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


                                  FORM 10-KSB/A

                                 Amendment No.1

                   ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF

             THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year
                             ended December 31, 2005

                        Commission File Number 000-30-543

                               Avenue Group, Inc.


                 Incorporated in Delaware IRS ID No. 98-0200077


             405 Lexington Avenue, 26th Floor, New York, N.Y. 10174

                     Issuer's Telephone No.: (888) 612-4188

           SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

      Title of each class             Name of each exchange on which registered
              N/A                                    N/A

           SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

                    Common Stock, par value $.0002 per share

                                (Title of Class)

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements the past 90 days. Yes [X] No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB.

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act):  Yes [ ]  No  [X]

Issuer's revenues for its most recent fiscal year was $$34,886

The aggregate market value of voting and non-voting common equity held by
non-affiliates based on the last sale price on the over-the-counter market of
the Registrant's common stock ("common stock") as of April 17, 2006, was
approximately $2,340,000. There were approximately 84,000,000 outstanding shares
of common stock held by non affiliates and 246,490,986 total outstanding shares
of common stock as of April 17, 2006

Documents incorporated by Reference: Items 9, 10, 11, 12, and 13 hereof are
incorporated by reference from Registrant's 10K-SB Statement as Amended to be
filed with the SEC by May 1, 2006

<PAGE>

                                     PART I

ITEM 1. BUSINESS

THIS ANNUAL REPORT ON FORM 10-KSB AND THE DOCUMENTS INCORPORATED HEREIN BY
REFERENCE CONTAIN FORWARD-LOOKING STATEMENTS BASED ON EXPECTATIONS, ESTIMATES
AND PROJECTIONS AS OF THE DATE OF THIS FILING. FOR FURTHER INFORMATION RELATING
TO FORWARD-LOOKING STATEMENTS, PLEASE REFER TO THE MANAGEMENT DISCUSSION AND
ANALYSIS SECTION OF THIS 10-KSB.

GENERAL

Avenue  Group,  Inc. was  incorporated  in Delaware on February 2, 1999.  We are
engaged in oil and gas  exploration  and  development  through our  wholly-owned
operating  subsidiary,  Avenue Energy,  Inc. (`Avenue Energy') We also own as of
December  31, 2005,  4.9% of the  outstanding  common  stock of ROO Group,  Inc.
(RGRP.OB),  an e-commerce and digital media  business,  4.75% of the outstanding
common stock of Langley Park  Investment  Trust  (LPI.L) and 50.1% of the common
stock of  Stampville.com,  Inc., an inactive  business.  We have a  wholly-owned
Australian subsidiary, I.T. Technology Pty. Ltd.

From 1999 to November 2002 we were known as I.T. Technology Inc. and our primary
business was in the technology  sector via our  investments in Videodome Inc and
Stampville.com  Inc.  Videodome  has  since  been  sold to Roo  Group  Inc.  and
Stampville.com Inc. operations are currently inactive.

In April 2002, our common stock commenced trading on the NASDAQ OTC Bulletin
Board under the symbol ITTE. In October 2002 we were listed on the third market
segment of the Frankfurt Stock Exchange under the symbol ITQ.

Due to changes in the marketplace and the economic environment, during 2002 we
determined to broaden our strategic focus and pursue a broader range of
potential growth and investment strategies. In connection with this our Board of
Directors approved a proposal to change the Company's name to "Avenue Group,
Inc." Our shareholders approved the name change at our 2002 Annual Meeting of
Stockholders, which was held on December 24, 2002 and the name change became
effective on January 21, 2003. We currently trade on the OTC Bulletin Board
under the symbol AVNU.

As part of our shift to a broader strategic focus, during the second half of
2002 we began to consider acquisitions of and investments in, oil and gas
exploration and production entities. In November 2002, we formed Avenue Energy,
Inc. to pursue this line of business. Avenue Energy entered into agreements with
the Sayer Group, experienced in oil and gas operations in Turkey. Through these
agreements, we initially acquired a 50% interest in the Karakilise license and
other exploration and production licenses and leases in Turkey. These leases and
licenses were granted to Avenue Energy pursuant to an option to acquire
interests in up to 31 other oil and gas properties in Turkey as well as an
option to invest in future exploration and production licenses acquired by the
Sayer Group in Turkey, provided we remain a rights holder in an exploration or
production lease with the Sayer Group. Subsequently we have reduced our existing
and ongoing obligations to fund activities at the Karakilise license and its
participation interests in this license from 50% to 10.5%. Other leases have
expired, and we now have, in addition to the Karakilise license, a 50%
participation interest in the North Rubai prospect in Turkey. We are considering
acquisition of interests in other oil and gas prospects. Avenue Energy is
discussed in detail in the "Business" section of this Form 10-KSB.

In February 2005, we had a change in the Board of Directors and Management.
Norman Singer, a 35 year veteran of the Oil and Gas business, Ambassador
Uri-Bar-Ner, the former Israel Ambassador to Turkey and Shaya Boymelgreen, a
prominent real estate developer and a large shareholder of Avenue Group joined
our Board of Directors. In February 2005, Jonathan Herzog, an EVP and Board
Member and Yam-Hin (Jim) Tan, our CFO and Board Member in June 2005, resigned
from all positions in the company.

The principal executive offices of the Company are located at 405 Lexington
Avenue 26th Floor New York, NY 10174 and the telephone number is 888-612-4188
(facsimile 347-952-3683). The Company's web site is located at
www.avenuegroupinc.com .

                                  RISK FACTORS

AN INVESTMENT IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD
CONSIDER CAREFULLY THE FOLLOWING INFORMATION ABOUT THESE RISKS BEFORE BUYING
SHARES OF OUR COMMON STOCK. THE RISKS DESCRIBED BELOW ARE NOT THE ONLY ONES
FACING US. ADDITIONAL RISKS MAY IMPAIR OUR BUSINESS OPERATIONS. IF ANY OF THE
FOLLOWING RISKS OCCUR, OUR BUSINESS, RESULTS OF OPERATIONS OR FINANCIAL
CONDITION COULD BE ADVERSELY AFFECTED. IN THAT CASE, THE TRADING PRICE OF OUR
COMMON STOCK COULD DECLINE, AND YOU MAY LOSE ALL OR PART OF YOUR INVESTMENT. YOU
SHOULD ALSO REFER TO THE OTHER INFORMATION CONTAINED IN THIS 10-KSB, INCLUDING
OUR FINANCIAL STATEMENTS AND THE NOTES TO THOSE STATEMENTS.

WE HAVE A LIMITED OPERATING HISTORY AND THEREFORE CANNOT ENSURE THE SUCCESSFUL
OPERATION OF OUR BUSINESSES OR THE EXECUTION OF OUR BUSINESS PLANS.

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<PAGE>

Although we were formed in 1999, we have a limited operating history. Our
businesses are still in the formative state and therefore have never operated
profitably and we do not foresee our current operations operating profitably in
the foreseeable future.

We currently intend to concentrate most of our financial resources for the
foreseeable future in the acquisition of rights and interests in oil and gas
exploration and production, as well as the ongoing working capital requirements
of our businesses and operations. To date, only one of our oil and gas
properties, the Karakilise-1 well, has generated any oil production revenues and
these revenues have, to date, been utilized entirely to cover part of the costs
of operating the well and infra-structure improvements at the Karakilise well.
Our ability to generate operating profits from oil and gas operations will be
contingent on the successful exploration and drilling of wells in which we have
an interest. There can be no assurances that the participation interests we have
in the Karakilise license and other exploration licenses and leases in Turkey
will result in any productive wells being drilled and, if productive, as to the
actual amounts and timing of revenues we will receive with respect thereto. We
will need significant additional capital in the near future to fund the further
exploration activities and the further development of our oil and gas leases and
licenses in the Republic of Turkey and elsewhere. Our failure to acquire this
capital may also cause the loss of some or all of our rights with respect to oil
and gas leases where we have interests in Turkey, as well as the curtailment of
our corporate activities which would have a material adverse effect on our
business, operations and prospects.

BECAUSE THERE CAN BE NO GUARANTEE THAT FUTURE FINANCING WILL BE AVAILABLE TO US,
WE CANNOT ASSURE THAT WE WILL BE ABLE TO OBTAIN THE CAPITAL NECESSARY TO FULLY
IMPLEMENT OUR PLAN OF OPERATIONS.

We have limited resources and we are currently dependent on debt or equity
financing to finance our operations, including the financial commitments in
connection with the further development of various oil and gas interests in
Turkey; the funding of the acquisition of additional oil and gas properties and
the ongoing working capital requirements of our businesses and operations. We
will need significant amounts of additional capital in the near future to
provide our share of the funding necessary to maintain our interests in the
upcoming drilling activities in Turkey and over the longer term to implement the
exploration and drilling programs across all our leases and licenses. We will be
required to raise funds from additional debt or equity offerings and/or increase
the currently limited revenues from our existing operations in order to maintain
our participation interests in the other licenses and leases where we have
rights in Turkey and to meet our working capital requirements engage in
exploration activities in the Republic of Turkey and elsewhere.


IF WE ISSUE EQUITY SECURITIES DILUTION MAY OCCUR.

In order to obtain the financing necessary to satisfy our commitments in Turkey
and elsewhere to implement our business plan, additional funds may be raised
through the issuance of equity securities or if we otherwise issue our equity
securities, our existing stockholders may experience significant dilution; and
the new securities may have rights, preferences or privileges senior to those of
the rights of the holders of our common stock.

CURRENTLY OUR BOARD OF DIRECTORS CONSISTS PRIMARILY OF MEMBERS OF MANAGEMENT AND
CONSULTANTS; CONSEQUENTLY, THE SHAREHOLDERS IN THE COMPANY MAY NOT HAVE
MEANINGFUL OVERSIGHT OVER THE MANAGEMENT OF OUR BUSINESS.

Currently, our Board of Directors consists of four members, two of whom are
members of management. As a result of the foregoing, our Board also serves as
the audit committee to oversee our financial reports and controls. Accordingly,
we have no separate audit or other committees of the Board. Although we hope to
be able to appoint additional independent outside directors to our Board in the
future, as a result of the present corporate and regulatory environment, it has
become increasingly difficult for small public companies such as ours to attract
qualified independent outside directors. Consequently, we cannot state when, if
ever we will be able to add additional qualified outside directors to our Board
of Directors. In addition, pursuant to recently enacted rules, NASDAQ and other
national stock exchanges now require that a company wishing to be eligible for
trading on a national market have one or more independent directors on its Board
to serve on an audit committee.

CURRENTLY OUR BUSINESS AND OPERATIONS ARE TOTALLY DEPENDENT ON MANAGEMENT, THE
LOSS OF ONE OR MORE MEMBERS OF WHICH MAY HAVE A MATERIAL ADVERSE AFFECT ON US.

We rely on management to make all of our business decisions. We would be
seriously affected if Levi Mochkin or other key personnel became unable to
perform for any reason. We do not have key man or other insurance to protect
against the death or disability of our key executives.

WE FACE SIGNIFICANT COMPETITION FROM BOTH ESTABLISHED AND POTENTIAL COMPETITORS
IN OUR BUSINESSES.

Avenue Energy faces intense competition from a number of parties, many of whom
have far greater resources and are devoting more time and resources to the
exploration and exploitation of oil and gas. There is competition within the
industry and also with other industries in supplying the energy and fuel needs
of industry and individual customers. Avenue Energy competes with other firms in
the sale or purchase of various goods or services in many national and
international markets.

                                        3
<PAGE>

THERE ARE RISKS ASSOCIATED WITH OUR INTERNATIONAL OPERATIONS AND EXPANSION.

A part of our business strategy is to acquire and develop oil and gas leases and
operations in foreign countries, particularly Turkey. As a result of this
strategy, we may experience difficulty in managing international operations as a
result of technical problems, distance, language and cultural differences. There
are significant risks inherent in doing business on an international level, such
as, political and economic instability, civil unrest, crime, unexpected changes
in regulatory requirements, trade barriers, difficulties in staffing and
managing foreign operations, fluctuations in foreign currency exchange rates,
longer payment cycles, problems in collecting amounts due, difficulty in
enforcing contracts, seasonal fluctuation in business activity and potential
adverse tax consequences, laws and regulations, such as forced divestiture of
assets; restrictions on production, imports and exports; war or other
international conflicts; civil unrest and local security concerns that threaten
the safe operation of company facilities; price controls; tax increases and
retroactive tax claims; expropriation of property; cancellation of contract
rights; and environmental regulations. Most of these risks are uninsurable. Both
the likelihood of such occurrences and their overall effect on us will vary
greatly from country to country and are not predictable. The rights acquired
from the Sayer Group in Turkey include leases located near the borders of Iraq
and Syria and given the current situation in the Middle East, may be subject to
increased instability and risks. If any of such risks materialize we may have
little or no ability to manage them or avert any consequences thereon and our
business may suffer as a result.

INDUSTRY, ECONOMIC FACTS AND MARKET FORCES MAY ADVERSELY AFFECT OIL AND GAS
EXPLORATION AND DEVELOPMENT, OPERATIONS AND EARNINGS.

The development, operations and earnings of our oil and gas exploration and
development activities may be adversely affected by local, regional and global
events or conditions that affect supply and demand for oil and gas products.
These events or conditions are generally not predictable and include, among
other things, general economic growth rates and the occurrence of economic
recessions; the development of new supply sources; adherence by countries to
OPEC quotas; supply disruptions; weather, including seasonal patterns that
affect energy demand and severe weather events that can disrupt operations;
technological advances, including advances in exploration, production, refining
and petrochemical manufacturing technology and advances in technology relating
to energy usage; changes in demographics, including population growth rates and
consumer preferences; and the competitiveness of alternative energy sources or
product substitutes. In the past, crude, natural gas, petroleum product and
chemical prices have fluctuated widely in response to changing market forces.

WE HAVE NOT ESTABLISHED ANY PROVEN RESERVE ESTIMATES.

We have not yet estimated the extent of any proven oil and gas reserves or the
present value of the estimated future revenues attributable to such reserves as
to the Turkish leases and licenses. At such time, if ever, that we make such an
estimate there can be no assurance that we will realize the amounts estimated to
be obtainable. Likewise, until such time, if ever, that we acquire additional
leases we are unable to estimate any future revenues attributable to any
reserves associated with the properties subject to such licenses or leases. As a
result, our actual revenues, if any, may be substantially different from any
estimates that we use in calculating the reserve values. Many other factors over
which we have little or no control might lower or preclude recovery from any
property which is subject to a lease or an interest in a lease owned by us.
These factors include acts of God, income tax laws, oil, gas and mineral prices,
and the development of alternative energy sources. In addition, there can be no
assurance that we will commence exploration activities or, if commenced, that we
will be successful in finding new reserves or, if found, that production in
quantities large enough to make the operation profitable will be possible.

OUR OIL AND GAS EXPLORATION AND DEVELOPMENT OPERATIONS AND EARNINGS DEPEND ON
DISCOVERY OF ECONOMICALLY RECOVERABLE OIL AND GAS RESERVES.

Our success will in the near term depend on our ability to acquire oil and gas
reserves that are economically recoverable. It cannot be assured that the
Karakilise-1 well will ever generate sufficient revenues to provide us with cash
for our other activities or that the other wells which we may develop in Turkey
or elsewhere will result in the discovery of oil and gas at such locations or,
if found, that the extraction of oil and gas from these locations will be
commercially feasible. No proven reserves have been determined at any of the oil
and gas licenses or leases where we hold interests. Unless we successfully
explore, develop or acquire properties containing economically extractable
reserves, our economic viability will be adversely affected.

NONE OF OUR MANAGEMENT HAS TECHNICAL TRAINING OR EXPERTISE IN PETROLEUM
ENGINEERING OR GEOLOGY.

Petroleum engineering and geology are fundamental tools in exploring for and
developing oil and gas property. Numerous petroleum engineers and geologists
provide consultation to the industry, and we utilize the services of such
consultants as we deem appropriate. Nevertheless, by not having such expertise
in our management, we are at risk of failing to recognize the need for such
consultation until after we have made one or more costly erroneous decisions as
a result of not having such expertise. We are also at risk of failing to
adequately evaluate the expertise of consultants whom we do engage, and thus
making costly erroneous decisions based on advice from inappropriate
consultants. The errors described above could have an impact so large as to
jeopardize our ability to continue as a going concern.

THE FAILURE TO FULLY IDENTIFY POTENTIAL PROBLEMS RELATING TO THE ACQUIRED OIL
AND GAS RIGHTS OR INTERESTS OR TO PROPERLY ESTIMATE THE VALUE OF SUCH RIGHTS OR
INTERESTS MAY HAVE A MATERIAL ADVERSE IMPACT ON US.

                                        4
<PAGE>

Since we do not own any other oil and gas rights or properties beyond our
interests in oil and gas leases and licenses and two wells in Turkey which we
acquired from the Sayer Group, our current interests as well as any anticipated
future growth (if any) other than through the exploitation of these rights and
interests will be from acquisitions from third parties. Although Avenue Energy
performed a review of the current acquisitions and anticipates performing a
review with respect to future acquisitions, such reviews are inherently
incomplete. It was not feasible and may not be feasible in the future to review
in depth every individual property, right and interest involved in each
acquisition. In addition, even a detailed review of records and properties may
not necessarily reveal existing or potential problems, nor will it permit a
buyer to become sufficiently familiar with the properties to assess fully their
deficiencies and potential. Inspections have not been performed on every license
and lease with respect to the current acquisitions and environmental or other
problems are not necessarily observable even when an inspection is undertaken.
Even when problems are identified, Avenue Energy may be required to assume
certain environmental and other risks and liabilities in connection with
acquired properties. There are numerous uncertainties inherent in estimating
quantities of proved or probable oil and gas reserves and actual future
production rates and associated costs with respect to acquired properties, and
actual results may vary substantially from those assumed in the estimates. The
failure of Avenue Energy to generate substantial revenues from the Karakilise-2
well or one or more of the initial wells drilled thereafter in the current
program may materially and adversely affect Avenue Energy's ability to proceed
with its further plans for exploration and drilling and may have a materially
adverse effect on our business and prospects, as a whole.

OPERATING HAZARDS AND UNINSURED RISKS WITH RESPECT TO THE ACQUIRED OIL AND GAS
RIGHTS OR INTERESTS MAY HAVE MATERIAL ADVERSE EFFECTS ON OUR OPERATIONS.

Our current and future acquisitions, if any, of oil and gas rights or properties
are subject to all of the risks normally incident to the exploration for and the
development and production of oil and gas, including blowouts, cratering,
uncontrollable flows of oil, gas or well fluids, fires, pollution and other
environmental and operating risks. These hazards could result in substantial
losses due to injury or loss of life, severe damage to or destruction of
property and equipment, pollution and other environmental damage and suspension
of operations. In addition, offshore operations are subject to a variety of
operating risks peculiar to the marine environment, such as hurricanes or other
adverse weather conditions, more extensive governmental regulation and
interruption or termination of operations by governmental authorities based on
environmental or other considerations. Neither we nor the owners of the current
acquisitions are insured against these risks. The occurrence of a significant
event against any of the oil and gas properties where we have an interest could
have a material adverse affect on the owner/operator of the properties and could
materially affect the continued operation of the affected owner/operator and
could expose Avenue Energy and/or us to liability, as well.

THE COMMON STOCK MAY BE AFFECTED BY LIMITED TRADING VOLUME AND ITS MARKET PRICE
MAY FLUCTUATE SIGNIFICANTLY.

Of the 246,490,986 shares of our common stock issued and outstanding as of April
17, 2006 only approximately 84,000,000 were held by non-affiliates and freely
tradable in the public marketplace. We and/or selling shareholders from recent
private placements may file a registration statement for the offer and sale of
additional shares without the assistance of an underwriter. There can be no
assurance that there will be a market for these additional shares. In addition,
the immediate availability of a significant number of additional shares in the
public marketplace through a public offering of our shares or the influx of Rule
144 shares from various parties who have acquired our shares in private
placements more than a year ago, may seriously and adversely affect the trading
price and liquidity of our shares. The influx of additional shares of our common
stock into the marketplace could also adversely affect an investor's ability to
sell the common stock in short time periods, or possibly at all. The common
stock has experienced, and is likely to experience in the future, significant
price and volume fluctuations, which could adversely affect the market price of
the common stock without regard to our operating performance. In addition, we
believe that factors such as fluctuations in our financial results or prospects
and changes in the overall economy, the oil and gas exploration, drilling and
production segment of the market or the condition of the financial markets could
cause the price of the common stock to fluctuate substantially.

OUR COMMON STOCK IS DEEMED TO BE A "PENNY STOCK," WHICH MAY MAKE IT MORE
DIFFICULT FOR INVESTORS TO SELL THEIR SHARES.

Our common stock is deemed to be "penny stock" as that term is defined and
promulgated under the Securities Exchange Act of 1934. These requirements may
reduce the potential market for the common stock by reducing the number of
potential investors. For example many mutual funds and other institutional
investors are prohibited from investing in "penny stocks." This may make it more
difficult for investors of the common stock to sell shares to third parties or
to otherwise dispose of them. This could cause our stock price to decline. Penny
stocks are stock with a price of less than $5.00 per share.

Broker/dealers dealing in penny stocks are required to provide potential
investors with a document disclosing the risks of penny stocks. Moreover,
broker/dealers are required to determine whether an investment in a penny stock
is a suitable investment for a prospective investor.

THE OUTSTANDING SHARES OF COMMON STOCK HELD BY AFFILIATES, WHICH MAY BECOME
ELIGIBLE FOR SALE, SUBJECT TO VOLUME LIMITATIONS, COULD ADVERSELY AFFECT THE
PRICE OF OUR COMMON STOCK.

As of April 17, 2006, 246,490,986 shares of our common stock were issued and
outstanding. Of such amount approximately 84,000,000 of our shares, are held by
non-affiliates and are freely tradable in the public marketplace. In September
2006, 48,458,149 shares of common stock held by Langley Park Investment Trust
PLC will be released from a lock-up agreement with us and the holder may seek to
have such shares traded on the open market at that time. There is also an
outstanding option to purchase up to 50,000,000 shares of our common stock at
$.04 per share, which expires in April 2008. In addition, there are outstanding
options and other vested commitments to issue in excess of an additional
10,950,000 shares of common stock. Given the limited market for the common
stock, there is no guarantee that a public market will exist for all or even a
significant portion of our outstanding restricted shares and the shares issuable
upon the exercise of options or other commitments and the market price of the
common stock could drop dramatically due to the sales of any significant amount
of these shares or the perception that such sales could occur.

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<PAGE>

The public float as a percentage of the outstanding shares remains small, which
may affect price and liquidity in the common stock for the foreseeable future.
These factors could also make it more difficult to raise funds through future
offerings of common stock and may seriously impact the market price for the
common stock.

A SIGNIFICANT PORTION OF OUR CURRENT ASSETS ARE IN HIGHLY VOLATILE EQUITY
SECURITIES WHICH ARE THINLY TRADED

We currently hold 140,109 shares of Common Stock of ROO Media, Inc which is
traded on the NASDAQ-OTCBB and 3,757,269 shares of Langley Park Investment Trust
PLC. which was listed on the London Stock Exchange in September 2004. Both of
these securities are highly speculative, have share prices which are very
volatile and have a high degree of risks. ROO is currently generating
significant losses and has stated that it will be dependent on additional
financing during the next twelve months. Langley's assets consist almost
entirely of micro cap securities of companies including ours and companies
similar to us. There are no assurances that any of these companies will be
successful. We also recorded an impairment loss relating to the Langley shares
of $10,003,318 for the year ended December 31, 2004. Much of our working capital
during 2005 has been generated through the sale of Langley and ROO shares. If we
are unable to continue to generate cash through the sale of either or both of
these securities our ability to operate may be materially and adversely
affected.

OUR ARTICLES OF INCORPORATION, BYLAWS AND DELAWARE LAW CONTAIN PROVISIONS THAT
COULD DELAY OR PREVENT A CHANGE IN CONTROL AND COULD ALSO LIMIT THE MARKET PRICE
OF YOUR STOCK.

Our Certificate of Incorporation and bylaws contain provisions that could delay
or prevent a change in control. These provisions could limit the price that
investors might be willing to pay in the future for shares of our common stock.

OUR SHAREHOLDERS MAY HAVE DIFFICULTY IN RECOVERING MONETARY DAMAGES FROM
DIRECTORS.

Our Certificate of Incorporation contains a provision that eliminates personal
liability of our directors for monetary damages which would be paid to us and
our shareholders for certain breaches of fiduciary duties. As a result of this
provision, our shareholders may be unable to recover monetary damages against
our directors for their actions that constitute breaches of fiduciary duties,
negligence or gross negligence.


THE COMPANY

Avenue  Group,  Inc. was  incorporated  in Delaware on February 2, 1999.  We are
engaged in oil and gas  exploration  and  development  through our  wholly-owned
operating  subsidiary,  Avenue Energy, Inc. We also own as of December 31, 2005,
4.9% of the outstanding common stock of ROO Group, Inc. (RGRP.OB), an e-commerce
and digital media  business,  4.75% of the  outstanding  common stock of Langley
Park Investment  Trust (LPI.L) and 50.1% of the common stock of  Stampville.com,
Inc., an inactive business. We have a wholly-owned  Australian subsidiary,  I.T.
Technology Pty. Ltd.

We have limited sales and our activities to date have been principally devoted
to raising capital, establishing and advancing operations at Avenue Energy,
which commenced oil production in September 2003 In July 2005, we relocated our
principal executive offices to New York, though we still maintain a
representative office in Ankara, Turkey.

From 1999 to November 2002 we were known as I.T. Technology Inc and our primary
business was in the technology sector via our investments in VideoDome Inc and
Stampville.com Inc. VideoDome has since been sold to Roo Group Inc. and
Stampville.com Inc operations are currently inactive.

In April 2002, our common stock commenced trading on the NASDAQ OTC Bulletin
Board under the symbol ITTE. In October 2002 we were listed on the third market
segment of the Frankfurt Stock Exchange under the symbol ITQ.

Due to changes in the marketplace and the economic environment, during 2002 we
determined to broaden our strategic focus and pursue a broader range of
potential growth and investment strategies. In connection with this our Board of
Directors approved a proposal to change the Company's name to "Avenue Group,
Inc." Our shareholders approved the name change at our 2002 Annual Meeting of
Stockholders, which was held on December 24, 2002 and the name change became
effective on January 21, 2003. We currently trade on the OTC Bulleting Board
under the symbol AVNU.

As part of our shift to a broader strategic focus, in November 2002 we began to
pursue acquisitions of and investments in oil and gas exploration and production
property.

We discuss our specific oil and gas properties in Item 2, Property, of this
report.

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<PAGE>

We anticipate requiring significant additional capital in order to fund Avenue
Energy's anticipated oil and gas related activities in the Republic of Turkey,
the acquisition and exploration of oil and gas leases and licenses located
elsewhere and to fund corporate overhead expenditures during 2006. In order to
meet these capital requirements we are currently considering a number of
strategies, including seeking additional financing through the sale of debt and
equity securities. There can be no assurance that sufficient financing will be
available to us, or if available, that it will be available on commercially
reasonable terms. If we are not successful in sourcing additional capital we may
have to significantly curtail our oil and gas activities and reduce corporate
activities, all of which would have a material adverse effect on our business
and operations in 2006.

We review the status of our oil and gas property periodically to determine if an
impairment of our property is necessary. We follow the guidance in paragraphs 28
and 31 of FASB Statement 19, Financial Accounting and Reporting by Oil and Gas
Producing Companies, requiring periodic assessments for impairment of unproved
properties and exploratory well cost when reserves are not found. In the
impairment test we compare the expected undiscounted future net revenue on a
field-by-field basis with the related net capitalized cost at the end of each
period. Should the net capitalized cost exceed the undiscounted future net
revenue of a property, we write down the cost of the property to fair value,
which we determine using estimates of discounted future net revenue. We provide
an impairment allowance on a property-by-property basis when we determine that
unproved property will not be developed.

In 2004, we recorded an impairment loss of $2,128,126 in connection with
licenses that had either lapsed or been relinquished. The impairment loss
includes a charge of $1,879,794 in connection with our Tosun License (acquired
in 2002 under the Farmin Participation Agreement with the Sayer Group) in Turkey
following the expiration of a previous extension granted in connection with the
license as well as an impairment charge of $248,332 following a reallocation of
our investment in oil leases to account for the retroactive reduction in our
participation interest in the Karakilise license to 15%. In 2005, we recorded an
additional impairment loss of $1,563,343 as a result of our review of our
remaining property in Turkey.

Separation Agreement

On February 7, 2005, Jonathan Herzog, our former Executive Vice President and a
member of our Board of Directors agreed to resign from all positions he held
with us and our subsidiaries. In connection with his resignation, we entered
into a Separation Agreement and General Release with Mr. Herzog pursuant to
which we agreed to pay Herzog $92,250 in cash to cover certain deferred
compensation owed to Herzog and to satisfy the parties' respective obligations
under his employment agreement with us. In addition to the cash payment, Herzog
caused to be delivered to us a total of 10,000,000 shares of our common stock
and paid us $125,000 in exchange for the delivery by us to Herzog of 12,500,000
shares of the common stock of ROO owned by us and a cash payment of $125,000.

Appointment of New Directors

Effective February 7, 2005, following the resignation of Herzog from our Board
of Directors, we amended our Bylaws to increase the authorized number of
directors to four members and the directors, Levi Mochkin and Yam-Hin (Jim) Tan,
appointed Norman J. Singer and Uri A. Bar Ner to fill the vacancies in the
Board.. Subsequently, effective February 17, 2005, we amended our Bylaws to
increase the authorized number of directors to five members and our Board of
Directors elected Shaya Boymelgreen to the Board. On July 11, 2005, Mr. Yam-Hin
Tan, who had been serving as the Chief Financial Officer and a Director,
resigned from such positions.

In connection with the appointment of Mr. Singer to our Board, we entered into a
Directorship and Consulting Agreement dated February 7, 2005 (the "Singer
Agreement") with Mr. Singer, pursuant to which Mr. Singer agreed to serve as one
of our directors. As compensation for his services as a director, Mr. Singer
receives from us $2,500 per month, payable quarterly in advance, plus an option
to purchase up to 1,200,000 shares of our common stock at $0.06 per share. In
addition, pursuant to the Singer Agreement, Mr. Singer has agreed to provide
consulting services to us on a full-time basis and for an initial term of six
months in connection with the promotion and development of our oil and gas
exploration operations. As compensation for his consulting services to us, Mr.
Singer receives $10,000 per month payable each month in advance and receives
options to purchase up to 600,000 shares of our common stock at $0.06 per share.
The options granted to Mr. Singer for his consulting services vest at the rate
of 100,000 shares on the first day of each calendar month commencing on February
1, 2005 and are for a term of five years commencing as of the date each block of
shares vests.

In connection with the appointment of Mr. Bar Ner to our Board, we entered into
a Directorship and Consulting Agreement dated February 7, 2005 (the "DFI
Agreement") with Development for Israel, LLC, a New York limited liability
company ("DFI"), pursuant to which DFI agreed to make available to us the
services of DFI's founder, Mr. Bar Ner, to serve as one of our directors. As
compensation for the services of Mr. Bar Ner as a director, DFI receives $2,500
per month, payable quarterly in advance, plus 100,000 shares of our common stock
per month for each month Mr. Bar Ner serves as a director during his first year
of service. In the event of the death of Mr. Bar Ner prior to the completion of
the first year of his service as a director, his entire stock grant of 1,200,000
shares shall be vested in DFI and delivered to DFI or its legal representative.

Sale of Marketable Securities

In January, March and April 2005, we sold an aggregate of 2,300,000 shares of
Langley Park Investment Trust (LPI.L) held by us for gross proceeds of $654,975.

In the quarter ended March 31, 2005, we sold all of our holdings in Australian
securities, 1,073,766 shares, for gross proceeds of $75,478.

                                        7
<PAGE>

In the Quarter ending December 31, 2005, we sold 110,000 shares of Roo Group
(RGRP.OB) for gross proceeds of $365,806

The proceeds from the sales of these shares were used to fund our ongoing
working capital requirements for 2005.

Business Strategy

Avenue Group, Inc.

Following  the  approval  of   shareholders   at  our  2002  Annual  Meeting  of
Stockholders  held on December 24, 2002, we announced  that the Company  changed
its name from I.T.  Technology,  Inc. (ITTE) to Avenue Group,  Inc. (AVNU).  The
decision to change our name was made in order to reflect  our broader  strategic
focus and investment strategies,  predominantly being pursued in the oil and gas
sector through Avenue Energy.

Our activities during 2005 were principally devoted to capital raising
activities, oil and gas activities in the Republic of Turkey arising out of the
Farmin Agreement between Avenue Energy and the Sayer Group, through our
wholly-owned subsidiary Avenue Energy and the pursuit to acquire oil and gas
exploration and production properties in the US and Colombia.

Set forth below is a description of the businesses and prospects of Avenue
Energy. Because this company has limited revenues, it will require significant
additional capital funding to achieve its business plans.

Avenue Energy, Inc.

In November 2002, we formed a wholly-owned Delaware subsidiary, Avenue Energy,
Inc. to pursue acquisitions of and investments in oil and gas exploration and
production entities.

Avenue Energy is currently engaged in the exploration, development and
production of oil and gas in Turkey. See Item 2, Property, of this report.

Our strategy is to secure, through Avenue Energy, rights to oil and gas leases
and licenses and to apply new technology and outside capital to undertake a
sustained and aggressive exploration and development program in an effort to
attempt to unlock undiscovered and undeveloped oil and gas reserves. We believe
that Colombia's oil and gas potential has not been fully explored and that it
has significant remaining potential. Success in this strategy will be dependent
on many factors some of which, discussed in "Risk Factors" are beyond our
control. Of critical importance will be our ability to raise sufficient capital
to complete whatever exploration and drilling program we ultimately enter into,
and our success in locating and drilling successful wells.

Avenue Energy, and outside consultants as and when required, are reviewing all
prospects and leads on all licenses in order to prioritize the most attractive
drillable prospects for a multi-well drilling program. Recommendations for
seismic and further geoscientific work on the less well defined leads and
prospects and budgets will be prepared in order to generate programs for
potential drilling campaigns. The extent of Avenue Energy's participation in
these programs will be dependant upon having requisite financing in place.

We continually review and consider potential acquisitions or investment targets
in the Oil and Gas sector. However, at this time, with the exception of the
Agreement with the Sayer Group in Turkey, we have not negotiated the terms of
any such acquisition or investment, completed our due diligence with respect to
any such acquisition or investment or negotiated or executed any agreement with
respect thereto and there can be no assurance that we will be able to
successfully negotiate, execute and consummate any such investment or
acquisition in the future.

Prospects of Avenue Energy -The Republic of Turkey

Avenue Energy is currently engaged in the exploration, development and
production of oil and gas in Turkey. See Item 2, Property, of this report.

ROO Group, Inc.

On April 30, 2002, we reached an agreement with our then President and Chief
Executive Officer, Mr. Robert Petty, pursuant to which Mr. Petty resigned from
all positions with us to pursue the further development of ROO Group, Inc., a
company owned and controlled by him (formerly ROO Media Corporation). ROO Group
is a provider of digital media systems and technology. Pursuant to this
agreement, we exercised an existing option to acquire a 25% equity interest in
ROO Group and certain stock options previously granted to Mr. Petty and his
affiliates became vested. In connection with the agreement, we recorded an
$8,500 investment in ROO Group. Subsequently, in November, 2003, we made a
further investment of $200,000 in ROO Group, enabling it to merge with the
publicly traded Virilitec Industries, Inc. As a result, we owned 800,000 shares
(approximately 25%) of common stock in the newly merged entity. ROO Group is
operated independently and we exercise no managerial or operational control over
ROO, nor do we intend to do so in the future. In October 2005 ROO Group
reverse-split its stock fifty to one. We state ROO Group shares in this report
post-split.

                                        8
<PAGE>

VideoDome Networks, Inc.

Until September 2004, we owned 50% of the outstanding shares of VideoDome
through our former wholly-owned subsidiary, Bickhams Media, Inc. VideoDome
provides Internet based digital media solutions for corporate and enterprise
markets. VideoDome focuses on providing enabling technologies that offer its
customers the ability to unify and control all their digital media technologies
and initiatives under one platform. VideoDome offers a complete solution,
combining the processes of encoding, delivery, publishing and tracking of video
over the Internet. VideoDome's products are compatible with existing streaming
media platforms, which facilitate transmission of audio/video over the Internet.
Although VideoDome generated revenues in 2004, its revenues were insufficient to
fund its research and development and expansion plans.

On September 10, 2004, we entered into an agreement with ROO Group for the sale
of all our shares in our wholly-owned subsidiary, Bickhams Media, Inc., which
holds 50% of the outstanding shares of VideoDome, in exchange for $300,000,
80,000 shares of ROO Group's restricted common stock valued at $280,000, and ROO
Group's assumption of an existing $288,000 promissory note of VideoDome. In
connection with this sale, we recorded a gain on sale of discontinued operations
of $724,874 (see Note 7). In addition, pursuant to the aforementioned agreement,
ROO Group issued an additional 60,000 shares of its restricted common stock to
us, valued at $210,000, in exchange for our termination of certain registration
rights with respect to ROO Group shares we owned. As of December 31, 2005, we
have collected all but $4,000 of the $288,000 VideoDome promissory note.

In November 2004 we assigned 16,790 shares of the common stock of ROO Group to
one of our executive officers in lieu of compensation owed to him in the amount
of $45,250. In February 2005 we transferred 250,000 shares of ROO Group common
stock to a former officer in connection with severance arrangements. For a
further discussion of this transaction, see Note 10 B, Other Agreements. Also,
see Note 2E.

In 2006 we sold 423,101 shares of ROO Group for $1,058,449. As of April 9, 2006,
we own 140,109 shares of ROO Group.

Competition

Competition in the oil and gas industry is intense, particularly with respect to
the acquisition of producing properties and undeveloped acreage. Major and
independent oil and gas companies, as well as individuals and drilling programs,
actively bid for desirable oil and gas properties, as well as for the equipment
and labor required to operate and develop such properties. Many competitors have
financial resources, staffs, facilities and exploration and development budgets
that are substantially greater than Avenue Energy's, which may adversely affect
Avenue Energy's ability to compete successfully. Given Avenue Energy's lack of
resources and staff relative to most of its competitors, Avenue is at a
competitive disadvantage in being able to locate and evaluate oil and gas
prospects and negotiate transactions for prospects that it considers favorable.
In addition, many of Avenue Energy's larger competitors may be better able to
respond to factors that affect the demand for oil and natural gas production
such as changes in worldwide oil and natural gas prices and levels of
production, the cost and availability of alternative fuels, the level of
consumer demand, the extent of domestic production of oil and gas, the extent of
imports of foreign oil and gas, the cost of and proximity to pipelines and other
transportation facilities, regulations by state and federal authorities and the
cost of complying with applicable environmental regulations.

Environmental Matters

Our operations are subject to various laws and regulations relating to the
environment, especially related to our oil and gas operations, which have become
increasingly stringent. These laws and regulations may require us to remediate
or otherwise redress the effects on the environment of prior disposal or release
of chemicals or petroleum substances by us or other parties. We expect to make
provisions for environmental restoration and remediation at the time we
determine that a clean-up is probable and the amount of such clean-up is
reasonably determinable. The costs of future restoration and remediation are
inherently difficult to estimate, could be significant, and may be material to
the results of our operations in the period in which they are recognized and may
have a material impact on our financial position or liquidity. Our operations
are also subject to environmental and common law claims for personal injury and
property damage caused by the release of chemicals or petroleum substances by us
or others.

There are no known proceedings instituted by governmental authorities, pending
or known to be contemplated against us under any international, United States
federal, state or local environmental laws. We are not aware of any events of
noncompliance in our operations in connection with any environmental laws or
regulations and we are not aware of any potentially material contingencies
related to environmental issues. However, we cannot predict whether any new or
amended environmental laws or regulations introduced in the future will have a
material adverse effect on the future business of Avenue Group, Inc.

Governmental Matters

The status of Avenue Energy as a petroleum right holder and its continued
ability to directly own the leases in connection with its interests in licenses
and leases in Turkey and ability to operate as such, is subject to ongoing
compliance with Turkish Law. Pursuant to an ongoing Representation Services
Agreement with Mr. Oyman Sayer in Turkey, these compliance matters and the
day-to-day administration of Avenue Energy's regulatory affairs in Turkey are
handled by Mr. Sayer, who receives quarterly fees of $30,000 (plus VAT) for such
services.

                                        9
<PAGE>

Employees

As of March 31, 2006 the Company together with its affiliated subsidiaries
employed 3 full-time employees including 3 officers and 2 part-time employees
and/or consultants including 2 directors.


ITEM 2.  PROPERTIES

The oil and gas leases and licenses where we have an interest are located in
southeast Turkey, which forms the north flank of the Arabian Basin and which
lies adjacent to the oilfields of Iraq, Iran and Syria. In 2003 we drilled the
Karakilise-1 well and in 2005 we drilled the Karakilise-2 well which are part of
the Karakilise License, located in Petroleum District XI- Diyarbakir in the
Republic of Turkey covering 122,943 hectares.

The North Rubai prospect comprised of 396,385 acres is located close to the
tri-nation boundary of Turkey, Iraq and Syria and is on trend with several large
oil producing features in the region. Avenue holds a 50% working interest in
this prospect with Aladdin Middle East, a wholly owned subsidiary of the Sayer
Group of Companies, holding the other 50%. Pursuant to an extension by the
governmental authority, the first well in this area must be spudded by May 30,
2006.

In 2002 we entered into a Farmin and Participation Agreement with Sayer Group
Consortium and Middle East Petroleum Services Limited. By the terms of the
agreement we paid $250,000 and acquired an option that ultimately allowed us to
participate in and acquire a 45% working interest in up to 31 exploration
licenses and 2 production leases held by the members of the Sayer Group in
Turkey, as well as the option to participate with a 45% interest in oil and gas
properties or rights acquired by the Sayer Group in the future, so long as we
continue to be an active right holder in an exploration or production lease with
the Sayer Group. The original agreement called for 45% working interest held by
Sayer Group Consortium, a 45% working interest held by us and a 10% working
interest held by Middle East Petroleum Services Limited. On Jan 22 2004 we
entered into an amendment with the other parties whereby Middle East Petroleum
Services Limited converted its 10% working interest into a 5% royalty, and our
and the Sayer Group Consortium's working interests increased from 45% each to
50% each.

In April 2003 we exercised an earlier acquired option to acquire up to a 45%
participating interest in the Karakilise-1 well and license located in the
Diyarbakir petroleum district in southeast Turkey. The Karakilise-1 well was
spud June 2003. Our total exercise price of the Karakilise-1 well and license
option was $2,000,000. This well went into production in September 2003. As a
result, we were also required to fund an additional $187,164 toward completion
cost. In September 2003, we paid $100,000 of this amount. We funded the
remaining balance of $87,164 from our share of the proceeds of crude oil sales
from the well. For 2003 we received $157,682 for our share of the net profits
from crude oil sales and remitted that amount to the Sayer Group as an
additional investment.

Karakilise-1

Although current production is minimal, the Karakilise-1 well has produced good
quality light crude (32.5 API). As of December 31, 2005, approximately 40,000
barrels of oil had been produced from this well. The Sayer Group sells the
Karakilise crude on behalf of the joint venture to the refinery at a price which
reflects world parity in the month preceding the sale, plus transportation costs
to the refinery gate, adjusted for crude quality. Due to the limited amount of
geological information available at the present time, there has been no
determination made as to any reserve estimates at Karakilise. This will likely
require the drilling of additional wells under the license.

Karakilise-1 is still not producing at the earlier anticipated rates. Monitoring
of the reservoir behavior has indicated that a barrier probably exists at
reservoir level near the well bore, which significantly impedes the flow of oil
in the reservoir towards the well bore. This barrier is likely to be a small
fault cutting through and sealing, the producing reservoir. The oil flow may
also be restricted due to the well's only partial intersection of the oil column
as the well did not intersect an oil/water contact. This implies that the actual
oil column is likely to be thicker than the well intersection.

The operator, AME will monitor the Karakilise-1 well at its recent production
rate of approximately 20 BOPD with an equivalent amount of water until more
information is available on reservoir behavior and the thickness of the oil pay
in the field.

After 2003 the well's production rate dropped significantly. The rate has
stabilized at approximately 20 barrels per day with an equivalent amount of
formation water.

Due to the limited amount of geological information available at the present
time, we have made no determination as to any proved reserves at Karakilise.

In 2003 and 2004 Aladdin Middle East (AME), the Karakilise operator, installed
substantial oil handling equipment for the well's production.

Following delays and uncertainties concerning the spud date of the Karakilise-2
well and the previously outstanding matters with Sayer Group regarding field
infrastructure and operating expense, we and Sayer Group finalized a series of
amendments to existing agreements in October 2004, by which we reduced our
existing and ongoing obligations to fund activities at the Karakilise license
and its participation interests at this license from 50% to 15%. These reduced
obligations include the infrastructure improvements and operational cost at the
Karakilise-2 well, which commenced drilling on November 3, 2004; as well as the
additional drilling and operating cost with respect to the Karakilise-2 well.
The Sayer Group has applied amounts previously paid by us toward the settlement
of these matters, such that we have now funded our share of such cost through
the present, and we also funded our initial obligations on the Karakilise-2
well.

                                       10
<PAGE>

Reduction of Interest in Karakilise-2 License

In May 2005, the Sayer Group completed a transaction with JKX Turkey Ltd, a
subsidiary of London Stock Exchange listed exploration and production company
JKX Oil & Gas (London: JKX.L), to complete the Karakilise-2 well. By this
arrangement, we sold to JKX 30% of our 15% interest in the Karakilise-2 well, or
4.5%, leaving us with a 10.5% interest in this well. In exchange, JKX reimbursed
us for 4.5% of the drilling cost to the completion point of this well. The
participating percentages of each party became AME and affiliates 59.5%, JKX 30%
and Avenue 10.5%. Avenue's interests in our other Turkish prospects were not
affected. As a result of this transaction, we recorded a loss on the sale of 30%
of our interest in the Karakilise-2 well of $721,046 and an impairment of our
oil and gas property of $319,757.

Non-participation election in the completion of the drilling of the Karakilise-2
well

The KK-2 well was planned to drill to a total depth of 8,320 feet to test
potential hydrocarbons in the Mardin formation and to provide further geological
information related to the Karakilise-1 well located about 570 meters away.
Drilling of the KK-2 well had been suspended for mechanical reasons. The well
recommenced drilling on June 8, 2005, with AME as Operator. On July 21, 2005,
the KK-2 reached its total depth. Four drill stem tests had been taken in the
Mardin formation which had been encountered 8,053 ft. Quantities of oil were
recovered in the second DST but the results of the other three tests plus the
mudlogs taken over the same interval did not indicate, in the judgment of our
geologists, sufficient quantities of hydrocarbons to justify participating in an
attempt to run casing and complete the well. Consequently, on July 25, 2005, we
notified AME that we elected not to participate in the completion of the
Karakilise-2 well. The KK-2 well was completed by the other parties and
subsequently abandoned. Even though we did not participate in the completion of
the KK-2 well, we have preserved our rights to participate with a 10.5% working
interest in all further drilling activity that might be initiated in the
Karakilise leases.

Other leases in Turkey

As part of the above mentioned amendments, we elected to relinquish our options
to acquire participation interests in certain licenses and leases with Sayer
Group in Turkey, including the Khata leases. The parties also agreed that they
may apply for new licenses in Turkey independently of each other. As a result of
these amendments we have substantially reduced our ongoing monthly expenditures
for representation fees, license fees, and ongoing administrative cost in
Turkey.

Following the amendments, we currently have a participation interest of 10.5% in
the Karakilise Licenses (other than the KK-2 well) and a 50% participation
interest in the North Rubai license. Avenue will require additional capital to
preserve these licenses and to participate in the proposed drilling programs at
these licenses during the next 12 months. The license for the North Rubai
prospect, which is located close to the tri-nation boundary point of Turkey,
Iraq and Syria is set to expire on May 30, 2006, unless we spud a well or obtain
an extension by that date.

The cost to complete this well will be approximately $2,000,000, however Avenue
Energy is currently attempting to assemble a group of companies to participate
in drilling this well. However, there can be no assurance that Avenue Energy
will be able to assemble a group of companies to participate in this well or
that the drilling of this well can be commenced before the lease expires.

In the quarter ended March 2005 we paid $25,000 to extend the Gercus lease for
one year. After December 31, 2005, we allowed our interest in this lease to
expire.

Avenue and AME held a 50% working interest in the Killis prospect located in the
folded overland area near the East Anatolian and Dead Sea strike faults. By the
terms of the leases, an initial well had to be drilled by July 2005. After
evaluation of the geophysical and geological data supporting this prospect,
Avenue elected not to participate in any attempt to extend the lease and
surrendered its interest in the prospect.

Avenue and AME held a 50% working interest in the Arpetete prospect, comprised
of 95,988 acres is located adjacent to the N.V.T. Perenco and the TPAO fields.
By the terms of the leases, an initial well had to be drilled by November 30
2005. After evaluation of the geophysical and geological data supporting this
prospect, Avenue elected not to participate in any attempt to extend the lease
or drill an initial well and surrendered its interest in the prospect.

In November of 2005, Avenue Energy and Geoproduction Oil and Gas Company LLC a
Lafayette, Louisiana based company with a branch office in Bogota, entered into
a Letter of Intent (LOI) whereby Avenue acquired an option to farm-in to The
Esperanza Block located in the Lower Magdalena Basin of Northwestern
Colombiacovers. The Esperanza Block covers 45,975 hectares or approximately
114,000 acres and includes areas formerly designated as the Jobo, Tablon,
Castor, Coral and Sucre Gas Fields, that have produced approximately 70 BCF of
natural gas in the aggregate. Avenue had an option to earn a 45% interest in the
contract area by paying certain bonuses to Geoproduction and fulfilling its
share of the work program under the Contract. The LOI was subject to further
technical and legal due diligence to be carried out by Avenue. In November,
Avenue sent a technical team to Colombia to carry out a detailed review of the
contract area. While Avenue's due diligence team felt that the contract area had
merit for establishing gas reserves, it also recommended that certain provisions
of the agreement be reexamined. Avenue and Geoproduction were unable to reach
agreement on these recommendations and on December 16, 2005 Avenue allowed its
option with Geoproduction Oil and Gas, Inc. to acquire a 45% interest in the
Esperanza Contract, to expire.

                                       11
<PAGE>

Our principal executive offices are located at 405 Lexington Avenue 26th Floor
New York, NY 10174. We also maintain space at 752 Pacific St Brooklyn, NY
provided to us at no charge by a member of our board of Directors Mr Shaya
Boymelgreen. In March, 2004 we signed a new one year lease covering office space
in California of approximately 1425 square feet at a rate of $2,636 per month
with an option to renew the lease for an additional year thereafter. Effective
April 1, 2005, ROO assumed our obligations under this lease. ROO has agreed to
provide us with office space at this location through June 30, 2005 in exchange
for certain office equipment. In July 2005 we relocated our principal executive
offices to New York, New York


ITEM 3.  LEGAL PROCEEDINGS

From time to time, we may be involved in litigation relating to claims arising
out of our operations in the normal course of business. We are currently not a
party to any legal proceedings.

Aladdin Middle East, the operator of the leases and licenses where we have an
interest in Turkey, is from time to time party to litigation regarding its
operations on these properties, including breach of contract and land use
litigation in the ordinary course of business, and has advised us that claims
have been asserted against it by various parties in the ordinary course of
business.


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

No matters were submitted to a vote of security holders in during the fourth
quarter of the fiscal year covered by this report.

                                       12
<PAGE>

                                     PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Our common stock was listed in April 2002 for trading on the NASDAQ Bulletin
Board under the symbol "ITTE." In 2003, due to our name change, our trading
symbol because "AVNU." To date, due in part to the small size of the public
float on our shares, there has been a limited public market for the common stock
and there can be no assurance that an active trading market for the common stock
will develop. As a result thereof, the price of the common stock is subject to
wide fluctuations and the current market price of the common stock may not be an
accurate reflection of our value or the common stock's further trading value.

On October 4, 2002 our common stock began trading on the third market segment of
the Frankfurt Stock Exchange under the symbol ITQ and the German Cusip number
(WKN) 722 861.

The following table sets forth, for the period indicated, the high and low sales
prices per share for our common stock as reported on Quotemedia.com. These
quotations reflect inter-dealer prices without retail markup, markdown or
commission and may not necessarily represent actual transactions.


      Fiscal Year ended December 31,
      2005
                                        High                          Low
      First Quarter                    $0.09                         $0.05
      Second Quarter                   $0.07                         $0.04
      Third Quarter                    $0.045                        $0.021
      Fourth Quarter                   $0.07                         $0.025

      Fiscal Year ended
      December 31, 2004
                                        High                          Low
      First Quarter                    $0.42                         $0.21
      Second Quarter                   $0.38                         $0.21
      Third Quarter                    $0.31                         $0.10
      Fourth Quarter                   $0.17                         $0.05


Shareholders

As of March 19, 2006 the Company had 65 shareholders of record.

Dividend Policy

It is the present policy of the Board of Directors to retain earnings for use in
our business. We have not declared any cash dividends to our shareholders and we
do not anticipate paying dividends in the foreseeable future.

Transfer Agent

The Transfer Agent and Registrar for the Company's common stock is Transfer
Online, Inc. Its address is 317 SW Alder Street, 2nd Floor Portland, Oregon
97204 and its telephone number at that location is 503-227-2950; Fax
503-227-6874.

Unregistered Sale of Equity Securities

During 2003, we entered into agreements with accredited investors in private
placements pursuant to which we agreed to issue an aggregate of 21,123,667
shares of our restricted common stock for proceeds of $3,687,524, net of costs.
Proceeds from the offering were principally to fund our acquisition of and
obligations with respect to the oil and gas interests in Turkey and to provide
us with working capital for our other operations and corporate overhead.

On April 15, 2003, we entered into a purchase agreement with an accredited
investor for the sale of a $1.3 million principal amount of one year convertible
notes bearing interest at a rate of 3.5%, in a private placement to assist with
the financing of drilling operations in Turkey. The purchase agreement was
amended on September 15, 2003, pursuant to which the purchaser funded the
balance due under the agreement and cancelled the original note issued to him in
return for a new $1.3 million convertible note that was immediately convertible
into the Company's restricted common stock at a price of $0.15 per share.
Shortly after receipt of the new convertible note the purchaser converted the
entire principal amount thereof into 8,666,667 shares of our restricted common
stock. In July 2003, we also issued 1,000,000 shares of common stock in
connection with the exercise of 1,000,000 stock options for $100,000.

                                       13
<PAGE>

In January and February 2004, we issued 3,906,666 shares of common stock in
private placements for the proceeds of $586,000 received in prior years

In July 2004, we entered into an agreement with a newly formed London-based
investment trust, Langley Park Investment Trust ("Langley") for the sale in a
private placement of 48,458,149 shares of our common stock in exchange for
6,057,269 ordinary shares of Langley valued at (pound)1.00 per share or $11
million. As part of the transaction, Langley entered into a "lock-up" agreement
with us pursuant to which it has agreed not to trade our shares that it received
as a result of this transaction for a period of two years from the closing date
of the sale. Fifty percent of the shares issued by Langley to us will be held in
escrow for two years following the closing and in the event the price per share
of our common stock at such time is less than it was at the time of the closing
(approximately $0.23 per share), Langley shall be entitled to receive out of
escrow a percentage of our shares from escrow equal to the percentage of such
decline. The remaining Langley shares held in escrow shall be released to us at
such time.

The forgoing private issuances were exempted from registration under the
securities act of 1933 pursuant to sections 4(2) thereunder.

Purchases of Equity Securities By the Issuer and Affiliated Purchasers

On February 7, 2005, Jonathan Herzog, our former Executive Vice President and a
member of our Board of Directors agreed to resign from all positions he held
with us and our subsidiaries. In connection with his resignation, we entered
into a Separation Agreement and General Release with Mr. Herzog pursuant to
which we agreed to pay Herzog $92,250 in cash to cover certain deferred
compensation owed to Herzog and to satisfy the parties' respective obligations
under his employment agreement with us. In addition to the cash payment, Herzog
caused to be delivered to us a total of 10,000,000 shares of our common stock
and paid us $125,000 in exchange for the delivery by us to Herzog of 12,500,000
shares of the common stock of ROO owned by us and a cash payment of $125,000.

Securities Authorized For Issuance Under Equity Compensation Plans

Our securities authorized for issuances under equity compensation plans are
discussed in Note 10 of our financial statements in this Report.


ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

Overview and Plan of Operations

Avenue  Group,  Inc. was  incorporated  in Delaware on February 2, 1999.  We are
engaged in oil and gas  exploration  and  development  through our  wholly-owned
operating  subsidiary,  Avenue Energy, Inc. We also own as of December 31, 2005,
4.9% of the outstanding common stock of ROO Group, Inc. (RGRP.OB), an e-commerce
and digital media  business,  4.75% of the  outstanding  common stock of Langley
Park Investment  Trust (LPI.L) and 50.1% of the common stock of  Stampville.com,
Inc., an inactive business. We have a wholly-owned  Australian subsidiary,  I.T.
Technology Pty. Ltd. Except as expressly  indicated to the contrary,  references
to "we," "us," or "our"  contained in this  references in this document  include
Avenue Group, Inc. and/or our wholly owned subsidiaries.

We have limited  sales and will require  significant  additional  capital in the
near term to support our operations and to implement our business strategies. On
January 21, 2003 we changed our name from "I.T. Technology, Inc." to the "Avenue
Group, Inc." which we believe better reflects our broader strategic focus.

Our shareholders approved the name change at our 2002 Annual Meeting of
Stockholders, which was held on December 24, 2002.

During 2005, our activities were principally devoted to capital raising
activities, oil and gas activities in the Republic of Turkey arising out of the
Farmin Agreement between Avenue Energy and the Sayer Group Consortium, through
our wholly-owned subsidiary Avenue Energy and the pursuit to acquire oil and gas
exploration and production properties in the US and Colombia..

As part of our shift to a broader strategic focus, during the second half of
2002 we began to consider acquisitions of and investments in oil and gas
exploration and production entities. Avenue Energy, Inc. was formed to pursue
this line of business.

In 2002 we entered into a Farmin and Participation Agreement with Sayer Group
Consortium and Middle East Petroleum Services Limited. By the terms of the
agreement we paid $250,000 and acquired an option that ultimately allowed us to
participate in and acquire a 45% working interest in up to 31 exploration
licenses and 2 production leases held by the members of the Sayer Group in
Turkey, as well as the option to participate with a 45% interest in oil and gas
properties or rights acquired by the Sayer Group in the future, so long as we
continue to be an active right holder in an exploration or production lease with
the Sayer Group. The original agreement called for 45% working interest held by
Sayer Group Consortium, a 45% working interest held by us and a 10% working
interest held by Middle East Petroleum Services Limited. On Jan 22 2004 we
entered into an amendment with the other parties whereby Middle East Petroleum
Services Limited converted its 10% working interest into a 5% royalty, and our
and the Sayer Group Consortium's working interests increased from 45% each to
50% each.

On April 17, 2003, we exercised the Karakilise option. Spudding of the
Karakilise-1 well occurred in late June 2003. This well went into production in
September 2003.

                                       14
<PAGE>

Karakilise-1

The Karakilise-1 has produced good quality light crude (32.5 API). As of April
17, 2006, approximately 40,000 barrels of oil had been produced from this well.
The Sayer Group sells the Karakilise crude on behalf of the joint venture to the
refinery at a price which reflects world parity in the month preceding the sale,
plus transportation costs to the refinery gate, adjusted for crude quality. Due
to the limited amount of geological information available at the present time,
there has been no determination made as to any reserve estimates at Karakilise.
This will likely require the drilling of additional wells under the license.

Karakilise-1 is still not producing at the earlier anticipated rates. Monitoring
of the reservoir behavior has indicated that a barrier probably exists at
reservoir level near the well bore, which significantly impedes the flow of oil
in the reservoir towards the well bore. This barrier is likely to be a small
fault cutting through and sealing, the producing reservoir. The oil flow may
also be restricted due to the well's only partial intersection of the oil column
as the well did not intersect an oil/water contact. This implies that the actual
oil column is likely to be thicker than the well intersection.

The operator, AME will monitor the Karakilise-1 well at its recent production
rate of approximately 20 BOPD with an equivalent amount of formation water until
more information is available on reservoir behavior and the thickness of the oil
pay in the field.

Karakilise-2

Following delays and uncertainties concerning the spudding date of the
Karakilise-2 well and the previously outstanding matters with the Sayer Group in
relation to field infrastructure and operating expenses, in October 2004, Avenue
Energy and the Sayer Group finalized a series of amendments to existing
agreements, whereby Avenue reduced it's existing and ongoing obligations to fund
activities at the Karakilise license and its participation interests at this
license from 50% to 15%.. These reduced obligations include the infrastructure
improvements and operational costs at the Karakilies-2 well, which commenced
drilling on November 3, 2004; as well as the additional drilling and operating
costs with respect to the Karakilise-2 well. The Sayer Group has applied amounts
previously paid by Avenue towards the settlement of these matters, such that
Avenue Energy has now funded its share of such costs through the end of the
September quarter and it has also funded its share of drilling the Karakilise-2
well. In the event of a decision to complete the Karakilise-2 well, Avenue would
have been required to pay approximately a further $60,000, representing its
proportionate share of completion costs of such well.

The Karakilise-2 well was spudded in November 2004 and drilling was suspended a
few weeks later at approximately 2,200 feet due to mechanical problems.
Subsequently, the Sayer Group completed a transaction with JKX to complete the
well. Pursuant to this arrangement, JKX received 30% of our 15% interest in the
Karakilise-2 well, or 4.5%, plus the remaining Karakilise lease, leaving Avenue
Energy with a 10.5% interest in this well. In exchange, JKX reimbursed Avenue
Energy for 4.5% of the drilling cost to the completion point of this well.

The KK-2 well was planned to drill to a total depth of 8,320 feet to test
potential hydrocarbons in the Mardin formation and to provide further geological
information related to the Karakilise-1 well located about 570 meters away.
Drilling of the KK-2 well had been suspended for mechanical reasons. The well
recommenced drilling on June 8, 2005, with AME as Operator. On July 21, 2005,
the KK-2 reached its total depth. Four drill stem tests had been taken in the
Mardin formation which had been encountered 8,053 ft. Quantities of oil were
recovered in the second DST but the results of the other three tests plus the
mudlogs taken over the same interval did not indicate, in the judgment of our
geologists, sufficient quantities of hydrocarbons to justify participating in an
attempt to run casing and complete the well. Consequently, on July 25, 2005, we
notified AME that we elected not to participate in the completion of the
Karakilise-2 well. The KK-2 well was completed by the other parties and
subsequently abandoned. Even though we did not participate in the completion of
the KK-2 well, we have preserved our rights to participate with a 10.5% working
interest in all further drilling activity that might be initiated in the
Karakilise leases.
..
Other Licenses and Leases in Turkey

Following Avenue Energy's participation in the two initial wells in 2003, Avenue
Energy elected to exercise its option into additional exploration licenses and
leases held by members of the Sayer Group in Turkey. In January, 2004, Avenue
Energy entered into new joint operating and related agreements ("the
Agreements") with Aladdin Middle East Ltd and its affiliates (AME) covering
drilling and production operations in the Karakilise license and 25 other
exploration and production licenses and leases in Turkey (the "Additional
Licenses").

As part of the our October 2004 amendments, Avenue Energy elected to relinquish
its options to acquire participation interests in certain licenses and leases
with the Sayer Group in Turkey, including the Khata leases and the parties also
agreed that they may now apply for new licenses in Turkey independently of each
other. As a result of these amendments Avenue Energy has substantially reduced
its ongoing monthly expenditures for representation fees, license fees, and
ongoing administrative costs in Turkey and all previous disagreements were
resolved.

We currently have a participation interest of 10.5% in the Karakilise Licenses
(other than the KK-2 well) and a 50% participation interest in the North Rubai
license. Avenue will require additional capital to preserve these licenses and
to participate in the proposed drilling programs at these licenses during the
next 12 months. The license for the North Rubai prospect, which is located close
to the tri-nation boundary point of Turkey, Iraq and Syria is set to expire on
May 30, 2006, unless we spud a well or obtain an extension by that date.

In the quarter ended March 2005 we paid $25,000 to extend the Gercus lease for
one year. After December 31, 2005, we allowed our interest in this lease to
expire.

                                       15
<PAGE>

Avenue and AME held a 50% working interest in the Killis prospect located in the
folded overland area near the East Anatolian and Dead Sea strike faults. By the
terms of the leases, an initial well had to be drilled by July 2005. After
evaluation of the geophysical and geological data supporting this prospect,
Avenue elected not to participate in any attempt to extend the lease or drill an
initial well and surrendered its interest in the prospect.

Avenue and AME held a 50% working interest in the Arpetete prospect, comprised
of 95,988 acres is located adjacent to the N.V.T. Perenco and the TPAO fields.
By the terms of the leases, an initial well had to be drilled by November 30th
2005. After evaluation of the geophysical and geological data supporting this
prospect, Avenue elected not to participate in any attempt to extend the lease
or drill an initial well and surrendered its interest in the prospect.

Colombia

Over the past year, we looked at a number of interesting exploration and
development projects in Colombia.

In November of 2005, Avenue Energy and Geoproduction Oil and Gas Company LLC a
Lafayette Louisiana based company with a branch office in Bogota, entered into a
Letter of Intent (LOI) whereby Avenue acquired an option to farm-in to The
Esperanza Block located in the Lower Magdalena Basin of Northwestern Colombia.
The Esperanza Block covers 45,975 hectares or approximately 114,000 acres and
includes areas formerly designated as the Jobo, Tablon, Castor, Coral and Sucre
Gas Fields, that have produced approximately 70 BCF of natural gas in the
aggregate. Avenue had an option to earn a 45% interest in the contract area by
paying certain bonuses to Geoproduction and fulfilling its share of the work
program under the Contract. The LOI was subject to further technical and legal
due diligence to be carried out by Avenue. In November, Avenue sent a technical
team to Colombia to carry out a detailed review of the contract area. While
Avenue's due diligence team felt that the contract area had merit for
establishing gas reserves, it also recommended that certain provisions of the
agreement be reexamined. Avenue and Geoproduction were unable to reach agreement
on these recommendations and on December 16, 2005 Avenue allowed its option with
Geoproduction Oil and Gas, Inc. to acquire a 45% interest in the Esperanza
Contract, to expire.

While we were unable to reach final agreement with Geoproduction to work
together to develop the Esperanza area, we are still enthusiastic about upstream
opportunities in Colombia and will continue to pursue other exploration and
production plays in the Area.

Other Operations and Activities

In July 2004, we entered into an agreement with a newly formed London-based
investment trust, Langley Park Investment Trust ("Langley") for the sale in a
private placement of 48,458,149 shares of our common stock in exchange for
6,057,269 ordinary shares of Langley valued at (pound)1.00 per share or $11
million.

As part of the transaction, Langley entered into a "lock-up" agreement with us
pursuant to which it has agreed not to trade our shares that it received as a
result of this transaction for a period of two years from the closing date of
the sale.

Fifty percent of the shares issued by Langley to us will be held in escrow for
two years following the closing and in the event the price per share of our
common stock at such time is less than it was at the time of the closing
(approximately $0.23 per share), Langley shall be entitled to receive out of
escrow a percentage of our shares from escrow equal to the percentage of such
decline. The remaining Langley shares held in escrow shall be released to us at
such time.

We recorded an impairment charge of $10,003,318 relating to the Langley shares
for the year ended December 31, 2004.

On April 30, 2002, we reached an agreement with our then President and Chief
Executive Officer, Mr. Robert Petty, pursuant to which Mr. Petty resigned from
all positions with us to pursue the further development of ROO Group, Inc., a
company owned and controlled by him (formerly ROO Media Corporation). ROO Group
is a provider of digital media systems and technology. Pursuant to this
agreement, we exercised an existing option to acquire a 25% equity interest in
ROO Group and certain stock options previously granted to Mr. Petty and his
affiliates became vested. In connection with the agreement, we recorded an
$8,500 investment in ROO Group. Subsequently, in November, 2003, we made a
further investment of $200,000 in ROO Group, enabling it to merge with the
publicly traded Virilitec Industries, Inc. As a result, we owned 800,000 shares
(approximately 25%) of common stock in the newly merged entity. ROO Group is
operated independently and we exercise no managerial or operational control over
ROO, nor do we intend to do so in the future. In October 2005 ROO Group
reverse-split its stock fifty to one. We state ROO Group shares in this report
post-split.

On September 10, 2004, we entered into an agreement with ROO Group for the sale
of all our shares in our wholly-owned subsidiary, Bickhams Media, Inc., which
holds 50% of the outstanding shares of VideoDome, in exchange for $300,000, and
80,000 shares of ROO Group's restricted common stock valued at $280,000, and ROO
Group's assumption of an existing $288,000 promissory note of VideoDome.
 In connection with this sale, we recorded a gain on sale of discontinued
operations of $724,874 (see Note 7). In addition, pursuant to the aforementioned
agreement, ROO Group issued an additional 60,000 shares of its restricted common
stock to us, valued at $210,000, in exchange for our termination of certain
registration rights with respect to ROO Group shares we owned. As of December
31, 2005, we have collected all but $4,000 of the $288,000 VideoDome promissory
note.

                                       16
<PAGE>

In November 2004 we assigned 16,790 shares of the common stock of ROO Group to
one of our executive officers in lieu of compensation owed to him in the amount
of $45,250. In February 2005 we transferred 250,000 shares of ROO Group common
stock to a former officer in connection with severance arrangements.

In 2006 we sold 423,101 shares of ROO Group for $1,058,449. As of April 9, 2006,
we own 140,109 shares of ROO Group.

We have incurred losses since inception, and management anticipates incurring
substantial additional losses as we pursue our operational strategies.

Results of Operations

Year ended December 31, 2005 versus year ended December 31, 2004 (Restated)

During 2005, our activities were principally devoted to capital raising
activities, oil and gas activities in the Republic of Turkey arising out of the
Farmin Agreement between Avenue Energy and the Sayer Group Consortium, through
our wholly-owned subsidiary Avenue Energy.

We generated $34,886 in revenue in the year ended December 31, 2005, versus
$86,077 in the year ended December 31, 2004. The reduction in revenue is
primarily due to a reduction in oil sales from the KK-1 well. Avenue Energy's
net share of oil production accounted for $25,468 in revenue for the year ended
December 31, 2005, with the remaining revenue of $9,418 attributable to
Stampville.

The net loss for the year ended December 31, 2005 was $6,025,230 compared to a
net loss of $13,653,417 for the year ended December 31, 2004. A substantial
component of this net loss figure is impairment losses of $1,563,343 incurred on
our Karakilise property in Turkey. We also incurred a loss of $721,000 on the
sale of part of our interest in the Karakilise property. During the 2005 period
selling, general and administrative expense decreased by $807,000, 34%,
primarily due to a reduction in compensation. Total operating expense for the
year ended December 31, 2005 actually increased by $2,086,211 from $4,548,170 in
the previous year to $6,634,381. This is predominantly a result of a
compensation with an option of $2,500,000 offset by decreases in selling,
general, and administrative.

Our 2004 loss was so large primarily because of a $10,003,318 impairment charge
on our investment in Langley Park Investment Trust. This impairment occurred
because of the following situation: In July 2004, we acquired 6,057,269 ordinary
shares of Langley Park stock in exchange for 48,458,149 shares of our common
stock. The Langley stock was valued at 1.00 British Pound per share or US$11
million, based on arms-length negotiation. The purpose and the underlying
economics of the transaction were to acquire a liquid asset which we would be
able to sell as needed as a source of cash. Upon our acquisition of the Langley
shares Langley was still privately-held. The fair value of the Langley shares we
acquired was determined by arms-length negotiation between us and Langley. The
price quoted for our stock on the Over-the Counter Bulletin Board, $0.227 per
share at the time of closing, was a key factor in the negotiations. There was no
relationship between us and Langley other than as arms-length parties to the
transaction. The Langley shares are listed on the London Stock Exchange with the
symbol LPI. We may freely trade the Langley shares we own, subject to an escrow.
Fifty percent of the shares issued by Langley to us will be held in escrow for
two years following the closing. In the event the price per share of our common
stock at such time is less than it was at the time of the closing ($0.227 per
share), Langley will be entitled to receive out of escrow a percentage of our
shares from escrow equal to the percentage of such decline. The remaining
Langley shares held in escrow will be released to us at that time. After the
Langley shares began trading, we began valuing the investment at its quoted
price. Because the December 31, 2004, Langley market price valuation was sharply
below our recorded valuation at acquisition, we recorded the impairment loss of
$10,003,318.

Liquidity and Capital Resources

We have generated losses from inception and anticipate that we will continue to
incur significant losses until, at the earliest, we can generate sufficient
revenue to offset the substantial up-front capital expenditures and operating
cost associated with establishing, attracting and retaining a significant
business base. We have a net loss of $6,025,230 and a negative cash flow from
operations of $1,240,885 for the year ended December 31, 2005, and an
accumulated deficit of $32,304,333 as of December 31, 2005. We can not assure
that we will be able to generate significant revenue or achieve profitable
operations.

The capital requirements relating to implementation of our business plan will be
significant. As of December 31, 2005, we had cash of $261,718 and a working
capital of $1,756,222 versus $120,114 in cash and working capital of $3,403,407
as of December 31, 2004. In addition to cash, a significant portion of our
current assets consist of our investments in ROO and Langley, both of which are
highly volatile equity securities which are thinly traded. Much of our working
capital during 2005 to date has been generated through the sale of Langley
shares. If we are unable to continue to generate cash through the sale of either
or both of these securities our ability to operate may be materially and
adversely affected.

Our cash and cash equivalents increased by $141,604 from $120,114 as of December
31, 2004, to $261,718 as of December 31, 2005. The increase in cash and cash
equivalents was due to the sale of Langley and Roo investments, the collection
of a note receivable of $276,000, offset by cash and cash equivalents used for
operating activities.

In July 2004, we acquired 6,057,269 ordinary shares of Langley Park stock in
exchange for 48,458,149 shares of our common stock. This transaction is
discussed in "Results of Operations", above.

                                       17
<PAGE>

In 2006 we sold 423,101 shares of ROO Group for $1,058,449. As of April 9, 2006,
we own 140,109 shares of ROO Group.

In June and July 2004, we borrowed $200,000 from an affiliate for working
capital purposes. The loans bore interest at the rate of nine percent (9%) per
annum and were unpaid at December 31, 2005 and 2004. In April 2006 we paid off
these loans.

During the next twelve months, our business plan contemplates that we further
develop our oil and gas activities. To date we have been dependent on the
proceeds of private placements of our debt and equity securities and other
financings in order to implement our operations.

Management plans to rely on the proceeds from new debt or equity financing and
the sale of shares held by it to finance its ongoing operations. During 2006, we
intend to continue to seek additional capital in order to meet our cash flow and
working capital. There is no assurance that we will be successful in achieving
any such financing or raise sufficient capital to fund our operations and
further development. There can be no assurance that any such financing will be
available to us on commercially reasonable terms, if at all. If we are not
successful in sourcing significant additional capital in the near future, we
will be required to significantly curtail or cease ongoing operations and
consider alternatives that would have a material adverse affect on our business,
results of operations and financial condition. In such event we may need to
relinquish most, if not all of our ongoing oil and gas rights and licenses.

A Significant Portion of Our Current Assets Are In Highly Volatile Equity
Securities Which Are Thinly Traded

We currently hold 140,109 shares of Common Stock of ROO Group, Inc. which is
traded on the NASDAQ-OTCBB and 3,757,269shares of Langley Park Investment Trust
PLC which was listed on the London Stock Exchange in October 2004. Both of these
securities are highly speculative, have share prices which are very volatile and
have a high degree of risks. ROO is currently generating significant losses and
has stated that it will be dependent on additional financing during the next
twelve months. Langley's assets consist almost entirely of micro cap securities
of companies including ours and companies similar to us. There are no assurances
that any of these companies will be successful. We recorded an impairment loss
relating to the Langley shares of $10,003,318 for the year ended December 31,
2004. Much of our working capital during 2005 has been generated through the
sale of Langley and ROO shares. If we are unable to continue to generate cash
through the sale of either or both of these securities our ability to operate
may be materially and adversely affected.

Critical Accounting Policies and Estimates

The preparation of our financial statements requires us to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of sales and expense during the reporting
periods. We make critical estimation judgments in the below area. Actual results
could differ materially from the estimates in the area:

The impairment losses related to and carrying amount of our oil property.

Estimates related to the above items are critical because the items are
substantial assets or expense and their measurement requires complex, subjective
reasoning. Should future events occur in different ways than the assumptions
about those events we used in developing the estimates, we will have to modify
our estimates to conform to such future information. Such modifications could be
material.

We utilized the following material assumptions in making the above estimates:

In 2004, we recorded an impairment loss of $2,128,126 in connection with
licenses that had either lapsed or been relinquished. The impairment loss
includes a charge of $1,879,794 in connection with our Tosun License (acquired
in 2002 under the Farmin Participation Agreement with the Sayer Group) in Turkey
following the expiration of a previous extension granted in connection with the
license as well as an impairment charge of $248,332 following a reallocation of
our investment in oil leases to account for the retroactive reduction in our
participation interest in the Karakilise license to 15%. In 2005, we recorded an
additional impairment loss of $1,563,343 as a result of our review of our
remaining property in Turkey.

The above estimates involve the following uncertainties:

The remaining carrying value of the oil and gas property has uncertainty in that
it is dependent on the results of our future exploration and development of the
property. The variability in potential future earnings and cash flow of the
property is quite wide and cannot be predicted.

The facts and circumstances underlying our critical estimates of do not compare
to those associated with past estimates because we had taken an impairment
charge on our Turkish oil and gas property prior to the 2005 and 2004 charges.
The charge prior to 2004 was made based on significantly different facts and
circumstances than the 2004 charge. The 2004 charge was made based on
significantly different facts and circumstances than the 2005 charge

                                       18
<PAGE>

We have changed assumptions and estimates in the past when facts and
circumstances have called for such changes such as the recording of the 2005 and
2004 impairment charges on our Turkish oil and gas property discussed above.
During 2004 prior to recording the charge the facts and circumstances had caused
us to conclude that we had no impairment. At the time we recorded the charge the
facts and circumstances had changed as reported above, such that we recorded the
charge as reported above. Additional details of the 2005 and 2004 impairment
charges are discussed in "Results of Operations, above, and in financial
statement Note 4.

Recent Accounting Pronouncements

In December 2004, the FASB reissued Statement No. 123, Accounting for
Stock-Based Compensation, as Statement 123(R), Share Based Compensation. This
statement replaces Statement 123, amends Statement 95, Statement of Cash Flows,
and supersedes APB Opinion 25, Accounting for Stock Issued to Employees.
Statement 123(R) requires companies to apply a fair-value based measurement
method in accounting for share-based payment transactions with employees and to
record compensation expense for all share-based awards granted, and to awards
modified, repurchased or cancelled after the required effective date.
Compensation expense for outstanding awards for which the requisite service had
not been rendered as of the effective date will be recognized over the remaining
service period using the compensation cost calculated for pro forma disclosure
purposes under Statement 123, adjusted for expected forfeitures. Additionally,
Statement 123(R) will require entities to record compensation expense for
employee stock purchase plans that may not have previously been considered
compensatory under the existing rules. Statement 123(R) will be effective for
the first interim or annual period beginning after December 15, 2005, therefore,
we will be adopting Statement 123(R) commencing with the quarter ended March 31,
2006. We will be adopting the provisions of Statement 123(R) using a modified
prospective application. If we had included the cost of employee stock option
compensation in our financial statements, our net loss for 2005 and 2004 would
have increased by $1,600,000 and $360,000, respectively.

In December 2004, the FASB issued Statement 153, Exchanges of Nonmonetary
Assets. Statement 153 addresses the measurement of exchanges of nonmonetary
assets. The guidance in APB Opinion No. 29, Accounting for Nonmonetary
Transactions, is based on the principle that exchanges of nonmonetary assets
should be measured based on the fair value of the assets exchanged. The guidance
in that Opinion, however, included certain exceptions to that principle. This
Statement amends Opinion 29 to eliminate the exception for nonmonetary exchanges
of similar productive assets and replaces it with a general exception for
exchanges of nonmonetary assets that do not have commercial substance. A
nonmonetary exchange has commercial substance if the future cash flow of the
entity is expected to change significantly as a result of the exchange. This
Statement is effective for financial statements for fiscal years beginning after
June 15, 2005. Earlier application is permitted for nonmonetary asset exchanges
incurred during fiscal years beginning after the date of this Statement was
issued. We believe this Statement will have no material impact on our financial
statements.

In March 2005 the FASB issued Interpretation No. 47, Accounting for Conditional
Asset Retirement Obligations. Interpretation 47 clarifies that the term
conditional obligation as used in Statement No. 143, Accounting for Asset
Retirement Obligations, refers to a legal obligation to perform an asset
retirement activity in which the timing and/or method of settlement are
conditional on a future event that may or may not be within the control of the
entity. Interpretation 47 requires that the uncertainty about the timing and/or
method of settlement of a conditional asset retirement obligation be factored
into the measurement of the liability when sufficient information exists.
Interpretation 47 also clarifies when an entity would have sufficient
information to reasonably estimate the fair value of an asset retirement
obligation. Interpretation 47 is effective for fiscal years ending after
December 15, 2005. We believe the Interpretation will have no material impact on
our financial statements.

On June 9, 2005, the FASB issued Statement 154, Accounting Changes and Error
Corrections. Statement 154 replaces APB Opinion 20, Accounting Changes, and
Statement 3, Reporting Accounting Changes in Interim Financial Statements, and
changes the requirements for the accounting for and reporting of a change in
accounting principle. Statement 154 applies to all voluntary changes in
accounting principles. It also applies to changes required by an accounting
pronouncement in the unusual instance that the pronouncement does not include
specific transition provisions. Statement 154 must be adopted for accounting
changes and corrections of errors made in years beginning after December 15,
2005. Early adoption is permitted for accounting changes and corrections of
errors made in years beginning after the date Statement 154 is issued.
Management does not expect these recent pronouncements to have a material impact
on our consolidated financial position or results of operations.

CAUTIONARY "SAFE HARBOR" STATEMENT UNDER THE UNITED STATES PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995

Certain information contained in this Form 10-KSB is considered forward looking
statements within the meaning of the Private Securities Litigation Act of 1995
(the "Act"), which became law in December, 1995. In order to obtain the benefits
of the "safe harbor" provisions of the Act for any such forward-looking
statements, we wish to caution investors and prospective investors about
significant factors which, among others, have in some cases affected our actual
results and are in the future likely to affect our actual results and cause them
to differ materially from those expressed in any such forward-looking
statements. This Form 10-KSB contains forward-looking statements relating to
future operational and business prospects. Actual results may differ as a result
of factors over which we have no control, including general economic and
business conditions; competition; success of operating initiatives; operating
costs; advertising and promotional efforts; the existence or absence of adverse
publicity; changes in business strategy or development plans; the ability to
retain management; availability, terms and deployment of capital; business
abilities and judgment of personnel; availability of qualified personnel; labor
and employment benefit costs; changes in, or failure to comply with various
government regulations; slower than anticipated completion of research and
development projects and movements in the foreign exchange rate. Future results
with respect to oil and gas properties would be subject to the timing and amount
of capital expenditures by us; drilling of wells in particular the Karakilise-2
well; timing and amount of future production of oil and gas; operating costs and
other expenses; cash flow and anticipated liquidity; prospect development and
property acquisitions; and our marketing of oil and gas. These other factors
include, among others: general economic conditions; oil and gas price
volatility; our ability to find, acquire, market, develop and produce new
properties; the risks associated with acquisitions and exploration; operating
hazards attendant to the oil and gas business; down hole drilling and completion
risks that are generally not recoverable from third parties or insurance;
uncertainties in the estimation of proved reserves and in the projection of
future rates of production and timing of development expenditures; potential
mechanical failure or underperformance of significant wells; the strength and
financial resources of our competitors and our ability to find and retain
skilled personnel.

ITEM 7.  FINANCIAL STATEMENTS

See Financial Statements Index on page F-1


                                       19
<PAGE>


Item 7. Financial Statements and Supplementary Data.


Avenue Group, Inc.

December 31, 2005

Reports of Independent Registered Public Accounting Firms                 F-2

Balance Sheet                                                             F-4

Operations Statement                                                      F-5

Stockholders' Equity Statement                                            F-6

Cash Flow Statement                                                       F-7

Comprehensive (Loss) Statement                                            F-8

Financial Statement Notes                                                 F-9

                                       F-1
<PAGE>

            REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


Stockholders and Directors
Avenue Group, Inc.
New York, New York

We have audited the accompanying consolidated Balance Sheet of Avenue Group,
Inc. as of December 31, 2005, and the related consolidated Operations Statement,
Stockholders' Equity Statement, Cash Flow Statement and Comprehensive Income
(Loss) Statement for the year then ended. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Avenue Group, Inc.
as of December 31, 2005, and the results of its operations and its cash flows
for the year then ended, in conformity with accounting principles generally
accepted in the United States.




                                                 /s/ Sherb & Co., LLP
                                                 Certified Public Accountants

      New York, New York
      April 7, 2006

                                       F-2
<PAGE>

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


To the Board of Directors and Stockholders of
Avenue Group, Inc and Subsidiaries.

We have audited the accompanying consolidated balance sheet of Avenue Group,
Inc. and subsidiaries (the "Company") as of December 31, 2004 and the related
consolidated statement of operations, stockholders' equity and cash flows for
the year then ended. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audit.

We conducted our audit in accordance with standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the
consolidated financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the consolidated financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Avenue
Group, Inc. and subsidiaries as of December 31, 2004 and the consolidated
results of their operations and their cash flows for the year then ended, in
conformity with accounting principles generally accepted in the United States of
America.

As more fully described in Note 13 to the consolidated financial statements,
errors were discovered by management during 2005 relating to the accounting for
oil and gas operations and investments as of and for the year ended December 31,
2004. Accordingly, the consolidated balance sheet as of December 31, 2004 and
the statement of operations, stockholders' equity and cash flows for the year
then ended have been restated to reflect corrections to previously reported
amounts.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. The Company has recurring net
losses and negative cash flows from operations and has an accumulated deficit.
These matters raise substantial doubt about the Company's ability to continue as
a going concern. The consolidated financial statements do not include any
adjustments that might result from the outcome of this uncertainty.



Weinberg & Company, P.A.

Boca Raton, Florida
May 9, 2005, except for Note 13, which is as of April 17, 2006

                                       F-3
<PAGE>

                               Avenue Group, Inc.
                           Consolidated Balance Sheet
<TABLE>
<CAPTION>

                                                                                   December 31,
ASSETS:                                                                                           2004
                                                                               2005            (restated)
                                                                         ---------------     ---------------
CURRENT ASSETS:
<S>                                                                      <C>                 <C>
      Cash                                                               $      261,718      $      120,114
      Investment in Langley Park - net                                          316,316             996,682
      Investment in ROO Group, Inc.                                           1,858,593           2,769,629
      Other current asset                                                        68,488               9,413
      Investment in Australian marketable securities                                  -              84,116
                                                                         ---------------     ---------------

          TOTAL CURRENT ASSETS                                                2,505,115           3,979,954
                                                                         ---------------     ---------------

OIL AND GAS PROPERTY:
      Developed oil and gas property, net                                        87,222           1,166,180
      Undeveloped oil and gas property                                           32,932           1,040,184
      Well in progress                                                                -             469,372
                                                                         ---------------     ---------------

          TOTAL OIL AND GAS PROPERTY                                            120,154           2,675,736
                                                                         ---------------     ---------------
FURNITURE, FIXTURES AND EQUIPMENT, net                                            3,098              46,650
                                                                         ---------------     ---------------

OTHER ASSETS:
      Note receivable Videodome                                                   4,000             276,000
      Other assets                                                                8,108               8,225
                                                                         ---------------     ---------------

TOTAL ASSETS                                                             $    2,640,475      $    6,986,565
                                                                         ===============     ===============


LIABILITIES AND STOCKHOLDERS' EQUITY:
      CURRENT LIABILITIES:
          Accounts payable and accrued liabilities                       $      498,892      $      326,547
          Notes payable                                                         250,000             250,000
                                                                         ---------------     ---------------

              TOTAL CURRENT LIABILITES                                          748,892             576,547

      OIL ASSET RETIREMENT OBLIGATION                                            62,937              56,057

STOCKHOLDERS' EQUITY:
      Preferred stock, $.001 par value, 25,000,000 shares
      authorized, none issued and outstanding                                         -                   -
      Common stock, $.0002 par value, 500,000,000 shares
      authorized, 246,890,986 and 256,490,986 shares issued
      and outstanding at December 31, 2005 and 2004, respectively                49,378              51,297
      Additional paid - in capital                                           32,977,391          30,553,473
      Accumulated other comprehensive income                                  1,107,209           2,162,393
      Deferred compensation                                                      (1,000)           (134,100)
      Accumulated deficit                                                   (32,304,332)        (26,279,102)
                                                                         ---------------     ---------------

TOTAL STOCKHOLDERS' EQUITY                                                    1,828,646           6,353,961
                                                                         ---------------     ---------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                               $    2,640,475      $    6,986,565
                                                                         ===============     ===============
</TABLE>


                          See financial statement notes
                                       F-4

<PAGE>

                               Avenue Group, Inc.
                        Consolidated Operations Statement
<TABLE>
<CAPTION>

                                                                    Year ended December 31,
                                                           -------------------------------------------
                                                                                          2004
                                                                  2005                 (restated)
                                                           -----------------       -------------------
Revenue:
<S>                                                        <C>                     <C>
Oil sales                                                  $         25,468        $           66,865
e-commerce sales                                                      9,418                    19,212
                                                           -----------------       -------------------
                                                                     34,886                    86,077
                                                           -----------------       -------------------

Expense:
       Cost of e-commerce sales                                       1,050                     4,645
       Oil lease operating expense                                  119,235                    10,824
       Impairment loss, developed oil property                    1,563,343                 1,861,108
       Impairment loss, undeveloped oil property                          -                   267,018
       Expired oil leases                                           175,198                         -
       Equity based compensation                                  2,500,000                         -
       Loss on sale of oil property                                 721,046                         -
       Sales, general and administrative                          1,554,509                 2,404,575
                                                           -----------------       -------------------

            Total operating expense                               6,634,381                 4,548,170
                                                           -----------------       -------------------

            (Loss) from operations                               (6,599,495)               (4,462,093)

Other income (expense):
       Gain on sale of marketable securities                        511,462                         -
       Gain on change in market value of Langley
       Park escrow contingency                                       98,769                         -
       Other income                                                       -                    49,504
       Interest expense                                             (35,966)                  (17,107)
       Impairment loss on Langley Park                                    -               (10,003,318)
                                                           -----------------       -------------------

            Total other income (expense)                            574,265                (9,970,921)
                                                           -----------------       -------------------

 Loss from continuing operations                                 (6,025,230)              (14,433,014)
                                                           -----------------       -------------------

Gain on sale of discontinued operations                                   -                   724,874
Income from discontinued operations                                       -                    54,723
                                                           -----------------       -------------------

Total income from discontinued operations                                 -                   779,597
                                                           -----------------       -------------------

Net (loss)                                                 $     (6,025,230)       $      (13,653,417)
                                                           =================       ===================

Basic and diluted loss per common share from
continuing operations                                               $ (0.02)                  $ (0.06)
                                                           =================       ===================

Basic and diluted loss per common share from
discontinued operations                                             $     -                   $     -
                                                           =================       ===================

Basic and diluted loss per common share                             $ (0.02)                  $ (0.06)
                                                           =================       ===================

Weighted average number of common shares outstanding -
Basic and diluted                                               247,758,931               222,397,036
                                                           =================       ===================
</TABLE>

                         See financial statement notes.
                                       F-5

<PAGE>

                               Avenue Group, Inc.
                   Consolidated Stockholders' Equity Statement
                                 (2004 restated)

<TABLE>
<CAPTION>

                                                       Common stock
                                 Common Stock          to be issued
                            ------------------- ---------------------
                                                                                 Accumulated
                                                                      Additional     Other
                                                                      Paid-In    Comprehensive  Deferred   Accumulated
                              Shares    Amount    Shares     Amount   Capital    Income(Loss) Compensation   Deficit       Total
                            ----------- ------- ---------- ---------- ----------- ----------- ----------- ------------- ------------
<S> <C>                     <C>         <C>      <C>       <C>        <C>         <C>           <C>       <C>           <C>
Balance at December
31, 2003                    203,976,171 $40,795  3,906,666 $  586,000 $17,737,475 $   26,200    ($16,800) ($12,625,685) $ 5,747,985
Issued 2,000,000 shares
to K & K Plastics             2,000,000     400 (2,000,000)  (300,000)    299,600          -           -             -            -
Issued 1,906,666 shares
to Alore, LTD-(Kashet
Ltd.)                         1,906,666     380 (1,906,666)  (286,000)    285,620          -           -             -            -
Granted 6,750,000 options
to Steve Gordon                       -       -          -          -   1,012,500          -  (1,012,500)            -            -
375,000 options vest to
Steve Gordon                          -       -          -          -           -          -      56,250             -       56,250
Options vest to Steve
Gordon                                -       -          -          -           -          -     843,750             -      843,750
Options vest to Daniel
Aharonoff for services                -       -          -          -           -          -      12,600             -       12,600
Issued 48,458,149 shares to
Langley Park Investment
Trust                        48,458,149   9,692          -          -  10,990,308          -           -             -   11,000,000
Granted 300,000 options to
MacReport.net                         -       -          -          -           -          -     (18,000)            -      (18,000)
Issued 150,000 shares to
MacReport.net                   150,000      30          -          -      17,970          -           -             -       18,000
Options vest to
MacReport.net                         -       -          -          -           -          -         600             -          600
Value of  the registration
rights of 3,000,000 shares
of ROO Group received for
termination of registration
agreement                             -       -          -          -     210,000          -           -             -      210,000
Net loss for 2004                     -       -          -          -           -          -           -   (13,653,417) (13,653,417)
Foreign currency translation
gain                                  -       -          -          -           -     15,119           -             -       15,119
Unrealized gain on marketable
securities                            -       -          -          -           -  2,121,074           -             -    2,121,074
                            ----------- ------- ---------- ---------- ----------- ----------- ----------- ------------- ------------
Balance at December 31,
2004 (Restated)             256,490,986 $51,297          - $        - $30,553,473 $2,162,393   ($134,100) ($26,279,102) $ 6,353,961
 Retirement of treasury
 stock                      (10,000,000) (2,000)         -          -    (123,000)         -           -             -     (125,000)
Issuance of options
  Deferred compensation               -       -          -          -      18,000          -     (18,000)            -            -
  Non-deferred compensation           -       -          -          -       3,000          -           -             -        3,000
Amortization of options               -       -          -          -           -          -     151,100             -      151,100
Issuance of stock for
services                        400,000      81          -          -      25,918          -           -             -       25,999
Equity based compensation             -       -          -          -   2,500,000          -           -             -    2,500,000
Reduction in unrealized
component of marketable
securities
     Investment in ROO                -       -          -          -           -   (858,087)          -             -     (858,087)
     Investment in Langley            -       -          -          -           -   (108,220)          -             -     (108,220)
     Australian securities            -       -          -          -           -    (47,416)          -             -      (47,416)
Reduction in comprehensive
income due to foreign
exchange rate tranlation              -       -          -          -           -    (41,461)          -             -      (41,461)
Net loss for 2005                     -       -          -          -           -          -           -    (6,025,230)  (6,025,230)
                            ----------- ------- ---------- ---------- ----------- ----------- ----------- ------------- ------------
Balance at December 31,
2005                        246,890,986 $49,378          - $        - $32,977,391 $1,107,209     ($1,000) ($32,304,332) $ 1,828,646
                            =========== ======= ========== ========== =========== =========== =========== ============= ============
</TABLE>


                         See financial statement notes.
                                       F-6

<PAGE>


                               Avenue Group, Inc.
                        Consolidated Cash Flow Statement

<TABLE>
<CAPTION>

                                                              Year ended December 31,
                                                         -----------------------------------
                                                                                 2004
                                                               2005           (restated)
                                                         ----------------   ----------------
Cash Flow From Operating Activity:
<S>                                                         <C>               <C>
Net loss                                                 $    (6,025,230)     $ (13,653,417)
Income from discontinued operations                                    -            (54,723)
Gain on sale of discontinued operations                                -           (724,874)
                                                         ----------------   ----------------
Loss from continuing operations                               (6,025,230)       (14,433,014)
Adjustments to reconcile net loss to net cash
used in operating activity:
     Depreciation                                                 10,725             13,523
     Impairment loss on investment in Langley Park
     securities                                                        -         10,003,318
     Impairment loss on developed oil property                 1,563,343          2,128,126
     Expired oil leases                                          175,198                  -
     Loss on sale of oil lease                                   721,046                  -
     Gain on decrease in escrow contingency Langley
     Park securities                                             (98,769)                 -
     Gain on sale of Australian securities                       (38,885)                 -
     Gain on sale of Langley Park securities                     (34,721)                 -
     Gain on sale of ROO Group securities                       (437,856)                 -
     Equity based compensation                                 2,529,000            895,200
     Amortization of deferred compensation                       151,100                  -
     Changes in operating assets and liabilities:
        Decrease in accounts receivable                                -             16,900
        Decrease (increase) in prepaid expense                         -              3,464
        Increase in other current assets                         (55,075)                 -
        Increase in other assets                                  (3,883)                 -
        Increase in accounts payable and accrued
        liabilities                                              300,242             91,887
        Accretion of oil asset retirement obligation               6,880                  -
                                                         ----------------   ----------------
Net Cash Used In Operating Activity                           (1,236,885)        (1,280,596)
                                                         ----------------   ----------------

Cash Flow From Investing Activity:
Investment in oil and gas property                                     -         (1,036,818)
Purchases of fixed assets                                              -            (17,806)
Proceeds from sale of Langley park securities                    654,975                  -
Proceeds from sale of ROO Group securities                       490,806                  -
Proceeds from sale of Australian marketable securities            75,585             54,920
                                                         ----------------   ----------------
Net Cash Provided by (Used in) Investing Activity              1,221,366           (999,704)
                                                         ----------------   ----------------

Cash Flow From Financing Activity:
Proceeds received from notes payable                                   -            213,975
Proceeds of notes receivable                                     272,000                  -
Purchases of treasury stock                                     (125,000)                 -
Proceeds received from issuance of common stock, net                   -            300,000
                                                         ----------------   ----------------
Net Cash Provided By Financing Activities                        147,000            513,975
                                                         ----------------   ----------------
Effect of foreign currency translation on cash                    10,123             16,314
                                                         ----------------   ----------------

Net Increase (Decrease) In Cash                                  141,604         (1,750,011)
Cash At Beginning of Year                                        120,114          1,870,125
                                                         ----------------   ----------------
Cash At End of Year                                      $       261,718    $       120,114
                                                         ================   ================

Non-Cash Investing and Financing Activity:
Asset retirement obligation on oil and gas property                    -    $        56,067
Issuance of 48,458,149 shares of common stock for
investment in Langley Park Investments PLC                             -    $    11,000,000
Additional paid-in capital for value of termination
of registration agreement                                              -    $       210,000
Sale of Bickhams Media (a former wholly-owned subsidiary)              -    $       588,000

</TABLE>

                         See financial statement notes.
                                       F-7

<PAGE>

                               Avenue Group, Inc.
               Consolidated Comprehensive Income (Loss) Statement


                                               Year ended December 31,
                                      ------------------------------------------
                                                                            2004
                                            2005                 (restated)
                                      -----------------      -------------------

 Net Loss                             $     (6,025,230)      $      (13,653,417)
                                      -----------------      -------------------
 Other comprehensive income (loss), net of tax: Unrealized gain (loss) on:
        marketable securities                 (966,307)               2,121,074
        foreign translation                    (88,877)                  15,119
                                      -----------------      -------------------

 Other comprehensive income (loss)          (1,055,184)               2,136,193
                                      -----------------      -------------------

  Comprehensive loss                  $     (7,080,414)      $      (11,517,224)
                                      =================      ===================



                         See financial statement notes.
                                       F-8
<PAGE>

                               Avenue Group, Inc.
                            Financial Statement Notes
                        As of December 31, 2005 and 2004


Note 1  Company Background and Business Plan

Avenue  Group,  Inc. was  incorporated  in Delaware on February 2, 1999.  We are
engaged in oil and gas  exploration  and  development  through our  wholly-owned
operating  subsidiary,  Avenue Energy, Inc. We also own as of December 31, 2005,
4.9% of the common stock of ROO Group, Inc. (RGRP.OB), an e-commerce and digital
media  business,  4.75% of the common  stock of Langley  Park  Investment  Trust
(LPI.L)  and 50.1% of the common  stock of  Stampville.com,  Inc.,  an  inactive
business.  We have a wholly-owned  subsidiary,  I.T. Technology Pty. Ltd., which
furthers our operations in Australia.

In our oil and gas exploration and production we have agreements with the Sayer
Group, experienced in oil and gas operations in Turkey. Through these
agreements, we initially acquired a 50% interest in the Karakilise license and
other exploration and production licenses and leases in Turkey. These leases and
licenses were granted to Avenue Energy pursuant to an option to acquire
interests in up to 31 other oil and gas properties in Turkey as well as an
option to invest in future exploration and production licenses acquired by the
Sayer Group in Turkey, provided we remain a rights holder in an exploration or
production lease with the Sayer Group. Subsequently we have reduced our existing
and ongoing obligations to fund activities at the Karakilise license and its
participation interests in this license from 50% to 10.5%. Other leases have
expired, and we now have, in addition to the Karakilise license, a 50%
participation interest in the North Rubai prospect in Turkey. We are considering
acquisition of interests in other oil and gas prospects.


Note 2  Summary of Significant Accounting Policies

A.  Restatement of 2004 Financial Statements

We determined in 2005 that there were errors in our 2004 financial statements ,
as originally issued. Therefore, we have restated and reclassified the financial
statements as explained in Note 13.

B.  Principles of Consolidation

The financial statements are consolidated with the accounts of Avenue Group, its
wholly-owned subsidiaries and the accounts of Stampville which as of December
31, 2005 and 2004 was 50.1% owned. The losses allocated to the minority
stockholders of Stampville exceeded the remaining minority interest; we have
allocated the excess to Avenue Group. We eliminate all material intercompany
accounts and transactions.

C.  Estimates

The preparation of the consolidated financial statements in conformity with
accounting principles generally accepted in the United States requires us to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenue and expense. Actual
results could differ from those estimates. See Notes 2F and 4.

D.  Fair Value of Financial Instruments

The carrying value of financial instruments including cash, accounts payable,
and debt, approximates their fair values at December 31, 2005 and 2004, due to
the relatively short-term nature of these instruments. See also Note 2E.

E.  Marketable Securities

We report marketable securities at fair value (quoted market price) on the
balance sheet date. We have designated investments in Australian marketable
securities and ROO Group, Inc. as available for sale. We include net unrealized
gains and losses on securities available for sale in equity as other
comprehensive income (loss), as provided by Statement 115 of the Financial
Accounting Standards Board (FASB), Accounting for Certain Investments in Debt
and Equity Securities.

                                       F-9
<PAGE>

                               Avenue Group, Inc.
                            Financial Statement Notes
                        As of December 31, 2005 and 2004

The investment in Langley Park Investment Trust has two components: shares which
are freely tradable and shares which are escrowed. We describe the escrow in
Note 9, Capitalization, B, Common Stock. We classify the freely tradable shares
as available-for-sale.

Accounting for the escrowed Langley Park shares. We record the escrow as a
restricted asset. Statement 115 provides that securities which may be sold
within one year and which we designate as available for sale should be accounted
for as available for sale. As of December 31, 2005, the Langley Park escrow will
settle in less than one year. Therefore, at that date the escrowed shares are
available for sale (However, see below regarding accounting for the escrow
obligation). As of December 31, 2004, the escrowed shares could not be sold
within one year. Accordingly we accounted for them at that date using the cost
methodology described in Accounting Principles Board Opinion 18, paragraph 6(a).

The contingency arrangement under which we may be required to relinquish Langley
Park shares held in escrow is a derivative which we account for at fair value as
a contra to the escrowed shares, with changes in fair value recorded in our
operations statement, in accordance with the guidance of paragraphs 17 and 18(a)
in FASB Statement 133, Accounting for Derivative Instruments and Hedging
Activities. The value of the contra was $538,194 and $636,963 at December 31,
2005 and 2004, respectively, computed as the value of the portion of the
escrowed shares which would have to be returned to Langley if the price of our
common stock on the valuation date were the price at the end of the two year
escrow period.

Net unrealized gain (loss) for 2005 and 2004 were $1,504,214 and $2,268,795,
respectively. We review all of our investments for any unrealized losses deemed
to be other than temporary. We recognize unrealized losses that are other than
temporary in earnings. Realized gains and losses on investments are determined
using the specific identification method. During the year ended December 31,
2004, we determined that the loss in market value relating to Langley Park was
other than temporary; we recognized a permanent impairment amounting to
$10,003,318 for the year ended December 31, 2004.

See Notes 3, 9B and 10B.

F.  Oil and Gas Property

We follow the successful-efforts method of accounting for oil and gas property.
Under this method of accounting, we capitalize all property acquisition cost and
cost of exploratory and development wells when incurred, pending determination
of whether the well has found proved reserves. If an exploratory well does not
find proved reserves, we charge to expense the cost of drilling the well. We
include exploratory dry hole cost in cash flow from investing activity within
the cash flow statement. We capitalize the cost of development wells whether
productive or nonproductive. We had no exploratory well cost that had been
suspended for one year or more as of December 31, 2005, or 2004. As of December
31, 2005 and 2004, we had drilled one well, the Karakilise 1. The well has
produced a small amount of oil which we have sold, but we have concluded that
the well will not produce commercial quantities of oil and gas. The data on the
well is quite preliminary and we have not yet determined if we have found proved
reserves.

We expense as incurred geological and geophysical cost and the cost of carrying
and retaining unproved property. We will provide depletion, depreciation and
amortization (DD&A) of capitalized cost of proved oil and gas property on a
field-by-field basis using the units-of-production method based upon proved
reserves. In computing DD&A we will take into consideration restoration,
dismantlement and abandonment cost and the anticipated proceeds from equipment
salvage. We apply the provisions of FASB Statement 143, Accounting for Asset
Retirement Obligations, which provides guidance on accounting for dismantlement
and abandonment cost. In 2004 we produced a small quantity of oil from the
Karakilise 1 well. We have not established any proved reserves on the well.
Accordingly, we have no basis for computing DD&A. Alternatively, we follow the
guidance in paragraphs 28 and 31 of FASB statement 19, Financial Accounting and
Reporting by Oil and Gas Producing Companies, requiring periodic assessments for
impairment of unproved properties and exploratory well cost when reserves are
not found.

We review our long-lived assets for impairment when events or changes in
circumstances indicate that an impairment may have occurred. In the impairment
test we compare the expected undiscounted future net revenue on a field-by-field
basis with the related net capitalized cost at the end of each period. We will
calculate expected future cash flow on all proved reserves using a 10% discount
rate and escalated prices. Should the net capitalized cost exceed the
undiscounted future net revenue of a property, we write down the cost of the
property to fair value, which we determine using discounted future net revenue.
We provide an impairment allowance on a property-by-property basis when we
determine that unproved property will not be developed. See section H of this
Note.

                                      F-10
<PAGE>

                               Avenue Group, Inc.
                            Financial Statement Notes
                        As of December 31, 2005 and 2004

Sales of Producing and Nonproducing Property - We will account for the sale of a
partial interest in a proved property as normal retirement. We will recognize no
gain or loss as long as this treatment does not significantly affect the
unit-of-production depletion rate. We recognize a gain or loss for all other
sales of producing properties and include the gain or loss in the results of
operations.

We will account for the sale of a partial interest in an unproved property as a
recovery of cost when substantial uncertainty exists as to recovery of the cost
applicable to the interest retained. We will recognize a gain on the sale to the
extent that the sales price exceeds the carrying amount of the unproved
property. We will recognize a gain or loss for all other sales of nonproducing
properties and include the gain or loss in the results of operations.

G.  Other Fixed Assets

We state other fixed assets at cost. We provide for depreciation using the
straight-line method of accounting over the estimated useful lives ranging from
3 to 7 years.

H. Impairment of Long-Lived Assets

We account for impairment and disposal of long-lived assets in accordance with
FASB Statement 144, Accounting for the Impairment or Disposal of Long-Lived
Assets, which requires impairment losses to be recorded on assets to be held and
used by us when indicators of impairment are present and the undiscounted cash
flow estimated to be generated by those assets are less than the carrying amount
of the assets. When an impairment loss is required for assets we will hold and
use, we adjust the related assets to their estimated fair value. Fair value
represents the amount at which an asset could be bought or sold in a current
transaction between willing parties, that is, other than a forced or liquidation
sale.

The estimation process involved in determining if assets have been impaired and
in the determination of fair value is inherently uncertain because it requires
estimates of current market yields as well as future events and conditions. Such
future events and conditions include economic and market conditions, as well as
availability of suitable financing to fund acquisition and development activity.
Our realization of our revenue producing assets is dependent upon future
uncertain events and conditions, and accordingly, the actual timing and amounts
we realize may be materially different from their estimated value.

In 2005 and 2004 we recorded impairment losses of $1,387,532 and $2,128,126,
respectively, on our oil and gas property (See Note 7). In 2004 we recorded an
impairment loss of $10,003,318 on our investment in Langley Park Investment
Trust (See Note 9 B).

I.  Accruals

We can not reasonably estimate accrued vacation.

J.  Revenue Recognition

We recognize revenue on our oil and gas property when we receive our
distributable share of income generated by the operations. That is the point in
time when title of products sold has passed to the customer, the customer has
assumed the risks and rewards of ownership and we are able to determine the
collectibility of the revenue.

We recognize revenue and related cost for digital media and e-commerce sales
when services are rendered or products are shipped to the customer, which is the
point in time when title passed to the customer and the customer assumed the
risks and rewards of ownership.

                                      F-11
<PAGE>

                               Avenue Group, Inc.
                            Financial Statement Notes
                        As of December 31, 2005 and 2004

K.  Foreign Currency Translation

We translate assets and liabilities of our Australian subsidiary at current
exchange rates, and related revenue and expense at average exchange rates in
affect during the period. We record resulting translation adjustments as a
component of accumulated comprehensive income (loss) in stockholders' equity.

L.  Income Taxes

We record deferred income tax using enacted tax laws and rates for the years in
which we expect the tax to be paid. We provide deferred income tax when there is
a temporary difference in recording such items for financial reporting and
income tax reporting. The temporary differences that give rise to deferred tax
assets primarily are depreciation and accrual-to-cash adjustments, which we
reduced by a like amount because we are uncertain as to whether we will realize
the deferred tax assets.

At December 31, 2005, we had federal net operating loss carryforwards amounting
to approximately $18,053,000, which expire in 2021 through 2025. We have
recorded a full valuation allowance against deferred tax assets (approximately
$6,138,000 using a Federal tax rate of 34%) resulting from the net operating
loss carryforwards, because we do not consider the realization of such deferred
tax assets to be more likely than not.

The difference between the recorded income tax benefit and the computed tax
benefit using a 34% Federal tax rate is:

                                                  2005              2004
                                             ------------         ------------
Expected income tax (benefit)                $(2,050,000)         $(4,640,000)
Permanent difference                             850,000                    -
Increase in valuation allowance                1,200,000            4,640,000
                                             ------------         ------------
                                             $         -          $         -
                                             ============         ============
M.  Loss Per Common Share

We base net loss per common share (basic and diluted) on the net loss divided by
the weighted average number of common shares outstanding during each year. We
exclude common stock equivalents in the computation of diluted net loss per
common share because the effect would be antidilutive. Had common stock
equivalents not been antidilutive, the equivalents we would have added to
weighted average shares outstanding in computing the loss per share would have
been 59,350,000 for 2005 and 54,450,000 for 2004. We have restated our 2004
financial statements, as described in Section A of this Note and in Note 13. The
restatement did not change basic or diluted net loss per share.

N. Stock-Based Compensation

We recognize compensation expense for our stock options plan using the intrinsic
value method of accounting. Under the terms of the intrinsic value method,
compensation cost is the excess, if any, of the quoted market price of the stock
at the grant date, over the amount an employee must pay to acquire the stock.

In December 2002, the FASB issued Statement No. 148, Accounting for Stock-Based
Compensation-Transition and Disclosure - an amendment of Statement No. 123,
Accounting for Stock Based Compensation, which provides alternative methods for
accounting for a change by businesses to the fair value method of accounting for
stock-based compensation. Additionally, Statement 148 amends the disclosure
requirements of Statement 123 to require disclosure of the method of accounting
for stock based-compensation and related pro forma disclosures when the
intrinsic value method continues to be used.

For pro forma disclosure, we amortize to expense the estimated fair value of the
options over the options' vesting period. Our pro forma stock-based compensation
disclosure is:
                                                  2005                  2004
                                                  ----                  ----
         Net loss as reported                $ (6,025,230)        $ (13,653,417)
         Pro forma net loss                  $ (6,132,230)        $ (14,013,417)


         Loss per share as reported          $   (0.02)           $       (0.06)
         Pro forma loss per share            $   (0.03)           $       (0.06)

                                      F-12
<PAGE>

                               Avenue Group, Inc.
                            Financial Statement Notes
                        As of December 31, 2005 and 2004

We estimated the fair value of options granted during the years ended December
31, 2005 and 2004 on the date of grant, using the Black-Scholes pricing model
with the following assumptions:
                                                          2005          2004
                                                         ------         ----
Weighted average of expected risk-free interest rates     5.00%         3.00%
Expected years from vest date to exercise date           3 to 5         3
Expected stock volatility                                  136%         82%
Expected dividend yield                                     0%          0%

O.  Recent Accounting Pronouncements

In December 2004, the FASB reissued Statement No. 123, Accounting for
Stock-Based Compensation, as Statement 123(R), Share Based Compensation. This
statement replaces Statement 123, amends Statement 95, Statement of Cash Flows,
and supersedes APB Opinion 25, Accounting for Stock Issued to Employees.
Statement 123(R) requires companies to apply a fair-value based measurement
method in accounting for share-based payment transactions with employees and to
record compensation expense for all share-based awards granted, and to awards
modified, repurchased or cancelled after the required effective date.
Compensation expense for outstanding awards for which the requisite service had
not been rendered as of the effective date will be recognized over the remaining
service period using the compensation cost calculated for pro forma disclosure
purposes under Statement 123, adjusted for expected forfeitures. Additionally,
Statement 123(R) will require entities to record compensation expense for
employee stock purchase plans that may not have previously been considered
compensatory under the existing rules. Statement 123(R) will be effective for
the first interim or annual period beginning after December 15, 2005, therefore,
we will be adopting Statement 123(R) commencing with the quarter ended Mach 31,
2006. We will be adopting the provisions of Statement 123(R) using a modified
prospective application. If we had included the cost of employee stock option
compensation in our financial statements, our net loss for 2005 and 2004 would
have increased by $1,600,000 and $360,000, respectively.

In December 2004, the FASB issued Statement 153, Exchanges of Nonmonetary
Assets. Statement 153 addresses the measurement of exchanges of nonmonetary
assets. The guidance in APB Opinion No. 29, Accounting for Nonmonetary
Transactions, is based on the principle that exchanges of nonmonetary assets
should be measured based on the fair value of the assets exchanged. The guidance
in that Opinion, however, included certain exceptions to that principle. This
Statement amends Opinion 29 to eliminate the exception for nonmonetary exchanges
of similar productive assets and replaces it with a general exception for
exchanges of nonmonetary assets that do not have commercial substance. A
nonmonetary exchange has commercial substance if the future cash flow of the
entity is expected to change significantly as a result of the exchange. This
Statement is effective for financial statements for fiscal years beginning after
June 15, 2005. Earlier application is permitted for nonmonetary asset exchanges
incurred during fiscal years beginning after the date of this Statement was
issued. We believe this Statement will have no material impact on our financial
statements.

In March 2005 the FASB issued Interpretation No. 47, Accounting for Conditional
Asset Retirement Obligations. Interpretation 47 clarifies that the term
conditional obligation as used in Statement No. 143, Accounting for Asset
Retirement Obligations, refers to a legal obligation to perform an asset
retirement activity in which the timing and/or method of settlement are
conditional on a future event that may or may not be within the control of the
entity. Interpretation 47 requires that the uncertainty about the timing and/or
method of settlement of a conditional asset retirement obligation be factored
into the measurement of the liability when sufficient information exists.
Interpretation 47 also clarifies when an entity would have sufficient
information to reasonably estimate the fair value of an asset retirement
obligation. Interpretation 47 is effective for fiscal years ending after
December 15, 2005. We believe the Interpretation will have no material impact on
our financial statements.

On June 9, 2005, the FASB issued Statement 154, Accounting Changes and Error
Corrections. Statement 154 replaces APB Opinion 20, Accounting Changes, and
Statement 3, Reporting Accounting Changes in Interim Financial Statements, and
changes the requirements for the accounting for and reporting of a change in
accounting principle. Statement 154 applies to all voluntary changes in
accounting principles. It also applies to changes required by an accounting
pronouncement in the unusual instance that the pronouncement does not include
specific transition provisions. Statement 154 must be adopted for accounting
changes and corrections of errors made in years beginning after December 15,
2005. Early adoption is permitted for accounting changes and corrections of
errors made in years beginning after the date Statement 154 is issued. We
believe this Statement will have no material impact on our financial statements.

                                      F-13
<PAGE>

                               Avenue Group, Inc.
                            Financial Statement Notes
                        As of December 31, 2005 and 2004

P.  Concentration Of Credit Risk

Financial instruments, which potentially subject us to concentration of credit
risk, consist principally of cash described below.

At December 31, 2005, we had cash balances with a bank in excess of the $100,000
limit insured by the Federal Deposit Insurance Corporation of approximately
$160,000. Based on credit worthiness of the financial institutions with which we
do business, we believe we are not exposed to any significant risk.


Note 3  Investments In Marketable Securities

The changes in accumulated other comprehensive income in 2005 and 2004 resulted
primarily from unrealized gains and losses in marketable securities.

In the quarter ended March 31, 2005, we sold all of our holdings in Australian
securities, 1,073,766 shares, for $75,478, with a $38,884 gain, included in
Other Income.

ROO Group, Inc.

On April 30, 2002, we reached an agreement with our then President and Chief
Executive Officer, Mr. Robert Petty, pursuant to which Mr. Petty resigned from
all positions with us to pursue the further development of ROO Group, Inc., a
company owned and controlled by him (formerly ROO Media Corporation). ROO Group
is a provider of digital media systems and technology. Pursuant to this
agreement, we exercised an existing option to acquire a 25% equity interest in
ROO Group and certain stock options previously granted to Mr. Petty and his
affiliates became vested. In connection with the agreement, we recorded an
$8,500 investment in ROO Group. Subsequently, in November, 2003, we made a
further investment of $200,000 in ROO Group, enabling it to merge with the
publicly traded Virilitec Industries, Inc. As a result, we owned 800,000 shares
(approximately 25%) of common stock in the newly merged entity. ROO Group is
operated independently and we exercise no managerial or operational control over
ROO, nor do we intend to do so in the future. In October 2005 ROO Group
reverse-split its stock fifty to one. We state ROO Group shares in this report
post-split.

On September 10, 2004, we entered into an agreement with ROO Group for the sale
of all our shares in our wholly-owned subsidiary, Bickhams Media, Inc., which
holds 50% of the outstanding shares of VideoDome, in exchange for $300,000,
80,000 shares of ROO Group's restricted common stock valued at $280,000, and ROO
Group's assumption of an existing $288,000 promissory note of VideoDome. In
connection with this sale, we recorded a gain on sale of discontinued operations
of $724,874 (see Note 7). In addition, pursuant to the aforementioned agreement,
ROO Group issued an additional 60,000 shares of its restricted common stock to
us, valued at $210,000, in exchange for our termination of certain registration
rights with respect to ROO Group shares we owned. As of December 31, 2005, we
have collected all but $4,000 of the $288,000 VideoDome promissory note.

In November 2004 we assigned 16,790 shares of the common stock of ROO Group to
one of our executive officers in lieu of compensation owed to him in the amount
of $45,250. In February 2005 we transferred 250,000 shares of ROO Group common
stock to a former officer in connection with severance arrangements. For a
further discussion of this transaction, see Note 10 B, Other Agreements. Also,
see Note 2E.

In 2006 we have sold 423,101 shares of ROO Group for $1,058,449. As of April 9,
2006, we own 140,109 shares of ROO Group.

Langley Park Investment Trust:  See Notes 2E and 9B.

Summary of 2005 Investments Activity

                                      F-14
<PAGE>

                               Avenue Group, Inc.
                            Financial Statement Notes
                        As of December 31, 2005 and 2004

At December 31, 2004 we owned Australian securities with a market value of
US$84,116. We sold all of those securities in 2005. The details of our ownership
of other securities are below.

<TABLE>
<CAPTION>

Langley Park-tradable                                                 Unrealized
---------------------                                                 Gain (loss)      Realized       Market
                                              Shares         Cost          - net        Gain         Value
                                           -----------     --------- -------------   ---------     ----------
<S>      <C> <C>                            <C>            <C>       <C>             <C>           <C>
December 31, 2004                           3,028,635      $816,749  $   (318,408)   $       -     $ 498,341
 Sold in 2005                              (2,300,000)     (620,254)            -       34,721             -
                                           -----------     --------- -------------   ---------     ----------
 December 31, 2005                            728,635       196,495       (30,362)           -       166,133
                                           -----------     --------- -------------   ---------     ----------

Langley Park-restricted (escrow)                                      Unrealized
--------------------------------                                     Gain (loss)      Realized       Market
                                              Shares           Cost        - net        Gain         Value
                                           -----------     --------- -------------   ---------     ----------
December 31, 2004                           3,028,634      $816,896  $   (318,555)   $       -      $498,341
 No transactions                                   -              -             -            -             -
                                           -----------     --------- -------------   ---------     ----------
 December 31, 2005                          3,028,634       816,896      (128,518)           -       688,378
                                           -----------     --------- -------------   ---------
 Less escrow contingency at 12-31-05                                                                (538,194)
                                                                                                   ----------
 Adjusted value at December 31, 2005                                                                 150,184
                                                                                                   ----------

Total Langley Park                                                   Unrealized
------------------                                                   Gain (loss)     Realized        Market
                                              Shares           Cost        - net       Gain           Value
                                           -----------   ----------- -------------   ---------     ----------
December 31, 2004                           6,057,269    $1,633,645  $   (636,963)   $       -     $ 996,682
 Sold in 2005                              (2,300,000)     (620,254)            -       34,721             -
                                           -----------     --------- -------------   ---------     ----------
 December 31, 2005                          3,757,269    $1,013,391  $   (158,880)   $       -     $ 316,317
                                           ===========   =========== =============   =========     ==========

 ROO Group                                                            Unrealized
 ---------                                                           Gain (loss)      Realized      Market
                                              Shares         Cost          - net       Gain          Value
                                           -----------   ----------- -------------   ---------     ----------
 December 31, 2004                            923,210    $  653,250  $  2,116,379    $       -     $2,769,629
 Adjustment to cost                                 -        40,875             -            -         40,875
 Sold in 2005                                (360,000)      (93,825)            -      396,981              -
                                           -----------     --------- -------------   ---------     ----------
 December 31, 2005                            563,210    $  600,300   $ 1,258,293    $       -     $1,858,593
                                           ===========   ===========  ============   =========     ==========
</TABLE>

Note 4  Oil and Gas Operations

As part of our shift to a broader strategic focus, in November 2002 we began to
pursue acquisitions of and investments in oil and gas exploration and production
property.

In 2002 we entered into a Farmin and Participation Agreement with Sayer Group
Consortium and Middle East Petroleum Services Limited (MEPS)By the terms of the
agreement we paid $250,000 and acquired an option that ultimately allowed us to
participate in and acquire a 45% working interest in up to 31 exploration
licenses and 2 production leases held by the members of the Sayer Group in
Turkey, as well as the option to participate with a 45% interest in oil and gas
properties or rights acquired by the Sayer Group in the future, so long as we
continue to be an active right holder in an exploration or production lease with
the Sayer Group. The original agreement called for 45% working interest held by
Aladdin Middle East (AME), a 45% working interest held by us and a 10% working
interest held by MEPS. On Jan 22 2004 we entered into an amendment with the
other parties whereby MEPS converted its 10% working interest into a 5% royalty,
and our and AME's working interests increased from 45% each to 50% each.

                                      F-15
<PAGE>

                               Avenue Group, Inc.
                            Financial Statement Notes
                        As of December 31, 2005 and 2004

In April 2003 we exercised an earlier acquired option to acquire up to a 45%
participating interest in the Karakilise-1 well and license located in the
Diyarbakir petroleum district in southeast Turkey. The Karakilise-1 well was
spud June 2003. Our total exercise price of the Karakilise-1 well and license
option was $2,000,000. This well began producing oil in September 2003. As a
result, we were also required to fund an additional $187,164 toward completion
cost. In September 2003, we paid $100,000 of this amount. We funded the
remaining balance of $87,164 from our share of the proceeds of crude oil sales
from the well. For 2003 we received $157,682 for our share of the net profits
from crude oil sales and remitted that amount to the Sayer Group as an
additional investment.

After 2003 the well's production rate dropped significantly. The rate has
stabilized at approximately 20 barrels per day with an equivalent amount of
formation water.

Due to the limited amount of geological information available at the present
time, we have made no determination as to any proved reserves at Karakilise.

In 2003 and 2004 AME, the Karakilise operator, installed substantial oil
handling equipment for the well's production.

Following delays and uncertainties concerning the spud date of the Karakilise-2
well and the previously outstanding matters with Sayer Group regarding field
infrastructure and operating expense, we and Sayer Group finalized a series of
amendments to existing agreements in October 2004, by which we reduced our
existing and ongoing obligations to fund activities at the Karakilise license
and its participation interests at this license from 50% to 15%. These reduced
obligations include the infrastructure improvements and operational cost at the
Karakilise-2 well, which commenced drilling on November 3, 2004; as well as the
additional drilling and operating cost with respect to the Karakilise-2 well.
The Sayer Group has applied amounts previously paid by us toward the settlement
of these matters, such that we have now funded our share of such cost through
the present, and we also funded our initial obligations on the Karakilise-2
well.

Reduction of Interest in Karakilise-2 License

In May 2005, the Sayer Group completed a transaction with JKX Turkey Ltd, a
subsidiary of London Stock Exchange listed exploration and production company
JKX Oil & Gas (London: JKX.L), to complete the Karakilise-2 well. By this
arrangement, we sold to JKX 30% of our 15% interest in the Karakilise-2 well, or
4.5%, leaving us with a 10.5% interest in this well. In exchange, JKX reimbursed
us for 4.5% of the drilling cost to the completion point of this well. The
participating percentages of each party became AME and affiliates 59.5%, JKX 30%
and Avenue 10.5%. Avenue's interests in our other Turkish prospects were not
affected. As a result of this transaction, we recorded a loss on the sale of 30%
of our interest in the Karakilise-2 well of $721,046 and an impairment of our
oil and gas property of $319,757.

Non-participation election in the completion of the drilling of the Karakilise-2
well

The KK-2 well was planned to drill to a total depth of 8,320 feet to test
potential hydrocarbons in the Mardin formation and to provide further geological
information related to the Karakilise-1 well located about 570 meters away.
Drilling of the KK-2 well had been suspended for mechanical reasons. The well
recommenced drilling on June 8, 2005, with AME as Operator. On July 21, 2005,
the KK-2 reached its total depth. Four drill stem tests had been taken in the
Mardin formation which had been encountered 8,053 ft. Quantities of oil were
recovered in the second DST but the results of the other three tests plus the
mudlogs taken over the same interval did not indicate, in the judgment of our
geologists, sufficient quantities of hydrocarbons to justify participating in an
attempt to run casing and complete the well. Consequently, on July 25, 2005, we
notified AME that we elected not to participate in the completion of the
Karakilise-2 well. The other working interest owners unsuccessfully attempted to
complete the well and have plugged and abandoned it. We have preserved our
rights to participate with a 10.5% working interest in all further drilling
activity that might be initiated in the Karakilise leases.

Other leases in Turkey

As part of the above mentioned amendments, we elected to relinquish our options
to acquire participation interests in certain licenses and leases with Sayer
Group in Turkey, including the Khata leases. The parties also agreed that they
may apply for new licenses in Turkey independently of each other. As a result of
these amendments we have substantially reduced our ongoing monthly expenditures
for representation fees, license fees, and ongoing administrative cost in
Turkey.

Avenue and AME held a 50% working interest in the Arpetete prospect, 95,988
acres located adjacent to the N.V.T. Perenco and the TPAO fields. By the terms
of the leases, an initial well had to be drilled by November 30th 2005. After
evaluation of the geophysical and geological data supporting this prospect, we
elected not to participate in any attempt to extend the lease or drill an
initial well and surrendered our interest in the prospect.

                                      F-16
<PAGE>

                               Avenue Group, Inc.
                            Financial Statement Notes
                        As of December 31, 2005 and 2004

Following the amendments referred to above, we currently have a participation
interest of 10.5% in the Karakilise Licenses (other than the KK-2 well) and a
50% participation interest in the North Rubai license. We will require
additional capital to preserve these licenses and to participate in the proposed
drilling programs at these licenses during the next 12 months. The license for
the North Rubai prospect, which is located close to the tri-nation boundary
point of Turkey, Iraq and Syria is set to expire on May 30, 2005, unless we spud
a well or obtain an extension by that date.

We review our oil and gas property periodically to determine if an impairment is
necessary. In 2005 and 2004 we recorded impairment losses of $1,563,343 and
$2,128,126, respectively, as a result of the expiration of leases and our
determination of reduced value in our remaining properties.

In the quarter ended March 2005 we paid $25,000 to extend the Gercus lease for
one year. After December 31, 2005, we allowed our interest in this lease to
expire.

Avenue and AME held a 50% working interest in the Killis prospect located in the
folded overland area near the East Anatolian and Dead Sea strike faults. By the
terms of the leases, an initial well had to be drilled by July 2005. After
evaluation of the geophysical and geological data supporting this prospect,
Avenue elected not to participate in any attempt to extend the lease and
surrendered its interest in the prospect.

Asset Retirement Obligation

We account for our asset retirement obligation using the standards of FASB
Statement 143. We record the fair value of an asset retirement obligation in the
period in which it is incurred if we can make a reasonable estimate of fair
value. We capitalize the associated present value of the asset retirement cost
as part of the carrying amount of the long-lived asset. We have an obligation to
plug and abandon the Karakilise 1 well when the oil production from the well is
depleted. We record these future expenditures in the period the liability is
incurred.

The following table summarizes the estimate of our future asset retirement
obligation for 2005 and 2004:

                                                        2005              2004
                                                     ---------        ----------
Asset retirement obligation at beginning of year     $ 56,057         $       -
Liabilities settled during the year                         -                 -
New obligations for wells drilled and completed             -            56,057
Accretion of asset retirement obligation                6,880                 -
Revisions to estimates                                      -                 -
                                                     ---------        ----------
Asset retirement obligation at end of year           $ 62,937         $  56,057
                                                     =========        ==========
The asset retirement obligation is a long-term liability.


Note 5  Other Fixed Assets

Other fixed assets at December 31 include:
                                                        2005              2004
                                                     ---------         ---------
Office and computer equipment                        $ 21,565          $168,184
Less: accumulated depreciation                        (18,467)         (121,534)
                                                     ---------         ---------
Fixed assets, net                                    $  3,098          $ 46,650
                                                     =========         =========

Depreciation expense for 2005 and 2004 was $12,735 and $13,523, respectively.


Note 6  Investment In Stampville.Com, Inc.

                                      F-17
<PAGE>

                               Avenue Group, Inc.
                            Financial Statement Notes
                        As of December 31, 2005 and 2004

We own 50.1% of Stampville. In March 2002, in view of the limited financial
resources available for us to direct toward Stampville and after reviewing
possible alternatives, we commenced a restructuring of Stampville's operations
and supervision of substantially all of Stampville's activities reverted back to
its founders in New York. Through December 2004, Stampville had an agreement
with the Inter-Governmental Philatelic Corporation (IGPC) whereby IGPC would
provide stamp sheets as well as additional services to Stampville. This
agreement terminated in December 2004. Stampville is currently inactive.


Note 7  Discontinued Operations

On September 10, 2004, we entered into an agreement with ROO Group for the sale
of all our shares in our wholly-owned subsidiary, Bickhams Media, Inc., which
held 50% of the outstanding shares of VideoDome.com Networks Inc. (VideoDome), a
digital video streaming company based in Los Angeles, in exchange for $300,000,
80,000 shares of ROO Group's restricted common stock valued at $280,000 and ROO
Group's assumption of a an existing $288,000 promissory note of VideoDome. In
addition, ROO Group agreed to issue an additional 60,000 shares of ROO Group's
restricted common stock valued at $210,000 to us in exchange for our termination
of registration rights with respect to ROO Group shares we owned. We credited
this amount to additional paid-in capital in 2004. ROO Group is an independently
operated provider of digital media solutions and technology. Also see Note 3.

The sale transaction resulted in a gain of $724,874, which we included in the
2004 operations statement as a gain from sale of discontinued operations. The
elements of the $724,874 gain are:

         Cash                                                         $ 300,000
         80,000 shares of restricted ROO Group common stock             280,000
         Assumed Note                                                   288,000
                                                                      ----------
Total consideration                                                     868,000
Net Assets of Video Dome                                               (143,126)
                                                                      ----------
Gain on Disposition                                                   $ 724,874
                                                                      ==========

Note 8  Notes And Loans Payable

On August 1, 2000, we borrowed $150,000 from Instanz Nominees Pty. Ltd.
("Instanz"), a related party at that time. The loan bears interest at the rate
of ten percent (10%) per annum. In November, 2002, we repaid $100,000 of this
note from the proceeds of a private placement, leaving a balance payable of
principal and interest of $120,725 and $109,585 at December 31, 2005 and 2004,
respectively. Upon mutual agreement of the parties, we will repay this loan and
accrued interest payable, only after we have received additional financing and
at that time upon the mutual agreement of Instanz and us.

In June and July 2004, we borrowed $200,000 for working capital purposes from
the holder of the 50,000,000 share stock option discussed in Note 10. The loans
bear interest at the rate of nine percent (9%) per annum and were unpaid at
December 31, 2005 and 2004. In April 2006 we paid off these loans.


Note 9  Capitalization

A.  Preferred Stock

We have authorized the issuance of 25,000,000 shares of preferred stock, par
value $.001 per share. our board of directors has the right to create one or
more series of preferred stock and to determine the rights, preferences and
privileges of any such series. No shares of preferred stock are currently
outstanding.

                                      F-18
<PAGE>

                               Avenue Group, Inc.
                            Financial Statement Notes
                        As of December 31, 2005 and 2004

B.  Common Stock

See also Notes 10 B and 12.

Private Placement

In January and February 2004, we issued 3,906,666 shares of common stock in
private placements for the proceeds of $586,000 received in prior years.

Financial Services Agreement

In March 2004, we entered into a three year part-time, non-exclusive Employment
Agreement with an individual pursuant to which the individual agreed to provide
us with financial, capital markets, strategic planning, public relations,
investor relations, general business management and corporate financial services
in Canada. Compensation for the services under the employment agreement is from
the grant of stock options to the individual in March 2004 to purchase 6,750,000
shares of common stock at $0.15 per share which at the time of grant had a total
fair value of $1,012,500. Of the total options granted, 2,250,000 were granted
pursuant to our 2000 Stock Option Plan and were not deemed vested until the
filing of a registration statement in connection with the Plan, which was filed
on April 26, 2004. The remaining 4,500,000 options were granted outside of the
Plan and vested monthly over twelve months from the date of grant. As of
December 31, 2004, 3,750,000 of the options granted outside of the Plan were
fully vested. All of the options granted outside of the Plan were fully vested
as of February 8, 2005. In connection with the grant, we expensed the vested
intrinsic value of $112,500 and $900,000 for 2005 and 2004, respectively.

Langley Park Investment Trust

In July 2004, we entered into an agreement with a newly formed London-based
investment trust, Langley Park Investment Trust ("Langley") for the sale in a
private placement of 48,458,149 shares of our common stock in exchange for
6,057,269 ordinary shares of Langley valued at (pound)1.00 per share or $11
million, based on arms-length negotiation. The purpose and the underlying
economics of the transaction were to acquire a liquid asset which we would be
able to sell as needed as a source of cash. Upon our acquisition of the Langley
shares Langley was still privately-held. The fair value of the Langley shares we
acquired was determined by arms-length negotiation between us and Langley. As
consideration for acquiring the shares we issued 48,458,149 shares of our common
stock. The price quoted for our stock on the Over-the Counter Bulletin Board,
$0.227 per share at the time of closing, was a key factor in the negotiations.
There was no relationship between us and Langley other than as arms-length
parties to the transaction.

The Langley shares are listed on the London Stock Exchange with the symbol LPI.
We may freely trade the Langley shares we own, subject to the escrow described
below. As part of the transaction, Langley entered into a "lock-up" agreement
with us by which it has agreed not to trade our shares that it received as a
result of this transaction for a period of two years from the closing date of
the sale. Fifty percent of the shares issued by Langley to us will be held in
escrow for two years following the closing. In the event the price per share of
our common stock at such time is less than it was at the time of the closing
($0.227 per share), Langley will be entitled to receive out of escrow a
percentage of our shares from escrow equal to the percentage of such decline.
The remaining Langley shares held in escrow will be released to us at that time.

After the Langley shares began trading, we began valuing the investment at its
quoted price. Because the December 31, 2004, Langley market price valuation was
sharply below our recorded valuation at acquisition, we recorded an impairment
loss of $10,003,318.

Langley's assets consist almost entirely of micro cap securities of companies
including ours and companies similar to us. We cannot assure that any of these
companies will be successful. Much of our working capital during 2005 has been
generated through the sale of Langley shares. Under the terms of our agreement,
we have no guarantees as to the price of the Langley Investment shares and no
right to receive additional shares based on the decline in the value of the
investment. It is possible that the value of these shares may decline further in
the future, in which event the value of our restricted investment will be
reduced further, and the benefit to our financial position may be substantially
reduced or eliminated.

                                      F-19
<PAGE>

                               Avenue Group, Inc.
                            Financial Statement Notes
                        As of December 31, 2005 and 2004

In 2005, we sold 2,300,000 shares of Langley held by us for proceeds of
$654,975. We used the proceeds from the sale of these shares to fund our working
capital requirements. We owned 4.75% of Langley shares outstanding at December
31, 2005.

Information regarding our Langley stock holdings for 2005 and 2004 is:

<TABLE>
<CAPTION>

                                                                     2005                            2004
                                                          ---------------------------       -----------------------
                                                             Shares            Value         Shares         Value
                                                          ------------       --------       ----------   ----------
<S>                             <C>                         <C>              <C>            <C>          <C>
Unrestricted shares at December 31,                           728,635        $166,056       3,028,635    $  816,896
Escrowed shares at December 31,                             3,028,634         690,226       3,028,634       816,749
                                                          ------------       --------       ---------    ----------
Total                                                       3,757,269        $856,282       6,057,269    $1,633,645
                                                          ============       ========       =========    ==========
Contingent shares forfeitable from escrow if forfeiture
 date were December 31,                                     2,361,534        $538,194       2,361,534    $  636,963
                                                          ============       ========       =========    ==========
</TABLE>

Also see Note 2E.

Business Development Agreement

In November 2004, we entered into a one-year consulting agreement with a
financial services company, which consultant is to provide us with public
relations and business development advice and related services. As compensation
for these services, we issued the consultant options to purchase 300,000 shares
of common stock at an exercise price of $0.06 per share. These options were
fully vested and fully exercisable as of the grant date, but we amortized the
intrinsic value of $18,000 over the life of the consulting agreement. In
November 2004, the holder of these options exercised 150,000 of these options
utilizing the "stock withholding exercise"; in connection with the exercise we
cancelled the options for the remaining 150,000 shares.


Note 10  Stock Options And Other Agreements

A.  Stock Options

In April 2000, our Board of Directors authorized the issuance of up to 8,250,000
shares of common stock in connection with our Stock Option Plan (the "Plan").
The Plan became effective on February 14, 2001 in connection with our effective
registration statement on Form SB-2. On December 24, 2002, stockholders approved
an amendment to the Plan, enabling the Board as currently configured without
non-employee directors to grant options under the Plan and to increase the
number of shares authorized for grant from 8,250,000 to 15,000,000. We intend to
grant options under the Plan to our officers, directors, employees and
consultants.

Our stock option plan is subject to the provisions of SFAS No 123, Accounting
for Stock-Based Compensation. Under the provisions of this standard, employee
and director stock-based compensation expense is measured using either the
intrinsic-value method as prescribed by APB Opinion No. 25, Accounting for Stock
Issued to Employees, and related Interpretations, or the fair value method
described in Statement 123. We have elected to account for its employee and
director stock-based awards under the provisions of APB Opinion No. 25. Under
APB Opinion No. 25, compensation cost for stock options is measured as the
excess, if any, of the fair value of the underlying common stock on the date of
grant over the exercise price of the stock option.

In 2005 and 2004 we granted options in the following transactions:

In March 2004, we entered into a three year part-time, non-exclusive Employment
Agreement with an individual pursuant to which the individual agreed to provide
us with financial, capital markets, strategic planning, public relations,
investor relations, general business management and corporate financial services
in Canada. Compensation for the services under the employment agreement is from
the grant of stock options to the individual in March 2004 to purchase 6,750,000
shares of common stock at $0.15 per share. Of the total options granted,
2,250,000 were granted pursuant to our 2000 Stock Option Plan and are not deemed
vested until the filing of a registration statement in connection with the Plan,
which was filed on April 26, 2004. The remaining 4,500,000 options were granted
outside of the Plan and vested monthly over twelve months from the date of
grant. As of December 31, 2004, 3,750,000 of the options granted outside of the
Plan were fully vested. All of the options granted outside of the Plan were
fully vested as of February 8, 2005. In connection with the grant, we expensed
the vested intrinsic value of $900,000 in 2004. The unamortized balance of
$112,500 was included in the balance sheet as deferred compensation at December
31, 2004 and expensed in 2005.

                                      F-20
<PAGE>

                               Avenue Group, Inc.
                            Financial Statement Notes
                        As of December 31, 2005 and 2004

On November 8, 2004, we entered into a one-year consulting agreement with a
financial services company for investor relations, public relations and general
business consulting services. As compensation for these services, we granted
options to this company to purchase 300,000 shares of our common stock at an
exercise price of $0.06 per share. These options are fully vested and fully
exercisable as of the grant date, but we amortized the intrinsic value of
$18,000 over the life of the consulting agreement. At December 31, 2004, we
included the remaining unamortized balance of $18,000 in the balance sheet as
deferred compensation. We expensed the $18,000 in 2005. In November 2004, the
holder of these options exercised options for 150,000 shares utilizing the
"stock withholding exercise"; in connection with the exercise we cancelled the
options for the remaining 150,000 shares.

In April 2005 we extended for three years to April 30, 2008, the expiration date
of the option granted to Fawdon Investments, Ltd. to purchase 50,000,000 shares
of common stock at a $0.04 exercise price. We charged operations $2,500,000 in
connection with this extension.

See also Note 12.

The following table is a summary of stock option transactions for 2004 and 2005:

<TABLE>
<CAPTION>

                                                                                         Weighted
                                                                          Number         average exercise
                                                                          of Shares      price per share
                                                                         ----------      ----------------
<S>                                        <C> <C>                       <C>                  <C>
           Options outstanding at December 31, 2003                      51,150,000           $0.04
           Granted                                                        7,050,000           $0.15
           Exercised                                                        150,000           $0.12
           Expired                                                          300,000           $0.18
                                                                         ----------           -----
           Balance at December 31, 2004                                  57,750,000           $0.05
           Granted                                                       54,200,000           $0.04
Exercised  0                                                                    N/A
           Expired                                                       51,000,000           $0.04
                                                                         ----------           -----
           Balance at December 31, 2005                                  60,950,000           $0.05
                                                                         ==========           =====
</TABLE>

Information, at date of issuance, for stock option grants during 2004 and 2005:
<TABLE>
<CAPTION>

                                                                                               Weighted-    Weighted-
                                                                                                Average      Average
                                                                                               Exercise       Fair
                                                                                  Shares         Price        Value
                                                                              ------------     ---------    ---------
<S>                                                                                   <C>         <C>           <C>
2004:
  Exercise price exceeds market price                                                none
  Exercise price equals market price                                                 none
  Exercise price below market price                                             7,050,000        $0.15        $0.29

2005:
  Exercise price exceeds market price                                           2,400,000        $0.05        $0.04
  Exercise price equals market price                                                 none
  Exercise price below market price                                            51,800,000        $0.04        $0.06
</TABLE>


At December 31, 2005, we had outstanding options to purchase 60,950,000 shares,
of which 60,150,000 were fully vested and exercisable. The following table
summarizes information about outstanding stock options at December 31, 2005:

                                      F-21
<PAGE>

                               Avenue Group, Inc.
                            Financial Statement Notes
                        As of December 31, 2005 and 2004

<TABLE>
<CAPTION>


                                         Outstanding Options                            Options Exercisable
                         ----------------------------------------------------     ---------------------------------
Range of                   Outstanding         Weighted          Weighted           Exercisable         Weighted
                                                average           Average                                average
                              as of            exercise          remaining             as of            exercise
                           December 31,        price per        contractual         December 31,        price per
Exercise Prices                2005             option          life (years             2005             option
--------------------     -----------------    ------------     --------------     -----------------    ------------

<S>    <C>                     <C>               <C>                <C>                 <C>               <C>
$0.10 -$0.15                   60,950,000        $0.05              5.0                 60,150,000        $0.05
                         =================    ============     ==============     =================    ============
</TABLE>


                                                            2005          2004
Total compensation cost recognized as an expense for      -------        -------
    Stock-based employee-director compensation awards     $20,000        $12,600

The weighted average fair value of options outstanding at December 31, 2005, was
$0.05.

B.  Other Agreements

Separation Agreement

On February 7, 2005, Jonathan Herzog, our former Executive Vice President and
member of our Board of Directors, agreed to resign from all positions he held
with us and our subsidiaries. Beginning in 2004 and continuing into early 2005,
significant disagreements in management style and philosophy about our direction
and business had developed between and among certain members of management and
Mr. Herzog. The parties agreed that it was no longer feasible for them to
continue to work together. Mr. Herzog was not asked to resign and he was not
terminated for cause; a separation was mutually decided upon to address the
aforesaid disagreements.

In connection with his resignation, we entered into a Separation Agreement and
General Release with Mr. Herzog pursuant to which we agreed to pay Herzog
$92,250 in cash to cover certain deferred compensation owed to Herzog and to
satisfy the parties' respective obligations under his employment agreement with
us. In other elements of the Agreement, we repurchased 10,000,000 shares of our
common stock from Eurolink International Pty. Ltd. ("Eurolink"), a company
affiliated with Mr. Herzog's family, for which we paid Eurolink $125,000, the
then fair value of such shares purchased. We also sold Mr. Herzog 250,000 shares
of the common stock of ROO which we owned, for which Mr. Herzog paid us
$125,000, the then fair value of such shares sold. The purpose of this exchange
was to divest Mr. Herzog directly and indirectly of all of his interest in our
common stock, as part of a mutual desire for Mr. Herzog's total separation from
us, and to provide Mr. Herzog shares of stock in ROO in lieu thereof, in an
amount that was approximately equal to the market value of Eurolink's 10,000,000
shares of our common stock.

Consulting Agreement

Effective January 1, 2005, we entered into a consulting agreement with David
Landauer and Reuadnal Limited of London, England. Pursuant to that agreement,
Reuadnal agreed to provide business and financial services to us, including, but
not limited to, assistance with our strategic plan and the introduction of
potential investors. Mr. Landauer is an employee of Reuadnal. As consideration
for these services, we agreed to pay Reuadnal a consulting fee of $80,000, of
which $35,000 was paid upon the effective date of the agreement and the balance
of $45,000 was paid at the rate of $5,000 per month over the nine-month term of
the agreement. The agreement expired on September 30, 2005. Other

On November 11, 2002 our subsidiary, Avenue Energy entered into a two-year
non-exclusive consulting agreement, effective as of October 15, 2002, with
Dormley Pty Ltd an entity controlled by Dr. Jaap Poll, to provide Dr. Poll's
services on a part-time basis to Avenue Energy as its Director of Exploration.
Pursuant to the terms of the Consulting Agreement, Dormley is to be compensated
at a rate of $6,800 per month in fees, plus $1,000 per month as reimbursement
for its office expenses. The consulting agreement also provides for severance
pay upon termination without cause, equal to: (i) six months of fees in the
event Avenue Energy ceases to be in the oil and gas exploration and development
business or (ii) twelve months of fees for any other reason. This agreement
expired in accordance with its terms in October 2004.

                                      F-22
<PAGE>

                               Avenue Group, Inc.
                            Financial Statement Notes
                        As of December 31, 2005 and 2004

On June 1, 2005, we engaged Mr. Mendel Mochkin as a Vice President. Mr. Mochkin
is a brother of Avenue CEO Levi Mochkin. In Mr. Mochkin's first year he will
receive an option to purchase 2,400,000 shares of common stock at $0.06 per
share. This option vests at the rate of 200,000 shares per month commencing as
of June 1, 2005 up until May 1, 2006 and is for a term of five years from the
date of the vesting of each block of stock. In Mr. Mochkin's second year he will
receive an additional option to purchase 2,400,000 shares at $0.10 per share.
This option vests at the rate of 200,000 shares per month commencing June 1,
2006 up until May 1, 2007 and will be for a term of five years from the date of
the vesting of each block of stock.


Note 11 Segments

We operate in three segments, including investments in oil and gas and
e-commerce. See Note 1 for further description. Through December 31, 2005,
Avenue Energy's assets, revenue and expense have been in Turkey. Stampville,
which is inactive, operated in the U.S. Avenue Group, the headquarters
operation, is in the U.S. IT Tech, which is inactive except for its contribution
to headquarters operations, is in Australia. Segment data are:

<TABLE>
<CAPTION>

                                                                                   Ave Group
                                                                                       &
                                                                                    IT Tech
                                               Ave. Energy Stampville Aust
                                                Oil & Gas       E-Commerce         Corporate           Consolidated
                                             --------------  --------------     --------------     ----------------
December 31, 2005
<S>                                          <C>             <C>                <C>
Revenue, net                                 $       25,468  $        9,418     $                  $        34,886
Operating income/(loss)                          (2,659,249        (16,682)         (3,349,299)         (6,025,230)
Impairment loss, oil property                     1,563,343                                              1,563,343
Depreciation and amortization                                                           10,725              10,725
Interest expense                                      6,880          15,420             13,666              35,966
Total assets                                        123,632                          2,516,843           2,640,475

December 31, 2004-restated
Revenue, net                                 $       66,865  $       19,212     $                  $        86,077
Impairment loss, oil property                     2,128,126                                              2,128,126
Impairment loss, Langley Park                    10,003,318                                             10,003,318
Operating income/(loss)                          (2,557,608)           (527)        (1,903,958)         (4,462,093)
Depreciation and amortization                           550                             12,973              13,523
Interest expense                                                                       (17,107)            (17,107)
Capital expenditures                              1,036,818                             17,806           1,054,624
Total assets                                      2,682,702           1,262          4,302,601           6,986,565
</TABLE>


Note 12  Appointment of New Directors

Effective February 7, 2005, we amended our bylaws to increase the authorized
number of directors to four members and our then-current directors, Levi Mochkin
and Yam-Hin (Jim) Tan, appointed Norman J. Singer and Uri A. Bar-Ner to fill the
vacancies in the Board. In addition, the Board named Mr. Mochkin, who at the
time served as our President and Chief Executive Officer, as Chairman of the
Board and appointed Mr. Tan as Secretary.

Subsequently, effective February 17, 2005, we amended our Bylaws to increase the
authorized number of directors to five members and our Board of Directors
elected Shaya Boymelgreen to the Board. In 2003 Mr. Boymelgreen, as Trustee for
the Shaya Boymelgreen Trust, acquired 8,666,667 shares of our common stock upon
the conversion of convertible promissory notes issued by us in the principal
amount of $1,300,000, or a conversion price of $0.15 per share.

                                      F-23
<PAGE>

                               Avenue Group, Inc.
                            Financial Statement Notes
                        As of December 31, 2005 and 2004

In connection with the appointment of Mr. Singer to our Board, we entered into a
Directorship and Consulting Agreement dated February 7, 2005 (the "Singer
Agreement") with Mr. Singer, pursuant to which Mr. Singer agreed to serve as one
of our directors. As compensation for his services as a director, Mr. Singer
receives from us $2,500 per month, payable quarterly in advance, plus an option
to purchase up to 1,200,000 shares of our common stock at $0.06 per share. In
addition, pursuant to the Singer Agreement, Mr. Singer has agreed to provide
consulting services to us on a full-time basis in connection with the promotion
and development of our oil and gas exploration operations. As compensation for
his consulting services to us, Mr. Singer receives $10,000 per month payable
each month in advance and received options to purchase up to 600,000 shares of
our common stock at $0.06 per share. The options granted to Mr. Singer for his
consulting services vest at the rate of 100,000 shares on the first day of each
calendar month commencing on February 1, 2005 and are for a term of five years
commencing as of the date each block of shares vests. Effective August 1, 2005,
we extended Mr. Singer's consulting arrangement to January 31, 2006. During this
period, Mr. Singer received an additional option to purchase 600,000 shares of
common stock at the rate of 100,000 shares per month at the asking price for the
stock as reported by Nasdaq Bulletin Board on the first day of each month during
this period. In 2005 we recorded stock-based compensation expense of $17,000.
for Mr. Singer. As of April 2006 Mr. Singer continues to consult for us.

In connection with the appointment of Mr. Bar-Ner to our Board, we entered into
a Directorship and Consulting Agreement dated February 7, 2005 (the "DFI
Agreement") with Development for Israel, LLC, a New York limited liability
company ("DFI"), pursuant to which DFI agreed to make available to us the
services of DFI's founder, Mr. Bar-Ner, to serve as one of our directors. As
compensation for the services of Mr. Bar-Ner as a director, DFI receives $2,500
per month, payable quarterly in advance, plus 100,000 shares of our common stock
per month for each month Mr. Bar-Ner serves as a director during his first year
of service as a director. We issued 400,000 of the shares in June 2005 and the
remaining 800,000 shares in March 2006. Mr. Bar-Ner continues to serve as a
director.


Note 13.   Restatement and Reclassification of Financial Statements

We determined in 2005 that there were errors in our 2004 financial statements,
as originally issued. Therefore, we have restated and reclassified the financial
statements as explained below. We have prepared the restatement and
reclassification in accordance with FASB Statement 154, Accounting Changes and
Error Corrections.

A. In accordance with the successful-efforts method of accounting for oil and
gas properties, we have reclassified the Turkish oil leases into developed oil
and gas properties, undeveloped oil and gas properties, and well in progress. We
recorded an impairment loss on oil property of $583,091 on the Karakilise 1 well
at December 31, 2004. Because the Karakilise 1 does not have proved reserves, we
did not record depreciation, depletion, and amortization on the production of
the well.

B. We recorded a long-term liability and an increase to developed oil and gas
properties of $56,057 for estimated future dismantlement and abandonment cost on
the Karakilise 1 in accordance with FASB Statement 143, Accounting for Asset
Retirement Obligations.

C. We adjusted $10,824 from capitalized oil and gas property on the Karakilise 1
to lease operating expense for the Karakilise 1 because we had inadvertently
capitalized the expense.

D. We had previously concluded that an appropriate measure of the fair value of
our investment in ROO Group, Inc. was 50% of quoted market price of the stock,
because we owned a very large block of the stock and the trading of the stock
was rather limited. We have now concluded that the best measure of the fair
value is 100% of quoted market price. Therefore, to increase the investment in
ROO Group from 50% to 100% of the full market value of $.06 per share, we
recorded a $1,404,629 increase to investment in ROO Group and corresponding
increases of $140,000 to gain on sale of discontinued operations related to the
sale of 80,000 shares of ROO Group restricted stock and $1,159,629 to other
comprehensive income/unrealized gain on marketable securities.

E. We reclassified $105,000 from other income and $105,000 from other
comprehensive income related to termination of license agreement to additional
paid-in capital for the value of the registration rights accompanying the 60,000
shares of ROO Group that were acquired in exchange for the release of ROO Group
from its registration requirement.

The value we ascribed to the shares of ROO Group received in the various
transactions described included the value of the registration rights
accompanying those shares. We previously inadvertently did not consider the
registration rights when we recognized a $210,000 gain upon receiving the
additional 60,000 shares in exchange for releasing ROO Group of the registration
requirement. We have now concluded that we should not have recognized the gain.
Accordingly, we restated the financial statements to remove the gain, applying
the credit instead to additional paid-in capital.

                                      F-24
<PAGE>

                               Avenue Group, Inc.
                            Financial Statement Notes
                        As of December 31, 2005 and 2004

F. With a December 31, 2004, market value equaling $.269724 per share, we
reclassified $816,896 from investment in Langley Park Investment Trust to
restricted investment in Langley Park Investment Trust for the 3,028,634 shares
of the 6,057,269 shares of Langley required to be held in escrow for two years
according to the July 2004 private placement agreement, in order to show the
restricted nature of the Langley Park escrow.

G. In the 2004 financial statements as originally issued we did not account for
the contingency arrangement under which we may be required to relinquish Langley
Park shares held in escrow. That contingency arrangement is a derivative which
we need to account for at fair value as a contra to the escrowed shares, with
changes in fair value recorded in our operations statement, in accordance with
the guidance in FASB Statement 133, paragraphs 17 and 18(a). The value of the
contra was $636,963 at December 31, 2004, computed as the value of the portion
of the escrowed shares which would have to be returned to Langley if the price
of our common stock on the valuation date were the price at the end of the two
year escrow period. Accordingly, based on the drop in market price of Avenue
Group common stock from $.227 per share at the closing of the private placement
to $.05 per share at December 31, 2004, we recorded a $636,963 contra-asset to
the restricted escrowed Langley Park stock and a corresponding charge on the
operations statement for a derivative loss on the Langley Park escrow for the
3,028,635 shares of Langley held in escrow. The escrow will be in place until
October 2006, at which time Avenue Group will be required to return to Langley a
percentage of these shares equal to the percentage drop in the market price of
Avenue Group common stock.

                                      F-25
<PAGE>

                               Avenue Group, Inc.
                            Financial Statement Notes
                        As of December 31, 2005 and 2004



Balance Sheet Amounts:
<TABLE>
<CAPTION>

                                                                                          December 31, 2004
                                                                       As Previously
                                                                         Reported              Adjustments        As Restated
                                                                       --------------     -----------------      --------------
<S>                                                                    <C>                <C>
   Assets
   Current assets:
   Cash and cash equivalents                                           $      120,114     $                      $     120,114
   Investment in Australian securities                                         84,116                                   84,116
                                                                                9,413                                    9,413
   Prepaid expenses                                                    --------------
          Total current assets                                                213,643                                  213,643

Developed oil and gas property - net                                                              1,166,180 (A,B)    1,166,180
Undeveloped oil and gas property                                            3,213,594            (2,173,410)(A,C)    1,040,184
                                                                                                    469,372 (A,C)      469,372
Well in progress                                                                    .     ------------------     --------------
          Total oil and gas property                                        3,213,594              (537,858)         2,675,736

Furniture, fixtures and equipment - net                                        46,650                                   46,650

Other assets:
   Note receivable                                                            276,000                                  276,000
   Investment in Langley Park - restricted                                                          816,896 (F)        816,896
   Investment in Langley Park - other                                       1,633,645              (816,896)(F)        816,749
   Escrow return contingency - Langley Park                                                        (636,963)(G)       (636,963)
   Investment in ROO Group, Inc.                                            1,365,000             1,404,629 (D)      2,769,629
   Other assets                                                                 8,225                     .              8,225
                                                                       --------------     -----------------      --------------
          Total other assets                                                3,282,870               767,666          4,050,536
                                                                       --------------     -----------------      --------------
          Total assets                                                 $    6,756,757     $         229,808      $   6,986,565
                                                                       ==============     =================      ==============
                Liabilities and Stockholders' Equity

Current liabilities:
   Accounts payable                                                    $      326,547     $                      $     326,547
   Notes payable                                                              250,000                                  250,000
                                                                       --------------                            --------------
          Total current liabilities                                           576,547                                  576,547

Oil asset retirement obligation                                                                      56,057 (B)         56,057


Stockholders' equity:

Common stock, par value $0.0002                                                51,297                                   51,297

Additional paid-in capital                                                 30,343,473               210,000 (E)     30,553,473

Deferred compensation                                                        (134,100)                                (134,100)
Accumulated deficit                                                       (25,083,224)           (1,195,878)       (26,279,102)
Accumulated other comprehensive income                                      1,002,764             1,159,629(D)(E)    2,162,393
                                                                       --------------     -----------------      --------------
          Total stockholders' equity                                        6,180,210               173,751          6,353,961
                                                                       --------------     -----------------      --------------
          Total liabilities and stockholders' equity                   $    6,756,757     $         229,808      $   6,986,565
                                                                       ==============     =================      ==============
</TABLE>

                                      F-26
<PAGE>

                               Avenue Group, Inc.
                            Financial Statement Notes
                        As of December 31, 2005 and 2004


Operations Statement Amounts:
<TABLE>
<CAPTION>

                                                                            Year Ended December 31, 2004
                                                                   As Previously
                                                                   Reported        Adjustments          As Restated
                                                             --------------------  ------------    ---------------------
<S>                                                                        <C>                                    <C>
Revenue
     Oil sales                                                             66,865                                 66,865
     e-commerce                                                            19,212                                 19,212
                                                             --------------------                  ---------------------
                                                             $             86,077  $               $              86,077

Expense:
     Cost of e-commerce sales                                               4,645                                  4,645
     Oil lease operating expense                                                         10,824 (C)               10,824
     Impairment loss, developed oil property                            1,296,703       564,405 (A)            1,861,108
     Impairment loss, undeveloped oil property                            248,332        18,686 (A)              267,018
     Sales, General and administrative                                  2,404,575             .                2,404,575
                                                             --------------------  ------------    ---------------------
          Total operating expense                                       3,954,255       593,915                4,548,170
                                                             --------------------  ------------    ---------------------
          Income (loss) from operations                                (3,868,178)     (593,915)              (4,462,093)
                                                             --------------------  ------------    ---------------------
Other income (expense):
     Gain on sale of discontinued operations                              584,874       140,000 (D)              724,874
     Income from discontinued operations                                   54,723                                 54,723
     Income from termination of license agreement                         105,000      (105,000)(E)                  ---
     Other income                                                          49,504                                 49,504
     Interest expense                                                     (17,107)                               (17,107)
     Impairment loss on Langley Park                                   (9,366,355)     (636,963)(G)          (10,003,318)
                                                             --------------------  ------------    ---------------------
          Net other (loss)                                             (8,589,361)     (601,963)              (9,191,324)
                                                             --------------------  ------------    ---------------------
          Net income (loss)                                  $        (12,457,539) $ (1,195,878)   $         (13,653,417)
                                                             ====================  ============    =====================
</TABLE>


                                      F-27
<PAGE>

                               Avenue Group, Inc.
                            Financial Statement Notes
                        As of December 31, 2005 and 2004


Stockholders' Equity Statement Amounts:
                          Year Ended December 31, 2004

<TABLE>
<CAPTION>

                                      Common Stock                     Accumulate
                 Common Stock         to be Issued        Additional     Other
              -------------------  ----------------------  Paid-In    Comprehensive
               Shares     Amount    Shares      Amount     Capital    Income (Loss)     Compensation   Deficit         Total
              ----------- -------  ----------  ---------  ----------- -------------     ------------  ------------- ------------
<S>           <C>         <C>       <C>        <C>        <C>         <C>               <C>           <C>           <C>
Balance at
Decem. 31,
2003          203,976,171 $40,795   3,906,666  $ 586,000  $17,737,475 $     26,200      $   (16,800)  $(12,625,685) $  5,747,985
Issued
shares
2,000,000
shares to K
& K Plastics    2,000,000     400  (2,000,000)   (300,00)     299,600           --               --            --             --
Issued
shares
1,906,666
                                   shares to
Alore, LTD-
(Kashet Ltd.)  1,906,666      380  (1,906,666)   (286,00)     285,620           --               --            --             --
Granted
6,750,000
options to
Steve Gordon          --       --          --         --    1,012,500           --       (1,012,500)           --             --
375,000
options
vest to
Steve Gordon          --       --          --         --           --           --           56,250            --         56,250
Options vest
to Steve
Gordon                --       --          --         --           --           --          843,750            --        843,750
Options vest
to Daniel
Aharonoff
for services          --       --          --         --           --           --           12,600            --         12,600
Issued
48,458,149
shares to
Langley Park
Investment
Trust         48,458,149    9,692          --         --   10,990,308           --               --            --     11,000,000
Granted
300,000
options to
MacReport.net                  --          --         --           --           --          (18,000)           --        (18,000)
Issued
150,000
shares to
MacReport.net    150,000       30          --         --       17,970           --               --            --        18,000
Options vest
to
MacReport.net                                                                                   600            --           600
Value of
the
registration
rights of
3,000,000
shares of
ROO Group
received for
termination
of
registration
agreement                                                     210,000 (E)                                               210,000
Net loss                       --          --         --           --           --               --    (13,653,417) (13,653,417)
Foreign
currency
translation
gain                           --          --         --           --       15,119               --            --        15,119
Unrealized
gain on
marketable                                                                 961,445
securities            --       --          --         --           --    1,159,629(D)(E)         --            --     2,121,074
              ----------- -------  ----------  ---------  ----------- -------------     ------------  ------------- ------------
Balance at
Decem. 31,
2004          256,490,986 $51,297          --  $      --  $30,553,473 $  2,162,393      $  (134,100)  $(26,279,102) $ 6,353,961
              =========== =======  ==========  =========  =========== =============     ============  ============= ============
</TABLE>

                                      F-28
<PAGE>

                               Avenue Group, Inc.
                            Financial Statement Notes
                        As of December 31, 2005 and 2004

Cash Flow Statement Amounts:
                          Year Ended December 31, 2004

<TABLE>
<CAPTION>

                                                                              As
                                                                      Previously
                                                                     Reported         Adjustments          As Restated
                                                               -------------------  ---------------      --------------
<S>                                                            <C>                  <C>                  <C>
Cash Flow From Operating Activity:
Net loss                                                       $      (12,457,539)  $   (1,195,878)      $ (13,653,417)
Income from discontinued operations                                       (54,723)                             (54,723)
Gain on sale of discontinued operations                                  (584,874)        (140,000)(D)        (724,874)
                                                               -------------------  ---------------      --------------
Loss from continuing operations                                       (13,097,136)      (1,335,878)        (14,433,014)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and Amortization                                              13,523                               13,523

Impairment loss on investment in Langley Park                           9,366,355          636,963  (G)     10,003,318

Impairment loss on oil and gas property                                 1,545,035          583,091  (A)      2,128,126
Non-monetary compensation                                                 895,200                              895,200

Income related to termination of license agreement                       (105,000)         105,000  (E)
Changes in operating assets and liabilities:
Decrease in accounts receivable                                            16,900                                16,900
Decrease (increase) in prepaid expenses                                     3,464                                 3,464
(Decrease) increase in accounts payable                                    (7,678)                               (7,678)

Increase (decrease) in accrued expenses                                    99,565                .               99,565
                                                               -------------------  ---------------      --------------
Net Cash Used In Operating Activity                                    (1,269,772)         (10,824)          (1,280,596)
                                                               -------------------  ---------------      --------------

Cash Flow From Investing Activity:

Investment in oil and gas property                                     (1,047,642)          10,824  (C)      (1,036,818)
Purchases of fixed assets                                                 (17,806)                              (17,806)

Proceeds from sale of Australian marketable securities                     54,920                                54,920
                                                               -------------------  ---------------      --------------
Net Cash Used In Investing Activity                                    (1,010,528)          10,824            (999,704)
                                                               -------------------  ---------------      --------------

Cash Flow From Financing Activity:
Proceeds received (payments made) from notes payable                      213,975                              213,975
Proceeds received from issuance of common stock, net                      300,000                              300,000
                                                               -------------------  ---------------      --------------
Net Cash Provided By Financing Activity                                   513,975                              513,975
                                                               -------------------  ---------------      --------------


Effect of foreign currency translation on cash                             16,314                               16,314
                                                               -------------------  ---------------      --------------

Net Decrease In Cash                                                   (1,750,011)                          (1,750,011)
Cash At Beginning of Year                                               1,870,125                            1,870,125
                                                               -------------------  ---------------      --------------
Cash At End of Year                                            $          120,114   $                    $     120,114
                                                               ===================  ===============      ==============
</TABLE>

                                      F-29
<PAGE>

                               Avenue Group, Inc.
                            Financial Statement Notes
                        As of December 31, 2005 and 2004



Cash Flow Statement Amounts, continued
                          Year Ended December 31, 2004

<TABLE>
<CAPTION>

                                                                              As
                                                                      Previously
                                                                     Reported         Adjustments          As Restated
                                                               -------------------  ---------------      --------------
<S>                                                                                 <C>                         <C>
 Non-Cash Investing and Financing Activity:

 Asset retirement obligation on oil and gas
   property                                                                         $       56,067 (B)          56,067
 Issuance of 48,458,149 shares of common stock for
   investment in Langley Park Investments PLC                  $       11,000,000   $                    $  11,000,000
 Additional paid-in capital for value of
   termination of registration agreement                                            $      210,000 (E)   $     210,000
 Sale of Bickhams Media (a former wholly-owned
   subsidiary) see Note 3                                      $          728,000   $     (140,000)(D)   $     588,000
 Issuance of 150,000 shares of common stock for
   consulting services                                         $           18,000   $                    $      18,000




Comprehensive Income Statement Amounts:
                                                   Year Ended December 31, 2004

                                                                              As
                                                                      Previously
                                                                     Reported         Adjustments          As Restated
                                                               -------------------  ---------------      --------------


Net Loss                                                       $      (12,457,539)  $   (1,195,878)      $  (13,653,417)
Other comprehensive income,  net of tax:
    Unrealized gain (loss) on:
       Marketable securities                                              961,445         1,159,629 (D),(E)   2,121,074
       Foreign currency translation                                        15,119                 -              15,119
                                                               -------------------  ---------------      --------------
Other comprehensive income                                                976,564         1,159,629           2,136,193
                                                               -------------------  ---------------      --------------
Comprehensive loss                                             $      (11,480,975)  $       (36,249)     $  (11,517,224)
                                                               ===================  ===============      ===============

</TABLE>




                                      F-30
<PAGE>

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

On July 13, 2005, Weinberg & Company,  P.A. (the "Former  Accountant")  resigned
from its position as the principal independent accountants of Avenue Group, Inc.
(the  "Registrant").  The  decision to change  accountants  was  approved by the
Registrant's Board of Directors.

The reports of the Former Accountant on the consolidated financial statements as
of and for the years ended December 31, 2004 and 2003 contained no adverse
opinion or disclaimer of opinion, and were not qualified or modified as to
uncertainty, audit scope, or accounting principles; however each year-end report
contained a modification paragraph that expressed substantial doubt about the
Company's ability to continue as a going concern. During the Registrant's two
most recent fiscal years and through July 13, 2005, there were no disagreements
with the Former Accountant on any matters of accounting principles or practices,
financial statement disclosure, or auditing scope or procedures, which
disagreements, if not resolved to the satisfaction of the Former Accountant,
would have caused it to make reference to the subject matter of the
disagreements in connection with its reports. None of the reportable events set
forth in Item 304(a)(1)(iv)(B) of Regulation S-B occurred within the
Registrant's two most recent fiscal years nor through July 13, 2005.

The Registrant has provided the Former Accountant with a copy of this disclosure
and has requested that the Former Accountant furnish it with a letter addressed
to the U.S. Securities and Exchange Commission ("SEC") stating whether it agrees
with the above statements, and if not, stating the respects in which it does not
agree. A copy of the letter from the Former Accountant addressed to the SEC
dated July 18, 2005 is filed as Exhibit 16.1 to the Form 8-K dated July 18,
2005.

On August 15, 2005, the Registrant retained Sherb & Co. to serve as the
Registrant's new principal independent accountants. Such action was recommended
and approved by the Registrant's Board of Directors.

During the Registrant's two most recent fiscal years and through August 15,
2005: (1) the Registrant did not consult Sherb & Co. regarding either the
application of accounting principles to a specified transaction, either
completed or proposed or the type of audit opinion that might be rendered on
Registrant's financial statements; (2) neither a written report nor oral advice
was provided to the Registrant by Sherb & Co. that they concluded was an
important factor considered by the Registrant in reaching a decision as to the
accounting, auditing or financial reporting issue; and (3) the Registrant did
not consult Sherb & Co. regarding any matter that was either the subject of a
"disagreement" (as defined in Item 304(a)(1)(iv) of Regulation S-B and the
related instructions) or any of the reportable events set forth in Item
304(a)(1)(iv)(B) of Regulation S-B.


ITEM 8A.  CONTROLS AND PROCEDURES

As of December 31, 2005, the end of the period covered by this report (the
"Evaluation Date"), we carried out an evaluation, under the supervision and with
the participation of our management, including our Chief Executive Officer, of
the effectiveness of the design and operation of our disclosure controls and
procedures pursuant to Rule 13a-15 under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). Based upon this evaluation, our Chief Executive
Officer concluded that, as of the Evaluation Date, our disclosure controls and
procedures were effective under Rule 13a-15.
There have been no significant changes in our internal controls or in other
factors, which could significantly affect internal controls subsequent to the
date we carried out our evaluation.

In February 2005 our former chief financial officer resigned. We have concluded
that for a period from the time of his resignation until later in 2005 but
ending prior to December 31, 2005, our disclosure controls and procedures were
not effective under Rule 13a-15. We prepared our 2004 Form 10-KSB during this
period. We have concluded that as a result of our ineffective disclosure
controls and procedures during this period, certain items in the 2004 financial
statements in our 2004 Form 10-KSB were not accounted for under accounting
principles generally accepted in the U.S. Accordingly, in this 2005 Form 10-KSB
we have restated the 2004 financial statements in conformity with accounting
principles generally accepted in the U.S. This restatement is discussed in more
detail in Note 13 of the financial statements in this Report.

Our actions to cause our disclosure controls and procedures to be effective
under Rule 13a-15 included: 1. The engagement of an experienced consulting CPA
to ensure that our detail
     accounting procedures are performed in accordance with accounting
     principles generally accepted in the U.S.
2.   The engagement of another experienced consulting CPA to ensure that our
     disclosure controls and procedures are effective under Rule 13a-15, and
     that our accounting is performed in accordance with accounting principles
     generally accepted in the U.S., and in compliance with the regulations of
     the U.S. Securities and Exchange Commission.

                                       20
<PAGE>


                                    PART III

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

Directors and Executive Officers of Avenue Group

The following table sets out certain information in relation to each person who
holds a position of Director and/or executive officer of the Company. The
background of each of the individuals identified in the table follows the table.


 Name                     Age   Position(s) Currently Held With the Company

 Levi Mochkin             44    President, Chief Executive Officer and Director
 Norman Singer*           64    Director and Vice President
 Uri Bar Ner*             70    Director
 Shaya Boymelgreen**      55    Director
 Mendel Mochkin** *       32    Vice President


* Messrs.  Singer and Bar Ner were elected Directors by the Board on February 7,
2005

** Mr. Boymelgreen was elected as a Director by the Board on February 17, 2005.

*** Mr Mochkin joined the company on June 1, 2005

LEVI MOCHKIN has served as Avenue's Chief Executive Officer, President and
Director since October 2003. He has also served as the Chief Executive Officer
of Avenue Energy since October 2003 and as one of Avenue Energy's Directors and
its Director Operations since November 2002. Previously, he served as one of
Avenue's initial directors from mid 1999 until August 2001 and served as its
Chief Executive Officer from January 1999 until August 2001. For over twelve
years, Mr. Mochkin has been an executive director of the Ledger Holdings Group,
located in Melbourne, Australia which until 1999 was engaged in equity and
capital market activities in Australia. From 1995 to 1999, Ledger was contracted
to Bell Securities Limited for the development of Bell's equity brokering
business.

In 1997, Bell, through Mr. Mochkin and his Ledger Group, acted on behalf of one
of the Australia's largest gold mining companies, Great Central Mines and
carried out two simultaneous market takeover bids on the Australian Stock
Exchange, worth a combined total value of AUD $330 million. Great Central Mines
was ultimately acquired by Normandy Mining, which in turn was acquired by
Newmont Mining in the United States. Mr. Mochkin is the brother of Mendel
Mochkin.

NORMAN J. SINGER. Norman J. Singer joined the company's Board of Directors in
February 2006. Mr. Singer also oversees the company's worldwide exploration
activities. Prior to joining the company, Mr. Singer was a private investor in
oil and gas activities and high tech startup companies and a participant in a
photo journal project in Papua New Guinea for MSNBC. Prior to this Mr. Singer
served from 1970 to 2004 as a director and manager of Pexco Holdings, Inc. Pexco
is the U.S. division of a multi national multi billion dollar corporation based
in Southeast Asia. During this time he managed all of the companies U.S. and
worldwide exploration activities. These activities extended over thirty
countries throughout Africa and Asia. Mr. Singer was also the founding partner
during this time of Pextech Energy and Anadarko Land & Exploration Company which
were exploration companies focused on several Texas and Oklahoma basins. Mr.
Singer is a member of the Colorado, New York and American bar associations and
of the Society of Exploration Geophysicists. He is a graduate of Colgate
University, Columbia School of Law and the Fletcher School of Law and Diplomacy.

                                       21
<PAGE>

URI BAR NER. Mr. Bar Ner has had a long and distinguished career in Israel's
Foreign Service. He is a former Ambassador to Turkey, where Avenue has several
significant exploration properties. He has held senior diplomatic positions in
the United States, Europe and Asia and is a former Deputy Director General of
the Israel Ministry of Foreign Affairs. He holds a masters degree in political
science from Emory University in Atlanta, Georgia and a bachelors degree from
Hebrew University in Jerusalem

SHAYA BOYMELGREEN. Mr. Boymelgreen of Boymelgreen Developers founded his company
in 1994 as a full service developer, owner and manager of residential, mixed-use
and retail property. Boymelgreen Developers is an established real estate
development company with operations located in New York City, Toronto, Miami and
Las Vegas with projects in the pipeline worth $6 billion. Under Mr.
Boymelgreen's leadership, Boymelgreen Developers is developing more than
5,000,000 square feet of commercial and residential properties in New York City
alone.

MENDEL MOCHKIN Prior to joining Avenue Group, Mr Mochkin worked as an
independent consultant providing investor relations and capital formation
advisory services for companies in the energy and technology sectors and was a
Founder and Managing Director of a digital media firm based in New York. Mr
Mochkin is the brother of Levi Mochkin.

Compliance with section 16(a) of the exchange act
Section 16 of the Exchange Act requires the Company's directors and executive
officers and persons who own more than 10% of a registered class of the
Company's equity securities to file various reports with the Securities and
Exchange Commission concerning their holdings of, and transactions in,
securities of the Company. Copies of these filings must be furnished to the
Company.

Based on a review of the copies of such forms furnished to the Company and
written representations from the Company's executive officers and directors the
Company believes that during the 2005 fiscal year of its officers, directors and
greater than 10% stockholders complied with all applicable Section 16(a) filing
requirements other than Norman Singer failed to file a form 4 in a timely manner
Uri Bar-Ner failed to file a form 4 in a timely manner and Mendel Mochkin failed
to file a form 3 in a timely manner.

Code of Ethics

We have adopted a corporate code of ethics. A copy of the code of ethics was
previously filed. We believe our code of ethics is reasonably designed to deter
wrongdoing and promote honest and ethical conduct; provide full, fair, accurate,
timely and understandable disclosure in public reports; comply with applicable
laws; ensure prompt internal reporting of code violations; and provide
accountability for adherence to the code.

Directors and Executive Officers of Avenue Energy

The following table sets out certain information in relation to the Directors
and/or executive officers of Avenue Energy.


 Name                Age   Position(s) Held

 Norman Singer       64    Director and Vice President
 Levi Mochkin        44    President, Chief Executive Officer and Director

                                       22
<PAGE>

ITEM 10.  EXECUTIVE COMPENSATION.

The following summary compensation table sets forth the compensation paid by the
Company to its officers for services rendered in all capacities during the
calendar year 2005. Except for Norman Singer and Mendel Mochkin, as described
below, no executive officer of the Company received any stock options, stock
appreciation rights or other stock or other incentive based compensation during
the fiscal year ended December 31, 2005. During the Company's fiscal year ended
December 31, 2005 and for each of the two preceding fiscal years executive
officers of the Company who received compensation, including salary and bonuses
in excess of $100,000 are outlined below.
<TABLE>
<CAPTION>
                                                          SUMMARY COMPENSATION TABLE

                                                                                                         Long-Term Compensation
Name and Principal Position          Year         Salary     Annual Compensation  Other Annual      Stock Option        All Other
                                                                  Bonus(1)       Compensation(2)      Grants(3)      Compensation(4)

<S>                                  <C>       <C>                    <C>               <C>               <C>               <C>
Levi Mochkin                         2005      $144,000(1)           -0-               -0-               -0-               -0-
Chairman and                         2004      $144,000(1)           -0-               -0-               -0-               -0-
Chief Executive Officer              2003      $144,000(1)           -0-               -0-               -0-               -0-

Norman Singer                        2005      $137,500(3)           -0-               -0-            2,400,000            -0-
Director and Vice President          2004      -0-                   -0-               -0-               -0-               -0-
                                     2003      -0-                   -0-               -0-               -0-               -0-

Mendel Mochkin                       2005      $ 56,000(5)           -0-               -0-            2,400,000            -0-
Vice President                       2004      -0-                   -0-               -0-               -0-               -0-
                                     2003      -0-                   -0-               -0-               -0-               -0-
Yam-Hin (Jim) Tan *                  2005      $ 36,405(2)           -0-               -0-               -0-               -0-
Former Chief Financial Officer       2004      $ 44,653(2)           -0-               -0-               -0-               -0-
and Director                         2003      $ 54,021(2)           -0-               -0-               -0-               -0-

Jonathan Herzog *                    2005      $ 78,500(2)(4)        -0-               -0-               -0-               -0-
Former Exec. V.P.                    2004      $105,270(2)(4)        -0-               -0-               -0-               -0-
and Director                         2003      $108,750(2)           -0-               -0-               -0-               -0-

</TABLE>
* Jonathan Herzog resigned from the Company effective February 7, 2005. Yam-Hin
(Jim) Tan resigned from the Company effective July 11, 2005.

(1)

Effective as of January 1, 2003 we engaged the services of Ledger Holdings Pty
Ltd, of which our current President and Chief Executive Officer Levi Mochkin is
a Director, on a month to month basis as a consultant to Avenue Group Inc.
pursuant to which Mr. Mochkin serves Avenue Group, Inc. as President and Chief
Executive Officer. Ledger is compensated at a rate of $10,000 per month in fees,
plus $2,000 per month in the form a discretionary expense allowance. Ledger is
also reimbursed for various travel and other related expenses conducted on our
behalf. From May 1999 until August 2001, Levi Mochkin was our Chief Executive
Officer and did not receive any compensation, including salary or bonuses while
serving in such capacity. Our Board agreed in February and April of 2000 to
compensate Mr. Mochkin in connection with his past services rendered, subject to
the Board's satisfaction that such payment would not materially adversely effect
our financial condition. These payments, totaling $32,000, were made to Mr.
Mochkin in January 2003.

(2)

Does not include the statutory requirement of an additional 8%-9% that we are
required to pay toward an employee's superannuation account, of officers
employed in Australia. Amounts listed above, that were paid in Australian
Dollars have been converted to United States Dollars and rounded up, based on
the average exchange rate during the relevant period.

                                       23
<PAGE>

(3)

In connection with the appointment of Mr. Singer to our Board, we entered into a
Directorship and Consulting Agreement dated February 7, 2005 (the "Singer
Agreement") with Mr. Singer, pursuant to which Mr. Singer agreed to serve as one
of our directors. As compensation for his services as a director, Mr. Singer
receives from us $2,500 per month, payable quarterly in advance, plus an option
to purchase up to 1,200,000 shares of our common stock at $0.06 per share. In
addition, pursuant to the Singer Agreement, Mr. Singer has agreed to provide
consulting services to us on a full-time basis in connection with the promotion
and development of our oil and gas exploration operations. As compensation for
his consulting services to us, Mr. Singer receives $10,000 per month payable
each month in advance and received options to purchase up to 600,000 shares of
our common stock at $0.06 per share. The options granted to Mr. Singer for his
consulting services vest at the rate of 100,000 shares on the first day of each
calendar month commencing on February 1, 2005 and are for a term of five years
commencing as of the date each block of shares vests. Effective August 1, 2005,
we extended Mr. Singer's consulting arrangement to January 31, 2006. During this
period, Mr. Singer received an additional option to purchase 600,000 shares of
common stock at the rate of 100,000 shares per month at the asking price for the
stock as reported by Nasdaq Bulletin Board on the first day of each month during
this period.

(4)

In November 2004, the Company assigned 839,517 shares of the common stock of ROO
to Mr. Herzog in lieu of compensation owed to Mr. Herzog in the amount of
$45,250.

(5)

On June 1, 2005, we engaged Mr. Mendel Mochkin as a Vice President. In Mr.
Mochkin's first year he will receive an option to purchase 2,400,000 shares of
common stock at $0.05 per share. This option vests at the rate of 200,000 shares
per month commencing as of June 1, 2005 up until May 1, 2006 and is for a term
of five years from the date of the vesting of each block of stock. In Mr.
Mochkin's second year he will receive an additional option to purchase 2,400,000
shares at $0.10 per share. This option vests at the rate of 200,000 shares per
month commencing June 1, 2006 up until May 1, 2007 and will be for a term of
five years from the date of the vesting of each block of stock.

                                      Option Grants and Year-End Value Table
<TABLE>
<CAPTION>
--------------- --------------------- --------------------- ----------------- ------------------
<S>              <C>                   <C>                   <C>                <C>
Name             Number of             % of total options    Exercise or base  Expiration date
                 Securities            granted to            price
                 underlying options    employees in fiscal
                                       year
--------------- --------------------- --------------------- ----------------- ------------------
Levi Mochkin     -0-                   -0-                   -0-               -0-
--------------- --------------------- --------------------- ----------------- ------------------
Norman Singer   2,200,000                                   .03-.07            5 years from
                                                                               vesting*
--------------- --------------------- --------------------- ----------------- ------------------
Mendel Mochkin  1,400,000                                   $.05               5 years from
                                                                               vesting
--------------- --------------------- --------------------- ----------------- ------------------
</TABLE>
During 2005 none of our Officers or Directors exercised any options to purchase
shares of common stock.

* Common Stock valued at $0.06 per share for 1,800,000 shares as of date of
grant. In addition, pursuant to the Singer Agreement, an additional 600,000
options for shares of common stock at the rate of 100,000 shares per month at
the asking price for the stock as reported by Nasdaq Bulletin Board on the first
day of each month during this period.

Except as set forth above and below in the section entitled `Compensation of
Directors', no officer or director has received any material cash or non-cash
benefit from us in connection with their services on our behalf including stock
options, stock appreciation rights or other stock or other incentive based
compensation during the fiscal year ended December 31, 2005, nor are there any
such stock options, stock appreciation rights or other stock or other incentive
based compensation or rights held by any executive officer.

                                       24
<PAGE>

Compensation of Directors

It is our policy to reimburse Directors for reasonable out-of-pocket expenses
relating to their activities for us, including travel and lodging expenses
incurred.

In connection with the appointment of Mr. Singer to our Board, we entered into a
Directorship and Consulting Agreement dated February 7, 2005 (the "Singer
Agreement") with Mr. Singer, pursuant to which Mr. Singer agreed to serve as one
of our directors. As compensation for his services as a director, Mr. Singer
receives from us $2,500 per month, payable quarterly in advance, plus an option
to purchase up to 1,200,000 shares of our common stock at $0.06 per share. In
addition, pursuant to the Singer Agreement, Mr. Singer has agreed to provide
consulting services to us on a full-time basis in connection with the promotion
and development of our oil and gas exploration operations. As compensation for
his consulting services to us, Mr. Singer receives $10,000 per month payable
each month in advance and received options to purchase up to 600,000 shares of
our common stock at $0.06 per share. The options granted to Mr. Singer for his
consulting services vest at the rate of 100,000 shares on the first day of each
calendar month commencing on February 1, 2005 and are for a term of five years
commencing as of the date each block of shares vests. Effective August 1, 2005,
we extended Mr. Singer's consulting arrangement to January 31, 2006. During this
period, Mr. Singer received an additional option to purchase 600,000 shares of
common stock at the rate of 100,000 shares per month at the asking price for the
stock as reported by Nasdaq Bulletin Board on the first day of each month during
this period. In 2005 we recorded stock-based compensation expense of $17,000 for
Mr. Singer. As of April 2006 Mr. Singer continues to consult for us.

In connection with the appointment of Mr. Bar-Ner to our Board, we entered into
a Directorship and Consulting Agreement dated February 7, 2005 (the "DFI
Agreement") with Development for Israel, LLC, a New York limited liability
company ("DFI"), pursuant to which DFI agreed to make available to us the
services of DFI's founder, Mr. Bar-Ner, to serve as one of our directors. As
compensation for the services of Mr. Bar-Ner as a director, DFI receives $2,500
per month, payable quarterly in advance, plus 100,000 shares of our common stock
per month for each month Mr. Bar-Ner serves as a director during his first year
of service as a director. We issued 400,000 of the shares in June 2005 and the
remaining 800,000 shares in March 2006. Mr. Bar-Ner continues to serve as a
director.

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

As of April 30, 2006, there were 247,590,986 shares of our Common Stock, which
were issued and outstanding. In addition, there are 5,500,000 shares which are
subject to outstanding options or agreements and that are exercisable or
issuable to our officers, directors and greater than 5% shareholders within 60
days from such date.

The following table sets forth to the best of our knowledge the number of shares
beneficially owned as of April 30, 2006 by (i) our executive officers and
directors; (ii) each person (including any "group" as that term is defined in
Section 13(d)(3) of the Exchange Act) who beneficially owns more than 5% of our
common stock, and (iii) all of our directors and officers as a group. Except as
noted below each of the persons listed is deemed to have the sole voting right
and right to dispose of the shares held by them.
<TABLE>
<CAPTION>

Name of Shareholder               Current Beneficial Ownership    Percent of Class(1)

<S>                                      <C>                             <C>
Levi Mochkin                             70,802,053(2)(3)(4)             28.6%
Fawdon Investments Limited               50,100,000(5)                   16.8%
Instanz Nominees Pty Ltd                 18,500,000(6)                    7.4%
Langley Park Investment Trust PLC        48,458,149(7)                   19.6%
Shaya Boymelgreen                        22,666,667(8)                    9.1%
Mendel Mochkin                            4,566,667(9)                    1.8%
Norman J. Singer                          2,400,000(10)                      *
Uri Bar Ner                               1,200,000(11)                      *
All directors and officers              101,635,387(12)                   40.8%
as a group (5 individuals)

</TABLE>

*Represents less than 1% of the outstanding Common Stock

                                       25
<PAGE>

(1)

Based upon 247,590,986 shares outstanding plus in the case of the executive
officers and directors and all officers and directors as a group, all shares
issuable upon the exercise of stock options held by them or pursuant to existing
agreements which were exercisable on April 30, 2006 or within 60 days
thereafter. Pursuant to the rules promulgated by the SEC, every person who has
or shares the power to vote or to dispose of shares of common stock are deemed
to be the "beneficial" owner of all the shares of common stock over which any
such sole or shared power exists.

(2)

Includes (i) 54,783,356  shares held by Ledger  Technologies Pty Ltd ("Ledger");
(ii) 9,000,000 shares held by Sunswipe  Australasia Pty Ltd ("Sunswipe");  (iii)
6,704,521  shares held by Daccar Pty Ltd ("Daccar") and (iv) 314,176 shares held
by Nasdaq  Australia Pty Ltd.  ("NAPL").  Mr.  Mochkin,  the President and Chief
Executive  Officer of Avenue Group,  Inc., is an affiliate of Ledger,  Sunswipe,
Daccar and NAPL and may be deemed be a beneficial owner of the 70,802,053 shares
held by such entities.

(3)

Lisa Mochkin, spouse of Levi Mochkin, the President and Chief Executive Officer
of Avenue Group, Inc, is a director of Ledger and Sunswipe.

(4)

We have entered into a voting agreement with Levi Mochkin pursuant to which all
of shares beneficially owned by him, will be voted in a like manner with those
held by the remaining shareholders.

(5)

Includes 50,000,000 shares issuable to Fawdon Investments Limited upon the
exercise of an option held by such party at $0.04 per share.

(6)

Helen  Abeles,  a former  director  of Avenue  Group,  Inc. is an  affiliate  of
Instanz.

(7)

Langley Park Investment Trust PLC is a self managed investment trust which is
traded on the London Stock Exchange.

(8)

All of these shares are held by Mr. Boymelgreen as Trustee for the Shaya
Boymelgreen Trust. Mr. Boymelgreen's beneficial ownership has been derived from
the Schedule 13D and Form 3(amended) and Form 4 which he filed with the
Securities and Exchange Commission on April 23, 2003, September 15, 2003 and
September 19, 2003, respectively.

                                       26
<PAGE>

(9)

Includes 2,400,000 shares issuable to Mr. Mochkin upon the exercise of a stock
option at an exercise price of $.5 per share and 2,166,667 shares of restricted
common stock.

(10)

All of these shares are subject to options to acquire shares of common stock of
the Company at an exercise price of $0.06 per share.

(11)

Includes 1,200,000 shares of restricted shares of common stock issued to
Development for Israel, LLC.

(12)

Includes shares that currently may be deemed to be beneficially owned by Messrs.
Mochkin, Tan, Singer, Bar Ner, Mochkin and Boymelgreen.

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

On December 2, 2003, we entered into a Subscription Agreement with an affiliate,
ROO Media Corporation, a company of which we owned a 25% equity interest at the
time, pursuant to which we agreed to acquire 75 shares of the common stock of
ROO Media for $200,000. The stock was subsequently converted into an aggregate
of 80,000[shares of common stock of Virilitec Industries, Inc., approximately
25.4% of the outstanding stock. Virilitec Industries, subsequently changed its
name to ROO Group, Inc. and is traded on the NASDAQ Bulletin Board under the
symbol "ROOG."

Employment Agreements

The employment agreements with Levi Mochkin, Norman Singer and Mendel Mochkin
have been described above.

Stock Options Grants to Employees or Consultants

2000 Amended and Restated Stock Option Plan

In April 2000, Avenue Group's Board of Directors authorized the issuance of up
to 8,250,000 shares of common stock in connection with Avenue Group's 2000
Amended and Restated Stock Option Plan. The Option Plan became effective on
February 14, 2001 in connection with Avenue Group's effective registration
statement on Form SB-2. On December 24, 2002, shareholders approved an amendment
to the Option Plan, enabling the Board as it is currently configured without
non-employee directors to grant options under the plan and to increase the
number of shares authorized for grant from 8,250,000 to 15,000,000. Avenue Group
intends to grant options under the Stock Option Plan to officers, directors,
employees and consultants of Avenue Group and its subsidiaries. Through December
31, 2004, options to purchase 2,700,000 shares of common stock had been granted
under the Option Plan of which no options had been exercised and options to
purchase 150,000 shares had expired. The options granted pursuant to the Option
Plan are summarized as follows:

On December 10, 2003, the Company granted its then Executive Vice President -
Information Technology and former President, Daniel Aharonoff a three-year
option to purchase 150,000 shares of common stock at $0.25 per share under the
Option Plan. This option was to vest over fifteen months contingent upon Mr.
Aharonoff's continued employment with the Company. The option expired in
accordance with its terms on November, 2004 as a result of Mr. Aharonoff's
resignation as an officer, director and employee of the Company in October,
2004.

                                       27
<PAGE>

In March 2004, we entered into a three year part-time, non-exclusive Employment
Agreement with Steven Gordon pursuant to which Mr. Gordon agreed to provide us
with financial, capital markets, strategic planning, public relations, investor
relations, general business management and corporate financial services in
Canada. Mr. Gordon has agreed to perform his services under the Employment
Agreement without any cash compensation and as full compensation for therefore,
has agreed to accept the grant, as of the date hereof, of non-transferable stock
options to purchase up to an aggregate of Six Million Seven Hundred and Fifty
Thousand (6,750,000) shares of Common Stock at $.15 per share of which options
to purchase Two Million Two Hundred and Fifty Thousand (2,250,000) were pursuant
to the Company's Option Plan. The options issued pursuant to the Company's
Option Plan were fully vested on the date of grant and the 4,500,000 options
that were issued outside of the Plan vested in monthly installments of 375,000
options per month. All options granted to Mr. Gordon were fully vested and
exercisable as of February 8, 2005 and all options expire upon the first to
occur of either (i) one year from the date of the termination of Mr. Gordon's
employment with the Company or (ii) April 26, 2007.

In November 2004, the Company entered into a one-year consulting agreement with
a financial services company, which consultant is to provide the Company with
public relations and business development advice and related services. As
compensation for these services, the Company issued the consultant options to
purchase 300,000 shares of common stock at an exercise price of $0.06 per share.
These options were issued pursuant to the Plan.

In connection with the appointment of Mr. Singer to our Board, we entered into a
Directorship and Consulting Agreement dated February 7, 2005 (the "Singer
Agreement") with Mr. Singer, pursuant to which Mr. Singer agreed to serve as one
of our directors. As compensation for his services as a director, Mr. Singer
receives from us $2,500 per month, payable quarterly in advance, plus an option
to purchase up to 1,200,000 shares of our common stock at $0.06 per share. In
addition, pursuant to the Singer Agreement, Mr. Singer has agreed to provide
consulting services to us on a full-time basis in connection with the promotion
and development of our oil and gas exploration operations. As compensation for
his consulting services to us, Mr. Singer receives $10,000 per month payable
each month in advance and received options to purchase up to 600,000 shares of
our common stock at $0.06 per share. The options granted to Mr. Singer for his
consulting services vest at the rate of 100,000 shares on the first day of each
calendar month commencing on February 1, 2005 and are for a term of five years
commencing as of the date each block of shares vests. Effective August 1, 2005,
we extended Mr. Singer's consulting arrangement to January 31, 2006. During this
period, Mr. Singer received an additional option to purchase 600,000 shares of
common stock at the rate of 100,000 shares per month at the asking price for the
stock as reported by Nasdaq Bulletin Board on the first day of each month during
this period. In 2005 we recorded stock-based compensation expense of $17,000 for
Mr. Singer. As of April 2006 Mr. Singer continues to consult for us.

On June 1, 2005, we engaged Mr. Mendel Mochkin as a Executive Vice President.
Mr. Mochkin is a brother of Avenue CEO Levi Mochkin. In Mr. Mochkin's first year
he will receive an option to purchase 2,400,000 shares of common stock at $0.06
per share. This option vests at the rate of 200,000 shares per month commencing
as of June 1, 2005 up until May 1, 2006 and is for a term of five years from the
date of the vesting of each block of stock. In Mr. Mochkin's second year he will
receive an additional option to purchase 2,400,000 shares at $0.10 per share.
This option vests at the rate of 200,000 shares per month commencing June 1,
2006 up until May 1, 2007 and will be for a term of five years from the date of
the vesting of each block of stock.

                                       28
<PAGE>

ITEM 13.  EXHIBITS

3.1

Certificate of Incorporation of the Registrant, Incorporated by reference to
Exhibit 3.1 to the Company's Registration Statement on Form SB-2 dated February
14, 2000, Commission File No. 333-30364.

3.2

By-laws of the Registrant. Incorporated by reference to Exhibit 3.2 to the
Company's Registration Statement on Form SB-2 dated February 14, 2000,
Commission File No. 333-30364.

3.3

Amendment to Certificate of Incorporation, incorporated by reference to Exhibit
1 to the Company's Form 8-K Report, dated December 27, 2000, Commission File No.
30-543.

3.4

Amendment to the Company's By-laws adopted November 6, 2000, incorporated by
reference to Exhibit 3.4 of the Company's 10K-SB for the year ending December
31, 2000 dated March 28, 2001.

3.5

Amendment to the Company's By-laws adopted November 8, 2001 incorporated by
reference to Exhibit 3.5 of the Company's 10Q-SB for quarter ended September 30,
2001 dated November 21, 2001.

3.6

Amendment  to the  Corporation's  bylaws dated June 25,  2002,  incorporated  by
reference  to  Exhibit  3.6  to the  Company's  10QSB  dated  August  12,  2002.
Commission File No. 000-30-543.

10.1

The Company's 2000 Stock Option Plan, incorporated by reference to Exhibit 10.6a
of the Company's 10K-SB for the year ending December 31, 2000 dated March 28,
2001.

10.2

Form of  Registration  Rights  Agreement  dated  October 16, 2002  between  I.T.
Technology and named Shareholders,  incorporated by reference to Exhibit 10.8 to
the Company's Form 8K dated October 17, 2002. Commission File No. 333-30364.

10.3

Registration  Rights  Agreement  dated  November  1,  2002 by and  between  I.T.
Technology,  Inc. and Perfect Optical Corporation,  incorporated by reference to
Exhibit 10.8(b) to the Company's Form 10-KSB dated December 31, 2002. Commission
File No. 000-30-543.

10.4

Registration   Rights   Agreement  dated  November  2002  by  and  between  I.T.
Technology,  Inc. and Cohero Group, incorporated by reference to Exhibit 10.8(c)
to the  Company's  Form 10-KSB  dated  December 31,  2002.  Commission  File No.
000-30-543.

10.5

Partial Loan  Satisfaction  notice dated  November,  2002 by and between  Ledger
Technologies,  Inc.  and I.T.  Technology,  Inc,  incorporated  by  reference to
Exhibit 10.9(e) to the Company's Form 10-KSB dated December 31, 2002. Commission
File No. 000-30-543.

                                       29
<PAGE>

10.6

Assignment and Assumption Agreement dated November 1, 2002 by and between Ledger
Technologies and Perfect  Optical,  incorporated by reference to Exhibit 10.9(f)
to the  Company's  Form 10-KSB  dated  December 31,  2002.  Commission  File No.
000-30-543.

10.7

Loan  Satisfaction  Agreement  dated  November  1, 2002 by and  between  Perfect
Optical  Corporation  and I.T.  Technology,  Inc,  incorporated  by reference to
Exhibit 10.9(g) to the Company's Form 10-KSB dated December 31, 2002. Commission
File No. 000-30-543.

10.8

Assignment and Assumption Agreement dated November 1, 2002 by and between Ledger
Technologies,  Pty Ltd and  Cohero  Group,  Inc (on  behalf of I.T.  Technology,
Inc.), incorporated by reference to Exhibit 10.9(h) to the Company's Form 10-KSB
dated December 31, 2002. Commission File No. 000-30-543.

10.9

Assignment  and  Assumption  Agreement  dated  November  1, 2002 by and  between
Sunswipe  Australasia Pty Ltd and Cohero Group, Inc. (in re VideoDome  Networks,
Inc.), incorporated by reference to Exhibit 10.9(i) to the Company's Form 10-KSB
dated December 31, 2002. Commission File No. 000-30-543.

10.10

Assignment and Assumption Agreement dated November 1, 2002 by and between
Sunswipe Australasia Pty Ltd and Cohero Group (in re Stampville), incorporated
by reference to Exhibit 10.9(j) to the Company's Form 10-KSB dated December 31,
2002. Commission File No. 000-30-543.

10.11

Assignment and Assumption  Agreement  dated November 4, 2002 by and between I.T.
Technology and Cohero Group, Inc. (in re VideoDome Networks, Inc.), incorporated
by reference to Exhibit  10.9(k) to the Company's Form 10-KSB dated December 31,
2002. Commission File No. 000-30-543.

10.12

Assignment and Assumption  Agreement  dated November 4, 2002 by and between I.T.
Technology,  Inc. and Cohero Group,  Inc. (in re  Stampville),  incorporated  by
reference to Exhibit  10.9(l) to the  Company's  Form 10-KSB dated  December 31,
2002. Commission File No. 000-30-543.

10.13

Partial Loan  Satisfaction  notice dated  November  2002 by and between  Instanz
Nominees Pty Ltd and I.T. Technology, Inc., incorporated by reference to Exhibit
10.10(a) to the Company's Form 10-KSB dated December 31, 2002.  Commission  File
No. 000-30-543.

10.14

Option Agreement dated April, 2002 for the issuance of up to 50,000,000  shares,
incorporated  by reference to Exhibit 10.11 to the  Company's  Form 10-KSB dated
December 31, 2002. Commission File No. 000-30-543.

10.15

Asset Purchase  Agreement  dated January 14, 2002,  incorporated by reference to
Exhibit 10.21 of the Company's Form 10KSB dated April 10, 2002.  Commission File
No. 000-30-543.

                                       30
<PAGE>

10.16

Agreement dated April 30, 2002 by and between the Registrant, Bickham's Media,
Robert Petty, ROO Media and Petty Consulting, incorporated by reference to
Exhibit 10.22 of the Company's Form 8K Report dated May 2, 2002. Commission File
No. 333-30364.

10.17

Lock-up  Agreement,  incorporated by reference to Exhibit 10.24 to the Company's
Form 10QSB dated May 15, 2002. Commission File No. 000-30-543.

10.18

Investment and Merchant Banking Consulting Agreement,  incorporated by reference
to Exhibit 10.25 to the Company's Form 10QSB dated May 15, 2002. Commission File
No. 000-30-543.

10.19

Employment  Agreement between I.T. Technology and Jonathan Herzog,  incorporated
by reference to Exhibit 10.26 to the Company's Form 10QSB Report dated September
30, 2002. Commission File No. 000-30-543.

10.20

Investment and Merchant  Banking  Consulting  Services dated November 1, 2002 by
and between I.T. Technology and Tecumseh Holdings,  incorporated by reference to
Exhibit 10.26 to the Company's Form 10-KSB dated  December 31, 2002.  Commission
File No. 000-30-543.

10.21

Stock  Purchase  Agreement  dated  November  11,  2002 by and between the Avenue
Energy,  Inc.,  a Delaware  corporation,  Dormley Pty Ltd and Jacob Jan Kornelis
Poll,  incorporated by reference to Exhibit 10.23 of the Company's Form 8k dated
November 14, 2002. Commission File No. 333-30364.

10.22

Consultancy  Agreement  dated  November 11, 2002 by and between  Avenue  Energy,
Inc.,  a  Delaware  corporation,  Dormley  Pty Ltd and Jacob Jan  Kornelis  Poll
incorporated  by  reference  to  Exhibit  10.24 of the  Company's  Form 8k dated
November 14, 2002. Commission File No. 333-30364.

10.23

Option Agreement  between I.T.  Technology and Yam-Hin (Jim) Tan dated September
12, 2002, incorporated by reference to Exhibit 10.25 of the Company's Form 10QSB
dated November 14, 2002. Commission File No. 000-30-543.

10.24

Farmin  Participation   Agreement  dated  November  14,  2002,  incorporated  by
reference to Exhibit  10.27 of the Company's  Form 8K filing dated  November 25,
2002. Commission File No. 333-30364.

                                       31
<PAGE>

10.25

Agreement  Amending Farmin & Participation  Agreement dated November 14, 2002 by
and between Avenue Energy,  Inc., Aladdin Middle East Ltd., Ersan Petrol Sanayii
A.S., Tranmediterranean Oil Company Ltd., and Guney Yildizi Petrol Uretim Sondaj
Muteahhitlik  ve  Ticaret  A.S.,  collectively  referred  to as the Sayer  Group
Consortium and Middle East Petroleum Services Limited, incorporated by reference
to  Exhibit  10.1 of the  Company's  Form  8K  filing  dated  January  6,  2003.
Commission File No. 333-30364.

10.26

Joint Operating Agreement dated December 20, 2002, by and between Avenue Energy,
Inc.,  Aladdin Middle East Ltd., Ersan Petrol Sanayii A.S - License AR/AME - EPS
3462 GAZIANTEP, S.E. ANATOLIA,  Republic of Turkey, incorporated by reference to
Exhibit 10.2 of the Company's  Form 8K filing dated January 6, 2003.  Commission
File No. 333-30364.

10.27

Subscription  Agreement  covering $1.3 million in convertible  notes dated April
15, 2003, incorporated by reference to Exhibit 10.1 of the Company's Form 10Q-SB
dated June 30, 2003. Commission File No. 000-30-543.

10.28

Convertible  Note dated April 15,  2003,  incorporated  by  reference to Exhibit
10.1(a) of the Company's  Form 10Q-SB dated June 30, 2003.  Commission  File No.
000-30-543.

10.29

Memorandum of Understanding between Aladdin Middle East, Ltd. and Avenue Energy,
Inc.  dated May 22, 2003,  incorporated  by reference to Exhibit  10.1(a) of the
Company's Form 10Q-SB dated June 30, 2003. Commission File No.000-30-543.

10.30

Amended Subscription Agreement dated September 15, 2003 with respect to the sale
of a $1.3 million convertible note, incorporated by reference to Exhibit 10.1 of
the Company's Form 10Q-SB dated September 30, 2003. Commission File No.
000-30-543.

10.31

Convertible  Note in the principal  amount of $1.3 million  dated  September 15,
2003,  incorporated by reference to Exhibit 10.1(a) of the Company's Form 10Q-SB
dated September 30, 2003. Commission File No. 000-30-543.

10.32

Employment  Agreement by and between Avenue Energy, Inc. and Steven Gordon dated
March 8, 2004,  incorporated by reference to Exhibit 10.33 of the Company's Form
10K-SB dated December 31, 2003. Commission File No. 000-30-543.

10.33

Option  Agreement by and between  Avenue  Energy,  Inc. and Steven  Gordon dated
March 8, 2004,  incorporated  by reference to Exhibit  10.33(a) of the Company's
Form 10K-SB dated December 31, 2003. Commission File No. 000-30-543

10.34

Option  Agreement by and between  Avenue  Energy,  Inc. and Steven  Gordon dated
March 8, 2004,  incorporated  by reference to Exhibit  10.33(b) of the Company's
Form 10K-SB dated December 31, 2003. Commission File No. 000-30-543

                                       32
<PAGE>

10.35

Loan agreement by and between Avenue Group, Inc. and Ledger Technologies Pty,
Ltd for an amount up to the sum of $750,000 dated January 23, 2004, incorporated
by reference to Exhibit 10.34 of the Company's Form 10K-SB dated December 31,
2003. Commission File No. 000-30-543

10.36

Lease Agreement by and between Gelb  Enterprises and Avenue Group,  Inc. for the
lease of Avenue  Group  Inc.'s  principal  executive  offices  at 17547  Ventura
Boulevard, Encino, CA 91316 dated January 16, 2004, commencing on March 1, 2004,
incorporated  by reference to Exhibit 10.35 of the  Company's  Form 10K-SB dated
December 31, 2003. Commission File No. 000-30-543.

10.37

Form Of Joint Operating Agreement Between Aladdin Middle East Ltd., Ersan Petrol
Sanayii A.S. and Avenue Energy,  Inc.  incorporated by reference to Exhibit 99.2
of the Company's Form 8-K dated January 2, 2004. Commission File No. 000-30543.

10.38

Participation Agreement Between The Sayer Group Consortium and Avenue Energy,
Inc. and Middle East Petroleum Services Limited dated January 22, 2004
(supercedes and corrects the Participation Agreement filed as Exhibit 99.3 to
the Company's Form 8-K dated January 2, 2004), incorporated by reference to
Exhibit 10.36 of the Company's Form 10K-SB dated December 31, 2003. Commission
File No. 000-30-543.

10.38

Separation  Agreement  dated as of  February 1, 2005 by am among the Company and
Jonathan Herzog, incorporated by reference to Exhibit 99.1 of the Company's Form
8-K dated February 11, 2005. Commission File No. 000-30543.

10.39

Directorship  and Consulting  Agreement  dated February 7, 2005 by and among the
Registrant  and Norman J. Singer,  incorporated  by reference to Exhibit 99.2 of
the Company's Form 8-K dated February 11, 2005. Commission File No. 000-30543.

10.40

Directorship  and Consulting  Agreement  dated February 7, 2005 by and among the
Registrant and Development for Israel, LLC, incorporated by reference to Exhibit
99.3 of the  Company's  Form 8-K dated  February 11, 2005.  Commission  File No.
000-30543.

10.41

Employment  Agreement by and between Avenue Group, Inc. and Mendel Mochkin dated
June 1, 2005 *

10.42

Consulting  Agreement  dated as of January 1, 2005 by and among the  Registrant,
Reuadnal Limited and David Landauer,  incorporated by reference to Exhibit 10.41
of the  Company's  Form 10K-SB  dated  December 31,  2004.  Commission  File No.
000-30-543.

                                       33
<PAGE>

10.43

Participation  Agreement  Between The Sayer Group  Consortium and JKX Turkey LTD
and Avenue Energy,  Inc. and Middle East Petroleum  Services  Limited dated May,
2005,  incorporated  by reference to Exhibit 10.4 of the  Company's  Form 10Q-SB
dated March 31, 2005. Commission File No. 000-30-543.

14.

Code of Ethics For Principal Executive Officers And Senior Financial Officers,
incorporated by reference to Exhibit 14 of the Company's Form 10K-SB dated
December 31, 2003. Commission File No. 000-30-543.

21.

List of  Subsidiaries  as of December  31,  2005,  incorporated  by reference to
Exhibit 21 of the Company's Form 10K-SB dated December 31, 2003. Commission File
No. 000-30-543.

31.1

Certification of Levi Mochkin, Chief Executive Officer, pursuant to Section 302
of the Sarbanes-Oxley Act of 2002.*

32.1

Certification of Levi Mochkin, Chief Executive Officer, pursuant to Section 906
of Sarbanes-Oxley Act of 2002.*

*Filed herewith

                                       34
<PAGE>

ITEM 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES

For the years ended December 31, 2005 and December 31, 2004, fees for services
provided by the independent registered accountants were:

Audit Fees: Audit fees billed to us in connection with Weinberg & Company, PA's
reviews of Form 10-QSB's and audit of our annual financial statements for the
year ended December 31, 2004 and opinion reissuance in 2005 included in Form
10-KSB's totaled approximately $39,500 and $56,700, for 2005 and 2004,
respectively.

The forms 10-QSB were reviewed by the firm of Sherb & Co. LLP, for the quarters
ended June 30 and September 30, 2005. The associated audit fees were $6,500 and
$4,000 for June 30 and September 30, 2005, respectively. The fee for the audit
of the financial statements for the year end December 31, 2005 is estimated at
$71,000.

All Other Fees. The aggregate fees billed in each of the last two fiscal years
for the products and services provided by the principal accountant, other than
the services reported in paragraph entitled Audit Fees for the year ended
December 31, 2004, totaled approximately $10,100.

Tax Fees: The Company did not engage Sherb & Co. LLP or Weinberg & Company, PA,
to perform any tax services during the years ended December 31, 2005 and
December 31, 2004.

Financial Information Systems Design and Implementation Fees: The Company did
not engage Sherb & Co. LLP or Weinberg & Company, PA, to provide advice to the
Company regarding financial information systems design and implementation during
the years ended December 31, 2005 or 2004.

The Board has considered whether the services provided by Sherb & Co. LLP and
Weinberg & Company, PA, are compatible with maintaining the independence of
Sherb & Co. LLP and Weinberg & Company, PA, and has concluded that the
independence of Sherb & Co. LLP and Weinberg & Company, PA, is maintained and is
not compromised by the services provided.

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                                   SIGNATURES


Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has caused this Annual Report to be signed on its
behalf by the undersigned, thereunto duly authorized this 20th day of May 2005.

                               AVENUE GROUP, INC.
                                  (Registrant)

 By  /s/ LEVI MOCHKIN
         ---------------------------------------------------
         Levi Mochkin
         Chairman of the Board, President and Chief Executive
         Officer and Principal Financial Officer


Pursuant to the requirements of the Securities Exchange Act of 1934, this Report
has been signed below by the following persons in the capacities and on the
dates indicated.


SIGNATURE                 TITLE                                       DATE

/s/ LEVI MOCHKIN          Chairman of the Board, President,       April 30, 2006
    ------------          Chief Executive Officer and Director
Levi Mochkin

/s/ NORMAN SINGER         Director                                April 30, 2006
    -------------
Norman Singer

/s/ URI BARNER            Director                                April 30, 2006
    -----------
Uri BarNer

/s/ SHAYA BOYMELGREEN     Director                                April 30, 2006
    -----------------
Shaya Boymelgreen