**UNITED
STATES SECURITIES AND EXCHANGE COMMISSION**
 **Washington,
D. C. 20549**
 
 **FORM
10-QSB**
 ****
 (X)
    QUARTERLY
      REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
      1934
 
 For the
quarterly period ended: March
31, 2005
 
 (  
      )
    TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF
      1934
 
 For the
transition period from ___________________to____________________
 
 Commission
File number 0-11695
 
 **APEX
RESOURCES GROUP, INC.**
 (Exact
name of registrant as specified in charter)
 
 UTAH
    87-0403828(State
      or other jurisdiction of incorporation or organization)
    (I.R.S.
      Employer Identification No.)136
      East South Temple, Suite 1600, Salt Lake City, Utah
    84111(Address
      of principal executive offices)
    (Zip
      Code)
 
 (801)
363-2599
 Registrant’s
telephone number, including area code
 
 
 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), Yes [x ] No [ ] and (2) has been subject to such filing
requirements for the past 90 days. Yes [x] No [ ]
 
 State the
number of shares outstanding of each of the registrant’s classes of common
equity, as of the latest practicable date.
 
 Common
stock, par value $.001; 91,585,212 shares outstanding as of March 31,
2005.
 
  
  
 INDEX
 
 
 PageNumberPART
      I.ITEM
      1.
    Financial
      Statements (unaudited)
    3Balance
      SheetsMarch
      31, 2005 and June 30, 2004
    4Statements
      of OperationsThree
      months and nine months ended March 31, 2005 and 2004 and the period
      January 27, 1984 to March 31, 2005
    5Statement
      of Changes in Stockholders’ EquityPeriod
      from January 27, 1984 to March 31, 2005
    6Statements
      of Cash FlowsNine
      months ended March 31, 2005 and 2004 and the period January 27, 1984 to
      March 31, 2005
    8Notes
      to Financial Statements
    10ITEM
      2.
    Management's
      Discussion and Analysis of Financial Condition and Results of
      Operations
    15ITEM
      3.
    Controls
      and Procedures
    20PART
      IIITEM
      2.
    Changes
      in Securities
    21ITEM
      6.
    Exhibits
    22Signatures
    22
  2
  **PART
I - FINANCIAL INFORMATION**
 
 
 
 This
filing contains certain forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. For this purpose any
statements contained herein that are not statements of historical fact may be
deemed to be forward-looking statements. Without limiting the foregoing, words
such as “may,” “will,” “expect,” “believe,” anticipate,” “estimate” or
“continue” or comparable terminology are intended to identify forward-looking
statements. These statements by their nature involve substantial risks and
uncertainty, and actual results may differ materially depending on a variety of
factors, many of which are not within the Company’s control. These factors
include but are not limited to economic conditions generally and in the
industries in which the Company and its customers participate; competition
within the Company’s industry, including competition from much larger
competitors; technological advances which could render the Company’s products
less competitive or obsolete; failure by the Company to successfully develop new
products or to anticipate current or prospective customers’ product needs; price
increase or supply limitations for components purchased by the Company for use
in its products; and delays, reductions, or cancellations of orders previously
placed with the Company.
 
 **ITEM
1. FINANCIAL STATEMENTS**
 
 
 The
accompanying balance sheets of Apex Resources Group, Inc., (development stage
company) at December 31, 2004 and March 31, 2005, the statements of operations
for the three and nine months ended March 31, 2005 and 2004 and the period
January 27, 1984 (date of inception) to March 31, 2005 and cash flows for the
nine months ended March 31, 2005 and 2004 and the period January 27, 1984 (date
of inception) to March 31, 2005 and the statement of stockholders’ equity for
the period from January 27, 1984 to March 31, 2005, have been prepared by the
Company’s management in conformity with accounting principles generally accepted
in the United States of America. In the opinion of management, all adjustments
considered necessary for a fair presentation of the results of operations and
financial position have been included and all such adjustments are of a normal
recurring nature.
 
 Operating
results for the quarter ended March 31, 2005, are not necessarily indicative of
the results that can be expected for the year ending June 30,
2005.
  3
  **APEX
RESOURCES GROUP, INC.**
 **(Development
Stage Company)**
 **BALANCE
SHEETS**
 **March
31, 2005 and June 30, 2004**
  
 (unaudited)**ASSETS****Mar
      31,****2005**
    
    **Jun
      30,****2004********CURRENT
      ASSETS**Cash
    
    $
    21,961
    
    $
    14,741Total
      Current Assets
    
    
    21,961
    
    
    14,741**PROPERTY
      AND EQUIPMENT -**net
      of accumulateddepreciation
    
    
    183,255
    
    
    197,538**OTHER
      ASSETS**Accounts
      receivable - affiliates
    
    
    146,072
    
    
    148,932Oil
      leases
    
    
    67,913
    
    
    67,913Land
    
    
    305,834
    
    
    83,600Available-for-sale
      securities
    
    
    2,428
    
    
    2,628522,247
    
    
    303,073$
    727,463
    
    $
    515,352**LIABILITIES
      AND STOCKHOLDERS' EQUITY****CURRENT
      LIABILITIES**Notes
      payable - land
    
    $
    208,463
    
    $
    71,183Accounts
      payable
    
    
    37,786
    
    
    42,526Accounts
      payable - related parties
    
    
    349,122
    
    
    84,000Total
      Current Liabilities
    
    
    595,371
    
    
    197,709**STOCKHOLDERS'
      EQUITY**Common
      stock400,000,000
      shares authorized, at $.001 par value;91,585,212
      issued and outstanding
    
    
    91,585
    
    
    58,264Capital
      in excess of par value
    
    
    10,880,275
    
    
    8,002,023Less
      stock subscriptions receivable
    
    
    (2,427,000
    )
    
    -Deficit
      accumulated during the development stage
    
    
    (8,412,768
    )
    
    (7,742,644
    )Total
      Stockholders' Equity
    
    
    132,092
    
    
    317,643$
    727,463
    
    $
    515,352
 
 
 The
accompanying notes are an integral part of these financial
statements.
  4
  **APEX
RESOURCES GROUP, INC.**
 **(Development
Stage Company)**
 **STATEMENT
OF OPERATIONS - unaudited**
 **For
the Three and Nine Months Ended March 31, 2005 and 2004 and the**
 **Period
January 27, 1984 (date of inception) to March 31, 2005**
 
 
 
 **Three
      Months**
    
    **Nine
      Months****Mar****2005**
    
    **Mar****2004**
    
    **Mar****2005**
    
    **Mar****2004**
    
    **Jan
      27, 1984 to****Mar 31, 2005**REVENUESRents
      and interest
    
    $
    1,234
    
    $
    1,128
    
    $
    12,301
    
    $
    3,917
    
    $
    362,998EXPENSESExploration,
      development and promotion
    
    
    172,773
    
    
    81,003
    
    
    664,425
    
    
    294,009
    
    
    9,987,135Depreciation
    
    
    6,000
    
    
    7,000
    
    
    18,000
    
    
    21,000
    
    
    113,386178,773
    
    
    88,003
    
    
    682,425
    
    
    315,009
    
    
    10,100,521NET
      LOSS - before other income
    
    
    (177,539
    )
    
    (86,875
    )
    
    (670,124
    )
    
    (311,092
    )
    
    (9,737,523
    )Gain
      on sale of assets
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    1,324,755NET
      LOSS
    
    $
    (177,539
    )
    $
    (86,875
    )
    $
    (670,124
    )
    $
    (311,092
    )
    $
    (8,412,768
    )LOSS
      PER COMMON SHAREBasic
    
    $
    -
    
    $
    -
    
    $
    (.01
    )
    $
    -AVERAGE
      OUTSTANDING SHARES
      - (stated in 1,000's)Basic
    
    
    91,585
    
    
    72,727
    
    
    84,468
    
    
    69,721
 
 
 
 
 
 
 The
accompanying notes are an integral part of these financial
statements .
  5
  **APEX
RESOURCES GROUP, INC.**
 **(Development
Stage Company)**
 **STATEMENT
OF CHANGES IN STOCKHOLDERS' EQUITY**
 **Period
January 27, 1984 (Date of Inception) to March 31, 2005**
 ****
 
 ****
 **Common
      Stock**
    
    **Capital
      in Excess**
    
    **Accumulated****Shares**
    
    **Amount**
    
    **of****Par
      Value**
    
    **Deficit****Balance
      January 27, 1984**(Date
      of Inception)
    
    
    -
    
    $
    -
    
    $
    -
    
    $
    -Issuance
      of common stock from inception to June 30, 1998
    
    
    1,610,838
    
    
    1,611
    
    
    2,120,660Net
      losses from operations for the six years ended June 30,
    1989
    
    
    -
    
    
    -
    
    
    -
    
    
    (38,910
    )Capital
      contribution - expenses
    
    
    -
    
    
    -
    
    
    752
    
    
    -Net
      losses from operations for the six years ended June 30,
    1998
    
    
    -
    
    
    -
    
    
    -
    
    
    (1,641,468
    )Issuance
      of common stock for the year ended June 30, 1999
    
    
    1,943,798
    
    
    1,944
    
    
    1,344,079
    
    
    -Net
      loss from operations for the year ended June 30, 1999
    
    
    -
    
    
    -
    
    
    -
    
    
    (1,607,517
    )Issuance
      of common stock for the year ended June 30, 2000
    
    
    3,318,058
    
    
    3,318
    
    
    2,948,196
    
    
    -Net
      loss from operations for the year ended June 30, 2000
    
    
    -
    
    
    -
    
    
    -
    
    
    (1,029,239
    )Issuance
      of common stock for the year ended June 30, 2001
    
    
    1,034,500
    
    
    1,034
    
    
    778,467
    
    
    -Net
      loss from operations for the year ended June 30, 2001
    
    
    -
    
    
    -
    
    
    -
    
    
    (807,576
    )Issuance
      of common stock for services & expenses - August 31,
    2001
    
    
    105,000
    
    
    105
    
    
    62,894
    
    
    -Net
      loss from operations for the year ended June 30, 2002
    
    
    -
    
    
    -
    
    
    -
    
    
    (1,216,953
    )Issuance
      of common stock for services at $.001 - April 14, 2003
    
    
    6,380,000
    
    
    6,380
    
    
    -
    
    
    -Issuance
      of common stock for cash at $.001 - April & June 2003
    
    
    15,650,000
    
    
    15,650
    
    
    -
    
    
    -Issuance
      of common stock for services at $.01 - June 3, 2003
    
    
    2,500,000
    
    
    2,500
    
    
    22,500
    
    
    -Issuance
      of common stock for services at $.05 - June 30, 2003
    
    
    1,680,000
    
    
    1,680
    
    
    82,320
    
    
    -Net
      loss from operations for the year ended June 30, 2003
    
    
    -
    
    
    -
    
    
    -
    
    
    (652,701
    )**Balance
      June 30, 2003**
    
    
    34,222,194
    
    $
    34,222
    
    $
    7,359,868
    
    $
    (
      6,994,364
    )
 
 
 The
accompanying notes are an integral part of these financial
statements.
 
  6
  
 **APEX
RESOURCES GROUP, INC.**
 **(Development
Stage Company)**
 **STATEMENT
OF CHANGES IN STOCKHOLDERS' EQUITY (Continued)**
 **Period
January 27, 1984 (Date of Inception) to March 31, 2005**
 
 ****
 **Common
      Stock******
    
    **Capital
      in **Excess****
    
    **Accumulated****Shares**
    
    **Amount**
    
    **of
      Par Value**
    
    **Deficit**Issuance
      of common stock for purchase of land at $.03 - Nov 17,
2003
    
    300,000
    
    
    300
    
    
    8,700
    
    
    -Issuance
      of common stock for payment of debt at $.03 - Nov 25, 2003
    
    7,095,666
    
    
    7,095
    
    
    205,774
    
    
    -Issuance
      of common stock for cash at $.02 - Nov 6, 2003
    
    2,500,000
    
    
    2,500
    
    
    47,500
    
    
    -Issuance
      of common stock for cash at $.015 to $.04 - Jan & Feb
    2004
    
    2,501,820
    
    
    2,502
    
    
    49,657
    
    
    -Issuance
      of common stock for services at $.05 - Mar 2004
    
    367,655
    
    
    368
    
    
    18,014
    
    
    -Issuance
      of common stock for services at $.001 - Apr 2004
    
    500,000
    
    
    500
    
    
    -
    
    
    -Issuance
      of common stock for payment of debt at $.03 - Jun 2004
    
    2,376,234
    
    
    2,377
    
    
    68,910
    
    
    -Issuance
      of common stock for services and expenses at $.03 - Nov & Jun
      2004
    
    8,400,000
    
    
    8,400
    
    
    243,600
    
    
    -Net
      loss from operations for the year ended June 30, 2004
    
    -
    
    
    -
    
    
    -
    
    
    (748,280
    )**Balance
      June 30, 2004 -**audited
    
    58,263,569
    
    
    58,264
    
    
    8,002,023
    
    
    (7,742,644
    )Issuance
      of common stock for expenses at $.02 - Sept 2, 2004
    
    1,717,785
    
    
    1,718
    
    
    30,137
    
    
    -Issuance
      of common stock for payment of debt at $.02 - Sept 2, 2004
    
    311,500
    
    
    311
    
    
    7,789
    
    
    -Issuance
      of common stock for expenses and services at $.02 - Sept 24,
      2004
    
    2,800,000
    
    
    2,800
    
    
    81,200
    
    
    -Issuance
      of common stock for cash and note receivable at $.02 - Sept 27,
      2004
    
    5,000,000
    
    
    5,000
    
    
    95,000
    
    
    -Issuance
      of common stock for land at $.016 to .02 - Sept 29, 2004
    
    1,100,000
    
    
    1,100
    
    
    16,900
    
    
    -Issuance
      of common stock for stock subscriptions receivable at $.05 to $.20
      November & December 2004
    
    18,000,000
    
    
    18,000
    
    
    2,432,000
    
    
    -Issuance
      of common stock for expenses at $.05 - December 21, 2004
    
    4,392,358
    
    
    4,392
    
    
    215,226
    
    
    -Net
      loss form operations for the nine months ended March 31,
    2005
    
    -
    
    
    -
    
    
    -
    
    
    (670,124
    )**Balance
      March 31, 2005 -**unaudited
    
    91,585,212
    
    $
    91,585
    
    $
    10,880,275
    
    $
    (8,412,768
    )
 
 The
accompanying notes are an integral part of these financial
statements.
  7
  **APEX
RESOURCES GROUP, INC.**
 **(Development
Stage Company)**
 **STATEMENT
OF CASH FLOWS - unaudited**
 **For
the Nine Months Ended March 31, 2005 and 2004 and the**
 **Period
January 27, 1984 (Date of Inception) to March 31, 2005**
 
 
  **Mar****31****2005****,**
    
    **Mar
      31****2004****,**
    
    **January
      27, 1984****to Mar 31, 2005****CASH
      FLOWS FROM OPERATING ACTIVITIES**Net
      loss
    
    $
    (670,124
    )
    $
    (311,092
    )
    $
    (8,412,768
    )Adjustments
      to reconcile net loss to net cash provided by operating
      activitiesDepreciation
    
    
    18,000
    
    
    21,000
    
    
    118,386Common
      capital stock issued for services & expenses
    
    
    335,473
    
    
    102,382
    
    
    5,312,093(Increase)
      decrease in accounts receivable
    
    
    2,860
    
    
    (54,638
    )
    
    (146,072
    )Increase
      (decrease) in liabilities
    
    
    405,762
    
    
    175,684
    
    
    884,011Net
      Change in Cash from Operations
    
    
    91,971
    
    
    (66,664
    )
    
    (2,244,350
    )**CASH
      FLOWS FROM INVESTING ACTIVITIES**Purchase
      of investments
    
    
    200
    
    
    -
    
    
    (2,428
    )Purchase
      of property & equipment
    
    
    (207,951
    )
    
    (35,020
    )
    
    (602,475
    )Purchase
      of oil & gas leases and mining claims
    
    
    -
    
    
    -
    
    
    (67,913
    )(207,751
    )
    
    (35,020
    )
    
    (672,816
    )**CASH
      FLOWS FROM FINANCING ACTIVITIES**Net
      proceeds from issuance of capital stock
    
    
    123,000
    
    
    102,158
    
    
    2,939,127Net
      Change in cash
    
    
    7,220
    
    
    474
    
    
    21,961Cash
      at beginning of year
    
    
    14,741
    
    
    14,259
    
    
    -Cash
      at end of year
    
    $
    21,961
    
    $
    14,733
    
    $
    21,961
 
 
 
 
 
 
 
 
 
 
 
 The
accompanying notes are an integral part of these financial
statements.
  8
  **APEX
RESOURCES GROUP, INC.**
 **(Development
Stage Company)**
 **STATEMENT
OF CASH FLOWS (Continued)**
 **For
the Period January 27, 1984 (Date of Inception) to March 31,
2005**
 
 
 **SCHEDULE
OF NONCASH OPERATING, INVESTING, AND FINANCING ACTIVITIES**
 
 Issuance
      of 1,154,073 common shares for assets, services and expenses - from
      inception to June 30, 1998
    
    $
    1,500,765Issuance
      of 1,549,875 common shares for assets, services and expenses - for the
      year ended June 30, 1999
    
    
    1,157,000Issuance
      of 1,242,781 common shares for assets, services and expenses - for the
      year ended June 30, 2000
    
    
    1,240,093Issuance
      of 784,500 common shares for services and expenses - for the year ended
      June 30, 2001
    
    
    629,500Issuance
      of 105,000 common shares for services and expenses - for the year ended
      June 30, 2002
    
    
    62,999Issuance
      of 10,560,000 common shares for services and expenses - for the year ended
      June 30, 2003
    
    
    115,380****Issuance
      of 9,267,655 common shares for services and expenses - for the year ended
      June 30, 2004
    
    
    270,882Issuance
      of 4,517,785 common shares for services and expenses for the three months
      ended September 30, 2004
    
    
    115,855Issuance
      of 4,392,358 common shares for services and expenses for the three months
      ended December 31, 2004
    
    
    219,619
 
 
 
 
 
 
 
 
 
  9
  **APEX
RESOURCES GROUP, INC.**
 **(Development
Stage Company)**
 **NOTES
TO FINANCIAL STATEMENTS**
 **March
31, 2005**
 
 ****
 
 **1. ORGANIZATION**
 
 The
Company was incorporated in the State of Utah on January 27, 1984 with
authorized capital stock of 50,000,000 shares at a par value of $0.001. On May
17, 1999 the authorized was increased to 100,000,000 shares and on March 3, 2000
the authorized was increased to 400,000,000 shares with the same par value. On
March 26, 2003 the name of the Company was changed from “Ambra Resources Group,
Inc. to “Apex Resources Group, Inc.”
 
 The
Company has been in the development stage since inception and has been engaged
in the business of the acquisition of mining and oil property interests and
other business activities.
 
 **2. 
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**
 
 Accounting
Methods
 The
Company recognizes income and expenses based on the accrual method of
accounting.
 
 Dividend
Policy
 
 The
Company has not yet adopted any policy regarding payment of
dividends.
 
 Cash
and Cash Equivalents
 
 The
Company considers all highly liquid instruments purchased with a maturity, at
the time of purchase, of less than three months, to be cash
equivalents.
 
 Property
and Equipment
 
 The
Company’s property and equipment consists of the following:
 
 Office
      equipment
    
    
    132,130Residential
      rentals
    
    
    164,511Less
      accumulated depreciation
    
    
    (113,386
    )183,255
 
 Office
equipment is depreciated on the straight line method over five and seven years
and the residential rentals are depreciated on the straight line method over
forty years.
 
 Basic
and Diluted Net Income (Loss) Per Share
 
 Basic net
income (loss) per share amounts are computed based on the weighted average
number of shares actually outstanding. Diluted net income (loss) per share
amounts are computed using the weighted average number of common shares and
common equivalent shares outstanding as if shares had been issued on the
exercise of any common share rights unless the exercise becomes antidilutive and
then only the basic per share amounts are shown in the report.
  10
  **APEX
RESOURCES GROUP, INC.**
 **(Development
Stage Company)**
 **NOTES
TO FINANCIAL STATEMENTS (Continued)**
 **March
31, 2005**
 
 ****
 
 Capitalization
of Oil Leases Costs
 
 The
Company uses the successful efforts cost method for recording its oil lease
interests, which provides for capitalizing the purchase price of the project and
the additional costs directly related to proving the properties and amortizing
these amounts over the life of the reserve when operations begin or a shorter
period if the property is shown to have an impairment in value or expensing the
remaining balance if it is proven to be of no value. Expenditures for oil well
equipment are capitalized and depreciated over their useful lives.
 
 Environmental
Requirements
 
 At the
report date environmental requirements related to the mineral claim interests
acquired are unknown and therefore an estimate of any future cost cannot be
made.
 
 Foreign
Currency Translation
 
 Part of
the transactions of the Company were completed in Canadian dollars and have been
translated to US dollars as incurred, at the exchange rate in effect at the
time, and therefore, no gain or loss from the translations is recognized. US
dollars are considered to be the functional currency.
 
 Financial
Instruments
 
 The
carrying amounts of financial instruments are considered by management to be
their estimated fair values due their short term maturities.
 
 Income
Taxes
 
 The
Company utilizes the liability method of accounting for income taxes. Under the
liability method deferred tax assets and liabilities are determined based on the
differences between financial reporting and the tax bases of the assets and
liabilities and are measured using the enacted tax rates and laws that will be
in effect, when the differences are expected to reverse. An allowance against
deferred tax assets is recorded, when it is more likely than not, that such tax
benefits will not be realized.
 
 At March
31, 2005, the Company had a net operating loss available for carry forward of
$8,412,768. The tax benefit of approximately $2,524,000 from the loss carry
forward has been fully offset by a valuation reserve because the use of the
future tax benefit is doubtful because the Company is unable to establish a
predictable projection of operating profits for future years.
 
 The net
operating loss carryovers will expire beginning in the years 2004 through
2025.
 
 
  11
  **APEX
RESOURCES GROUP, INC.**
 **(Development
Stage Company)**
 **NOTES
TO FINANCIAL STATEMENTS (Continued)**
 **March
31, 2005**
 
 
 **2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)**
 
 Revenue
Recognition
 
 Revenue
is recognized on the sale and transfer of properties or services and the receipt
other sources of income.
 
 Advertising
and Market Development
 
 The
Company expenses advertising and market development costs as
incurred.
 
 Estimates
and Assumptions
 
 Management
uses estimates and assumptions in preparing financial statements in accordance
with accounting principles generally accepted in the United States of America.
Those estimates and assumptions affect the reported amounts of the assets and
liabilities, the disclosure of contingent assets and liabilities, and the
reported revenues and expenses. Actual results could vary from the estimates
that were assumed in preparing these financial statements.
 
 Concentration
of Credit Risk
 
 Financial
instruments that potentially subject the Company to significant concentration of
credit risk consists primarily of cash and account receivables. Cash balances
are maintained in accounts that are not federally insured for amounts over
$100,000 but are other wise in financial institutions of high credit quality.
Accounts receivable are unsecured, however management considers them to be
currently collectable.
 Other
Recent Accounting Pronouncements
 
 The
Company does not expect that the adoption of other recent accounting
pronouncements to have any material impact on its financial
statements.
 
 **3.
OIL LEASES -** BEAUFORT
SEA PROJECT
  On June
9, 1997 the Company purchased a 3.745% working interest, for $67,913, in the
Beaufort Sea well Esso Pex Home et al Itiyok I-27 consisting of 640 acres and is
located at Latitude 70-00', Longitude 134-00', Sections 7, 8, 17, 18, 27, 28,
and 37, License No. 55, dated April 22, 1987. During 1982 and 1983 a consortium
of companies participated in the drilling, casing, and testing the area to a
depth of 12,980 feet. A review of the well data and geological prognosis
indicates that the areawould contain proven recoverable gas reserves of 108 Bscf
and proven recoverable oil reserves of 8,976 MSTB.
 
  12
  
 **APEX
RESOURCES GROUP, INC.**
 **(Development
Stage Company)**
 **NOTES
TO FINANCIAL STATEMENTS (Continued)**
 **March
31, 2005**
 
 
 
 **3.
OIL LEASES (continued)**
 
 The lease
is shown at cost, which is considered by management to be its estimated fair
value.
 
 The other
partners in the project are controlled by Exxon Oil Corporation, however, there
are no immediate
plans to develop the area until a gas pipe line becomes available.
 
 **4.
PURCHASE OF LAND**
 
 The
Company is obligated under installment sales contracts for the purchase of land.
The contracts have balances of $208,463 at March 31, 2005, including accrued
interest, on which $126,105 was due December 31, 2004 (unpaid) and the balance
of $82,358 due over 25 years in monthly payments, including interest of 11%. The
payments due are in arrears.
 
 **5.
AVAILABLE-FOR-SALE SECURITIES**
 
 During
2001 the Company purchased 6,000,000 shares of Omega Ventures Group, Inc. for
$3,000. During the year ended June 30, 2004 745,635 shares were sold for
$21,184, and during August 2004 399,735 shares were sold for $8,761, leaving
4,854,630 shares. On the date of this report the shares have been trading, in a
small quantities, for $.035 per share.
 
 Management
intents to hold the securities for investment.
 
 **6.
PURCHASE OF OIL LEASES**
 
 During
the quarter ended September 2004 the Company purchased a 1% interest, and 2.5
participation units in two oil leases by the payment of the initial drilling
costs. The payments for the drilling costs have been expensed.
 
 **7.
ISSUANCE OF COMMON CAPITAL STOCK**
 
 During
the year ended June 30, 2004 the Company issued 5,001,820 common shares in a
private placement sale for cash of $102,159.
 
 During
the year ended June 30, 2004 the Company issued 9,471,900 restricted common
shares for payment of debt of $284,156, 9,267,655 restricted common shares for
services at $.03 per share, and 300,000 restricted common shares for Arizona
land for $9,000, all to related parties.
 
 During
the quarter ended September 2004 the Company issued 4,517,785 restricted common
shares for services and expenses, 311,500 for payment of a debt, 1,100,000 for
purchase of land, and 5,000,000 shares for cash and a note
receivable.
  13
  
 **APEX
RESOURCES GROUP, INC.**
 **(Development
Stage Company)**
 **NOTES
TO FINANCIAL STATEMENTS (Continued)**
 **March
31, 2005**
 
 
 **7.
ISSUANCE OF COMMON CAPITAL STOCK**  **(continued)**
 
 During
the quarter ended December 2004 the Company issued 18,000,000 restricted common
shares for stock subscriptions receivable of $2,450,000 and 4,392,358 for
expenses of $219,618.
 
 On March
26, 2003 the Company completed a reverse stock split of one share for 20 shares
of outstanding stock. This report has been prepared showing post split shares
from inception.
 
 **8.
SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES**
 
 Officers-directors
and their controlled entities and a consultant have acquired 14% of the
outstanding common stock of the Company.
 
 The
Company has made no interest, demand loans to affiliates of $146,072. The
affiliations resulted through common officers between the company and its
affiliates, and the Company owns 7% of the outstanding stock of one of the
affiliates.
 
 Officers-directors
have made no interest, demand, loans to the Company of $349,122.
 
 **9.
GOING CONCERN**
 
 The
Company will need additional working capital for its future planned activity and
to service its debt, which raises substantial doubt about its ability to
continue as a going concern. Continuation of the Company as a going concern is
dependent upon obtaining sufficient working capital to be successful in that
effort. The management of the Company has developed a strategy, which it
believes will accomplish this objective, through additional short term loans,
and equity funding, which will enable the Company to operate for the coming
year.
        14
  **APEX
RESOURCES GROUP, INC.**
 **(Development
Stage Company)**
 **NOTES
TO FINANCIAL STATEMENTS (Continued)**
 **March
31, 2005**
 
 
 **10.
SCHEDULE OF EXPENSES**
 
 Following
is a summary schedule of the expenses for the nine months ended March 31, 2005
and 2004 shown in the statement of operations under exploration, development,
and administrative.
 
 **Mar
      31,****2005**
    
    **Mar
      31,****2004**Travel
    
    $
    61,310
    
    $
    27,691Office
      expenses
    
    
    102,394
    
    
    69,547Professional
    
    
    22,915
    
    
    15,387Consultants
    
    
    320,886
    
    
    104,909Promotional
    
    
    18,678
    
    
    9,801Rent
    
    
    56,373
    
    
    23,041Exploration
      and development - oil and gas
    
    
    55,414
    
    
    35,028Other
    
    
    26,455
    
    
    8,605$
    664,425
    
    $
    294,009
 
 
 **ITEM
2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATION**
 
 For a
complete understanding, this Management Discussion and Analysis should be read
in conjunction with Part I- Item 1. Financial Statements to this Form 10-QSB and
the Annual Report of the Company on Form 10-KSB for the year ended June 30,
2004.
 
 **General**
 
 The
Company is in the development stage and engaged in the acquisition of interests
in gas and oil properties and the acquisition of interests in real estate. The
Company has not been engaged in the production of any gas and oil. For a
detailed description of the oil and gas and real estate holding of the Company,
please see the Annual Report of the Company filed on Form 10-KSB for the year
ended June 30, 2004, and the subsequent Quarterly Reports filed by the Company
on Form 10-QSB. Following is a brief description of relevant events that
occurred during the quarter ended March 31, 2005.
 
 
 
  15
  
 **Recent
Developments**
 
 Oil
and Gas Interests
 
 *Plaquemines
Parish, Louisiana*
 
 During
the quarter, the Company learned that Royal “T” Oil, the operator of the
Plaquemines Parish, Bastian Bay Well #16152, turned over its interest in the
well to Imperial Petroleum, Inc. Imperial is preparing to do a work over of the
well at an estimated cost of $906,800 and has made a cash call to all
participants. The participants in the well were given the choice to pay the cash
call or continue on a non-consent basis under which the non paying participants
relinquish half of their working interest after Imperial has recouped its
expenditures. The Company determined to continue on a non-consent basis and will
not meet the cash call. This means the Company’s net revenue interest will be
reduced from 6.25% to 3.125%.
 
 *Henry
Dome Prospect, Texas*
 
 During
the quarter, PB Energy Partners, the operator of the Henry Dome Prospect in
McMullen County, Texas, informed the Company that the JB Henry Dome #1 was
successfully re-entered and gas was found. The Company owns 2.5 participation
units in the Henry Dome Prospect in McMullen County, Texas, for $12,500. These
units give the Company a 1.875% working interest in JB Henry Dome #1 well.
Initial flow testing of the well demonstrated flow of 1.2 to 1.4 million cubic
feet of gas per day. Following initial testing, acid washing of the well was
performed to attempt to increase flow rates. Additional flow testing following
the acid washing will be performed before results will be announced. The
estimated life expectancy of this well is at least six years.
 
 Real
Estate Interests
 
 *Cowichan
Lake, Victoria, B.C.*
 
 In
January 2005, the Company paid approximately $39,000 toward the purchase price
for Lot 4 on Upper Point Ideal Road in the Cowichan Lake District in Victoria
B.C. In March 2005, the Company paid approximately $42,000 toward the purchase
price of Lot 2. Part of the payment covered various fees and taxes, the
remainder was applied to reduce the balance of the purchase price. The Company
will pay off the balance of the purchase price of the two lots by making monthly
payments for 25 years. The Company acquired these properties for investment
purposes and has no present intent to develop or improve these
parcels.
 
 The
Company also owns approximately 4,854,630 or 7% of the outstanding common shares
of Omega Ventures Group, Inc., a corporation whose common stock is traded on the
Over-the-Counter Bulletin Board, stock symbol “APXR.”
 
  16
  **Liquidity
and Capital Resources**
 
 The
Company currently does not have sufficient cash reserves or cash flow from
operations to meet its cash requirements. This raises substantial doubt about
the Company’s ability to continue as a going concern. During the nine months
ended March 31, 2005, the Company financed its operations primarily through the
issuance of Company securities and loans from related parties. During the
quarter ended December 31, 2004, the Company received subscriptions to purchase
18,000,000 shares of its common stock in private placement transactions for cash
totaling $2,450,000. As of March 31, 2005, the Company has received $23,000. The
Company’s balance sheet reflects the remaining balance as stock subscriptions
receivable. During the quarter ended December 31, 2004, the Company caused its
transfer agent to issue the 18,000,000 shares. These shares, however, are being
held in escrow and will only be delivered out as funds are received by the
Company. During the quarter ended March 31, 2005, the Company did not issue any
shares for services or in satisfaction of expenses, as a result, accounts
payable to related parties increased to $349,122 compared to $154,574 at
December 31, 2004.
 
 On March
31, 2005, the Company had cash on hand of $21,961, as cash flows from operating
activities and financing activities were only partially offset by cash flows
used in investing activities.
 
 The
Company has plans to further develop its oil and gas properties, which will
require substantial additional working capital which the Company does not
currently have. Moreover, the Company does not anticipate significant revenue
from its operating activities in the upcoming quarter.
 
 **Results
of Operations**
 
 ***Comparison
of the three months ended March 31, 2005 and 2004***
 
 The
Company sustained a net loss of $177,539 in the quarter ended March 31, 2005
compared to a loss of $86,875 for the quarter ended March 31, 2004. This
increase in loss was primarily the result of the Company being much more active
in its business operations in the three months ended March 31, 2005, compared to
the same period of 2004, as shown in the following comparison of expenses:
 
 **March
      31, 2005**
    
    **March
      31, 2004**Travel
    
    $
    7,156
    
    $
    4,005Office
      Expenses
    
    
    28,822
    
    
    9,614Professional
    
    
    13,055
    
    
    151Consultants
    
    
    84,411
    
    
    30,934Promotional
    
    
    8,000
    
    
    1,054Rent
    
    
    15,202
    
    
    7,734Exploration
      and Development -Oil
      and Gas
    
    
    -0-
    
    
    18,906Other
    
    
    16,127
    
    
    8,605$
    172,773
    
    $
    81,003
 
  17
  
 Travel
expenses increased $3,151 or 79% to $7,156 during the three months ended March
31, 2005 compared to March 31, 2004. This increase is primarily the result of
increased travel in connection with increasing operating activities during the
three months ended March 31, 2005 compared to the same period of 2004. The
Company anticipates travel expenses to continue at rates consistent with those
incurred during the three month period ended March 31, 2005.
 
 Office
expenses increased $19,208 or 200% to $28,822 during the three months ended
March 31, 2005 compared to the same period 2004. This significant increase is
partially the result of the Company retaining the services of two individuals to
provide administrative and office support services, as well as increasing
expenses due to more extensive operations during the third fiscal quarter of
2005 compared to 2004. Office expenses in the future should remain fairly
consistent with those experienced during the third fiscal quarter of
2005.
 
 As with
travel and office expenses, professional expenses increased $12,904 to $13,055
during the three months ended March 31, 2005 compared to the three months ended
March 31, 2004, as accounting and legal expenses continue to increase as a
result of more stringent compliance obligations imposed by the Sarbanes-Oxley
Act of 2002. The Company expects professionals fees to continue to increase in
upcoming fiscal quarters.
 
 Consultants
fees increased $53,477 or 173% to $84,411 during the three months ended March
31, 2005 compared to three month period ended March 31, 2004. The Company has no
employees, rather management retains consultants to provide the services the
Company needs. Again, as a result of increasing operating activities, consulting
fees increased in the three months ended March 31, 2005 compared to the same
three month period of 2004. While the Company expects consultants fees to
continue to be greater than 2004 levels, management does not expect to see such
significant increases in the immediate future.
 
 Promotional
expenses increased $6,946 to $8,000 during the quarter ended March 31, 2005
compared to $1,054 for the quarter ended March 31, 2004. This increase in
promotional expenses is largely the result of the Company’s efforts to keep its
shareholders and the market better informed as to the Company’s activities
through a coordinated media campaign. The Company expects promotional expenses
to continue to increase in upcoming quarters.
 
 Rent
expenses nearly doubled from $7,734 during the three months ended March 31, 2004
to $15,202 during the three months ended March 31, 2005. We do not expect rent
expenses to continue to increase at such significant rates in the
future.
 
 During
the three months ended March 31, 2005, the Company incurred no expenses for
exploration and development, compared to $18,906 during the three months ended
March 31, 2004. The Company believes this decrease is simply a result of timing
issues and anticipates exploration and development expenses in the future will
return to the higher levels experienced during the three months ended March 31,
2004.
 
 Other
expenses increased to $16,127 for the three months ended March 31, 2005 compared
to $8,605 for the three months ended March 31, 2004, an 87% increase. This
increase is primarily due to the increased operating activities of the Company
during the 2005 quarter compared to the 2004 quarter. The Company anticipates
other expenses to continue at level consistent with the three month ended March
31, 2005.
  18
  Revenue
from interest and rents remained constant, at $1,234 during the three months
ended March 31, 2005, compared to $1,128 during the three months ended March 31,
2004.
 
 ***Comparison
of the nine months ended March 31, 2005 and 2004***
 
 The
Company sustained a net loss of $670,124 during the nine months ended March 31,
2005, compared to a net loss of $311,092 for the nine months ended March 31,
2004. This increase in loss was primarily the result of the Company being much
more active in its business operations in the nine months ended March 31, 2005,
compared to the same period of 2004, as shown in the following comparison of
expenses:
 
 **March
      31, 2005**
    
    **March
      31, 2004**Travel
    
    $
    61,310
    
    $
    27,691Office
      Expenses
    
    
    102,394
    
    
    69,547Professional
    
    
    22,915
    
    
    15,387Consultants
    
    
    320,886
    
    
    104,909Promotional
    
    
    18,678
    
    
    9,801Rent
    
    
    56,373
    
    
    23,041Exploration
      and Development -Oil
      and Gas
    
    
    55,414
    
    
    35,028Other
    
    
    26,455
    
    
    8,605$
    664,425
    
    $
    294,009
 
 
 Travel
expenses increased $33,619 or 121% to $61,310 during the nine months ended March
31, 2005 compared to March 31, 2004. This increase is primarily the result of
increased travel in connection with increasing operating activities during the
nine months ended March 31, 2005 compared to the same period of 2004. The
Company anticipates travel expenses to continue at rates consistent with those
incurred during the first nine months of the 2005 fiscal year.
 
 Office
expenses increased $32,847 or 47% to $102,394 during the nine months ended March
31, 2005 compared to the same period 2004. This increase is partially the result
of the Company retaining the services of two individuals to provide
administrative and office support services, as well as increasing expenses due
to more extensive operations during the first three fiscal quarters of 2005
compared to 2004. Office expenses in the future should remain fairly consistent
with those experienced during the nine months ended March 31, 2005.
 
 Professional
expenses went from $15,387 during the nine months ended March 31, 2004 to
$22,915 during the nine months ended March 31, 2005. This increase is
attributable to increasing accounting and legal expenses incurred by the Company
as it seeks to comply with the increasingly more stringent requirements of the
Sarbanes-Oxley Act of 2002.
  19
  Consultants
fees increased $215,977 or 206% to $320,886 during the nine months ended March
31, 2005 compared to nine month period ended March 31, 2004. The Company has no
employees, rather management retains consultants to provide the services the
Company needs. The increased in consultants fees is attributable to the
Company’s increased operational activities during the nine months ended March
31, 2005 compared to the same period 2004. While the Company expects consultants
fees to continue to be greater than 2004 levels, management does not expect to
see such significant increases in the immediate future.
 
 Promotional
expenses increased $8,877 to $18,678 during the nine month period ended March
31, 2005 compared to $9,801 for the same period of 2004. This increase in
promotional expenses is largely the result of the Company’s efforts to keep its
shareholders and the market better informed as to the Company’s activities
through a coordinated media campaign. The Company expects promotional expenses
to continue to increase in upcoming quarters.
 
 Rent
expenses increased from $35,028 during the nine months ended March 31, 2004 to
$47,082 during the nine months ended March 31, 2005, a 34% increase. We do not
expect rent expenses to continue to increase at such significant rates in the
future.
 
 Exploration
and development expenses increased from $35,028 during the nine months ended
March 31, 2004 to $55,414 during the nine months ended March 31, 2005, a 58%
increase. This increase is directly related to increase oil and gas prices, and
a corresponding increase in exploration activities. The Company expects
exploration and development expenses will continue to increase in the future for
as long as oil and gas prices remain at current or higher rates.
 
 Other
expenses increased to $26,455 for the nine months ended March 31, 2005 compared
to $8,605 for the nine months ended March 31, 2004, a 207% increase. This
increase is primarily due to the increased operating activities of the Company
during the nine months enced March 31, 2005 compared to the nine months ended
March 31, 2004. The Company anticipates other expenses to continue at level
consistent with those experienced during the nine months ended March 31, 2005.
 
 Revenue
from interest and rents for the nine months ended March 31, 2005 was $12,301
compared to $3,917 during the nine months ended March 31, 2004.
 
 **ITEM
3. CONTROLS AND PROCEDURES**
 
 The
Company’s principal executive officers and our principal financial officer (the *"Certifying
Officers"* ) are
responsible for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e). Such officers have
concluded (based upon their evaluations of these controls and procedures as of
the end of the period covered by this report) that the Company’s disclosure
controls and procedures are effective to ensure that information required to be
disclosed by it in this report is accumulated and communicated to management,
including the Certifying Officers as appropriate, to allow timely decisions
regarding required disclosure.
  20
  The
Certifying Officers have also indicated that there were no significant changes
in the Company’s internal controls over financial reporting or other factors
that could significantly affect such controls subsequent to the date of their
evaluation, and there were no significant deficiencies and material weaknesses. ****
 
 Management,
including the Certifying Officers, does not expect that the Company’s disclosure
controls or its internal controls will prevent all error and all fraud. A
control system, no matter how well conceived and operated, can provide only
reasonable, not absolute, assurance that the objectives of the control system
are met. In addition, the design of a control system must reflect the fact that
there are resource constraints, and the benefits of controls must be considered
relative to their costs. Because of the inherent limitations in all control
systems, no evaluation of controls can provide absolute assurance that all
control issues and instances of fraud, if any, within a company have been
detected. These inherent limitations include the realities that judgments in
decision-making can be faulty, and that breakdowns can occur because of simple
error or mistake. Additionally, controls can be circumvented by the individual
acts of some persons, by collusion of two or more people or by management
override of the control. The design of any systems of controls is also based in
part upon certain assumptions about the likelihood of future events, and there
can be no assurance that any design will succeed in achieving its stated goals
under all potential future conditions. Because of these inherent limitations in
a cost-effective control system, misstatements due to error or fraud may occur
and may not be detected.
 
 **PART
II - OTHER INFORMATION**
 
 **ITEM
2. CHANGES IN SECURITIES**
 
 No
instruments defining the rights of the holders of any class of registered
securities have been materially modified, limited or qualified during the
quarter ended March 31, 2005.
 
 
 During
the quarter ended March 31, 2005, the Company issued no securities that were not
registered under the Securities Act of 1933.
 
 
 **ITEM
6. EXHIBITS AND REPORTS ON FORM 8-K**
 
 
 (A)
    Reports
      on Form 8-KNone.(B)
    Exhibits.
      The following exhibits are included as part of this
  report:31.1
    Certification
      of Principal Executive Officer pursuant to Section 302 of the
      Sarbanes-Oxley Act of 200231.2
    Certification
      of Principal Financial Officer pursuant to Section 302 of the
      Sarbanes-Oxley Act of 200232.1
    Certification
      of Principal Executive Officer pursuant to Section 906 of the
      Sarbanes-Oxley Act of 200232.2
    Certification
      of Principal Financial Officer pursuant to Section 906 of the
      Sarbanes-Oxley Act of 2002
 
  21
  
 **SIGNATURES**
 
 Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized
 
 **APEX
      RESOURCES GROUP, INC.**Date:
      May 13, 2005
    By:
    /s/
      John R.
      RaskJohn
      R. Rask, President and DirectorDate:
      May 13, 2005
    By:
    /s/
      John M.
      HickeyJohn
      M. Hickey, Secretary and Director
 
 
 
 
 
  22