||||||
|
Cash
flows from financing activities
|
||||||||||
|
Stock
subscriptions received
|
60,000
|
-
|
562,400
|
|||||||
|
Proceeds
from note payable
|
-
|
25,000
|
25,000
|
|||||||
|
Share
issue costs
|
-
|
-
|
(95,732
|
)
|
||||||
|
|
||||||||||
|
Net
cash provided by financing activities
|
60,000
|
25,000
|
491,668
|
|||||||
|
|
||||||||||
|
Cash
flows from discontinued operations
|
-
|
-
|
(365,519
|
)
|
||||||
|
|
||||||||||
|
Foreign
currency translation effect on cash
|
(49,031
|
)
|
(6,380
|
)
|
(89,260
|
)
|
||||
|
|
||||||||||
|
Change
in cash
|
(14,576
|
)
|
(28,768
|
)
|
6,207
|
|||||
|
|
||||||||||
|
Cash,
Beginning of period
|
20,783
|
49,551
|
-
|
|||||||
|
|
||||||||||
|
Cash,
End of period
|
$
|
6,207
|
$
|
20,783
|
$
|
6,207
|
||||
The
accompanying notes are an integral part of these financial
statements.
Supplemental
Disclosures with Respect to Cash Flows
(Note
9)
F-7
American
Petro-Hunter Inc.
(A
Development Stage Company)
(Expressed
in U.S. Dollars)
Notes
to
Financial Statements
December
31, 2007 and 2006
| 1. |
Nature
and Continuance of
Operations
|
American
Petro-Hunter Inc. (“the Company”) was incorporated in the State of Nevada on
January 24, 1996 as Wolf Exploration Inc. Wolf Exploration Inc., changed its
name to Wolf Industries Inc. on March 17, 1997, to Travelport Systems Inc.,
on
November 21, 2000 and to American Petro-Hunter Inc., on August 17, 2001. The
Company’s business offices are located in Blaine, Washington, USA.
The
Company is evaluating the acquisition of certain natural resource projects
with
the intent of developing such projects. The Company’s focus is currently in
locating and assessing potential acquisition targets, including real property,
oil and gas rights and oil and gas companies.
These
financial statements have been prepared in accordance with the United States
generally accepted accounting principles applicable to a going concern, which
contemplates the realization of assets and the satisfaction of liabilities
and
commitments in the normal course of business. The Company is at development
stage and has no revenue, has limited assets and has accumulated deficit and
comprehensive losses during the development period of $3,585,517 and requires
additional funds to maintain its operations. Management’s plan in this regard is
to raise equity financing as required. There can be no assurance that sufficient
funding will be obtained. The foregoing matters raise substantial doubt about
the Company’s ability to continue as a going concern. The financial statements
do not include any adjustments relating to the recoverability and classification
of recorded assets, or the amounts of and classification of liabilities that
might be necessary in the event the Company cannot continue in
existence.
| 2. |
Significant
Accounting
Policies
|
The
following is a summary of significant accounting policies used in the
preparation of these financial statements.
Principles
in accounting
These
financial statements are stated in United States dollars (“U.S. dollars”) and
have been prepared in accordance with accounting principles generally accepted
in the United States of America.
Foreign
currency translation
The
Company’s functional currency is the Canadian dollar and its reporting currency
is the U.S. dollar. Assets and liabilities denominated in foreign currencies
are
translated to U.S. dollars in accordance with Statement of Financial Accounting
Standards (“SFAS”) No. 52“Foreign
Currency Translation”
using
the exchange rate in effect at the balance sheet date. Revenues and expenses
are
translated at rates approximating exchange rates in effect at the time of the
transactions. Certain translation adjustments are reported as a separate
component of stockholders’ deficit, whereas gains or losses resulting from
foreign currency transactions are included in the results of
operations.
F-8
American
Petro-Hunter Inc.
(A
Development Stage Company)
(Expressed
in U.S. Dollars)
Notes
to
Financial Statements
December
31, 2007 and 2006
| 2. |
Significant
Accounting Policies
(continued)
|
Income
taxes
The
Company adopted the SFAS No. 109,“Accounting
for Income Taxes”.
Pursuant to SFAS No. 109, deferred income tax assets and liabilities are
computed for differences between the financial statement carrying amounts and
the respective tax bases. Deferred tax assets and liabilities are measured
using
enacted or substantially enacted tax rates expected to apply to the taxable
income in the periods in which those differences are expected to affect taxable
income. Valuation allowances are established when necessary to reduce deferred
income tax assets to the amount expected to be realized.
Potential
benefits of net operating losses have not been recognized in the financial
statements because the Company cannot be assured it is more likely than not
it
will utilize the net operating losses carried forward in future
years.
Use
of estimates
The
preparation of financial statements, in conformity with accounting principles
generally accepted in the United States, requires management to make estimates
and assumptions that affect the reported amount of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Stock-based
compensation
Effective
December 1, 2006, the Company adopted the provisions of SFAS No. 123R,
“Share-Based Payment,”(“SFAS 123R”), which establishes standards for the
accounting for transactions in which an entity incurs liabilities in exchange
for goods or services that are based on the fair value of the entity’s equity
instruments or that may be settled by the issuance of those equity
instruments.
The
Company has not issued common stock nor granted stock options in exchange for
services during the years ended December 31, 2007 and 2006.
Comprehensive
income (loss)
The
Company has adopted SFAS No. 130,“Reporting
Comprehensive Income”,
which
established standards for the reporting and display of comprehensive income/
loss, its components and accumulated balances in financial
statements.
Concentration
of Credit Risk
The
Company maintains its cash in a bank deposit account in the United States,
which
at times, may exceed US federally insured limits.
F-9
American
Petro-Hunter Inc.
(A
Development Stage Company)
(Expressed
in U.S. Dollars)
Notes
to
Financial Statements
December
31, 2007 and 2006
| 2. |
Significant
Accounting Policies
(continued)
|
Net
Loss per share
The
Company computes net income (loss) per share in accordance with SFAS No.
128,“Earnings
per share”
which
requires presentation of both basic and diluted earnings per share (“EPS”) on
the ace of the income statement. Basic EPS is computed by dividing net income
(loss) available to common shareholders by the weighted average number of common
shares outstanding during the year. Diluted EPS gives effect to all dilutive
potential common shares outstanding during the period using the treasury stock
method. In computing diluted EPS, the average stock price for the period is
used
in determining the number of shares assumed to be purchased from the exercise
of
stock options or warrants. Diluted ESP excludes all dilutive potential shares
if
their effect is anti-dilutive. Because the Company does not have any potentially
dilutive securities only basic loss per share is presented in the accompanying
financial statements.
Financial
instruments
The
Company’s financial instruments consist of cash, taxes recoverable, accounts
payable and accrued liabilities, due to related parties, note payable and loan
guarantee. Unless otherwise noted, it is management’s opinion that the Company
is not exposed to significant interest, or credit risks arising form these
financial instruments. The fair values of these financial instruments
approximate their carrying values because of their relatively short-term
maturities.
The
Company operates outside of the United States of America and is exposed to
foreign currency risk due to the fluctuation between the currency in which
the
Company operates in and the U.S. dollars.
|
|
3.
|
Recent
Accounting Pronouncements
|
The
following are disclosed as they may be applicable to the Company’s operations
and have an impact on the Company’s financial statements:
In
February 2007, the Financial Accounting Standard Board (“FASB”) issued SFAS No.
159, “
Establishing the Fair Value Option for Financial Assets and
Liabilities
(“SFAS
No. 159”). SFAS No. 159 permits all entities to choose to elect, at specified
election dates, to measure eligible financial instruments at fair value. An
entity shall report unrealized gains and losses on items for which the fair
value option has been elected in earnings, at each subsequent reporting date,
and recognize upfront costs and fees related to those items in earnings as
incurred and not deferred. SFAS No. 159 applies to fiscal years beginning after
November 15, 2007, with early adoption permitted for an equity that has also
elected to apply the provisions of SFAS No. 157, “
Fair
Value Measurements”.
An
entity is prohibited from retrospectively applying SFAS No. 159, unless it
chooses early adoption. SFAS No. 159 also applies to eligible items existing
at
November 15, 2007 (or early adoption date). The Company is evaluating the impact
of the adoption of SFAS No. 159 could have on the Company’s financial
statements.
F-10
American
Petro-Hunter Inc.
(A
Development Stage Company)
(Expressed
in U.S. Dollars)
Notes
to
Financial Statements
December
31, 2007 and 2006
|
|
3.
|
Recent
Accounting Pronouncements
(continued)
|
In
September 2006, FASB issued SFAS No. 157, “Fair
Value Measures”
(“SFAS
No. 157”). This Statement defines fair value, establishes a framework for
measuring fair value in generally accepted accounting principles (GAAP), expands
disclosures about fair value measurements, and applies under other accounting
pronouncements that require or permit fair value measurements. SFAS No. 157
does
not require any new fair value measurements. However, the FASB anticipates
that
for some entities, the application of SFAS No. 157 will change current practice.
SFAS No. 157 is effective for financial statements issued for fiscal years
beginning after November 15, 2007, which for the Company would be the fiscal
year beginning January 1, 2008. The Company is currently evaluating the impact
of adopting SFAS No. 157 and does not expect that it will have a significant
effect on its financial position or results of operations.
In
September 2006, the Securities and Exchange Commission (“SEC”) issued Staff
Accounting Bulletin (“SAB”) No. 108, “
Considering the Effects of Prior Year Misstatements when Quantifying
Misstatements in Current Year Financial Statements
.” SAB
No. 108 addresses how the effects of prior year uncorrected misstatements
should be considered when quantifying misstatements in current year financial
statements. SAB No. 108 requires companies to quantify misstatements using
a
balance sheet and income statement approach and to evaluate whether either
approach results in quantifying an error that is material in light of relevant
quantitative and qualitative factors. SAB No. 108 is effective for interim
periods ending after November 15, 2006. The Company is currently evaluating
the
impact of adopting SAB No. 108 and does not expect that it will have a
significant effect on its financial position or results of
operations.
In
June
2006, FASB issued Interpretation No. 48, “Accounting
for Uncertainty in Income Taxes-an Interpretation of FASB Statement No.
109
.” This
Interpretation clarifies the accounting for uncertainty in income taxes
recognized in an enterprise’s financial statements in accordance with FASB No.
109, “
Accounting for Income Taxes.”
This
Interpretation prescribes a recognition threshold and measurement attribute
for
the financial statement recognition and measurement of a tax position taken
or
expected to be taken in a tax return. This Interpretation also provides guidance
on derecognition, classification, interest and penalties, accounting in interim
periods, disclosure and transition. This Interpretation is effective for fiscal
years beginning after December 15, 2006. The Company has determined that the
adoption of Statement No. 158 does not have any material impact on the Company’s
results of operations or financial position.
|
|
4.
|
Related
Party Transactions
|
Amounts
due to related parties are payable to a director of the Company, a former
director of the Company, a company owned by a director of the Company, and
a
company owned by a former director and officer of the Company. All amounts
due
to related parties are non-interest bearing, unsecured and payable on
demand.
During
the year ended December 31, 2007, the Company accrued and/or paid executive
compensation of $15,000 (2006 - $10,000) to a former director.
F-11
American
Petro-Hunter Inc.
(A
Development Stage Company)
(Expressed
in U.S. Dollars)
Notes
to
Financial Statements
December
31, 2007 and 2006
|
|
4.
|
Related
Party Transactions
(continued)
|
During
the year ended December 31, 2006, the Company paid accounting fees, rental,
and
office expenses of $14,682 to a company owned by a former director and officer,
which are included in general and administrative expenses.
During
the year ended December 31, 2007, the Company paid a total of $19,406 (2006
-
$8,079) in consulting fees to two companies controlled by a former director
and
to a director, which are included in general and administrative
expenses.
In
December 2007, the Company entered into a Management and Governance Consultant
Agreement (the "Agreement") with Sound Energy Advisors, LLC, an affiliated
entity, whereby it was agreed that the consultant provide the Company with
management and consulting services for a monthly fee of $2,500. The agreement
was effective on December 1, 2007 and expires on November 30, 2009 and is
subject to termination upon 30-day prior written notice by either
party.
During
the year ended December 31, 2007, the Company carried out a number of
transactions with related parties in the normal course of business.
|
|
5.
|
Note
Payable
|
On
October 18, 2006, the Company entered into a promissory note agreement with
VCF
Capital Corp. (“VCF”), an affiliated company, whereby VCF loaned the Company
$25,000. The loan bears interest at 12% per annum, is collateralized by a
general security arrangement over all of the Company’s assets and was payable in
full on May 18, 2007.
This
note
payable was in default at December 31, 2007. During the years ended December
31,
2007 and 2006, the Company accrued $6,870 and $600 of interest expense which
is
included in general and administrative expenses.
|
|
6.
|
Loan
Guarantee
|
In
2004,
the Company received a demand for payment from Canadian Western Bank (“CWB”)
pursuant to a guarantee provided by the Company in favor of Calgary Chemical,
a
former subsidiary.
The
Company divested itself of Calgary Chemical in 1998 under an agreement with
its
purchaser (a former president). The agreement included an indemnity guarantee,
whereby the purchaser would indemnify and hold the Company harmless from any
and
all liability, loss, damage or expenses.
Upon
receipt of the claim, the Company accrued the amount of the claim since in
the
opinion of legal counsel it is more likely than not that CWB would prevail
in
this action.
F-12
American
Petro-Hunter Inc.
(A
Development Stage Company)
(Expressed
in U.S. Dollars)
Notes
to
Financial Statements
December
31, 2007 and 2006
|
|
7.
|
Common
Stock to be issued
|
During
the year ended December 31, 2007, the Company received full payment towards
subscriptions to purchase 1,200,000 units at a price of $0.05 per unit. Each
unit consists of the right to purchase a common share and contains a purchase
warrant. Each purchase warrant entitles the holder to purchase an additional
common share at a price of $0.15 through February 23, 2010. At December 31,
2007, the Company had not issued the common shares and share purchase warrants
related to these subscriptions.
|
|
8.
|
Income
Taxes
|
The
Company’s operations for the years ended December 31, 2007 and 2006 resulted in
losses, thus no income taxes have been reflected in the accompanying statements
of operations.
As
of
December 31, 2007 and 2006 the Company had the following deferred tax
asset:
|
|
2007
|
2006
|
|||||
|
|
|
|
|||||
|
Deferred
asset related to net operating loss carry-forwards
|
$
|
1,186,000
|
$
|
1,038,000
|
|||
|
|
|||||||
|
Less:
Valuation allowance
|
(1,186,000
|
)
|
(1,038,000
|
)
|
|||
|
|
|||||||
|
Deferred
tax asset recognized
|
$
|
-
|
$
|
-
|
|||
A
valuation allowance has been recorded to reduce the net benefit recorded in
the
financial statements related to this deferred asset. The valuation allowance
is
deemed necessary as a result of the uncertainty associated with the ultimate
realization of the deferred tax asset. The Company has concluded that it is
more
likely than not, that it will not realize the benefit of this deferred tax
asset.
As
of
December 31, 2007, the Company has net operating loss carry-forwards of
approximately $3,586,000 (2006 - $3,054,000) which may be used to reduce future
income taxes payable and which expire from 2026 to 2027. Current Federal Tax
Law
limits the amount of loss available to offset against future taxable income
when
a substantial change in ownership occurs. Therefore, the amount available to
offset future taxable income may be limited.
F-13
American
Petro-Hunter Inc.
(A
Development Stage Company)
(Expressed
in U.S. Dollars)
Notes
to
Financial Statements
December
31, 2007 and 2006
|
|
8.
|
Income
Taxes (continued)
|
The
provision/benefit for income taxes differs from the amount computed by applying
the statutory federal income tax rate of 34% (2006 - 34%) to the net loss for
the year. The difference is summarized as follows:
|
|
2007
|
2006
|
|||||
|
|
|
|
|||||
|
Computed
tax benefit at statutory rates
|
$
|
37,000
|
$
|
25,000
|
|||
|
|
|||||||
|
Less:
Valuation allowance
|
(37,000
|
)
|
(25,000
|
)
|
|||
|
|
|||||||
|
Income
tax benefit
|
$
|
-
|
$
|
-
|
|||
|
|
9.
|
Supplemental
Disclosure with Respect to Cash
Flows
|
|
|
For the year
ended
December 31,
2007
(As restated)
|
For the year
ended December 31, 2006 |
For the period
from January 24, 1996 (inception) to December 31, 2007 |
|||||||
|
|
|
|
|
|||||||
|
Shares
issued in settlement of debt
|
$
|
-
|
$
|
-
|
$
|
1,509,667
|
||||
|
Shares
issued for services rendered
|
$
|
-
|
$
|
-
|
$
|
992,558
|
||||
|
Shares
issued for investment
|
$
|
-
|
$
|
-
|
$
|
7,500
|
||||
|
|
10.
|
Subsequent
Event
|
Subsequent
to year end, the Company completed an equity financing for 600,000 units at
$0.05 per unit for total proceeds of $30,000 to foreign accredited investors.
Each unit is comprised of one share of the Company’s common stock and a warrant
to purchase one share of the Company’s common stock at a price per share of
$0.15 for a period of 3 years from the date of issuance.
|
|
11.
|
Restatement
of Financial Statements
|
The
Company’s disclosure in Note 9, “Supplemental Disclosure with Respect to Cash
Flows” for the year ended December 31, 2008 has been restated to report the
amounts for shares issued in settlement of debt, for services rendered, and
for
investment purposes for the year ended December 31, 2007 to be $Nil.
F-14
INDEX
TO EXHIBITS
|
Exhibit Number
|
|
Name
|
|
|
3.1(1)
|
|
Amended
and Restated Articles of Incorporation
|
|
|
|
|
|
|
|
4.1(2)
|
|
1998
Directors and Officers Option Plan
|
|
|
|
|
|
|
|
4.2(3)
|
|
Amended
1998 Key Personnel Compensation Plan
|
|
|
|
|
|
|
|
4.3(4)
|
|
2000
Stock Option Plan
|
|
|
|
|
|
|
|
4.4(5)
|
|
2001
Stock Option Plan
|
|
|
|
|
|
|
|
10.1(6)
|
|
Sale
Agreement between Wolf Industries Inc. and Gorda Technology Holdings
Limited
|
|
|
|
|
|
|
|
10.2(6)
|
|
License
Agreement between Wolf Industries Inc. and Andrew Engineering Inc.,
et
al
|
|
|
|
|
|
|
|
10.3(7)
|
|
Asset
Purchase Agreement between Wolf Industries Inc. and Andrew Engineering
Inc.
|
|
|
|
|
|
|
|
10.4(7)
|
|
Agreement
between Wolf Industries Inc., Andrew Engineering Inc., Andrew Rawicz
and
GPT Management
|
|
|
|
|
|
|
|
10.5(8)
|
|
Letter
of Intent with Galloway Financial Services
|
|
|
|
|
|
|
|
10.6(8)
|
|
Letter
Agreement with Dancing Star Resources
|
|
|
|
|
|
|
|
10.7(8)
|
|
Assignment
of Lease with Exor Oil Company, LLC
|
|
|
|
|
|
|
|
10.8(9)
|
|
Loan
Agreement with VCF Capital Corp.
|
|
|
|
|
|
|
|
10.9(9)
|
|
Form
of Securities Purchase Agreement
|
|
|
|
|
|
|
|
10.10
|
|
Management
and Governance Consultant Agreement
|
|
|
|
|
|
|
|
16(10)
|
|
Letter
from Morgan and Company
|
|
|
|
|
|
|
|
23.1
|
|
Consent
of Morgan and Company
|
|
|
|
|
|
|
|
31.1
|
|
Rule
13(a) — 14(a)/15(d) — 14(a) Certification (Principal Executive
Officer)
|
|
|
|
|
|
|
|
31.2
|
|
Rule
13(a) — 14(a)/15(d) — 14(a) Certification (Principal Financial
Officer)
|
|
|
|
|
|
|
|
32
|
|
Section
1350 Certifications
|
|
Footnotes
to Exhibits Index
|
(1)
|
Incorporated
by reference to Form 10-SB12G dated June 19, 1997.
|
|
|
|
|
(2)
|
Incorporated
by reference to Form S-8 dated September 10, 1998.
|
|
|
|
|
(3)
|
Incorporated
by reference to Form S-8 dated December 9, 1998.
|
|
|
|
|
(4)
|
Incorporated
by reference to Form S-8 dated October 20, 2000.
|
|
|
|
|
(5)
|
Incorporated
by reference to Form S-8 dated October 2, 2001.
|
|
|
|
|
(6)
|
Incorporated
by reference to Form 10-QSB for the period ended March 31,
1998.
|
|
|
|
|
(7)
|
Incorporated
by reference to Form 10-QSB for the period ended June 30,
1999.
|
|
|
|
|
(8)
|
Incorporated
by reference to Form 10-QSB for the period ended September 30,
2001.
|
|
|
|
|
(9)
|
Incorporated
by reference to Form 10-KSB for the period ended December 31,
2006.
|
|
|
|
|
(10)
|
Incorporated
by reference to Form 8-K/A dated April 14,
2008.
|
19
MANAGEMEMT
AND GOVERNANCE CONSULTANT AGREEMENT
THIS
AGREEMENT
dated
effective December 1, 2007, although executed on December 21, 2007 is
made:
BETWEEN:
American
Petro-Hunter Inc.
225
Marine Drive, Suite 210
Blaine,
WA 98230 USA
(referred
to as the “Company")
AND:
Sound
Energy Advisors LLC
225
Marine Drive, Suite 210
Blaine,
WA 98230 USA
(referred
to as “Consultant")
1.
Consultation Services
The
Company hereby engages the Consultant to perform the following services in
accordance with the terms and conditions set forth in this Agreement: The
Consultant will consult with the officers and employees of the Company
concerning matters relating to corporate management and governance, including
day-to-day operations, accounting, regulatory compliance, marketing and investor
relation services.
2.
Terms of Agreement.
The
term
of this Agreement will commence December 1, 2007 and will continue until
November 30, 2009. Either party may terminate this Agreement by giving the
other
party thirty (30) days written notice delivered by registered mail or confirmed
email.
3.
Place Where Services Will Be Rendered
The
Consultant will perform most services in accordance with this Agreement at
225
Marine Drive, Blaine, WA 98230. In addition, the Consultant will perform
services on the telephone and at such other places as designated by the Company
to perform these services in accordance with this Agreement.
4.
Payment to Consultant
The
Consultant will be paid in advance on the 1st day of each month at the rate
of
Two Thousand Five Hundred Dollars in US funds (US$ 2,500.00) per month for
work
performed in accordance with this Agreement; Provided that the Consultant issues
an invoice to the Company on or before the first day of each month of the term.
The Company will reimburse the Consultant for all disbursements, including
travel, accommodation, printing, postage, long distance telephone charges and
other related costs, reasonably incurred by the Consultant for the purpose
of
the provision of the Consultant’s services to the Company within 10 days of
having received written receipts in respect of this disbursements, providing
that any such disbursement exceeding $500.00 must have been approved by the
Company in advance of its having been incurred; and providing further that
the
disbursements must be submitted once a month and will only be reimbursed once
a
month. The Consultant has the right to ask the Company for an advance payment,
if appropriate, to pay for certain disbursements that have been pre-approved
by
the Company.
5.
Independent Contractor
Both
the
Company and the Consultant agree that the Consultant will at all times act
as an
independent contractor in the performance of its duties under this Contract.
Accordingly, the Consultant shall be solely responsible for payment of all
taxes
including Federal, State and local taxes arising out of the Consultant's
activities in accordance with this Agreement, including by way of illustration
but not limitation, Federal and State income tax, business tax, and any other
taxes or business license fees as may be required to be paid.
6. Confidential
Information and Non-Competition
The
Consultant agrees that any information received by the Consultant or Gregory
Leigh Lyons during the performance of the Consultant's obligations pursuant
to
this Agreement or otherwise, regarding the business, financial, technological
or
other any other affairs of the Company or its personnel will be maintained
by
the Consultant and Gregory Leigh Lyons as strictly confidential and will not
be
revealed by the Consultant or Gregory Leigh Lyons to any other persons, firms,
organizations or other entities whatsoever. This covenant shall survive the
termination of this Agreement.
The
Consultant agrees that during the term of this Agreement and thereafter, it
and
Gregory Leigh Lyons will not compete or attempt to compete with the business
or
technology of the Company or in any other respects whatsoever.
7.
Employment of Others
The
Company may from time to time request that the Consultant arrange for the
services of others. All costs to the Consultant for those services will be
paid
by the Company.
8.
Signatures
Both
the
Company and the Consultant agree to the above Contract.
9.
Entire Agreement
This
agreement contains the entire agreement between the parties hereto with respect
to the Consultant’s engagement by the Company and supersedes any prior oral or
written agreements or understandings with respect hereto.
10.
Notices
All
notices, requests, demands, and other communications hereunder shall be in
writing and shall be delivered personally, sent be recognized overnight courier
or sent by registered or certified mail, return receipt requested, to the other
parties hereto at his or its address as set forth above, and shall be deemed
given when delivered, or if sent by registered or certified mail, five (5)
days
after mailing. Any party may change the address to which notices, requests,
demands, and other communications hereunder shall be sent by sending written
notice of such change of address to the other parties in the manner above
provided.
11.
Successors and Assigns
Subject
to the terms of Paragraph 7, this Agreement shall inure to the benefit of,
and
be binding upon, the successors and assigns of the party hereto.
12.
Amendment
No
amendment of any provision of the Agreement, or consent to any departure
therefrom, shall be effective unless the same be in writing signed by the
parties.
13.
Waiver
The
waiver by the Company of any breach of any term or condition of the Agreement
shall not be deemed to constitute the waiver of any other breach of the same
or
any other term or condition hereof.
14.
Severability
Each
of
the terms and provisions of this Agreement is to be deemed severable in whole
or
in part and, if any terms or provision or the application thereof in any
circumstances should be invalid, illegal or unenforceable, the remaining terms
and provisions or the application of such term or provision to circumstances
other than those as to which it is held invalid, illegal or unenforceable shall
not be affected thereby and shall remain in full force and effect.
15.
Governing Law
This
agreement and the enforcement thereof shall be governed and controlled in all
aspect by the laws of the State of Nevada.
14.
Counterparts
This
Agreement may be executed in several counterparts and all so executed shall
constitute one agreement binding on all the parties hereto, notwithstanding
that
all the parties are not signatories to the original or the same
counterpart.
AMERICAN
PETRO-HUNTER INC.
_________________________________________
Gregory
Leigh Lyons, Director
SOUND
ENERGY ADVISORS LLC
_________________________________________
Gregory
Leigh Lyons, President