As filed with the Securities and Exchange Commission on December 8, 2003


                                                     Registration No. 333-107233

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                          PRE-EFFECTIVE AMENDMENT NO. 2
                                   TO FORM S-4
             REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933



                               ASSURE ENERGY, INC.
                 (Name of Small Business Issuer in its Charter)




        Canada                                 1311                           None
-------------------------          ----------------------------        ----------------
                                                                
(State or jurisdiction of          (Primary Standard Industrial        (I.R.S. Employer
incorporation organization)        Classification Code Number)        Identification No.)



        521-3rd Avenue S.W., Suite 1250, Calgary, Alberta, Canada T2P 3T3

                                 (403) 266-4975
                                 --------------
          (Address and telephone number of principal executive offices)

                          Copies of communications to:

                            Adam S. Gottbetter, Esq.
                           Gottbetter & Partners, LLP
                               488 Madison Avenue
                            New York, New York 10022



Approximate  date  of  commencement  of  proposed  sale  to  the  public:   Upon
effectiveness of this Registration  Statement and consummation of the conversion
described herein.


If the securities being registered on this Form are being offered in connection
with the  formation of a holding  company and there is  compliance  with General
Instruction G, check the following box. [_]

If this form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the  Securities  Act,  check the following box and list the
Securities  Act  registration   statement   number  of  the  earlier   effective
registration statement for the same offering. [_]

If this form is a  post-effective  amendment filed pursuant to Rule 462(d) under
the  Securities  Act,  check  the  following  box and  list the  Securities  Act
registration  statement number of the earlier effective  registration  statement
for the same offering. [_]




                         CALCULATION OF REGISTRATION FEE



Title of each class of                  Amount to be       Proposed                 Proposed               Amount of
securities to be registered             registered         maximum aggregate        aggregate offering     registration fee
                                                           offering price           price
                                                           per share
                                                                                                
Common Stock, $.001 par value           16,433,000          $     3.025(1)          $49,709,825(1)          $  4,573.30(1)

Common Stock, $.001 par value            1,548,100          $     4.345(2)          $ 6,726,495(2)          $    618.84(2)
                                       -----------          -----------             -----------             -----------

Total                                   17,981,100                                                          $  5,192.14(3)
                                        ===========                                                         ===========


     (1)  Estimated  solely for the purpose of calculating the  registration fee
          pursuant to Rule 457 under the Securities Act of 1933, as amended,  on
          the basis of the  average of the bid and ask prices  reported  on July
          17, 2003 on the over-the-Counter  Bulletin Board for the common stock,
          par  value  $.001  per  share,  of  Assure  Energy,   Inc.,  a  Nevada
          corporation which will become common stock, $.001 par value, of Assure
          Energy,  Inc., an Alberta Canada  corporation,  on a one-for-one basis
          pursuant  to  the  continuance   and  conversion   described  in  this
          Registration  Statement.  Payment  of the  registration  fee for these
          shares was made at the time of the original filing of the Registration
          Statement on July 22, 2002.


     (2)  Estimated  solely for the purpose of calculating the  registration fee
          pursuant to Rule 457 under the Securities Act of 1933, as amended,  on
          the basis of the average of the bid and ask prices reported on October
          24, 2003 on the over-the-Counter  Bulletin Board for the common stock,
          par  value  $.001  per  share,  of  Assure  Energy,   Inc.,  a  Nevada
          corporation which will become common stock, $.001 par value, of Assure
          Energy, Inc., a Canadian corporation,  on a one-for-one basis pursuant
          to the  continuance  and  conversion  described  in this  Registration
          Statement.  Payment of the  registration fee for these shares was made
          at the time of the  filing  of  Pre-Effective  Amendment  No. 1 to the
          Registration Statement on October 31, 2003.

     (3)  Previously paid.


                            -------------------------

THE REGISTRANT HEREBY AMENDS THIS  REGISTRATION  STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT  SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY  STATES THAT THIS REGISTRATION  STATEMENT
SHALL  THEREAFTER  BECOME  EFFECTIVE  IN  ACCORDANCE  WITH  SECTION  8(a) OF THE
SECURITIES  ACT OF 1933,  OR UNTIL  THIS  REGISTRATION  STATEMENT  SHALL  BECOME
EFFECTIVE ON SUCH DATE AS THE  COMMISSION,  ACTING PURSUANT TO SECTION 8(a), MAY
DETERMINE.

                                      -2-





PROXY STATEMENT/PROSPECTUS

                               ASSURE ENERGY, INC.
                         521-3rd Avenue S.W., Suite 1250
                        Calgary, Alberta, Canada T2P 3T3

Dear Stockholder:

A special  meeting of the  stockholders  of Assure Energy,  Inc. will be held on
January __, 2004, at ___ a.m.,  at the offices of  Gottbetter & Partners,  LLP.,
488  Madison  Avenue,  12th  Floor,  New York,  New York  10022.  At the special
meeting,  you will be  asked to  approve  a  proposal  to  change  the  place of
incorporation  of the  company  from Nevada to  Alberta,  Canada.  The change in
corporate  domicile  will be  accomplished  through the adoption of our proposed
plan of conversion.  If we complete the plan of conversion,  Assure Energy, Inc.
will be continued under the Alberta  Business  Corporations  Act and cease to be
incorporated in Nevada and as a result will be governed by the Alberta  Business
Corporations Act.

OUR BOARD OF DIRECTORS  HAS  UNANIMOUSLY  APPROVED THE  CONVERSION  PROPOSAL AND
RECOMMENDS  THAT OUR  STOCKHOLDERS  VOTE "FOR" THE  PROPOSALS  DESCRIBED  IN THE
ATTACHED  MATERIALS.   BEFORE  VOTING,  YOU  SHOULD  CAREFULLY  REVIEW  ALL  THE
INFORMATION  CONTAINED IN THE ATTACHED JOINT PROXY  STATEMENT/PROSPECTUS  AND IN
PARTICULAR  YOU SHOULD  CONSIDER  THE MATTERS  DISCUSSED  UNDER  "RISK  FACTORS"
BEGINNING ON PAGE 13.

Whether or not you expect to attend the meeting, please complete, date, sign and
promptly  return  the  accompanying  proxy  card in the  enclosed  postage  paid
envelope or deliver your proxy  instructions via the Internet or by telephone so
that your shares may be represented at the meeting,  regardless of the number of
shares  you own.  If you fail to submit  your  proxy or to vote in person at the
special  meeting,  it will have the same effect as a vote against the conversion
proposal.

We strongly support the proposed conversion and enthusiastically  recommend that
you vote in favor of the proposals presented to you for approval.

Sincerely,

Harvey Lalach
President and

Chief Executive Officer

NEITHER  THE  SECURITIES  AND  EXCHANGE  COMMISSION  NOR  ANY  STATE  SECURITIES
COMMISSION  HAS  APPROVED  OR  DISAPPROVED  OF THE  SECURITIES  TO BE  ISSUED IN
CONNECTION  WITH THE  CONVERSION OR PASSED UPON THE ADEQUACY OR ACCURACY OF THIS
JOINT  PROXY  STATEMENT/PROSPECTUS.  ANY  REPRESENTATION  TO THE  CONTRARY  IS A
CRIMINAL OFFENSE.

This joint proxy  statement/prospectus  is dated  December 8,  2003 and is first
being mailed to stockholders on or about December __, 2003.


                                      -3-




                               ASSURE ENERGY, INC.
                         521-3rd Avenue S.W., Suite 1250
                        Calgary, Alberta, Canada T2P 3T3


                    NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
                          TO BE HELD JANUARY ____, 2004


To the Stockholders of Assure Energy Inc.:

You are cordially  invited to attend a special meeting of stockholders of Assure
Energy,  Inc.  to be held on January  __,  2004 at ____ a.m.  at the  offices of
Gottbetter & Partners,  LLP., 488 Madison Avenue, 12th Floor, New York, New York
10022 to consider the following matters:

     o    A proposal to approve the plan of  conversion  to change our corporate
          domicile from Nevada to Alberta, Canada;

     o    A proposal to  authorize  us to adjourn the special  meeting on one or
          more occasions,  if necessary,  to solicit additional proxies if there
          are not sufficient votes at the time of the special meeting to approve
          the conversion proposal; and

     o    Such other business as may properly come before the special meeting or
          any adjournments or postponements thereof.

The  accompanying  proxy  statement/prospectus  forms a part of this  notice and
describes the terms and conditions of the plan of conversion.

We believe that the change in domicile to Alberta,  Canada will more  accurately
reflect our present operations as an oil and gas company, which have always been
in  Canada.  Since  engaging  in this line of  business,  we have  never had any
employees or  operations in the U.S. We also believe the change in domicile will
enable us to benefit from  investor  interest in Canada for Canadian oil and gas
companies  and other  Canadian  sources of financing  more readily  available to
Canadian companies.

Our common  stock is currently  listed for trading on the NASD  Over-the-Counter
Bulletin Board ("OTCBB") under the symbol "ASUR".  Upon the effectiveness of the
conversion we will be considered a foreign  private  issuer under the Securities
Act of 1933,  as  amended  and our  common  stock is  expected  to be listed for
trading on the OTCBB under the symbol "ASURF."

Our  Board of  Directors  has  declared  the plan of  conversion  advisable  and
recommends that you vote in favor of the plan of conversion.

This notice and the accompanying proxy  statement/prospectus are being mailed to
holders of our common stock. However, only holders of record of our common stock
at the close of business  on  December  __, 2003 will be entitled to vote at the
special meeting or any  adjournments or postponements  thereof.  Eligible voters
may include persons that executed  shareholder consents dated September 18, 2003
approving the plan of conversion as these  consents have been voided and have no
force or effect.


                                      -4-




To approve the  conversion  proposal,  holders of a majority of our  outstanding
shares must vote to approve the plan of  conversion.  To approve the proposal to
adjourn the special meeting, holders of a majority of our shares of common stock
present and represented by proxy must vote to approve the adjournment  proposal.
Approval of the  adjournment  proposal is not a condition to the approval of the
plan of conversion. Our board of directors recommends that stockholders vote FOR
both proposals.

Whether or not you expect to attend the meeting, please complete, date, sign and
properly return the accompanying  proxy in the enclosed postage paid envelope so
that your shares may be represented at the meeting. Alternatively,  you may vote
by  telephone  or via the  Internet.  If you fail to return a properly  executed
proxy  card,  to vote by  telephone  or  Internet,  or to vote in  person at the
special meeting,  it will have the same effect as a vote against the proposal to
adopt the conversion plan.

Eligible Assure Energy, Inc. stockholders who properly demand dissenters' rights
prior  to the  meeting,  who do not  consent  to the  adoption  of the  plan  of
conversion  and who otherwise  comply with the  provisions of Chapter 92A of the
Nevada Revised  Statutes will be entitled,  if the  conversion is completed,  to
receive  the fair value of their  shares of common  stock.  Refer to the section
entitled "Dissenters' Rights" in the accompanying proxy statement/prospectus and
the full text of  Sections  92A.300 to 92A.500 of the Nevada  Revised  Statutes,
which is attached as Appendix E to the accompanying proxy  statement/prospectus,
for a description of the procedures that Assure Energy,  Inc.  shareholders must
follow in order to exercise their dissenters' rights.


                               By Order of the Board of Directors,


                               Harvey Lalach
                               President and Chief Executive Officer


Calgary, Alberta
December        , 2003



                                      -5-



                                TABLE OF CONTENTS



                                                                                    PAGE
                                                                                 
SUMMARY.........................................................................      7
SUMMARY FINANCIAL INFORMATION...................................................     11
RISK FACTORS....................................................................     13
Risks Relating to the Continuance...............................................     13
Risks Relating to the Company...................................................     13
CONTINUANCE AND CONVERSION PROPOSAL ............................................     16
VOTING AND PROXY INFORMATION....................................................     19
DISSENTERS' RIGHTS..............................................................     22
MATERIAL UNITED STATES FEDERAL TAX CONSEQUENCES.................................     25
MATERIAL CANADIAN TAX CONSEQUENCES..............................................     28
COMPARATIVE RIGHTS OF STOCKHOLDERS..............................................     31
ACCOUNTING TREATMENT............................................................     38
BUSINESS OF ASSURE ENERGY, INC..................................................     39
LEGAL PROCEEDINGS...............................................................     47
MANAGEMENT'S DISCUSSION AND ANALYSIS
     OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS...........................     48
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS........................     50
MANAGEMENT......................................................................     53
EXECUTIVE COMPENSATION..........................................................     55
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS..................................     59
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT..................     60
DESCRIPTION OF CAPITAL STOCK....................................................     62
EXPERTS.........................................................................     65
LEGAL MATTERS...................................................................     65
AVAILABLE INFORMATION...........................................................     65
CAUTIONARY STATEMENT CONCERNING FORWARD LOOKING STATEMENTS......................     66
FINANCIAL STATEMENTS OF ASSURE ENERGY, INC......................................     F-1

     APPENDIX A - Form of Articles of Conversion

     APPENDIX B - Form of Plan of Conversion

     APPENDIX C - Form of Articles of Continuance

     APPENDIX D - Form of By Laws of Assure Energy, Inc., an Alberta corporation

     APPENDIX E - Sections 92A.300 to 92A.500 of the Nevada Revised Statutes




                                      -6-



                                     SUMMARY


THIS  SUMMARY  PROVIDES AN OVERVIEW OF THE  INFORMATION  CONTAINED IN THIS JOINT
PROXY  STATEMENT/PROSPECTUS  AND DOES NOT  CONTAIN  ALL OF THE  INFORMATION  YOU
SHOULD CONSIDER.  THEREFORE,  YOU SHOULD ALSO READ THE MORE DETAILED INFORMATION
SET FORTH IN THIS DOCUMENT,  INCLUDING THE FINANCIAL  STATEMENTS OF THE COMPANY.
THE SYMBOL "$" REFERS TO UNITED STATES DOLLARS.

In this proxy  statement/prospectus,  unless otherwise  indicated or the context
otherwise requires,  we will refer to Assure Energy,  Inc., a Nevada corporation
herein  referred to as Assure Nevada and Assure  Energy,  Inc, an Alberta Canada
corporation  herein  referred to as Assure Canada as "we",  "us",  "our" or "the
Company".  The  procedure  by which we will change our  domicile  from Nevada to
Alberta, Canada is referred to as a conversion or a continuance.


THE COMPANY


We  are  actively  engaged  in the  exploration,  development,  acquisition  and
production of petroleum and natural gas properties  primarily located in Western
Canada.  We  own  varying  interests  through  farmout   participations,   asset
purchases,  and  acquisitions  of  crown  land  rights  of  both  producing  and
prospective  oil and  gas  properties.  For a more  detailed  discussion  of our
operations  see  "Business  of Assure  Energy,  Inc."  beginning on page 39. Our
principal  executive  office is located  at 521-3rd  Avenue  S.W.,  Suite  1250,
Calgary, Alberta, Canada T2P 3T3, telephone (403) 266-4975.

After effecting the continuance,  we will be a Canadian  corporation governed by
the Alberta Business  Corporations Act. We will continue to conduct the business
in which we are currently engaged.  Our operations and employees presently exist
entirely  within Canada,  and therefore  there will be no material effect on our
operations.  Our  business  and  operations  following  the  conversion  will be
identical  in most  respects  to our  current  business,  except that we will no
longer be  subject  to the  corporate  laws of the  State of Nevada  but will be
subject  to  the  Alberta  Business   Corporations   Act.  The  Alberta  company
hereinafter  referred to as Assure Canada,  will be liable for all the debts and
obligations of the Nevada company, hereinafter referred to as Assure Nevada, and
the  officers  and  directors  of the Alberta  company  will be the officers and
directors of the Nevada company.  The material differences between the laws will
not materially affect our business but will affect your rights as a stockholder.
The  differences  between  the  applicable  laws  of the  two  jurisdictions  is
discussed  in  greater   detail  under  the  heading   "Comparative   Rights  of
Stockholders" beginning on page 25.


FACTORS YOU SHOULD CONSIDER

The  conversion,  which will have the effect of  transferring  our domicile from
Nevada to Alberta,  Canada will not have any effect on your  relative  equity or
voting  interests in our  business.  You will  continue to hold exactly the same
number  and type of shares  which you  currently  hold.  The  continuance  will,
however,  result in changes  in your  rights and  obligations  under  applicable
corporate laws. In addition, the continuance may have tax consequences for you.


                                      -7-


REASONS FOR THE CONVERSION

We believe that the continuance to Alberta Canada will more  accurately  reflect
our  operations,  all of which are based in Canada.  Since  entering our current
line of business, we have not had any operations in the U.S. We also believe the
continuance  to  Alberta,  Canada may enable us to  benefit  from new  financing
opportunities that may be available to us as a Canadian corporation.

RISK FACTORS RELATED TO THE CONVERSION TRANSACTION


Factors such as possible  adverse tax consequences and stock price volatility of
our common stock  following the  continuance  may affect your interest in owning
Assure  Canada  common  shares.   In  evaluating  the  merits  of  the  proposed
conversion,  you should  carefully  consider the risk  factors  included in this
prospectus beginning on page 13.

DISSENTERS RIGHTS

Under the Nevada Revised Statutes,  certain Assure Nevada  shareholders have the
right to dissent from the plan of conversion and receive the fair value of their
shares. See "Dissenters Rights."


MATERIAL TAX CONSEQUENCES FOR STOCKHOLDERS

The  following  is  a  brief  summary  of  the  material  tax  consequences  the
continuance will have for  stockholders.  Stockholders  should consult their own
tax advisers  with respect to their  particular  circumstances.  A more detailed
summary of the factors  affecting the tax  consequences  for stockholders is set
out under  "Material  United  States  Federal Tax  Consequences"  and  "Material
Canadian Income Tax Consequences."

UNITED STATES FEDERAL INCOME TAX CONSEQUENCES

On the date of the  continuance,  the Nevada company must recognize any gain but
not any losses to the  extent  that the fair  market  value of any of its assets
exceeds its taxable basis in such assets.  The calculation of any potential gain
will need to be made separately for each asset held. No loss will be allowed for
any asset that has a taxable basis in excess of its fair market VALUE. We do not
believe  that any of our assets  have a fair  market  value  which is greater or
significantly  greater than their respective tax basis.  Accordingly,  we do not
expect to recognize material taxable gains as a result of the continuance.


U.S.  holders of our stock will not be required to recognize any gain or loss as
a result of the continuance.  A U.S.  stockholder's adjusted basis in the shares
of the Alberta company will be equal to such stockholder's adjusted basis in the
shares of the Nevada company. A U.S.  stockholder's holding period in the shares
of the  Alberta  company  will  include  the  period of time  during  which such
stockholder  held his or her shares in the Nevada  company.  For a more complete
discussion of the U.S.  Income Tax  Consequences,  please see  "Material  United
States Federal Income Tax Consequences" beginning on page 25.



                                      -8-


CANADIAN INCOME TAX CONSEQUENCES

On our  continuance to Alberta,  Canada,  the Alberta  company will be deemed to
dispose of and to immediately  re-acquire its assets at their fair market value.
If the fair market value of the assets  exceed the taxable basis in the assets a
tax will be due. Pre-continuance losses are available for use in Alberta.


A Canadian  stockholder will not realize a disposition of their Nevada shares on
the  continuance  to  Alberta.  To the extent a deemed  dividend  is paid by the
Nevada  company to a Canadian  stockholder,  the amount of the dividend  will be
included in their income. For a more complete  discussion of the Canadian Income
Tax  Consequences,  please see  "Material  Canadian  Income Tax  Considerations"
beginning on page 28.


HOW THE CONVERSION WILL AFFECT YOUR RIGHTS AS A STOCKHOLDER


You will continue to hold the same shares you now hold following the continuance
of the company to Alberta, Canada. Similarly,  following the continuance we will
continue  to be exempt  from the proxy  rules and our  officers,  directors  and
principal  shareholders  will  continue  to be  exempt  from  Section  16 of the
Securities Exchange Act of 1934, as amended. However, the rights of stockholders
under  Nevada  law  differ  in  certain  substantive  ways  from the  rights  of
stockholders  under the Alberta Business  Corporations  Act. Examples of some of
the changes in stockholder rights which will result from continuance are:


     o    Under  Nevada  law,   unless   otherwise   provided  in  the  charter,
          stockholders  may act  without a meeting  by  written  consent  of the
          majority of the voting power of the outstanding  common stock entitled
          to vote on the matter,  and notice need not be given to  stockholders.
          Under  Alberta law,  stockholders  may only act by way of a resolution
          passed at a duly  called  meeting  unless all  stockholders  otherwise
          entitled to vote consent in writing.

     o    Under Nevada law, a charter amendment requires approval by vote of the
          holders of a majority of the outstanding  stock. Under Alberta law, an
          amendment to a corporation's  charter requires approval by the holders
          of a  two-thirds  majority of the  outstanding  stock  represented  in
          person or by proxy.

     o    Dissenter's   rights  are   available  to   stockholders   under  more
          circumstances under Alberta law than under Nevada law.

     o    Stockholders have a statutory oppression remedy under Alberta law that
          does not exist  under  Nevada  law.  It is  similar  to the common law
          action in  Delaware  for breach of  fiduciary  duty,  but the  Alberta
          remedy does not require stockholders to prove that the directors acted
          in bad faith.

     o    A director's  liability may not be limited under Alberta law as it may
          under Nevada law.


     o    Under Nevada law, unless otherwise provided in the charter or by-laws,
          a  majority  of  the  voting  power   constitutes  a  quorum  for  the
          transaction of business at a shareholders' meeting. Under Alberta law,
          unless  otherwise  provided in the  by-laws,  a majority of the voting
          power  constitutes  a quorum  for the  transaction  of  business  at a
          shareholders' meeting.  However,  Alberta companies may provide that a
          quorum  is deemed  present  when as  little  as 5% of the  issued  and
          outstanding  share capital is present.  Our proposed by-laws contain a
          provision  that provides a quorum is deemed present when 12.5% or more
          of the issued and outstanding share capital is present.  The provision
          may be detrimental to the rights of shareholders  owning a majority of
          our voting shares.  As a result thereof,  resolutions may be passed at
          shareholders'  meetings not attended by such  shareholders  on matters
          that would have  otherwise not been subject to a vote.  Except for the
          election of directors and matters such as charter amendments,  certain
          amalgamations,  the continuance of an Alberta corporation into another
          jurisdiction,  share consolidations,  business  combinations,  and the
          sale,  lease, or exchange of all or substantially  all of the property
          of a corporation  outside the ordinary  course of business,  where the
          Alberta  Business  Corporation  Act  requires  approval  by a  special
          resolution,  requiring approval by a two-thirds majority of the shares
          present in person or  represented by proxy and entitled to vote on the
          resolution,  a simple  majority  of the  shares  present  in person or
          represented  by proxy and entitled to vote on a resolution is required
          to approve a resolution properly brought before the shareholders.



                                      -9-



For a more detailed  discussion of the differences in the rights of stockholders
under Nevada and Alberta law see "Comparative Rights of Stockholders"  beginning
on page 31.

PRICE VOLATILITY

We cannot  predict  what effect the  continuance  will have on the market  price
prevailing from time to time or the liquidity of our shares.

ACCOUNTING TREATMENT OF THE CONVERSION

For  U.S.  accounting  purposes,   conversion  of  our  company  from  a  Nevada
corporation  to an Alberta one represents a transaction  between  entities under
common control. Assets and liabilities transferred between entities under common
control are accounted for at  historical  cost, in accordance  with the guidance
for transactions between entities under common control in Statement of Financial
Accounting Standards No. 141, Business Combinations.  The historical comparative
figures of Assure Canada will be those of Assure Nevada.

Upon the effective date of the conversion,  we will be subject to the securities
laws of the province of Alberta.  We will qualify as a foreign private issuer in
the United States.  Before our continuance in Alberta,  Canada,  we prepared our
consolidated   financial   statements  in  accordance  with  generally  accepted
accounting  principles  ("GAAP") in the United  States.  As a Canadian  domestic
issuer,  we will be  required  to prepare  our annual and  interim  consolidated
financial  statements in accordance with Canadian generally accepted  accounting
principles.  For  purpose of our  annual  disclosure  obligations  in the United
States,  we will  annually  file in the  United  States  consolidated  financial
statements   prepared  in   accordance   with  Canadian  GAAP  together  with  a
reconciliation to US GAAP.


THE SPECIAL MEETING

The special  meeting  will take place at the offices of  Gottbetter  & Partners,
LLP., 488 Madison Avenue,  12th Floor,  New York, New York 10022 on January ___,
2004 at ____ a.m., local time. At the special meeting, the holders of our common
stock will be asked to approve  the  conversion  proposal  and the  proposal  to
adjourn the special meeting, if necessary.

The close of business on December ___,  2003 is the record date for  determining
if you are  entitled to vote at the special  meeting.  On that date,  there were
approximately  ______  shares of our common  stock  outstanding  and entitled to
vote.  Each share of our common  stock is  entitled  to one vote at the  special
meeting.

REQUIRED VOTE

The affirmative  vote of the holders of a majority of the outstanding  shares of
our common stock entitled to vote at the special  meeting is required to approve
the plan of conversion. The affirmative vote of the holders of a majority of the
shares of our  common  stock  present  or  represented  by proxy at the  special
meeting is required to approve the adjournment proposal.



                                      -10-


OUR RECOMMENDATION TO STOCKHOLDERS

Taking into  consideration all of the factors and reasons for the conversion set
forth  above and  elsewhere  in this  proxy  statement/prospectus,  our board of
directors  has  approved  the  plan  of  conversion  and  recommends   that  our
stockholders vote FOR approval of the plan of conversion and FOR approval of the
adjournment proposal.

                          SUMMARY FINANCIAL INFORMATION


THE FOLLOWING  SUMMARY  FINANCIAL  INFORMATION  FOR THE YEARS ENDED DECEMBER 31,
2002 AND DECEMBER 31, 2001  INCLUDES  BALANCE  SHEET AND STATEMENT OF OPERATIONS
DATA FROM THE AUDITED  CONSOLIDATED  FINANCIAL  STATEMENTS OF ASSURE NEVADA. THE
SUMMARY  FINANCIAL  INFORMATION  FOR THE NINE MONTHS  ENDED  SEPTEMBER  30, 2003
INCLUDES   BALANCE  SHEET  AND  STATEMENT  OF  OPERATIONS  DATA  FROM  UNAUDITED
CONSOLIDATED FINANCIAL STATEMENTS OF ASSURE NEVADA. THE INFORMATION CONTAINED IN
THIS TABLE SHOULD BE READ IN CONJUNCTION WITH OUR  "MANAGEMENT'S  DISCUSSION AND
ANALYSIS OF FINANCIAL  CONDITION AND RESULTS OF OPERATIONS" AND THE CONSOLIDATED
FINANCIAL STATEMENTS AND ACCOMPANYING NOTES INCLUDED HEREIN.


The financial  statements of Assure Nevada have been prepared in accordance with
accounting  principles  generally accepted in the United States. The application
of Canadian generally accepted accounting  principles,  which will be applicable
to our financial  statements  following the conversion,  would not result in any
material differences from the Assure Nevada financial statements.


                                      -11-


Income Statement Data:




                                      Year Ended             Year Ended           Nine Months Ended
                                   December 31, 2002      December 31, 2001      September 30, 2003
                                   -----------------      -----------------      ------------------
                                                                          
Revenues                             $  1,136,896           $          0           $  3,840,475
Net Income (Loss)                    $   (792,162)          $    (59,383)          $ (2,083,758)
Net Income (Loss) Per Share          $      (0.03)          $     (0.002)          $      (0.13)
Weighted Average Number of
Shares Outstanding                     27,924,740             31,070,762             16,210,220





Balance Sheet Data:





                                   December 31, 2002     December 31, 2001         September 30, 2003
                                   -----------------     -----------------         ------------------
                                                                              
Current Assets                         $ 2,424,724          $    17,289                $ 3,714,721
Total Assets                           $ 7,161,203          $    20,289                $28,285,512
Current Liabilities                    $ 1,028,100          $     6,144                $ 9,706,084
Total Liabilities                      $ 1,733,040          $     6,144                $18,237,083
Minority Interest                                -                    -                $ 2,588,419
Stockholders' Equity                   $ 5,428,163          $    14,145                $ 7,460,010





                                      -12-



                                  RISK FACTORS

An investment in our common shares involves  certain risks. In evaluating us and
our business,  investors should carefully consider the following risk factors in
addition to the other information  included or incorporated by reference in this
prospectus.

RISKS RELATING TO THE CONTINUANCE

We May Owe Taxes As A Result Of The Continuance If Our  Conclusions  Relating To
The Value Of Our Assets Are Incorrect

For U.S. tax purposes, on the date of continuance,  we will be treated as though
we sold all of our  property  and  received  the fair  market  value  for  those
properties.  We will be taxed on any income or gain  realized on that "sale." If
the fair market value of any of our assets is greater than our tax basis in such
assets, we will have taxable gain on the deemed "sale".


We have reviewed our assets, liabilities and paid-up capital and believe that we
will not owe material U.S.  federal income taxes as a result of the continuance.
We believe  that the fair market value of most of our assets is not in excess of
our tax basis in such assets.  We further believe that the fair market value for
those  assets  with a fair  market  value that is in excess of the tax basis for
such assets is not materially excessive.  Accordingly, we believe that little or
no U.S.  taxes  will be owed as a  result  of the  proposed  continuance.  It is
possible that the facts on which we based our assumptions and conclusions  could
change before the  continuance is completed.  We have not applied to the federal
tax  authorities for a ruling on this matter and do not intend to do so. We have
also made certain assumptions regarding the tax treatment of this transaction in
order  to  reach  our  conclusions  and it may be  possible  for  some of  these
assumptions  to be  interpreted  in a  different  manner  which  would  be  less
favorable to us. You should  understand that it is possible that the federal tax
authorities  will not accept our  valuations  or positions and claim that we owe
more taxes then we expect as a result of this transaction.


The Stock Price Of Our Common Shares May Be Volatile. In Addition, Demand In The
United States For Our Shares May Be Decreased By The Change In Domicile.

The market price of our common shares may be subject to significant fluctuations
in  response  to  variations  in  results  of  operations   and  other  factors.
Developments  affecting  the oil and gas  industry  including  oil and gas price
fluctuations  could also have a  significant  impact on the market price for our
shares. In addition,  the stock market has experienced a high level of price and
volume  volatility.  Market prices for the stock of many similar  companies have
experienced  wide  fluctuations  which have not necessarily  been related to the
operating performance of such companies. These broad market fluctuations,  which
are beyond our control, could have a material adverse effect on the market price
of our shares.

We cannot predict what effect,  if any, the  conversion  will have on the market
price  prevailing  from time to time or the liquidity of our common shares.  The
change in domicile may decrease the demand for our shares in the United  States.
The  decrease may not be offset by expected  increased  demand for our shares in
Canada.


                                      -13-


RISKS RELATING TO THE COMPANY

We Have A Limited Operating  History With Respect To Our Current Business.  This
Makes An Evaluation Of Our Business Difficult.

We were  formed in  Delaware  in August  1999 to  engage in a toy  business.  No
operations in this area were ever commenced.  Commencing with our April 23, 2002
acquisition of Assure Oil & Gas Corp.,  followed by Assure Oil & Gas Corp.'s May
30, 2002  acquisition  of Westerra  2000 Inc., we became an oil and gas company.
Through Assure Canada, we are committed to continue and expand these operations.
Through  our  wholly  owned  subsidiary,  Assure  Holdings  Inc.,  we  also  own
approximately 48.5% of the outstanding common shares of Quarry Oil & Gas Ltd., a
junior  oil and gas  exploration  and  development  company  based  in  Calgary,
Alberta.  Both  Assure  Oil & Gas Corp.  and  Westerra  2000 Inc.  have  limited
operating histories.  Accordingly,  we have limited performance history on which
you can evaluate our future performance. We are at an early stage of development
and it is possible that we may not achieve the revenues that we  anticipate.  If
that  occurs,  we will  receive  less  than  our  anticipated  income  from  our
operations  and our  profitability  will suffer.  Before  investing,  you should
carefully   evaluate  the  risks,   uncertainties,   expenses  and  difficulties
frequently encountered by early stage companies.

Our Future Success Is Dependent On The Performance And Continued  Service Of Our
Chief  Executive  Officer,  And  Our  Ability  To  Attract  And  Retain  Skilled
Personnel.

Our  performance  and future  operating  results are  dependent on the continued
service and performance of Harvey Lalach,  our president and chief executive and
financial  officer.  To the  extent  that  the  services  of Mr.  Lalach  become
unavailable,  our business or prospects may be adversely affected.  Should we be
required to do so, we do not know  whether we would be able to employ an equally
qualified person or persons to replace Mr. Lalach. We do not currently  maintain
"key man" insurance for any of our executive officers or other key employees and
do not intend to obtain this type of insurance  following the completion of this
offering.  If we are  successful in further  developing  our  business,  we will
require additional managerial, administrative and support personnel. Competition
for  highly-qualified  personnel  is intense,  and we cannot  assure that we can
retain our key employees or that we will be able to attract or retain  qualified
personnel in the future.  The loss of the services of any of our  management  or
other key  employees  and our  inability to attract and retain  other  necessary
personnel  could  have a material  adverse  effect on our  financial  condition,
operating results, and cash flows. See "Directors, Executive Officers, Promoters
and Control Persons".

Our Competitors Have Greater Financial and Human Resources Than We Do. This May
Give Them A Competitive Advantage

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
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.


                                      -14-


Our future success will depend, to a significant  extent, 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.

We Do Not Intend To Pay Dividends On Our Common Stock For The Foreseeable
Future.

We have not paid any cash dividends,  nor do we contemplate or anticipate paying
any dividends upon our common stock in the foreseeable future.

We May Need  Additional  Financing Which May Not Be Available And, If Available,
Might Only Be Available On Unfavorable  Terms. Our Failure To Obtain  Financing,
If Needed, Would Hinder Our Operations And Our Ability To Achieve Profitability.

We have  principally  funded our  operations to date through sales of our equity
and debt securities.  We expect to continue to raise funds in the future through
sales of our debt or equity  securities  and through  loans until such time,  if
ever, as we are able to operate profitably. There can be no assurance given that
we will be able to obtain  funds in such manner or on terms that are  beneficial
to us. Our inability to obtain needed funding can be expected to have a material
adverse effect on our operations and our ability to achieve profitability.

We Have A History Of Losses And An Accumulated Deficit And Expect To Continue to
Incur Losses Until We Establish Profitable Business Operations. This Could Drive
The Price Of Our Stock Down


We have experienced  operating  losses since our inception.  As at September 30,
2003 we had accumulated deficit in the amount of $2,944,910.  We expect to incur
additional  operating losses until we are able to establish  profitable business
operations.  If we fail to establish profitable business operations and continue
to incur losses, the price of our common stock can be expected to fall.


The Continuance Into Alberta, Canada May Materially Affect Shareholders' Rights.

Alberta law is materially  different  from Nevada law, under which Assure Nevada
is currently  incorporated.  We cannot assure you that the  differences  between
Alberta  law and Nevada law will not  materially  affect  the  interests  of our
shareholders. See "Comparative Rights of Shareholders."

Sales Of Shares  Eligible For Future Sale Could Depress The Market Price For Our
Common Stock.

We presently have issued and outstanding:


     o    19,416,100 shares of our common stock


     o    options to purchase 120,000 shares of our common stock at an exercise
          price of $2.75 per share

     o    options to purchase 305,000 shares of our common stock at an exercise
          price of $3.00 per share


                                      -15-



     o    warrants to purchase 10,270,400 shares of our common stock at exercise
          prices ranging from $.333 to $4.00 per share


     o    17,500 shares of convertible Series A Preferred Stock

     o    5,250 shares of convertible Series B Preferred Stock.


None of our  outstanding  shares  of Series A or  Series B  Preferred  Stock are
presently   convertible.   75,000  of  our  outstanding  options  are  presently
exercisable.  All  but  5,035,000  of our  outstanding  warrants  are  presently
exercisable. Market sales of large amounts of our common stock, or the potential
for those  sales  even if they do not  actually  occur,  may have the  effect of
depressing  the market price of our common  stock.  In  addition,  if our future
financing  needs  require  us to issue  additional  shares  of  common  stock or
securities  convertible  into common stock, the supply of common stock available
for resale could be increased which could stimulate  trading  activity and cause
the market  price of our common  stock to drop,  even if our  business  is doing
well.


There Is A Limited  Public  Market For Our Common  Stock.  Unless Such Market Is
Expanded You May Have Difficulty Selling Shares Of Our Common Stock.

To date there has been only a limited and sporadic  public market for our common
stock.  There can be no assurance that an active and more reliable public market
will develop in the future or, if developed, that such market will be sustained.
Purchasers  of shares of our common stock may,  therefore,  have  difficulty  in
reselling  such  shares.  As a  result,  investors  may  find it  impossible  to
liquidate  their  investment in us should they desire to do so. Our common stock
is  currently  traded  in the  over-the-counter  market  and  quoted  on the OTC
Bulletin  Board.  As at the date hereof,  we are not  eligible for  inclusion in
NASDAQ or for listing on any national  stock  exchange.  At the present time, we
are  unable  to  state  when,  if ever,  we will  meet  the  Nasdaq  application
standards.  Even if we meet the minimum  requirements  to apply for inclusion in
The Nasdaq  SmallCap  Market,  there can be no assurance  that  approval will be
received  or, if  received,  that we will meet the  requirements  for  continued
listing on the Nasdaq  SmallCap  Market.  Further,  Nasdaq reserves the right to
withdraw or  terminate a listing on the Nasdaq  SmallCap  Market at any time and
for any reason in its  discretion.  If we are unable to obtain or to  maintain a
listing on the Nasdaq SmallCap Market, quotations, if any, for "bid" and "asked"
prices of the common  stock would be available  only on the OTC  Bulletin  Board
where our common stock is  currently  quoted or in the "pink  sheets".  This can
result in an  investor's  finding it more  difficult  to dispose of or to obtain
accurate quotations of prices for our common stock than would be the case if our
common stock were quoted on the Nasdaq Small Cap Market. Irrespective of whether
or not our common stock is included in the Nasdaq SmallCap system,  there can be
no assurance that the public market for our common stock will become more active
or liquid in the future.


                       CONTINUANCE AND CONVERSION PROPOSAL


BACKGROUND OF THE CONTINUANCE AND CONVERSION PROPOSAL



The Board of Directors of Assure Nevada has  determined  that it is advisable to
change the  company's  domicile  from Nevada to Alberta,  Canada.  Management of
Assure Nevada has determined  that a conversion will be the most effective means
of achieving the desired change of domicile. The Nevada Revised Statutes allow a
corporation that is duly incorporated,  organized, existing and in good standing
under  Nevada  law to  convert  into a  foreign  entity  pursuant  to a plan  of
conversion approved by the stockholders of the Nevada corporation.



                                      -16-



Under the continuance and conversion,  Articles of Conversion will be filed with
the Secretary of State of Nevada and Articles of  Continuance,  along with other
documents  required by the Alberta Business  Corporation Act, will be filed with
the Registrar of Corporations in the Province of Alberta.  Upon the filings,  we
will be  continued  as an Alberta  company  and will be  governed by the laws of
Alberta,  Canada. The assets and liabilities of the Alberta company  immediately
after the  consummation  of the  conversion  will be identical to the assets and
liabilities  of the Nevada  company  immediately  prior to the  conversion.  The
current  officers and  directors of the Nevada  company will be the officers and
directors of the Alberta company.  The change of domicile will not result in any
material change to the business of Assure Nevada and will not have any effect on
the relative  equity or voting  interests of our  stockholders.  Each previously
outstanding  share,  option and warrant of Assure  Nevada will become one share,
option and warrant of the Alberta company. The change in domicile will, however,
result in  changes  in the  rights and  obligations  of  current  Assure  Nevada
stockholders  under  applicable  corporate  laws.  For an  explanation  of these
differences  see  "Comparative  Rights  of  Stockholders".   In  addition,   the
conversion  may have  adverse  tax  consequences  for  stockholders.  For a more
detailed  explanation of the  circumstances  to be considered in determining the
tax  consequences,  see "Material  United States Federal Tax  Consequences"  and
"Material Canadian Tax Consequences."

Pursuant  to  Sections  92A.120 of the  Nevada  Revised  Statutes,  the Board of
Directors  of  Assure  Nevada  has  adopted  resolutions  approving  the plan of
conversion.  The effect of this  conversion  will be to change the  domicile  of
Assure Nevada from Nevada to Alberta,  Canada. Assure Nevada shall file with the
Secretary of State of Nevada  Articles of Conversion  and shall file a Notice of
Registered  Office,  a Notice of Directors and Articles of Continuance  with the
Registrar under the Alberta  Business  Corporations  Act. Upon the filing of the
Plan of  Conversion  in accordance  with Section  92A.205 of the Nevada  Revised
Statutes and payment to the Secretary of State of Nevada of all prescribed fees,
the conversion  shall become effective in accordance with Section 92A.240 of the
Nevada Revised Statutes. Upon receipt of the Articles of Continuance and payment
of all applicable  fees, the Registrar shall issue a Certificate of Continuance,
and the continuance shall be effective on the date shown in the certificate.


REASONS FOR THE CHANGE OF DOMICILE

We believe that the continuance to Alberta,  Canada will more accurately reflect
our  present  operations  as an oil and gas  company,  which have always been in
Canada. Further, all of our employees are located in Canada. We also believe the
continuance to Alberta may enable us to benefit from new financing opportunities
which may become  available  to us.  Furthermore,  a majority  of our issued and
outstanding common stock is owned of record by non-U.S. residents.  Accordingly,
upon the continuance, we will be considered a "foreign private issuer" under the
Securities Act of 1933, as amended.


                                      -17-


EFFECTIVE TIME OF THE CONVERSION

The continuance and conversion will become effective upon:


     o    The approval of the Plan of Conversion by the  stockholders  of Assure
          Nevada;


     o    The delivery of duly executed  articles of conversion to the Secretary
          of State of the State of Nevada in accordance  with Section 92A.205 of
          the Nevada Revised Statutes; and


     o    The  issuance  of a  Certificate  of  Continuance  by the  Director of
          Business Corporations under the Alberta Business Corporations Act.


We anticipate  that the Articles of Conversion and Articles of Continuance  will
be filed  promptly  after the  Special  Meeting of Assure  Nevada  stockholders.
Therefore,  the only condition  required for us to effect the Plan of Conversion
and became continued into Alberta is that our stockholders must duly approve the
Plan of Conversion.


CONDITIONS TO THE CONSUMMATION OF THE CONVERSION


The Board of  Directors  of Assure  Nevada has adopted and  approved the plan of
conversion.   The  only  other  material  actions  required  to  consummate  the
conversion are the approval of the  stockholders  of Assure Nevada in accordance
with Section 92A.120 of the Nevada Revised Statutes,  the filing of the Articles
of  Conversion  with the Secretary of State of Nevada and the filing of Articles
of  Continuance,  along with other  documents  required by the Alberta  Business
Corporations Act, with the Alberta Registrar of Corporations.


EXCHANGE OF SHARE CERTIFICATES

No  exchange  of  certificates   that,  prior  to  the  effective  time  of  the
continuance,  represented  shares of Assure Nevada common stock is required with
respect to the continuance and the  transactions  contemplated by the conversion
plan. Promptly after the effective time of the conversion, we shall mail to each
record holder of certificates  that  immediately  prior to the effective time of
the  conversion  represented  shares of Assure Nevada common stock,  a letter of
transmittal and instructions for use in surrendering  those  certificates.  Upon
the surrender of each  certificate  formerly  representing  Assure Nevada stock,
together  with a properly  completed  letter of  transmittal,  we shall issue in
exchange  a  share  certificate  of  Assure  Canada  and the  stock  certificate
representing shares in the Assure Nevada shall be cancelled.

STOCK OPTIONS AND WARRANTS

As of the effective time of the conversion, all warrants and options to purchase
shares of Assure  Nevada  common stock  granted or issued prior to the effective
time of the conversion  will become  warrants and options to purchase  shares in
Assure Canada as continued under the Alberta Business Corporations Act.


RECOMMENDATION OF THE BOARD OF DIRECTORS



THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE PLAN OF CONVERSION DESCRIBED
IN THIS PROXY STATEMENT/PROSPECTUS


In reaching its decision,  the board  reviewed the fairness to Assure Nevada and
its stockholders of the proposed  continuance and considered,  without assigning
relative weights to, the following factors:

     o    The fact that all of the  company's  operations,  assets and employees
          and  current  principal  executive  offices are  currently  located in
          Canada.


                                      -18-


     o    The belief of the board of directors that the  continuance may provide
          new financing opportunities for the company.

     o    The belief that there will be minimal or no tax consequences to Assure
          Nevada from the proposed continuance.


     o    The fact that stockholders have an opportunity to vote on the proposed
          continuance.


Without  relying on any single  factor  listed above more than any other factor,
the board of directors, based upon their consideration of all such factors taken
as a whole,  concluded  that the  proposals  are fair to Assure  Nevada  and its
stockholders.


ACCORDINGLY,  THE BOARD OF DIRECTORS  UNANIMOUSLY  RECOMMENDS THAT  STOCKHOLDERS
VOTE  FOR  THE   PLAN  OF   CONVERSION   PROPOSAL   DESCRIBED   IN  THIS   PROXY
STATEMENT/PROSPECTUS



In  addition  to the  conversion  proposal,  our  board  of  directors  is  also
soliciting proxies to authorize us to adjourn the special meeting on one or more
occasions,  if  necessary,  to  solicit  additional  proxies  if  there  are not
sufficient  votes at the time of the  special  meeting  to  approve  the plan of
conversion. This will increase the likelihood of ultimate passage of the plan of
conversion proposal.



OUR BOARD OF DIRECTORS' HAS UNANIMOUSLY  APPROVED THE  ADJOURNMENT  PROPOSAL AND
RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE ADJOURNMENT PROPOSAL DESCRIBED IN THIS
PROXY STATEMENT/PROSPECTUS.



                          VOTING AND PROXY INFORMATION



SPECIAL MEETING



A special meeting of the Assure Nevada stockholders will be held at ____________
a.m. on January __, 2004,  at the offices of  Gottbetter & Partners,  LLP.,  488
Madison Avenue,  12th Floor, New York, New York 10022 (or at any adjournments or
postponements thereof) to consider and vote on the following matters:



     o    a proposal to effect a plan of conversion,  which will have the effect
          of transferring  the  jurisdiction of  incorporation  of Assure Nevada
          from the State of Nevada to Alberta, Canada;



     o    a proposal to authorize the adjournment of the special meeting, on one
          or more  occasions,  if necessary,  to solicit  additional  proxies if
          there are  insufficient  votes at the time of the  special  meeting to
          approve the plan of conversion proposal; and



     o    any other matters that may properly come before such meeting.



The presence,  in person or by proxy, of stockholders  holding a majority of the
outstanding  shares of Assure Nevada common stock will constitute a quorum.  The
vote of any  stockholder who is represented at the special meeting by proxy will
be cast as  specified in the proxy.  If no vote is specified in a duly  executed
and delivered proxy such vote will be cast for the proposal.  Any stockholder of
record who is present at the special  meeting in person will be entitled to vote
at the meeting  regardless of whether the stockholder  has previously  granted a
proxy for the special meeting.



                                      -19-



THE BOARD OF DIRECTORS OF ASSURE NEVADA HAS APPROVED THE PLAN OF CONVERSION  AND
ADJOURNMENT  PROPOSALS AND RECOMMENDS THAT  STOCKHOLDERS  VOTE IN FAVOR OF THEIR
APPROVAL.



PROXY SOLICITATION



The  total  cost of  soliciting  proxies  will be  borne by us.  Proxies  may be
solicited  by officers  and regular  employees of Assure  Nevada  without  extra
remuneration,  by personal  interviews,  telephone and by electronic  means.  We
anticipate  that banks,  brokerage  houses and other  custodians,  nominees  and
fiduciaries will forward  soliciting  material to stockholders and those persons
will be reimbursed,  upon request, for the related  out-of-pocket  expenses they
incur.



RECORD DATE



Only those  stockholders  of record at the close of business  on  December  ___,
2003, as shown in Assure Nevada's records,  will be entitled to vote or to grant
proxies to vote at the special meeting.



VOTE REQUIRED FOR APPROVAL



Approval  of the  conversion  proposal  requires  the  affirmative  vote  of the
stockholders  of Assure Nevada holding a majority of the  outstanding  shares of
Assure Nevada common stock.  Abstentions  and broker  "non-votes"  will have the
same  effect  as  votes  against  the  conversion  proposal.   Approval  of  the
adjournment proposal requires the affirmative vote of the stockholders of Assure
Nevada  holding a majority of the  outstanding  shares of Assure  Nevada  common
stock present or  represented by proxy at the special  meeting.  Failure to vote
will have no effect on the adjournment proposal. As of December ___, 2003, there
were __________  shares of common stock  outstanding held by  approximately  ___
holders of record.



PROXY INSTRUCTIONS



Each Assure Nevada  stockholder as of December ___,  2003,  will receive a proxy
card. A stockholder may grant a proxy to vote for or against, or to abstain from
voting on, the  proposals  by marking  his or her proxy card  appropriately  and
executing it in the space  provided.  Alternatively,  stockholders  may vote via
telephone or the Internet.



Holders of our common  stock whose names  appear on the stock  records of Assure
Nevada should return their proxy card to our transfer agent,  Continental  Stock
Transfer  & Trust  Company,  in the  envelope  provided  with  the  proxy  card.
Stockholders who hold their common stock in the name of a bank,  broker or other
nominee should follow the instructions provided by their bank, broker or nominee
on voting their shares.



TO BE EFFECTIVE, A PROXY CARD MUST BE RECEIVED PRIOR TO THE SPECIAL MEETING. ANY
PROPERLY  EXECUTED  PROXY  WILL BE VOTED IN  ACCORDANCE  WITH THE  SPECIFICATION
INDICATED  ON THE PROXY CARD. A PROPERLY  EXECUTED  AND  RETURNED  PROXY CARD IN
WHICH NO SPECIFICATION IS MADE WILL BE VOTED FOR THE PROPOSALS.



                                      -20-



If any  other  matters  are  properly  presented  at  the  special  meeting  for
consideration,  the  persons  named in the  proxy  card  and  acting  under  its
authority will have  discretion to vote on such matters in accordance with their
best judgment.



PROXY REVOCATION



Holders of Assure Nevada common stock whose names appear on the stock records of
Assure Nevada may revoke their proxy at any time prior to its exercise by:



     o    Giving written notice of such revocation to the corporate secretary;



     o    Appearing and voting in person at the special meeting; or



     o    Properly  completing and executing a later-dated  proxy and delivering
          it to the corporate secretary at or before the special meeting.



Presence without voting at the special meeting will not  automatically  revoke a
proxy,  and any revocation  during the meeting will not affect votes  previously
taken.  Assure Nevada  stockholders who hold their Assure Nevada common stock in
the name of a bank,  broker or other  nominee  should  follow  the  instructions
provided by their bank,  broker or nominee in revoking  their  previously  voted
shares.



PROXY VALIDITY



All questions as to the validity, form, eligibility (including time of receipt),
and  acceptance  of proxy cards will be determined by the Assure Nevada board of
directors.  Any such determination will be final and binding.  The Assure Nevada
board of directors will have the right to waive any irregularities or conditions
as to the manner of voting.  Assure Nevada may accept  proxies by any reasonable
form of  communication  so long as Assure Nevada can be reasonably  assured that
the communication is authorized by the Assure Nevada stockholder.



TERMINATION OF PRIOR CONSENT



Certain  shareholders  of record of Assure Nevada as of the close of business on
September  18, 2003 have  previously  executed  consents  approving  the plan of
conversion to re-domicile Alberta. These consents have been voided and will have
no  bearing  on the vote to be taken on the  proposals  to be  presented  at the
special shareholder meeting. All Assure Nevada shareholders  eligible to vote at
the special  shareholder meeting that have previously executed a consent will be
asked to vote on the proposals at the shareholder meeting, including the plan of
conversion  proposal.  These  shareholders are not obligated to vote in favor of
any of the  proposals  and can vote against or abstain from voting on any of the
proposals.



                                      -21-



                               DISSENTERS' RIGHTS


Under Section 92A.120 of the Nevada Revised Statutes,  the approval of the board
of directors of a company and the affirmative  vote of the holders of at least a
majority of its outstanding shares on the record date for a stockholder vote are
required to approve and adopt a plan of  conversion.  Our board of directors has
approved and adopted our plan of conversion by unanimous written consent. If the
conversion  is  completed,  eligible  holders of Assure Nevada common stock that
follow the procedures  summarized  below will be entitled to dissenters'  rights
under  Sections  92A.300 to 92A.500 of the  Nevada  Revised  Statutes.  To be an
eligible  shareholder,  a person must have been an Assure Nevada  shareholder of
record as of the close of trading on September  11, 2003,  the date the terms of
the  plan of  conversion  were  first  announced  in a press  release.  Eligible
shareholders  include  persons that executed  written  consents on September 18,
2003  approving  the plan of  conversion  to  re-domicile  in  Alberta  as these
consents have been voided and have no further effect.



THE FOLLOWING  DISCUSSION IS NOT A COMPLETE  STATEMENT OF THE LAW  PERTAINING TO
DISSENTERS'  RIGHTS  UNDER THE NEVADA  REVISED  STATUTES AND IS QUALIFIED IN ITS
ENTIRETY BY THE FULL TEXT OF SECTIONS  92A.300 TO 92A.500 OF THE NEVADA  REVISED
STATUTES  ATTACHED  HERETO AS  APPENDIX  E. YOU  SHOULD  READ  APPENDIX E IN ITS
ENTIRETY.  A PERSON  HAVING A  BENEFICIAL  INTEEST IN SHARES OF OUR COMMON STOCK
HELD OF RECORD IN THE NAME OF ANOTHER PERSON, SUCH AS A BROKER OR NOMINEE,  MUST
ACT  PROMPTLY TO CAUSE THE RECORD  HOLDER TO FOLLOW THE STEPS  SUMMARIZED  BELOW
PROPERLY AND IN A TIMELY MANNER TO PERFECT THEIR DISSENTERS' RIGHTS.  FAILURE TO
PROPERLY  DEMAND AND PERFECT  DISSENTERS'  RIGHTS IN  ACCORDANCE  WITH  SECTIONS
92A.300 TO 92A.500 OF THE NEVADA  REVISED  STATUTES  WILL  RESULT IN THE LOSS OF
DISSENTERS' RIGHTS.



Eligible Assure Nevada shareholders who wish to assert dissenters' rights:



     o    Must  deliver  to  Assure  Nevada,  before  the  vote is  taken on the
          conversion  proposal at the special  shareholders'  meeting, a written
          notice of the  shareholder's  intent to demand  payment for his or her
          shares if the conversion is effectuated; and



     o    Must not vote his or her shares in favor of the conversion.



If the conversion is authorized by the  shareholders,  Assure Nevada will send a
written  dissenters'  notice to all eligible  shareholders  who provided  timely
notice of their  intent to demand  payment for their shares and who did not vote
their shares in favor of the  conversion,  within 10 days after  effectuation of
the conversion. The notice will:


     o    state  where the  demand for  payment  must be sent and where and when
          certificates for Assure Nevada shares are to be deposited;

     o    supply a form for demanding payment;


     o    set a date by which we must receive the demand for payment,  which may
          not be less than 30 or more than 60 days  after the date the notice is
          delivered; and



                                      -22-


     o    be accompanied by a copy of Sections  92A.300  through  92A.500 of the
          NRS;

An eligible  shareholder to whom a dissenter's  notice is sent must, by the date
set forth in the dissenter's notice:

     o    demand payment;


     o    certify whether the stockholder  acquired beneficial  ownership of the
          shares  on or  before  September  11,  2003,  the  date  of the  first
          announcement to the news media or to the  shareholders of the terms of
          the conversion; and


     o    deposit his or her  certificates  in accordance  with the terms of the
          dissenter's notice.

Eligible  shareholders  who do not demand payment or deposit their  certificates
where required,  each by the date set forth in the dissenter's  notice, will not
be  entitled to demand  payment  for their  shares  under  Nevada law  governing
dissenters' rights.

Within 30 days after  receipt of a valid  demand for  payment,  we will pay each
dissenter who complied with the procedures  described by the Nevada  dissenters'
rights  statute the amount we estimate to be the fair value of the shares,  plus
accrued interest. The payment will be accompanied by:

     o    our balance  sheet as of the end of a fiscal year ending not more than
          16 months  before the date of payment,  a statement of income for that
          fiscal year, a statement of changes in  shareholders'  equity for that
          fiscal year and the latest available interim financial statements,  if
          any;

     o    a statement of our estimate of the fair value of the shares;

     o    an explanation of how the interest was calculated;

     o    a statement of  dissenters'  rights to demand  payment  under  Section
          92A.480 of the NRS; and

     o    a copy of Sections 92A.300 through 92A.500 of the NRS.

An eligible  dissenter may notify us in writing of the  dissenter's own estimate
of the fair value of the shares and interest due, and demand  payment based upon
his or her estimate, less our fair value payment or offer for payment, or reject
the offer for  payment  made by us and  demand  payment of the fair value of the
dissenter's  shares and interest due if the  dissenter  believes that the amount
paid or offered is less than the fair  value of the  dissenter's  shares or that
the  interest due is  incorrectly  calculated.  A dissenter  waives his right to
demand such payment  unless the  dissenter  notifies us of his demand in writing
within 30 days after we made or offered payment for the dissenter's shares.

If a demand for payment remains unsettled,  we will commence a proceeding within
60 days after  receiving  the  demand  for  payment  and  petition  the court to
determine the fair value of the shares of Assure Nevada common stock and accrued
interest. If we do not commence the proceeding within the 60-day period, we will
be required to pay each  dissenter  whose demand  remains  unsettled  the amount
demanded.


                                      -23-


Each dissenter who is made a party to the proceeding is entitled to a judgment:

     o    for the amount, if any, by which the court finds the fair value of the
          dissenter's shares, plus interest, exceeds the amount paid by us; or

     o    for  the  fair  value,  plus  accrued  interest,  of  the  dissenter's
          after-acquired  shares  for  which  we  elected  to  withhold  payment
          pursuant to Nevada law.

Under Nevada law, the fair value of shares of Assure  Nevada  common stock means
the value of the shares  immediately  before the consummation of the conversion,
excluding any increase or decrease in value in  anticipation  of the  conversion
unless excluding such increase or decrease is inequitable.  The value determined
by the court for the Assure Nevada  common stock could be more than,  less than,
or the  same as the  conversion  consideration,  but the  form of  consideration
payable as a result of the dissent proceeding would be cash.

The court  will  determine  all of the costs of the  proceeding,  including  the
reasonable  compensation and expenses of any appraisers  appointed by the court.
The court will  assess the costs  against  us,  except that the court may assess
costs  against  all or some of the  dissenters,  in the  amounts the court finds
equitable,  to the extent that the court finds the dissenters acted arbitrarily,
vexatiously or not in good faith in demanding payment. The court may also assess
the fees and expenses of the counsel and experts for the respective  parties, in
amounts the court finds equitable:

     o    against us in favor of all  dissenters  if the court  finds we did not
          substantially comply with the Nevada dissenters' rights statute; or

     o    against  either us or a dissenter in favor of any other party,  if the
          court  finds that the party  against  whom the fees and  expenses  are
          assessed  acted  arbitrarily,  vexatiously  or not in good  faith with
          respect  to  the   dissenters'   rights   provided  under  the  Nevada
          dissenters' rights statute.

If the court  finds that the  services  of  counsel  for any  dissenter  were of
substantial benefit to other dissenters  similarly  situated,  and that the fees
for those  services  should not be  assessed  against us, the court may award to
those  counsel  reasonable  fees to be paid out of the  amounts  awarded  to the
dissenters who were benefited.

If a proceeding is commenced  because we did not pay each dissenter who complied
with the  procedures  described  by the Nevada  dissenters'  rights  statute the
amount we estimated to be the fair value of the shares,  plus accrued  interest,
within 30 days after receipt of a valid demand for payment, the court may assess
costs  against us, except that the court may assess costs against all or some of
the  dissenters  who are parties to the  proceeding,  in amounts the court finds
equitable,  to the extent the court finds that such  parties did not act in good
faith in instituting the  proceeding.  The assessment of costs and fees, if any,
may also be affected by Nevada law governing offers of judgment.

The foregoing summary of the rights of eligible dissenting stockholders does not
purport to be a complete  statement  of such  rights  and the  procedures  to be
followed by stockholders  desiring to exercise any available dissenters' rights.
The preservation and exercise of dissenters'  rights require strict adherence to
the applicable provisions of Nevada law.


                                      -24-


                 MATERIAL UNITED STATES FEDERAL TAX CONSEQUENCES

GENERAL

The following sections  summarize  material  provisions of United States federal
income tax laws that may affect our  stockholders  and us. Although this summary
discusses the material United States federal income tax  considerations  arising
from and relating to the continuance,  it does not purport to discuss all of the
United States consequences that may be relevant to our stockholders, nor will it
apply to the same  extent or in the same way to all  stockholders.  The  summary
does not describe the effect of the U.S.  federal estate tax laws or the effects
of any  state  or local  tax law,  rule or  regulation,  nor is any  information
provided as to the effect of any other United  States or foreign tax law,  other
than the  income tax laws of the United  States to the extent  specifically  set
forth herein.

The tax  discussion  set  forth  below is based  upon the  facts set out in this
prospectus and upon additional  information possessed by our management and upon
representations  of our  management.  The tax discussion is included for general
information  purposes only. It is not intended to be, nor should it be construed
to be, legal or tax advice to any particular stockholder. The following does not
address  all  aspects of  taxation  that may be relevant to you in light of your
individual  circumstances  and tax situation.  YOU ARE STRONGLY  ADVISED AND ARE
EXPECTED TO CONSULT  WITH YOUR OWN LEGAL AND TAX ADVISORS  REGARDING  THE UNITED
STATES INCOME TAX  CONSEQUENCES  OF THE  CONTINUANCE IN LIGHT OF YOUR PARTICULAR
CIRCUMSTANCES.

UNITED STATES FEDERAL INCOME TAX CONSEQUENCES

This portion of the summary applies to U.S. holders who own our common shares as
capital assets.  U.S.  holders include  individual  citizens or residents of the
United  States,  corporations  (or  entities  treated as  corporations  for U.S.
federal income tax purposes),  and partnerships  organized under the laws of the
United States or any State thereof or the District of Columbia.  Trusts are U.S.
holders if they are subject to the primary  supervision  of a U.S. court and the
control of one or more U.S. persons with respect to substantial trust decisions.
An  estate is a U.S.  holder if the  income  of the  estate is  subject  to U.S.
federal income taxation regardless of the source of the income. U.S. holders who
own  interests  indirectly  through  one or more  non-U.S.  entities or carry on
business  outside the United States through a permanent  establishment  or fixed
place of business,  or U.S.  holders who hold an interest other than as a common
shareholder,  should consult with their tax advisors  regarding their particular
tax consequences.

This summary also  describes  certain U.S.  federal income tax  consequences  to
Canadian holders following the continuance,  who are specifically  those persons
resident in Canada who own our common shares as capital  assets.  The discussion
is limited to the U.S.  federal income tax  consequences to Canadian  holders of
their  ownership and disposition of the common shares of the company as a result
of the continuance and assumes the Canadian holders have no other U.S. assets or
activities.


                                      -25-


This  discussion  is based on the  Internal  Revenue  Code of 1986,  as amended,
adopted and proposed  regulations  thereunder,  Internal Revenue Service ("IRS")
rulings  and  pronouncements,  reports  of  congressional  committees,  judicial
decisions,  and  current  administrative  practice,  all of which are subject to
change,  perhaps with  retroactive  effect.  Any such change could alter the tax
consequences  discussed  below.  No  ruling  from  the  IRS  will  be  requested
concerning the U.S. federal income tax consequences of the continuance.  The tax
consequences set forth in the following discussion are not binding on the IRS or
the courts and no assurance  can be given that  contrary  positions  will not be
successfully asserted by the IRS or adopted by a court. As indicated above, this
discussion does not address all aspects of U.S. federal income taxation that may
be relevant to particular U.S. holders in light of their personal  circumstances
or to U.S. holders subject to special  treatment under the U.S. Internal Revenue
Code, including,  without limitation,  banks, financial institutions,  insurance
companies, tax-exempt organizations,  broker-dealers, S corporations, individual
retirement and other deferred accounts,  application of the alternative  minimum
tax rules,  holders who  received  our stock as  compensation,  persons who hold
notes or stock as part of a hedge, conversion, or constructive sale transaction,
straddle, or other risk-reduction  transaction,  persons that have a "functional
currency"  other  than the U.S.  dollar,  and  persons  subject to  taxation  as
expatriates.  Furthermore, this discussion does not address the tax consequences
applicable  to holders that are treated as  partnerships  or other  pass-through
entities for U.S. federal income tax purposes.

This summary does not address the U.S. federal income tax consequences to a U.S.
holder of the ownership, exercise, or disposition of any warrants or options.

U.S. TAX CONSEQUENCES TO THE COMPANY

While the continuance of the Company from Nevada to Alberta,  Canada is actually
a migration of the corporation from Nevada to Alberta, Canada, for tax purposes,
the  continuance is treated as the transfer of our assets to the Alberta company
in  exchange  for stock of the  Alberta  company.  This is to be  followed  by a
distribution of the stock in the Alberta company to our  stockholders,  and then
the exchange by Assure  Nevada's  stockholders  of their Assure Nevada stock for
Assure Canada stock. As a Nevada company,  we must recognize gain (but not loss)
on the assets  held by us at the time of the  conversion  to the extent that the
fair market value of any of our assets  exceeds  their  respective  basis in the
assets.  The  calculation of any potential gain will need to be made  separately
for each asset held by Assure Nevada. No loss will be allowed for any asset that
has a taxable  basis in excess of its fair market  value.  We do not believe the
current  fair  market  value of the  assets  held by Assure  Nevada  exceeds  or
materially  exceeds their respective  basis.  Accordingly,  we are not expecting
Assure  Nevada  to  recognize   material  taxable  gains  as  a  result  of  the
continuance.

U.S. TAX CONSEQUENCES TO U.S. AND CANADIAN SHAREHOLDERS

The  continuance  should be treated by  shareholders as the exchange by them, of
their  stock for stock of the  Alberta  company.  The  shareholders  will not be
required to recognize any U.S. gain or loss on this transaction. A shareholder's
adjusted  basis in the shares of Assure Canada  received in the exchange will be
equal to such  shareholder's  adjusted  basis in the  shares  of  Assure  Nevada
surrendered  in the exchange.  A  shareholder's  holding period in the shares of
Assure Canada  received in the exchange should include the period of time during
which such shareholder held his or her shares in Assure Nevada.


Shareholders  exercising  dissenters' rights will recognize capital gain or loss
with  respect  to their  receipt  of  payment in cash of the fair value of their
Assure Nevada shares in the amount by which the fair value payment exceeds or is
less than the basis in their Assure Nevada shares.



                                      -26-


CONTROLLED FOREIGN CORPORATION CONSIDERATIONS

There is  currently  no  single  U.S.  shareholder  of Assure  Nevada  that owns
(directly or indirectly) at least 10% of the Assure Nevada shares.  Further, the
total combined ownership of all U.S.  shareholders is less than 50%.  Therefore,
the Controlled  Foreign  Corporation  ("CFC") rules under Internal  Revenue Code
("IRC")  Sections  951 - 959  will  not  apply  to  Assure  Canada  and its U.S.
shareholders  immediately  after the  continuance.  Any United States person who
owns (directly or indirectly)  10% or more of the total combined voting power of
all classes of stock entitled to vote of a foreign  corporation,  such as Assure
Canada,  will be considered a "United States  shareholder"  under the CFC rules.
If, in the future, "United States shareholders" (as defined above) own more than
50% of the total  combined  voting  power of all classes of Assure  Canada stock
entitled  to vote or own more  than 50% of the  value of  Assure  Canada  stock,
Assure  Canada will be  considered  to be a CFC for U.S. tax  purposes.  In such
situation,  the  "United  States  shareholders"  would  likely be subject to the
effects of the CFC rules,  and should consult with their tax advisors  regarding
their particular tax consequences.

FOREIGN PERSONAL HOLDING COMPANY CONSIDERATIONS

There is not  currently  a group of five or fewer  U.S.  shareholders  of Assure
Nevada that owns  (directly or  indirectly)  more than 50% of the Assure  Nevada
shares. Therefore, the Foreign Personal Holding Company ("FPHC") rules under IRC
Sections  551 - 558 will not  apply  to  Assure  Canada  immediately  after  the
continuance.  If, in the  future,  any group of five or fewer U.S.  shareholders
owns (directly or indirectly)  more than 50% of Assure Canada's stock,  the U.S.
shareholders  may be subject to the FPHC rules,  depending on the type of income
earned by the company. Should that situation occur, the U.S. shareholders should
consult with their tax advisors regarding their particular tax consequences.

PASSIVE FOREIGN INVESTMENT COMPANY CONSIDERATIONS

After the continuance, Assure Canada and every U.S. shareholder of Assure Canada
will need to  annually  evaluate  whether  Assure  Canada  is a Passive  Foreign
Investment  Company  ("PFIC")  under IRC Sections  1291 - 1298.  If, at any time
after the continuance, Assure Canada were considered a PFIC, the company and all
U.S.  shareholders  of Assure  Canada would need to consider  various  potential
reporting  requirements,  tax elections,  and tax liabilities  imposed under the
PFIC rules.  In such  situation,  the company and all U.S.  shareholders  should
consult with their tax advisors regarding their particular tax consequences.

If  Assure  Canada  generates  revenues  in any tax year  that are at least  75%
passive  income  (dividends,  interest,  royalties,  rents,  annuities,  foreign
currency gains,  and gains from the sale of assets  generating  passive income),
Assure  Canada will be considered a PFIC for that year and for all future years.
In addition, if 50% or more of the gross average value of Assure Canada's assets
in any tax year consist of assets that would produce  passive income  (including
cash and cash  equivalents  held as  working  capital),  Assure  Canada  will be
considered a PFIC for that year and for all future years.

POST-CONTINUANCE U.S. TAXATION OF INCOME, GAINS AND LOSSES

After  the  continuance,  Assure  Canada  will not have any U.S.  activities  or
operations.  As long as Assure Canada does not develop a permanent establishment
in the U.S., the operations of Assure Canada will not be subject to U.S.  income
tax. If Assure Canada receives dividends,  interest, rent, or royalties from any
U.S.  entity,  those amounts will be subject to  withholding  tax (which will be
withheld and remitted to the US Treasury by the U.S. entity paying the dividends
or  interest)  under the  convention  between  the United  States of America and
Canada with respect to taxes on income and capital.  Depending on the particular
situation,  such amounts may be available to offset taxes imposed by the country
of residence of a particular stockholder.


                                      -27-


POST-CONTINUANCE SALE OF ASSURE CANADA SHARES

A U.S.  shareholder  who sells his or her shares of Assure Canada will generally
recognize  capital gain (or loss) equal to the amount by which the cash received
pursuant  to sale of the  shares  exceeds  (or is  exceeded  by)  such  holder's
adjusted  basis in the shares  surrendered.  If the U.S.  shareholder's  holding
period for the Assure Canada shares (which  includes the holding  period for the
Assure Nevada shares) is less than one year, the U.S. shareholder will recognize
ordinary income (or loss) on the sale of his or her shares.

POST-CONTINUANCE DIVIDENDS ON ASSURE CANADA SHARES

Any dividends received by U.S.  shareholders of Assure Canada will be recognized
as ordinary income by the shareholders  for U.S. tax purposes.  Any Canadian tax
withheld by Canada  Customs & Revenue Agency on such dividends will be available
as a foreign  tax credit to the U.S.  shareholders.  In  general,  any  Canadian
income tax withheld from dividends paid to U.S.  shareholders can be used by the
shareholder to offset the U.S. income tax assessed on the dividends.  The amount
of the  Canadian  taxes that can be used as a foreign  tax credit will depend on
the particular  tax situation of each U.S.  shareholder.  Each U.S.  shareholder
should  consult with a tax advisor  regarding the  calculation  of any available
foreign tax credit available in his or her particular tax consequences.

                       MATERIAL CANADIAN TAX CONSEQUENCES

GENERAL

The following sections summarize material  provisions of Canadian federal income
tax laws  that  may  affect  our  stockholders  and us.  Although  this  summary
discusses the material Canadian federal income tax  considerations  arising from
and  relating  to the  continuance,  it does not  purport to discuss  all of the
Canadian tax consequences that may be relevant to our stockholders,  nor will it
apply to the same  extent or in the same way to all  stockholders.  The  summary
does not  describe  the  effects  of any  provincial  or local tax law,  rule or
regulation,  nor is any  information  provided  as to the  effect  of any  other
Canadian federal or foreign tax law, other than the income tax laws of Canada to
the extent specifically set forth herein.

The tax  discussion  set  forth  below is based  upon the  facts set out in this
prospectus and upon additional  information possessed by our management and upon
representations  of our  management.  The tax discussion is included for general
information  purposes only. It is not intended to be, nor should it be construed
to be, legal or tax advice to any particular stockholder. The following does not
address  all  aspects of  taxation  that may be relevant to you in light of your
individual  circumstances  and tax situation.  YOU ARE STRONGLY  ADVISED AND ARE
EXPECTED TO CONSULT WITH YOUR OWN LEGAL AND TAX ADVISORS  REGARDING THE CANADIAN
INCOME  TAX  CONSEQUENCES  OF  THE  CONTINUANCE  IN  LIGHT  OF  YOUR  PARTICULAR
CIRCUMSTANCES.


                                      -28-


CANADIAN INCOME TAX CONSIDERATIONS

The  following  general  summary is our  understanding  of the Canadian  federal
income tax consequences of the proposed continuance of Assure Nevada to Alberta,
Canada as it applies to Assure Canada and to those individual  Canadian resident
stockholders to whom shares of the Nevada company constitute  "capital property"
for the purposes of the Income Tax Act (Canada)  (the "Act").  This summary also
describes the principal Canadian federal income tax consequences of the proposed
continuance  of Assure  Nevada to  Alberta,  Canada to  non-resident  individual
stockholders who do not carry on business in Canada. Stockholders should consult
their own Canadian tax advisors on the Canadian tax consequences of the proposed
continuance.

This summary is based upon our  understanding  of the current  provisions of the
Act, the regulations thereunder in force on the date hereof (the "Regulations"),
any proposed  amendments  (the "Proposed  Amendments") to the Act or Regulations
previously announced by the Federal Minister of Finance and our understanding of
the current  administrative  and  assessing  policies of the Canada  Customs and
Revenue  Agency.  This  description is not  exhaustive of all possible  Canadian
federal income tax consequences and does not take into account or anticipate any
changes in law,  whether by  legislative,  governmental or judicial action other
than the  Proposed  Amendments,  nor does it take  into  account  provincial  or
foreign tax considerations,  which may differ significantly from those discussed
herein.

CONSEQUENCES OF CONTINUANCE TO ALBERTA, CANADA

CANADIAN CORPORATION

As a result of being granted articles of continuance to Alberta,  Canada, Assure
Canada will be deemed to have been  incorporated  in  Alberta,  Canada from that
point onwards, and not to have been incorporated elsewhere.

NOT FOREIGN PROPERTY

As of the date of  continuance,  Assure  Canada  shares  will not be  considered
foreign  property  for  investment  by a  registered  pension  plan,  registered
retirement  savings plan or deferred  profit sharing plan. It is not likely that
the Assure Canada shares will ever be considered foreign property.

DEEMED DISPOSITION

As a result of the continuance to Alberta,  Canada, Assure Canada will be deemed
to have disposed of, and immediately reacquired, all of its assets at their then
fair market value.  Gains arising on the deemed  disposition of taxable Canadian
property  (if  any)  are  taxable  in  Canada   (subject  to  exclusion  by  the
Canada-United States income tax treaty). Since all of our property is located in
Canada, all of our property is taxable Canadian property.

Pre-continuance  accrued gains on a subsequent  disposition by Assure Canada are
not  subject  to  further  Canadian  tax.  Pre-continuance  accrued  losses  are
available for future use in Canada.  The effect of this provision is that Assure
Canada's  assets are  re-stated  for Canadian  income tax purposes at their fair
market value as at the time of continuance to Canada.


                                      -29-


NEW FISCAL PERIOD


We will be deemed to have a year-end  immediately  prior to our  continuance  to
Alberta, Canada. For Canadian income tax purposes, Assure Canada will be able to
choose  a new  fiscal  year end  falling  within  the 12  months  following  the
effective date of the continuance.


CONSEQUENCES OF CONTINUANCE TO CANADIAN STOCKHOLDERS

NO DEEMED DISPOSITION

A stockholder  will not realize a  disposition  of their Assure Nevada shares on
the continuance to Canada. For Canadian income tax purposes, the income tax cost
of their  Assure  Canada  shares  will be equal to the  income tax cost of their
Nevada shares.  On a subsequent sale of Assure Canada shares,  a capital gain or
loss will result equal to the proceeds of  disposition  less the income tax cost
of their Assure Canada shares and any related selling costs.

DEEMED DIVIDEND

The deemed  disposition of Assure  Nevada's  assets will result in a decrease in
the  income  tax  cost of  certain  of its  assets.  To the  extent  there is an
adjustment in the income tax cost of Assure  Canada's  assets,  a  corresponding
adjustment  to the paid up capital  of Assure  Canada's  shares  will be made to
insure their paid up capital does not exceed the difference between the adjusted
income tax cost of its assets (as  adjusted by the deemed  disposition)  and its
outstanding liabilities.  Since a decrease in Assure Canada's paid up capital is
required, such decrease is allocated pro-rata amongst Assure Canada's shares.

If an  increase  in the  income  tax cost of  Assure  Canada's  asset  values is
realized,  Assure Canada may elect to increase the paid up capital of its shares
prior to  continuing  to  Canada.  In the  event  Assure  Canada  makes  such an
election,  it will  be  deemed  to have  paid a  dividend  to its  stockholders.
Canadian  stockholders  that are deemed to have  received  such a dividend  must
include that dividend in income. In such a situation, the amount of the dividend
will be added to the  stockholders'  income  tax  cost of  their  Assure  Canada
shares.   Since  the  tax  consequences   would  be  detrimental  to  individual
stockholders  if we were to increase the income tax cost,  we will not be making
such an election.

INTEREST EXPENSE

Assure  Nevada's  continuance  to Canada  will not affect the  deductibility  of
interest  incurred  on money  borrowed  to  purchase  shares of  Assure  Nevada.
Generally,  interest that is currently deductible will continue to be deductible
by a stockholder  after our  continuance to Canada,  as long as the  stockholder
continues to own Assure Canada shares.

CONSEQUENCES OF CONTINUANCE TO NON-RESIDENT STOCKHOLDERS

On the  continuance  of  Assure  Nevada to  Alberta,  the  income  tax cost of a
non-resident's  Assure Canada shares will be equal to their fair market value at
the time of  continuance to Alberta.  A subsequent  disposition of Assure Canada
shares  by a  non-resident  stockholder  will not be  subject  to tax in  Canada
provided his shares are not taxable Canadian property.


                                      -30-



To the extent Assure Canada pays a dividend to a non-resident stockholder,  such
dividend  is  subject to a 25%  withholding  tax (to be reduced by an income tax
treaty between Canada and the non-resident  stockholder's country of residence).
Under the treaty,  most  shareholders of Assure Canada would be subject to a 15%
withholding tax. Any shareholders  that are corporation and that own 10% or more
of Assure Canada would be subject to a 5% withholding tax.

                       COMPARATIVE RIGHTS OF STOCKHOLDERS

After the conversion,  the  stockholders of the former Nevada  corporation  will
become the holders of shares of a Canadian  company  organized under the Alberta
Business  Corporations Act.  Differences between the Nevada Revised Statutes and
the Alberta  Business  Corporations  Act, will result in various  changes in the
rights of  stockholders  of  Assure.  It is  impractical  to  describe  all such
differences,  but the  following is a description  of the material  differences.
This description is qualified in its entirety by reference to the Nevada Revised
Statutes and the Alberta Business Corporations Act.

ELECTION AND REMOVAL OF DIRECTORS

NEVADA. Any director, or the entire Board, may be removed with or without cause,
but only by the vote of not less  than two  thirds  of the  voting  power of the
company at a meeting  called for that purpose.  The directors may fill vacancies
on the board.

ALBERTA,  CANADA.  Any  director,  or the entire  Board,  may be removed with or
without cause,  but only by a majority vote at a meeting of shareholders  called
for that purpose.  The directors may fill  vacancies on the Board subject to the
provisions  of  the  articles  of  the  corporation  and  the  Alberta  Business
Corporations Act.

INSPECTION OF STOCKHOLDERS LIST

NEVADA.  Under Nevada law, any  stockholder  of record of a corporation  who has
held his shares for more than six months and stockholders holding at least 5% of
all of its outstanding  shares,  is entitled to inspect,  during normal business
hours, the company's stock ledger and make extracts  therefrom.  Nevada Law also
provides that a Nevada company may condition such inspection right upon delivery
of a written  affidavit  stating that  inspection is not desired for any purpose
not related to the stockholder's interest in the company.

ALBERTA,   CANADA.  Under  Alberta  law,  where  a  corporation  has  previously
distributed its shares to the public, any person may, on payment of a reasonable
fee, require a corporation to furnish a list setting out the names and addresses
of the  stockholders  of a  corporation  and the  number of shares  held by each
stockholder.  In order to obtain such a list, a statutory  declaration must also
be provided  confirming  that the list will only be used in  connection  with an
effort to influence voting of the stockholders,  an offer to acquire  securities
of  the  corporation  or  any  other  matter  relating  to  the  affairs  of the
corporation.

TRANSACTIONS WITH OFFICERS AND DIRECTORS

NEVADA.  Under  Nevada law,  contracts  or  transactions  in which a director or
officer is financially interested are not automatically void or voidable if:


                                      -31-


     o the fact of the common  directorship,  office or  financial  interest  is
known  to the  board of  directors  or  committee,  and the  board or  committee
authorizes, approves or ratifies the contract or transactions in good faith by a
vote  sufficient  for the  purpose,  without  counting  the vote or votes of the
common or interested director or directors;

     o the contract or  transaction,  in good faith,  is ratified or approved by
the holders of a majority of the voting power;

     o the fact of common  directorship,  office or financial  interest known to
the director or officer at the time of the  transactions  is brought  before the
board of directors for actions; or

     o the contract or transaction is fair to the  corporation at the time it is
authorized or approved.

Common or interested  directors may be counted to determine presence of a quorum
and if the votes of the common or  interested  directors  are not counted at the
meeting,  then a  majority  of  directors  may  authorize,  approve  or ratify a
contract or transaction.

ALBERTA, CANADA. Under Alberta law, a material contract or transaction between a
corporation  and  one or  more  of its  directors  or  officers,  or  between  a
corporation and another entity in which a director or officer of the corporation
is a director  or  officer,  or in which the  director or officer has a material
interest  in, is not invalid nor is the director or officer  accountable  to the
corporation  for any profit  realized,  if the director or officer has disclosed
the  nature and extent of his  interest  and the  contract  or  transaction  was
approved by the directors or the  shareholders and it was reasonable and fair to
the corporation at the time it was approved. Interested directors may be counted
for the  purpose of  determining  a quorum at a meeting of  directors  called to
authorize the contract.

LIMITATION ON LIABILITY OF DIRECTORS; INDEMNIFICATION OF OFFICERS
AND DIRECTORS

NEVADA.  Nevada  law  provides  for  discretionary  indemnification  made by the
corporation  only as authorized in the specific case upon a  determination  that
indemnification  of the  director,  officer,  employee or agent is proper in the
circumstances. The determination must be made either:

     o by the stockholders;

     o by the board of  directors  by majority  vote of a quorum  consisting  of
directors who were not parties to the actions, suit or proceeding;

     o if a  majority  vote of a quorum  consisting  of  directors  who were not
parties to the actions,  suit or  proceeding  so orders,  by  independent  legal
counsel in a written opinion; or

     o if a quorum  consisting of directors who were not parties to the actions,
suit or proceeding cannot be obtained, by independent legal counsel in a written
opinion.


                                      -32-


The  articles  of  incorporation,  the  bylaws  or  an  agreement  made  by  the
corporation may provide that the expenses of officers and directors  incurred in
defending a civil or criminal  action,  suit or  proceeding  must be paid by the
corporation as they are incurred and in advance of the final  disposition of the
actions,  suit or proceeding,  upon receipt of an undertaking by or on behalf of
the director or officer to repay the amount if it is ultimately  determined by a
court of competent jurisdiction that he is not entitled to be indemnified by the
corporation.  The  provisions do not affect any right to advancement of expenses
to which  corporate  personnel  other than directors or officers may be entitled
under any contract or otherwise by law. The  indemnification  and advancement of
expenses  authorized  in or ordered by a court  pursuant  to Nevada law does not
exclude  any  other  rights  to  which  a  person  seeking   indemnification  or
advancement of expenses may be entitled under the articles of  incorporation  or
any  bylaw,  agreement,  vote of  stockholders  or  disinterested  directors  or
otherwise, for either an action in his official capacity or an action in another
capacity while holding office, except that indemnification,  unless ordered by a
court or for the advancement of expenses, may not be made to or on behalf of any
director or officer if his acts or omissions  involved  intentional  misconduct,
fraud or a knowing violation of the law and was material to the cause of action.
In  addition,  indemnification  continues  for a person  who has  ceased to be a
director,  officer,  employee  or agent and inures to the  benefit of the heirs,
executors and administrators of such a person.

ALBERTA,  CANADA.  Alberta  law  provides  that a  corporation  may  indemnify a
director  or officer or former  director or officer of the  corporation  against
costs,  charges and  expenses,  including  an amount paid to settle an action or
satisfy a  judgment  reasonably  incurred  by the  individual,  in  respect of a
proceeding  to which such person was a party by reason of being or having been a
director or officer, if the person:

     o acted honestly and in good faith with a view to the best interests of the
corporation; and

     o in the case of a criminal  or  administrative  proceeding  enforced  by a
monetary  penalty,  he had  reasonable  grounds  for  believing  his conduct was
lawful.

Where  the  indemnity  is in  respect  of an  action  by or  on  behalf  of  the
corporation for a judgment in its favor to which the director or officer is made
party,  such  indemnity is only  available  if the director or officer  fulfills
those conditions.

VOTING RIGHTS WITH RESPECT TO EXTRAORDINARY CORPORATE TRANSACTIONS

NEVADA.  Approval of mergers and  consolidations,  amendments to the articles of
incorporation, and sales, leases or exchanges of all or substantially all of the
property or assets of a  corporation,  whether or not in the ordinary  course of
business,  requires the affirmative vote or consent of the holders of a majority
of the outstanding  shares entitled to vote, except that, unless required by the
articles of incorporation,  no vote of stockholders of the corporation surviving
a merger is necessary if:

     o  the  merger  does  not  amend  the  articles  of  incorporation  of  the
corporation,

     o each  outstanding  share  immediately  prior  to the  merger  is to be an
identical share after the merger, and

     o  either  no  common  stock  of  the  corporation  and  no  securities  or
obligations convertible into common stock are to be issued in the merger, or the
common  stock to be  issued  in the  merger,  plus that  initially  issuable  on
conversion of other  securities  issued in the merger does not exceed 20% of the
common stock of the corporation outstanding immediately before the merger.


                                      -33-



ALBERTA,  CANADA.   Approvals  of  charter  amendments,   amalgamations  (except
amalgamations between a corporation and wholly owned subsidiaries), continuances
into other  jurisdictions,  share  consolidations,  business  combinations,  and
sales,  leases or exchanges of substantially  all the property of a corporation,
other  than in the  ordinary  course of  business  of the  corporation  requires
approval by the  stockholders  by a  two-thirds  majority  vote at a duly called
meeting.


STOCKHOLDERS' CONSENT WITHOUT A MEETING

NEVADA.  Unless  otherwise  provided  in the  articles of  incorporation  or the
bylaws,  any  actions  required  or  permitted  to be taken at a meeting  of the
stockholders  may be taken  without a meeting  if,  before or after  taking  the
actions,  a written  consent  is signed by the  stockholders  holding at least a
majority of the voting  power,  except that if a different  proportion of voting
power is  required  for such an actions at a meeting,  then that  proportion  of
written  consent is required.  In no instance  where  actions is  authorized  by
written consent need a meeting of the stockholders be called or notice given.

ALBERTA,  CANADA.  Any action  required or permitted to be taken at a meeting of
the  stockholders  may be  taken  by a  written  resolution  signed  by all  the
stockholders entitled to vote on such resolution.

STOCKHOLDER VOTING REQUIREMENTS

NEVADA.  Unless the articles of  incorporation  or bylaws  provide for different
proportions,  a majority of the voting  power,  which  includes the voting power
that is  present  in person or by proxy,  regardless  of  whether  the proxy has
authority to vote on all matters,  constitutes a quorum for the  transactions of
business.  In all  matters  other than the  election  of  directors  and certain
corporate  actions,   including  approval  of  amendments  to  the  articles  of
incorporation  for which  Chapter  98 of the  Nevada  Revised  Statutes  imposes
special  voting  requirements,  the  affirmative  vote of the majority of shares
present in person or represented by proxy at the meeting and entitled to vote on
the  subject  matter  shall be the act of the  stockholders.  Under  Nevada law,
charter  amendments  require  approval  by  persons  holding  a  majority  of  a
corporation's  outstanding  voting shares without regard to the number of shares
that may be  present  at a meeting  in person  or by  proxy.  Directors  must be
elected  by a  plurality  of the  votes  of the  shares  present  in  person  or
represented  by proxy at the  meeting and  entitled  to vote on the  election of
directors.  Where a  separate  vote by a class or series or classes or series is
required,  a majority of the voting power of the class or series that is present
in person or by proxy,  regardless of whether the proxy has authority to vote on
all matters, constitutes a quorum for the transaction of business. An act by the
stockholders  of each class or series is  approved  if a majority  of the voting
power of a quorum of the class or series votes for the actions.


                                      -34-



ALBERTA,  CANADA. Unless the by-laws otherwise provide, a quorum of stockholders
is present for a meeting if the holders of a majority of the shares  entitled to
vote at the meeting are present in person or represented by proxy.  It is common
practice  for  companies  to provide for a quorum of  stockholders  to be deemed
present  when as  little  as 5% of the  issued  and  outstanding  share  capital
entitled  to vote is present in person or  represented  by proxy.  Our  proposed
bylaws  provide  that a quorum  of  shareholders  is  present  at a  meeting  of
shareholders if at least 2 persons are present in person or by proxy who hold or
represent by proxy, in the aggregate, not less than 12.5% of the shares entitled
to be voted at the meeting.  This  provision may be detrimental to the rights of
shareholders  owning a  majority  of our  voting  shares.  As a result  thereof,
resolutions  may be  passed  at  shareholders'  meetings  not  attended  by such
shareholders  on matters that would have  otherwise  not been subject to a vote.
Except  where the  Alberta  Business  Corporations  Act  requires  approval by a
special  resolution,  requiring approval by a two-thirds  majority of the shares
present  in  person  or  represented  by  proxy  and  entitled  to  vote  on the
resolution,  a simple majority or the shares present in person or represented by
proxy and entitled to vote on a resolution is required to approve any resolution
properly  brought before the  stockholders.  Where the articles of a corporation
provide for cumulative voting,  stockholders  voting at an election of directors
have the right to a number of votes  equal to the votes  attached  to the shares
held by such stockholder multiplied by the number of directors to be elected and
stockholders  may cast all such votes in favor of one  candidate for director or
may distribute  the votes among the  candidates in any manner.  The holders of a
class or series of shares are entitled to vote  separately on proposals to amend
the articles of a corporation  where such  amendment  affects the rights of such
class or series in a manner  different than other shares of the  corporation.  A
vote to  approve  any such  amendment  is passed  if  approved  by a  two-thirds
majority of the voting power of the class or series  represented in person or by
proxy at a meeting called to approve such amendment.


DIVIDENDS

NEVADA.   A  corporation  is  prohibited  from  making  a  distribution  to  its
stockholders if, after giving effect to the distribution,  the corporation would
not be able to pay its debts as they become due in the usual  course of business
or the corporation's total assets would be less than its total liabilities (plus
any amounts necessary to satisfy any preferential rights).

ALBERTA, CANADA. A corporation is prohibited from declaring or paying a dividend
if there are reasonable grounds for believing that the corporation,  is or would
after the payment be,  unable to pay its  liabilities  as they become due or the
realizable value of the corporation's assets would be less than the total of its
liabilities and stated capital of all classes.

ANTI-TAKEOVER PROVISIONS

NEVADA. Nevada's "Acquisition of Controlling Interest Statute" applies to Nevada
corporations that have at least 200 shareholders, with at least 100 shareholders
of record being Nevada  residents  that do business  directly or  indirectly  in
Nevada.  Where applicable,  the statute prohibits an acquiror from voting shares
of  a  target  company's  stock  after  exceeding  certain  threshold  ownership
percentages,  until the acquiror provides certain information to the company and
a majority of the  disinterested  shareholders vote to restore the voting rights
of the  acquiror's  shares at a meeting called at the request and expense of the
acquiror. If the voting rights of such shares are restored,  shareholders voting
against such restoration may demand payment for the "fair value" of their shares
(which  is  generally  equal  to the  highest  price  paid  in  the  transaction
subjecting the stockholder to the statute).  The Nevada statute also restricts a
"business combination" with "interested shareholders", unless certain conditions
are met, with respect to  corporations  which have at least 200  shareholders of
record. A "combination" includes:

     o any merger with an  "interested  stockholder,"  or any other  corporation
which is or after  the  merger  would  be,  an  affiliate  or  associate  of the
interested stockholder;


                                      -35-



     o  any  sale,  lease,  exchange,   mortgage,   pledge,  transfer  or  other
disposition  of assets,  to an  "interested  stockholder,"  having an  aggregate
market  value  equal  to 5% or  more  of  the  aggregate  market  value  of  the
corporation's  assets;  an  aggregate  market  value  equal to 5% or more of the
aggregate  market  value  of  all  outstanding  shares  of the  corporation;  or
representing 10% or more of the earning power or net income of the corporation;

     o  any  issuance  or  transfer  of  shares  of  the   corporation   or  its
subsidiaries,  to the "interested stockholder," having an aggregate market value
equal to 5% or more of the aggregate market value of all the outstanding  shares
of the corporation;

     o the adoption of any plan or proposal for the  liquidation  or dissolution
of the corporation proposed by the "interested stockholder";

     o certain  transactions  which would result in increasing the proportionate
percentage of shares of the corporation  owned by the "interested  stockholder";
or

     o the receipt of benefits, except proportionately as a stockholder,  of any
loans, advances or other financial benefits by an "interested stockholder."

An  "interested  stockholder"  is a person who,  together  with  affiliates  and
associates, beneficially owns (or within the prior three years, did beneficially
own) 10% or more of the corporation's  voting stock. A corporation to which this
statute applies may not engage in a  "combination"  within three years after the
interested  stockholder  acquired  its  shares,  unless the  combination  or the
interested  stockholder's  acquisition  of shares was  approved  by the board of
directors  before  the  interested  stockholder  acquired  the  shares.  If this
approval  was not  obtained,  then  after the three  year  period  expires,  the
combination may be consummated if all applicable statutory  requirements are met
and either:

     o the board of directors of the corporation approves,  prior to such person
becoming an "interested stockholder",  the combination or the purchase of shares
by  the  "interested  stockholder";  or  the  combination  is  approved  by  the
affirmative vote of holders of a majority of voting power not beneficially owned
by the "interested  stockholder" at a meeting called no earlier than three years
after the date the "interested stockholder" became such; or

     o the aggregate amount of cash and the market value of consideration  other
than cash to be  received  by holders of common  shares and holders of any other
class or series of shares meets certain  minimum  requirements  set forth in the
statutes, and prior to the consummation of the "combination",  except in limited
circumstances,  the "interested stockholder" will not have become the beneficial
owner of additional voting shares of the corporation.

ALBERTA,  CANADA.  There is no provision under Alberta law similar to the Nevada
Acquisition of Controlling Interest Statute.


                                      -36-


APPRAISAL RIGHTS; DISSENTERS' RIGHTS

NEVADA.  Nevada law limits dissenters rights in a merger, when the shares of the
corporation  are  listed  on a  national  securities  exchange  included  in the
National  Market System  established  by the National  Association of Securities
Dealers,  Inc. or are held by at least 2,000 shareholders of record,  unless the
shareholders  are required to accept in exchange for their shares anything other
than cash or

     o shares in the  surviving  corporation  if the  surviving  corporation  is
publicly  listed on a national  securities  exchange  or held by more than 2,000
shareholders;

     o shares in another entity that is publicly listed on a national securities
exchange or held by more than 2,000 shareholders; or

     o any combination of cash or shares in an entity described above.

Also,  the Nevada law does not provide for  dissenters'  rights in the case of a
sale of assets.

ALBERTA,  CANADA. Under the Alberta Business  Corporations Act stockholders have
rights of  dissent  where the  corporation  amends  its  articles  to change any
provisions  restricting  or  constraining  the issue or transfer of ownership of
shares of a class, or to add,  change or remove  restrictions on the business or
businesses the corporation may carry out.  Stockholders also have dissent rights
where a  corporation  proposes  to  amalgamate,  other than with a wholly  owned
subsidiary  corporation,  continue to another  jurisdiction,  or sell,  lease or
exchange all or substantially all of its property.

STATUTORY OPPRESSION REMEDY

NEVADA. There is no provision under Nevada law similar to the Alberta Oppression
Remedy Statute described below.

ALBERTA,  CANADA.  Under the Alberta Business  Corporations  Act,  shareholders,
creditors,  or officers and directors of a corporation  may apply to a court for
relief for acts or omissions by a corporation,  or its officers,  directors,  or
other affiliates that are oppressive or unfairly prejudicial to or that unfairly
disregard the interests of such persons. The court may issue an order:

     o    restraining the conduct complained of;

     o    appointing a receiver;

     o    to  regulate a  corporation's  affairs by  amending  its  articles  or
          bylaws;

     o    declaring that any amendment  made to the articles or bylaws  pursuant
          to  the  above  operates  notwithstanding  any  unanimous  shareholder
          agreement made before or after the date of the order,  until the court
          otherwise orders;

     o    directing an issue or exchange of securities;

     o    appointing  directors  in place of or in addition to all or any of the
          directors then in office;


     o    directing a corporation subject to repurchase  restrictions related to
          the  solvency  of the  corporation,  or any other  person to  purchase
          securities of a security holder;



                                      -37-


     o    directing  a  corporation  or any other  person  to pay to a  security
          holder  any  part  of the  money  paid  by  the  security  holder  for
          securities;


     o    directing  a  corporation  subject to  dividend  payment  restrictions
          related to the solvency of the  corporation,  to pay a dividend to its
          shareholders or a class of its shareholders;


     o    varying  or  setting  aside  a  transaction  or  contract  to  which a
          corporation is a party and  compensating  the corporation or any other
          party to the transaction or contract;


     o    requiring a  corporation,  within a time  specified  by the court,  to
          produce to the court or an interested  person financial  statements in
          the form required to be produced at an annual shareholders' meeting or
          an accounting in any other form the court may determine;


     o    compensating an aggrieved person;

     o    directing  rectification  of  the  registers  or  other  records  of a
          corporation;

     o    for the liquidation and dissolution of the corporation


     o    directing an investigation to be made of the corporation or any of its
          affiliated corporations;


     o    requiring the trial of any issue;

     o    granting leave to the applicant to:

          o    bring an action in the name and on behalf of the  corporation  or
               any of its subsidiaries, or

          o    intervene  in an action to which  the  corporation  or any of its
               subsidiaries  is  a  party,   for  the  purpose  of  prosecuting,
               defending or discontinuing an action on behalf of the corporation
               or any of its subsidiaries.


                              ACCOUNTING TREATMENT

The continuance of our company from Nevada to Alberta,  Canada  represents,  for
U.S. accounting  purposes,  a transaction between entities under common control.
Assets and  liabilities  transferred  between  entities under common control are
accounted  for  at  historical   cost,  in  accordance  with  the  guidance  for
transactions  between  entities  under common  control in Statement of Financial
Accounting Standards No. 141, Business Combinations.  The historical comparative
figures of Assure Canada will be those of Assure Nevada.

Upon the effective date of the conversion,  we will be subject to the securities
laws of Alberta,  Canada as those laws apply to Canadian  domestic  issuers.  We
will  qualify  as a foreign  private  issuer in the  United  States.  Before our
continuance in Alberta,  we prepared our  consolidated  financial  statements in
accordance with generally accepted accounting  principles ("GAAP") in the United
States. As a Canadian domestic issuer, we will be required to prepare our annual
and interim  consolidated  financial  statements  in  accordance  with  Canadian
generally accepted accounting  principles.  For purpose of our annual disclosure
obligations  in the United  States,  we will  annually file in the United States
consolidated  financial  statements  prepared in  accordance  with Canadian GAAP
together with a reconciliation to US GAAP.


                                      -38-


                         BUSINESS OF ASSURE ENERGY, INC.

GENERAL

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,  entitled 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,
entitled 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
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. 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 acquisitions of crown land
rights 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 seven  producing oil wells
with working interests therein ranging from 16.88%-95%. Assure Oil & Gas Corp.'s
share of the average daily  production  for the past three months from these oil
wells is  approximately  28 barrels of oil per day.  Six of these oil wells also
produce  gas that  contributes  to Assure  Oil & Gas  Corp.  the  equivalent  of
approximately  31 barrels of oil equivalent per day.  Assure Oil & Gas Corp. has
three other gas wells that contribute to Assure Oil & Gas Corp. approximately 71
barrels of oil  equivalent  per day.  Working  interests in these gas wells vary
from 10.83% to 95%. Assure Oil & Gas Corp. currently has one abandoned and three
shut in gas wells.  Assure Oil & Gas Corp.  is currently  drilling one deep test
well to the Wabamum formation in the Doe East area of Alberta.


                                      -39-



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
capital  stock of  Westerra  2000 Inc.  The  purchase  price  was  CDN$3,450,000
(approximately US$2,100,000) consisting of:

     o  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.;

     o 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

     o 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 "Legal Proceedings."


                                      -40-


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
five 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 six  producing  oil wells  with  working
interests  therein  ranging from 50% to 100%.  Westerra 2000 Inc.'s share of the
average  daily  production  for the past  three  months  from these oil wells is
approximately  130  barrels of oil per day.  Westerra  2000 Inc.  also has eight
producing gas wells,  each with a working interest of 60%.  Westerra 2000 Inc.'s
share of the average daily  production  for the past three months from these gas
wells is  approximately  153 barrels of oil  equivalent  per day, based upon the
standard  gas  conversion  ratio where six million  cubic feet of gas equals one
barrel of oil.  Westerra 2000 Inc. has one suspended and one abandoned oil well.
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
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.

On July 28, 2003 we completed  the  acquisition  of 6,267,500  common  shares of
Quarry Oil & Gas Ltd.  ("Quarry"),  pursuant  to a March 6, 2003 Share  Purchase
Agreement (the "Share Purchase  Agreement") among us, Quarry, and certain Quarry
shareholders  including Al J. Kroontje,  Trevor G. Penford,  Karen Brawley-Hogg,
Donald J. Brown and Troon  Investments,  Ltd.  (collectively the "Sellers").  We
subsequently  received  an  additional  482,500  Quarry  shares from the Sellers
resulting in our aggregate purchase of 6,750,000 Quarry shares (the "Acquisition
Shares")  pursuant  to the Share  Purchase  Agreement.  These  6,750,000  shares
together  with  the  169,900   Quarry  shares  already  owned  by  us  represent
approximately  48.5% of the outstanding common shares of Quarry. The Acquisition
Shares were purchased by us at a price of CDN $1.3278 (approximately US$.95) per
share or CDN $8,962,650  (approximately US $6,434,107) on an aggregate basis. In
furtherance of the Share Purchase Agreement,  on July 28, 2003 Harvey Lalach was
appointed the president and chief executive officer of Quarry.


                                      -41-



The Share Purchase  Agreement provided for the transfer of certain Quarry assets
(the "Excluded Assets") by Quarry, prior to closing, to a Quarry subsidiary, 51%
of which was sold to the  Sellers  on the  closing  date of the  Share  Purchase
Agreement, at a purchase price of CDN$867,662  (approximately  US$622,877).  The
purchase  price  represented  51% of the adjusted net book value of the Excluded
Assets  as at the date of the  Share  Purchase  Agreement.  The  Share  Purchase
Agreement  also  provided  for the  payment  by  Quarry  to Al  Kroontje  or his
designees,  the sum of CDN$592,500  (approximately  US$425,344) representing (i)
salary  compensation  to Mr.  Kroontje for the six years ended December 31, 2000
when Mr. Kroontje did not receive any compensation for serving as an officer and
director  of Quarry;  (ii)  severance  pay;  and (iii) a  retirement  allowance.
Payment in full was made to Mr.  Kroontje  at  closing.  In  furtherance  of our
obligations under the Share Purchase Agreement,  in September 2003, we presented
to Quarry and the Sellers, an experienced, previously successful management team
for Quarry. The members of the management team are Harvey Lalach,  Colin McNeil,
Tim  Chorney,  Cam Bogle and Colin  Emerson.  Through  Assure  Oil & Gas  Corp.,
effective  September 15, 2003, we entered into a Management  Services  Agreement
with Quarry whereby we are supplying  Quarry with the services of certain of our
employees  that have  management or  operational  expertise  including,  but not
limited to, the services of Messrs. Chorney, Bogle and Emerson. In consideration
thereof,  Quarry is paying us a monthly fee equal to a  percentage  of the costs
incurred by us in providing such services.



Effective  September  29,  2003,  Messrs.  Chorney,  Bogle and Emerson have been
employed by Assure Oil & Gas Corp. in the capacities of Operations Manager, Land
Manager, and Exploration Manager, respectively,  pursuant to two year employment
contracts  dated as of August 29,  2003.  Messrs.  Chorney and Bogle  receive an
annual base salary of CDN$100,000. Mr. Emerson receives an annual base salary of
CDN$90,000  in the first year of his  employment  agreement  and an annual  base
salary of CDN$100,000  in the second year.  Each of Messrs.  Chorney,  Bogle and
Emerson also received  75,000 stock options,  each  exercisable  upon vesting to
purchase  one share of our common stock at a price of $3.00 per share during the
five year period commencing on the date of vesting, and the right to participate
in our production  bonus pool.  The  production  bonus pool is a cash pool to be
funded by us based on the  sustained  barrel of oil per day or its  natural  gas
equivalent  production  of  all  oil  and  gas  properties  in  which  we or our
subsidiaries have a working interest.  Initial funding of the pool will commence
if we reach 2,000 barrels of oil or its natural gas  equivalent  production  per
day for a period of 120 consecutive  days.  Additional  funding is required upon
our reaching additional production milestones.  Maximum funding in the aggregate
amount of  CDN$1,075,000  is required if we reach  sustained  production for 120
consecutive  days of 5,000 barrels of oil or its natural gas equivalent per day.
Allocations  from the production bonus pool are subject to the discretion of our
board of directors which shall also determine the other employees of the Company
and its subsidiaries eligible for participation in the pool.


Quarry is a junior oil and gas  exploration  and  development  company  based in
Calgary,  Alberta,  Canada  whose  common  shares are listed on the TSX  Venture
Exchange under the symbol "QUC".  Quarry's average daily production is currently
approximately  1100 barrels of oil equivalent  per day.  Quarry has a stable oil
production  base in Alberta,  Canada.  It has  recently  added  significant  gas
reserves from its discoveries in northeast British Columbia, Canada where it has
access  to a large  base of  undeveloped  lands.  Quarry  has also  developed  a
portfolio of natural gas prospects to facilitate future growth.


Effective  December 1, 2003 we entered into an agreement,  through  Assure Oil &
Gas Corp.,  with Quarry  whereby we are  obligated  to pay Quarry a  CDN$450,000
prospect fee and drill two wells at our sole expense,  on or before  January 31,
2004, on certain farmout lands of Quarry located in northeast  British Columbia.
We will earn a 100% working  interest on the two wells  before  payout and a 50%
working  interest  thereafter.  Additionally,  we  will  earn  50%  of  Quarry's
pre-farmout  interest in the  balance of the  farmout  land.  The  agreement  is
subject to the approval of the TSX Venture  Exchange,  upon which Quarry's stock
trades.



                                      -42-


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.  Pursuant to the Agreement, as amended,
we paid a $25,000 fee to TGR and issued  100,000 5 year  warrants  to TGR,  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.

On  March  25,  2003  we  entered  into a one  year  Consulting  Agreement  with
Investormedia  Group  pursuant  to which  Investormedia  Group  provides us with
strategic planning and media services, including assistance with creating market
awareness  of  our  company.   In  consideration  of  these  services,   we  pay
Investormedia  Group a monthly retainer of $2,500 plus a fee equal to 15% of the
of the gross cost of services engaged or facilitated by Investormedia  Group. In
certain  mutually agreed upon  instances,  the fee can be reduced to 5%. On June
21,  2003 we  authorized  Investormedia  Group to  include  a report  on us in a
newsletter with an estimated  circulation of 300,000  persons.  In consideration
thereof,  we paid  Investormedia  Group an aggregate of $326,585  consisting  of
typesetting, printing and mailing costs and a 5% agency fee.

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.

NEVADA REINCORPORATION

On September  11, 2003 we  reincorporated  from  Delaware to Nevada for the sole
purpose  of  taking   advantage   of  the  Nevada   continuance   statute.   The
reincorporation  was effected  through a Plan and  Agreement  of Merger  between
Assure Energy, Inc., a Delaware  corporation,  hereinafter referred to as Assure
Delaware,  and  Assure  Nevada.  The  Merger was  approved  by the  holders of a
majority of the outstanding shares of Assure Delaware. Pursuant to Delaware Law,
dissenting  Assure  Delaware   shareholders  were  given  appraisal  rights.  No
dissenting shareholders to whom appraisal rights applied made written demand for
appraisal within the required period for doing so.

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.  The  information  set forth above does not
take into account the effects of our March 6, 2002 and  September 17, 2002 stock
splits.


                                      -43-


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.

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.


                                      -44-


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 1/2 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.


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.
Effective  December 5, 2003, the holder of the note agreed to convert $1,260,000
of the  principal  amount of the note into 350,000  units offered in our private
offering which was completed on December 5, 2003. In connection  therewith,  the
$4,500,000 note was cancelled and replaced with a $3,240,000 note dated December
5, 2003. The interest due on the  $4,500,000  note for the period March 15, 2003
through and including December 4, 2003 is due and payable on March 15, 2004.


In October  2003,  persons  holding an aggregate  of 1,538,100  Class A Warrants
exercised  such  warrants at an exercise  price of $.333 per share  resulting in
proceeds of approximately $512,187.

In October 2003, a person holding 10,000 warrants exercisable at $3.00 per share
exercised such warrants resulting in proceeds of $30,000.


                                      -45-



During the period  November  21, 2003  through  December 5, 2003 we engaged in a
private  offering  of up to  1,500,000  units at a price of $3.60 per unit.  The
offering was completed on December 5, 2003 with the sale of 1,435,000 units to 6
persons  resulting in gross  proceeds of  $5,166,000.  These  proceeds  included
$1,260,000 received from the holder of a March 15, 2003 promissory note upon the
partial  conversion  thereof.  Each unit consists of 1 share of our common stock
and one Class C redeemable common stock purchase  warrant.  Each Class C Warrant
entitles  the holder to  purchase  one share of our common  stock at an exercise
price of $4.00 per share during the six month period  commencing  on the earlier
of the registration of the shares underlying the Class C Warrants or 1 year from
the date of issuance of the Class C Warrants.  The C Warrants are  redeemable by
us upon 10 days prior written notice if, during the exercise period, the closing
bid price of our common stock is equal to or greater than $4.50 per share for 10
consecutive  trading days.  Upon exercise of all or part of the C Warrants,  the
holder will be entitled to receive such number of Class D common stock  purchase
warrants  that is equal to the  number of C Warrants  exercised.  Each D Warrant
will  entitle the holder to purchase one share of our common stock at a price of
$4.25 per  share for a period of 2 years  from  issuance.  The  offering  of the
units,  including the underlying securities was made in reliance on Regulation S
under the Securities Act of 1933, as amended.


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
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.


                                      -46-


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,  our
operations  manager,  land manager,  exploration  manager and an  administrative
support  person.  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.

PROPERTY


Since October 1, 2003, we are also utilizing  approximately 1,500 square feet of
office space provided to us by Quarry Oil & Gas Ltd. at 521 3rd Avenue SW, Suite
1250,  Calgary,  Alberta T2P 3T3 which serves as our executive  offices.  We are
currently  negotiating an arrangement with Quarry Oil & Gas Ltd.  respecting the
use of this space. Quarry Oil & Gas Ltd.'s current lease at this location covers
approximately  5,000  square  feet of  space,  runs  through  April 7,  2007 and
involves  base rent  payments of CDN$4,000  (approximately  US$3,000)  per month
together with Quarry's share of taxes and other  operating  expenses  related to
the premises. Under such an arrangement with Quarry Oil & Gas Ltd., we expect to
be  charged  for the  amount of space  utilized  by us on a pro rata  basis.  In
conjunction  with this  arrangement,  we intend to sublease the space at 140-4th
Avenue SW,  Calgary,  Alberta T2P 3T3,  which  formerly  served as our principal
executive offices, to a third party for the remainder of the lease term. Through
Assure Oil & Gas Corp. we sublease  approximately  1,836 square feet of space at
that location under an arrangement  which runs through  December 30, 2005. Under
the sublease we pay CDN$4,674.81  (approximately US$3,115) per month. We believe
the  Quarry  Oil & Gas Ltd.  space is  sufficient  to  handle  our  present  and
immediate  future needs. In the event our arrangement with Quarry Oil & Gas Ltd.
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
expected to be available from several alternative sources at comparable rates.


                                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 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 or producing wells were and are in fact non-producing
and that the  shareholders  had  represented  that the wells could be brought to
production  at any time.  We  further  asserted  that since the wells are not on
production the holdback has been forfeited and is not payable.  On May 27, 2003,
Messrs.  Freitag,  Keyte, and Stephens filed a Reply and Statement of Defense to
Counterclaim  alleging  that  the  payment  of the  CDN  $350,000  to  them  was
unconditional and that no  representations  or warranties had been made that any
of Westerra  2000 Inc.  wells were proven or  producing.  While we disagree with
these statements made in the Reply and Statement of Defense to Counterclaim, and
we continue to believe our  position  has merit we can offer no  assurance as to
the outcome of this matter.



                                      -47-



On July 3, 2003,  Assure Oil and Gas Corp.  and Westerra 2000 Inc.,  hereinafter
referred  to as the  plaintiffs,  filed a  Statement  of Claim  in the  Court of
Queen's Bench of Alberta,  Judicial District of Calgary (Action No.: 0301-10499)
naming  Lloyd  Venture  1  Inc.,  970313  Alberta  Ltd.  and  Roswell  Petroleum
Corporation as  defendants.  The action relates to a May 2002 Farmout and Option
Agreement in which Assure Oil & Gas Corp. and Nevarro Energy Ltd. were given the
ability to earn an interest in certain oil and gas interests of the  defendants.
Effective November 8, 2002, Nevarro Energy Ltd. assigned its interests under the
Farmout and Option Agreement to Westerra 2000 Inc. The plaintiffs claim that all
of the requirements to earn an interest in the properties was satisfied and that
they became entitled to drill certain option wells,  subject to the terms of the
Farmout and Option  Agreement.  Consequently,  several option wells were drilled
and the plaintiffs earned interests in some of the farmout lands.  Subsequently,
plaintiffs  provided  notices to  defendants to drill  additional  option wells.
Defendants advised plaintiffs that the notices were invalid,  that they were not
to occupy any  further  farmout  lands or commence  any further  drilling on the
farmout lands,  and that the Farmout and Option  Agreement was  terminated.  The
action seeks an order  declaring  that the  plaintiffs  have properly  exercised
their rights to drill the option wells in accordance with the Farmout and Option
Agreement,  an  order  for  specific  performance,  and a  declaration  that the
plaintiffs  are  entitled to exercise  the  remainder  of their rights under the
Farmout and Option  Agreement to elect to drill further option wells and to earn
a working interest in the specifically  identified  farmout lands. On August 25,
2003 the  defendants  filed a Statement  of Defense and a  Counterclaim.  In the
Statement of Defense defendants allege that:

     o    Westerra has no interest in the Farmout  Agreement or,  alternatively,
          it failed to provide proper notice of such interest to defendants;

     o    Plaintiffs  have no right to drill any  additional  option wells or to
          earn further interests in the farmout lands;

     o    Plaintiffs had no right to drill  multiple  option wells and failed to
          exercise  their right to drill  option  wells in  accordance  with the
          provisions of the Farmout and Option Agreement; and

     o    Certain  election notices were improperly  issued by plaintiffs,  were
          not valid,  and  resulted in  plaintiff's  not having any  interest in
          certain farmout lands;

The Counterclaim seeks, among other things:

     o    Orders for  accounting  of all  production  from certain wells drilled
          pursuant to the Farmout and Option Agreement;


                                      -48-


     o    An order directing the  abandonment of certain wells drilled  pursuant
          to the Farmout and Option Agreement; and

     o    Monetary charges for trespass and general damages.

We are presently preparing a Statement of Defense to the Counterclaim.  While we
believe  our  claims  have merit and the  defendants  Statement  of Defense  and
Counterclaim  does not,  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.

MANAGEMENT'S  DISCUSSION  AND  ANALYSIS OF  FINANCIAL  CONDITION  AND RESULTS OF
OPERATIONS


The following  discussion  of our financial  condition and results of operations
should be read in  conjunction  with the financial  statements  and the notes to
those  statements  included  elsewhere in this  prospectus.  On July 28, 2003 we
completed the initial phase of our acquisition of 6,750,000 shares of Quarry Oil
& Gas Ltd.  ("Quarry")  common stock through our acquisition of 6,267,500 Quarry
shares.  We acquired the balance of the  acquisition  shares in August 2003. The
6,750,000 Quarry shares together with the 169,900 Quarry shares already owned by
us represent  approximately  48.5% of Quarry's  outstanding  common shares.  The
Quarry  acquisition  had a significant  impact on our Results of Operations  and
Liquidity  and Capital  Resources,  as  discussed  below,  and in our  unaudited
September 30, 2003 financial statements and notes thereto.


RESULTS OF OPERATIONS


For the three-month  periods ended September 30, 2003 and September 30, 2002, we
had total revenue of $1,882,104 and $397,893, respectively. Quarry's revenue for
the three and nine month period ended September 30, 2003 was $1,247,927 or 66.3%
of total  revenue for the three  months  ended  September  30, 2003 and 32.5% of
total revenue for the nine months ended  September 30, 2003.  For the nine-month
periods ended September 30, 2003 and September 30, 2002, we had total revenue of
$3,840,475 and $702,491 respectively. The increase in total revenue for the nine
month period ended September 30, 2003 as compared to the nine month period ended
September  30, 2002 was due  primarily  to the  acquisition  of Quarry and, to a
lesser extent,  increased drilling activity within our subsidiaries during 2003,
an increase in the price of oil and natural gas during  2003,  and the  relative
strength of the Canadian  dollar against the United States dollar since December
2002.  Another  factor  giving rise to the increase in total revenue is the fact
that our  subsidiaries,  Assure  Oil & Gas Corp.  and  Westerra  2000 Ltd.  were
acquired  effective  April 1, 2002.  Accordingly,  only six months of operations
were included in the nine month period ended September 30, 2002.



Our total  expenses for the  three-month  periods  ended  September 30, 2003 and
September 30, 2002 was $2,380,820 and $266,131, respectively.  Quarry's expenses
for the three and nine month period ended  September 30, 2003 was  $1,047,695 or
44.0% of total expenses for the three months ended  September 30, 2003 and 21.8%
of total  expense  for the nine  months  ended  September  30,  2003.  Our total
expenses were $4,798,412 for the nine-month  period ended September 30, 2003 and
$607,293 for the  nine-month  period ended  September 30, 2002.  The increase in
total expenses for the three and nine month periods ended  September 30, 2003 as
compared to the three and nine month periods  ended  September 30, 2002 were due
to increased costs associated with our expanded  operations  including increases
in general and administrative  expenses,  operating expenses,  interest expenses
and depletion and site restoration.



                                      -49-



For the  three-months  ended September 30, 2003 and September 30, 2002, we had a
net loss of $1,169,053 or $.07 per share and net income of $96,493, or less than
$.01 per share, respectively. Quarry had net income for the three and nine month
periods ended September 30, 2003 of $53,326. For the nine-months ended September
30, 2003, we had a net loss of $2,083,758 or $.13 per share as compared to a net
loss of $11,872 or less than $.01 per share, for the nine-months ended September
30, 2002. The Company attributes the losses for the three and nine month periods
ended  September  30, 2003,  to  increased  costs  associated  with our expanded
operations including increases in general and administrative expenses, operating
expenses, interest expenses and depletion and site restoration. During the three
month period ended September 30, 2003, the Company incurred  non-recurring costs
associated with the acquisition of Quarry of approximately $340,000.


LIQUIDITY AND CAPITAL RESOURCES


We have  incurred  losses since the  inception of our business as an oil and gas
exploration  company in April 2002.  Prior to this date we were a  developmental
stage  company.  Since that time,  we have been  dependent on  acquisitions  and
funding  from  private  lenders  and  investors  to  conduct  operations.  As of
September 30, 2003 we had an accumulated deficit of $2,944,910.  As of September
30,  2003,  we  had  total  current  assets  of  $3,714,721  and  total  current
liabilities of $9,706,084 or negative working capital of $5,991,363.  The Quarry
acquisition  increased our current  assets by  approximately  $1,100,000 and our
current  liabilities by approximately  $8,100,000.  This negatively impacted our
working capital by approximately $7,000,000.  During the nine month period ended
September 30, 2003 we obtained financing of $4,500,000 and issued equity whereby
we obtained an additional $2,400,500.  These sums were used to provide financing
for our operations.


                      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." Following the
continuance  our stock is expected to be quoted under the symbol  "ASURF".  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.


                                      -50-





PERIOD INDICATED OR QUARTER 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
March 31, 2003                                              $3.06         $3.06
June 30, 2003                                               $3.10         $2.75
September 30, 2003                                          $3.91         $2.90


HOLDERS


As of December 1, 2003, there were 61 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 February  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.


Effective  December 5, 2003 we issued an aggregate  of  1,435,000  shares of our
common  stock  and  1,435,000  redeemable  Class  C  warrants  to 6  persons  in
connection  with our sale of 1,435,000  units at $3.60 per unit or $5,166,000 on
an aggregate basis.  These issuances were made in reliance on the exemption from
registration  provided by  Regulation  S under the  Securities  Act of 1933,  as
amended.


In October 2003, we issued an aggregate of 1,548,100  shares of our common stock
to 13 persons  in  connection  with  their  exercise  of common  stock  purchase
warrants.   These  issuances  were  made  in  reliance  on  the  exemption  from
registration provided by Section 4(2) of the Securities Act of 1933, as amended.


Effective  August 28, 2003 we issued 50,000  non-statutory  stock options to one
person each exercisable, upon vesting, to purchase one share of our common stock
at a price of $3.00 per share during the five year period commencing on the date
of vesting. 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  August 29, 2003 we issued an aggregate of 225,000 non statutory stock
options to three persons each exercisable,  upon vesting,  to purchase one share
of our common  stock at a price of $3.00 per share  during the five year  period
commencing on the date of vesting.  These issuances were made in reliance on the
exemption  from  registration  provided by Section 4(2) of the Securities Act of
1933, as amended.


                                      -51-



Effective September 4, 2003 we issued 30,000 non-statutory stock options to Lisa
Komoroczy,  each  exercisable,  upon vesting to purchase one share of our common
stock at a price of  $3.00  per  share  during  the  three  year  period  ending
September  3, 2006.  The  issuance  was made in reliance on the  exemption  from
registration provided by Section 4(2) of the Securities Act of 1933, as amended.

In April 2003 we issued 100,000  warrants to 1 person for  consulting  services,
each  exercisable  upon  issuance to purchase one share of our common stock at a
price of $3.00 per share during a five year  exercise  period.  The issuance was
made in reliance or the exemption from registration  provided by Section 4(2) of
the Securities Act of 1933, as amended.

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.

Effective  October 1, 2002 we issued  100,000  and 20,000  non  statutory  stock
options,  respectively to Harvey Lalach and 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.  These  issuances  were
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 April 28, 2003 these options were terminated.

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.


                                      -52-


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.

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.

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.

                                   MANAGEMENT

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

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.


                                      -53-



The following table sets forth certain information, as of December 5, 2003, with
respect to our directors and executive officers.




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

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

Lisa Komoroczy            Director                                           38      September 4, 2003


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 has served as the president and
chief  executive of Quarry Oil & Gas Ltd. since July 28, 2003. He also serves as
president,  chief executive and financial  officer and as a director for each of
Assure Oil & Gas Corp,  Westerra 2000 Inc and Assure Holdings Inc. From July 22,
2003 to the present he has served as a director  for Keantha  Holdings  Inc.,  a
private  company  that is 49%  owned by Quarry  Oil & Gas Ltd.  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.

James 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 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.


                                      -54-


Lisa Komoroczy has served as a director of ours since September 4, 2003. She has
served in various financial consulting, accounting and administrative capacities
during  the past ten  years.  For the past  three  years  she has  worked  as an
independent consultant. Within this period, she has provided consulting services
to Path 1 Network Technologies Inc., a US public company, and to several private
companies.  From December 1998 until July 2000 she served as Director of Finance
and Administration for The Box Lot Company. Other jobs have involved her serving
as vice  president-finance  for a merchant banking firm and as an accountant for
KPMG Peat Marwick.  She received a B.A. Degree from California  State University
of Fullerton after majoring in finance and accounting.

BOARD OF DIRECTORS

Our  directors  presently  receive  no cash  remuneration  for  acting  as such.
Directors may however be reimbursed  their  expenses,  if any, for attendance at
meetings  of the Board of  Directors.  We may also  grant  stock  options to our
directors.  In September 2003 we issued 30,000 stock options to Lisa  Komoroczy.
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.

                             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.


                                      -55-



                           SUMMARY COMPENSATION TABLE



                             Annual Compensation                         Long-Term Compensation

                       Fiscal Year                                                  Restricted
Name and                 Ended                                 Other     Options/     Stock      LTIP      All Other
Principal Position    December 31      Salary        Bonus  Compensation   SARs      Awards     Payouts  Compensation
------------------    -----------      ------        -----  ------------   ----      ------     -------  ------------
                                                                                 
   Ed Kaplan             2002              0           0         0            0         0          0           0
   President and CEO     2001              0           0         0            0         0          0           0
                         2000              0           0         0            0         0          0           0

   Doug Kaplan           2002              0           0         0            0         0          0           0
   President and CEO     2001              0           0         0            0         0          0           0
                         2000              0           0         0            0         0          0           0

   James Golla           2002              0           0         0        20,000(1)     0          0           0
   President and CEO     2001              0           0         0            0         0          0           0
                         2000              0           0         0            0         0          0           0

   Suzanne West          2002        $31,150(2)        0         0            0(3)      0          0           0
   President and CEO     2001              0           0         0            0         0          0           0
                         2000              0           0         0            0         0          0           0

   Harvey Lalach         2002        $10,384           0         0        100,000(4)    0          0           0
   President and CEO     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.


                                      -56-


                      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
    Name                    Granted (#)      Employees in Fiscal Year     (per share)     Date of 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.


                                      -57-


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



                                                         Number of Securities Underlying        Value of Unexercised In-the-Money
                    Shares Acquired On     Value         Unexercised Options/SARs               Options/SARs
                    Exercise               Realized      at Fiscal Year End (#)                 at Fiscal Year End ($)
      Name               (#)                 ($)         Exercisable/Unexcercisable             Exercisable/Unexcercisable
      ----          -------------------    --------      -------------------------------        ---------------------------------
                                                                                    
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
                                                         10,000 Exercisable                     $3,100 Exercisable
                                                         10,000 Unexercisable                   $3,100 Unexercisable

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

Harvey Lalach       N/A                    N/A           100,000
                                                         50,000 Exercisable                     $15,500 Exercisable
                                                         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
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, commencing December 6, 2002 we were paying Mr. Lalach a salary
of CDN$7,500 per month  (approximately  US$5,000)  under a verbal month to month
arrangement.  Effective  September  2,  2003 we  entered  into a 2 year  written
employment  agreement  with Mr. Lalach.  Thereunder,  we are paying Mr. Lalach a
base annual salary of CDN$90,000.

COMPENSATION OF DIRECTORS

We do not presently  provide cash  compensation  to our directors for serving as
directors.  We have,  in one instance  however,  provided a director  with stock
options  in  consideration  for her  serving as such.  Two of our three  present
directors are also employees, however, and receive compensation from us in their
employment capacities.


                                      -58-



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.

                 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 "Business of Assure Energy, Inc.".

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  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.

Effective  September 30, 2002 we entered into a nine month employment  agreement
with Harvey  Lalach.  Subsequent  thereto Mr. Lalach was employed under a verbal
month to month  arrangement.  Effective  September 2, 2003 we entered into a two
year employment agreement with Mr. Lalach. See "Item 10. Executive  Compensation
-  Employment  Contracts,  Termination  of  Employment,  and  Change in  Control
Arrangements."

Effective September 4, 2003 we issued 30,000 non-statutory stock options to Lisa
Komoroczy.  The options  have a term of three years that expires on September 3,
2006 and are  exercisable  for the  purchase of shares of our common stock at an
exercise price of $3.00 per share.


                                      -59-


In October 2003 we issued  150,000 shares of our common stock to Shelly Green in
connection with her exercise of a like number of Class A Warrants at an exercise
price of $.333 per share.

In October 2003 we issued 21,600 shares of our common stock to Lisa Komoroczy in
connection with her exercise of a like number of Class A Warrants at an exercise
price of $.333 per share.

In October 2003, we issued 20,000 shares of our common stock to Harvey Lalach in
connection with his exercise of a like number of Class A Warrants at an exercise
price of $.333 per share.

         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  December 5, 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.



                                      -60-






------------------------------------ ------------------------------------- ------------------------- ---------------
         Name and Address                                                     Amount and Nature        Percentage
        of Beneficial Owner                     Title of Class             of Beneficial Ownership      of Class
------------------------------------ ------------------------------------- ------------------------- ---------------
                                                                                            
Hans Schopper
P.O. Box CB 11742
Chelsea Place                                                                 1,200,000 shares,
Nassau Bahamas                          Common Stock, $.001 per share             Direct (1)               6%
------------------------------------ ------------------------------------- ------------------------- ---------------
Bamby Investments S.A. (2)
Plaza 2000 Bldg.
50th Street, 16th Floor
Panama 5                                                                      1,500,000 shares,
Republic of Panama                      Common Stock, $.001 per share             Direct (3)              7.4%
------------------------------------ ------------------------------------- ------------------------- ---------------
Shelly Green
P.O. Box 55
Jacksons Point, Ontario                                                       1,044,000 shares,
L0E 1L0                                 Common Stock, $.001 per share             Direct (4)              5.3%
------------------------------------ ------------------------------------- ------------------------- ---------------
Harvey Lalach
2575 Alberta Court                                                              90,000 shares,
Kelowna, British Columbia V1W 2X8       Common Stock, $.001 per share             Direct (5)              .46%
------------------------------------ ------------------------------------- ------------------------- ---------------
James Golla
829 Terlin Blvd.                                                                10,000 shares,
Mississauga, Ontario L5H 1T1            Common Stock, $.001 per share             Direct (6)              .05%
------------------------------------ ------------------------------------- ------------------------- ---------------
Lisa Komoroczy
P.O. Box 1652                                                                   58,200 shares,
Rancho Santa Fe, CA 92067               Common Stock, $.001 per share             Direct (7)              .3%
------------------------------------ ------------------------------------- ------------------------- ---------------
All officers and directors as a                                                158,200 shares,
group (3 persons)                       Common Stock, $.001 per share             Direct (8)              .81%
------------------------------------ ------------------------------------- ------------------------- ---------------




(1)      Includes 600,000 presently exercisable warrants.
(2)      The beneficial owner of Bamby Investments, S.A. is Camille Escher.
(3)      Includes 750,000 presently exercisable warrants.
(4)      Includes 372,000 presently exercisable warrants.
(5)      Includes 50,000 presently exercisable stock options.
(6)      Includes 10,000 presently exercisable stock options.
(7)      Includes 15,000 presently exercisable stock options.
(8)      Includes 75,000 presently exercisable stock options.


                                      -61-




CHANGES IN CONTROL

         Not Applicable.

                          DESCRIPTION OF CAPITAL STOCK


Our  authorized  capital  consists of  105,000,000  shares of which  100,000,000
shares are  designated  as common  stock,  par value $.001 per share,  4,977,250
shares are designated as blank check preferred stock,  $.0001 per share,  17,500
shares  are  designated  as  Series A  Preferred  Stock  and  5,250  shares  are
designated  as Series B Preferred  Stock.  As of  December  5, 2003,  19,416,100
shares of our common stock,  17,500  shares of our Series A Preferred  Stock and
5,250 shares of our Series B Preferred Stock were issued and outstanding.


COMMON STOCK

Each holder of our common  stock is entitled to one vote for each share owned of
record  on all  matters  voted  upon  by our  shareholders.  In the  event  of a
dissolution  of our  company,  the holders of our common  stock are  entitled to
share equally and ratably in our assets, if any,  remaining after the payment of
all of our debts and liabilities.

Our common stock has no preemptive  rights, no cumulative voting rights,  and no
redemption,  sinking fund, or  conversion  privileges.  Since the holders of our
common stock do not have cumulative  voting rights,  holders of more that 50% of
our  outstanding  shares  can  elect  all of our  directors,  and  holder of the
remaining shares, by themselves,  cannot elect any of our directors.  Holders of
our commons tock are entitled to receive  dividends if, as, and when declared by
our board of directors out of funds legally available for such purpose.

BLANK CHECK PREFERRED STOCK

Shares of our preferred stock may be issued from time to time one or more series
or  classes.  Our Board of  Directors  is  expressly  authorized  to  provide by
resolution or  resolutions  duly adopted prior to issuance,  for the creation of
each such series and class of preferred stock and to fix the designation and the
powers,  preferences,  rights,  qualifications,  limitations,  and  restrictions
relating  to the  shares  of each such  series.  The  authority  of the Board of
Directors with respect to each series of preferred stock shall include,  but not
be limited to, determining the following:

     o    the  designation  of such series,  the number of shares to  constitute
          such series and the stated  value  thereof if  different  from the par
          value thereof;

     o    whether  the  shares of such  series  shall  have  voting  rights,  in
          addition to any voting rights provided by law, and, if so, the term of
          such voting rights, which may be general or limited;

     o    the  dividends,  if any,  payable  on such  series,  whether  any such
          dividends  shall be  cumulative,  and,  if so,  from what  dates,  the
          conditions and dates upon which such dividends  shall be payable,  and
          the  preference  or relation  which such  dividends  shall bear to the
          dividends  payable  on any  shares of stock of any other  class or any
          other series of Preferred Stock;

     o    whether the shares of such series  shall be subject to  redemption  by
          us,  and,  if so,  the  times,  prices  and other  conditions  of such
          redemption;


                                      -62-


     o    the amount or amounts payable upon shares of such series upon, and the
          rights of the holders of such series in, the voluntary or  involuntary
          liquidation,  dissolution or winding up, or upon any  distribution  of
          our assets;

     o    whether the shares of such series shall be subject to the operation of
          a  retirement  or sinking fund and, if so, the extent to and manner in
          which any such  retirement  or  sinking  fund  shall be applied to the
          purchase or redemption of the shares of such series for  retirement or
          other corporate purposes and the terms and provisions  relating to the
          operation thereof;

     o    whether  the  shares of such  series  shall be  convertible  into,  or
          exchangeable  for,  shares  of stock of any  other  class or any other
          series of  Preferred  Stock or any other  securities  and,  if so, the
          price or prices or the rate or rates of conversion or exchange and the
          method,  if any,  of  adjusting  the  same,  and any  other  terms and
          conditions of conversion or exchange;

     o    the  conditions  or  restrictions,   if  any,  upon  the  creation  of
          indebtedness  by us  or  upon  the  issue  of  any  additional  stock,
          including  additional  shares of such series or of any other series of
          Preferred Stock or of any other class; and

     o    any other powers, preferences and relative, participating, options and
          other  special  rights,  and  any   qualifications,   limitations  and
          restrictions, thereof.

The powers,  preferences and relative,  participating optional and other special
rights of each series of Preferred Stock, and the qualifications, limitations or
restrictions  thereof, if any, may differ from those of any and all other series
at any time  outstanding.  All shares of any one series of Preferred Stock shall
be identical in all respects  with all other shares of such series,  except that
shares of any one series  issued at  different  times may differ as to the dates
from which dividends thereof shall be cumulative.

STOCK OPTIONS AND WARRANTS


As of  December  5, 2003 we have  2,061,900  A  Warrants;  3,600,000 B Warrants;
1,435,000 C Warrants and 3,173,500 other warrants issued and outstanding. Each A
Warrant is  exercisable  for the  purchase of one share of our common stock at a
price of $.333 per share  during the four year period that  commenced on October
1, 2003.  Each B Warrant is  exercisable  for the  purchase  of one share of our
common  stock  at a price  of $.667  per  share  during  the  four  year  period
commencing on July 1, 2004.  Each C Warrant is  exercisable  for the purchase of
one share of our common stock at a price of $4.00 per share during the six month
period  commencing on the earlier of December 5, 2004 or the registration of the
underlying  shares.  The C  Warrants  are  redeemable  by us upon 10 days  prior
written notice if during the exercise period the closing bid price of our common
stock is equal to or  greater  than $4.50 per share for 10  consecutive  trading
days.  2,100,000 of the other warrants are  exercisable  for the purchase of one
share of our  common  stock at a price of $1.00 per share  during  the four year
period  that  commenced  on July 1,  2003.  533,500  of the other  warrants  are
exercisable  for the  purchase  of one share of our  common  stock at a price of
$2.50 per share  during the five year period that  commenced  February 26, 2003.
90,000 of the other  Warrants are  exercisable  for the purchase of one share of
our common  stock at a price of $3.00 per share during the five year period that
commenced on April 7, 2003.  450,000 of the other Warrants are  exercisable  for
the  purchase of one share of common  stock at a price of $3.10 per share during
the five year period that commenced on July 1, 2003.



                                      -63-



As of December 5, 2003 we have 425,000  stock  options  issued and  outstanding.
120,000 of these stock options are exercisable,  upon vesting,  for the purchase
of one  share of our  common  stock at a price  of $2.75  per  share at any time
through  September 30, 2005.  305,000 of these options are  exercisable  for the
purchase of one share of our common stock at a price of $3.00 per share,  50,000
of which are  exercisable,  upon vesting,  at any time through  August 27, 2006,
225,000 of which are exercisable,  upon vesting,  at any time through August 28,
2006 and 30,000 of which are exercisable at any time through September 3, 2006.


TRANSFER AGENT AND REGISTRAR

Continental Stock Transfer & Trust Company, 17 Battery Place, New York, New York
10004 is our transfer  agent and the registrar  for our common stock.  Its phone
number is (212) 509-4000.

SERIES A PREFERRED STOCK

This series  consists of  seventeen  thousand  five hundred  (17,500)  shares of
convertible  Series A Preferred Stock with a stated value of one hundred dollars
per share.  The  holders of Series A  Preferred  Stock are  entitled  to receive
dividends at the rate of five percent (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 date of  issuance.  So long as any  shares of the  Series A
Preferred Stock are  outstanding,  no dividends shall be declared or paid or set
apart for payment or other distribution  declared or made upon junior securities
including our common stock.  The outstanding  shares of Series A Preferred Stock
are convertible into Company units as is determined by dividing the stated value
by the conversion  price, as defined below, at the option of the Holder in whole
or in part. Each unit consists of one share of common stock and one common stock
purchase warrant which may be exercised for the purchase of one additional share
of common stock at an exercise  price of $1.166 per share at any time during the
four year  period  commencing  one year after the date of issuance of the units.
The present conversion price for the conversion of a share of Series A Preferred
Stock  into  units is $1.00 of stated  value  and is  subject  to  anti-dilution
provisions.

The shares of Series A Preferred  Stock are redeemable at the sole option of the
Company at any time prior to the Company's  receipt of a notice of conversion to
the extent funds are legally  available  therefor,  at any time and from time to
time,  in whole or in part,  at a  redemption  price equal to 105% of the stated
value of each share of Series A Preferred  Stock being redeemed plus accrued and
unpaid dividends thereon.

The Series A Preferred Stock as to dividends,  redemptions, and the distribution
of assets upon liquidation, dissolution or winding up of the Company, ranks:

     o prior to the Company's common stock;

     o prior to any class or series of capital stock of the Company that, by its
terms, ranks junior to the Series A Preferred Stock;

     o junior to any class or series of capital  stock of the  Company  which by
its terms ranks senior to the Series A Preferred Stock; and


                                      -64-



     o pari passu with any other series of preferred  stock of the Company which
by its terms ranks on a parity with the Series A Preferred Stock.

SERIES B PREFERRED STOCK

This  Series  consists of five  thousand  two hundred  fifty  (5,250)  shares of
convertible Series B Preferred Stock, with a stated value of one hundred dollars
per  share.  The  Series B  Preferred  Stock  is pari  passu  with the  Series A
Preferred  Stock and is  identical  in all  respects,  except that the  warrants
issuable upon conversion  have a current  exercise price of $1.333 per share and
that the  current  conversion  price for the  conversion  of a share of Series B
Preferred Stock into units is $1.166 of stated value.

                                     EXPERTS


The financial  statements  referred to in this  prospectus  and elsewhere in the
registration  statement have been audited by Rogoff & Company, P.C., independent
certified  public  accountants,  as  indicated  in their  reports  with  respect
thereto, and are included in reliance upon the authority of said firm as experts
in giving said reports.


                                  LEGAL MATTERS

The validity of the issuance of common stock offered  hereby will be passed upon
for Assure Canada by Gottbetter & Partners, LLP, 488 Madison Avenue, 12th Floor,
New York, New York 10022.

                              AVAILABLE INFORMATION


We are subject to the informational  requirements of the Securities Exchange Act
of 1934, as amended. In accordance with those  requirements,  we presently file,
and after the  conversion  will  continue to file reports and other  information
with the Securities and Exchange  Commission.  After the conversion  however, we
will be a foreign  private  issuer  and will file  reports  related  to this new
status  including but not limited to the filing of annual  reports on Form 20-F.
After the  conversion we will continue to be exempt from the proxy rules and our
officers,  directors and principal  shareholders will continue to be exempt from
the  requirements  of  Section 16 of the  Securities  Exchange  Act of 1934,  as
amended.  Such reports and other  information can be inspected and copied at the
public  reference  facilities  maintained  by the SEC in Room  1024,  450  Fifth
Street, NW, Washington, D.C. 20549. Copies of such material may also be obtained
at prescribed rates by writing to the SEC's Public Reference Section,  450 Fifth
Street,  NW,  Washington,  D.C. 20549 upon payment of the fees prescribed by the
SEC. Please call the SEC at 1-800-SEC-0330 for more information on the operation
of its public  reference  rooms. The SEC also maintains a Web site that contains
reports,  proxy and  information  statements and other  materials that are filed
through the SEC's  Electronic Data Gathering,  Analysis,  and Retrieval  (EDGAR)
system.  This Web Site  can be  accessed  at  http://www.sec.gov.  Our  reports,
registration statements,  and other information that we file electronically with
the SEC are available on this site.



                                      -65-


You  may  request  a copy of any of our  filings,  at no  cost,  by  writing  or
telephoning us at the following address:


Secretary
Assure Energy, Inc.
521-3rd Avenue S.W., Suite 1250
Calgary, Alberta T2P 3T3
(403) 266-4975


This  prospectus  does  not  contain  all  the  information  set  forth  in that
registration  statement  of  which  it  is a  part  and  the  related  exhibits.
Statements  herein concerning the contents of any contract or other document are
not  necessarily  complete,  and in  each  instance  reference  is  made to such
contract or other  document  filed with the SEC or  included  as an exhibit,  or
otherwise, each such contract or document being qualified by and subject to such
reference  in all  respects.  The  registration  statement  and  any  subsequent
amendments,  including  exhibits filed as a part of the registration  statement,
are available for inspection and copying as set forth above.

           CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

Information included or incorporated by reference in this prospectus may include
"forward-looking  statements".  This  information  may involve known and unknown
risks,  uncertainties  and other  factors  which  could  cause  actual  results,
financial  performance,  operating  performance  or  achievements  expressed  or
implied by such  forward-looking  statements  not to occur or be realized.  Such
forward-looking statements generally are based upon our best estimates of future
results,  performance or achievement  and based upon current  conditions and the
most recent results of operations.  Forward-looking statements may be identified
by  the  use  of  forward-looking   terminology  such  as  "believes,"  "could,"
"possibly,"  "probably,"  "anticipates,"   "estimates,"  "projects,"  "expects,"
"may," "will," or "should" or the negative thereof or other  variations  thereon
or comparable terminology.

This  prospectus  contains  forward-looking  statements,   including  statements
regarding, among other things, our projected sales and profitability, our growth
strategies,  anticipated  trends in our  industry  and our future  plans.  These
statements  may be  found  under  "Business",  as  well  as in  this  prospectus
generally.  Our actual results or events may differ  materially from the results
discussed  in  forward-looking  statements  as  a  result  of  various  factors,
including,  without  limitation,  the risks  outlined  under "Risk  Factors" and
elsewhere in this prospectus.

Although  we believe  that the  expectations  reflected  in the  forward-looking
statements  are  reasonable,  we  cannot  guarantee  future  results,  levels of
activity, performance or achievements. Moreover, we do not assume responsibility
for the accuracy or completeness  of the  forward-looking  statements  after the
date of this prospectus.


                                      -66-


                                     PART II

                   INFORMATION NOT REQUIRED IN THE PROSPECTUS

Item 20.  Indemnification of Directors and Officers.

Nevada law permits a company to indemnify its directors and officers, except for
any  act  of   dishonesty.   Assure  has   provided   in  its  by-laws  for  the
indemnification  of officers and directors to the fullest extent  possible under
Nevada law against  expenses  (including  attorney's  fees),  judgments,  fines,
settlements,  and other amounts  actually and reasonably  incurred in connection
with any proceeding, arising by reason of the fact that such person is or was an
agent of ours. In addition,  Assure has the power,  to the maximum extent and in
the manner  permitted  by Nevada  Revised  Statutes,  to  indemnify  each of our
employees  and agents  (other than  directors  and  officers)  against  expenses
(including  attorneys' fees),  judgments,  fines,  settlements and other amounts
actually and reasonably  incurred in connection  with any proceeding  arising by
reason of the fact that such person is or was an agent of Assure.

The  Certificate  of  Incorporation  of Assure Nevada  limits or eliminates  the
personal  liability of its officers and  directors  for damages  resulting  from
breaches  of their  fiduciary  duty for acts or  omissions  except  for  damages
resulting from acts or omissions which involve intentional misconduct,  fraud, a
knowing violation of law, or the inappropriate payment of dividends in violation
of Nevada Revised Statutes.



                                      -67-


Item 21. Exhibits.

EXHIBITS

         The following exhibits are included as part of this report:




Financial Statements
                                                                            Page
                                                                            ----
                                                                         
         Independent Auditors Report - Rogoff & Company, P.C..............   F-1

         Consolidated Balance Sheet (Audited) as at December 31, 2002.....   F-2

         Consolidated Statements of Operations (Audited) for the years
         ended December 31, 2002 and December 31, 2001....................   F-3

         Consolidated Statement of Stockholders' Equity (Audited) for
         the year ended December 31, 2002.................................   F-4

         Consolidated Statements of Cash Flows (Audited) for the
         years ended December 31, 2002 and December 31, 2001..............   F-5

         Notes to Consolidated Financial Statements (Audited).............   F-6

         Consolidated Balance Sheet as at September 30, 2003
         (Unaudited)....................................................... F-20

         Consolidated Statement of Operations for the three and nine month
         periods ended September 30, 2003 and 2002 (Unaudited)............. F-21

         Consolidated Statement of Cash Flows for the nine month periods
         ended September 30, 2003 and 2002 (Unaudited)..................... F-22

         Notes to Consolidated Financial Statement (Unaudited)............. F-24






                                      -68-


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.




Exhibits

                           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)

   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)

   2.5                   2.1                  Share  Purchase  Agreement  dated  March  6,  2003 by and  among  Assure
                                              Energy,   Inc.,   and  Al  J.   Kroontje,   Trevor  G.  Penford,   Karen
                                              Brawley-Hogg,  Donald J. Brown, Troon Investments,  Ltd., and Quarry Oil
                                              & Gas, Ltd. (9)

   2.6                   2.2                  Amending  Agreement dated March 26, 2003 to March 6, 2003 Share Purchase
                                              Agreement. (9)

   2.7                   2.3                  Amending  Agreement  No. 2 dated  April 11,  2003 to March 6, 2003 Share
                                              Purchase Agreement. (9)

   2.8                   2.1                  Agreement  and Plan of Merger  dated as of  September  9,  2003  between
                                              Assure Energy,  Inc., a Delaware  corporation and Assure Energy, Inc., a
                                              Nevada corporation. (10)

   2.9                   2.2                  Certificate  of Merger as filed  with the  Delaware  Secretary  of State
                                              effective September 11, 2003. (10)

   2.10                  2.3                  Articles  of  Merger  as filed  with the  Nevada  Secretary  of State on
                                              September 11, 2003. (10)


                                       69





                           SEC Report
                            Reference
    Exhibit No.              Number                                         Description
--------------------   --------------------   ------------------------------------------------------------------------
                                        
   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 Assure Energy, Inc., a Delaware corporation.(5)

   3.5                   3.1                  Articles of Incorporation of Assure Energy,  Inc., a Nevada  corporation
                                              as filed with the Nevada Secretary of State on September 3, 2003. (10)

   3.6                   3.2                  By-Laws of Assure Energy, Inc., a Nevada corporation. (10)

   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                   4.3                  Certificate  of   Designation,   Preferences  and  Rights  of  Series  A
                                              Preferred Stock of Registrant as filed on June 7, 2002(8)

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

   5.1                                        Opinion of  Gottbetter  & Partners,  LLP  regarding  the validity of the
                                              securities issued hereby(12)

   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                  10.4                 Convertible  Preferred  Stock  Purchase  Agreement  dated  as of June 1,
                                              2002(8)

   10.5                  10.5                 Employment  Agreement dated as of September 17, 2002 between  Registrant
                                              and Harvey Lalach(8)

   10.6                  10.6                 Stock Option Agreement made as of September 17, 2002 between  Registrant
                                              and Harvey Lalach(8)


                                       70






                           SEC Report
                            Reference
    Exhibit No.              Number                                         Description
--------------------   --------------------   ------------------------------------------------------------------------
                                        
   10.7                  10.7                 Stock Option  Agreement  made as of October 1, 2002  between  Registrant
                                              and James Golla(8)

   10.8                  10.8                 Stock Option  Agreement  made as of October 1, 2002  between  Registrant
                                              and Primoris Group Inc. (8)

   10.9                  10.9                 Subordinated Promissory Note dated December 28, 2002(8)

   10.10                 10.10                Subordinated Promissory Note with Warrant dated March 15, 2003(8)

   10.11                                      Management and Operational  Services Agreement dated as of September 15,
                                              2003 between Assure Oil & Gas Corp. and Quarry Oil & Gas Ltd. (12)

   10.12                                      Employment  Agreement  dated as of August  29,  2003  among  Registrant,
                                              Assure Oil & Gas Corp. and Colin Emerson(12)

   10.13                                      Employment  Agreement  dated as of August  29,  2003  among  Registrant,
                                              Assure Oil & Gas Corp. and Tim Chorney(12)

   10.14                                      Employment  Agreement  dated as of August  29,  2003  among  Registrant,
                                              Assure Oil & Gas Corp. and Cameron Bogle(12)

   10.15                                      Stock Option  Agreement made as of September 4, 2003 between  Registrant
                                              and Lisa Komoroczy(12)

   21                    21                   List of subsidiaries of Registrant (11)

   23.1                                       Consent of Independent Auditors(12)

   23.2                                       Consent of Gottbetter & Partners, LLP. (included in Exhibit 5.1)

   99.1                                       Proxy Card(12)


(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.

                                       71


(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.

(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.

(8) Filed with the Securities  and Exchange  Commission on April 15, 2003, as an
exhibit,  numbered as indicated above, to the Registrant's Annual Report on Form
10KSB for the year ended December 31, 2002, which exhibit is incorporated herein
by reference.

(9) Filed with the Securities and Exchange  Commission on August 11, 2003, as an
exhibit, numbered as indicated above, to the Registrant's Current Report on Form
8K dated July 28, 2003, which exhibit is incorporated herein by reference.

(10) Filed with the Securities and Exchange Commission on September 25, 2003, as
an exhibit,  numbered as indicated above to the  Registrant's  Current Report on
Form 8K dated  September  11,  2003,  which  exhibit is  incorporated  herein by
reference.

(11) Filed with the Securities  and Exchange  Commission on October 31, 2003, as
an exhibit,  numbered as indicated  above,  to Amendment  No. 1 to  Registrant's
Registration Statement on Form S-4.

(12) Filed herewith.

                                       72


Item 22.  Undertakings.

The undersigned registrant hereby undertakes that it will:

(1)  File,  during  any  period  in  which it  offers  or  sells  securities,  a
     post-effective amendment to this registration statement to:

(i)  Include any prospectus required by Section 10(a) (3) of the Securities Act;
     and

(ii) Reflect  in the  prospectus  any facts or  events  which,  individually  or
     together,  represent a fundamental  change in the information set forth the
     registration  statement.  Notwithstanding  the  foregoing,  any increase or
     decrease  in volume of  securities  offered (if the total  dollar  value of
     securities  offered  would not exceed  that which was  registered)  and any
     deviation from the low or high end of the estimated  maximum offering range
     may be  reflected  in the form of  prospectus  filed  with  the  Commission
     pursuant  to Rule  424(b) if, in the  aggregate,  the changes in volume and
     price  represent no more than a 20 percent change in the maximum  aggregate
     offering price set forth in the "Calculation of Registration  Fee" table in
     the effective registration statement; and

(2)  For   determining   liability   under  the   Securities   Act,  treat  each
post-effective  amendment  as a new  registration  statement  of the  securities
offered,  and the offering of the securities at that time to be the initial bona
fide offering.

(3) File a  post-effective  amendment  to remove  from  registration  any of the
securities that remain unsold at the end of the offering.

Insofar as indemnification  for liabilities  arising under the Securities Act of
1933 business issuer  pursuant to the foregoing  provisions,  or otherwise,  the
small business issuer has been advised that in the opinion of the Securities and
Exchange Commission such  indemnification is against public policy as express in
the  Act  and is,  therefore,  unenforceable.  In the  event  that a  claim  for
indemnification  against  such  liabilities  (other  than  the  payment  by  the
registrant of expenses  incurred or paid by a director,  officer or  controlling
person of the registrant in the successful  defense of any such action,  suit or
proceeding)  is  asserted by such  director,  officer or  controlling  person in
connection with the securities being registered,  the registrant will, unless in
the opinion of counsel  the matter has been  settled by  controlling  precedent,
submit  to a  court  of  appropriate  jurisdiction  the  question  whether  such
indemnification  by it is against  public policy as expressed in the  Securities
Act and will be governed by the final adjudication of such issue.

                                       73


                                   SIGNATURES


Pursuant to the  requirements  of the  Securities  Act of 1933, as amended,  the
Registrant  has duly  caused  this  Registration  Statement  to be signed on its
behalf by the undersigned,  thereunto duly authorized,  in Alberta,  Canada,  on
December 8, 2003.




By:  /s/ Harvey Lalach
     -----------------------------
     Harvey Lalach
     President, Chairman, Chief Executive
     Officer (principal executive officer and
     principal financial officer)



     Pursuant to the  requirements  of the  Securities  Act of 1933, as amended,
     this Registration Statement has been signed by the following persons in the
     capacities and on the dates indicated.





                                                                     
     /s/ Harvey Lalach
     -----------------------
     Harvey Lalach                   President, Chairman, Chief            Dated: December 8, 2003
                                     Executive Officer, (principal
                                     executive officer and principal
                                     financial officer)


     /s/ Lisa Komoroczy
     -----------------------
     Lisa Komoroczy                  Director                              Dated: December 8, 2003


     /s/ James Golla
     -----------------------
     James Golla                     Director                              Dated: December 8, 2003



                                       74



                          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


                                      F-1


                      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.


                                      F-2


                      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.


                                      F-3


                      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
                                    SHARES          AMOUNT          SHARES          AMOUNT           CAPITAL
                                 -----------     -----------     -----------      -----------      -----------
                                                                                    
Balance, December 31, 2000                --     $        --      24,750,000      $    24,750      $    51,836
Issuance of common stock
to director                               --              --          60,000               60               --

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

Net loss                                  --              --              --               --               --
                                 -----------     -----------     -----------      -----------      -----------

Balance, December 31, 2001                --              --      31,326,000           31,326           52,469

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                                  --              --              --               --               --
                                 -----------     -----------     -----------      -----------      -----------

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




                                                                         OTHER            TOTAL
                                     ACCUMULATED      SUBSCRIPTION    COMPREHENSIVE    STOCKHOLDERS'
                                       DEFICIT         RECEIVABLE        INCOME           EQUITY
                                     -----------      -----------      -----------     -----------
                                                                           
Balance, December 31, 2000           $    (9,607)     $      (600)     $        --     $    66,379
Issuance of common stock
to director                                   --               --               --              60

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

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

Balance, December 31, 2001               (68,990)            (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)              --               --        (792,162)
                                     -----------      -----------      -----------     -----------

Balance, December 31, 2002           $  (861,152)     $        --      $    72,699     $ 5,428,163
                                     ===========      ===========      ===========     ===========



See Notes to Consolidated Financial Statements.


                                      F-4


                      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.


                                      F-5



                      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.


                                      F-6



                      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,  2002  assume  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 diluted       27,924,740
                                                                           ============



   (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.


                                      F-7


                      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.



                                      F-8



                      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 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.


                                      F-9


                      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  common share and 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 due to former  shareholder  of
         business acquired approximates fair value based the purchase agreement.
         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.


                                      F-10



                      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.


                                      F-11


                      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
                                                                              ==========



                                      F-12


                      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.  The Canadian net operating loss creates a deferred tax asset
         of  approximately  $152,000.  Since it is more likely than not that the
         Canadian  subsidiaries  will not  realize  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.

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.


                                      F-13


                      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
                                          Remaining
Range of Exercise           Number        Contractual  Weighted-Average   Number       Weighted-Average
    Prices               Outstanding         Life      Exercise Price   Exercisable    Exercise Price
    ------               -----------         ----      --------------   -----------    --------------
                                                                            
$0.00 - $2.75             320,000           1.60           $2.75          200,000          $2.75



                                      F-14


                      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.


                                      F-15


                      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.


                                      F-16


                      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
                                                             ==========



                                      F-17


                      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
         and Gas Ltd ("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
                                                           ===========



                                      F-18


                      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
                                                                            ============




                                      F-19



                      ASSURE ENERGY, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                               SEPTEMBER 30, 2003
                                   (Unaudited)





                                    ASSETS
                                                                         
Current Assets:
Cash                                                                        $    559,601
Accounts receivable                                                            2,211,632
   Prepaid expenses and other current assets                                     943,488
                                                                            ------------

                         Total current assets                                  3,714,721

Investment                                                                       645,024
Restricted cash                                                                   64,153
Property and equipment                                                        23,861,614
                                                                            ------------

                                                                            $ 28,285,512
                                                                            ============

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
   Bank line of credit                                                      $  5,667,120
   Current portion of long term debt                                             343,800
   Accounts payable and accrued expenses                                       2,905,810
   Accrued interest payable                                                      310,000
   Commodity hedging payable                                                     255,660
   Income tax payable                                                            223,694
                                                                            ------------

     Total current liabilities                                                 9,706,084

Long term debt, net of current portion                                         5,851,224
Obligation for site restoration                                                  249,061
Deferred income tax payable                                                    2,430,714
                                                                            ------------

                                                                              18,237,083

Minority interest                                                              2,588,419

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,
     16,433,000 shares issued and outstanding                                     16,433
   Additional paid in capital                                                  6,635,293
   Accumulated other comprehensive income                                      1,478,194
   Accumulated deficit                                                        (2,944,910)
                                                                            ------------

     Total stockholders' equity                                                7,460,010
                                                                            ------------

                                                                            $ 28,285,512
                                                                            ============



See Notes to Consolidated Financial Statements.


                                      F-20




                      ASSURE ENERGY, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)





                                                            Nine Months Ended               Three Months Ended
                                                             September 30,                     September 30,
                                                        2003              2002             2003             2002
                                                     -----------      -----------      -----------      -----------
                                                                                            
Revenue:
   Oil and gas production                            $ 3,760,973      $   685,967      $ 1,828,781      $   388,761
   Other                                                  79,502           16,524           53,323            9,132
                                                     -----------      -----------      -----------      -----------

     Total revenue                                     3,840,475          702,491        1,882,104          397,893
                                                     -----------      -----------      -----------      -----------

Royalty expense:
   Crown royalties                                       529,488           73,405          261,677           24,180
   Freehold royalties                                    116,652           33,665           43,178           11,089
   Gross overriding royalties                             81,603               --           21,892               --
                                                     -----------      -----------      -----------      -----------

     Total royalty expense                               727,743          107,070          326,747           35,269
                                                     -----------      -----------      -----------      -----------

Net oil and gas revenue                                3,112,732          595,421        1,555,357          362,624
                                                     -----------      -----------      -----------      -----------

Expenses:
   General and administrative                          1,249,377          307,761          689,710          159,656
   Operating                                           1,220,316          167,483          843,306           85,156
   Interest                                              549,851           25,060          156,060            2,979
   Unrealized gain on commodity hedging                  (93,859)              --          (93,859)              --
   Depletion and site restoration                      1,872,727          106,989          785,603           18,340
                                                     -----------      -----------      -----------      -----------

     Total expenses                                    4,798,412          607,293        2,380,820          266,131
                                                     -----------      -----------      -----------      -----------

(Loss) income before provision for
   income taxes and minority interest                 (1,685,680)         (11,872)        (825,463)          96,493
                                                                                                        -----------

Provision for income taxes                               262,503               --          208,015               --
Minority interest                                        135,575               --          135,575               --
                                                     -----------      -----------      -----------      -----------

Net (loss) income                                     (2,083,758)         (11,872)      (1,169,053)          96,493

Other comprehensive income (loss), net of taxes:
     Foreign translation gain (loss)                   1,551,493         (146,910)         117,448          (26,419)
                                                     -----------      -----------      -----------      -----------

     Comprehensive income (loss)                     $  (532,265)     $  (158,782)     $(1,051,605)     $    70,074
                                                     ===========      ===========      ===========      ===========


Basic loss per common share                          $     (0.13)     $         *      $     (0.07)     $         *
                                                     ===========      ===========      ===========      ===========

Basic weighted average common shares
   outstanding                                        16,210,220       32,156,989       16,433,000       29,021,217
                                                     ===========      ===========      ===========      ===========



* Amount is less than $.01

See Notes to Consolidated Financial Statements.


                                      F-21



                      ASSURE ENERGY, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                         NINE MONTHS ENDED SEPTEMBER 30,
                                   (Unaudited)





                                                                          2003             2002
                                                                       -----------      -----------
                                                                                  
Cash flows from operating activities:
Net loss                                                               $(2,083,758)     $   (11,872)
Adjustments to reconcile net loss to net cash provided by
     (used in) operating activities:
     Depreciation and depletion                                          1,814,240          207,942
     Allowance for site restoration                                         58,487           16,744
     Unrealized gain on commodity hedging payable                          (93,859)              --
     Warrants issued for interest                                          181,260               --
     Options and warrants issued for services                              127,500               --
     Deferred income taxes                                                 245,891               --
     Minority interest                                                     135,575               --

   Change in working capital items, net of acquisition:
     Accounts receivable                                                   120,684         (240,393)
     Prepaid expenses and other current assets                            (915,948)              --
     Other assets                                                               --            3,000
     Accounts payable and accrued expenses                                 587,374          (62,869)
     Accrued interest payable                                              310,000               --
     Income tax payable                                                      6,631               --
                                                                       -----------      -----------

Net cash provided by (used in) operating activities                        494,077          (87,448)
                                                                       -----------      -----------

Cash flows from investing activities:
   Purchases of property and equipment                                  (2,698,782)        (452,833)
   Disposition of commodity hedging payable                               (191,567)              --
   Acquisition of business, net of acquired assets and liabilities      (6,999,973)      (1,838,620)
                                                                       -----------      -----------

Net cash used in investing activities                                   (9,890,322)      (2,291,453)
                                                                       -----------      -----------

Cash flows from financing activities:
   Proceeds from long term debt                                          4,500,000        1,350,000
   Proceeds from bank line of credit                                       431,772               --
   Repayment of long term debt                                                  --         (100,000)
   Proceeds from the sale of units                                       2,400,750               --
   Proceeds from sale of common stock                                           --        1,750,000
   Proceeds from sale of Series A Preferred Stock                               --          500,000
   Proceeds from sale of Series B Preferred Stock                               --          525,000
                                                                       -----------      -----------

Net cash provided by financing activities                                7,332,522        4,025,000
                                                                       -----------      -----------

Effect of exchange rate changes on cash                                  1,406,570          (41,563)
                                                                       -----------      -----------

Increase (decrease) in cash                                               (657,153)       1,604,536
Cash, beginning of period                                                1,216,754           17,289
                                                                       -----------      -----------

Cash, end of period                                                    $   559,601      $ 1,621,825
                                                                       ===========      ===========



See Notes to Consolidated Financial Statements.


                                      F-22



                      ASSURE ENERGY, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                         NINE MONTHS ENDED SEPTEMBER 30,
                                   (Unaudited)





                                                                   2003               2002
                                                              --------------     --------------
                                                                           
Supplemental disclosure of cash flow information:
   Cash paid for interest                                     $       58,591     $       25,046
                                                              ==============     ==============

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
                                                              ==============     ==============
   Options and warrants issued for services                   $      127,500     $           --
                                                              ==============     ==============




See Notes to Consolidated Financial Statements.


                                      F-23



                      ASSURE ENERGY, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2003
                                   (Unaudited)


Note 1 - Nature of Business

         Assure Energy,  Inc. (the  "Company") was  incorporated in the State of
         Delaware on August 11, 1999. On September 11, 2003 the Company  changed
         its state of domicile from Delaware to Nevada (the  "Reincorporation").
         The Company,  through its wholly owned Canadian subsidiaries Assure Oil
         & Gas Corp. and Westerra 2000,  Inc.,  and partially  owned  subsidiary
         Quarry Oil & Gas Ltd. is engaged in the  exploration,  development  and
         production   of  oil  and  natural  gas   properties  in  the  Canadian
         providences of Alberta, Saskatchewan and British Columbia.

         By August 14, 2003 the Company  acquired a total of 6,919,900 shares of
         Quarry Oil & Gas Ltd. ("Quarry"). The Company acquired 6,750,000 shares
         of Quarry  pursuant to a Purchase  Agreement  (the  "Agreement")  dated
         March 6, 2003 and acquired an additional  169,900 shares through market
         transactions.  The aggregate  purchase price for the acquisition of the
         6,919,900  Quarry  shares,  which  represents  approximately  48.5%  of
         Quarry's  outstanding  common stock,  was $6,814,268  which was paid in
         cash (the "Acquisition").  Quarry is an oil and natural gas exploration
         and development  company located in Calgary,  Canada with properties in
         Alberta  and  British  Columbia,  Canada.  As part  of the  Acquisition
         certain non oil and gas industry  assets,  as defined in the Agreement,
         have been excluded from the Acquisition and have been  transferred to a
         new entity which is a subsidiary  of Quarry.  The Company then sold 51%
         of this subsidiary to certain vendors, as defined in the Agreement, for
         approximately  $640,000 in cash.  The  remaining  49% interest has been
         recorded  by  the  Company  as  an  investment   in  the   accompanying
         consolidated balance sheet.

         The acquisition of Quarry was accounted for as a purchase. The purchase
         price of  $6,814,268  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                                   $    898,664
         Investment                                            645,024
         Oil and Natural Gas Properties                     16,710,838
         Accounts Payable and Accrued Expenses              (4,847,138)
         Notes payable bank                                 (6,593,120)
                                                          ------------
         Purchase price                                   $  6,814,268
                                                          ============


         The following  unaudited pro forma  consolidated  results of operations
         for  the  nine  months  ended   September  30,  2003  assume  that  the
         acquisition  had occurred as of January 1, 2003.  The pro forma data is
         for  informational  purposes only and may not  necessarily  reflect the
         actual  results of operations had Quarry been operated as a part of the
         Company since January 1, 2003.



                                                          
         Net revenue                                         $  8,580,077
                                                             ============
         Net loss                                            $ (1,760,450)
                                                             ============
         Basic net loss per common share                     $      (0.11)
                                                             ============
         Basic weighted average common share outstanding       16,210,220
                                                             ============




                                      F-24



                      ASSURE ENERGY, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2003
                                   (Unaudited)


Note 2 - Basis of Presentation

     The accompanying  unaudited  consolidated  financial statements and related
     footnotes  have been  prepared in  accordance  with  accounting  principles
     generally  accepted in the United  States of America for interim  financial
     statements and pursuant to the rules and  regulations of the Securities and
     Exchange Commission for Form 10-QSB.  Accordingly,  they do not include all
     of  the  information  and  footnotes  required  by  accounting   principles
     generally  accepted in the United States of America for complete  financial
     statements.  In the opinion of management,  all adjustments  (consisting of
     normal recurring  accruals)  considered  necessary for a fair  presentation
     have been included.  For further information read the financial  statements
     and  footnotes  thereto  included in the  Company's  Annual  Report on Form
     10-KSB for the year ended  December 31, 2002. The results of operations for
     the nine-months ended September 30, 2003 are not necessarily  indicative of
     the operating results that may be expected for the year ending December 31,
     2003.

     The accompanying  financial statements include the accounts of the Company,
     its wholly owned  subsidiaries and Quarry, as the Company controls Quarry's
     operations,  from the date of  Acquisition.  All  significant  intercompany
     balances and transactions have been eliminated in consolidation.

Note 3 - Summary of Significant Accounting Policies

     Investment

     An  investment  where the  Company  owns 20% or more but 50% or less of the
     voting stock of another entity is recorded  using the equity method.  Under
     this method the initial investment is recorded at cost.  Subsequently,  the
     investment  is increased or  decreased  to reflect the  Company's  share of
     income, losses and dividends actually paid.

                                Minority Interest

     Minority interest represents the minority stockholders' proportionate share
     of the equity of the  Company's  subsidiary  at  September  30,  2003.  The
     minority  interest is adjusted for the minority's  share of the earnings or
     loss of Quarry.

                            Stock based compensation

     Effective January 1, 2003, the Company adopted the fair value of accounting
     for stock based  compensation  following  the  provisions  of  Statement of
     Financial   Accounting   Standards  No.  148  "Accounting  for  Stock-Based
     Compensation - Transition and Disclosure" an amendment of SFAS No. 123.



                                      F-25



                           ASSURE ENERGY, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2003
                                   (Unaudited)


Note 3 - Summary of Significant Accounting Policies - continued



                                                                             Nine-Months Ended
                                                                             September 30, 2003
                                                                            
         Net loss (as reported)                                                $  (2,083,758)

         Deduct:  Additional stock based compensation expense determined
               under the fair value based method for all awards granted,
               modified or settled during the period, net of related taxes                --
                                                                               -------------

         Pro forma net loss                                                    $  (2,083,758)
                                                                               =============

         Basic, as reported                                                    $       (0.13)
                                                                               =============

         Basic, pro forma                                                      $       (0.13)
                                                                               =============



     Use of estimates

     The  preparation of  consolidated  financial  statements in conformity with
     accounting  principles  generally  accepted in the United States of America
     requires  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 revenues
     and expenses during the reporting period.  Actual results could differ from
     those estimates.

     Recent accounting pronouncements

     In January 2003, the Financial  Accounting Standards Board issued Financial
     Interpretation No. 46,  "Consolidation of Variable Interest Entities" ("FIN
     46").  The  consolidation  requirements  of FIN  46  apply  immediately  to
     variable   interest   entities   created  after   January  31,  2003.   The
     consolidation requirements apply to older entities in the first fiscal year
     or interim periods beginning after June 15, 2003. Certain of the disclosure
     requirements  apply in all  financial  statements  issued after January 31,
     2003, regardless of when the variable interest entity was established.  The
     Company does not have  variable  interest  entities and does not expect the
     adoption of FIN 46 to have a material  effect on its financial  position or
     results of operations.

     Reclassification

     Certain  reclassifications  have been made to the prior period's  financial
     statements in order to conform to the current period presentation.

Note 4 - Commitments

     On August 28, 2003 the Company  entered  into a  consulting  agreement  for
     approximately  $3,500 per month.  In addition,  the Company  granted 50,000
     non-cancelable  options to purchase an equal number of the Company's common
     stock,  with an exercise price of $3 per share and are exercisable for five
     years from the vesting  date.  The vesting  date for 25,000  options is the
     earlier of August 28, 2004 or when the Company achieves production of 2,000
     barrels of oil per day or its natural gas equivalent.  The remaining 25,000
     shares vest on the first  anniversary  of the vesting  date.  These options
     have been valued at approximately $11,000.



                                      F-26


                      ASSURE ENERGY, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2003
                                   (Unaudited)


Note 4 - Commitments - continued

     On August 29, 2003 the Company  entered  into three  employment  contracts,
     each for approximately  $70,000 annually.  The employment  contacts grant a
     total of 225,000 stock options for an equal number of the Company's  common
     stock. The employment  agreements are each through  September 29, 2005. The
     Company will amortize the fair value of these  options over the  employment
     period.  The  options  have  an  exercise  price  of $3 per  share  and are
     exercisable  for five years from the vesting  date.  The  vesting  date for
     75,000  options  is the  earlier  of March  31,  2004 or when  the  Company
     achieves  production  of 2,500  barrels of oil per day or its  natural  gas
     equivalent.  The next 75,000  options vest on the earlier of September  30,
     2004 or when the Company  achieves  production  of 3,000 barrels of oil per
     day or its natural gas equivalent. The remaining 75,000 options vest on the
     earlier of March 31, 2005 or when the Company achieves  production of 3,000
     barrels of oil per day or its natural gas  equivalent.  These  options have
     been valued at approximately $123,000.

Note 5 - Options

     On  September  4, 2003 the Company  granted  30,000  options to purchase an
     equal number of the  Company's  common stock to one of its  directors.  The
     options have an exercise  price of $3 per share and are  exercisable at any
     time during the period  ending  September 3, 2006.  These options have been
     valued at approximately $12,400.

Note 6 - Subsequent Events

         During October 2003 the Company issued  1,538,100  shares of its common
         stock upon the  exercise  of  1,538,100  shares of the A  warrants  for
         approximately $512,000.  Additionally, the Company issued 10,000 shares
         of its common stock upon the exercise of 10,000 warrants for $30,000.


                                      F-27



                                                                      APPENDIX A


                             ARTICLES OF CONVERSION
                              (PURSUANT TO 92A.205)


1. NAME AND  JURISDICTION OF  ORGANIZATION  OF CONSTITUENT  ENTITY AND RESULTING
ENTITY:



     Assure Energy, Inc.
--------------------------------------------------------------------------------
NAME OF CONSTITUENT ENTITY

   Nevada                                                   Corporation
----------------------------                      ------------------------------
Jurisdiction                                                Entity type*

and,

     Assure Energy, Inc.
--------------------------------------------------------------------------------
NAME OF RESULTING ENTITY

     Alberta, Canada                                         Corporation
----------------------------                      ------------------------------
Jurisdiction                                                 Entity type



2. A PLAN OF CONVERSION HAS BEEN ADOPTED BY THE CONSTITUENT ENTITY IN COMPLIANCE
WITH THE LAW OF THE JURISDICTION GOVERNING THE CONSTITUENT ENTITY.



3.       LOCATION OF PLAN OF CONVERSION: (CHECK ONE)



/ /      THE ENTIRE PLAN OF CONVERSION IS ATTACHED TO THESE ARTICLES.



/X/      THE COMPLETE  EXECUTED PLAN OF CONVERSION IS ON FILE AT THE  REGISTERED
         OFFICE OR PRINCIPAL PLACE OF BUSINESS OF THE RESULTING ENTITY.



/ /      THE COMPLETE  EXECUTED  PLAN OF CONVERSION  FOR THE RESULTING  DOMESTIC
         LIMITED  PARTNERSHIP IS ON FILE AT THE RECORDS  OFFICE  REQUIRED BY NRS
         88.330.



4.       FORWARDING ADDRESS WHERE COPIES OF PROCESS MAY BE SENT BY THE SECRETARY
         OF STATE OF NEVADA (IF A FOREIGN ENTITY IS THE RESULTING ENTITY IN THE
         CONVERSION):



                  Attn:    Harvey Lalach
                           ----------------------------
                  c/o:     Assure Energy, Inc.
                           ----------------------------
                           521-3rd Avenue S.W., Suite 1250
                           ----------------------------
                           Calgary, Alberta T2P 3T3
                           ----------------------------



5.       EFFECTIVE DATE OF CONVERSION (OPTIONAL) (NOT TO EXCEED 90 DAYS AFTER
         THE ARTICLES ARE FILED PURSUANT TO NRS 92A.240)*:



---------------------------------------------------------

                                       1





6.       SIGNATURES - MUST BE SIGNED BY:



         1. If constituent entity is a Nevada entity: an officer of each Nevada
         corporation; all general partners of each Nevada limited partnership or
         limited-liability limited partnership; a manger of each Nevada
         limited-liability company with managers or all the members if there are
         no managers; a trustee of each Nevada business trust; a managing
         partner of a Nevada limited-liability partnership (a.k.a.; general
         partnership governed by NRS chapter 87).



         2. If constituent entity is a foreign entity: must be signed by the
         constituent entity in the manner provided by the law governing it.



         -----------------------------------------------------------------------
         NAME OF CONSTITUENT ENTITY

                                                              /      /
         -----------------------------------------------------------------------
         SIGNATURE                 TITLE                       DATE



* Pursuant to NRS  92A.205(4)  if the  conversion  takes  effect on a later date
specified in the articles of conversion pursuant to NRS 92A.240, the constituent
document  filed with the Secretary of State pursuant to paragraph (b) subsection
1 must state the name and the  jurisdiction of the  constituent  entity and that
the existence of the resulting  entity does not begin until the later date. THIS
STATEMENT MUST BE INCLUDED WITHIN THE RESULTING ENTITY'S ARTICLES.



FILING FEE $350.00



                                       2



                                                                      APPENDIX B



                               PLAN OF CONVERSION

It is hereby certified that:

1.       The  constituent  business  corporation  participating  in the  plan of
         conversion is Assure Energy, Inc., which is incorporated under the laws
         of the State of Nevada ("Assure Nevada"). The current address of Assure
         Nevada is 521-3rd Avenue S.W., Suite 1250, Calgary, Alberta T2P 3T3.

2.       The  proposed  name of the  resulting  business  corporation  is Assure
         Energy,  Inc.,  a company  continued  under the laws of the Province of
         Alberta ("Assure  Canada").  The proposed address of Assure Canada will
         be 521-3rd Avenue S.W., Suite 1250, Calgary, Alberta T2P 3T3.

3.       A copy of the Articles of  Continuance  and By-Laws of Assure Canada is
         attached hereto.

4.       Assure  Nevada  desires to  effectuate  a conversion  to Assure  Canada
         pursuant to Nevada Revised Statutes Chapter 92A.105.

5.       The conversion of Assure Energy, Inc., a Nevada corporation,  to Assure
         Energy,  Inc.,  a Canadian  corporation,  is  intended  to qualify as a
         tax-free reorganization under the provisions of Section 368(a)(1)(F) of
         the Internal Revenue Code of 1986, as amended.  Upon the effective date
         of the conversion,  each issued and outstanding  share of Assure Nevada
         shall automatically, without any action on the part of the company or a
         stockholder, become one issued and outstanding share of Assure Canada.

6.       Assure  Nevada  is  authorized  to issue  100,000,000  shares of common
         stock,  4,977,250 shares of blank check preferred stock,  17,500 shares
         of Series A  Preferred  Stock and  5,250  shares of Series B  Preferred
         Stock.  As of the date hereof,  Assure Nevada has 17,981,100  shares of
         common  stock,  17,500  shares of Series A Preferred  Stock,  and 5,250
         shares of Series B Preferred Stock issued and outstanding.


7.       Assure  Canada is  authorized  to issue  shares of  common  shares  and
         preferred  shares.  Upon the effective  date of the plan of conversion,
         Assure  Canada will have  19,416,100  common  shares,  17,500  Series A
         preferred  shares,  and 5,250  Series B  preferred  shares  issued  and
         outstanding.


8.       Upon  the  effectiveness  of  the  plan  of  conversion,  the  separate
         existence of Assure Nevada shall cease.

9.       The Articles of  Continuance  and By-Laws of Assure  Canada will be the
         Articles of Incorporation  and By-Laws of Assure Canada,  the resulting
         entity,  and will  continue  in full  force and effect  until  changed,
         altered or amended as  provided in the  Alberta  Business  Corporations
         Act.


                                       1



10.      The officers and  directors of Assure  Nevada shall be the officers and
         directors  of  Assure  Canada  upon the  effective  date of the plan of
         conversion,  all of whom  shall hold their  directorships  and  offices
         until the election and qualification of their respective  successors or
         until their tenure is otherwise terminated.

11.      The plan of  conversion  was duly  adopted by the Board of Directors of
         Assure Nevada on September 11, 2003.


12.      The plan of conversion was duly adopted by the  stockholders  of Assure
         Nevada at a special shareholders' meeting held on January ___, 2004.



The plan of conversion shall be effective upon the filing hereof.


ASSURE ENERGY, INC. (A NEVADA CORPORATION)

By:
   ---------------------------------
         Name: Harvey Lalach
         Title: President


ASSURE ENERGY, INC. (AN ALBERTA CORPORATION)

By:
   ---------------------------------
         Name: Harvey Lalach
         Title: President



Date:                      , 2004



                                       2




                                                                      APPENDIX C



ALBERTA REGISTRIES                                       ARTICLES OF CONTINUANCE
                                                       Business Corporations Act
                                                       Sections 188, 273 and 274



--------------------------------------------------------------------------------
1.       NAME OF CORPORATION                2. CORPORATE ACCESS NUMBER

         ASSURE ENERGY, INC.

--------------------------------------------------------------------------------
3.       THE CLASSES OF SHARES, AND ANY MAXIMUM NUMBER OF SHARES THAT THE
         CORPORATION IS AUTHORIZED TO ISSUE:

         SEE SCHEDULE "A" ATTACHED HERETO AND FORMING A PART HEREOF.
--------------------------------------------------------------------------------
4.       RESTRICTIONS ON SHARE TRANSFERS (if there are no restrictions, enter
         "NONE"):

         NONE

5.       Number, or minimum and maximum number of directors:

         MINIMUM THREE (3) AND MAXIMUM TEN (10)

--------------------------------------------------------------------------------
6.       IF THE CORPORATION IS RESTRICTED FROM CARRYING ON A CERTAIN BUSINESS OR
         RESTRICTED TO CARRYING ON A CERTAIN BUSINESS,  SPECIFY THE RESTRICTIONS
         (if there are no restrictions, enter "NONE"):

         NONE

-------------------------------------------------------------------------------
7.       IF A CHANGE OF NAME IS EFFECTED, INDICATE PREVIOUS NAME:

--------------------------------------------------------------------------------
8.       DETAILS OF INCORPORATION:

         INCORPORATED IN NEVADA ON SEPTEMBER 3, 2003 AND SUBSEQUENTLY MERGED
         WITH ASSURE ENERGY INC. (DELAWARE CORPORATION) IN THE STATE OF NEVADA
         ON SEPTEMBER 11, 2003.

--------------------------------------------------------------------------------

9.       OTHER RULES OR PROVISIONS (if there are no rules or provisions, enter
         "NONE"):

         SEE SCHEDULE "B" ATTACHED HERETO AND FORMING A PART HEREOF.

DATE              SIGNATURE         TITLE

--------------------------------------------------------------------------------


               , 2004         Harvey Lalach                    Director
--------------------------------------------------------------------------------
FOR DEPARTMENTAL USE ONLY                                      FILED:



                                       1




                     Schedule "A" to Articles of Continuance

                                       Of

                               ASSURE ENERGY, INC.


                            dated the day of , 2004.



3. THE CLASSES OF SHARES,  AND ANY MAXIMUM NUMBER OF SHARES THAT THE CORPORATION
IS AUTHORIZED TO ISSUE:

         (a) 100,000,000 Common Shares;

         (b) 4,977,250 Blank Check Preferred Shares;

         (c) 17,500 Series A Preferred Shares; and

         (d) 5,250 Series B Preferred Shares.

The rights,  privileges,  restrictions and conditions attaching to the shares of
each of the aforementioned classes are as follows:

(A) COMMON SHARES

         1.       Voting

                  Except for meetings at which only holders of another specified
                  class or series of shares of the  Corporation  are entitled to
                  vote separately as a class or series,  each holder of a Common
                  Share is entitled to receive  notice of, to attend and to vote
                  at all meetings of the shareholders of the Corporation.

         2.       Dividends

                  Subject to the rights, privileges, restrictions and conditions
                  attached to any other class of shares of the Corporation,  the
                  holders of the Common Shares are entitled to receive dividends
                  if, as and when declared by the directors of the Corporation.

         3.       Return of Capital

                  Subject to the rights, privileges, restrictions and conditions
                  attached to any other class of shares of the Corporation,  the
                  holders of the Common  Shares are entitled to share equally in
                  the remaining  property of the Corporation  upon  liquidation,
                  dissolution or winding-up of the Corporation.


                                       1



         (B) BLANK CHECK PREFERRED SHARES

         The Blank Check Preferred Shares may be issued from time to time in one
         or more series or classes.  The Board of Directors is hereby  expressly
         authorized to provide by resolution or  resolutions  duly adopted prior
         to  issuance,  for the  creation of each such series and class of Blank
         Check  Preferred  Shares  and to fix the  designation  and the  powers,
         preferences,  rights,  qualifications,  limitations,  and  restrictions
         relating to the shares of each such series.  The authority of the Board
         of  Directors  with  respect to each  series of Blank  Check  Preferred
         Shares shall include, but not be limited to, determining the following:

         (1) the designation of such series,  the number of shares to constitute
         such series and the stated value thereof;

         (2)  whether the shares of such series  shall have  voting  rights,  in
         addition to any voting rights  provided by law, and, if so, the term of
         such voting rights, which may be general or limited;

         (3) the  dividends,  if any,  payable on such series,  whether any such
         dividends  shall be  cumulative,  and,  if so,  from  what  dates,  the
         conditions  and dates upon which such dividends  shall be payable,  and
         the  preference  or  relation  which such  dividends  shall bear to the
         dividends  payable on any shares of any other class or any other series
         of Blank Check Preferred Shares;

         (4) whether the shares of such series shall be subject to redemption by
         the Corporation,  and, if so, the times, prices and other conditions of
         such redemption;

         (5) the amount or amounts  payable upon shares of such series upon, and
         the  rights  of the  holders  of  such  series  in,  the  voluntary  or
         involuntary  liquidation,  dissolution  or  winding  up,  or  upon  any
         distribution of the assets, of the Corporation;

         (6) whether the shares of such series shall be subject to the operation
         of a retirement or sinking fund and, if so, the extent to and manner in
         which any such  retirement  or  sinking  fund  shall be  applied to the
         purchase or redemption  of the shares of such series for  retirement or
         other Corporation purposes and the terms and provisions relating to the
         operation thereof;

         (7) whether the shares of such series  shall be  convertible  into,  or
         exchangeable  for,  shares  of any other  class or any other  series of
         Blank Check  Preferred  Shares or any other  securities and, if so, the
         price or prices or the rate or rates of  conversion or exchange and the
         method,  if any,  of  adjusting  the  same,  and any  other  terms  and
         conditions of conversion or exchange;


                                       2


         (8) the  conditions  or  restrictions,  if any,  upon the  creation  of
         indebtedness  of the  Corporation  or upon the issue of any  additional
         shares,  including  additional  shares  of such  series or of any other
         series of Blank Check Preferred Shares or of any other class; and

         (9) any other powers, preferences and relative, participating,  options
         and other  special  rights,  and any  qualifications,  limitations  and
         restrictions, thereof.

         The powers, preferences and relative,  participating optional and other
special  rights  of  each  series  of  Blank  Check  Preferred  Shares,  and the
qualifications,  limitations or  restrictions  thereof,  if any, may differ from
those of any and all other series at any time outstanding. All shares of any one
series of Blank Check  Preferred  Shares shall be identical in all respects with
all other shares of such series,  except that shares of any one series issued at
different times may differ as to the dates from which dividends thereof shall be
cumulative.

(C) SERIES A PREFERRED SHARES

         (1) Designation and Amount. This Series consists of Seventeen Thousand
Five Hundred (17,500) Series A Preferred Shares, with a stated value of One
Hundred U.S. Dollars ($100.00) per share (the "Stated Value").

         (2) Dividends

             (i) The holders of Series A Preferred  Shares as they appear on the
share records of the  Corporation  ("Holder" or "Holders")  shall be entitled to
receive,  the  Board  of  Directors  shall  be  obligated  to  declare  and  the
Corporation  shall be obligated to pay, out of funds  legally  available for the
payment of dividends, dividends in cash or (as provided herein) Common Shares at
the rate of five  percent  (5%) per  annum  (computed  on the basis of a 360-day
year) (the  "Dividend  Rate") on the  Stated  Value of each  Series A  Preferred
Share.  Dividends on the Series A Preferred  Shares shall be cumulative from the
date of issuance.

             (ii) Dividends shall be payable  annually as of each anniversary of
the date of  issuance  until the earlier of  redemption  or  conversion,  to the
Holders  of record of Series A  Preferred  Shares,  as they  appear on the share
records of the Corporation. An additional dividend shall be payable with respect
to converted or redeemed Series A Preferred Shares, which shall be payable as of
the date of conversion or redemption, as the case may be. The annual anniversary
date as of  which  dividend  payments  are  due or the  date  of  conversion  or
redemption  as of which  an  additional  dividend  payment  is due is  hereafter
referred to as the Dividend Payment Date.



                                       3


             (iii) The  dividend  shall be paid in (i) cash or (ii)  through the
issuance  of  duly  and   validly   authorized   and  issued,   fully  paid  and
non-assessable,  Common  Shares  valued at the average  closing bid price of the
Corporation's  Common  Shares  during  the 10  trading  day  period  immediately
preceding the Dividend Payment Date.

             (iv) So long as any Series A Preferred Shares are  outstanding,  no
dividends,  except  as  described  in the  next  succeeding  sentence,  shall be
declared or paid or set apart for payment on Pari Passu  Securities  (as defined
herein) for any period unless full cumulative  dividends  required to be paid in
cash have been or contemporaneously  are declared and paid or declared and a sum
sufficient  for the payment  thereof set apart for such  payment on the Series A
Preferred Shares for all dividend payment periods terminating on or prior to the
date of  payment  of the  dividend  on  such  class  or  series  of  Pari  Passu
Securities.  When  dividends are not paid in full or a sum  sufficient  for such
payment is not set apart, as aforesaid, all dividends declared upon the Series A
Preferred  Shares and all  dividends  declared upon any other class or series of
Pari Passu  Securities shall be declared ratably in proportion to the respective
amounts of dividends accumulated and unpaid on the Series A Preferred Shares and
accumulated and unpaid on such Pari Passu Securities.

             (v) So long as any Series A Preferred  Shares are  outstanding,  no
dividends  shall  be  declared  or  paid  or set  apart  for  payment  or  other
distribution  declared or made upon Junior  Securities (as defined herein),  nor
shall any Junior Securities be redeemed,  purchased or otherwise acquired (other
than a  redemption,  purchase  or other  acquisition  of Common  Shares made for
purposes of an employee  incentive  or benefit  plan  (including  a stock option
plan) of the Corporation or any subsidiary) for any consideration (or any moneys
be paid to or made  available for a sinking fund for the  redemption of any such
shares) by the Corporation,  directly or indirectly, unless in each case (i) the
full cumulative  dividends required to be paid in cash on all outstanding Series
A Preferred  Shares and any other Pari Passu  Securities shall have been paid or
set apart for payment for all past dividend periods with respect to the Series A
Preferred  Shares and all past dividend  periods with respect to such Pari Passu
Securities,  and (ii) sufficient funds shall have been paid or set apart for the
payment of the  dividend  for the current  dividend  period with  respect to the
Series A Preferred  Shares and the current  dividend period with respect to such
Pari Passu Securities.

         (3) Conversion

             (i) The outstanding  Series A Preferred Shares shall be convertible
into  Corporation  units (the  "Units") as is  determined by dividing the Stated
Value by the Conversion  Price, as defined below, at the option of the Holder in
whole  or in  part,  within  15 days of the  Holder's  receipt  of a  notice  of
redemption  from the  Corporation  or at any time  during the three year  period
commencing  on  the  second  anniversary  of  the  Issuance  Date  (the  "Holder
Conversion Period").  Each Unit consists of one Common Share (the "Unit Shares")
and one  Common  Share  purchase  warrant  (the  "Unit  Warrants")  which may be
exercised for the purchase of one additional Common Share (the "Warrant Shares")
at an exercise  price of $1.75 U.S.  Dollars per Common Share at any time during
the four year  period  commencing  one year  after the date of  issuance  of the
Units.  Any conversion under this section shall be for a minimum Stated Value of
$25,000.00 U.S.  Dollars of Series A Preferred  Shares.  The Holder shall effect
conversions by sending a conversion  notice (the "Notice of  Conversion") in the
manner set forth  herein.  Each Notice of  Conversion  shall  specify the Stated
Value of Series A Preferred  Shares to be converted,  and the date on which such
conversion is to be effected (the "Conversion Date"). Except as provided herein,
each Notice of Conversion,  once given,  shall be irrevocable.  If the Holder is
converting  less than all of the Stated Value  represented by a certificate  for
the  Series  A  Preferred  Shares  tendered  by  the  Holder  in the  Notice  of
Conversion, the Corporation shall deliver to the Holder a new Series A Preferred
Shares  certificate for such Stated Value as has not been converted within seven
(7)  Business  Days  of the  Corporation's  receipt  of the  original  Series  A
Preferred Shares and Notice of Conversion.


                                       4


             (ii) Not later than seven (7) Business Days after the Corporation's
receipt of the certificate or certificates for the Series A Preferred Shares and
the original of the Notice of Conversion,  the  Corporation  will deliver to the
Holder (i) a certificate or certificates  representing the number of Unit Shares
and Unit  Warrants  being  acquired  upon the  conversion  of Series A Preferred
Shares and (ii), if applicable,  Series A Preferred  Shares in principal  amount
equal to the principal amount of Series A Preferred Shares not converted. In the
case of a conversion pursuant to a Notice of Conversion,  if such certificate or
certificates  are not  delivered  by the  date  required,  the  Holder  shall be
entitled by providing written notice to the Corporation at any time on or before
its receipt of such  certificate  or  certificates  thereafter,  to rescind such
conversion, in which event the Corporation shall immediately return the Series A
Preferred Shares tendered for conversion.

             (iii)  The  Conversion  Price  for the  conversion  of a  Series  A
Preferred  Share into Units  shall be $1.50  U.S.  Dollars of Stated  Value (the
"Conversion Price").

             (iv) If the  Corporation,  at any time while any Series A Preferred
Shares  are  outstanding,   (a)  shall  pay  a  dividend  or  otherwise  make  a
distribution  or  distributions  on shares of its Junior  Securities  payable in
shares of its capital shares  (whether  payable in Common Shares or of shares of
any other class),  (b) subdivide  outstanding Common Shares into a larger number
of shares,  (c)  combine  outstanding  Common  Shares  into a smaller  number of
shares, or (d) issue by  reclassification of Common Shares into any other shares
of the  Corporation,  the Conversion  Price shall be multiplied by a fraction of
which the  numerator  shall be the  number of Common  Shares of the  Corporation
outstanding  before such event and of which the denominator  shall be the number
of Common Shares  outstanding  after such event. Any adjustment made pursuant to
this section shall become  effective  immediately  after the record date for the
determination of shareholders  entitled to receive such dividend or distribution
and shall become effective immediately after the effective date in the case of a
subdivision, combination or reclassification.

             (v) If the  Corporation,  at any time while any Series A  Preferred
Shares are outstanding,  shall issue or sell Common Shares, or options, warrants
or other rights to subscribe for or purchase  Common Shares,  (excluding  Common
Shares issuable upon exercise of options,  warrants or conversion rights granted
prior to the date hereof and Common  Shares  issuable  upon  exercise of options
which  may  be  issued  subsequent  to the  date  hereof  to  the  Corporation's
employees, officers, or directors) at a price per share less than the Conversion
Price then in effect, the Conversion Price designated herein shall be reduced to
the  price at which  the  Common  Shares  are  issued  or the price at which the
options,  warrants or other rights may be  exercised  for the purchase of Common
Shares.  Such  adjustment  shall  be made as of the  date  such  Common  Shares,
options, rights or warrants are issued.


                                       5


             (vi) If the  Corporation,  at any time  while  Series  A  Preferred
Shares are  outstanding,  shall  distribute to all holders of Common Shares (and
not to Holders of Series A Preferred  Shares)  evidences of its  indebtedness or
assets  or  rights  or  warrants  to  subscribe  for or  purchase  any  security
(excluding those referred to in Section  (c)(3)(v) above) then in each such case
the Conversion  Price at which each Series A Preferred Share shall thereafter be
convertible  shall be determined by multiplying  the Conversion  Price in effect
immediately  prior to the record date fixed for  determination  of  shareholders
entitled to receive  such  distribution  by a fraction of which the  denominator
shall be the per share market value of Common Shares determined as of the record
date mentioned  above, and of which the numerator shall be such per share market
value of the Common  Shares on such record date less the then fair market  value
at such record date of the portion of such assets or evidence of indebtedness so
distributed  applicable  to one  outstanding  Common Share as  determined by the
Board of  Directors  in good  faith;  provided,  however  that in the event of a
distribution  exceeding ten percent (10%) of the net assets of the  Corporation,
such fair market value shall be determined  by a nationally  recognized or major
regional  investment  banking  firm  or  firm of  independent  certified  public
accountants  of  recognized  standing  (which  may be the  firm  that  regularly
examines the financial statements of the Corporation) (an "Appraiser")  selected
in good faith by the Holders of a majority of the principal amount of the Series
A  Preferred  Shares  then  outstanding;   and  provided,   further,   that  the
Corporation, after receipt of the determination by such Appraiser shall have the
right to select an  additional  Appraiser,  in which case the fair market  value
shall be equal to the average of the  determinations by each such Appraiser.  In
either case the  adjustments  shall be described in a statement  provided to the
Holder and all other  Holders  of Series A  Preferred  Shares of the  portion of
assets or evidences of indebtedness so distributed or such  subscription  rights
applicable to one Common Share.  Such adjustment shall be made whenever any such
distribution  is made and shall become  effective  immediately  after the record
date mentioned above.

             (vii)  All  calculations  hereunder  shall  be made to the  nearest
1/1000th of a cent or the nearest  1/1000th of a share,  as the case may be. Any
calculation  over  .005  shall be  rounded  up to the next cent or share and any
calculation less than .005 shall be rounded down to the previous cent or share.

             (viii)  Whenever  the  Conversion  Price is  adjusted  pursuant  to
Section (c)(3)(iv), (v) or (vi), the Corporation shall within two (2) days after
the  determination of the new Conversion Price mail and fax to the Holder and to
each other  Holder of Series A  Preferred  Shares,  a notice  setting  forth the
Conversion  Price after such  adjustment and setting forth a brief  statement of
the facts requiring such adjustment.


                                       6



             (ix) In case of any  reclassification  of the  Common  Shares,  any
consolidation or merger of the Corporation with or into another person, the sale
or transfer of all or substantially  all of the assets of the Corporation or any
compulsory share exchange pursuant to which the Common Shares are converted into
other  securities,  cash or  property,  then each  holder of Series A  Preferred
Shares then outstanding shall have the right thereafter to convert such Series A
Preferred  Shares  only  into the  shares  and  other  securities  and  property
receivable upon or deemed to be held by holders of Common Shares  following such
reclassification,  consolidation,  merger,  sale,  transfer  or  share  exchange
(except in the event the property is cash,  then the Holder shall have the right
to convert the Series A Preferred  Shares and receive cash in the same manner as
other shareholders), and the Holder shall be entitled upon such event to receive
such amount of  securities or property as Common Shares into which such Series A
Preferred   Shares  could  have  been  converted   immediately   prior  to  such
reclassification,  consolidation, merger, sale, transfer or share exchange would
have been entitled. The terms of any such consolidation,  merger, sale, transfer
or share  exchange  shall  include  such terms so as to  continue to give to the
holder the right to receive the securities or property set forth in this section
upon any conversion  following such  consolidation,  merger,  sale,  transfer or
share   exchange.   This   provision   shall   similarly   apply  to  successive
reclassifications, consolidations, mergers, sales, transfers or share exchanges.

             (x) If:

                          the Corporation shall declare a dividend (or any other
                          distribution) on its Common Shares; or

                          the Corporation  shall declare a special  nonrecurring
                          cash dividend on or a redemption of its Common Shares;
                          or

                          the  Corporation  shall  authorize the granting to all
                          holders of the Common  Shares  rights or  warrants  to
                          subscribe  for or  purchase  any  shares  of any other
                          class or of any rights; or

                          the approval of any  shareholders  of the  Corporation
                          shall   be   required   in    connection    with   any
                          reclassification   of  the   Common   Shares   of  the
                          Corporation  (other than a subdivision  or combination
                          of the outstanding  Common Shares),  any consolidation
                          or  merger to which the  Corporation  is a party,  any
                          sale or  transfer of all or  substantially  all of the
                          assets of the  Corporation,  or any  compulsory  share
                          exchange  whereby the Common Shares are converted into
                          other securities, cash or property; or

                          the  Corporation  shall  authorize  the  voluntary  or
                          involuntary dissolution,  liquidation or winding-up of
                          the affairs of the Corporation;


                                       7


then the Corporation shall cause to be mailed and faxed to the Holders of Series
A Preferred  Shares at their last addresses as it shall appear upon the Series A
Preferred  Shares  register,  at least  thirty (30)  calendar  days prior to the
applicable record or effective date hereinafter  specified, a notice stating (x)
the date on which a record  is to be taken  for the  purpose  of such  dividend,
distribution, redemption, rights or warrants, or if a record is not to be taken,
the date as of which the  holders of Common  Shares of record to be  entitled to
such  dividend,  distributions,   redemption,  rights  or  warrants  are  to  be
determined,  or (y) the  date on  which  such  reclassification,  consolidation,
merger, sale, transfer, share exchange,  dissolution,  liquidation or winding-up
is expected to become  effective,  and the date as of which it is expected  that
holders of Common  Shares of record  shall be entitled to exchange  their Common
Shares for securities or other property deliverable upon such  reclassification,
consolidation,  merger, sale, transfer, share exchange, dissolution, liquidation
or winding-up;  provided,  however,  that the failure to mail such notice or any
defect  therein or in the mailing  thereof  shall not affect the validity of the
corporate action required to be specified in such notice.

             (xi) The  Corporation  covenants  that it will at all times reserve
and keep available out of its  authorized and unissued  Common Shares solely for
the purpose of issuance upon  conversion of Series A Preferred  Shares as herein
provided,  free from preemptive rights or any other actual  contingent  purchase
rights of persons  other than the  Holders of Series A  Preferred  Shares,  such
number  of  Common  Shares  as  shall  be  issuable  (taking  into  account  the
adjustments  and  restrictions  hereof)  upon the  conversion  of the  aggregate
principal amount of all outstanding  Series A Preferred Shares.  The Corporation
covenants that all Common Shares that shall be so issuable shall, upon issuance,
be duly and validly authorized, issued and fully paid and nonassessable.

             (xii) No  fractional  Units  shall be  issuable  upon a  conversion
hereunder  and the number of Unit Shares and Unit Warrants to be issued shall be
rounded up to the  nearest  whole  number.  Accordingly,  if a  fractional  Unit
interest arises upon any conversion  hereunder,  the Corporation shall eliminate
such fractional Unit interest by issuing Holder an additional full Unit.

             (xiii)  The  issuance  of  certificates  for Unit  Shares  and Unit
Warrants on conversion of Series A Preferred Shares shall be made without charge
to the Holder for any documentary  stamp or similar taxes that may be payable in
respect  of the  issue  or  delivery  of such  certificates,  provided  that the
Corporation  shall not be required to pay any tax that may be payable in respect
of any transfer  involved in the  issuance and delivery of any such  certificate
upon  conversion  in a name other  than that of the  Holder and the  Corporation
shall not be required to issue or deliver such certificates  unless or until the
person  or  persons  requesting  the  issuance  thereof  shall  have paid to the
Corporation the amount of such tax or shall have established to the satisfaction
of the Corporation that such tax has been paid.

             (xiv)  Series A  Preferred  Shares  converted  into Units  shall be
canceled upon conversion.


                                       8



             (xv) Each Notice of  Conversion  shall be given by facsimile to the
Corporation  no  later  than  4:00 PM New  York  Time.  In the  event  that  the
Corporation  receives the Notice of Conversion  after 4:00 PM New York Time, the
Conversion  Date shall be deemed to be the next  business day. In the event that
the Corporation  receives the Notice of Conversion after the end of the business
day, notice will be deemed to have been given the next business day.

         (4) Events of Default and Remedies.

             (i) "Event of Default",  wherever used herein, means any one of the
following events:

                   (A) the  Corporation  shall fail to  observe  or perform  any
material  covenant,  agreement or warranty  contained in Section  (c)(3) of this
Schedule  "A", and such  failure  shall not have been  remedied  within ten (10)
Business Days after the date on which written  notice of such failure shall have
been given;

                   (B) the  occurrence  of any event or breach or default by the
Corporation  under the Purchase  Agreement  and such failure or breach shall not
have been remedied within ten (10) Business Days after the date on which written
notice of such failure shall have been given;

                   (C) the Corporation or any of its subsidiaries shall commence
a voluntary  case under the  Bankruptcy  and  Insolvency  Act (Canada) as now or
hereafter in effect or any  successor  thereto (the  "Bankruptcy  Code");  or an
involuntary case is commenced  against the Corporation under the Bankruptcy Code
and the Corporation fails to pursue dismissal of the case within sixty (60) days
after  commencement  of  the  case;  or  the  Corporation  commences  any  other
proceeding under any reorganization,  arrangement, adjustment of debt, relief of
debtors,   dissolution,   insolvency  or  liquidation  or  similar  law  of  any
jurisdiction  whether now or hereafter in effect  relating to the Corporation or
there  is  commenced  against  the  Corporation  any  such  proceeding  and  the
Corporation  fails to pursue  dismissal of the case within sixty (60) days after
commencement  of the case; or the  Corporation  suffers any  appointment  of any
custodian  or the like for it or any  substantial  part of its  property and the
Corporation  fails to pursue  dismissal of the custodian  within sixty (60) days
after the  appointment;  or the Corporation  makes a general  assignment for the
benefit  of  creditors;  or any  corporate  or  other  action  is  taken  by the
Corporation for the purpose of effecting any of the foregoing;

                   (D) the Corporation  shall voluntarily have its Common Shares
deleted  or  delisted,  as the case may be,  from  the  OTCBB or other  national
securities exchange or market on which such Common Shares are listed for trading
or suspended from trading thereon, and shall not have its Common Shares relisted
or have such suspension  lifted,  as the case may be, within twenty (20) trading
days of such deletion or delisting;

                   (E) the Corporation shall issue a press release, or otherwise
make  publicly  known,  that it is not  honoring  properly  executed  Notice  of
Conversions for any reason whatsoever;


                                       9


                   If any Event of Default occurs and continues, beyond any cure
period,  if any,  then so long as such Event of Default shall then be continuing
any Holder may, by notice to the Corporation  demand  redemption of his Series A
Preferred  Shares  at the  price of 105% of the  Stated  Value of each  Series A
Preferred  Share  being  redeemed  plus  accrued but unpaid  dividends  thereon,
whereupon  the  Stated  Value and all  accrued  but  unpaid  Dividends  shall be
immediately  due and  payable,  and such  Holder  may  immediately  and  without
expiration  of any grace  period  enforce any and all of its rights and remedies
hereunder  and all other  remedies  available to it under  applicable  law. Such
declaration  may be  rescinded  and annulled by such Holder at any time prior to
payment  hereunder.  No such rescission or annulment shall affect any subsequent
Event of Default or impair any right consequent thereon. This shall include, but
not be limited to the right to temporary,  preliminary and permanent  injunctive
relief without the requirement of posting any bond or undertaking.

             (iii) Such Holder may thereupon  proceed to protect and enforce its
rights  either by suit in equity,  or by action at law, or by other  appropriate
proceedings  whether for the specific  performance  (to the extent  permitted by
law) of any  covenant or  agreement  contained  in this  Section  (c)(3) of this
Schedule  "A" or in aid of the  exercise  of any power  granted in this  Section
(c)(3) of this Schedule "A", and proceed to enforce the redemption of any of the
Series  A  Preferred  Shares  held by it,  and to  enforce  any  other  legal or
equitable right of such Holder.

             (iv) As a  non-exclusive  remedy,  in the Event of a  Default,  the
Holder can convert the outstanding  Series A Preferred Shares held by him at the
Conversion Price upon giving a Notice of Conversion to the Corporation.

         (5) Redemption

             (i) The Series A Preferred Shares are redeemable at the sole option
of the Corporation at any time prior to the Corporation's receipt of a Notice of
Conversion to the extent funds are legally available  therefor,  at any time and
from time to time, in whole or in part,  at a redemption  price equal to 105% of
the Stated Value of each Series A Preferred  Share being  redeemed  plus accrued
and unpaid dividends thereon  ("Redemption  Price").  The Holder may provide the
Corporation with a Notice of Conversion within 15 days after Holder's receipt of
a notice of redemption from the Corporation. The Corporation is not obligated to
provide for redemption of the Series A Preferred  Shares through a sinking fund.
The  Corporation  must  redeem the Series A Preferred  Shares at the  Redemption
Price on the fifth anniversary of the Issuance Date.

             (ii) The  Corporation  shall not  optionally  redeem  the  Series A
Preferred  Shares or any other Pari Passu Securities in whole or in part without
redeeming,  on a pro rata  basis,  all  outstanding  Pari  Passu  Securities  in
accordance with the relative amounts due the holders of Pari Passu Securities on
redemption.

             (iii)  Series A  Preferred  Shares  which  have  been  redeemed  or
converted  shall be deemed  retired  and shall  thereafter  resume the status of
authorized and unissued Blank Check Preferred Shares, undesignated as to series,
and may be  redesignated  and  reissued as part of any new series of Blank Check
Preferred Shares other than Series A Preferred Shares.

             (iv)  Notwithstanding  the  foregoing  provisions  of this  Section
(c)(3),  of this  Schedule  "A"  unless  the full  cumulative  dividends  on all
outstanding Series A Preferred Shares shall have been paid or  contemporaneously
are  declared  and paid  for all past  dividend  periods,  none of the  Series A
Preferred Shares may be redeemed.


                                       10


             (v) No  redemption  shall  be made  and no sum set  aside  for such
redemption  unless at the time  thereof  (i) all  accrued  and unpaid  dividends
payable on any Senior Securities (as defined in Section (c)(6) herein) have been
paid in full, (ii) all required mandatory  redemptions on Senior Securities have
been made in full and (iii) all optional  redemptions of Senior  Securities,  if
any,  previously  declared,  have been made in full. No redemption shall be made
and no sum set  aside  for  such  redemption  at any  time  that  the  terms  or
provisions  of any  indenture  or agreement of the  Corporation,  including  any
agreement  relating to indebtedness,  specifically  prohibits such redemption or
setting aside or provides that such redemption or setting aside would constitute
a breach or default  thereunder (after notice or lapse of time or both),  except
with the written consent of the lender or other parties to said agreement as the
case may be.

             (vi) If any  redemption  shall  at any  time be  prohibited  by the
Business  Corporations  Act  (Alberta)  (the "Act"),  the same shall be deferred
until such time as the redemption can occur in full compliance with the Act.

             (vii) In the  event  the  Corporation  shall  redeem  any  Series A
Preferred Shares,  notice of such redemption shall be given by first class mail,
postage  prepaid,  or  by  confirmed  facsimile  transmission,   not  less  than
twenty-one (21) days prior to the date fixed by the Board for redemption to each
holder  of  Series  A  Preferred  Shares  at the  address  that  appears  on the
Corporation's share record books; provided,  however, that no failure to provide
such notice nor any defect  therein shall affect the validity of the  redemption
proceeding  except as to the Holder to whom the  Corporation  has failed to send
such  notice or whose  notice was  defective.  Each  notice  shall state (i) the
redemption  date,  (ii) the number of Series A Preferred  Shares to be redeemed;
(iii) the  Redemption  Price;  (iv) the place or places where  certificates  for
Series  A  Preferred  Shares  are to be  surrendered  for  payment  and (v) that
dividends on the redeemed shares shall cease to accrue on such redemption  date.
When notice has been  provided as aforesaid  then from and after the  redemption
date (unless default shall be made by the Corporation in providing money for the
payment of the Redemption  Price of the shares called for redemption)  dividends
on the shares called for redemption  shall cease to accrue and said shares shall
no longer be deemed to be  outstanding  and all  rights of the  holders  thereof
shall  cease  (other  than the right to  receive  the  Redemption  Price).  Upon
surrender of the certificates  for the Series A Preferred Shares  accompanied by
appropriate stock powers, the shares shall be redeemed by the Corporation at the
Redemption  Price.  In case  fewer  than  all  shares  represented  by any  such
certificate are redeemed, a new certificate  representing the Series A Preferred
Shares not so redeemed shall be issued to the holder without cost.

         (6) Rank

             The Series A Preferred Shares shall, as to dividends,  redemptions,
and the  distribution of assets upon  liquidation,  dissolution or winding up of
the Corporation,  rank (i) prior to the Corporation's  Common Shares; (ii) prior
to any class or series of any other shares of the Corporation  hereafter created
that,  by its terms,  ranks  junior to the Series A  Preferred  Shares  ("Junior
Securities");  (iii)  junior to any  class or series of any other  shares of the
Corporation  hereafter created (with the consent of the Holders of a majority of
the  outstanding  Series A Preferred  Shares) which by its terms ranks senior to
the Series A Preferred  Shares ("Senior  Securities");  and (iv) pari passu with
any other series of Blank Check Preferred  Shares of the  Corporation  hereafter
created (with the consent of the Holders of a majority of the outstanding Series
A  Preferred  Shares)  which  by  its  terms  ranks  on a  parity  ("Pari  Passu
Securities") with the Series A Preferred Shares.


                                       11


         (7) Liquidation Preference

             If the  Corporation  shall  commence  a  voluntary  case  under the
Federal  bankruptcy  laws or any  other  applicable  bankruptcy,  insolvency  or
similar  law,  or consent to the entry of an order for relief in an  involuntary
case under any law or to the  appointment of a receiver,  liquidator,  assignee,
custodian,  trustee, sequestrator (or other similar official) of the Corporation
or of any  substantial  part of its  property,  or make  an  assignment  for the
benefit of its  creditors,  or admit in writing its  inability  to pay its debts
generally  as they  become due, or if a decree or order for relief in respect of
the Corporation shall be entered by a court having  jurisdiction in the premises
in an involuntary case under the Federal bankruptcy laws or any other applicable
bankruptcy,  insolvency  or  similar  law  resulting  in  the  appointment  of a
receiver,  liquidator,  assignee,  custodian,  trustee,  sequestrator  (or other
similar official) of the Corporation or of any substantial part of its property,
or ordering the winding up or liquidation of its affairs, and any such decree or
order shall be unstayed and in effect for a period of 60  consecutive  days and,
on account of any such event, the Corporation shall liquidate,  dissolve or wind
up,  or if the  Corporation  shall  otherwise  liquidate,  dissolve  or wind up,
including,  but not limited to, the sale or transfer of all or substantially all
of the  Corporation's  assets  in one  transaction  or in a  series  of  related
transactions  (a  "Liquidation  Event"),  no  distribution  shall be made to the
holders of any shares of the Corporation  (other than Senior Securities and Pari
Passu  Securities)  upon  liquidation,  dissolution or winding up unless,  prior
thereto,  the  Holders of Series A  Preferred  Shares  shall have  received  the
Liquidation  Preference (as defined below) with respect to each share.  If, upon
the  occurrence  of a  Liquidation  Event,  the assets and funds  available  for
distribution  among the Holders of the Series A Preferred  Shares and Holders of
Pari  Passu  Securities  shall be  insufficient  to permit  the  payment to such
holders of the preferential amounts payable thereon,  then the entire assets and
funds of the  Corporation  legally  available for  distribution  to the Series A
Preferred  Shares and the Pari Passu  Securities  shall be  distributed  ratably
among such shares in  proportion  to the ratio that the  Liquidation  Preference
payable on each such share bears to the aggregate Liquidation Preference payable
on all such shares.  The purchase or redemption by the  Corporation of shares of
any class, in any manner  permitted by law, shall not, for the purposes  hereof,
be  regarded as a  liquidation,  dissolution  or winding up of the  Corporation.
Neither the  consolidation  or merger of the Corporation  with or into any other
entity nor the sale or transfer by the  Corporation  of less than  substantially
all of its assets shall, for the purposes hereof, be deemed to be a liquidation,
dissolution or winding up of the Corporation.  The "Liquidation Preference" with
respect to a Series A Preferred  Share means an amount equal to the Stated Value
thereof, plus the accrued but unpaid dividends thereon through the date of final
distribution.  The  Liquidation  Preference  with  respect  to  any  Pari  Passu
Securities  shall be as set forth in the  Certificate  of  Designation  filed in
respect thereof.


                                       12


         (8) Voting Rights

             The Holders of the Series A Preferred  Shares have no voting  power
whatsoever,  except as  otherwise  provided by the Act. To the extent that under
the Act the  vote of the  Holders  of the  Series  A  Preferred  Shares,  voting
separately as a class or series, as applicable, is required to authorize a given
action of the Corporation,  the affirmative vote or consent of the Holders of at
least a majority of the then outstanding  Series A Preferred Shares  represented
at a duly held meeting at which a quorum is present or by written consent of the
Holders of at least a majority of the then outstanding Series A Preferred Shares
(except  as  otherwise  may be  required  under the Act)  shall  constitute  the
approval of such  action by the class.  To the extent that under the Act Holders
of the Series A Preferred  Shares are  entitled to vote on a matter with holders
of Common Shares,  voting  together as one class,  each Series A Preferred Share
shall be entitled to a number of votes equal to the number of Common Shares into
which it is then convertible (subject to the limitations contained herein) using
the record  date for the taking of such vote of  shareholders  as the date as of
which the Conversion Price is calculated.

         (9) Miscellaneous

             (i) If any Series A Preferred  Shares are converted,  the shares so
converted  shall be  cancelled,  shall return to the status of  authorized,  but
unissued Blank Check Preferred Shares of no designated  series, and shall not be
issuable by the Corporation as Series A Preferred Shares.

             (ii) Upon receipt by the  Corporation  of (i) evidence of the loss,
theft, destruction or mutilation of any Series A Preferred Shares certificate(s)
and (ii) (y) in the case of loss,  theft or destruction,  of indemnity  (without
any bond or other security) reasonably  satisfactory to the Corporation,  or (z)
in the case of  mutilation,  upon  surrender  and  cancellation  of the Series A
Preferred Shares  certificate(s),  the Corporation shall execute and deliver new
Series A Preferred Shares  certificate(s) of like tenor and date.  However,  the
Corporation  shall not be  obligated  to  reissue  such lost or stolen  Series A
Preferred Shares  certificate(s)  if the Holder  contemporaneously  requests the
Corporation to convert such Series A Preferred Shares.

             (iii)  Upon  submission  of a Notice of  Conversion  by a Holder of
Series A  Preferred  Shares,  (i) the  shares  covered  thereby  shall be deemed
converted into Units and (ii) the Holder's  rights as a Holder of such converted
Series A Preferred Shares shall cease and terminate, excepting only the right to
receive  certificates  for the  Unit  Shares  and the Unit  Warrants  and to any
remedies  provided  herein or  otherwise  available  at law or in equity to such
Holder because of a failure by the  Corporation to comply with the terms of this
Certificate of Designation.  Notwithstanding the foregoing,  if a Holder has not
received certificates for all the Unit Shares and the Unit Warrants prior to the
tenth business day after the expiration of the delivery period with respect to a
conversion of Series A Preferred Shares for any reason,  then (unless the Holder
otherwise  elects to retain  its  status as a holder of the Unit  Shares and the
Unit  Warrants by so notifying the  Corporation  within five business days after
the  expiration  of such 10 business  day period)  the Holder  shall  regain the
rights of a Holder of Series A Preferred Shares with respect to such unconverted
Series A Preferred  Shares and the  Corporation  shall,  as soon as practicable,
return such  unconverted  shares to the Holder.  In all cases,  the Holder shall
retain all of its rights and remedies for the  Corporation's  failure to convert
Series A Preferred Shares.


                                       13


             (iv)  The  remedies  provided  herein  shall be  cumulative  and in
addition to all other remedies  available under this Certificate of Designation,
at law or in equity  (including  a decree of specific  performance  and/or other
injunctive  relief),  and nothing  herein shall limit a Holder's right to pursue
actual  damages for any failure by the  Corporation  to comply with the terms of
this Certificate of Designation.  The Corporation  acknowledges that a breach by
it of its obligations  hereunder will cause  irreparable  harm to the Holders of
Series A Preferred  Shares and that the remedy at law for any such breach may be
inadequate. The Corporation therefore agrees, in the event of any such breach or
threatened  breach,  that the  Holders  of Series A  Preferred  Shares  shall be
entitled,  in  addition  to  all  other  available  remedies,  to an  injunction
restraining  any breach,  without the  necessity  of showing  economic  loss and
without any bond or other security being required.

(D) SERIES B PREFERRED SHARES

         (1) Designation and Amount

             This Series  consists of five  thousand two hundred  fifty  (5,250)
shares of Series B Preferred  Shares,  with a stated  value of One Hundred  U.S.
Dollars ($100.00) per share (the "Stated Value").

         (2) Dividends

             (i) The holders of Series B Preferred  Shares as they appear on the
share records of the  Corporation  ("Holder" or "Holders")  shall be entitled to
receive,  the  Board  of  Directors  shall  be  obligated  to  declare  and  the
Corporation  shall be obligated to pay, out of funds  legally  available for the
payment of dividends, dividends in cash or (as provided herein) Common Shares at
the rate of five  percent  (5%) per  annum  (computed  on the basis of a 360-day
year) (the  "Dividend  Rate") on the  Stated  Value of each  Series B  Preferred
Share.  Dividends on the Series B Preferred  Shares shall be cumulative from the
date of issuance.

             (ii) Dividends shall be payable  annually as of each anniversary of
the date of  issuance  until the earlier of  redemption  or  conversion,  to the
Holders  of record of Series B  Preferred  Shares,  as they  appear on the share
records of the Corporation. An additional dividend shall be payable with respect
to converted or redeemed Series B Preferred Shares, which shall be payable as of
the date of conversion or redemption, as the case may be. The annual anniversary
date as of  which  dividend  payments  are  due or the  date  of  conversion  or
redemption  as of which  an  additional  dividend  payment  is due is  hereafter
referred to as the Dividend Payment Date.

             (iii) The  dividend  shall be paid in (i) cash or (ii)  through the
issuance  of  duly  and   validly   authorized   and  issued,   fully  paid  and
non-assessable,  Common  Shares  valued at the average  closing bid price of the
Corporation's  Common  Shares  during  the 10  trading  day  period  immediately
preceding the Dividend Payment Date.


                                       14


             (iv) So long as any Series B Preferred Shares are  outstanding,  no
dividends,  except  as  described  in the  next  succeeding  sentence,  shall be
declared or paid or set apart for payment on Pari Passu  Securities  (as defined
herein) for any period unless full cumulative  dividends  required to be paid in
cash have been or contemporaneously  are declared and paid or declared and a sum
sufficient  for the payment  thereof set apart for such  payment on the Series B
Preferred Shares for all dividend payment periods terminating on or prior to the
date of  payment  of the  dividend  on  such  class  or  series  of  Pari  Passu
Securities.  When  dividends are not paid in full or a sum  sufficient  for such
payment is not set apart, as aforesaid, all dividends declared upon the Series B
Preferred  Shares and all  dividends  declared upon any other class or series of
Pari Passu  Securities shall be declared ratably in proportion to the respective
amounts of dividends accumulated and unpaid on the Series B Preferred Shares and
accumulated and unpaid on such Pari Passu Securities.

             (v) So long as any Series B Preferred  Shares are  outstanding,  no
dividends  shall  be  declared  or  paid  or set  apart  for  payment  or  other
distribution  declared or made upon Junior  Securities (as defined herein),  nor
shall any Junior Securities be redeemed,  purchased or otherwise acquired (other
than a  redemption,  purchase  or other  acquisition  of Common  Shares made for
purposes of an employee  incentive  or benefit  plan  (including  a stock option
plan) of the Corporation or any subsidiary) for any consideration (or any moneys
be paid to or made  available for a sinking fund for the  redemption of any such
shares) by the Corporation,  directly or indirectly, unless in each case (i) the
full cumulative  dividends required to be paid in cash on all outstanding Series
B Preferred  Shares and any other Pari Passu  Securities shall have been paid or
set apart for payment for all past dividend periods with respect to the Series B
Preferred  Shares and all past dividend  periods with respect to such Pari Passu
Securities,  and (ii) sufficient funds shall have been paid or set apart for the
payment of the  dividend  for the current  dividend  period with  respect to the
Series B Preferred  Shares and the current  dividend period with respect to such
Pari Passu Securities.

         (3) Conversion.

             (i) The outstanding  Series B Preferred Shares shall be convertible
into  Corporation  units (the  "Units") as is  determined by dividing the Stated
Value by the Conversion  Price, as defined below, at the option of the Holder in
whole  or in  part,  within  15 days of the  Holder's  receipt  of a  notice  of
redemption  from the  Corporation  or at any time  during the three year  period
commencing  on  the  second  anniversary  of  the  Issuance  Date  (the  "Holder
Conversion Period").  Each Unit consists of one Common Share (the "Unit Shares")
and one  Common  Share  purchase  warrant  (the  "Unit  Warrants")  which may be
exercised for the purchase of one additional Common Share (the "Warrant Shares")
at an exercise  price of $2.00 U.S.  Dollars per Common Share at any time during
the four year  period  commencing  one year  after the date of  issuance  of the
Units.  Any conversion under this section shall be for a minimum Stated Value of
$25,000.00 U.S.  Dollars of Series B Preferred  Shares.  The Holder shall effect
conversions by sending a conversion  notice (the "Notice of  Conversion") in the
manner set forth  herein.  Each Notice of  Conversion  shall  specify the Stated
Value of Series B Preferred  Shares to be converted,  and the date on which such
conversion is to be effected (the "Conversion Date"). Except as provided herein,
each Notice of Conversion,  once given,  shall be irrevocable.  If the Holder is
converting  less than all of the Stated Value  represented by a certificate  for
the  Series  B  Preferred  Shares  tendered  by  the  Holder  in the  Notice  of
Conversion, the Corporation shall deliver to the Holder a new Series B Preferred
Shares  certificate for such Stated Value as has not been converted within seven
(7)  Business  Days  of the  Corporation's  receipt  of the  original  Series  B
Preferred Shares and Notice of Conversion.


                                       15


             (ii) Not later than seven (7) Business Days after the Corporation's
receipt of the certificate or certificates for the Series B Preferred Shares and
the original of the Notice of Conversion,  the  Corporation  will deliver to the
Holder (i) a certificate or certificates  representing the number of Unit Shares
and Unit  Warrants  being  acquired  upon the  conversion  of Series B Preferred
Shares and (ii), if applicable,  Series B Preferred  Shares in principal  amount
equal to the principal amount of Series B Preferred Shares not converted. In the
case of a conversion pursuant to a Notice of Conversion,  if such certificate or
certificates  are not  delivered  by the  date  required,  the  Holder  shall be
entitled by providing written notice to the Corporation at any time on or before
its receipt of such  certificate  or  certificates  thereafter,  to rescind such
conversion, in which event the Corporation shall immediately return the Series B
Preferred Shares tendered for conversion.

             (iii)  The  Conversion  Price  for the  conversion  of a  Series  B
Preferred  Share into Units  shall be $1.75  U.S.  Dollars of Stated  Value (the
"Conversion Price").

             (iv) If the  Corporation,  at any time while any Series B Preferred
Shares  are  outstanding,   (a)  shall  pay  a  dividend  or  otherwise  make  a
distribution  or  distributions  on shares of its Junior  Securities  payable in
shares of its capital shares  (whether  payable in Common Shares or of shares of
any other class),  (b) subdivide  outstanding Common Shares into a larger number
of shares,  (c)  combine  outstanding  Common  Shares  into a smaller  number of
shares, or (d) issue by  reclassification of Common Shares into any other shares
of the  Corporation,  the Conversion  Price shall be multiplied by a fraction of
which the  numerator  shall be the  number of Common  Shares of the  Corporation
outstanding  before such event and of which the denominator  shall be the number
of Common Shares  outstanding  after such event. Any adjustment made pursuant to
this section shall become  effective  immediately  after the record date for the
determination of shareholders  entitled to receive such dividend or distribution
and shall become effective immediately after the effective date in the case of a
subdivision, combination or reclassification.

             (v) If the  Corporation,  at any time while any Series B  Preferred
Shares are outstanding,  shall issue or sell Common Shares, or options, warrants
or other rights to subscribe for or purchase  Common Shares,  (excluding  Common
Shares issuable upon exercise of options,  warrants or conversion rights granted
prior to the date hereof and Common  Shares  issuable  upon  exercise of options
which  may  be  issued  subsequent  to the  date  hereof  to  the  Corporation's
employees, officers, or directors) at a price per share less than the Conversion
Price then in effect, the Conversion Price designated herein shall be reduced to
the  price at which  the  Common  Shares  are  issued  or the price at which the
options,  warrants or other rights may be  exercised  for the purchase of Common
Shares.  Such  adjustment  shall  be made as of the  date  such  Common  Shares,
options, rights or warrants are issued.

             (vi) If the  Corporation,  at any time  while  Series  B  Preferred
Shares are  outstanding,  shall  distribute to all holders of Common Shares (and
not to Holders of Series B Preferred  Shares)  evidences of its  indebtedness or
assets  or  rights  or  warrants  to  subscribe  for or  purchase  any  security
(excluding those referred to in Section  (d)(3)(v) above) then in each such case
the Conversion  Price at which each Series B Preferred Share shall thereafter be
convertible  shall be determined by multiplying  the Conversion  Price in effect
immediately  prior to the record date fixed for  determination  of  shareholders
entitled to receive  such  distribution  by a fraction of which the  denominator
shall be the per share market value of Common Shares determined as of the record
date mentioned  above, and of which the numerator shall be such per share market
value of the Common  Shares on such record date less the then fair market  value
at such record date of the portion of such assets or evidence of indebtedness so
distributed  applicable  to one  outstanding  Common Share as  determined by the
Board of  Directors  in good  faith;  provided,  however  that in the event of a
distribution  exceeding ten percent (10%) of the net assets of the  Corporation,
such fair market value shall be determined  by a nationally  recognized or major
regional  investment  banking  firm  or  firm of  independent  certified  public
accountants  of  recognized  standing  (which  may be the  firm  that  regularly
examines the financial statements of the Corporation) (an "Appraiser")  selected
in good faith by the Holders of a majority of the principal amount of the Series
B  Preferred  Shares  then  outstanding;   and  provided,   further,   that  the
Corporation, after receipt of the determination by such Appraiser shall have the
right to select an  additional  Appraiser,  in which case the fair market  value
shall be equal to the average of the  determinations by each such Appraiser.  In
either case the  adjustments  shall be described in a statement  provided to the
Holder and all other  Holders  of Series B  Preferred  Shares of the  portion of
assets or evidences of indebtedness so distributed or such  subscription  rights
applicable to one Common Share.  Such adjustment shall be made whenever any such
distribution  is made and shall become  effective  immediately  after the record
date mentioned above.


                                       16



             (vii)  All  calculations  hereunder  shall  be made to the  nearest
1/1000th of a cent or the nearest  1/1000th of a share,  as the case may be. Any
calculation  over  .005  shall be  rounded  up to the next cent or share and any
calculation less than .005 shall be rounded down to the previous cent or share.

             (viii)  Whenever  the  Conversion  Price is  adjusted  pursuant  to
Section (d)(3)(iv), (v) or (vi), the Corporation shall within two (2) days after
the  determination of the new Conversion Price mail and fax to the Holder and to
each other  Holder of Series B  Preferred  Shares,  a notice  setting  forth the
Conversion  Price after such  adjustment and setting forth a brief  statement of
the facts requiring such adjustment.

             (ix) In case of any  reclassification  of the  Common  Shares,  any
consolidation or merger of the Corporation with or into another person, the sale
or transfer of all or substantially  all of the assets of the Corporation or any
compulsory share exchange pursuant to which the Common Shares are converted into
other  securities,  cash or  property,  then each  holder of Series B  Preferred
Shares then outstanding shall have the right thereafter to convert such Series B
Preferred  Shares  only  into the  shares  and  other  securities  and  property
receivable upon or deemed to be held by holders of Common Shares  following such
reclassification,  consolidation,  merger,  sale,  transfer  or  share  exchange
(except in the event the property is cash,  then the Holder shall have the right
to convert the Series B Preferred  Shares and receive cash in the same manner as
other shareholders), and the Holder shall be entitled upon such event to receive
such  amount of  securities  or  property  as the Common  Shares into which such
Series B Preferred  Shares could have been converted  immediately  prior to such
reclassification,  consolidation, merger, sale, transfer or share exchange would
have been entitled. The terms of any such consolidation,  merger, sale, transfer
or share  exchange  shall  include  such terms so as to  continue to give to the
holder the right to receive the securities or property set forth in this section
upon any conversion  following such  consolidation,  merger,  sale,  transfer or
share   exchange.   This   provision   shall   similarly   apply  to  successive
reclassifications, consolidations, mergers, sales, transfers or share exchanges.


                                       17




             (x) If:

                          the Corporation shall declare a dividend (or any other
                          distribution) on its Common Shares; or

                          the Corporation  shall declare a special  nonrecurring
                          cash dividend on or a redemption of its Common Shares;
                          or

                          the  Corporation  shall  authorize the granting to all
                          holders of the Common  Shares  rights or  warrants  to
                          subscribe  for or  purchase  any  shares  of any other
                          class or of any rights; or

                          the approval of any  shareholders  of the  Corporation
                          shall   be   required   in    connection    with   any
                          reclassification   of  the   Common   Shares   of  the
                          Corporation  (other than a subdivision  or combination
                          of the outstanding  Common Shares),  any consolidation
                          or  merger to which the  Corporation  is a party,  any
                          sale or  transfer of all or  substantially  all of the
                          assets of the  Corporation,  or any  compulsory  share
                          exchange  whereby the Common Shares are converted into
                          other securities, cash or property; or

                          the  Corporation  shall  authorize  the  voluntary  or
                          involuntary dissolution,  liquidation or winding-up of
                          the affairs of the Corporation;

then the Corporation shall cause to be mailed and faxed to the Holders of Series
B Preferred  Shares at their last addresses as it shall appear upon the Series B
Preferred  Shares  register,  at least  thirty (30)  calendar  days prior to the
applicable record or effective date hereinafter  specified, a notice stating (x)
the date on which a record  is to be taken  for the  purpose  of such  dividend,
distribution, redemption, rights or warrants, or if a record is not to be taken,
the date as of which the  holders of Common  Shares of record to be  entitled to
such  dividend,  distributions,   redemption,  rights  or  warrants  are  to  be
determined,  or (y) the  date on  which  such  reclassification,  consolidation,
merger, sale, transfer, share exchange,  dissolution,  liquidation or winding-up
is expected to become  effective,  and the date as of which it is expected  that
holders of Common  Shares of record  shall be entitled to exchange  their Common
Shares for securities or other property deliverable upon such  reclassification,
consolidation,  merger, sale, transfer, share exchange, dissolution, liquidation
or winding-up;  provided,  however,  that the failure to mail such notice or any
defect  therein or in the mailing  thereof  shall not affect the validity of the
corporate action required to be specified in such notice.

             (xi) The  Corporation  covenants  that it will at all times reserve
and keep available out of its  authorized and unissued  Common Shares solely for
the purpose of issuance upon  conversion of Series B Preferred  Shares as herein
provided,  free from preemptive rights or any other actual  contingent  purchase
rights of persons  other than the  Holders of Series B  Preferred  Shares,  such
number  of  Common  Shares  as  shall  be  issuable  (taking  into  account  the
adjustments  and  restrictions  hereof)  upon the  conversion  of the  aggregate
principal amount of all outstanding  Series B Preferred Shares.  The Corporation
covenants that all Common Shares that shall be so issuable shall, upon issuance,
be duly and validly authorized, issued and fully paid and nonassessable.


                                       18



             (xii) No  fractional  Units  shall be  issuable  upon a  conversion
hereunder  and the number of Unit Shares and Unit Warrants to be issued shall be
rounded up to the  nearest  whole  number.  Accordingly,  if a  fractional  Unit
interest arises upon any conversion  hereunder,  the Corporation shall eliminate
such fractional Unit interest by issuing Holder an additional full Unit.

             (xiii)  The  issuance  of  certificates  for Unit  Shares  and Unit
Warrants on conversion of Series B Preferred Shares shall be made without charge
to the Holder for any documentary  stamp or similar taxes that may be payable in
respect  of the  issue  or  delivery  of such  certificates,  provided  that the
Corporation  shall not be required to pay any tax that may be payable in respect
of any transfer  involved in the  issuance and delivery of any such  certificate
upon  conversion  in a name other  than that of the  Holder and the  Corporation
shall not be required to issue or deliver such certificates  unless or until the
person  or  persons  requesting  the  issuance  thereof  shall  have paid to the
Corporation the amount of such tax or shall have established to the satisfaction
of the Corporation that such tax has been paid.

             (xiv)  Series B  Preferred  Shares  converted  into Units  shall be
canceled upon conversion.

             (xv) Each Notice of  Conversion  shall be given by facsimile to the
Corporation  no  later  than  4:00 PM New  York  Time.  In the  event  that  the
Corporation  receives the Notice of Conversion  after 4:00 PM New York Time, the
Conversion  Date shall be deemed to be the next  business day. In the event that
the Corporation  receives the Notice of Conversion after the end of the business
day, notice will be deemed to have been given the next business day.

         (4) Events of Default and Remedies

             (i) "Event of Default",  wherever used herein, means any one of the
following events:

                   (A) the  Corporation  shall fail to  observe  or perform  any
material  covenant,  agreement or warranty  contained in this Section  (d)(3) of
this Schedule "A", and such failure shall not have been remedied within ten (10)
Business Days after the date on which written  notice of such failure shall have
been given;

                   (B) the  occurrence  of any event or breach or default by the
Corporation  under the Purchase  Agreement  and such failure or breach shall not
have been remedied within ten (10) Business Days after the date on which written
notice of such failure shall have been given;


                                       19


                   (C) the Corporation or any of its subsidiaries shall commence
a voluntary  case under the  Bankruptcy  and  Insolvency  Act (Canada) as now or
hereafter in effect or any  successor  thereto (the  "Bankruptcy  Code");  or an
involuntary case is commenced  against the Corporation under the Bankruptcy Code
and the Corporation fails to pursue dismissal of the case within sixty (60) days
after  commencement  of  the  case;  or  the  Corporation  commences  any  other
proceeding under any reorganization,  arrangement, adjustment of debt, relief of
debtors,   dissolution,   insolvency  or  liquidation  or  similar  law  of  any
jurisdiction  whether now or hereafter in effect  relating to the Corporation or
there  is  commenced  against  the  Corporation  any  such  proceeding  and  the
Corporation  fails to pursue  dismissal of the case within sixty (60) days after
commencement  of the case; or the  Corporation  suffers any  appointment  of any
custodian  or the like for it or any  substantial  part of its  property and the
Corporation  fails to pursue  dismissal of the custodian  within sixty (60) days
after the  appointment;  or the Corporation  makes a general  assignment for the
benefit  of  creditors;  or any  corporate  or  other  action  is  taken  by the
Corporation for the purpose of effecting any of the foregoing;

                   (D) the Corporation  shall voluntarily have its Common Shares
deleted  or  delisted,  as the case may be,  from  the  OTCBB or other  national
securities exchange or market on which such Common Shares are listed for trading
or suspended from trading thereon, and shall not have its Common Shares relisted
or have such suspension  lifted,  as the case may be, within twenty (20) trading
days of such deletion or delisting;

                   (E) the Corporation shall issue a press release, or otherwise
make  publicly  known,  that it is not  honoring  properly  executed  Notice  of
Conversions for any reason whatsoever;

             (ii) If any Event of Default occurs and continues,  beyond any cure
period,  if any,  then so long as such Event of Default shall then be continuing
any Holder may, by notice to the Corporation  demand  redemption of his Series B
Preferred  Shares  at the  price of 105% of the  Stated  Value of each  Series B
Preferred  Share  being  redeemed  plus  accrued but unpaid  dividends  thereon,
whereupon  the  Stated  Value and all  accrued  but  unpaid  Dividends  shall be
immediately  due and  payable,  and such  Holder  may  immediately  and  without
expiration  of any grace  period  enforce any and all of its rights and remedies
hereunder  and all other  remedies  available to it under  applicable  law. Such
declaration  may be  rescinded  and annulled by such Holder at any time prior to
payment  hereunder.  No such rescission or annulment shall affect any subsequent
Event of Default or impair any right consequent thereon. This shall include, but
not be limited to the right to temporary,  preliminary and permanent  injunctive
relief without the requirement of posting any bond or undertaking.

             (iii) Such Holder may thereupon  proceed to protect and enforce its
rights  either by suit in equity,  or by action at law, or by other  appropriate
proceedings  whether for the specific  performance  (to the extent  permitted by
law) of any  covenant or  agreement  contained  in this  Section  (d)(3) of this
Schedule  "A" or in aid of the  exercise  of any power  granted in this  Section
(d)(3) of this Schedule "A", and proceed to enforce the redemption of any of the
Series  B  Preferred  Shares  held by it,  and to  enforce  any  other  legal or
equitable right of such Holder.


                                       20



             (iv) As a  non-exclusive  remedy,  in the Event of a  Default,  the
Holder can convert the outstanding  Series B Preferred Shares held by him at the
Conversion Price upon giving a Notice of Conversion to the Corporation.

         (5) Redemption

             (i) The Series B Preferred Shares are redeemable at the sole option
of the Corporation at any time prior to the Corporation's receipt of a Notice of
Conversion to the extent funds are legally available  therefor,  at any time and
from time to time, in whole or in part,  at a redemption  price equal to 105% of
the Stated Value of each Series B Preferred  Share being  redeemed  plus accrued
and unpaid dividends thereon  ("Redemption  Price").  The Holder may provide the
Corporation with a Notice of Conversion within 15 days after Holder's receipt of
a notice of redemption from the Corporation. The Corporation is not obligated to
provide for redemption of the Series B Preferred  Shares through a sinking fund.
The  Corporation  must  redeem the Series B Preferred  Shares at the  Redemption
Price on the fifth anniversary of the Issuance Date.

             (ii) The  Corporation  shall not  optionally  redeem  the  Series B
Preferred  Shares or any other Pari Passu Securities in whole or in part without
redeeming,  on a pro rata  basis,  all  outstanding  Pari  Passu  Securities  in
accordance with the relative amounts due the holders of Pari Passu Securities on
redemption.

             (iii)  Series B  Preferred  Shares  which  have  been  redeemed  or
converted  shall be deemed  retired  and shall  thereafter  resume the status of
authorized and unissued Blank Check Preferred Shares, undesignated as to series,
and may be  redesignated  and  reissued as part of any new series of Blank Check
Preferred Shares other than Series B Preferred Shares.

             (iv)  Notwithstanding  the  foregoing  provisions  of this  Section
(d)(3)  of this  Schedule  "A",  unless  the full  cumulative  dividends  on all
outstanding Series B Preferred Shares shall have been paid or  contemporaneously
are  declared  and paid  for all past  dividend  periods,  none of the  Series B
Preferred Shares may be redeemed.

             (v) No  redemption  shall  be made  and no sum set  aside  for such
redemption  unless at the time  thereof  (i) all  accrued  and unpaid  dividends
payable on any Senior Securities (as defined in Section (d)(6) herein) have been
paid in full, (ii) all required mandatory  redemptions on Senior Securities have
been made in full and (iii) all optional  redemptions of Senior  Securities,  if
any,  previously  declared,  have been made in full. No redemption shall be made
and no sum set  aside  for  such  redemption  at any  time  that  the  terms  or
provisions  of any  indenture  or agreement of the  Corporation,  including  any
agreement  relating to indebtedness,  specifically  prohibits such redemption or
setting aside or provides that such redemption or setting aside would constitute
a breach or default  thereunder (after notice or lapse of time or both),  except
with the written consent of the lender or other parties to said agreement as the
case may be.

             (vi) If any redemption  shall at any time be prohibited by the Act,
the same shall be deferred  until such time as the  redemption can occur in full
compliance with the Act.


                                       21



             (vii) In the  event  the  Corporation  shall  redeem  any  Series B
Preferred Shares,  notice of such redemption shall be given by first class mail,
postage  prepaid,  or  by  confirmed  facsimile  transmission,   not  less  than
twenty-one (21) days prior to the date fixed by the Board for redemption to each
holder  of  Series  B  Preferred  Shares  at the  address  that  appears  on the
Corporation's share record books; provided,  however, that no failure to provide
such notice nor any defect  therein shall affect the validity of the  redemption
proceeding  except as to the Holder to whom the  Corporation  has failed to send
such  notice or whose  notice was  defective.  Each  notice  shall state (i) the
redemption  date,  (ii) the number of Series B Preferred  Shares to be redeemed;
(iii) the  Redemption  Price;  (iv) the place or places where  certificates  for
Series  B  Preferred  Shares  are to be  surrendered  for  payment  and (v) that
dividends on the redeemed shares shall cease to accrue on such redemption  date.
When notice has been  provided as aforesaid  then from and after the  redemption
date (unless default shall be made by the Corporation in providing money for the
payment of the Redemption  Price of the shares called for redemption)  dividends
on the shares called for redemption  shall cease to accrue and said shares shall
no longer be deemed to be  outstanding  and all  rights of the  holders  thereof
shall  cease  (other  than the right to  receive  the  Redemption  Price).  Upon
surrender of the certificates  for the Series B Preferred Shares  accompanied by
appropriate stock powers, the shares shall be redeemed by the Corporation at the
Redemption  Price.  In case  fewer  than  all  shares  represented  by any  such
certificate are redeemed, a new certificate  representing the Series B Preferred
Shares not so redeemed shall be issued to the holder without cost.

         (6) Rank

             The Series B Preferred Shares shall, as to dividends,  redemptions,
and the  distribution of assets upon  liquidation,  dissolution or winding up of
the Corporation,  rank (i) prior to the Corporation's  Common Shares; (ii) prior
to any class or series of any other shares of the Corporation  hereafter created
that,  by its terms,  ranks  junior to the Series B  Preferred  Shares  ("Junior
Securities");  (iii)  junior to any  class or series of any other  shares of the
Corporation  hereafter created (with the consent of the holders of a majority of
the outstanding  Series A Preferred  Shares and the holders of a majority of the
outstanding  Series B Preferred  Shares)  which by its terms ranks senior to the
Series B Preferred  Shares ("Senior  Securities");  and (iv) pari passu with the
Corporation's  Series A  Preferred  Shares and any other  series of Blank  Check
Preferred Shares of the Corporation  hereafter  created (with the consent of the
holders of a  majority  of the  outstanding  Series A  Preferred  Shares and the
holders of a majority of the outstanding Series B Preferred Shares) which by its
terms ranks on a parity  ("Pari Passu  Securities")  with the Series B Preferred
Shares.

         (7) Liquidation Preference

             If the  Corporation  shall  commence  a  voluntary  case  under the
Federal  bankruptcy  laws or any  other  applicable  bankruptcy,  insolvency  or
similar  law,  or consent to the entry of an order for relief in an  involuntary
case under any law or to the  appointment of a receiver,  liquidator,  assignee,
custodian,  trustee, sequestrator (or other similar official) of the Corporation
or of any  substantial  part of its  property,  or make  an  assignment  for the
benefit of its  creditors,  or admit in writing its  inability  to pay its debts
generally  as they  become due, or if a decree or order for relief in respect of
the Corporation shall be entered by a court having  jurisdiction in the premises
in an involuntary case under the Federal bankruptcy laws or any other applicable
bankruptcy,  insolvency  or  similar  law  resulting  in  the  appointment  of a
receiver,  liquidator,  assignee,  custodian,  trustee,  sequestrator  (or other
similar official) of the Corporation or of any substantial part of its property,
or ordering the winding up or liquidation of its affairs, and any such decree or
order shall be unstayed and in effect for a period of 60  consecutive  days and,
on account of any such event, the Corporation shall liquidate,  dissolve or wind
up,  or if the  Corporation  shall  otherwise  liquidate,  dissolve  or wind up,
including,  but not limited to, the sale or transfer of all or substantially all
of the  Corporation's  assets  in one  transaction  or in a  series  of  related
transactions  (a  "Liquidation  Event"),  no  distribution  shall be made to the
holders of any shares of the Corporation  (other than Senior Securities and Pari
Passu  Securities)  upon  liquidation,  dissolution or winding up unless,  prior
thereto,  the  Holders of Series B  Preferred  Shares  shall have  received  the
Liquidation  Preference (as defined below) with respect to each share.  If, upon
the  occurrence  of a  Liquidation  Event,  the assets and funds  available  for
distribution  among the Holders of the Series B Preferred  Shares and Holders of
Pari  Passu  Securities  shall be  insufficient  to permit  the  payment to such
holders of the preferential amounts payable thereon,  then the entire assets and
funds of the  Corporation  legally  available for  distribution  to the Series B
Preferred  Shares and the Pari Passu  Securities  shall be  distributed  ratably
among such shares in  proportion  to the ratio that the  Liquidation  Preference
payable on each such share bears to the aggregate Liquidation Preference payable
on all such shares.  The purchase or redemption by the  Corporation of shares of
any class, in any manner  permitted by law, shall not, for the purposes  hereof,
be  regarded as a  liquidation,  dissolution  or winding up of the  Corporation.
Neither the  consolidation  or merger of the Corporation  with or into any other
entity nor the sale or transfer by the  Corporation  of less than  substantially
all of its assets shall, for the purposes hereof, be deemed to be a liquidation,
dissolution or winding up of the Corporation.  The "Liquidation Preference" with
respect to a Series B Preferred  Share means an amount equal to the Stated Value
thereof, plus the accrued but unpaid dividends thereon through the date of final
distribution.  The  Liquidation  Preference  with  respect  to  any  Pari  Passu
Securities  shall be as set forth in the  Certificate  of  Designation  filed in
respect thereof.


                                       22



         (8) Voting Rights

             The Holders of the Series B Preferred  Shares have no voting  power
whatsoever,  except as  otherwise  provided by the Act. To the extent that under
the Act the  vote of the  Holders  of the  Series  B  Preferred  Shares,  voting
separately as a class or series, as applicable, is required to authorize a given
action of the Corporation,  the affirmative vote or consent of the Holders of at
least a majority of the then outstanding  Series B Preferred Shares  represented
at a duly held meeting at which a quorum is present or by written consent of the
Holders of at least a majority of the then outstanding Series B Preferred Shares
(except  as  otherwise  may be  required  under the Act)  shall  constitute  the
approval of such  action by the class.  To the extent that under the Act Holders
of the Series B Preferred  Shares are  entitled to vote on a matter with holders
of Common Shares,  voting  together as one class,  each Series B Preferred Share
shall be entitled to a number of votes equal to the number of Common Shares into
which it is then convertible (subject to the limitations contained herein) using
the record  date for the taking of such vote of  shareholders  as the date as of
which the Conversion Price is calculated.


                                       23



         (9) Miscellaneous

             (i) If any Series B Preferred  Shares are converted,  the shares so
converted  shall be  cancelled,  shall return to the status of  authorized,  but
unissued Blank Check Preferred Shares of no designated  series, and shall not be
issuable by the Corporation as Series B Preferred Shares.

             (ii) Upon receipt by the  Corporation  of (i) evidence of the loss,
theft, destruction or mutilation of any Series B Preferred Shares certificate(s)
and (ii) (y) in the case of loss,  theft or destruction,  of indemnity  (without
any bond or other security) reasonably  satisfactory to the Corporation,  or (z)
in the case of  mutilation,  upon  surrender  and  cancellation  of the Series B
Preferred Shares  certificate(s),  the Corporation shall execute and deliver new
Series B Preferred Shares  certificate(s) of like tenor and date.  However,  the
Corporation  shall not be  obligated  to  reissue  such lost or stolen  Series B
Preferred Shares  certificate(s)  if the Holder  contemporaneously  requests the
Corporation to convert such Series B Preferred Shares.

             (iii)  Upon  submission  of a Notice of  Conversion  by a Holder of
Series B  Preferred  Shares,  (i) the  shares  covered  thereby  shall be deemed
converted into Units and (ii) the Holder's  rights as a Holder of such converted
Series B Preferred Shares shall cease and terminate, excepting only the right to
receive  certificates  for the  Unit  Shares  and the Unit  Warrants  and to any
remedies  provided  herein or  otherwise  available  at law or in equity to such
Holder because of a failure by the  Corporation to comply with the terms of this
Certificate of Designation.  Notwithstanding the foregoing,  if a Holder has not
received certificates for all the Unit Shares and the Unit Warrants prior to the
tenth business day after the expiration of the delivery period with respect to a
conversion of Series B Preferred Shares for any reason,  then (unless the Holder
otherwise  elects to retain  its  status as a holder of the Unit  Shares and the
Unit  Warrants by so notifying the  Corporation  within five business days after
the  expiration  of such 10 business  day period)  the Holder  shall  regain the
rights of a Holder of Series B Preferred Shares with respect to such unconverted
Series B Preferred  Shares and the  Corporation  shall,  as soon as practicable,
return such  unconverted  shares to the Holder.  In all cases,  the Holder shall
retain all of its rights and remedies for the  Corporation's  failure to convert
Series B Preferred Shares.

             (iv) The remedies provided in this Certificate of Designation shall
be  cumulative  and in  addition  to all other  remedies  available  under  this
Certificate of Designation,  at law or in equity (including a decree of specific
performance  and/or other injunctive  relief),  and nothing herein shall limit a
Holder's  right to pursue actual  damages for any failure by the  Corporation to
comply  with the  terms of this  Certificate  of  Designation.  The  Corporation
acknowledges  that  a  breach  by it of its  obligations  hereunder  will  cause
irreparable harm to the Holders of Series B Preferred Shares and that the remedy
at law for any such breach may be inadequate.  The Corporation therefore agrees,
in the event of any such breach or threatened breach, that the Holders of Series
B  Preferred  Shares  shall be  entitled,  in  addition  to all other  available
remedies,  to an  injunction  restraining  any breach,  without the necessity of
showing economic loss and without any bond or other security being required.


                                       24



(E) PREEMPTIVE RIGHTS

         No holder of any of the shares of any class of the Corporation shall be
entitled as of right to subscribe for, purchase, or otherwise acquire any shares
of any class of the Corporation  which the Corporation  proposes to issue or any
rights or options  which the  Corporation  proposes to grant for the purchase of
shares of any class of the Corporation or for the purchase of any shares, bonds,
securities,  or obligations of the  Corporation  which are  convertible  into or
exchangeable  for, or which carry any rights,  to subscribe  for,  purchase,  or
otherwise  acquire  shares of any class of the  Corporation;  and any and all of
such shares, bonds, securities,  or obligations of the Corporation,  whether now
or  hereafter  authorized  or  created,  may be issued,  or may be  reissued  or
transferred if the same have been reacquired and have treasury  status,  and any
and all of such rights and options may be granted by the Board of  Directors  to
such  persons,  firms,  corporations,  and  associations,  and for  such  lawful
consideration,  and on such terms,  as the Board of Directors in its  discretion
may  determine,  without first  offering the same,  or any thereof,  to any said
holder.


                                       25



                     Schedule "B" to Articles of Continuance
                                       of
                               ASSURE ENERGY, INC.


                            dated the day of , 2004.


9.       OTHER RULES OR PROVISIONS (IF ANY):

         (i)      The Directors of the Corporation  may,  between annual general
                  meetings,  appoint  one or more  additional  directors  of the
                  Corporation  to serve until the next annual  general  meeting,
                  but the number of  additional  directors  shall not at anytime
                  exceed one-third of the number of directors who held office at
                  the  expiration  of the last  annual  general  meeting  of the
                  Corporation.

         (ii)     Meetings of shareholders  of the Corporation  shall be held in
                  the City of Vancouver in the Province of British Columbia,  in
                  the City of Toronto in the Province of Ontario, in the City of
                  Montreal in the Province of Quebec,  in the City of St. John's
                  in the  Province of New  Foundland,  in the City of Halifax in
                  the  Province of Nova  Scotia,  in the City of New York in the
                  State of New York, or anywhere in the Province of Alberta that
                  the directors determine.



                                       26



                                                                      APPENDIX D


                         BY-LAWS OF ASSURE ENERGY, INC.
                             AN ALBERTA CORPORATION

                                   SECTION 1.
                         DEFINITIONS AND INTERPRETATION

(1)               DEFINITIONS

In the By-laws, unless the context otherwise requires:

(a)      "ABCA" means the Business Corporations Act (Alberta), as amended;

(b)      "appoint" includes elect and vice versa;

(c)      "Articles" includes the original or restated articles of incorporation,
         articles  of   amendment,   articles  of   amalgamation,   articles  of
         continuance,  articles  of  reorganization,  articles  of  arrangement,
         articles of dissolution and articles of revival of the Corporation, and
         any amendment to any of them;

(d)      "Board" means the board of directors of the Corporation;

(e)      "By-laws"  means this by-law and all other  by-laws of the  Corporation
         from time to time in force;

(f)      "Corporation" means Assure Energy, Inc.;

(g)      "Director"  means  an  individual  who is  elected  or  appointed  as a
         director of the Corporation;

(h)      "Indemnified  Party"  has the  meaning  set out in  section  I.A.8  for
         purposes of that section;

(i)      "Officer" means an officer of the Corporation appointed by the Board;

(j)      "Record  Date"  means,  for the  purpose  of  determining  Shareholders
         entitled to receive notice of a meeting of Shareholders:

         i) the date fixed in advance by the Board for that determination  which
         precedes  the date on which the  meeting is to be held by not more than
         50 days and not less than 21 days,

         ii) if no date is fixed by the Board,  at the close of  business on the
         last  business day which  precedes the day on which the notice is sent,
         or

         iii) if no notice is sent, the day on which the meeting is held;

(k)      "Recorded Address" means:

         i) in the case of a Shareholder,  the  Shareholder's  latest address as
         shown in the Corporation's records or those of its transfer agent,

         ii) in the case of joint  Shareholders,  the latest address as shown in
         the Corporation's  records or those of its transfer agent in respect of
         those joint  holders,  or the first address  appearing if there is more
         than one address,


                                       1



         iii) in the case of a Director,  the Director's latest address as shown
         in the  Corporation's  records or in the last notice of directors filed
         with the Registrar, and

         iv) in the case of an  Officer  or  auditor  of the  Corporation,  that
         person's latest address as shown in the Corporation's records;

(l)      "Registrar"  means the Registrar of Corporations or a Deputy  Registrar
         of Corporations appointed under the ABCA;

(m)      "Regulations" means the Regulations,  as amended, in force from time to
         time under the ABCA; and

(n)      "Shareholder" means a shareholder of the Corporation.

(2)      INTERPRETATION

In the  By-laws,  except if defined  in this  section  or the  context  does not
permit:

(a)      words and  expressions  defined or used in the ABCA have the meaning or
         use given to them in the ABCA;

(b)      words importing the singular include the plural and vice versa;

(c)      words importing gender include masculine,  feminine and neuter genders;
         and

(d)      words importing persons include bodies corporate.

(3)      HEADINGS

The headings used in the By-laws are inserted for convenience of reference only.
The headings are not to be considered  or taken into account in  construing  the
terms of the By-laws nor are they to be deemed in any way to clarify,  modify or
explain the effect of any term of the By-laws.

(4)      BY-LAWS SUBJECT TO THE ABCA

The  By-laws  are  subject  to the ABCA and the  Regulations,  to any  unanimous
shareholder agreement and to the Articles, in that order.

                                   SECTION 2.

                           BUSINESS OF THE CORPORATION

(1)               EXECUTION OF DOCUMENTS

Documents may be executed on behalf of the  Corporation in the manner and by the
persons the Board may designate by resolution.

(2)               CHEQUES, DRAFTS AND NOTES

Cheques, drafts or orders for the payment of money, notes, acceptances and bills
of  exchange  must be  signed in the  manner  and by the  persons  the Board may
designate by resolution.


                                       2


(3)               CORPORATE SEAL

The Board may, by resolution,  adopt a corporate seal containing the name of the
Corporation as the corporate seal. A document issued by or executed on behalf of
the Corporation is not invalid only because the corporate seal is not affixed to
that document.  A document requiring  authentication by the Corporation does not
need to be under seal.

(4)               BANKING ARRANGEMENTS

The Board may open any bank accounts the  Corporation may require at a financial
institution  designated  by  resolution  of the  Board.  The  Board  may  adopt,
authorize,  execute  or  deposit  any  document  furnished  or  required  by the
financial  institution  and  may  do any  other  thing  as  may  be  necessarily
incidental to the banking and financial arrangements of the Corporation.

(5)               VOTING RIGHTS IN OTHER BODIES CORPORATE

The  persons  designated  by the  Board to  execute  documents  on behalf of the
Corporation  may execute and  deliver  instruments  of proxy and arrange for the
issue of voting  certificates  or other evidence of the right to exercise voting
rights  attached  to any  securities  held by the  Corporation  in another  body
corporate. The instruments, certificates or other evidence shall be in favour of
the person that is designated by the persons  executing the instruments of proxy
or arranging for the issue of voting certificates or other evidence of the right
to exercise voting rights. In addition, the Board may direct the manner in which
and the person by whom any particular voting right or class of voting rights may
be exercised.

(6)               WITHHOLDING INFORMATION FROM SHAREHOLDERS

No  Shareholder is entitled to obtain any  information  respecting any detail or
conduct of the Corporation's  business which, in the opinion of the Board, would
not  be in the  best  interests  of  the  Shareholders  or  the  Corporation  to
communicate to the public.

The Board may determine whether and under what conditions the accounts,  records
and documents of the Corporation are open to inspection by the Shareholders.  No
Shareholder  has a right to  inspect  any  account,  record or  document  of the
Corporation  except as conferred by the ABCA or  authorized by resolution of the
Board or by resolution passed at a meeting of Shareholders.

(7)               DIVISIONS

The Board may cause any part of the business and  operations of the  Corporation
to be segregated or  consolidated  into one or more divisions upon the basis the
Board  considers  appropriate.  Any division may be  designated  by the name the
Board  determines  and may transact  business  under that name.  The name of the
Corporation  must  be set out in  legible  characters  in and on all  contracts,
invoices, negotiable instruments and orders for goods or services issued or made
by or on behalf of any division of the Corporation.


                                       3


                                   SECTION 3.
                                    BORROWING

(1)               BORROWING POWER

Without  limiting the borrowing power of the  Corporation  provided by the ABCA,
the Board may, without authorization of the Shareholders:

(a)      borrow money on the credit of the Corporation;

(b)      issue, reissue, sell or pledge debt obligations of the Corporation;

(c)      subject to section 45 of the ABCA,  give a  guarantee  on behalf of the
         Corporation to secure performance of an obligation of any person; and

(d)      mortgage,  hypothecate,  pledge or otherwise create a security interest
         in all or  any  property  of the  Corporation,  owned  or  subsequently
         acquired, to secure any obligation of the Corporation.

The  Directors  may,  by  resolution,  delegate to a  Director,  a committee  of
Directors  or an  Officer  all or any of the  powers  conferred  on them by this
section.

                                   SECTION 4.
                                    DIRECTORS

(1)               MANAGEMENT OF BUSINESS

The Board  shall  manage the  business  and  affairs of the  Corporation.  Every
Director  must comply  with the ABCA,  the  Regulations,  the  Articles  and the
By-laws.

(2)               QUALIFICATION

A person is disqualified for election as a Director if that person:

(a) is less than 18 years of age;

(b) is

         i) a dependant  adult as defined in the Dependent  Adults Act (Alberta)
         or the subject of a certificate of incapacity under that Act,

         ii) a formal patient as defined in the Mental Health Act (Alberta),

         iii) the subject of an order under The Mentally  Incapacitated  Persons
         Act  (Alberta)  appointing a committee of his or her person,  estate or
         both, or

         iv) a  person  who has  been  found  to be of  unsound  mind by a court
         elsewhere than in Alberta;

(c) is not an individual; or

(d) has the status of bankrupt.


                                       4


A Director is not required to hold shares issued by the Corporation.

(3)               NUMBER OF DIRECTORS

The Board is to consist of that number of Directors  permitted by the  Articles.
In the event the Articles permit a minimum and maximum number of Directors,  the
Board is to consist of the number of  Directors  the  Shareholders  determine by
ordinary  resolution.  The number of  Directors  at any one time may not be less
than the minimum or more than the maximum number permitted by the Articles.

(4)               INCREASE NUMBER

The Shareholders  may amend the Articles to increase the number,  or the minimum
or maximum number,  of Directors.  Upon the adoption of an amendment  increasing
the number or minimum number of Directors,  the Shareholders may, at the meeting
at which they adopt the  amendment,  elect the  additional  number of  Directors
authorized by the amendment.  Upon the issue of a certificate of amendment,  the
Articles  are deemed to be amended as of the date the  Shareholders  adopted the
amendment.

(5)               DECREASE NUMBER

The Shareholders  may amend the Articles to decrease the number,  or the minimum
or maximum number,  of Directors.  No decrease shortens the term of an incumbent
Director.

(6)               ELECTION AND TERM

Each  Director  named  in  the  notice  of  directors   filed  at  the  time  of
incorporation  holds office from the issue of the  certificate of  incorporation
until the first meeting of Shareholders. The Shareholders are to elect Directors
by  ordinary  resolution  at the  first  meeting  of  Shareholders  and at  each
succeeding  annual  meeting at which an election of Directors  is required.  The
elected  Directors  are to hold  office for a term  expiring  not later than the
close of the next annual  meeting of  Shareholders  following  the  election.  A
Director not elected for an  expressly  stated term ceases to hold office at the
close of the first  annual  meeting of  Shareholders  following  the  Director's
election.  If  Directors  are not  elected  at a meeting  of  Shareholders,  the
incumbent  Directors  continue in office until their  respective  successors are
elected.

(7)               REMOVAL OF DIRECTORS

The  Shareholders  may by  ordinary  resolution  passed at a special  meeting of
Shareholders  remove a Director from office.  Any vacancy created by the removal
of a Director  may be filled at the meeting at which the  Director  was removed,
failing which the vacancy may be filled by a quorum of Directors.

(8)               CONSENT

No election or appointment of an individual as a Director is effective unless:

(a) the  individual was present at the meeting when elected or appointed and did
not refuse to act as Director; or

(b) if the  individual  was not present at the meeting when elected or appointed
as a Director, the individual

         i)  consented in writing to act as a Director  before the  individual's
         election or appointment or within 10 days after it, or


                                       5


         ii) has acted as a Director pursuant to the election or appointment.

(9)               CEASING TO HOLD OFFICE

A Director ceases to hold office when:

(a) the Director dies or resigns;

(b) the  Director  is removed  from office by the  Shareholders  who elected the
Director; or

(c) the  Director  ceases to be  qualified  for  election  as a  Director  under
subsection (2).

A Director's  resignation is effective at the time a written resignation is sent
to the Corporation,  or at the time specified in the  resignation,  whichever is
later.

(10)              FILLING VACANCIES

A quorum  of  Directors  may  fill a  vacancy  in the  Board,  except a  vacancy
resulting  from an increase in the number or minimum number of Directors or from
a failure to elect the number or minimum  number of  Directors  required  by the
Articles. If there is not a quorum of Directors,  or if there has been a failure
to elect the number or minimum number of Directors required by the Articles, the
Directors then in office must immediately call a special meeting of Shareholders
to fill the vacancy. If the Directors fail to call a meeting, or if there are no
Directors then in office, the meeting may be called by any Shareholder.

(11)              DELEGATION TO A MANAGING DIRECTOR OR COMMITTEE

The Directors  may appoint from their number a Managing  Director or a committee
of Directors.  At least half of the members of a committee of Directors  must be
resident  Canadians.  A  Managing  Director  must be a  resident  Canadian.  The
Directors may delegate to a Managing Director or a committee of Directors any of
the powers of the Directors.  However,  no Managing Director and no committee of
Directors has authority to:

(a)      submit  to the  Shareholders  any  question  or  matter  requiring  the
         approval of the Shareholders;

(b)      fill a vacancy among the Directors or in the office of auditor;

(c)      issue  securities,  except in the manner and on the terms authorized by
         the Directors;

(d)      declare dividends;

(e)      purchase, redeem or otherwise acquire shares issued by the Corporation,
         except in the manner and on the terms authorized by the Directors;

(f)      pay a  commission  in  connection  with  the  sale  of  shares  of  the
         Corporation;

(g)      approve a management proxy circular;

(h)      approve any financial statements; or

(i)      adopt, amend or repeal By-laws.


                                       6


(12)              REMUNERATION AND EXPENSES

The Directors  are entitled to receive  remuneration  for their  services in the
amount the Board determines.  Subject to the Board's approval, the Directors are
also entitled to be reimbursed for traveling and other expenses incurred by them
in  attending  meetings of the Board or any  committee  of  Directors  or in the
performance of their duties as Directors.

Nothing  contained  in  the  By-laws  precludes  a  Director  from  serving  the
Corporation in another  capacity and receiving  remuneration  for acting in that
other capacity.

The Directors must disclose to the Shareholders the aggregate  remuneration paid
to the  Directors.  The  disclosure  must be in a written  document to be placed
before the  Shareholders at every annual meeting of Shareholders and must relate
to the same time period as the financial  statements required to be presented at
the meeting relate to.

(13)              ANNUAL FINANCIAL STATEMENTS

The Board  must  place  before  the  Shareholders  at every  annual  meeting  of
Shareholders  financial  statements  which  have been  approved  by the Board as
evidenced by the  signature of one or more of the  Directors,  the report of the
auditor and any further  information  respecting  the financial  position of the
Corporation  and the results of its operations that is required by the ABCA, the
Regulations, the Articles, the By-laws or any unanimous shareholder agreement.

                                   SECTION 5.

                              MEETINGS OF DIRECTORS

(1)               CALLING MEETINGS

The Chairperson of the Board,  the Managing  Director or any Director may call a
meeting of Directors.  A meeting of Directors or of a committee of Directors may
be held  within or outside of  Alberta  at the time and place  indicated  in the
notice referred to in subsection (2).

(2)               NOTICE

Notice of the time and place of a  meeting  of  Directors  or any  committee  of
Directors  must be given to each  Director or each Director who is a member of a
committee not less than 48 hours before the time fixed for that meeting.  Notice
must be given in the manner  prescribed in section I.A.11. A notice of a meeting
of Directors  need not specify the purpose of the business to be  transacted  at
the meeting except when the business to be transacted deals with a proposal to:

(a) submit to the  Shareholders any question or matter requiring the approval of
the Shareholders;

(b) fill a vacancy among the Directors or in the office of auditor;

(c) issue securities;

(d) declare dividends;

(e) purchase, redeem or otherwise acquire shares issued by the Corporation;


                                       7



(f) pay a commission in connection with the sale of shares of the Corporation;

(g) approve a management proxy circular;

(h) approve any financial statements; or

(i) adopt, amend or repeal By-laws.

(3)               NOTICE OF ADJOURNED MEETING

Notice of an  adjourned  meeting of  Directors  is not  required  if a quorum is
present  at the  original  meeting  and if the time and  place of the  adjourned
meeting is announced at the original meeting.  If a meeting is adjourned because
a quorum is not present,  notice of the time and place of the adjourned  meeting
must be given as for the original  meeting.  The  adjourned  meeting may proceed
with the business to have been transacted at the original meeting, even though a
quorum is not present at the adjourned meeting.

(4)               MEETINGS WITHOUT NOTICE

No notice of a meeting of Directors  or of a committee of Directors  needs to be
given:

(a) to a newly  elected  Board  following  its  election at an annual or special
meeting of Shareholders; or

(b) for a meeting  of  Directors  at which a  Director  is  appointed  to fill a
vacancy in the Board, if a quorum is present.

(5)               WAIVER OF NOTICE

A Director  may waive,  in any manner,  notice of a meeting of Directors or of a
committee of Directors. Attendance of a Director at a meeting of Directors or of
a committee of  Directors is a waiver of notice of the meeting,  except when the
Director  attends  the  meeting  for the  express  purpose of  objecting  to the
transaction  of any  business  on the grounds  that the meeting is not  lawfully
called.

(6)               QUORUM

The  Directors may fix the quorum for meetings of Directors or of a committee of
Directors, but unless so fixed, a majority of the Directors or of a committee of
Directors  holding  office  at the time of the  meeting  constitutes  a  quorum.
Subject to the  provisions of the ABCA, no business may be transacted  unless at
least half of the Directors present are resident Canadians.

(7)               REGULAR MEETINGS

The Board may by  resolution  establish  one or more days in a month for regular
meetings  of the  Board at a time and  place to be named in the  resolution.  No
notice is required for a regular meeting.

(8)               CHAIRPERSON OF MEETINGS

The  chairperson  of any  meeting of  Directors  is the first  mentioned  of the
following  Officers  (if  appointed)  who is a  Director  and is  present at the
meeting:  Chairperson of the Board, Managing Director, or President.  If none of
the  foregoing  Officers are present,  the  Directors  present may choose one of
their number to be chairperson of the meeting.


                                       8


(9)               DECISION ON QUESTIONS

Every  resolution  submitted  to a meeting of  Directors  or of a  committee  of
Directors  must be decided by a majority  of votes cast at the  meeting.  In the
case of an equality of votes, the chairperson does not have a casting vote.

(10)              MEETING BY TELEPHONE

If all the  Directors  consent,  a  Director  may  participate  in a meeting  of
Directors  or of a  committee  of  Directors  by  means  of  telephone  or other
communication facilities that permit all persons participating in the meeting to
hear each other. A Director  participating in a meeting by means of telephone or
other communication facilities is deemed to be present at the meeting.

(11)              RESOLUTION IN LIEU OF MEETING

A resolution  in writing  signed by all the  Directors  entitled to vote on that
resolution at a meeting of Directors or committee of Directors is as valid as if
it had been  passed at a meeting of  Directors  or  committee  of  Directors.  A
resolution in writing takes effect on the date it is expressed to be effective.

A resolution in writing may be signed in one or more counterparts,  all of which
together constitute the same resolution.  A counterpart signed by a Director and
transmitted  by  facsimile  or other device  capable of  transmitting  a printed
message is as valid as an originally signed counterpart.

                                   SECTION 6.

                      OFFICERS AND APPOINTEES OF THE BOARD

(1)               APPOINTMENT OF OFFICERS

The Directors may designate the offices of the Corporation,  appoint as officers
individuals of full  capacity,  specify their duties and delegate to them powers
to manage the  business  and affairs of the  Corporation,  except  those  powers
referred to in section  I.A.4 which may not be delegated to a Managing  Director
or to a committee of Directors.  Unless required by the By-laws, an Officer does
not have to be a Director.  The same  individual may hold two or more offices of
the Corporation.

(2)               TERM OF OFFICE

An Officer  holds  office  from the date of the  Officer's  appointment  until a
successor is appointed or until the Officer's resignation or removal. An officer
may resign by giving  written  notice to the Board.  All Officers are subject to
removal by the Board, with or without cause.

(3)               DUTIES OF OFFICERS

An Officer  has all the powers and  authority  and must  perform  all the duties
usually incident to, or specified in the By-laws or by the Board for, the office
held.

(4)               REMUNERATION

The  Officers  are entitled to receive  remuneration  for their  services in the
amount the Board determines. The Directors must disclose to the Shareholders the
aggregate  remuneration paid to the five highest Officers in accordance with the
rules and regulations of any stock exchange on which its shares are listed.  The
disclosure must be in a written document to be placed before the Shareholders at
every annual meeting of Shareholders  and must relate to the same time period as
the financial statements required to be presented at the meeting relate to.


                                       9



(5)               CHAIRPERSON OF THE BOARD

If appointed and present at the meeting,  the  Chairperson of the Board presides
at all meetings of Directors, committees of Directors and, in the absence of the
President, at all meetings of Shareholders. The Chairperson of the Board must be
a Director.

(6)               MANAGING DIRECTOR

If appointed,  the Managing Director is responsible for the general  supervision
of the  affairs of the  Corporation.  During the  absence or  disability  of the
Chairperson of the Board,  or if no Chairperson of the Board has been appointed,
the Managing Director exercises the functions of that office. Subject to section
I.A.4, the Board may delegate to the Managing  Director any of the powers of the
Board.

(7)               PRESIDENT

If appointed,  the President is the chief  executive  officer of the Corporation
responsible  for the management of the business and affairs of the  Corporation.
During the absence or  disability  of the Managing  Director,  or if no Managing
Director has been appointed,  the President also exercises the functions of that
office.  The  President  may not  preside as  chairperson  at any meeting of the
Directors or of any committee of Directors unless the President is a Director.

(8)               VICE-PRESIDENT

During the absence or disability of the  President,  or if no President has been
appointed,  the  Vice-President or if there is more than one, the Vice-President
designated by the Board, exercises the functions of the office of the President.

(9)               SECRETARY

If  appointed,  the  Secretary  shall call  meetings  of the  Directors  or of a
committee of Directors at the request of a Director.  The Secretary shall attend
all meetings of Directors,  of committees of Directors and of  Shareholders  and
prepare and maintain a record of the minutes of the  proceedings.  The Secretary
is the  custodian  of the  corporate  seal,  the  minute  book and all  records,
documents and instruments belonging to the Corporation.

(10)              TREASURER

If appointed,  the Treasurer is responsible  for the preparation and maintenance
of proper  accounting  records,  the  deposit  of  money,  the  safe-keeping  of
securities and the disbursement of funds of the Corporation.  The Treasurer must
render to the Board an account of all financial  transactions of the Corporation
upon request.

(11)              AGENTS AND ATTORNEYS

The Board has the power to appoint agents or attorneys for the Corporation in or
outside of Canada with any power the Board considers advisable.


                                       10


                                   SECTION 7.

                              CONFLICT OF INTEREST

(1)               DISCLOSURE OF INTEREST

A Director or Officer who:

(a)      is a party to a material  contract or proposed  material  contract with
         the Corporation; or

(b)      is a director or an officer of or has a material interest in any person
         who is a party to a material  contract  or proposed  material  contract
         with the Corporation,

must  disclose in writing to the  Corporation  or request to have entered in the
minutes of meetings of the Directors the nature and extent of the  Director's or
Officer's interest.

(2)               APPROVAL AND VOTING

A Director or Officer must disclose in writing to the Corporation, or request to
have entered in the minutes of meetings of  Directors,  the nature and extent of
the Director's or Officer's interest in a material contract or proposed material
contract if the contract is one that in the ordinary course of the Corporation's
business  would  not  require  approval  by the Board or the  Shareholders.  The
disclosure must be made immediately  after the Director or Officer becomes aware
of the contract or proposed contract.  A Director who is required to disclose an
interest in a material  contract or proposed  material  contract may not vote on
any resolution to approve the contract unless the contract is:

(a)      an  arrangement  by way of  security  for money lent to or  obligations
         undertaken  by  the  Director,  or by a body  corporate  in  which  the
         Director  has an  interest,  for the benefit of the  Corporation  or an
         affiliate;

(b)      a contract  relating  primarily  to the  Director's  remuneration  as a
         Director  or  Officer,  employee  or agent of the  Corporation  or as a
         director, officer, employee or agent of an affiliate;

(c)      a contract for indemnity or insurance under the ABCA; or

(d)      a contract with an affiliate.

(3)      EFFECT OF CONFLICT OF INTEREST

If a material  contract  is made  between  the  Corporation  and a  Director  or
Officer,  or between the  Corporation  and another person of which a Director or
Officer is a  director  or officer  or in which the  Director  or Officer  has a
material interest:

(a)      the  contract  is  neither  void nor  voidable  by reason  only of that
         relationship, or by reason only that a Director with an interest in the
         contract  is present at or is counted to  determine  the  presence of a
         quorum at a  meeting  of  Directors  or  committee  of  Directors  that
         authorized the contract; and

(b)      a Director  or Officer or former  Director  or Officer to whom a profit
         accrues  as a result of the  making of the  contract  is not  liable to
         account to the  Corporation  for that  profit by reason only of holding
         office as a Director or Officer,


                                       11



if the Director or Officer disclosed the Director's or Officer's interest in the
contract in the manner  prescribed  by the ABCA and the contract was approved by
the Board or the  Shareholders and was reasonable and fair to the Corporation at
the time it was approved.

                                   SECTION 8.

                          LIABILITY AND INDEMNIFICATION

(1)               LIMITATION OF LIABILITY

Every Director and Officer in exercising the powers and  discharging  the duties
of office must act honestly and in good faith with a view to the best  interests
of the  Corporation  and must  exercise  the care,  diligence  and skill  that a
reasonably  prudent  person  would  exercise  in  comparable  circumstances.  No
Director or Officer is liable for:

(a)      the acts,  omissions or defaults of any other Director or Officer or an
         employee of the Corporation;

(b)      any loss,  damage or expense  incurred by the  Corporation  through the
         insufficiency or deficiency of title to any property acquired for or on
         behalf of the Corporation;

(c)      the insufficiency or deficiency of any security in or upon which any of
         the money of the Corporation is invested;

(d)      any loss or damage arising from the bankruptcy,  insolvency or tortious
         or criminal acts of any person with whom any of the Corporation's money
         is, or securities or other property are, deposited;

(e)      any loss occasioned by any error of judgment or oversight; or

(f)      any other loss,  damage or misfortune  which occurs in the execution of
         the duties of office or in relation to it,

unless  occasioned by the wilful neglect or default of that Director or Officer.
Nothing in this By-law relieves any Director or Officer of any liability imposed
by the ABCA or otherwise by law.

(2)               INDEMNITY

The  Corporation  shall  indemnify a Director or Officer,  a former  Director or
Officer  and a  person  who  acts or acted  at the  Corporation's  request  as a
director or officer of a body  corporate  of which the  Corporation  is or was a
shareholder  or creditor  (the  "Indemnified  Parties")  and the heirs and legal
representatives of each of them, against all costs, charges and expenses,  which
includes,  without limiting the generality of the foregoing,  the fees,  charges
and        disbursements        of       legal        counsel        on       an
as-between-a-solicitor-and-the-solicitor's-own-client  basis and an amount  paid
to settle an action or satisfy a judgment, reasonably incurred by an Indemnified
Party, or the heirs or legal  representatives  of an Indemnified Party, or both,
in respect of any action or  proceeding  to which any of them is made a party by
reason of an  Indemnified  Party being or having been a Director or Officer or a
director or officer of that body corporate, if:

(a)      the  Indemnified  Party acted honestly and in good faith with a view to
         the best interests of the Corporation; and


                                       12



(b)      in the case of a criminal or  administrative  action or proceeding that
         is enforced by a monetary penalty, the Indemnified Party had reasonable
         grounds for believing that the Indemnified Party's conduct was lawful.

The  Corporation  shall  indemnify an Indemnified  Party and the heirs and legal
representatives of an Indemnified Party in any other circumstances that the ABCA
permits  or  requires.  Nothing  in this  By-law  limits  the  right of a person
entitled to  indemnity  to claim  indemnity  apart from the  provisions  of this
By-law.

(3)               INSURANCE

The Corporation may purchase and maintain  insurance for the benefit of a person
referred to in  subsection  (2) against the  liabilities  and in the amounts the
ABCA permits and the Board approves.

                                   SECTION 9.
                                   SECURITIES

(1)               SHARES

Shares of the Corporation may be issued at the times, to the persons and for the
consideration  the  Board   determines.   No  share  may  be  issued  until  the
consideration  for the  share is fully  paid in  money  or in  property  or past
service that is not less in value than the fair equivalent of the money that the
Corporation would have received if the share had been issued for money.

(2)               OPTIONS AND OTHER RIGHTS TO ACQUIRE SECURITIES

The  Corporation  may  issue  certificates,   warrants  or  other  evidences  of
conversion   privileges,   options  or  rights  to  acquire  securities  of  the
Corporation.  The conditions attached to the conversion privileges,  options and
rights must be set out in the  certificates,  warrants or other  evidences or in
certificates  evidencing  the  securities  to which the  conversion  privileges,
options or rights are attached.

(3)               COMMISSIONS

The Board may authorize the  Corporation  to pay a reasonable  commission to any
person in consideration of that person purchasing or agreeing to purchase shares
of the Corporation  from the Corporation or from any other person,  or procuring
or agreeing to procure purchasers for shares of the Corporation.

(4)               SECURITIES REGISTER

The  Corporation  shall maintain at its records office a securities  register in
which it records the securities  issued by it in registered  form,  showing with
respect to each class or series of securities:

(a) the names,  alphabetically  arranged  and the latest  known  address of each
person who is or has been a security holder;

(b) the number of securities held by each security holder; and

(c) the date and particulars of the issue and transfer of each security.

The  Corporation  shall keep  information  relating to a security holder that is
entered in the  securities  register for at least seven years after the security
holder ceases to be a security holder.


                                       13



(5)               TRANSFER AGENTS AND REGISTRARS

The  Corporation  may  appoint  one or more trust  corporations  as its agent to
maintain a central  securities  register  and one or more  agents to  maintain a
branch securities register.  An agent may be designated as a transfer agent or a
branch transfer agent, and a registrar,  according to the agent's  function.  An
agent's appointment may be terminated at any time. The Board may provide for the
registration  or transfer of securities  by a transfer  agent,  branch  transfer
agent or registrar.

(6)               DEALINGS WITH REGISTERED HOLDERS

The  Corporation  may treat the  registered  owner of a  security  as the person
exclusively  entitled to vote,  to receive  notices,  to receive  any  interest,
dividend or other payments in respect of the security, and otherwise to exercise
all the rights and powers of an owner of the security.

(7)               TRANSFERS OF SECURITIES

Securities  of the  Corporation  may be  transferred  in the form of a  transfer
endorsement on the security  certificates issued in respect of the securities of
the Corporation, or in any form of transfer endorsement which may be approved by
resolution of the Board.

(8)               REGISTRATION OF TRANSFERS

If a security in registered form is presented for registration of transfer,  the
Corporation must register the transfer if:

(a)      the security is endorsed by the person  specified by the security or by
         special  endorsement  to be entitled to the security or by the person's
         successor,  fiduciary,  survivor,  attorney or authorized agent, as the
         case may be;

(b)      reasonable  assurance  is given that the  endorsement  is  genuine  and
         effective;

(c)      the  Corporation  has no duty to inquire  into adverse  claims,  or has
         discharged its duty to do so;

(d)      any  applicable  law  relating  to the  collection  of  taxes  has been
         complied with;

(e)      the transfer is rightful or is to a bona fide purchaser; and

(f)      the fee  prescribed by the Board for a security  certificate  issued in
         respect of a transfer has been paid.

(9)               LIEN

If the Articles provide that the Corporation has a lien on a share registered in
the name of a Shareholder or the Shareholder's  legal  representative for a debt
of the  Shareholder to the  Corporation,  and the Shareholder is indebted to the
Corporation, the Corporation may refuse to register any transfer of the holder's
shares pending enforcement of the lien.


                                       14



(10)              SECURITY CERTIFICATES

Security certificates and acknowledgments of a security holder's right to obtain
a security  certificate  must be in a form the Board approves by  resolution.  A
security certificate must be signed by at least one Director or Officer.  Unless
the Board otherwise determines, security certificates representing securities in
respect of which a transfer  agent or registrar has been appointed are not valid
unless  countersigned  by or on behalf of the transfer  agent or registrar.  Any
signature  may be printed or  otherwise  mechanically  reproduced  on a security
certificate.  If a  security  certificate  contains  a printed  or  mechanically
reproduced  signature  of a person,  the  Corporation  may  issue  the  security
certificate,  notwithstanding  that the person  has  ceased to be a Director  or
Officer,  and the  security  certificate  is as  valid as if the  person  were a
Director or Officer at the date of issue.

(11)              ENTITLEMENT TO A SECURITY CERTIFICATE

A security holder is entitled at the holder's  option to a security  certificate
or to a non-transferable  written acknowledgment of the holder's right to obtain
a security  certificate from the Corporation in respect of the securities of the
Corporation held by that holder.

(12)              SECURITIES HELD JOINTLY

The  Corporation is not required to issue more than one security  certificate in
respect of securities held jointly by several persons. Delivery of a certificate
to one of the joint  holders is sufficient  delivery to all of them.  Any one of
the joint  holders may give  effectual  receipts for the  certificate  issued in
respect of the securities or for any dividend, bonus, return of capital or other
money payable or warrant issuable in respect of the security.

(13)              REPLACEMENT OF SECURITY CERTIFICATES

The  Board or an  Officer  or agent  designated  by the  Board may in its or the
Officer's or agent's  discretion direct the issue of a new security  certificate
in place of a certificate that has been lost,  destroyed or wrongfully  taken. A
new security  certificate  may be issued only on payment of a reasonable fee and
on any terms as to indemnity,  reimbursement of expenses and evidence of loss of
title as the Board may prescribe.

(14)              FRACTIONAL SHARES

The Corporation  may issue a certificate for a fractional  share or may issue in
its place scrip  certificates  in a form that  entitles  the holder to receive a
certificate for a full share by exchanging scrip certificates aggregating a full
share. The Directors may attach conditions to any scrip  certificates  issued by
the Corporation, including conditions that:

(a)      the scrip  certificates  become  void if they are not  exchanged  for a
         share  certificate  representing a full share before a specified  date;
         and

(b)      any shares for which those scrip  certificates  are  exchangeable  may,
         notwithstanding  any pre-emptive right, be issued by the Corporation to
         any person and the proceeds of those shares distributed rateably to the
         holders of the scrip certificates.

                                   SECTION 10.

                            MEETINGS OF SHAREHOLDERS

(1)               ANNUAL MEETING OF SHAREHOLDERS

The Board must call an annual meeting of  Shareholders to be held not later than
18 months after the date of incorporation  and  subsequently,  not later than 15
months after holding the last preceding annual meeting.  An annual meeting is to
be held for the purposes of considering  the financial  statements and auditor's
report,  fixing  the  number  of  Directors  for the  following  year,  electing
Directors,  appointing an auditor and  transacting  any other  business that may
properly be brought before the meeting.


                                       15



(2)               SPECIAL MEETINGS OF SHAREHOLDERS

The Board may at any time call a special meeting of Shareholders.

(3)               SPECIAL BUSINESS

All business  transacted at a special meeting of  Shareholders  and all business
transacted at an annual meeting of  Shareholders,  except  consideration  of the
financial  statements and auditor's  report,  fixing the number of Directors for
the following  year,  election of Directors and  reappointment  of the incumbent
auditor, is deemed to be special business.

(4)               PLACE AND TIME OF MEETINGS

Meetings of Shareholders may be held at the place within Alberta and at the time
the Board  determines.  A meeting of Shareholders may be held outside Alberta if
all the  Shareholders  entitled  to vote at that  meeting  agree to holding  the
meeting  outside  Alberta.  A Shareholder  who attends a meeting of Shareholders
held  outside  Alberta is deemed to have agreed to holding  the meeting  outside
Alberta, except when the Shareholder attends the meeting for the express purpose
of objecting to the  transaction of any business on the grounds that the meeting
is not lawfully held.  Notwithstanding the foregoing,  a meeting of Shareholders
may be held outside of Alberta at one or more places specified in the Articles.

(5)               NOTICE OF MEETINGS

Notice of the time and place of a meeting of Shareholders  must be sent not less
than 21 days and not more than 50 days before the meeting to:

(a) each Shareholder entitled to vote at the meeting;

(b) each Director; and

(c) the auditor of the Corporation.

Notice of a meeting of  Shareholders  called for the purpose of transacting  any
business  other than  consideration  of the financial  statements  and auditor's
report,  fixing the number of  Directors  for the  following  year,  election of
Directors and  reappointment  of the incumbent  auditor must state the nature of
the business to be transacted in  sufficient  detail to permit a Shareholder  to
form a reasoned judgment on that business and must state the text of any special
resolution to be submitted to the meeting.

(6)               NOTICE OF ADJOURNED MEETINGS

With the consent of the Shareholders  present at a meeting of Shareholders,  the
chairperson  may  adjourn  that  meeting to another  fixed time and place.  If a
meeting  of  Shareholders  is  adjourned  by one  or  more  adjournments  for an
aggregate  of less  than 30 days,  it is not  necessary  to give  notice  of the
adjourned  meeting,  other  than  by  verbal  announcement  at the  time  of the
adjournment.  If  a  meeting  of  Shareholders  is  adjourned  by  one  or  more
adjournments  for an  aggregate  of 30 days or  more,  notice  of the  adjourned
meeting must be given as for the original  meeting.  The  adjourned  meeting may
proceed with the business to have been transacted at the original meeting,  even
though a quorum is not present at the adjourned meeting.


                                       16



(7)               WAIVER OF NOTICE

A Shareholder  and any other person entitled to attend a meeting of Shareholders
may waive in any manner  notice of a meeting of  Shareholders.  Attendance  of a
Shareholder or other person at a meeting of  Shareholders  is a waiver of notice
of the meeting,  except when the Shareholder or other person attends the meeting
for the express  purpose of objecting to the  transaction of any business on the
grounds that the meeting is not lawfully called.

(8)               SHAREHOLDER LIST

If the Corporation  has more than 15 Shareholders  entitled to vote at a meeting
of Shareholders, the Corporation must prepare a list of Shareholders entitled to
receive notice of the meeting,  arranged in  alphabetical  order and showing the
number of shares held by each Shareholder,

(a)      if a Record Date is fixed, not later than 10 days after that date; or

(b)      if no Record Date is fixed,

         i at the close of business on the last  business day  preceding the day
         on which the notice is given, or

         ii if no notice is given, on the day on which the meeting is held.

A Shareholder may examine the list of Shareholders:

(c)      during usual business hours at the  Corporation's  records office or at
         the place where its central securities register is maintained; and

(d)      at the meeting of Shareholders for which the list was prepared.

(9)      PERSONS ENTITLED TO VOTE

A person  named in a list of  Shareholders  is entitled to vote the shares shown
opposite the person's name at the meeting to which the list  relates,  except to
the extent that:

(a)      i if a Record Date is fixed, the person  transfers  ownership of any of
         the person's shares after the Record Date, or

         ii if no Record Date is fixed, the person transfers ownership of any of
         the person's shares after the date on which the list of Shareholders is
         prepared; and

(b)      the transferee of those shares

         i        produces properly endorsed share certificates, or

         ii       otherwise establishes ownership of the shares,


                                       17


         and  demands,  not later  than 10 days  before  the  meeting,  that the
         transferee's name be included in the list before the meeting,

in which case the transferee is entitled to vote the shares.

(10)              CHAIRPERSON OF MEETINGS

The  chairperson of any meeting of  Shareholders  is the first  mentioned of the
following  Officers (if  appointed)  who is present at the  meeting:  President,
Chairperson of the Board or Managing Director. If none of the foregoing Officers
are present,  the  Shareholders  present and entitled to vote at the meeting may
choose a chairperson from among those individuals present.

(11)              SCRUTINEER

If  desired,  one or more  scrutineers,  who  need not be  Shareholders,  may be
appointed by resolution or by the chairperson of the meeting with the consent of
the meeting.

(12)              PROCEDURE AT MEETINGS

The chairperson of any meeting of Shareholders  shall conduct the proceedings at
the meeting in all respects.  The chairperson's  decision on any matter or thing
relating  to  procedure,  including,  without  limiting  the  generality  of the
foregoing,  any question  regarding  the validity of any  instrument of proxy or
other  evidence  of  authority  to vote,  is  conclusive  and  binding  upon the
Shareholders.

(13)              PERSONS ENTITLED TO BE PRESENT

The only persons entitled to be present at a meeting of Shareholders are:

(a)      the Shareholders entitled to vote at the meeting;

(b)      the Directors;

(c)      the auditor of the Corporation; and

(d)      any others who, although not entitled to vote, are entitled or required
         under any provision of the ABCA, any unanimous  shareholder  agreement,
         the Articles or the By-laws to be present at the meeting.

Any other person may be admitted only on the  invitation of the  chairperson  of
the meeting or with the consent of the meeting.

(14)              QUORUM

A quorum of Shareholders is present at a meeting of Shareholders if at least two
persons are  present in person or by proxy,  each of whom is entitled to vote at
the meeting,  and who hold or represent by proxy in the  aggregate not less than
12.5% of the shares  entitled to be voted at the meeting.  If any share entitled
to be voted at a meeting of Shareholders is held by two or more persons jointly,
the persons or those of them who attend the meeting of  Shareholders  constitute
only one  Shareholder  for the  purpose  of  determining  whether  a  quorum  of
Shareholders is present.


                                       18



(15)              LOSS OF QUORUM

If a quorum  is  present  at the  opening  of a  meeting  of  Shareholders,  the
Shareholders  present or  represented  by proxy may proceed with the business of
the meeting, even if a quorum is not present throughout the meeting. If a quorum
is not present at the  opening of a meeting of  Shareholders,  the  Shareholders
present or  represented  by proxy may  adjourn  the  meeting to a fixed time and
place but may not transact any other business.

(16)              PROXY HOLDERS AND REPRESENTATIVES

A Shareholder  entitled to vote at a meeting of  Shareholders  may by means of a
proxy appoint a proxy holder and one or more alternate  proxy  holders,  who are
not required to be Shareholders,  to attend and act at the meeting in the manner
and to the extent  authorized by the proxy and with the  authority  conferred by
the proxy. A proxy must be executed by the  Shareholder or by the  Shareholder's
attorney authorized in writing and be in the form prescribed by the Regulations.
A proxy is valid  only at the  meeting  in  respect  of which it is given or any
adjournment of that meeting.  An instrument of proxy signed by a Shareholder and
transmitted  by facsimile or other device capable of  transmittal,  or a printed
message is as valid as an originally executed instrument of proxy.

A Shareholder  that is a body corporate or association may, by resolution of its
directors or governing  body,  authorize an individual to represent it in person
at a meeting of Shareholders.  That individual's authority may be established by
depositing  with the  Corporation  prior to the  commencement  of the  meeting a
certified  copy of the  resolution  passed  by the  Shareholder's  directors  or
governing  body or other  evidence  of the  individual's  authority  to vote.  A
resolution  or other  evidence of authority to vote is valid only at the meeting
in respect of which it is given or any adjournment of that meeting.

(17)              TIME FOR DEPOSIT OF PROXIES

The Board may specify in a notice  calling a meeting of  Shareholders a time not
exceeding 48 hours,  excluding Saturdays and holidays,  preceding the meeting or
an  adjournment  of the meeting  before which  proxies to be used at the meeting
must be deposited with the  Corporation or its agent. If no time for the deposit
of proxies has been specified in a notice calling a meeting of  Shareholders,  a
proxy to be used at the meeting  must be  deposited  with the  Secretary  of the
Corporation or the  chairperson of the meeting prior to the  commencement of the
meeting.

(18)              REVOCATION OF PROXIES

A Shareholder may revoke a proxy:

(a)      by depositing an instrument in writing  executed by the  Shareholder or
         by the Shareholder's attorney authorized in writing:

         i at the  registered  office of the  Corporation  at any time up to and
         including the last business day preceding the day of the meeting, or an
         adjournment of that meeting, at which the proxy is to be used, or

         ii with the  chairperson of the meeting on the day of the meeting or an
         adjournment of the meeting; or

(b)      in any other manner permitted by law.


                                       19



(19)              JOINT SHAREHOLDERS

If two or more persons hold shares  jointly,  one of those holders  present at a
meeting of Shareholders  may, in the absence of the others,  vote the shares. If
two or more of those  persons are present in person or by proxy,  they must vote
as one on the shares jointly held by them.

(20)              DECISION ON QUESTIONS

At every meeting of Shareholders all questions proposed for the consideration of
Shareholders must be decided by the majority of votes, unless otherwise required
by  the  ABCA  or the  Articles.  In the  case  of an  equality  of  votes,  the
chairperson of the meeting does not, either on a show of hands or verbal poll or
on a ballot,  have a casting  vote in addition to the vote or votes to which the
chairperson may be entitled as a Shareholder or proxy holder.

(21)              VOTING BY SHOW OF HANDS

Subject to subsection  (22),  voting at a meeting of Shareholders  shall be by a
show of hands of those present in person or  represented by proxy or by a verbal
poll of those  present by telephone or other  communication  facilities.  When a
vote by show of hands has been  taken  upon a  question,  a  declaration  by the
chairperson  of the  meeting  that  the  vote has  been  carried,  carried  by a
particular  majority or not  carried,  an entry to that effect in the minutes of
the meeting is  conclusive  evidence of the fact without  proof of the number of
votes  recorded in favour of or against any  resolution  or other  proceeding in
respect of the question.

(22)              VOTING BY BALLOT

If a ballot is  required by the  chairperson  of the meeting or is demanded by a
Shareholder or proxy holder entitled to vote at the meeting, either before or on
the  declaration  of the  result  of a vote by a show of hands or  verbal  poll,
voting  must be by ballot.  A demand for a ballot may be  withdrawn  at any time
before the ballot is taken. If a ballot is taken on a question,  a prior vote on
that question by show of hands or verbal poll has no effect.

(23)              NUMBER OF VOTES

At every  meeting a  Shareholder  present in person or  represented  by proxy or
present by telephone or other communication  facilities and entitled to vote has
one vote for each share held.

(24)              MEETING BY TELEPHONE

Any  person  described  in  subsection  (13) may  participate  in a  meeting  of
Shareholders by means of telephone or other communication facilities that permit
all  persons  participating  in the meeting to hear each  other.  A  Shareholder
participating  in a  meeting  by  means  of  telephone  or  other  communication
facilities is deemed to be present at the meeting.

(25)              RESOLUTION IN LIEU OF MEETING

A resolution in writing signed by all the Shareholders  entitled to vote on that
resolution at a meeting of  Shareholders is as valid as if it had been passed at
a meeting of  Shareholders.  A resolution in writing takes effect on the date it
is expressed to be effective.


                                       20



A resolution in writing may be signed in one or more counterparts,  all of which
together  constitute the same resolution.  A counterpart signed by a Shareholder
and  transmitted by facsimile or other device capable of  transmitting a printed
message is as valid as an originally signed counterpart.

                                   SECTION 11.
                                     NOTICES

(1)               METHOD OF NOTICE

A notice or document required to be sent to a Shareholder,  Director, Officer or
auditor  of  the  Corporation  may  be  given  by  personal  delivery,   prepaid
transmitted or recorded communication or prepaid mail addressed to the recipient
at the  recipient's  Recorded  Address.  A notice or  document  sent by personal
delivery  is  deemed  to be given  when it is  actually  delivered.  A notice or
document  sent by means of prepaid  transmitted  or  recorded  communication  is
deemed to be given when dispatched or delivered to the appropriate communication
company or agency or its representative for dispatch.  A notice or document sent
by mail is deemed to be given  when  deposited  at a post  office or in a public
letter box.

(2)               NOTICE TO JOINT SHAREHOLDERS

If two or more persons are registered as joint holders of any share, a notice or
document may be sent or  delivered  to all of them,  but notice given to any one
joint Shareholder is sufficient notice to the others.

(3)               NOTICE TO SUCCESSORS

Every person who, by operation of law,  transfer,  death of a Shareholder or any
other means becomes  entitled to any share,  is bound by every notice in respect
of the share which is sent or delivered to the Shareholder prior to the person's
name and address  being  entered in the  Corporation's  securities  register and
prior to the person  furnishing proof of authority or evidence of entitlement as
prescribed by the ABCA.  This  subsection  applies  whether the notice was given
before or after the event which resulted in the person becoming  entitled to the
share.

(4)               NON-RECEIPT OF NOTICES

If a notice or document is sent to a Shareholder,  Director,  Officer or auditor
of the  Corporation in accordance with subsection (1) and the notice or document
is returned on three consecutive  occasions,  the Corporation is not required to
give any further notice or documents to the person until that person informs the
Corporation in writing of the person's new address.

(5)               FAILURE TO GIVE NOTICE

The accidental failure to give a notice to a Shareholder,  Director,  Officer or
auditor  of the  Corporation,  the  non-receipt  of a  notice  by  the  intended
recipient  or any  error  in a  notice  not  affecting  its  substance  does not
invalidate any action taken at the meeting to which the notice relates.

(6)               EXECUTION OF NOTICES

Unless otherwise provided,  the signature of any person designated by resolution
of the Board to sign a notice or  document on behalf of the  Corporation  may be
written, stamped, typewritten or printed.


                                       21




         MADE by the  Directors as evidenced by the  signature of the  following
Director effective ____________________, 2004.




                                                 -------------------------------



         CONFIRMED by the  Shareholders  as  evidenced  by the  signature of the
following Shareholder effective ____________________, 2004.




                                                 -------------------------------


                                       22


                                                                      APPENDIX E


            SECTIONS 92A.300 - 92A.500 OF THE NEVADA REVISED STATUTES
                         -- RIGHTS OF DISSENTING OWNERS


         NRS 92A.300 DEFINITIONS.  As used in NRS 92A.300 to 92A.500, inclusive,
unless  the  context  otherwise  requires,  the words and terms  defined  in NRS
92A.305 to  92A.335,  inclusive,  have the  meanings  ascribed  to them in those
sections.

         NRS 92A.305 "BENEFICIAL STOCKHOLDER" DEFINED.  "Beneficial stockholder"
means a person who is a beneficial  owner of shares held in a voting trust or by
a nominee as the stockholder of record.

         NRS 92A.310  "CORPORATE  ACTION" DEFINED.  "Corporate action" means the
action of a domestic corporation.

         NRS 92A.315 "DISSENTER" DEFINED. "Dissenter" means a stockholder who is
entitled to dissent from a domestic  corporation's  action under NRS 92A.380 and
who  exercises  that  right when and in the manner  required  by NRS  92A.400 to
92A.480, inclusive.

         NRS 92A.320  "FAIR  VALUE"  DEFINED.  "Fair  value,"  with respect to a
dissenter's  shares,  means  the  value of the  shares  immediately  before  the
effectuation  of the  corporate  action  to  which  he  objects,  excluding  any
appreciation or  depreciation  in  anticipation  of the corporate  action unless
exclusion would be inequitable.

         NRS 92A.325 "STOCKHOLDER" DEFINED. "Stockholder" means a stockholder of
record or a beneficial stockholder of a domestic corporation.

         NRS 92A.330  "STOCKHOLDER OF RECORD"  DEFINED.  "Stockholder of record"
means the  person in whose  name  shares  are  registered  in the  records  of a
domestic  corporation  or the  beneficial  owner of shares to the  extent of the
rights granted by a nominee's certificate on file with the domestic corporation.

         NRS 92A.335 "SUBJECT CORPORATION" DEFINED.  "Subject corporation" means
the domestic  corporation  which is the issuer of the shares held by a dissenter
before the corporate action creating the dissenter's rights becomes effective or
the  surviving or acquiring  entity of that issuer  after the  corporate  action
becomes effective.

         NRS 92A.340  COMPUTATION OF INTEREST.  Interest payable pursuant to NRS
92A.300 to 92A.500,  inclusive,  must be computed from the effective date of the
action  until the date of payment,  at the average  rate  currently  paid by the
entity on its principal  bank loans or, if it has no bank loans,  at a rate that
is fair and equitable under all of the circumstances.



                                        1



         NRS  92A.350   RIGHTS  OF  DISSENTING   PARTNER  OF  DOMESTIC   LIMITED
PARTNERSHIP.  A  partnership  agreement of a domestic  limited  partnership  or,
unless otherwise provided in the partnership  agreement,  an agreement of merger
or exchange, may provide that contractual rights with respect to the partnership
interest  of a  dissenting  general  or limited  partner  of a domestic  limited
partnership  are  available for any class or group of  partnership  interests in
connection with any merger or exchange in which the domestic limited partnership
is a constituent entity.

         NRS 92A.360 RIGHTS OF DISSENTING  MEMBER OF DOMESTIC  LIMITED-LIABILITY
COMPANY.  The  articles of  organization  or  operating  agreement of a domestic
limited-liability  company or,  unless  otherwise  provided  in the  articles of
organization  or operating  agreement,  an agreement of merger or exchange,  may
provide  that  contractual  rights with  respect to the interest of a dissenting
member are  available  in  connection  with any merger or  exchange in which the
domestic limited-liability company is a constituent entity.

         NRS  92A.370  RIGHTS  OF  DISSENTING   MEMBER  OF  DOMESTIC   NONPROFIT
CORPORATION.

         1. Except as otherwise  provided in subsection 2, and unless  otherwise
provided  in the  articles  or bylaws,  any member of any  constituent  domestic
nonprofit  corporation  who voted against the merger may,  without prior notice,
but  within  30 days  after  the  effective  date  of the  merger,  resign  from
membership  and is  thereby  excused  from all  contractual  obligations  to the
constituent or surviving corporations which did not occur before his resignation
and is thereby  entitled to those  rights,  if any,  which would have existed if
there had been no merger and the  membership  had been  terminated or the member
had been expelled.

         2. Unless  otherwise  provided  in its  articles  of  incorporation  or
bylaws,  no member  of a  domestic  nonprofit  corporation,  including,  but not
limited to, a cooperative  corporation,  which  supplies  services  described in
chapter  704 of NRS to its  members  only,  and no  person  who is a member of a
domestic  nonprofit  corporation as a condition of or by reason of the ownership
of an interest in real property,  may resign and dissent  pursuant to subsection
1.

         NRS 92A.380  RIGHT OF  STOCKHOLDER  TO DISSENT FROM  CERTAIN  CORPORATE
ACTIONS AND TO OBTAIN PAYMENT FOR SHARES.

         1.  Except as  otherwise  provided  in NRS  92A.370  and  92A.390,  any
stockholder is entitled to dissent from, and obtain payment of the fair value of
his shares in the event of any of the following corporate actions:

         (a)  Consummation  of a  conversion  or plan of  merger  to  which  the
domestic corporation is a constituent entity:

                  (1) If  approval  by the  stockholders  is  required  for  the
conversion  or merger by NRS 92A.120 to 92A.160,  inclusive,  or the articles of
incorporation,  regardless of whether the stockholder is entitled to vote on the
conversion or plan of merger; or

                  (2) If the domestic  corporation is a subsidiary and is merged
with its parent pursuant to NRS 92A.180.



                                       2



         (b)   Consummation  of  a  plan  of  exchange  to  which  the  domestic
corporation is a constituent  entity as the  corporation  whose subject  owner's
interests  will be  acquired,  if his shares are to be  acquired  in the plan of
exchange.

         (c) Any corporate  action taken pursuant to a vote of the  stockholders
to the extent that the articles of incorporation,  bylaws or a resolution of the
board of directors  provides that voting or nonvoting  stockholders are entitled
to dissent and obtain payment for their shares.

         2. A stockholder who is entitled to dissent and obtain payment pursuant
to NRS 92A.300 to 92A.500,  inclusive,  may not challenge  the corporate  action
creating  his  entitlement  unless the action is  unlawful  or  fraudulent  with
respect to him or the domestic corporation.

         NRS 92A.390  LIMITATIONS ON RIGHT OF DISSENT:  STOCKHOLDERS  OF CERTAIN
CLASSES OR SERIES; ACTION OF STOCKHOLDERS NOT REQUIRED FOR PLAN OF MERGER.

         1.  There is no right of  dissent  with  respect to a plan of merger or
exchange in favor of  stockholders  of any class or series which,  at the record
date fixed to determine the  stockholders  entitled to receive  notice of and to
vote at the  meeting at which the plan of merger or  exchange is to be acted on,
were either listed on a national securities  exchange,  included in the national
market system by the National  Association of Securities Dealers,  Inc., or held
by at least 2,000 stockholders of record, unless:

         (a) The articles of incorporation of the corporation issuing the shares
provide otherwise; or

         (b) The holders of the class or series are  required  under the plan of
merger or exchange to accept for the shares anything except:

                  (1) Cash,  owner's  interests or owner's interests and cash in
lieu of fractional owner's interests of:

                           (I) The surviving or acquiring entity; or

                           (II) Any other entity which, at the effective date of
the plan of merger or  exchange,  were  either  listed on a national  securities
exchange,  included in the national market system by the National Association of
Securities Dealers,  Inc., or held of record by a least 2,000 holders of owner's
interests of record; or

         (2) A combination  of cash and owner's  interests of the kind described
in sub-subparagraphs (I) and (II) of subparagraph (1) of paragraph (b).

         2.  There  is no  right  of  dissent  for any  holders  of stock of the
surviving domestic  corporation if the plan of merger does not require action of
the stockholders of the surviving domestic corporation under NRS 92A.130.



                                       3



         NRS 92A.400  LIMITATIONS ON RIGHT OF DISSENT:  ASSERTION AS TO PORTIONS
ONLY TO SHARES REGISTERED TO STOCKHOLDER; ASSERTION BY BENEFICIAL STOCKHOLDER.

         1. A stockholder  of record may assert  dissenter's  rights as to fewer
than all of the shares  registered  in his name only if he dissents with respect
to all shares  beneficially  owned by any one person and  notifies  the  subject
corporation in writing of the name and address of each person on whose behalf he
asserts  dissenter's  rights.  The  rights of a  partial  dissenter  under  this
subsection are determined as if the shares as to which he dissents and his other
shares were registered in the names of different stockholders.

         2. A beneficial  stockholder may assert dissenter's rights as to shares
held on his behalf only if:

         (a) He submits to the subject  corporation  the written  consent of the
stockholder  of record to the  dissent  not later  than the time the  beneficial
stockholder asserts dissenter's rights; and

         (b) He does so with respect to all shares of which he is the beneficial
stockholder or over which he has power to direct the vote.

         NRS 92A.410 NOTIFICATION OF STOCKHOLDERS REGARDING RIGHT OF DISSENT.

         1. If a  proposed  corporate  action  creating  dissenters'  rights  is
submitted to a vote at a stockholders'  meeting,  the notice of the meeting must
state that  stockholders  are or may be  entitled to assert  dissenters'  rights
under NRS 92A.300 to 92A.500,  inclusive,  and be accompanied by a copy of those
sections.

         2. If the  corporate  action  creating  dissenters'  rights is taken by
written consent of the stockholders or without a vote of the  stockholders,  the
domestic corporation shall notify in writing all stockholders entitled to assert
dissenters'  rights  that the  action  was taken  and send them the  dissenter's
notice described in NRS 92A.430.

         NRS 92A.420 PREREQUISITES TO DEMAND FOR PAYMENT FOR SHARES.

         1. If a  proposed  corporate  action  creating  dissenters'  rights  is
submitted to a vote at a  stockholders'  meeting,  a  stockholder  who wishes to
assert dissenter's rights:

         (a) Must deliver to the subject corporation,  before the vote is taken,
written  notice of his intent to demand  payment for his shares if the  proposed
action is effectuated; and

         (b) Must not vote his shares in favor of the proposed action.

         2. A stockholder who does not satisfy the  requirements of subsection 1
and NRS 92A.400 is not entitled to payment for his shares under this chapter.



                                       4



         NRS 92A.430  DISSENTER'S NOTICE:  DELIVERY TO STOCKHOLDERS  ENTITLED TO
ASSERT RIGHTS; contents.

         1. If a  proposed  corporate  action  creating  dissenters'  rights  is
authorized at a stockholders'  meeting,  the subject corporation shall deliver a
written dissenter's notice to all stockholders who satisfied the requirements to
assert those rights.

         2. The dissenter's  notice must be sent no later than 10 days after the
effectuation of the corporate action, and must:

         (a) State where the demand for payment  must be sent and where and when
certificates, if any, for shares must be deposited;

         (b) Inform the holders of shares not  represented  by  certificates  to
what extent the transfer of the shares will be  restricted  after the demand for
payment is received;

         (c) Supply a form for  demanding  payment that includes the date of the
first  announcement to the news media or to the stockholders of the terms of the
proposed  action and  requires  that the  person  asserting  dissenter's  rights
certify  whether or not he acquired  beneficial  ownership of the shares  before
that date;

         (d) Set a date by which the subject corporation must receive the demand
for payment,  which may not be less than 30 nor more than 60 days after the date
the notice is delivered; and

         (e) Be accompanied by a copy of NRS 92A.300 to 92A.500, inclusive.

         NRS 92A.440 DEMAND FOR PAYMENT AND DEPOSIT OF  CERTIFICATES;  RETENTION
OF RIGHTS OF STOCKHOLDER.

         1. A stockholder to whom a dissenter's notice is sent must:

         (a) Demand payment;

         (b) Certify  whether he or the  beneficial  owner of whose behalf he is
dissenting,  as the case may be,  acquired  beneficial  ownership  of the shares
before  the date  required  to be set forth in the  dissenter's  notice for this
certification; and

         (c) Deposit his  certificates,  if any, in accordance with the terms of
the notice.

         2. The stockholder  who demands payment and deposits his  certificates,
if any, before the proposed  corporate  action is taken retains all other rights
of a  stockholder  until those  rights are canceled or modified by the taking of
the proposed corporate action.

         3.  The  stockholder  who  does  not  demand  payment  or  deposit  his
certificates  where  required,  each by the  date set  forth in the  dissenter's
notice, is not entitled to payment for his shares under this chapter.



                                       5



         NRS 92A.450 UNCERTIFICATED SHARES: AUTHORITY TO RESTRICT TRANSFER AFTER
DEMAND FOR PAYMENT; RETENTION OF RIGHTS OF STOCKHOLDER.

         1. The subject  corporation  may  restrict  the  transfer of shares not
represented  by a  certificate  from the date the  demand  for their  payment is
received.

         2. The person for whom dissenter's rights are asserted as to shares not
represented  by a certificate  retains all other rights of a  stockholder  until
those rights are  canceled or modified by the taking of the  proposed  corporate
action.

NRS 92A.460 PAYMENT FOR SHARES: GENERAL REQUIREMENTS.

         1. Except as otherwise  provided in NRS  92A.470,  within 30 days after
receipt  of a  demand  for  payment,  the  subject  corporation  shall  pay each
dissenter  who  complied  with NRS 92A.440  the amount the  subject  corporation
estimates  to be the fair  value  of his  shares,  plus  accrued  interest.  The
obligation of the subject  corporation  under this subsection may be enforced by
the district court:

         (a) Of the county where the corporation's registered office is located;
or

         (b) At the election of any dissenter  residing or having its registered
office in this  state,  of the  county  where the  dissenter  resides or has its
registered office. The court shall dispose of the complaint promptly.

         2. The payment must be accompanied by:

         (a) The subject  corporation's  balance sheet as of the end of a fiscal
year ending not more than 16 months  before the date of payment,  a statement of
income for that year,  a statement  of changes in the  stockholders'  equity for
that year and the latest available interim financial statements, if any;

         (b) A statement of the subject corporation's estimate of the fair value
of the shares;

         (c) An explanation of how the interest was calculated;

         (d) A statement of the  dissenter's  rights to demand payment under NRS
92A.480; and

         (e) A copy of NRS 92A.300 to 92A.500, inclusive.

         NRS 92A.470  PAYMENT FOR  SHARES:  SHARES  ACQUIRED ON OR AFTER DATE OF
DISSENTER'S NOTICE.

         1. A subject corporation may elect to withhold payment from a dissenter
unless he was the  beneficial  owner of the shares  before the date set forth in
the dissenter's  notice as the date of the first  announcement to the news media
or to the stockholders of the terms of the proposed action.



                                       6



         2. To the extent the subject  corporation  elects to withhold  payment,
after  taking  the  proposed  action,  it shall  estimate  the fair value of the
shares,  plus  accrued  interest,  and  shall  offer to pay this  amount to each
dissenter  who  agrees to  accept it in full  satisfaction  of his  demand.  The
subject corporation shall send with its offer a statement of its estimate of the
fair value of the shares, an explanation of how the interest was calculated, and
a statement of the dissenters' right to demand payment pursuant to NRS 92A.480.

         NRS 92A.480 DISSENTER'S ESTIMATE OF FAIR VALUE: NOTIFICATION OF SUBJECT
CORPORATION; DEMAND FOR PAYMENT OF ESTIMATE.

         1. A dissenter may notify the subject corporation in writing of his own
estimate  of the fair value of his shares and the amount of  interest  due,  and
demand  payment of his estimate,  less any payment  pursuant to NRS 92A.460,  or
reject the offer pursuant to NRS 92A.470 and demand payment of the fair value of
his shares and interest due, if he believes that the amount paid pursuant to NRS
92A.460 or offered  pursuant  to NRS  92A.470 is less than the fair value of his
shares or that the interest due is incorrectly calculated.

         2. A  dissenter  waives his right to demand  payment  pursuant  to this
section  unless he  notifies  the subject  corporation  of his demand in writing
within 30 days after the  subject  corporation  made or offered  payment for his
shares.

         NRS 92A.490 LEGAL PROCEEDING TO DETERMINE FAIR VALUE: DUTIES OF SUBJECT
CORPORATION; POWERS OF COURT; RIGHTS OF DISSENTER.

         1. If a demand for payment remains unsettled,  the subject  corporation
shall  commence  a  proceeding  within 60 days  after  receiving  the demand and
petition  the  court to  determine  the fair  value of the  shares  and  accrued
interest. If the subject corporation does not commence the proceeding within the
60-day period,  it shall pay each dissenter  whose demand remains  unsettled the
amount demanded.

         2. A subject  corporation shall commence the proceeding in the district
court of the county  where its  registered  office is  located.  If the  subject
corporation is a foreign entity without a resident agent in the state,  it shall
commence  the  proceeding  in the  county  where  the  registered  office of the
domestic  corporation  merged with or whose shares were  acquired by the foreign
entity was located.

         3. The subject  corporation  shall make all dissenters,  whether or not
residents of Nevada,  whose demands remain unsettled,  parties to the proceeding
as in an action against their shares.  All parties must be served with a copy of
the petition.  Nonresidents  may be served by registered or certified mail or by
publication as provided by law.

         4. The  jurisdiction  of the court in which the proceeding is commenced
under  subsection 2 is plenary and exclusive.  The court may appoint one or more
persons as  appraisers  to receive  evidence  and  recommend  a decision  on the
question of fair value.  The appraisers  have the powers  described in the order
appointing  them, or any amendment  thereto.  The dissenters are entitled to the
same discovery rights as parties in other civil proceedings.



                                       7



         5. Each  dissenter who is made a party to the proceeding is entitled to
a judgment:

         (a) For the amount,  if any, by which the court finds the fair value of
his shares, plus interest,  exceeds the amount paid by the subject  corporation;
or

         (b) For the fair value,  plus accrued interest,  of his  after-acquired
shares for which the subject corporation elected to withhold payment pursuant to
NRS 92A.470.

         NRS 92A.500  LEGAL  PROCEEDING TO DETERMINE  FAIR VALUE:  ASSESSMENT OF
COSTS AND FEES.

         1. The court in a proceeding  to determine  fair value shall  determine
all of the costs of the proceeding,  including the reasonable  compensation  and
expenses of any  appraisers  appointed by the court.  The court shall assess the
costs  against the subject  corporation,  except that the court may assess costs
against all or some of the dissenters,  in amounts the court finds equitable, to
the extent the court finds the dissenters acted arbitrarily,  vexatiously or not
in good faith in demanding payment.

         2. The court may also  assess the fees and  expenses of the counsel and
experts for the respective parties, in amounts the court finds equitable:

         (a) Against the subject  corporation  and in favor of all dissenters if
the court finds the subject  corporation did not  substantially  comply with the
requirements of NRS 92A.300 to 92A.500, inclusive; or

         (b) Against  either the subject  corporation or a dissenter in favor of
any other  party,  if the court finds that the party  against  whom the fees and
expenses are assessed acted  arbitrarily,  vexatiously or not in good faith with
respect to the rights provided by NRS 92A.300 to 92A.500, inclusive.

         3. If the court finds that the  services  of counsel for any  dissenter
were of substantial benefit to other dissenters similarly situated, and that the
fees for those services should not be assessed against the subject  corporation,
the  court  may  award to those  counsel  reasonable  fees to be paid out of the
amounts awarded to the dissenters who were benefited.

         4. In a proceeding  commenced  pursuant to NRS  92A.460,  the court may
assess the costs  against  the  subject  corporation,  except that the court may
assess  costs  against  all or some of the  dissenters  who are  parties  to the
proceeding,  in amounts the court finds equitable, to the extent the court finds
that such parties did not act in good faith in instituting the proceeding.

         5. This section  does not preclude any party in a proceeding  commenced
pursuant to NRS 92A.460 or 92A.490 from applying the  provisions of N.R.C.P.  68
or NRS 17.115.


                                       8


                                  EXHIBIT INDEX




                      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)

   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)

   2.5                   2.1                  Share  Purchase  Agreement  dated  March  6,  2003 by and  among  Assure
                                              Energy,   Inc.,   and  Al  J.   Kroontje,   Trevor  G.  Penford,   Karen
                                              Brawley-Hogg,  Donald J. Brown, Troon Investments,  Ltd., and Quarry Oil
                                              & Gas, Ltd. (9)

   2.6                   2.2                  Amending  Agreement dated March 26, 2003 to March 6, 2003 Share Purchase
                                              Agreement. (9)

   2.7                   2.3                  Amending  Agreement  No. 2 dated  April 11,  2003 to March 6, 2003 Share
                                              Purchase Agreement. (9)

   2.8                   2.1                  Agreement  and Plan of Merger  dated as of  September  9,  2003  between
                                              Assure Energy,  Inc., a Delaware  corporation and Assure Energy, Inc., a
                                              Nevada corporation. (10)

   2.9                   2.2                  Certificate  of Merger as filed  with the  Delaware  Secretary  of State
                                              effective September 11, 2003. (10)

   2.10                  2.3                  Articles  of  Merger  as filed  with the  Nevada  Secretary  of State on
                                              September 11, 2003. (10)

   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)




                                       1





                      SEC Report
                      Reference
 Exhibit No.            Number                                     Description
 -----------            ------                                     -----------
                                        
   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 Assure Energy, Inc., a Delaware corporation.(5)

   3.5                   3.1                  Articles of Incorporation of Assure Energy,  Inc., a Nevada  corporation
                                              as filed with the Nevada Secretary of State on September 3, 2003. (10)

   3.6                   3.2                  By-Laws of Assure Energy, Inc., a Nevada corporation. (10)

   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                   4.3                  Certificate  of   Designation,   Preferences  and  Rights  of  Series  A
                                              Preferred Stock of Registrant as filed on June 7, 2002(8)

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

   5.1                                        Opinion of  Gottbetter  & Partners,  LLP  regarding  the validity of the
                                              securities issued hereby(12)

   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                  10.4                 Convertible  Preferred  Stock  Purchase  Agreement  dated  as of June 1,
                                              2002(8)

   10.5                  10.5                 Employment  Agreement dated as of September 17, 2002 between  Registrant
                                              and Harvey Lalach(8)

   10.6                  10.6                 Stock Option Agreement made as of September 17, 2002 between  Registrant
                                              and Harvey Lalach(8)

   10.7                  10.7                 Stock Option  Agreement  made as of October 1, 2002  between  Registrant
                                              and James Golla(8)




                                       2






                      SEC Report
                      Reference
 Exhibit No.            Number                                     Description
 -----------            ------                                     -----------
                                        
   10.8                  10.8                 Stock Option  Agreement  made as of October 1, 2002  between  Registrant
                                              and Primoris Group Inc. (8)

   10.9                  10.9                 Subordinated Promissory Note dated December 28, 2002(8)

   10.10                 10.10                Subordinated Promissory Note with Warrant dated March 15, 2003(8)

   10.11                                      Management and Operational  Services Agreement dated as of September 15,
                                              2003 between Assure Oil & Gas Corp. and Quarry Oil & Gas Ltd. (12)

   10.12                                      Employment  Agreement  dated as of August  29,  2003  among  Registrant,
                                              Assure Oil & Gas Corp. and Colin Emerson(12)

   10.13                                      Employment  Agreement  dated as of August  29,  2003  among  Registrant,
                                              Assure Oil & Gas Corp. and Tim Chorney(12)

   10.14                                      Employment  Agreement  dated as of August  29,  2003  among  Registrant,
                                              Assure Oil & Gas Corp. and Cameron Bogle(12)

   10.15                                      Stock Option  Agreement made as of September 4, 2003 between  Registrant
                                              and Lisa Komoroczy(12)

   21                    21                   List of subsidiaries of Registrant (11)

   23.1                                       Consent of Independent Auditors(12)

   23.2                                       Consent of Gottbetter & Partners, LLP. (included in Exhibit 5.1)

   99.1                                       Proxy Card(12)




         (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.



         (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.


                                       3




         (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.



         (8) Filed with the  Securities  and  Exchange  Commission  on April 15,
2003, as an exhibit,  numbered as indicated  above, to the  Registrant's  Annual
Report on Form 10KSB for the year ended  December  31,  2002,  which  exhibit is
incorporated herein by reference.



         (9) Filed with the  Securities  and Exchange  Commission  on August 11,
2003, as an exhibit,  numbered as indicated above, to the  Registrant's  Current
Report on Form 8K dated July 28, 2003,  which exhibit is incorporated  herein by
reference.



         (10) Filed with the Securities and Exchange Commission on September 25,
2003, as an exhibit,  numbered as indicated  above to the  Registrant's  Current
Report on Form 8K dated September 11, 2003, which exhibit is incorporated herein
by reference.



         (11) Filed with the Securities  and Exchange  Commission on October 31,
2003,  as an  exhibit,  numbered  as  indicated  above,  to  Amendment  No. 1 to
Registrant's Registration Statement on Form S-4.



         (12) Filed herewith.



                                       4