AMERICAN PETRO-HUNTER INC

             Our focus is currently in locating and assessing potential acquisition targets, including real property, oil and gas rights and oil and gas companies. The Company is currently in negotiations to acquire an accommodation facility that services utility and oil service companies operating in the Eagleford region of Texas. The property is fully utilized and generates approximately $700,000 to $800,000 in pretax annual cash flow. We see the acquisition of “man-camps” accommodation facilities as an expanding, in demand, asset especially in the very active exploration and development sections of the country, often in remote, undeveloped areas with little or no services.

             We have operated as an oil and natural gas exploration and production (E&P) company. On March 5, 2014, we issued a press release discussing our plans to expand our business to include the acquisition and operation of workforce accommodation facilities servicing the energy industry, in addition to our continued exploration, development and production of crude oil and natural gas properties. On March 10, 2014, we sold all of our rights in and to certain properties located in Payne and Lincoln Counties in Oklahoma, which included all of our producing wells.

             During 2013, we had rights in six producing wells in Oklahoma arising out of our 2010 operating agreement with Bay Petroleum Corp. (“Bay”). One of these wells began production in mid-2010, an additional two wells, including one horizontal well, began production in 2011, and an additional three wells, including two horizontal wells, began production in 2012. Collectively, daily production from the Oklahoma wells averaged 5.48 barrels per day in 2013 from cumulative production from all wells of 12,005 barrels.

The ASYM agreement contains miscellaneous debt covenant requirements. As of December 31, 2012 and December 31, 2013, the Company was not in compliance with those covenants. On March 28, 2013, ASYM granted the Company a waiver of those covenants through March 31, 2013 in return for a 3% overriding royalty interest in all existing and future properties and a $25,000 waiver fee. The $25,000 waiver fee was not paid but rather recorded as a tranche loan under the agreement. In accordance with the terms of the financing agreement the Company granted the issuance of warrants to purchase 4,662 shares of common stock in connection with the funding advances and recorded financing costs of $240. The warrants were valued utilizing the Black-Sholes Model and the following terms: i) five-year life ii) exercise price of $0.01 iii) volatility of 120.5% iv) risk free rate of 0.72% and v) share price on the date of grant of $0.055. As of June 30, 2013, the Company was still not in compliance with those covenants. On September 5, 2013, ASYM granted the Company a waiver of those covenants through September 11, 2013 in return for a $25,000 waiver fee. The $25,000 waiver fee was not paid but rather recorded as a tranche loan under the agreement. In July of 2013, the Company received an additional tranche in the amount of $60,766. During the quarter ended September 30, 2013, In accordance with the terms of the financing agreement the Company granted the issuance of warrants to purchase 2,158,994 shares of common stock in connection with the funding advances and valued the warrants at $21,590. The warrants were valued utilizing the Black-Sholes Model and the following terms: i) five-year life ii) exercise price of $0.01 iii) volatility of 203.77% iv) risk free rate of 1.39% and v) share price on the date of grant of $0.01. As of September 30, 2013, the Company was still not in compliance with those covenants. On November 18, 2013, ASYM granted an extension of the waiver of those covenants for all periods prior to November 18, 2013 in return for $25,000 waiver fee in the form of an additional tranche loan under the agreement. During the quarter ended December 31, 2013, In accordance with the terms of the financing agreement the Company granted the issuance of warrants to purchase 2,056,129 shares of common stock in connection with the funding advances and valued the warrants at $25,290. The warrants were valued utilizing the Black-Sholes Model and the following terms: i) five-year life ii) exercise price of $0.01 iii) volatility of 207.46% iv) risk free rate of 1.41% and v) share price on the date of grant of $0.0125. As of the date of these financial statements, the Company is in default with respect to the ASYM note.

Effective March 4, 2013, in connection with the assignment of $140,000 of outstanding convertible debt of the Company to Magna Group, LLC (“Magna”), the Company issued to Magna a Twelve Percent (12%) Convertible Note, which matured on September 4, 2013. The Note provides that Magna, at any time, and the Company, on the maturity date, may convert any remaining outstanding principal balance and accrued interest under the Note into shares of common stock of the Company. The conversion price of the Note shall be equal to a forty five percent (45%) discount from the lowest trading price of the Company’s common stock in the five days prior to the day Magna requests conversion. An additional eight percent (8%) discount will be applied if the Company’s common stock is chilled for deposit at DTC and/or becomes chilled at any point while the Note is outstanding. In no event will the conversion price be less than $0.00004 per share. If at any time the Company issues any stock or grants options or warrants at a price per share less than the conversion price, then the conversion price will be reduced to such lesser amount. The Company may prepay the note at any time, upon three business days’ written notice, at a price equal to one hundred and fifty percent (150%) of the outstanding principal balance of the Note, plus accrued interest. This note contains a beneficial conversion feature that was calculated at $140,000 and a discount was recorded. The discount will be amortized over the six-month of the loan and adjusted for any conversions to common stock. During the year ended December 31, 2013, $140,000 was amortized into interest expense in relation to the discount and the discount is $0 as of December 31, 2013. In March of 2013, the company issued 1,305,034 shares of common stock in relation to a conversion of $40,000 of the Note. In April of 2013, the Company entered into an exchange agreement with Magna which changed the conversion price to $.008. During the three months ended, June 30, 2013, the company issued 11,283,784 shares of common stock in relation to a conversion of $90,000 of the note. In August of 2013, Magna converted an additional $10,000 of the note into 1,250,000 shares of common stock. In December of 2013, Magna converted an additional $1,560 in accrued interest related to this note into 195,000 shares of common stock. As of December 31, 2013, there is no balance due on this note.

In August of 2013, an additional $65,000 of outstanding convertible debt of the Company was assigned to Magna. The Company issued to Magna a Twelve Percent (12%) Convertible Note, which matures on August 20, 2014. The Note provides that Magna, at any time, and the Company, on the maturity date, may convert any remaining outstanding principal balance and accrued interest under the Note into shares of common stock of the Company. The conversion price of the Note shall be equal to $0.005 on the day of conversion request. An additional eight percent (8%) discount will be applied if the Company’s common stock is chilled for deposit at DTC and/or becomes chilled at any point while the Note is outstanding. In no event will the conversion price be less than $0.00004 per share. If at any time the Company issues any stock or grants options or warrants at a price per share less than the conversion price, then the conversion price will be reduced to such lesser amount. The Company may prepay the note at any time, upon three business days’ written notice, at a price equal to one hundred and fifty percent (150%) of the outstanding principal balance of the Note, plus accrued interest. This note contains a beneficial conversion feature that was calculated at $39,806 and a discount was recorded. The discount will be amortized over the one year term of the loan and adjusted for any conversions to common stock. During the year ended December 31, 2013, $39,806 was amortized into interest expense in relation to the discount and the discount is $0 as of December 31, 2013. In September of 2013, the company issued 1,500,000 shares of common stock in relation to a conversion of $7,500 of the note. In October of 2013, the company issued 3,000,000 shares of common stock in relation to a conversion of $15,000 of the note. In November of 2013, the company issued 4,500,000 shares of common stock in relation to a conversion of $22,500 of the note. In December of 2013, the company issued 4,178,764 shares of common stock in relation to a conversion of $20,000 of the note plus accrued interest of $894. As of December 31, 2013, there is no balance due on this note.