Edgar Filing: ASSURE ENERGY INC

U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-KSB

(Mark One)

|X| ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934

For Fiscal Year Ended: December 31, 2002

|_| TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______________ to _______________

Commission file number: 333-61714

ASSURE ENERGY, INC.
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(Exact name of small business issuer as specified in its charter)

DELAWARE 13-4125563
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(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)

2750-140 4TH AVENUE, S.W.
CALGARY, ALBERTA, CANADA T2P 3N3
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(Address of principal executive offices) (Postal Code)

Issuer's telephone number: (403) 266-2787
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Securities registered under Section 12(b) of the Act: NONE
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Securities registered under Section 12(g) of the Act: NONE
----

Check whether the registrant (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 registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes |X| No
|_|

Check 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. |_|

State registrant's revenues for its most recent fiscal year: $1,136,896.

As of April 8, 2003, there were 15,366,000 shares of the registrant's common
stock, par value $0.001, issued and outstanding. Of these, 15,366,000 shares
are held by non-affiliates of the registrant. The market value of securities
held by non-affiliates is $47,404,110 based on the average bid and asked price
of $3.085 for the registrant's common stock on April 8, 2003.

Transitional Small Business Disclosure Format (check one): Yes |_|; No |X|

DOCUMENTS INCORPORATED BY REFERENCE

If the following documents are incorporated by reference, briefly describe them
and identify the part of the Form 10-KSB (e.g., Part I, Part II, etc.) into
which the document is incorporated: (1) any annual report to security holders;
(2) any proxy or information statement; and (3) any prospectus filed pursuant to
Rule 424(b) or (c) of the Securities Act of 1933, as amended ("Securities Act").
Not Applicable.

TABLE OF CONTENTS

Item Number and Caption Page
----------------------- -----

Forward-Looking Statements . . . . . . . . . . . . . . . . . . . . . . 3

PART I

1. Description Of Business . . . . . . . . . . . . . . . . . . . . 3

2. Description Of Property . . . . . . . . . . . . . . . . . . . . 10

3. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . 11

4. Submission Of Matters to a Vote Of Security Holders . . . . . . 11

PART II

5. Market For Common Equity And Related Stockholder Matters. . . . 11

6. Plan of Operation . . . . . . . . . . . . . . . . . . . . . . . 14

7. Financial Statements. . . . . . . . . . . . . . . . . . . . . . 15

8. Changes in and Disagreements with Accountants on Accounting
and Results of Operation. . . . . . . . . . . . . . . . . . . . 15

PART III

9. Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act . . . . . . . 15

10. Executive Compensation. . . . . . . . . . . . . . . . . . . . . 17

11. Security Ownership of Certain Beneficial Owners and Management. 20

12. Certain Relationships and Related Transactions. . . . . . . . . 21

13. Exhibits, List and Reports On Form 8-K. . . . . . . . . . . . . 22

14. Controls And Procedures . . . . . . . . . . . . . . . . . . . . 25

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FORWARD-LOOKING STATEMENTS

Except for historical information, this report contains forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. Such forward-looking
statements involve risks and uncertainties, including, among other things,
statements regarding our business strategy, future revenues and anticipated
costs and expenses. Such forward-looking statements include, among others, those
statements including the words "expects," "anticipates," "intends," "believes"
and similar language. Our actual results may differ significantly from those
projected in the forward-looking statements. Factors that might cause or
contribute to such differences include, but are not limited to, those discussed
in the section "Plan of Operation". You should carefully review the risks
described in other documents we file from time to time with the Securities and
Exchange Commission. You are cautioned not to place undue reliance on the
forward-looking statements, which speak only as of the date of this report. We
undertake no obligation to publicly release any revisions to the forward-looking
statements or reflect events or circumstances after the date of this document.

PART I

ITEM 1. DESCRIPTION OF BUSINESS

GENERAL

BUSINESS

We were incorporated on August 11, 1999 in the State of Delaware under the
name Inventoy.com, Inc. with the objective to license toy designs to toy
manufacturers and to act as a toy inventor's agent in licensing toy designs
developed by others. We expected to market such toy designs by both direct
meetings with toy manufactures' representatives and through a web site that
could give manufacturers the opportunity to review pictures and descriptions of
new inventions at a single source to decide whether a face-to-face meeting would
be useful. Given the effect of an overcrowded .com business environment, no
operations in this area were ever commenced. Accordingly we looked at other
ventures of merit for corporate participation as a means of enhancing
shareholder value. This strategy resulted in our April 23, 2002 Acquisition
Agreement with Assure Oil & Gas Corp., an Ontario, Canada corporation, and the
shareholders of Assure Oil & Gas Corp.

The Acquisition Agreement principally involved our acquisition of all of
Assure Oil & Gas Corp.'s issued and outstanding capital stock, making Assure Oil
& Gas Corp. a wholly owned subsidiary of ours, in exchange for 2,400,000 units,
each unit consisting of one share of our common stock, one Class A Warrant and
one Class B Warrant. Each Class A Warrant, as amended, entitles the holder
thereof to acquire one share of our common stock at a price of $.50 per share at
any time or from time to time during the four year period commencing on October
1, 2003 and expiring on September 30, 2007. Each Class B Warrant, as amended,
entitles the holder thereof to acquire one share of our common stock at a price
of $1.00 per share at any time or from time to time during the four year period
commencing on July 1, 2004 and expiring on June 30, 2008. As the result of the
September 17, 2002 3:2 forward stock split the 2,400,000 units became 3,600,000

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units, consisting of 3,600,000 shares, 3,600,000 Class A Warrants and 3,600,000
Class B Warrants. Similarly, the exercise price for each Class A Warrant became
$.333 and the exercise price for each Class B Warrant became $.667 per share.
Pursuant to a related Registration Rights Agreement, as amended, dated as of
April 23, 2002, between us and the Assure Oil & Gas Corp. shareholders, we have
agreed to register the common stock forming part of the units (the "Unit
Shares") and the common stock underlying the Class A Warrants (the "Class A
Warrant Shares") and Class B Warrants (the "Class B Warrant Shares") by October
1, 2003. In connection with the Acquisition Agreement, Ed Kaplan, one of our
directors at that time, resigned and was replaced by James Golla, a designee of
Assure Oil & Gas Corp. Further, on May 1, 2002 we amended our Certificate of
Incorporation to change our name from Inventoy.com, Inc. to Assure Energy, Inc.

Assure Oil & Gas Corp. is actively engaged in the exploration, development,
acquisition and production of petroleum and natural gas properties primarily
located in Western Canada. In October 2000 Assure Oil & Gas Corp. commenced its
oil and gas operations as part of an initiative to create cash flow by
participating in a Farmout Agreement to drill a prospective Elkton zone natural
gas well. To date, Assure Oil & Gas Corp. has acquired varying interests,
through farmout participations, asset purchases and crown land sales in
approximately 3200 gross acres (3040 net acres) of both producing and
prospective petroleum and natural gas properties in the Western Sedimentary
Basin of Western Canada. Assure Oil & Gas Corp. has 5 producing oil wells with
working interests therein ranging from 50-95%. Current oil production to Assure
Oil & Gas Corp. from these oil wells is approximately 24 barrels of oil per day.
4 of these wells also produce gas that nets to Assure Oil & Gas Corp.
approximately 17 barrels of oil equivalent per day. Assure Oil & Gas Corp. has 7
other gas wells that net to Assure Oil & Gas Corp. approximately 100 barrels of
oil equivalent per day. Working interests in these 7 gas wells vary from 16.67%
to 63%. Assure Oil & Gass Corp. also has 1 non-producing oil well. No new oil or
gas wells are currently being drilled by Assure Oil & Gas Corp.

Assure Oil & Gas Corp. plans to continue to explore, develop or acquire
petroleum and natural gas properties to increase cash flow, and to build
petroleum and natural gas reserves. Assure Oil & Gas Corp. anticipates an
exploration program that could include infill drilling of current proved and
producing properties, seismic interpretation of prospective properties and
exploratory drilling. Acquisitions could include lands, licenses and leases,
producing well bores or corporate acquisitions. Assure Oil & Gas Corp. also may
from time to time acquire, or enter into strategic alliances with complementary
business to achieve these objectives.

On March 14, 2002 we signed an asset purchase agreement with Inventoy.com
International, Inc., through which we assigned all of our rights, titles and
exclusive interests in and to all patents, trademarks, trade names, technical
processes, know-how and other intellectual property that was associated with our
business at that time (toy designs), including the twenty seven (27) toy designs
we acquired from Kaplan Design Group upon our formation, in exchange for all of
the outstanding shares of Inventoy.com International, Inc. (100 shares, par
value $.001).

On May 30, 2002 Assure Oil & Gas Corp. entered into a Share Purchase
Agreement with the three shareholders of Westerra 2000 Inc., an Alberta, Canada
corporation engaged in the exploration, development and production of oil and
gas properties primarily located in Alberta and Saskatchewan, Canada. Pursuant
to the Share Purchase Agreement, Assure Oil & Gas Corp. acquired all of the

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capital stock of Westerra 2000 Inc. The purchase price was CDN$3,450,000
(approximately US$2,282,200) consisting of (i) CDN$2,677,703.55 paid, on behalf
of Westerra 2000 Inc., to Alta Gas Services Inc. pursuant to a June 1, 2001 Loan
Agreement between Westerra 2000 Inc. and Alta Gas Services Inc.; (ii)
CDN$422,296.45 paid to the three shareholders of Westerra 2000 Inc. on a pro
rata basis in proportion to their share ownership in Westerra 2000 Inc.; and
(iii) CDN$350,000 (approximately US $221,000) payable to the three shareholders
of Westerra 2000 Inc. on a pro rata basis in proportion to their share ownership
in Westerra 2000 Inc. following the resolution of title deficiencies on certain
properties. The parties deemed the effective date of the Acquisition Agreement
to be April 1, 2002. As a consequence thereof, Assure Oil & Gas Corp. paid an
additional CDN$34,164.98 to Alta Gas Services Inc., which represented additional
interest due under the loan agreement. As a further consequence, net revenues
and prepaid expenses of Westerra 2000 Inc., attributable to the period ending
after April 1, 2002 but received by Westerra 2000 Inc. prior to May 30, 2002,
were credited to Assure Oil & Gas Corp. The title deficiencies referred to above
were resolved in January 2003 but we have not released the CDN $350,000 to the
three shareholders of Westerra 2000 Inc. based on our contention that certain
Westerra 2000 Inc. wells that had been reported to us to be proven/producing
wells have not, in fact, been on production. Consequently, the three
shareholders commenced an action against us in Calgary, Alberta on February 19,
2003 seeking release of the CDN $350,000 together with interest. See "Item 3.
Legal Proceedings."

The Share Purchase Agreement also provided that within 60 days of Assure
Oil & Gas Corp.'s recoupment of the CDN$3,450,000 Purchase Price in the form of
net revenue from the acquired Westerra 2000 Inc. natural gas production, Assure
Oil & Gas Corp. had to give notice thereof to the three shareholders of Westerra
2000 Inc., who within 30 days of receipt of such notice, could elect to acquire
an aggregate 25% working interest in such natural gas production for no
additional consideration.

Westerra 2000 Inc. owns certain natural gas and oil interests in
approximately 5 sections of land (3,200 acres gross - 1,920 acres net) in the
Lloydminster area along the provincial border of Alberta and Saskatchewan (the
"Westerra interests"). Westerra 2000 Inc. has 6 producing oil wells with working
interests therein ranging from 50% to 100%. Current oil production net to
Westerra 2000 Inc. from these oil wells is approximately 160 barrels of oil per
day. Westerra 2000 Inc. also has 7 producing gas wells, each with a working
interest of 60%. Current gas production net to Westerra 2000 Inc. from these gas
wells is approximately 200 barrels of oil equivalent per day. Westerra 2000 Inc.
also has 5 non-producing gas wells but has no plans to abandon any of these
wells at this time. Westerra 2000 Inc. has 1 shut in oil well which is scheduled
to come on line shortly. No new oil or gas wells are currently being drilled by
Westerra 2000 Inc.

On August 27, 2002 we entered into a Stock Exchange Agreement with
Inventoy.com International, Inc., Kaplan Design Group, Douglas Kaplan, Ed Kaplan
and Ron Beit-Halachmy. At the time of the Stock Exchange Agreement, Kaplan
Design Group, Douglas Kaplan, Ed Kaplan and Ron Beit-Halachmy (collectively the
"Shareholders") owned an aggregate of 14,440,000 shares of our common stock (the
"Shares"). Pursuant to the Stock Exchange Agreement, the Shareholders exchanged
the Shares for all of the issued and outstanding shares of Inventoy.com
International, Inc., our inactive wholly-owned subsidiary. Inventoy.com
International, Inc. owned patents, trademarks, tradenames, technical processes,
know-how and other intellectual property intended to be utilized in a business

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involving the licensing of toy designs developed by others. The Shareholders
included certain founders of ours that contributed the Inventoy assets to us
upon our formation. The Shares had been received by the Shareholders in
consideration of their contribution of the Inventoy assets. The decision to sell
Inventoy.com International, Inc. to the Shareholders was based upon the
determination that Inventoy International, Inc. did not fit into our current
operations which primarily consist of the exploration, development, and
acquisition of petroleum and gas properties located in Western Canada. Pursuant
to the Stock Exchange Agreement, the Shares were cancelled and returned to the
status of authorized but unissued shares.

Effective September 23, 2002 we entered into a Consulting Agreement with
Primoris Group Inc., ("Primoris") an Ontario corporation pursuant to which
Primoris provides us with corporate media and investor relations services. The
agreement has a 61 week term which expires on November 30, 2003 unless mutually
extended. Under the agreement, we pay Primoris $5,500 per month. Further,
effective October 1, 2002, we issued to Primoris an option to purchase 200,000
shares of our restricted common stock for a period of 2 years from issuance at a
price of $2.75 per share. The shares underlying the options contain piggyback
registration rights until such time that the underlying shares are eligible for
sale pursuant to Rule 144 of the General Rules and Regulations under the
Securities Act of 1933, as amended. These piggyback registration rights do not
apply to registration statements relating solely to employee benefit plans,
business combinations, or changes in domicile.

On March 6, 2003 we entered into a share purchase agreement (the "Share
Purchase Agreement") with 5 shareholders (the "Shareholders") of Quarry Oil &
Gas Ltd., ("Quarry") an Alberta, Canada corporation respecting our proposed
purchase of 6,750,000 Quarry shares from the shareholders for an aggregate
purchase price of CDN $8,962,650 (approximately US $5,800,000) or CDN $1.3278
per share. These shares represent 47.28% of Quarry's outstanding common shares.
The closing of the Share Purchase Agreement, as amended on March 26, 2003, is
subject to the approval of the TSX Venture Exchange, Quarry's bank and certain
other conditions. Quarry is a junior oil and gas exploration and development
company based on Calgary, Alberta whose common shares are listed on the TSX
Venture Exchange under the symbol "QUC". Quarry's average daily production is
currently approximately 1200 barrels of oil equivalent per day. Quarry has a
stable oil production base in Alberta and has recently added significant gas
production from its discoveries in northeast British Columbia where it has
access to a large base of undeveloped lands. It has developed an extensive
portfolio of natural gas prospects to facilitate future growth.

The Share Purchase Agreement contains a covenant by us to engage in one of
the following post closing activities:

- present to Quarry an experienced, previously successful
management team for Quarry, subject to the reasonable consent of
the Shareholders;

- make, within 60 days of closing, an offer to acquire the
remaining Quarry shares at a price of not less than CDN $1.3278
per share; or

- subscribe, within 90 days of closing, to a material private
placement of Quarry at a subscription price per share of CDN
$1.3278.

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Subsequent to the period covered by the report, on April 7, 2003 we entered
into a Consulting Agreement with TGR Group, LLC, ("TGR") a Nevada limited
liability company, pursuant to which TGR provides public relations services on
our behalf. The Agreement, provides for the payment of a $50,000 fee to TGR and
for the issuance of 100,000 5 year warrants, each exercisable for the purchase
of 1 share of our restricted common at a price of $3 per share. Piggyback
registration rights apply with respect to the shares underlying the warrants.
These piggyback registration rights do not apply to registration statements
relating solely to employee benefit plans, business combinations or changes in
domicile.

STOCK SPLITS

Following the close of business on March 6, 2002 we effected a 4:1 forward
stock split in favor of our Shareholders of record as of the close of business
on February 25, 2002. Pursuant to the stock split our 5,221,000 shares of
common stock issued and outstanding on the record date were increased to
20,884,000 shares of common stock.

Following the close of business on September 17, 2002 we effected a 3:2
forward stock split in favor of our shareholders of record as of the close of
business on September 10, 2002. Pursuant to the stock split our 10,244,000
shares of common stock issued and outstanding on the record date were increased
to 15,366,000 shares.

FINANCING TRANSACTIONS

During the period October 2000 through April 2001 we engaged in a private
offering of up to 1,500,000 shares of our common stock at a price of $.10 per
share. The offering was completed in April 2001 with the sale of 1,111,000
shares of our common stock to 42 people resulting in gross proceeds of $111,100.
The offering was made in reliance on Rule 506 of Regulation D under the
Securities Act of 1933, as amended.

On April 23, 2002 we completed a $1,250,000 debt financing with an
accredited investor. The debt was evidenced by our demand promissory note dated
April 23, 2002 and bore interest at the rate of 1% above the prime rate charged
by Citicorp. The note was subsequently cancelled and the principal amount
thereof was utilized to purchase $1,250,000 of our Series A Preferred Stock. The
note was issued pursuant to the exemption from registration contained in Section
4(2) of the Securities Act of 1933, as amended.

On May 8, 2002 we completed a $1,750,000 equity financing with three
accredited persons pursuant to the exemption from the registration provisions of
the Securities Act of 1933, as amended, provided by Rule 506 of Regulation D. In
connection therewith, we issued an aggregate of 1,400,00 units at a purchase
price of $1.25 per unit. Each unit consists of one share of our common stock and
one common stock purchase warrant. Each warrant as amended, entitles the holder
to purchase one share of our common stock at a price of $1.50 per share for a
period of four years commencing July 1, 2003. As the result of the September 17,
2002 3:2 forward stock split the 1,400,000 unit shares became 2,100,000 shares
and the 1,400,000 warrants became 2,100,000 warrants, each with an exercise
price of $1.00 per share. Both the shares underlying the units and the shares
underlying the unit warrants have piggyback registration rights.

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As of June 1, 2002 we entered into a Preferred Stock Purchase Agreement
with three accredited persons pursuant to which we sold them 17,500 shares of
our Convertible Series A Preferred Stock at a price of $100 per share (the
"Stated Value") or an aggregate of $1,750,000. The Series A Preferred Stock was
issued pursuant to Section 4(2) of the Securities Act of 1933, as amended. One
of the purchasers was the purchaser of our $1,250,000 note described above,
which pursuant to a Note Termination and Conversion Agreement with us dated as
of June 1, 2002 terminated the April 23, 2002 note referred to above and applied
the $1,250,000 principal amount thereof to the purchase of 12,500 shares of our
Series A Preferred Stock. The Series A Preferred Stock is convertible by the
holder after 2 years, or if called for redemption by us, into units. The initial
conversion price for the conversion of the Series A Preferred Stock is $1.50 of
Stated Value. Each unit consists of one share of our common stock and one common
stock purchase warrant. Each warrant entitles the holder there of to purchase
one share of our common stock at a price of $1.75 per share at any time during
the four year period commencing one year after the date of issuance. Piggyback
registration rights apply to the shares underlying the units and unit warrants
issuable upon conversion of the Series A Preferred Stock. As the result of the
September 17, 2002 3:2 forward stock split, the initial conversion price of the
Series A Preferred Stock became $1.00 of Stated Value and the exercise price for
each share underlying the unit warrants issuable upon conversion of the Series A
Preferred Stock became approximately $1.166 per share. The holders of the Series
A Preferred Stock are entitled to receive out of funds legally available for the
payment of dividends, dividends in cash or stock at the rate of 5% per annum on
the Stated Value of each share of Series A Preferred Stock. Dividends on the
Series A Preferred Stock are cumulative from the issuance date.

As of August 27, 2002 we entered into a Preferred Stock Purchase Agreement
with an accredited person pursuant to which we sold such person 5,250 shares of
our Convertible Series B Preferred Stock at a price of $100 per share (the
"Stated Value") or an aggregate of $525,000. The Series B Preferred Stock was
issued pursuant to Section 4(2) of the Securities Act of 1933, as amended. The
Series B Preferred Stock is convertible by the holder after 2 years, or if
called for redemption by us, into units. The initial conversion price for the
conversion of the Series B Preferred Stock is $1.75 of Stated Value. Each unit
consists of one share of our common stock and one common stock purchase warrant.
Each warrant entitles the holder thereof to purchase one share of our common
stock at a price of $2.00 per share at any time during the four year period
commencing one year after the date of issuance. Piggyback registration rights
apply to the shares underlying the units and the unit warrants issuable upon
conversion of the Preferred Stock. As the result of the September 17, 2002 3:2
forward stock split, the initial conversion price of the Series B Preferred
Stock became approximately $1.166 of Stated Value and the exercise price for
each share underlying the unit warrants issuable upon conversion of the Series B
Preferred Stock became approximately $1.333 per share. The holders of the Series
B Preferred Stock are entitled to receive out of funds legally available for the
payment of dividends, dividends in cash or stock at the rate of 5% per annum on
the Stated Value of each share of Series B Preferred Stock. Dividends on the
Series B Preferred Stock are cumulative from the issuance date.

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On December 28, 2002 Assure Oil & Gas Corp. completed a CDN $1,000,000 debt
financing with an accredited investor. The debt is evidenced by a six year
promissory note which bears interest at the rate of 3 1/2 % above the prime rate
charged by Royal Bank of Canada in Toronto. No interest or principal is due on
the note during the first year of the note. On the first anniversary of the
note, all interest then due on the note is payable in full. Thereafter, for the
balance of the term of the note, interest and principal is payable quarterly.
The debt is subordinated to all present and future bank debt of ours, including
our subsidiaries.

On February 26, 2003 we completed a $2,400,750 equity financing in which we
sold 1,067,000 units to 2 accredited investors at a price of $2.25 per unit.
Each unit consists of 1 share of our common stock and warrant. Each full
warrant entitles the holder to purchase one share of our common stock at a price
of $2.50 per share for a period of five years, commencing February 26, 2003.
The shares comprising part of the units have yet to be issued but will be issued
shortly.

On March 15, 2003 we completed a $4,500,000 debt financing with an
accredited investor. The debt is evidenced by a six year promissory note which
bears interest at the rate of 3 1/2 % above prime rate charged by Citibank in
New York. No interest or principal is due on the note during the first year of
the note. On the first anniversary of the note, all interest then due on the
note is payable in full. Thereafter, for the balances of the term of the note,
interest and principal is payable quarterly. The debt is subordinated to all
present and future bank debt of ours, including our subsidiaries. In
consideration of the financing, we also issued 450,000 warrants to the investor
dated March 15, 2003. Each warrant entitles the holder to purchase 1 share of
our common stock at a price of $3.10 per share during the 5 year period
commencing July 1, 2003.

SUPPLIES AND SUPPLIERS

Any raw materials required by us in the operation of our business are
available at competitive rates from many suppliers. We are not dependent on any
one supplier for raw materials.

RESEARCH AND DEVELOPMENT

We have not engaged in any research and development activities since our
inception.

CUSTOMERS

No single customer accounts for a significant portion of our revenues.

COMPETITION

The oil and gas industry is highly competitive. We encounter competition
from numerous companies in all or our activities, particularly in acquiring
rights to explore for crude oil and natural gas. Most of our competitors are
larger and have substantially greater financial and human resources than we do.

The oil and gas business involves large-scale capital expenditures and
risk-taking. In the search for new oil and gas reserves, long lead times are
often required from successful exploration to subsequent production. Operations

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in the oil and gas industry depend on a depleting natural resource. The number
of areas where it can be expected that oil and gas will be discovered in
commercial quantities is constantly diminishing and exploration risks are high.
Areas where oil or gas may be found are often in remote locations where
exploration and development activities are capital intensive and operating costs
are high.

Our future success will depend, to a significant extents, on our ability to
make good decisions regarding our capital expenditures, especially when taking
into consideration our limited resources. We can give no assurance that we will
be able to overcome the competitive disadvantages we face as a small company
with limited capital.

GOVERNMENT REGULATION

As an oil and gas company with operations in Alberta, Canada and
Saskatchewan, Canada we are subject to the rules and regulations of the Alberta
Energy and Utilities Board (the "EUB") and the Saskatchewan Industry and
Resources ("SIR"). The function of both the EUB and SIR is to insure that the
discovery, development and delivery of oil and gas and other natural resources
takes place in a manner that is fair, responsible and in the public interest.
The EUB and SIR establish guidelines which we follow with respect to our oil and
gas operations. Our operating costs are materially affected by these
requirements.

EMPLOYEES

At the present time, our only employees are our two executive officers. We
utilize independent contractors for our other service requirements.

PATENTS, TRADEMARKS AND LICENSES

We do not have any patents, trademarks, licenses, franchises, concessions,
royalty agreements or labor contracts.

ITEM 2. DESCRIPTION OF PROPERTY

Our executive offices consist of approximately 1,836 square feet of space
which Assure Oil & Gas Corp. subleases at 140-4th Avenue SW, Calgary, Alberta.
The sublease which commenced on October 1, 2002 continues through December 30,
2005. Under the sublease we pay CDN$4,674.81 per month (approximately US$3,115
per month). Our president and our independent contractors including a
production accountant, accountant, geologist, land administrator and engineer
work from this location. We believe this space is sufficient to handle our
present and immediate future needs. In the event our sublease is terminated for
any reason or not renewed upon the expiration of the present term, space
sufficient to handle our then present and expected future needs is available
from several alternative sources at comparable rates.

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ITEM 3. LEGAL PROCEEDINGS

On February 19, 2003 Gary Freitag, Garth R. Keyte and Evan Stephens filed a
Statement of Claim against Assure Oil & Gas Corp. in the Court of Queen's Bench
of Alberta, Canada Judicial District of Calgary seeking judgment in the sum of
CDN$350,0000 (approximately US $221,000) together with interest thereon at the
rate of 6% per annum from January 15, 2003. The action relates to CDN$350,000
that was placed in trust as part of the May 30,2002 Share Purchase Agreement
between Assure Oil & Gas Corp. and the three shareholders of Westerra 2000 Inc.
Plaintiffs claim the money should have been released to them on or about January
15, 2003, the date of resolution of certain title deficiencies that existed at
the time the Share Purchase Agreement was executed. We have filed a Statement
of Defense and Counterclaim based upon our assertion that certain of the
Westerra 2000 Inc. wells that had been purchased in consideration of a report
that indicated they were proven/producing wells were and are in fact
non-producing and that the shareholders had agreed to a holdback of the
CDN$350,000 pending the wells being brought on to production. We further
asserted that since the wells are not on production the holdback has been
forfeited and is not payable. While we believe our position has merit we can
offer no assurance as to the outcome of this matter.

No other legal proceedings are pending to which we or any of our property
is subject, nor to our knowledge are any such proceedings threatened.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matter was submitted to a vote of security holders, through the
solicitation of proxies or otherwise, during the fourth quarter of the fiscal
year covered by this report.

PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

MARKET INFORMATION

Our common stock is quoted on the OTC Bulletin Board of the National
Association of Securities Dealers, Inc. (the "NASD") under the symbol "ASUR."
From November 6, 2001 until May 1, 2002, the date we changed our name from
Inventoy.com, Inc. to Assure Energy, Inc., our stock was quoted under the symbol
"INVY." The following table sets forth, for the periods and fiscal quarters
indicated, the high and low closing bid prices per share of our common stock, as
derived from quotations provided by Pink Sheets, LLC. Such quotations reflect
inter-dealer prices, without retail mark-up, mark-down or commission, and may
not represent actual transactions. Prices after March 6, 2002 reflect the 4:1
forward stock split which took effect after the close of business on March 6,
2002. Prices after September 17, 2002 reflect the aforementioned 4:1 forward
stock split and the 3:2 forward stock split which took effect after the close of
business on September 17, 2002.

-11-

PERIOD INDICATED ORQUARTER ENDED HIGH BID LOW BID
--------------------------------------- --------- --------

November 6, 2001 - December 31, 2001 $ .05 $ .01
January 2, 2002 - March 6, 2002 $ .06 $ .05
March 7, 2002 - March 31, 2002 $ .25 $ .01
June 30, 2002 $ 2.45 $ .02
July 1, 2002 - September 17, 2002 $ 4.00 $ 2.45
September 18, 2002 - September 30, 2002 $ 3.05 $ 3.05
December 31, 2002 $ 3.06 $ 3.05

HOLDERS

As of April 7, 2003, there were approximately 39 record holders of our
common stock.

DIVIDENDS

We have never declared any cash dividends with respect to our common stock.
Future payment of dividends is within the discretion of our board of directors
and will depend on our earnings, capital requirements, financial condition and
other relevant factors. Although there are no material restrictions limiting,
or that are likely to limit, our ability to pay dividends on our common stock,
we presently intend to retain future earnings, if any, for use in our business
and have no present intention to pay cash dividends on our common stock.

RECENT SALES OF UNREGISTERED SECURITIES

The information set forth below discusses the amount of securities sold on
the dates provided and does not take into account the effects of our March 2002
4:1 forward stock split or our September 2002 3:2 forward stock split, except to
the extent the date of issuance was after the date of one or both of the splits.

On March 15, 2003 we issued a six-year, $4,500,000 promissory note (the
"Note") together with 450,000 5 year warrants (the "Warrants") to 1 person.
Each Warrant entitles the holder to purchase one share of our common stock at a
price of $3.10 per share. The issuance of the Note and Warrants was made in
reliance on the exemption from registration provided by Section 4(2) of the
Securities Act of 1933, as amended.

On February 26, 2003 we completed a $2,400,750 equity financing in which we
sold 1,067,000 units to 2 persons at a purchase price of $2.25 per unit. Each
unit consists of 1 share of our common stock and one-half warrant. Each full
warrant entitles the holder to purchase one share of our common stock at a price
of $2.50 per share for a period of five years commencing February 26, 2003. The
issuance was made in reliance on the exemption from registration provided by
Section 4(2) of the Securities Act of 1933, as amended.

On December 28, 2002, Assure Oil & Gas Corp. issued a six year CDN
$1,000,000 promissory note (the "Note") to 1 person. The issuance of the Note
was made in reliance on the exemption from registration provided by Section 4(2)
of the Securities Act of 1933, as amended.

-12-

Effective October 1, 2002 we issued 20,000 non statutory stock options to
James Golla, each exercisable, upon vesting, to purchase one share of our common
stock at a price of $2.75 per share during the three year period ending
September 30, 2005. The issuance was made in reliance on the exemption from
registration provided by Section 4(2) of the Securities Act of 1933, as amended.

Effective October 1, 2002 we issued 200,000 non-statutory stock options to
1 person for consulting services, each exercisable upon issuance to purchase one
share of our common stock at a price of $2.75 per share during the two year
period ending September 30, 2004. The issuance was made in reliance on the
exemption from registration provided by Section 4(2) of the Securities Act of
1933, as amended.

Effective October 1, 2002 we issued 100,000 non-statutory stock options to
Harvey Lalach, each exercisable upon vesting to purchase one share of our common
stock during the three year period ending September 30, 2005, at a price of
$2.75 per share. The issuance was made in reliance on the exemption from
registration provided by Section 4(2) of the Securities Act of 1933, as amended.

On August 27, 2002 we sold 5,250 shares of our Series B Preferred Stock at
a price of $100 per share or $525,000 on an aggregate basis to 1 person. The
sale was made in reliance on the exemption from registration provided by Section
4(2) of the Securities Act of 1933, as amended.

As of June 1, 2002 we sold 17,500 shares of our Series A Preferred Stock at
a price of $100 per share or $1,750,000 on an aggregate basis to 3 persons. The
sales were made in reliance on the exemption from registration provided by
Section 4(2) of the Securities Act of 1933, as amended.

On May 8, 2002 we completed a $1,750,000 equity financing in which we sold
1,400,000 units to 3 persons at a purchase price of $1.25 per unit. Each unit
consisted of 1 share of our common stock and 1 common stock purchase warrant,
each exercisable for the purchase of an additional share of our common stock.
The sale was made in reliance on the exemption from registration provided by
Rule 506 of Regulation D under the Securities Act of 1933, as amended.

In connection with our April 23, 2002 Acquisition Agreement with Assure Oil
& Gas Corp. and the shareholders of Assure Oil & Gas Corp. we issued an
aggregate of 2,400,000 units to the shareholders of Assure Oil & Gas Corp. Each
unit consisted of 1 share of our common stock, 1 Class A Warrant and 1 Class B
Warrant. Each Class A Warrant and Class B Warrant is exercisable for the
purchase of 1 additional share of our common stock. The sale of the units was
made in reliance on the exemption from registration provided by Section 4(2) of
the Securities Act of 1933, as amended.

-13-

In July 2001, we issued 10,000 shares of our common stock to Ron
Beit-Halachmy at a price of $.001 per share in consideration of his serving as
one of our directors. The sale of the stock was made in reliance on the
exemption from registration provided by Section 4(2) of the Securities Act of
1933, as amended.

In October 2000 and December 2000, respectively, we issued 250,000 shares
of our common stock to Kaplan Gottbetter & Levenson, LLP, in exchange for legal
services rendered, and 250,000 shares of our common stock to Dunlap Industries
Ltd., in exchange for financial consulting services rendered. For purposes of
the foregoing transactions, the shares were valued at $.10 per share. The sales
of the stock were made in reliance on the exemption from registration provided
by Section 4(2) of the Securities Act of 1933, as amended.

In July 2000 we issued 300,000 shares of our common stock to each of Ed
Kaplan and Douglas Kaplan at a price of $.001 per share or $300 on an aggregate
basis. The sales were made in reliance on the exemption from registration
provided by Section 4(2) of the Securities Act of 1933, as amended.

In July 2000 we issued 3,000,000 shares of our common stock to Kaplan
Design Group in exchange for 27 toy designs. These shares were valued at $.001
per share or $3,000 on an aggregate basis. The sale was made in reliance on the
exemption from registration provided by Section 4(2) of the Securities Act of
1933, as amended.

ITEM 6. PLAN OF OPERATION

We were incorporated on August 11, 1999 in the state of Delaware with the
objective to license toy designs to toy manufacturers and to act as a toy
inventor's agent in licensing toy designs developed by others. We expected to
market such toy designs by both direct meetings with toy manufacturers'
representatives and through a web site that could give manufacturers the
opportunity to review pictures and descriptions of new inventions at a single
source to decide whether a face-to-face meeting would be useful. Given the
effect of an overcrowded .com business environment, no operations in this area
were ever commenced. Accordingly we looked at other ventures of merit for
corporate participation as a means of enhancing shareholder value. This
strategy resulted in our April 23, 2002 Acquisition Agreement with Assure Oil &
Gas Corp. ("Assure O&G").

Assure O&G is actively engaged in the exploration, development, acquisition
and production of petroleum and natural gas (P&NG) properties primarily located
in Western Canada. In October 2000 Assure O&G commenced its oil and gas
operations as part of an initiative to create cash flow by participating in a
Farmout Agreement to drill a prospective Elkton zone natural gas well. To date,
Assure O&G has acquired varying interests, through farmout participations, asset
purchases, crown land sales and corporate acquisitions, of both producing and
prospective P&NG properties in the Western Sedimentary Basin of Western Canada.

On May 30, 2002 Assure O&G entered into a Share Purchase Agreement with the
3 shareholders of Westerra 2000 Inc. ("Westerra"), wherein Assure O&G acquired

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Westerra, an Alberta, Canada corporation engaged in the exploration, development
and production of oil and gas properties primarily located in Saskatchewan,
Canada.

We plan to continue to explore, develop and acquire P&NG properties over
the next twelve months to increase cash flow, and to build P&NG reserves. We
anticipate engaging in an exploration program that could include infill drilling
of current proved and producing properties, seismic interpretation of
prospective properties and exploratory drilling. Acquisitions could include
lands, licenses and leases, producing well bores and corporate acquisitions. We
also may from time to time acquire, or enter into strategic alliances with,
complementary businesses to achieve these objectives.

We anticipate that our presently available capital resources together with
expected oil and gas cash flow from our existing oil and gas production will be
sufficient to fund our current oil and gas operations during the next twelve
months. We intend to fund our acquisition strategy and new exploration programs
during the next twelve months from oil and gas cash flow, working capital, sales
of our securities and other available sources of financing. Our employee levels
are expected to increase during the next twelve months in direct proportion to
the anticipated expansion of our oil and gas exploration program and available
cash resources. We do not presently anticipate any purchases or sales of plant
or significant equipment other than the purchase of pump jacks which are used to
enhance oil production and equipment utilized to transport gas to processing
facilities. Alternatively, we may rent, lease or subcontract for the use of
such equipment. We do no expect to engage in any material research and
development activities during the next twelve months. The exploration of and
drilling for oil and gas reserves is risky, uncertain and capital intensive. No
assurance can be given that we will increase our oil and gas operations to the
extent we anticipate or that if increased, our new acquisitions and exploration
programs will prove to be successful.

ITEM 7. FINANCIAL STATEMENTS

The financial statements and supplementary data are included beginning
immediately following the signature page to this report. See Item 13 for a list
of the financial statements and financial statement schedules included.

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

Not applicable.

PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

-15-

EXECUTIVE OFFICERS, DIRECTORS AND KEY EMPLOYEES

Directors serve until the next annual meeting of the stockholders; until
their successors are elected or appointed and qualified, or until their prior
resignation or removal. Officers serve for such terms as determined by our
board of directors. Each officer holds office until such officer's successor is
elected or appointed and qualified or until such officer's earlier resignation
or removal. No family relationships exist between any of our present directors
and officers.

The following table sets forth certain information, as of April 8, 2003,
with respect to our directors and executive officers.

Date of Election
or Appointment
Name Positions Held Age as Director
---- -------------- --- ------------------
Harvey Lalach President, 37 September 12, 2002
Chief Executive and Financial
Officer, Director

James Golla Secretary, Treasurer, Director 70 April 23, 2002

The following is a brief account of the business experience of each of our
directors and executive officers during the past five years or more.

Harvey Lalach has served as a director for us since September 12, 2002, as
a vice president from September 19, 2002 through December 6, 2002, as our
president and chief executive officer since December 6, 2002 and as our chief
financial officer since December 13, 2002. He also serves as president, chief
executive and financial officer and as a director for each of Assure Oil & Gas
Corp. and Westerra 2000 Inc. He is currently also the vice-president and a
director of Instapay Systems Corp., a company that provides encryption
technology for debit credit card transactions, whose common shares are publicly
traded on the OTC Bulletin Board. Mr. Lalach was employed in the investment
industry from 1987 to 1997 where he served as a securities trader, a floor
trader and ultimately a branch manager for Green Line Investor Services, Inc.
Mr. Lalach was the manager of administration and corporate relations for Goldtex
Resources Ltd., a public mining company listed on TSX Venture Exchange Inc.,
from July 1997 to November 1998. He was the founder, president and director of
GlobalNetCare, Inc. an Internet company whose shares are publicly traded on the
OTC Bulletin Board, from November 1998 to March 2001. From September 2001 to
July 2002, Mr. Lalach was the vice-president and director of Aubryn
International Corp., a company that was mining for spring water in Southern
California whose shares are publicly on the OTC Bulletin Board.

Mr. Golla has served as a director of ours since April 23, 2002. He served
as our interim president and chief executive officer from August 1, 2002 until
September 12, 2002. He has served as our secretary and treasurer since August
1, 2002. Mr. Golla was a sports and business journalist with the Globe and
Mail, Canada's national newspaper, from 1954 until his retirement in November

-16-

1996. Mr. Golla is also currently a director of Altair Nanotechnologies Inc.
and has been since May 1994, a company that is developing nanomaterial products
and is listed on the NASDAQ small-cap market. Mr. Golla is a director of
several other public companies including Apogee Minerals Ltd. (since February
1998), a public oil and gas exploration company listed on the TSX Venture
Exchange, Inc., European Gold, a public gold exploration company listed on the
TSX Venture Exchange, Inc., Radiant Energy Corp., a high tech company
manufacturing products for the airline industry listed on the TSX Venture
Exchange, Inc., and Barton Bay Resources, a public oil and gas company listed on
the TSX Venture Exchange, Inc.

BOARD OF DIRECTORS

Our directors presently receive no remuneration for acting as such.
Directors may however be reimbursed their expenses, if any, for attendance at
meetings of the Board of Directors. Our Board of Directors may designate from
among its members an executive committee and one or more other committees. No
such committees have been appointed to date.

COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

Our common stock is not registered pursuant to Section 12 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). Accordingly, our
officers, directors and principal shareholders are not subject to the beneficial
ownership reporting requirements of Section 16(a) of the Exchange Act.

ITEM 10. EXECUTIVE COMPENSATION

The following table sets forth information concerning the total
compensation paid or accrued by us during the three fiscal years ended December
31, 2002 to (i) all individuals that served as our chief executive officer or
acted in a similar capacity for us at any time during the fiscal year ended
December 31, 2002 and (ii) all individuals that served as executive officers of
ours at any time during the fiscal year ended December 31, 2002 that received
annual compensation during the fiscal year ended December 31, 2002 in excess of
$100,000.

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SUMMARY COMPENSATION TABLE

Annual Compensation Long-Term Compensation

Fiscal Year Other Restricted All Other
Name and Ended Compen- Options/ Stock LTIP Compen-
Principal Position December 31, Salary Bonus sation SARs Awards Payouts sation
------------------ ------------ ---------- ----- -------- ---------- ---------- ------- ---------

Ed Kaplan
President and CEO 2002 0 0 0 0 0 0 0
2001 0 0 0 0 0 0 0
2000 0 0 0 0 0 0 0
Doug Kaplan
President and CEO 2002 0 0 0 0 0 0 0
2001 0 0 0 0 0 0 0
2000 0 0 0 0 0 0 0
James Golla
President and CEO 2002 0 0 0 20,000(1) 0 0 0
2001 0 0 0 0 0 0 0
2000 0 0 0 0 0 0 0
Suzanne West
President and CEO 2002 $31,150(2) 0 0 0(3) 0 0 0
2001 0 0 0 0 0 0 0
2000 0 0 0 0 0 0 0
Harvey Lalach
President and CEO 2002 $ 10,384 0 0 100,000(4) 0 0 0
2001 0 0 0 0 0 0 0
2000 0 0 0 0 0 0 0

(1) Consists of 20,000 stock options issued to Mr. Golla on October 1, 2002 with an exercise price
of $2.75 per share. See "Certain Relationships and Related Transactions."
(2) Excludes $34,010 paid to Ms. West as consulting fees for services performed by Ms. West subsequent
to her engagement as our president and chief executive officer.
(3) Ms. West's employment contract provided for the grant of 200,000 stock options to Ms. West. These
options were never issued and upon the termination of Ms. West's employment effective December 6, 2002,
all rights of Ms. West to receive these options were likewise terminated
(4) Consists of 100,000 stock options issued to Mr. Lalach on October 1, 2002 with an exercise price
of $2.75 per share.

Option/SAR Grants In Last Fiscal Year
(Individual Grants)

Number of Securities
Underlying Percent of Total Exercise or
Options/SARs Options/SARs Granted to Base Price Date of
Name Granted (#) Employees in Fiscal Year (per share) Grant Expiration Date
------------- --------------------- ------------------------- ------------- --------------- ------------------

Ed Kaplan 0 Not Applicable ("N/A") N/A N/A N/A
Doug Kaplan 0 N/A N/A N/A N/A
James Golla 20,000 16.66% $ 2.75 October 1, 2002 September 30, 2005
Suzanne West 0 (1) N/A(2) N/A N/A N/A
Harvey Lalach 100,000 83.33% $ 2.75 October 1, 2002 September 30, 2005

(1) Ms. West's employment contract provided for the grant of 200,000 stock options to Ms. West. These options
were never issued and upon the termination of Ms. West's employment effective December 6, 2002, all rights of Ms.
West to receive these options were likewise terminated.

(2) Does not take into account 200,000 stock options that were issuable to Suzanne West (the "West Options")
pursuant to her September 17, 2002 Employment Agreement or 150,000 stock options that were issuable to Cameron
Smigel (the "Smigel Options") pursuant to his September 16, 2002 Employment Agreement. Due to the December 6, 2002
termination of the West Employment Agreement and the December 13, 2002 termination of the Smigel Employment
Agreement, the West Options and Smigel Options were never issued.

STOCK OPTION PLANS

We have not adopted any stock option plans since our inception.

STOCK APPRECIATION RIGHTS

We have not granted any stock appreciation rights to the named executive
officers or any other persons since our inception.

-18-

AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR END OPTION/SAR VALUES

Number of Securities
Shares Underlying Unexercised Value of Unexercised In-
Acquired Options/SARs at Fiscal the-Money Options/SARs
On Value Year End (#) at Fiscal Year End ($)
Exercise Realized Exercisable/ Exercisable/
Name (#) ($) Unexercisable Unexercisable
------------- --------- --------- ----------------------- --------------------------

Ed Kaplan N/A N/A N/A N/A
Doug Kaplan N/A N/A N/A N/A

James Golla N/A N/A 20,000 $3,100 Exercisable
10,000 Exercisable $3,100 Unexercisable
10,000 Unexercisable

Suzanne West N/A N/A N/A N/A

100,000
50,000 Exercisable $15,500 Exercisable
Harvey Lalach N/A N/A 50,000 Unexercisable $15,500 Unexercisable

LONG TERM INCENTIVE PLAN AWARDS

We made no long-term incentive plan awards to the named executive officers or
any other persons since our inception during the fiscal year ended December 31,
2002.

EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT,
AND CHANGE-IN-CONTROL ARRANGEMENTS

Effective September 12, 2002 we entered into a three-year employment agreement
with Suzanne West whereby Ms. West agreed to serve as our president and chief
executive officer. The agreement provided for an annual base salary of CDN
$100,000, the grant of 200,000 5 year non-statutory stock options exercisable at
$2.75 per share, and performance bonuses tied to our achievement of specified
oil and gas production levels. Effective December 6, 2002 Ms. West voluntarily
terminated the employment agreement to pursue other interests.

Effective September 30, 2002 we entered into a nine-month employment agreement
with Harvey Lalach to serve as our Vice-President-Corporate Affairs. The
agreement was automatically renewable for successive six-month terms unless
either party delivered written notice of termination to the other at least 15
days prior to the end of the then existing term. Upon the December 6, 2002
resignation of Suzanne West, Mr. Lalach succeeded to the positions of president
and chief executive officer and the agreement was deemed terminated except with
respect to the options granted to Mr. Lalach thereunder. The agreement provided
for a base salary of CDN $3,000 per month and the grant of 100,000 3-year

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non-statutory stock options with an exercise price of $2.75 per share. The
options contain anti-dilution provisions. 50,000 of the options vested on March
31, 2003. The remaining 50,000 options vest on March 31, 2004. In recognition
of his added duties, since December 6, 2002 we have been paying Mr. Lalach a
salary of CDN$7,500 per month (approximately US$5,000) under a verbal month to
month arrangement.

COMPENSATION OF DIRECTORS

We do not presently compensate our directors for serving as directors.
Both of our present directors are also employees, however, and receive
compensation from us in their employment capacities.

REPORT ON REPRICING OF OPTIONS/SARS

During the fiscal year ended December 31, 2002 we did not adjust or amend
the exercise price of any stock options or SARs.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information with respect to the beneficial
ownership of our common stock known by us as of April 8, 2003 by (i) each person
or entity known by us to be the beneficial owner of more than 5% of our common
stock , (ii) each of our directors, (iii) each of our executive officers, and
(iv) all of our directors and executive officers as a group. The percentages in
the table have been calculated on the basis of treating as outstanding for a
particular person, all shares of our common stock outstanding on such date and
all shares of our common stock issuable to such holder in the event of exercise
of outstanding options, warrants, rights or conversion privileges owned by such
person at said date which are exercisable within 60 days of such date. Except
as otherwise indicated, the persons listed below have sole voting and investment
power with respect to all shares of our common stock owned by them, except to
the extent such power may be shared with a spouse.

Name and Address Amount and Nature of Percentage
of Beneficial Owner Title of Class Beneficial Ownership of Class
-------------------------------- ----------------------------- --------------------- -----------

Harvey Lalach
2575 Alberta Court
Kelowna, British Columbia 50,000 shares,
V1W 2X8 Common Stock, $.001 per share Direct (1) .32%
-------------------------------- ----------------------------- --------------------- -----------
James Golla
829 Terlin Blvd. 10,000 shares,
Mississauga, Ontario L5H 1T1 Common Stock, $.001 per share Direct (2) .065%
-------------------------------- ----------------------------- --------------------- -----------
All officers and directors as a Common Stock, $.001 per share 60,000 shares,
group (2 persons) Direct (3) .389%
-------------------------------- ----------------------------- --------------------- -----------

(1) Includes 50,000 presently exercisable stock options.
(2) Includes 10,000 presently exercisable stock options.
(3) Includes 60,000 presently exercisable stock options.

-20-

CHANGES IN CONTROL

Not Applicable.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

In July, 2000 we issued 300,000 shares of our common stock to our founder
and president Ed Kaplan in exchange for a $300 subscription receivable, and
issued 300,000 shares of our common stock to our secretary Douglas Kaplan in
exchange for a $300 subscription receivable. These shares were valued at par
value, $.01 per share.

In July, 2000 we issued 3,000,000 shares of our common stock to Kaplan
Design Group in exchange for twenty-seven toy designs from Kaplan Design Group.
These shares were valued at par value, $.001 per share for a total of $3,000. Ed
Kaplan Associates paid $3,000 for the toy designs and then transferred them to
Kaplan Design Group for no additional consideration.

In July, 2001 we issued 10,000 shares of common stock, at par value $.001,
to our then newly appointed director Ron Beit-Halachmy.

On August 27, 2002 we entered into a Stock Exchange Agreement with
Inventoy.com International Inc., Kaplan Design Group, Douglas Kaplan, Ed Kaplan
and Ron Beit-Halachmy whereby we transferred ownership of our then inactive
subsidiary, Inventoy.com International Inc., to Kaplan Design Group, and Messrs.
Beit-Halachmy, Kaplan and Kaplan in exchange for an aggregate of 14,440,000
shares of our common stock. For a more detailed discussion of this transaction
see "Item 1. Description of Business".

Effective October 1, 2002 we issued 100,000 and 20,000 stock options,
respectively, to Harvey Lalach and James Golla. The options have a three year
term that expires on September 30, 2005 and are exercisable for the purchase of
shares of our common stock at an exercise price of $2.75 per share.

Effective September 12, 2002 we entered into a three year employment
agreement with Suzanne West. The agreement was terminated effective December 6,
2002. See "Item 10. Executive Compensation - Employment Contracts, Termination
of Employment, and Change in Control Arrangements."

Effective September 30, 2002 we entered into a nine month employment
agreement with Harvey Lalach. See "Item 10. Executive Compensation - Employment
Contracts, Termination of Employment, and Change in Control Arrangements."

Effective September 16, 2002 we entered into a two year employment
agreement with Cameron Smigel pursuant to which he served as a vice president
and as our chief financial officer until the termination of his employment with
us effective December 13, 2002. The agreement provided for an annual base salary
of CDN $86,000 and the issuance of 150,000 stock options exercisable for the
purchase of one share of our common stock at a price of $2.75 per share. The
options were never issued and upon Mr. Smigel's termination of his employment,
our obligation to issue the options ceased.

-21-

ITEM 13. EXHIBITS, LIST AND REPORTS ON FORM 8-K

Financial Statements Page
-------------------- ----
Independent Auditors Report - Rogoff & Company, P.C . . . . . . . . 27

Consolidated Balance Sheet as at December 31, 2002. . . . . . . . . 28

Consolidated Statements of Operations and Comprehensive Loss for
the years ended December 31, 2002 and December 31, 2001 . . . . . . 29

Consolidated Statement of Stockholders' Equity for the years
ended December 31, 2002 and December 31, 2001. . . . . . . . . . . 30

Consolidated Statements of Cash Flows for the years ended
December 31, 2002 and December 31, 2001 . . . . . . . . . . . . . . 31

Notes to Financial Statements . . . . . . . . . . . . . . . . . . . 32

FINANCIAL STATEMENT SCHEDULES

All financial statement schedules are omitted because they are not
applicable or the required information is shown in the financial statements or
notes thereto.

REPORTS ON FORM 8-K

No reports on Form 8-K were filed during the quarter ended December 31,
2002.

EXHIBITS

The following exhibits are included as part of this report:

SEC Report
Reference
Exhibit No. Number Description
----------- ---------- ---------------------------------------------------------------

2.1 2.1 Asset Purchase Agreement dated March 14, 2002 between
Registrant and Inventoy.com International, Inc.(1))

2.2 2.1 Acquisition Agreement dated April 23, 2002 by and among
Registrant, Assure Oil & Gas Corp. ("Assure") and the
shareholders of Assure (2)

-22-

SEC Report
Reference
Exhibit No. Number Description
----------- ---------- ---------------------------------------------------------------
2.3 2.1 Share Purchase Agreement dated May 30, 2002 by and
among Assure Oil and Gas Corp., and Gary Freitag, Garth R.
Keyte and Evan Stephens.(3)

2.4 2.1 Stock Exchange Agreement dated August 27, 2002 by and
among Registrant, Inventoy.com International Inc., Kaplan
Design Group, Douglas Kaplan, Ed Kaplan and Ron Beit-
Halachmy.(4)

3.1 3.1 Certificate of Incorporation of Registrant as filed August 11,
1999.(5)

3.2 3.1 Certificate of Amendment to Certificate of Incorporation of
Registrant filed February 15, 2002.(6)

3.3 3.1 Certificate of Amendment to Certificate of Incorporation of
Registrant filed May 1, 2002.(2)

3.4 3.2 By-Laws of Registrant.(5)

4.1 4.1 Registration Rights Agreement dated as of April 23, 2002 by
and between Registrant and the shareholders of Assure Oil &
Gas Corp.(1)

4.3 Certificate of Designation, Preferences and Rights of Series A
Preferred Stock of Registrant as filed on June 7, 2002

4.4. 4.1 Certificate of Designation, Preferences and Rights of Series B
Preferred Stock of Registrant as filed on August 28, 2002.(4)

-23-

SEC Report
Reference
Exhibit No. Number Description
----------- ---------- -----------------------------------------------------------

10.1 10.1 Promissory Note dated April 23, 2002 (2)

10.2 10.1 Convertible Preferred Stock Purchase Agreement dated
August 27, 2002 (4)

10.3 10.1 Employment Agreement dated as of September 12, 2002
between Registrant and Suzanne West.(7)

10.4 Convertible Preferred Stock Purchase Agreement dated as of
June 1, 2002

10.5 Employment Agreement dated as of September 17, 2002
between Registrant and Harvey Lalach

10.6 Stock Option Agreement made as of September 17, 2002
between Registrant and Harvey Lalach

10.7 Stock Option Agreement made as of October 1, 2002 between
Registrant and James Golla

10.8 Stock Option Agreement made as of October 1, 2002 between
Registrant and Primoris Group Inc.

10.9 Subordinated Promissory Note dated December 28, 2002

10.10 Subordinated Promissory Note with Warrant dated March 15,
2003

21 List of subsidiaries of Registrant

99.1 Certification of Chief Executive and Financial Officer

(1) Filed with the Securities and Exchange Commission on May 1, 2002 as an
exhibit, numbered as indicated above, to the Registrant's Quarterly Report
on Form 10-QSB for the quarterly period ended January 31, 2002, which
exhibit is incorporated herein by reference.

(2) Filed with the Securities and Exchange Commission on May 8, 2002, as an
exhibit, numbered as indicated above, to the Registrant's Current Report
on Form 8-K dated April 23, 2002, which Exhibit is incorporated herein by
reference.

(3) Filed with the Securities and Exchange Commission on June 14, 2002, as an
exhibit, numbered as indicated above, to the Registrant's Current Report
on Form 8K dated May 30, 2002, which exhibit is incorporated herein by
reference.

-24-

(4) Filed with the Securities and Exchange Commission on September 11, 2002,
as an exhibit, numbered as indicated above, to the Registrant's Current
Report on Form 8K dated August 27, 2002, which exhibit is incorporated
herein by reference.

(5) Filed with the Securities and Exchange Commission on May 25, 2001 as an
exhibit, numbered as indicated above, to the Registrants' registration
statement on Form SB-2, which exhibit is incorporated herein by reference.

(6) Filed with the Securities and Exchange Commission on April 8, 2002, as an
exhibit, numbered as indicated above, to the Registrant's Transition
Report on Form 10-QSB for the transition period from August 1, 2001 to
December 31, 2001, which exhibit is incorporated herein by reference.

(7) Filed with the Securities and Exchange Commission on November 19, 2002, as
an exhibit, numbered as indicated above to the Registrant's Quarterly
Report on Form 10-QSB for the quarterly period ended September 30, 2002,
which exhibit is incorporated herein by reference.

ITEM 14. CONTROLS AND PROCEDURES

Our principal executive officer and principal financial officer evaluated
the effectiveness of our disclosure controls and procedures as of a date within
90 days prior to the filing of this report. Based on this evaluation, our
principal executive officer and principal financial officer have concluded that
our controls and procedures are effective in providing reasonable assurance that
the information required to be disclosed in this report is accurate and complete
and has been recorded, processed, summarized and reported within the time period
required for the filing of this report. Subsequent to the date of this
evaluation, there have not been any significant changes in our internal controls
or, to our knowledge, in other factors that could significantly affect our
internal controls.

-25-

SIGNATURES

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

ASSURE ENERGY INC.

Dated: April 14, 2003 By: /s/ Harvey Lalach
-------------------
Harvey Lalach
President

Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this report has been signed below by the following persons on behalf of
the Registrant and in the capacities indicated on this 14th day of April, 2003.

/s/ Harvey Lalach
-------------------------------------------------------
Harvey Lalach, President, Chief Executive Officer,
Chief Financial and Accounting Officer, Director

/s/ James Golla
-------------------------------------------------------
James Golla, Director

-26-

Independent Auditors' Report
----------------------------

To the Stockholders' and the Board of Directors
of Assure Energy, Inc.

We have audited the accompanying consolidated balance sheet of Assure Energy
Inc. and Subsidiaries (the "Company") as of December 31, 2002, and the related
consolidated statements of operations and comprehensive loss, stockholders'
equity and cash flows for each of the two years 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 audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. 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 consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Assure Energy, Inc.
and Subsidiaries at December 31, 2002, and the consolidated results of their
operations and their cash flows for each of the two years then ended, in
conformity with accounting principles generally accepted in the United States of
America.

/s/ Rogoff & Company, PC

New York, New York
March 28, 2003

ASSURE ENERGY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 2002

ASSETS

Current Assets:
Cash $1,216,754
Accounts receivable 1,199,077
Prepaid expenses 8,893
-----------

Total current assets 2,424,724

Restricted cash 54,893

Property and equipment, net 4,681,586
-----------

$7,161,203
===========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
Accounts payable and accrued expenses $1,028,100
-----------

Deferred income tax payable 28,156
Long term debt 633,871
Obligation for site restoration 42,913
-----------

1,733,040
-----------

Commitments and Contingencies

Stockholders' Equity:
Preferred stock; 4,977,250 shares authorized
Series A; stated value $100, 5% cumulative dividend; 17,500 shares
authorized, issued and outstanding 1,750,000
Series B; stated value $100, 5% cumulative dividend, 5,250 shares
authorized, issued and outstanding 525,000
Common stock; $.001 par value; 100,000,000 shares
authorized; 15,366,000 shares issued and outstanding 15,366
Additional paid in capital 3,926,250
Accumulated other comprehensive income 72,699
Accumulated deficit (861,152)
-----------

Total stockholders' equity 5,428,163
-----------

$7,161,203
===========

See Notes to Consolidated Financial Statements.

ASSURE ENERGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
FOR THE YEARS ENDED DECEMBER 31,

2002 2001
--------------------- ------------------

Revenue:
Oil and gas revenue $ 1,136,896 $ -
--------------------- ------------------

Expenses:
Production expenses 299,622 -
Royalties 174,693 -
Depreciation, depletion and site restoration 724,247 -
Interest 24,178 -
General and administrative 677,932 59,383
--------------------- ------------------

Total expenses 1,900,672 59,383
--------------------- ------------------

Loss from operations before provision for income taxes (763,776) (59,383)

Provision for deferred income taxes 28,386 -
--------------------- ------------------

Net loss (792,162) (59,383)

Other comprehensive income, net of taxes:
Foreign translation gain 72,699 -
--------------------- ------------------

Comprehensive loss $ (719,463) $ (59,383)
===================== ==================

Basic loss per share (.03) $ (.002)
===================== ==================

Basic weighted average common shares outstanding 27,924,740 31,070,762
===================== ==================

See Notes to Consolidated Financial Statements.

ASSURE ENERGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001

Preferred Stock Common Stock Additional
------------------------------ --------------------------- Paid In Accumulated
Shares Amount Shares Amount Capital Deficit
--------------- ------------- ------------ ------------- ------------- ---------------

Balance, December 31, 2000 - $ - 24,750,000 $ 24,750 $ 51,836 $ (9,607)

Issuance of common stock
to director - - 60,000 60 - -

Sale of common stock
under private placement - - 6,516,000 6,516 633 -

Net loss - - - - - (59,383)
--------------- ------------- ------------ ------------- ------------- ---------------

Balance, December 31, 2001 - - 31,326,000 31,326 52,469 (68,990)

Issuance of common stock
for acquisition - - 3,600,000 3,600 2,104,821 -

Sale of common stock under
private placement - - 2,100,000 2,100 1,747,900 -

Sale of Series A
Preferred Stock 5,000 500,000 - - - -

Conversion of long term debt
to Series A Preferred Stock 12,500 1,250,000 - - - -

Sale of assets in exchange
for common stock - - (21,660,000) (21,660) 21,060 -

Sale of Series B Convertible
Preferred Stock 5,250 525,000 - - - -

Other comprehensive income - - - - - -

Net loss - - - - - (792,162)
--------------- ------------- ------------ ------------- ------------- ---------------

Balance, December 31, 2002 22,750 $ 2,275,000 15,366,000 $ 15,366 $ 3,926,250 $ (861,152)
=============== ============= ============ ============= ============= ===============

Accumulated
Other Total
Subscription Comprehensive Stockholders'
Receivable Income Equity
--------------- ------------ -------------

Balance, December 31, 2000 $ (600) $ - $ 66,379

Issuance of common stock
to director - - 60

Sale of common stock
under private placement - - 7,149

Net loss - - (59,383)
--------------- ------------ -------------

Balance, December 31, 2001 (600) - 14,205

Issuance of common stock
for acquisition - - 2,108,421

Sale of common stock under
private placement - - 1,750,000

Sale of Series A
Preferred Stock - - 500,000

Conversion of long term debt
to Series A Preferred Stock - - 1,250,000

Sale of assets in exchange
for common stock 600 - -

Sale of Series B Convertible
Preferred Stock - - 525,000

Other comprehensive income - 72,699 72,699

Net loss - - (792,162)
--------------- ------------ -------------

Balance, December 31, 2002 $ - $ 72,699 $ 5,428,163
=============== ============ =============

See Notes to Consolidated Financial Statements.

ASSURE ENERGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31,

2002 2001
------------ ---------

Cash flows from operating activities:

Net loss $ (792,162) $(59,383)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and depletion 641,928 -
Allowance for site restoration 53,000 -
Deferred income taxes 28,156 -
Sale of toy patents 3,000 -
Common stock issued for services - 50,000
Changes in operating assets and liabilities:
Accounts receivable (930,089) -
Prepaid expenses (229) -
Accounts payable and accrued expenses 965,350 (1,567)
------------ ---------

Net cash used in operating activities (31,046) (10,950)
------------ ---------

Cash flows from investing activities:
Purchases of property and equipment (1,394,521) -
Restricted cash (54,893) -
Acquisition of business (2,051,645) -
------------ ---------

Net cash used in investing activities (3,501,059) -
------------ ---------

Cash flows from financing activities:
Proceeds from sale of preferred stock 1,025,000 -
Proceeds from sale of common stock 1,750,000 7,149
Proceeds from long term debt 1,883,871 -
------------ ---------

Net cash provided by financing activities 4,658,871 7,149
------------ ---------

Effect of exchange rate changes on cash 72,699 -
------------ ---------

Increase (decrease) in cash 1,199,465 (3,801)

Cash, beginning of year 17,289 21,090
------------ ---------

Cash, end of year $ 1,216,754 $ 17,289
============ =========

Supplemental disclosure of cash flow information:
Cash paid during the year for interest $ 24,178 $ -
============ =========

Supplemental disclosure of non-cash financing activities:
Conversion of debt to Series A Preferred Stock $ 1,250,000 $ -
============ =========
Common stock issued for acquisition $ 2,108,421 $ -
============ =========
Common stock issued for deferred offering costs $ - $ 50,000
============ =========

See Notes Consolidated Financial Statements.

ASSURE ENERGY, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2002

NOTE 1 - DESCRIPTION OF BUSINESS AND ACQUISITIONS

Assure Energy, Inc. formerly Inventoy.com (the "Company") was incorporated
in the State of Delaware on August 11, 1999. From inception through March
31, 2002, the Company had been in the developmental stage. On March 14,
2002 the Company ceased business in the toy design business. On August 27,
2002 the Company sold its toy designs to certain former officers and
shareholders of the Company in exchange for all of their common stock in
the Company which was 21,660,000 shares. After the transaction the Company
cancelled these shares and returned them to the status of authorized but
unissued shares of common stock. On May 1, 2002 the Company changed its
name to Assure Energy, Inc.

On February 22, 2002, the Board of Directors of the Company approved a
change in the Company's fiscal year to December 31 from July 31.

The board of directors authorized a 4-for-1 common stock split with a
record date of February 25, 2002 and another 3-for-2 common stock split
with a record date of September 10, 2002. All share and per share
information has been retroactively restated to reflect these stock splits.

Effective April 1, 2002 the Company acquired all of the issued and
outstanding common stock of Assure Oil & Gas Corp., ("Oil & Gas") a
Canadian corporation, engaged in the exploration, development and
production of oil and gas properties in Alberta, Canada, for 3,600,000
units. Each unit consists of one share of the Company's common stock, one A
warrant which entitles the holder to acquire another share of the Company's
common stock at $.33 per share and one B warrant which entitles the holder
to acquire an additional share of the Company's common stock at $.67 per
share. The A warrants are exercisable from October 1, 2003 through
September 30, 2007 while the B warrants are exercisable from July 1, 2004
through June 30, 2008. The purchase price was derived entirely from the
fair value of the Company's common stock as the A and B warrants were
determined to have deminimus value at the date of acquisition.

The acquisition of Oil & Gas was accounted for as a purchase. The purchase
price of $2,108,421 has been allocated to the assets acquired and
liabilities assumed based upon their fair values at the date of
acquisition. The purchase price included excess of the fair value over book
basis of $992,482 which is attributable entirely to the oil and natural gas
properties based upon an independent evaluation of proved oil and natural
gas reserves. Total consideration paid has been allocated as follows:

Current Assets $ 369,028
Oil and Natural Gas Properties 1,887,435
Accounts Payable and Accrued Expenses (148,042)
-----------

Purchase price $2,108,421
===========

Effective April 1, 2002 the Company acquired all of the issued and
outstanding common stock of Westerra 2000, Inc. ("Westerra"), a Canadian
corporation, engaged in the exploration, development and production of oil
and gas properties in Alberta and Saskatchewan, Canada, for $2,060,345 in
cash.

ASSURE ENERGY, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2002

NOTE 1 - DESCRIPTION OF BUSINESS AND ACQUISITIONS - continued

The acquisition of Westerra was accounted for as a purchase. The purchase
price has been allocated to the assets acquired and liabilities assumed
based upon their fair values at the date of acquisition. Total
consideration paid has been allocated as follows:

Current Assets $ 8,700
Oil and Natural Gas Properties 2,051,645
----------

Purchase price $2,060,345
==========

The following unaudited pro forma consolidated results of operations for
the year ended December 31, 20021assume that the Oil & Gas and Westerra
acquisitions had occurred as of January 1, 2002, giving effect to purchase
accounting adjustments, if any. The pro forma data is for informational
purposes only and may not necessarily reflect the actual results of
operations had Oil & Gas and Westerra been operated as a part of the
Company since January 1, 2002.

Revenue:
Oil and gas $ 1,439,699
Other 6,704
------------
Total revenue $ 1,446,403
============

Net loss $ (594,460)
============

Earning per share - basic and diluted (a) $ (.02)
============

Weighted average common stock outstanding - basic and 27,924,740
============
diluted

(a) Reflects the effect of cumulative preferred stock dividends.

NOTE 2 - BASIS OF PRESENTATION

The accompanying consolidated financial statements present the results of
operations of the Company for the years ended December 31, 2002 and 2001
and its wholly owned subsidiaries, Oil & Gas and Westerra from April 1,
2002, the effective date of the acquisitions, through December 31, 2002.
All material intercompany accounts and transactions have been eliminated in
consolidation.

ASSURE ENERGY, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2002

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Concentration of credit risk

Concentrations of credit risk with respect to trade receivables are limited
to customers dispersed primarily across Canada. All trade receivables are
concentrated in the oil and natural gas exploration and production segment
of the economy; accordingly the Company is exposed to business and economic
risk. Although the Company does not currently foresee a concentrated credit
risk associated with these trade receivables, repayment is dependent upon
the financial stability of the oil and gas industry.

Property and equipment

Oil and gas properties are accounted for using the full cost method of
accounting, whereby all costs associated with acquisition, exploration and
development of oil and gas properties, including directly related internal
costs, are capitalized on a country by country cost center basis. The cost
of drilling and equipping wells, both exploratory and development are
capitalized. Capitalized costs of producing oil and gas properties, after
allowance for estimated abandonment and salvage costs, are depleted using
the unit of production method based upon the estimated recoverable proven
oil and gas reserves.

Costs of acquiring and evaluating unproved properties are initially
excluded from depletion calculations. These unevaluated properties are
assessed annually to ascertain whether impairment has occurred. When proved
reserves are assigned or the property is considered to be impaired, the
cost of the property or the amount of impairment is included in the
depletion calculation.

In applying the full cost method, the Company performs a ceiling test on
properties which restricts the capitalized costs less accumulated depletion
from exceeding an amount equal to the estimated undiscounted value of
future net revenues from proved oil and natural gas reserves, as determined
by independent engineers, based upon sales prices achievable under existing
contracts and posted average reference prices in effect at year end, and
current costs, after deducting estimated future general and administrative
expenses, production related costs, financing costs, future site
restoration costs and income taxes.

Furniture and fixtures are depreciated over the estimated useful lives of
the assets, generally five years. Maintenance and repairs are expensed as
incurred while major renewals and improvements are capitalized.

Site Restoration

Site restoration costs are costs being accrued for the future restoration
of the property back to its original condition. The accrual is based upon
management's best estimate of the future costs calculated on the unit of
production basis, utilizing proved producing reserves.

ASSURE ENERGY, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2002

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued

Impairment of long-lived assets

In accordance with Statement of Financial Accounting Standards ("SFAS") No.
144 "Accounting for the Impairment or Disposal of Long-Lived Assets" (SFAS
144), the Company reviews long-lived assets for impairment whenever
circumstances and situations change such that there is an indication that
the carrying amounts may not be recovered. In such circumstances, the
Company will estimate the future cash flows expected to result from the use
of the asset and its eventual disposition. Future cash flows are the future
cash inflows expected to be generated by an asset less the future outflows
expected to be necessary to obtain those inflows. If the sum of the
expected future cash flows (undiscounted and without interest charges) is
less than the carrying amount of the asset, the Company will recognize an
impairment loss to adjust to the fair value of the asset. Management
believes that there are no long-lived impaired assets at December 31, 2002.

Income Taxes

The Company uses the liability method for income taxes as required by SFAS
No. 109 "Accounting for Income Taxes." Under this method, deferred tax
assets and liabilities are determined based on differences between
financial reporting and tax basis of assets and liabilities. Deferred tax
assets and liabilities are measured using enacted tax rates and laws that
will be in effect when the differences are expected to reverse. Valuation
allowances are established when it is more likely than not that the
deferred tax assets will not be realized.

Joint Ventures

Substantially all of the Company's operations are carried out through joint
ventures with unrelated third parties. These financial statements reflect
only the Company's proportionate interest in such ventures.

Revenue Recognition

Revenue from the production of oil and natural gas is earned when title
passes to the customer.

Stock based compensation

The Company accounts for stock based compensation in accordance with SFAS
No. 123, "Accounting for Stock-Based Compensation". Accordingly, the
Company has elected to use the intrinsic method to account for stock based
compensation relating to employees. When the exercise price of employee
stock options equals or exceeds the market price of the underlying stock as
of the grant date, no compensation expense is recorded. As required, the
Company provides the pro forma effects of employee stock based compensation
using the fair value method. With respect to stock based compensation
granted to nonemployees, the Company records an expense equal to the fair
value of the option on the measurement date, which is either the earlier of
the date at which a commitment for performance is reached or the date at
which the service is complete.

ASSURE ENERGY, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2002

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued

Loss Per Share

The Company presents basic loss per share, and if appropriate, diluted
earnings per share in accordance with the provisions of SFAS No. 128,
"Earnings Per Share" ("SFAS 128").

Under SFAS 128 basic net loss available to common stockholders per share is
computed by dividing the net loss for the year by the weighted average
number of common shares outstanding for the year. Net loss available to
common stockholders is computed by taking the net loss and adding
cumulative dividends on preferred stock for the year. Diluted net earnings
per share is computed by dividing the net earnings for the period by the
weighted average number of common share equivalents during the year. Common
stock equivalents include warrants and options issued during the year.

Comprehensive Loss

Comprehensive loss consists of net income for the period and foreign
currency translation adjustments.

Financial Instruments

The carrying amounts of financial instruments, including cash, accounts
receivable, and accounts payable and accrued expenses approximate fair
value at December 31, 2002 because of the short term maturity of the
instruments. The carrying value of the long term debt approximates fair
value as of December 31, 2002 based upon debt terms available for entities
under similar terms. The carrying amount of the preferred stock is not
practical to estimate without incurring excessive cost, as this instrument
is not publicly traded.

Foreign Currency Translation and Transactions

The assets and liabilities of the foreign subsidiaries are translated at
current exchange rates and related revenues and expenses at average
exchange rates in effect during the year. Resulting translation
adjustments, if material, are recorded as a separate component of
stockholders' equity while foreign currency transaction gains and losses
are included in operations. At December 31, 2002 the foreign currency
translation adjustment was not material and included in general and
administrative expenses in the consolidated statement of operations.

Use of Estimates

The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America required
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and the disclosure of contingent assets
and liabilities at the date of the financial statements and revenue and
expenses during the reporting period. Actual results could differ from
those estimated.

ASSURE ENERGY, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2002

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued

New Accounting Pronouncements

In June 2001 the Financial Accounting Standards Board ("FASB") issued SFAS
No. 141, "Business Combinations" ("SFAS 141"). SFAS 141 requires the
purchase method of accounting for all business combinations initiated after
June 30, 2001 and eliminates the pooling-of-interest method. SFAS 141
further clarifies the criteria for recognition of intangible assets
separately from goodwill.

In June 2001 the FASB issued SFAS No. 142, "Goodwill and Other Intangible
Assets," ("SFAS 142"). SFAS 142 eliminates the amortization of goodwill and
indefinite lived intangible assets and initiates an annual review for
impairment. Identifiable intangible assets with determinable useful lives
will continue to be amortized. The Company adopted this Statement as of
January 1, 2002 and management does not believe that this Statement will
have a material impact on the financial statements.

In August 2001, the FASB issued SFAS No. 143, "Accounting for Asset
Retirement Obligations" ("SFAS 143"), which is effective for fiscal years
beginning after June 15, 2002. It requires that obligations associated with
the retirement of a tangible long-lived asset be recorded as a liability
when those obligations are incurred, with the amount of the liability
initially measured at fair market value. Upon initially recognition of an
accrued retirement obligation, an entity must capitalize the cost by
recognizing an increase in the carrying amount of the related long-lived
asset. Over time, the liability is accreted to its present value each
period, and the capitalized cost is depreciated over the useful life of the
related asset. Upon settlement of the liability, an entity either settles
the obligation for its recorded amount or incurs a gain or loss upon
settlement. Management believes the adoption of SFAS 143 will not have a
significant effect on the Company's financial statements.

In July 2002, the FASB issued SFAS No. 146, "Accounting for Costs
Associated with Exit or Disposal Activities" ("SFAS 146"). SFAS 146
requires that a liability for costs associated with an exit or disposal
activity be recognized and measured initially at fair value only when the
liability is incurred. SFAS 146 is effective for exit or disposal
activities that are initiated after December 31, 2002. The Company does not
expect the adoption of SFAS 146 to have a material impact on its operating
results or financial position.

In November 2002, the FASB issued Interpretation No. 45, "Guarantor's
Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness to Others, an interpretation of FASB Statements
No. 5, 57 and 107 and a rescission of FASB Interpretation No. 34" ("FIN
45"). FIN 45 requires the recognition of an initial liability for the fair
value of an obligation assumed by issuing a guarantee. The provision for
the initial recognition and measurement of the liability will be applied on
a prospective basis to guarantees issued or modified after December 31,
2002. The adoption of FIN 45 is not expected to materially affect the
consolidated financial statements.

ASSURE ENERGY, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2002

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued

On December 31, 2002, the FASB issued SFAS No. 148, "Accounting for
Stock-Based Compensation-Transition and Disclosure." SFAS No. 148 amends
SFAS No. 123, and provides alternative methods of transition for a
voluntary change to the fair value based method of accounting for
stock-based employee compensation. In addition, SFAS 148 amends the
disclosure requirements of SFAS 123 to require more prominent and more
frequent disclosures in financial statements of the effects of stock-based
compensation. The interim disclosure requirements of SFAS No. 148 are
effective for interim periods beginning after December 15, 2002. The
Company's stock-based compensation related to employees and non-employee
directors is recognized using the intrinsic value method in accordance with
Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to
Employees," and thus there is no compensation expense for options granted
with exercise prices equal to the fair value of the Company's common stock
on the date of the grant. The Company is currently evaluating the effect
that SFAS 148 will have on the Company's financial statements, if any.

Management does not believe that recently issued, but not yet effective
accounting pronouncements if currently adopted would have a material effect
on the accompanying financial statements.

NOTE 4 - RESTRICTED CASH

Restricted cash at December 31, 2002 consists of approximately $55,000 held
by an agency of the Alberta Provincial Government which may only be
utilized in the event that the Company does not fulfill its obligation
regarding site restoration.

NOTE 5 - PROPERTY AND EQUIPMENT

Property and equipment, at cost, at December 31, 2002 consists of the
following:

Oil and natural gas properties (including approximately $110,000
of non producing properties) $5,630,705
Furniture and fixtures 13,569
----------

5,644,274
Less accumulated depreciation and depletion 962,688
----------

$4,681,586
==========

ASSURE ENERGY, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2002

NOTE 6 - INCOME TAXES

As of December 31, 2002, the Company has a net operating loss carryforward
of approximately $400,000 which may be utilized to offset future taxable
income for United States Federal and New York State Corporate tax purposes.
A portion of these net operating loss carryforwards begin to expire in 2014
with the majority beginning to expire in 2020. The Company's net operating
loss carryforward may be subject to a substantial limitation due to the
change of ownership rules under Section 382 of the Internal Revenue Code.
There are no timing differences between financial reporting and tax
reporting. This net operating loss carryforward creates a deferred tax
asset of approximately $60,000. Since it is more likely than not that the
Company will not realized a benefit from these net operating loss
carryforwards a 100% valuation allowance has been recorded to reduce the
deferred tax asset to its net realizable value.

The Company's wholly owned subsidiaries have a net operating loss of
approximately $380,000 under The Income Tax Act (Canada). These net
operating losses can be carried back three years and forward seven years to
offset future taxable income. The Canadian entities have recorded a
deferred tax expense of $28,386 for the period from April 1, 2002 through
December 31, 2002 relating to the timing differences between financial
reporting and tax reporting relating to royalty expenses.

NOTE 7 - LONG TERM DEBT

On March 15, 2003 the Company entered into a six year Subordinated
Promissory Note Payable (the "Subordinated Note") with a foreign entity
with a principle balance of $4,500,000. This Subordinate Note accrues
interest at Citibank's prime rate (4.25% per annum at December 31, 2002)
plus 3.5% per annum. No interest will be due until March 14, 2004, at which
time all accrued and outstanding interest is due and payable. Thereafter,
quarterly payments of principle and interest are due each June 15,
September 15, December 15 and March 15. This note is subordinated to all
present and future bank debt of the Company and its subsidiaries. The
Company further agreed to issue 450,000 common stock purchase warrants to
purchase an equal number of the Company's common stock with an exercise
price of $3.10 per share. These common stock purchase warrants may be
exercised at ant time during the five years commencing July 1, 2003.

On December 28, 2002 the Company obtained a note payable in the principle
amount of $633,871. This note payable accrues interest at the Canadian bank
prime rate (which was 4.5% per annum at December 31, 2002) plus 3.5% per
annum. The note payable requires an interest only payment on December 28,
2003. Thereafter the note payable requires quarterly principle payments of
approximately $39,600 plus interest through December 28, 2007. This note is
subordinated to all present and future bank debt of the Company and its
subsidiaries.

ASSURE ENERGY, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2002

NOTE 7 - LONG TERM DEBT

The aggregate maturities of long term debt at December 31, 2002 are as
follows:

December 31,
-------------
2003 $ -
2004 158,500
2005 158,500
2006 158,500
2007 158,371
---------

$633,871
=========

NOTE 8 - STOCK OPTIONS

The Company has issued non statutory stock options to two employees, and an
unrelated third party vendor as partial compensation for services rendered
(See Note 10).

On October 1, 2002 the Company issued 20,000 options to an employee of the
Company with an exercise price of $2.75 per share (which is the fair value
at the grant date), through September 30, 2005. The first 10,000 stock
options vest on the earlier of March 31, 2003 or upon the Company achieving
1,000 barrels of oil per day or its natural gas equivalent (the "Initial
Vesting Period"). The remaining 10,000 stock options vest on the one year
anniversary of the Initial Vesting Period.

A summary of the Company's stock option activity is as follows:

Common Stock
---------------------------------
Weighted average
Shares Exercise Price
---------------- ---------------
Outstanding, December 31, 2001 - $ -

Grants 320,000 2.75
Exercised - -
---------------- ---------------

Outstanding, December 31, 2002 320,000 $ 2.75
================ ===============

A summary of the Company's stock options outstanding is as follows:

Options Outstanding Options Exercisable
------------------------------------------------------------
Weighted-
Average Weighted- Weighted-
Remaining Average Average
Range of Number Contractual Exercise Number Exercise
Exercise Prices Outstanding Life Price Exercisable Price
---------------- ----------- ----------- ---------- ----------- ---------

0.00 - $2.75 320,000 1.60 $ 2.75 200,000 $ 2.75

ASSURE ENERGY, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2002

NOTE 8 - STOCK OPTIONS - continued

Had the Company adopted the fair value based method for employee options at
the grant date the net loss for the year ended December would have
increased to $888,316 and had no effect on the loss per share.

The Company's calculations for employee option grants during the year ended
December 31, 2002 were made using an appropriate option-pricing model using
the following assumptions: expected volatility 16.3%, risk free interest
rate 2.3%, expected life in years 3 and dividend yield 0%.

NOTE 9 - EQUITY TRANSACTIONS

Preferred Stock

During June 2002 the Company issued shares of its Series A Preferred Stock
("Series A"). The Series A has a stated value of $100, a cumulative 5%
dividend payable in cash or shares of the Company's common stock. The
Series A is convertible by the holder after two years, or if called for
redemption by the Company, transferred into units of the Company on a one
for one basis at $1.00 of stated value. Units consist of one share of the
Company's common stock and one common stock purchase warrant. Each common
stock purchase warrant entitles the holder to purchase one share of the
Company's common stock exercisable at $1.17 per share at any time during
the four year period commencing one year after the date of issuance. On
April 23, 2002 the Company completed a $1,250,000 debt financing with a
foreign corporate entity. During June 2002 the debt was converted into
12,500 shares of the Company's Series A. On June 7, 2002 the Company issued
an additional 5,000 shares of its Series A. At December 31, 2002 the Series
A had accumulated a dividend payable of approximately $50,000.

During August 2002 the Company issued shares of its Convertible Series B
Preferred Stock ("Series B"). The Series B has a stated value of $100, a
cumulative 5% dividend payable annually in cash or common stock of the
Company, and the right to convert the Series B into units commencing on the
second anniversary of the issuance of the Series B. Each unit consists of
one share of the Company's common stock and one common stock purchase
warrant exercisable at $1.33 per share, at any time during the four year
period commencing one year from the date of issuance of the units. The
initial conversion price is $1.17 for each unit. On August 27, 2002 the
Company entered into a Preferred Stock Purchase Agreement to sell 5,250
shares of the Company's Series B at a price of $100 per share. At December
31, 2002 the Series B has a cumulative dividend of approximately $9,000.

Common Stock

On February 15, 2002 the Board of Directors of the Company approved a plan,
and filed an amended certificate of incorporation, to increase the
Company's authorized capital from 20,000,000 shares to 100,000,000 shares.

ASSURE ENERGY, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2002

NOTE 9 - EQUITY TRANSACTIONS - continued

On May 8, 2002, the Company completed an equity financing with certain
accredited investors, exempt from the registration provisions of the
Securities Act of 1933, as amended by Rule 506 of Regulation D. In that
financing, the Company received $1,750,000 in exchange for 2,100,000 units,
each unit consisting of one share of the Company's common stock and one
common stock purchase warrant entitling the holder to acquire another share
of the Company's common stock exercisable at $1.00 per share, for a period
of four years commencing July 1, 2003.

During February 2003 the Company entered into Subscription Agreements to
sell 1,067,000 units for an aggregate of $2,400,750. Each unit consists of
one share of the Company's common stock and one half common stock purchase
warrant. Each full warrant entitles the holder to purchase one share of the
Company's common stock at $2.50 per warrant share for a period of five
years commencing from the date of issuance, February 26, 2003.

During August 2000 the Company's Board of Directors authorized a Private
Placement Offering (the "Offering") of the 6,666,000 Company's common stock
to a limited number of sophisticated investors at a price of approximately
$.02 per share. During the first seven months of 2001 the Company completed
this Offering by issuing 6,516,000 shares of its common stock for proceeds
of $7,149 net of deferred offering costs of $101,451. As part of the
Offering the Company issued 50,000 of its common stock for services
rendered as deferred offering costs.

NOTE 10 - COMMITMENTS AND CONTINGENCIES

Employment and Consulting Agreements

On September 17, 2002 the Company entered into an Employment Agreement (the
"Agreement") with one officer of the Company. The initial term of the
Agreement is for nine months commencing on September 30, 2002. The officer
became the Company's president in December 2002, his salary was increased
to approximately $56,000 annually and the Agreement was cancelled. The
stock option portion of the Agreement has been retained where the officer
has been granted 100,000 options to purchase to purchase an equal number of
the Company's common stock at an exercise price of $2.75 per share (which
is the fair value at the grant date), through September 30, 2005. The first
50,000 stock options vest on the earlier of March 31, 2003 or upon the
Company achieving 1,000 barrels of oil per day or its natural gas
equivalent (the "Initial Vesting Period"). The remaining 50,000 stock
options vest on the one year anniversary of the Initial Vesting Period.

On September 17, 2002 the Company entered into a Consulting Service
Agreement (the "Service Agreement") with an unrelated third party (the
"Consultant"). The services by the Consultant include media and investor
relations. The initial term of the Service Agreement is for a period from
September 23, 2002 through November 30, 2003. For this service the Company
is required to pay in advance $5,500 per month, as well as reasonable
out-of-pocket expenses not to exceed $1,500 per month. As part of the
Service Agreement the Consultant has been granted 200,000 options to
purchase an equal number of common stock at an exercise price of $2.75 per
share through September 30, 2004. The Company agrees to make all necessary
legal and regulatory filings to enable the issuance of the option agreement
to the Consultant. The Service Agreement includes piggyback registration
rights.

ASSURE ENERGY, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2002

NOTE 10 - COMMITMENTS AND CONTINGENCIES - continued

Legal Proceedings

On February 19, 2003 an action was brought against the Company in the Court
of Queen's Bench of Alberta (Canada), Judicial District of Calgary. The
allegation is that the Company owes monies to the plaintiffs pursuant to a
Share Purchase Agreement dated May 30, 2002. The plaintiffs are seeking
approximately $221,000 plus accrued interest at 6% per annum from January
15, 2003. The Company has filed a Statement of Defense and Counterclaim
based upon management's believe that certain of the Westerra wells
purchased were represented as being proven/producing when they were non
producing. The Company believes its position has merit but can offer no
assurance as to the outcome.

Leases

The Company has an operating lease for its corporate headquarters. The
lease expires on December 31, 2005 and requires annual payments of
approximately $37,400.

NOTE 11 - CONCENTRATIONS

At December 31, 2002 all of the Company's cash is held outside of the
United States. The Company had deposits with commercial financial
institutions which at times, may exceed the Canadian insured limits of
approximately $40,000. Management has placed these funds in high quality
institutions in order to minimize the risk.

At December 31, 2002 the Company had three customers that accounted for
50.0% of the accounts receivable. For the period from April 1, 2002 through
December 31, 2002 the Company had one customer that accounted for 10.8% of
the Company's revenue.

NOTE 12 - SEGMENT AND GEOGRAPHIC INFORMATION

The Company operates in one business segment which includes the exploration
and production of oil and natural gas. The Company conducts all of its
operations in Canada. Information about the Company's assets in different
geographic locations as of December 31, 2002 is shown below pursuant to the
provisions of SFAS 131, "Disclosures About Segments of an Enterprise and
Related Information."

Total Assets are as follows:

Canada $6,973,403
United States 187,800
----------

Total Assets $7,161,203
==========

ASSURE ENERGY, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2002

NOTE 13 - SIGNIFICANT TRANSACTION

On March 6, 2003 the Company has entered into a Purchase Agreement among
certain shareholders (the "Selling Shareholders") of Quarry Oil & Gas Ltd
("Quarry'), and QUARRY an Alberta corporation, to acquire 47% of the
outstanding common stock of Quarry for approximately $5,800,000 in cash. As
part of the Purchase Agreement the Company has agreed to one of the three
following post closing activities: introduce to Quarry an experienced
management team, subject to approval of the Selling Shareholders, make an
offer, within 60 days of the closing, to acquire the remaining outstanding
common stock of Quarry at a price of not less then the original purchase
price or subscribe, within 90 days of the closing date, to a material
private placement of Quarry common stock at a subscription price per share
of not less than the purchase price. The Company anticipates completing
this Purchase Agreement within the near term.

NOTE 14 - SUPPLEMENTAL INFORMATION (UNAUDITED)

The following supplemental information regarding oil and natural gas
activities of the Company is presented pursuant to the disclosure
requirements promulgated by the Securities and Exchange Commission and SFAS
No. 69, "Disclosures About Oil and Gas Producing Activities." Following is
a summary of the estimated quantities of the Company's crude oil and
natural gas reserves for the years indicated, as estimated by a qualified
engineering firm, as of December 31, 2002. All of the Company's reserves
are located in Canada. Proved reserves cannot be measured exactly because
the estimation of reserves involves numerous judgmental determinations.
Accordingly, reserve estimates must be continually revised as a result of
new information obtained from drilling production history, new geological
and geophysical data and changes in economic conditions.

Oil Natural Gas
Quantity of Oil and Natural Gas Reserves (Bbls) (Mcf)
-------- ------------

Total proved reserves at December 31, 2001 - -
Acquisition 159,953 1,988,428
Production (13,253) (314,428)
-------- ------------

Total proved reserves at December 31, 2002 146,700 1,674,000
======== ============

Proved developed reserves:
December 31, 2002 13,200 207,000
======== ============

The following table sets forth the aggregate amounts of capitalized costs
relating to the Company's oil and natural gas producing activities and the
aggregate amount of related accumulated depletion as of December 31, 2002:

Unproved properties not being amortized $ 110,000
Proved properties being amortized 5,520,705
Less accumulated depletion (961,332)
-----------

Net capitalized costs $4,669,373
===========

ASSURE ENERGY, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2002

NOTE 14 - SUPPLEMENTAL INFORMATION (UNAUDITED) - continued

The following table reflects the costs incurred in oil and natural gas
property acquisition, exploration, and development activities during the
year ended December 31, 2002:

Property and acquisition costs $3,575,317
Exploration costs -
Development costs 2,055,388
----------

$5,630,705
==========

Standardized Measure of Discounted Future Net Cash Flows

The following table reflects the Standardized Measure of Discounted Future
Net Cash Flows relating to the Company's interest in proved oil and gas
reserves as of December 31, 2002:

Future cash inflows $12,207,000
Future development costs (71,000)
Future production costs (4,586,000)
------------
Future net cash inflows before income taxes 7,550,000

Future income taxes (1,092,000)
------------
Future net cash flows 6,458,000
10% discount factor (1,516,000)
------------

Standardized measure of discounted future
net cash inflow $ 4,942,000
============

CERTIFICATIONS

I, Harvey Lalach, certify that:

1. I have reviewed this annual report on Form 10-KSB of Assure Energy, Inc.

2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this annual report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this annual
report;

4. I am responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the
registrant and have:

(a) Designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made know to us by others within those
entities, particularly during the period in which this annual report
is being prepared;

(b) Evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date
of this annual report (the "Evaluation Date"); and

(c) Presented in this annual report my conclusions about the
effectiveness of the disclosure controls and procedures based on my
evaluation as of the Evaluation Date;

5. I have disclosed, based on my most recent evaluation, to the registrant's
auditors and the audit committee of registrant's board of directors (or
persons performing the equivalent functions):

(a) All significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and

(b) Any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and

6. I have indicated in this annual report whether or not there were
significant changes in internal controls or in other factors that could
significantly affect internal controls subsequent to the date of my most
recent evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.

Dated: April 14, 2003 /s/ Harvey Lalach
--------------------------------------------------
Harvey Lalach
Principal Executive and Financial Officer

-46-

SEC Report
Reference
Exhibit No. Number Description Page
----------- ---------- ------------------------------------------------------- ----

2.1 2.1 Asset Purchase Agreement dated March 14, 2002
between Registrant and Inventoy.com
International, Inc.(1)

2.2 2.1 Acquisition Agreement dated April 23, 2002 by
and among Registrant, Assure Oil & Gas Corp.
("Assure") and the shareholders of Assure (2)

2.3 2.1 Share Purchase Agreement dated May 30, 2002 by
and among Assure Oil and Gas Corp., and Gary
Freitag, Garth R. Keyte and Evan Stephens.(3)

2.4 2.1 Stock Exchange Agreement dated August 27, 2002
by and among Registrant, Inventoy.com
International Inc., Kaplan Design Group, Douglas
Kaplan, Ed Kaplan and Ron Beit-Halachmy.(4)

3.1 3.1 Certificate of Incorporation of Registrant as filed
August 11, 1999.(5)

3.2 3.1 Certificate of Amendment to Certificate of
Incorporation of Registrant filed February 15,
2002.(6)

3.3 3.1 Certificate of Amendment to Certificate of
Incorporation of Registrant filed May 1, 2002.(2)

3.4 3.2 By-Laws of Registrant.(5)

4.1 4.1 Registration Rights Agreement dated as of April
23, 2002 by and between Registrant and the
shareholders of Assure Oil & Gas Corp.(1)

4.3 Certificate of Designation, Preferences and Rights 50
of Series A Preferred Stock of Registrant as filed
on June 7, 2002

4.4. 4.1 Certificate of Designation, Preferences and Rights
of Series B Preferred Stock of Registrant as filed
on August 28, 2002.(4)

-47-

SEC Report
Reference
Exhibit No. Number Description Page
----------- ---------- ------------------------------------------------------- ----

10.1 10.1 Promissory Note dated April 23, 2002 (2)

10.2 10.1 Convertible Preferred Stock Purchase Agreement dated
August 27, 2002 (4)

10.3 10.1 Employment Agreement dated as of September 12,
2002 between Registrant and Suzanne West (7)

10.4 Convertible Preferred Stock Purchase Agreement dated 63
as of June 1, 2002

10.5 Employment Agreement dated as of September 17, 76
2002 between Registrant and Harvey Lalach

10.6 Stock Option Agreement made as of September 17, 88
2002 between Registrant and Harvey Lalach

10.7 Stock Option Agreement made as of October 1, 2002 92
between Registrant and James Golla

10.8 Stock Option Agreement made as of October 1, 2002 96
between Registrant and Primoris Group Inc.

10.9 Subordinated Promissory Note dated December 28, 100
2002

10.10 Subordinated Promissory Note with Warrant dated 104
March 15, 2003

21 List of subsidiaries of Registrant 113

99.1 Certification of Chief Executive and Financial Officer 114

-49-

(8) Filed with the Securities and Exchange Commission on November 19, 2002, as
an exhibit, numbered as indicated above to the Registrant's Quarterly
Report on Form 10-QSB for the quarterly period ended September 30, 2002,
which exhibit is incorporated herein by reference.

-48-