Avenue Group, Inc. 10Q

10-Q 1 avenue10q.htm QUARTERLY REPORT Avenue Group, Inc. 10Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

———————

FORM 10-Q

———————


X	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
	ACT OF 1934
For the quarterly period ended: MARCH 31, 2008
or

	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
	ACT OF 1934
For the transition period from: _____________ to _____________

———————

AVENUE GROUP, INC.

(Exact name of registrant as specified in its charter)

———————


Delaware	000-30543	98-0200077
(State or Other Jurisdiction	(Commission	(I.R.S. Employer
of Incorporation)	File Number)	Identification No.)

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

(Address of Principal Executive Office) (Zip Code)

(888) 612-4188

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

———————


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 for the past 90 days.		X	Yes		No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.

Large accelerated filer	Accelerated filer
Non-accelerated filer	Smaller reporting company			X

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

The number of shares of registrant’s common stock outstanding, as of June 2, 2008 was 252,190,986.

AVENUE GROUP, INC.

INDEX


PART I: FINANCIAL INFORMATION
ITEM 1:	FINANCIAL STATEMENTS (Unaudited)	3
	Consolidated Balance Sheets	3
	Consolidated Operations Statements	4
	Consolidated Cash Flows Statements	6
	Notes to the Consolidated Financial Statements	8
ITEM 2:	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	21
ITEM 3:	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	24
ITEM 4:	CONTROLS AND PROCEDURES	25
PART II: OTHER INFORMATION
ITEM 1:	LEGAL PROCEEDINGS	26
ITEM 1A:	RISK FACTORS	26
ITEM 2:	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	26
ITEM 3:	DEFAULTS UPON SENIOR SECURITIES	26
ITEM 4:	SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS	26
ITEM 5:	OTHER INFORMATION	26
ITEM 6:	EXHIBITS	26

PART I – FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS

Avenue Group, Inc. and Subsidiaries

Consolidated Balance Sheets

(A Development Stage Company)


	March 31 2008		December 31 2007
ASSETS:		(Unaudited)		(i)
CURRENT ASSETS:
Cash	$	36,190	$	9,918
Performance bond		100,000		-
Other current assets		11,985		26,520
TOTAL CURRENT ASSETS		148,175		36,438
OIL AND GAS PROPERTY (Successful efforts method), at cost
Unproved undeveloped oil and gas property		12,820		12,820
TOTAL OIL AND GAS PROPERTY		12,820		12,820
EQUIPMENT, net of $21,761 and $20,297 accumulated depreciation, respectively		1,668		423
TOTAL ASSETS	$	162,663	$	49,681

LIABILITIES AND STOCKHOLDERS' DEFICIT:
CURRENT LIABILITIES:
Accounts payable and accrued expenses	$	643,743	$	470,835
Advances from Tomco		75,000		-
Notes payable - Officer		66,100		68,100
Notes payable - Related Party		52,900		52,900
Note payable		250,000		-
TOTAL CURRENT LIABILITIES		1,087,743		591,835

ASSET RETIREMENT OBLIGATION		12,746		12,746

MINORITY INTEREST		375,000		375,000

STOCKHOLDERS' DEFICIT:
Preferred stock, $.001 par value, 25,000,000 shares authorized,
none issued, and outstanding		-		-
Common stock, $.0002 par value, 500,000,000 shares authorized,
252,190,986 and 247,590,986 issued and outstanding, respectively		50,438		50,438
Additional Paid - In Capital		33,254,831		33,254,831
Accumulated other comprehensive income		5,953		5,953
Deficit accumulated prior to development stage		(7,934,508)		(7,934,508)
Deficit accumulated during the development stage		(26,689,540)		(26,306,614)
TOTAL STOCKHOLDERS' DEFICIT		(1,312,826)		(929,900)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$	162,663	$	49,681

———————

(i) Derived From Audited Financial Statements

See accompanying notes to consolidated financial statements

Avenue Group, Inc. and Subsidiaries

Consolidated Operations Statements

(A Development Stage Company)


			For the Three Months Ended March 31,					Cumulative during development stage January 1, 2003 to March 31, 2008
				2008		2007		(Unaudited)
				(Unaudited)		(Unaudited)
Revenue:
	Oil and Gas sales		$	3,722	$	14,938	$	336,787
	E-commerce sales			-		-		60,072
				3,722		14,938		396,859
Expense:
	Cost of e-commerce sales			-		-		16,348
	Oil lease operating expense			-		4,500		264,418
	Impairment loss, developed oil property			-		-		5,320,360
	Impairment loss, undeveloped oil property			-		-		267,018
	Expired oil leases			-		-		175,198
	Loss on sale of oil lease			-		-		721,046
	Sales, general and administrative			381,200		185,788		11,032,855

		Total operating expenses		381,200		190,288		17,797,243
		(Loss) from operations		(377,478)		(175,350)		(17,400,384)

Other income (expense):
	Gain on settlement of oil lease			-		-		166,996
	(Loss) / Gain on sale of marketable securities			-		3,105		1,144,454
	Loss on change in market value of
		Langley Park escrow contingency		-				(122,647)
	Interest income			-		938		30,002
	Interest expense			(5,448)		(5,025)		(1,410,942)
	Other income			-		-		53,516
	Impairment loss on Langley Park			-		-		(10,003,318)
		Total other income (expense)		(5,448)		(982)		(10,141,939)

Net income (loss) from continuing operations			$	(382,926)	$	(176,332)	$	(27,542,323)

Income from discontinued operations
	Gain on sale of discontinued operations			-		-		724,874
	Income from discontinued operations			-		-		127,909
	Total income from discontinued operations			-		-		852,783

	Net loss		$	(382,926)	$	(176,332)	$	(26,689,540)
Basic and Diluted income (loss) per common share			$	(0.00)	$	(0.00)
Weighted average number of common shares outstanding -
	Basic and Diluted			252,190,986		249,413,684

See accompanying notes to consolidated financial statements

Avenue Group, Inc. and Subsidiaries

Consolidated Comprehensive Income (Loss) Statements

(A Development Stage Company)


						Cumulative during development Stage January 1, 2003 to
		For the Three Months Ended March 31,				March 31, 2008
		2008		2007			(Unaudited)
			(Unaudited)	(Unaudited)

Net (Loss)		$	(382,926)	$	(176,332)	$	(22,252,105)
Other comprehensive income (loss),
	net of tax related effects:
Unrealized gain (loss) on:
	marketable securities		-		(36,513)		2,421,711
	foreign currency translation		-		-		(118,109)
Other comprehensive gain (loss)			-		(36,513)		2,303,602

Comprehensive Income (loss)		$	(382,926)	$	(212,845)	$	(19,948,503)

See accompanying notes to consolidated financial statements.

Avenue Group, Inc. and Subsidiaries

Consolidated Cash Flows Statements

( A Development Stage Company)


			For the Three Months Ended March 31,				Cumulative during Development stage January 1, 2003 to
				2007		2006	March 31, 2008
				(Unaudited)		(Unaudited)		(Unaudited)
Cash Flow From Operating Activities:
Net income (loss)			$	(382,926)	$	(176,332)	$	(26,689,540)
	Income from discontinued operations			-		-		(127,909)
	Gain on sale of discontinued operations			-		-		(724,874)
(Loss) income from continuing operations				(382,926)		(176,332)		(27,542,323)
Adjustments to reconcile net (loss) to net cash used in operating activities:
	Depreciation and depletion			366		4,866		48,069
	Impairment loss on investment in Langley Park securities			-		-		10,003,318
	Impairment loss on developed oil property			-		-		5,587,378
	Increase in accretion of oil asset retirement obligation			-		490		59,740
	Gain on settlement of oil leases			-		-		(166,996)
	Expired oil leases			-		-		175,198
	Loss on sale of oil lease			-		-		721,046
	Gain on sale of Langley stock			-		(3,105)		122,647
	Gain on sale of Australian securities			-		-		(38,885)
	Loss (Gain) on sale of Langley Park securities			-		-		(37,826)
	Loss on sale of ROO Group securities			-		-		(1,067,743)
	Decrease in unrealized loss on investments			-		-		42,566
	Interest related to convertible debentures			-		-		1,300,000
	Share-based compensation			-		34,000		3,983,500
	Amortization of deferred compensation			-		-		152,100
	Changes in operating assets and liabilities:
		Decrease in accounts receivable		-		-		61,920
		(Increase) in prepaid expenses		-		-		(4,906)
		(Increase) decrease in other current assets		(85,465)		(42,305)		(5,878)
		Decrease in other assets		-		8,108		4,225
		Increase (Decrease) in accounts payable and accrued expenses		172,908		(17,930)		874,464
		Net assets of discontinued operations		-		-		(28,659)
Net Cash Used in Operating Activities:				(295,117)		(192,208)		(5,857,045)

Cash Flow From Investing Activities:
Investment in oil and gas property				-		-		(4,551,878)
Investment in Roo Group, Inc.				-		(3,620)		(208,500)
Proceeds from investor in joint venture				-		-		375,000
Purchases of fixed assets				(1,611)		-		(36,704)
Settlement on oil leases				-		-		(50,000)
Proceeds from sale of marketable securities				-		-		11,306
Proceeds from sale of Langley Park securities				-		199,600		925,921
Proceeds from sale of ROO Group Inc. securities				-		-		1,657,993
Proceeds from sale of Australian marketable securities				-		-		130,505
Net Cash Provided by (Used in) Investing Activities:				(1,611)		195,980		(1,746,357)

See accompanying notes to consolidated financial statements.

Avenue Group, Inc. and Subsidiaries

Consolidated Cash Flows Statements (Continued)

( A Development Stage Company)


			For the Three Months Ended March 31,				Cumulative during Development stage January 1, 2003 to
			2007		2006		March 31, 2008
			(Unaudited)		(Unaudited)		(Unaudited)
Cash Flow From Financing Activities:
Proceeds of notes receivable			-		-		485,975
Payment of notes payable			-		-		(697,100)
Proceeds / (repayments) from notes payable officer			(2,000)		-		66,100
Proceeds from advances			75,000		-		75,000
Proceeds from notes payable			250,000		-		250,000
Proceeds from issuance of convertible debt			-		-		1,300,000
Proceeds from stock to be issued			-		-		486,000
Proceeds from issuance of stock options			-		-		100,000
Purchases of treasury stock			-		-		(125,000)
Proceeds received from issuance of common stock, net			-		-		3,501,524
Net Cash Provided by Financing Activities:			323,000		-		5,442,499

Effect of foreign currency translation on cash			-		(53)		49,318

Net (decrease) in cash			26,272		3,719		(2,111,585)
Cash at beginning of period			9,918		76,187		2,147,775

Cash at end of period		$	36,190	$	79,906	$	36,190

Supplemental cash flow information

Cash paid for interest		$	-	$	-	$	33,535
Cash paid for taxes		$	-	$	-		$-

Issuance of 48,458,149 shares of common stock for investment
	in Langley Park securities	$	-	$	-	$	11,000,000
Additional paid in capital for value of termination of registration agreement		$	-	$	-	$	210,000
Sale of Bickhams Media ( a formerly wholly owned subsidiary)		$	-	$	-	$	588,000
Common Stock issued for accrued expenses		$	-	$	-	$	127,800

See accompanying notes to consolidated financial statements.

AVENUE GROUP INC. AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2008

(Unaudited)

Note 1 Company Background and Business Plan

Avenue Group, Inc. (“Avenue” or the “Company”) was incorporated in Delaware on February 2, 1999. We are engaged in oil and gas exploration and development through our wholly-owned operating subsidiaries, Avenue Energy, Inc. Avenue Energy owns 100% of Avenue Appalachia, Inc. In 2006, we started Avenue Appalachia, Inc. (“AAI”), a Delaware company. AAI has a 10% General Partner Interest and a 31.8% Limited Partner interest in Avenue Appalachia 2006 LP ("2006 LP"), a partnership formed in 2006. (see Note 4). We own 50.1% of the common stock of Stampville.com, Inc.("Stampville"), an inactive business, as of December 31, 2006. We have a wholly-owned subsidiary, I.T. Technology Pty. Ltd. (`IT Tech'). Avenue Energy Israel LTD owns 100% of the Heletz-Kokhav license and 50% of the Iris License in Israel, 2 petroleum exploration licenses in the State of Israel.

Our business activities during 2007 and the three months ended March 31, 2008 were principally devoted to our oil and gas operations in Israel and in the West Virginia area of the Appalachian Basin. In 2007 we refocused our efforts seeking lower risk oil and Gas exploration and production opportunities in the US and Israel.

Basis of Presentation

These financial statements are consolidated, unaudited and include, in our opinion, all adjustments (consisting of only normal recurring adjustments) necessary for fair presentation. The financial statements should be read in conjunction with our audited financial statements and the related notes included in our December 31, 2007 Form 10-KSB. The financial statements are interim financial statements prepared in accordance with accounting principles generally accepted in the United States and are stated in U.S. dollars. We have reclassified certain data in the financial statements of the prior periods to conform to the current period presentation.

Note 2 Summary of Significant Accounting Policies

A. Principles of Consolidation

Our financial statements are consolidated to include the accounts of Avenue Group, its wholly-owned subsidiaries Avenue Energy, Inc., Stampville, I.T. Technology Pty. Ltd, and the accounts of 2006 LP (see Note 4). As 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 inter-company accounts and transactions. We consolidate the accounts of 2006 LP because as the General Partner we control the partnership. This consolidation is required by the standards of Accounting Research Bulletin 51, Consolidated Financial Statements, Statement 94 of the Financial Accounting Standards Board (FASB), Consolidation of All Majority-Owned Subsidiaries, FASB Interpretation 46(R) Consolidation of Variable Interest Entities, Issue 04-05 of the Emerging Issues Task Force of the FASB, Determining Whether a General Partner, or the General Partners as a Group, Controls a Limited Partnership or Similar Entity When the Limited Partners Have Certain Rights, and FASB Staff Position SOP 78-9-1, Interaction of AICPA Statement of Position (SOP) 78-9 and EITF Issue 04-05.

B. Estimates

Our 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.

C. Cash and Cash Equivalents and Fair Value of Financial Instruments

The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. Cash equivalents include investments in money market funds and are stated at cost, which approximates market value. Cash at times may exceed FDIC insurable limits.

The carrying value of financial instruments including cash and marketable securities, accounts payable and accrued expense, and notes payable, approximates their fair values at March 31, 2008 and December 31, 2007, due to the relatively short-term nature of these instruments.

D. Marketable Securities

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

E. 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. We charge all geological and geophysical cost, cost of carrying and retaining undeveloped property and dry hole and bottom hole contributions to expense when incurred. If an exploratory well does not find proved reserves, we charge to expense the cost of drilling and equipping the well, as well as cost of service wells drilled in connection with the development. We include exploratory dry hole cost in cash flow from investing activity within the cash flow statement. If determination of proved reserves is not made within a year of completing the well, we charge cost of the well to expense.

We had no exploratory well cost that had been suspended for one year or more as of March 3,1 2008. As of March 31, 2008 we have drilled and completed two wells in West Virginia. The first well began producing in January 2007. The second well awaits a pipeline connection. As of December 31, 2005 we had drilled one well, the Karakilise 1 well, in Turkey. We sold that well in 2006.

We 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 account for cost of operating and maintaining of the proved property as part of the cost of oil and gas produced. We capitalize cost of support equipment and facilities and allocate their depreciation and operating costs between exploration, development, and production activities based on equipment function to the extent it is used in the activity. As of December 31, 2006, we had no proved reserves. Until such time as we discover or acquire proved reserves, 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 property and exploratory well cost when reserves are not found.

We apply the provisions of FASB Statement 143, Accounting for Asset Retirement Obligations, which provides guidance on accounting for dismantlement and abandonment cost. We have not established any proved reserves on our property. 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 property 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 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 will 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 G of this Note.

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 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 recognize a gain on the sale to the extent that the sales price exceeds the carrying amount of the unproved property. We recognize a gain or loss for all other sales of nonproducing properties and include the gain or loss in the results of operations.

F. Equipment

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

G. 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 2007 and 2006 we recorded impairment losses of $412,012 and $30,600 respectively, on our oil and gas property (see Note 4). We had no impairment losses during the quarter ending March 31, 2008.

H. Revenue Recognition

We recognize oil and gas sales when our purchaser accepts delivery at the transfer point. At that time, title passes to the purchaser, the purchaser assumes the risks and rewards of ownership and we are able to determine the collectibility of the sales.

I. Foreign Currency Translation

We translate assets and liabilities of our Australian subsidiary at the exchange rate prevailing at December 31,2007 and 2006, and related revenue and expense at average exchange rates in effect during the period. We record resulting translation adjustments as a component of accumulated comprehensive income (loss) in stockholders' equity.

J. 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 64,350,000 as of March 31, 2008 and December 31, 2007.

K. Share-Based Payments

Beginning January 1, 2006, we record share-based payments at fair value and record compensation expense for all share-based awards granted, modified, repurchased or cancelled after the effective date, in accord with FASB Statement 123(R), Share-Based Payments. We record compensation expense for outstanding awards for which the requisite service had not been rendered as of the effective date over the remaining service period. For share-based payments that had not been charged against income prior to January 1, 2006, we record compensation expense for portions of such payments vesting in 2006 or later. We adopted Statement 123(R) using a modified prospective application.)

L. Recent Accounting Pronouncements

Recent Accounting Pronouncements

In February 2007, the Financial Accounting Standards Board (FASB) issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities – Including an Amendment of FASB Statement No. 115”. This statement permits entities to choose to measure many financial instruments and certain other items at fair value. Most of the provisions of SFAS No. 159 apply only to entities that elect the fair value option. However, the amendment to SFAS No. 115 “Accounting for Certain Investments in Debt and Equity Securities” applies to all entities with available-for-sale and trading securities. SFAS No. 159 is effective as of the beginning of an entity’s first fiscal year that begins after November 15, 2007. Early adoption is permitted as of the beginning of a fiscal year that begins on or before November 15, 2007, provided the entity also elects to apply the provision of SFAS No. 157, “Fair Value Measurements”. The adoption of this statement is not expected to have a material effect on the Company's financial statements.

In December 2007, the Financial Accounting Standards Board (FASB) issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements – an amendment of ARB No. 51”. This statement improves the relevance, comparability, and transparency of the financial information that a reporting entity provides in its consolidated financial statements by establishing accounting and reporting standards that require; the ownership interests in subsidiaries held by parties other than the parent and the amount of consolidated net income attributable to the parent and to the noncontrolling interest be clearly identified and presented on the face of the consolidated statement of income, changes in a parent’s ownership interest while the parent retains its controlling financial interest in its subsidiary be accounted for consistently, when a subsidiary is deconsolidated, any retained noncontrolling equity investment in the former subsidiary be initially measured at fair value, entities provide sufficient disclosures that clearly identify and distinguish between the interests of the parent and the interests of the noncontrolling owners. SFAS No. 160 affects those entities that have an outstanding noncontrolling interest in one or more subsidiaries or that deconsolidate a subsidiary. SFAS No. 160 is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008. Early adoption is prohibited. The adoption of this statement is not expected to have a material effect on the Company's financial statements.

In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133” (SFAS 161). This statement is intended to improve transparency in financial reporting by requiring enhanced disclosures of an entity’s derivative instruments and hedging activities and their effects on the entity’s financial position, financial performance, and cash flows. SFAS 161 applies to all derivative instruments within the scope of SFAS 133, “Accounting for Derivative Instruments and Hedging Activities” (SFAS 133) as well as related hedged items, bifurcated derivatives, and nonderivative instruments that are designated and qualify as hedging instruments. Entities with instruments subject to SFAS 161 must provide more robust qualitative disclosures and expanded quantitative disclosures. SFAS 161 is effective prospectively for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application permitted. We are currently evaluating the disclosure implications of this statement. The adoption of this statement is not expected to have a material effect on the Company's financial statements.

All new accounting pronouncements issued but not yet effective have been deemed to not be applicable, hence the adoption of these new standards is not expected to have a material impact on our financial reporting.

M. Concentration Of Credit Risk

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

During the three months ended March 31, 2008 and 2007, we did not have balances in excess of the $100,000 limit insured by the Federal Deposit Insurance Corporation of $100,000.

N. Development Stage Company

From January 1, 2003, through the present we have been a development stage company. We devote most of our effort to raising capital and exploring and developing oil and natural gas property. Our financial statements present financial position, results of operations, cash flow and stockholders' equity in conformity with the generally accepted accounting principals that apply to established operating enterprises with additional information required by Statement 7, Accounting and Reporting By Development-Stage Enterprises. This additional information is presented on our balance sheet as "Deficit accumulated during development stage", on our operations and cash flow statements under "Cumulative during development stage from January 1, 2003.

O. Going concern

The accompanying consolidated financial statements have been prepared assuming the Company is a going concern, which assumption contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company has suffered a loss from operations, and the Company lacks sufficient liquidity to continue its operations.

Management's 2008 forecast indicates positive trends from revenues, but it may not result in an increase in operating income, net income, among others and positive cash flows.

These factors raise substantial doubt about the Company's ability to continue as a going concern. The financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amount of liabilities that might be necessary should the Company be unable to continue in existence.

Continuation of the Company as a going concern is dependent upon achieving profitable operations. Management's plans to achieve profitability include developing new areas of oil and gas exploration and implementing certain cost reduction initiatives as necessary. There can be no assurance that the Company will generate enough cash from such revenues, or that cost reduction initiatives will be successful to meet anticipated cash requirements.

Note 3 Performance Bond

The IPC required the company to post a plugging bond in the amount of $100,000 to ensure that the open wells on our licenses are properly plugged and abandoned when their useful lives are determined to be concluded. Such bond is an addition to the cost of the Company’s projects. The current bond of $100,000 is set to expire and be released to the company by March 18, 2009. The IPC may require the company to renew the bond prior to expiration if the wells are still open, until such time that the wells are properly plugged and abandoned.

Note 4 Oil and Gas Operations

Turkish Operations

In 2002 we entered into a Farmin and Participation Agreement with Sayer Group Consortium and Middle East Petroleum Services Limited, that allowed us to earn up to a 50% working interest in up to 31 exploration licenses and 2 production leases held by the members of the Sayer Group in Turkey.

Since initiating our activity in Turkey in 2002, three exploratory wells were drilled with only one, the Karakilise Nr 1, resulting in an initial production rate of approximately 400 BOPD, which after an ex-tended production test, declined to approximately 25 BOPD.

As drilling commitments on the licenses came due, we could elect to participate in the drilling commitments thereby enabling us to maintain our interest in the licenses, or we could elect to not participate in the drilling obligation, thereby losing our interest in the license.

After evaluation of the geophysical and geological data associated with the licenses listed below, Avenue elected not to participate in any attempt to extend its interest in the licenses or drill an initial well on any of the licenses and surrendered its interest:

Gercus

Avenue and AME held a 50% interest in the Gercus license. In the quarter ended June 30, 2005 we paid $25,000 to extend the Gercus license to June 30, 2006. As of June 30, 2006, we surrendered our interest to the operator.

North Rubai

Avenue and AME held a 50% interest in the North Rubai License. By the terms of the leases, an initial well had to be drilled by May 30, 2006. As of May 30, 2006, we surrendered our interest to the operator.

Killis

Avenue and AME held a 50% working interest in the Killis prospect. By the terms of the leases, an initial well had to be drilled by July 2005. As of July, 2006, we surrendered our interest to the operator.

Arpetete

Avenue and AME held a 50% working interest in the Arpetete prospect. By the terms of the leases, an initial well had to be drilled by November 30, 2005. As of November 30, 2006, we surrendered our interest to the operator.

Following the expiration of the licenses mentioned above and various revisions to the farmin and participation agreement, Avenue's remaining interest in Turkey was a 10.5% interest in the Karakilise licenses.

Karakilise

Drilled and completed in 2003, the Karakilise Nr 1, resulted in an initial production rate of approximately 400 BOPD, which after an extended production test, declined to approximately 25 BOPD. In May 2005, We and the Sayer Group completed a transaction with JKX Oil and Gas, an LSE listed British independent, to drill and 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%. As a result of this transaction during the year ended December 31, 2005 we recorded a loss on the sale of our interest in the Karakilise-2 well of $721,046 and an impairment of our oil and gas property of $319,757. After extensive testing, Karakilise Nr 2 was determined to be non-commercial and was abandoned.

In September 2006, we resolved to conclude and cease our oil exploration activities in southeast Turkey. As a result, Avenue Energy, Inc. and AME entered into a termination and indemnification agreement. As part of the terms of the agreement and in satisfaction of all of Avenue's outstanding obligations, Avenue paid $50,000 to AME and surrendered all of its interest in the Karakilise Licenses. The termination and indemnification agreement did not affect Avenue's right, pursuant to the terms of a previous farm-out agreement entered into by AME and Avenue with JKX Oil and Gas, to receive approximately $380,000 out of JKX's future production revenue from the Karakilise Licenses. As of December 31, 2006 $37,986 was paid by JKX to the Company, leaving a balance of $342,013. As of March 31, 2008 the Company had not collected any additional amounts.

West Virginia

In October 2006, Avenue Energy entered into an agreement with Drilling Appalachian Corporation, ("DAC") to participate in the drilling Natural Gas wells in West Virginia.

In order to meet its financial obligations under the agreement, Avenue formed a Limited Partnership called Avenue Appalachia 2006 LP ("2006 LP"), with Avenue's wholly owned subsidiary, Avenue Appalachia Inc. ("AAI") acting as the General Partner ("GP"). Avenue assigned the DAC agreement to the 2006 LP. In consideration of its assignment of the DAC contract and its services as GP, AAI received a 10% carried partnership interest in the 2006 LP, with its interest rising to 20% after payout of capital invested.

The limited partners of the 2006 LP are an unaffiliated private family trust holding a 68.2% limited partner interest with AAI holding the remaining 31.8% limited partner interest.

The first two wells of the program were drilled and completed in November and December, 2006. For the year ended December 31, 2007, the wells produced a Total of 8,861 mcf for an average of 30 mcf per day in the aggregate.

Due to the performance of the first two wells of the program, we have revised the terms of the program with DAC, where the obligations of the 2006 LP will go forward on a well by well basis. In October 2007, the Limited Partner of the 2006 LP decided to drill a well on a sole risk basis. AAI did not participate in this well and will not be sharing in the revenues of this well.

Heletz-Kokhav License

On September 25, 2007, Avenue Group, Inc. announced that the Petroleum Commissioner of Israel had issued a license for the Heletz-Kokhav Field to its wholly owned Israel subsidiary Avenue Energy Israel LTD. (“AEI”).

The Heletz-Kokhav license is comprised of 3 oil fields – Heletz, Brur and Kochav – equaling 229,600 dunam (approximately 60,000 acres), and is located approximately 55 km south of Tel Aviv and 12 km east of the Mediterranean Sea. Heletz was the first oil field discovered in the eastern Mediterranean and remains the most prolific oil field discovered onshore Israel.

The first well (Heletz 1) was drilled to a depth of 4800 feet (1515 Meters) and recognized as a producing well on 12 October 1955. Initial production was approximately 400 barrels per day; oil was 29^o API.

A total of 88 wells have been drilled on the Heletz field to depths ranging from 4,000 to 6,500 feet., of which 59 were producing wells with the other 29 having oil shows. Peak production reached 4,000 barrels of oil per day (“BOPD”) in the 1960’s.

Total reserves from the shallow sands have been estimated by Avenue’s geologists and by geological studies commissioned by the Israeli Government at 19.1 million barrels, of which 17.2 million barrels of oil has been recovered. Reserve estimates do not include secondary, tertiary recovery methods that may have the potential to raise production; these methods have not yet been applied to the field.

Oil production in the Heletz field continued until recently by Lapidoth Ltd., which acted as a contractor for the State of Israel. Recent production has been approximately 85 BOPD from 7 producing wells.

According to the terms of the License, AEI agreed to a work program over the next 3 years that will consist of field studies, well workovers, initiating 3D seismic and the drilling of a new well. Failure by AEI in implementing the work program may cause AEI to lose the license. AEI may request the conversion of the License to a 30 year production Lease. In the event of a substantial increase in daily production that occurs as a result of the work program.

There are 53 idle wells which AEI believes can be excellent workover candidates. There is significant infill drilling potential on the acreage as well. The field is currently developed on 80 acre spacing or greater, providing additional increased density drilling opportunity.

The Heletz sandstone together with production from an active waterdrive, makes Heletz-Kokhav an excellent candidate for a waterflood program, as other fields with similar characteristics have had success in increasing recoverable oil reserves through such processes.

Tomco Agreement

On January 16, 2008, the Company entered into a Letter of Intent with TomCo Energy Plc (“TomCo.”).

In February, 2008 the Petroleum Commissioner of Israel issued the Company 50% of the Iris License covering the remaining part of the Heltz Field. Lapidoth-HEletz LP, a Limited Partnership listed on the Tel Aviv Stock Exchange, was issued the other 50% of the Iris License.

According to the terms of the Licenses, Avenue agreed to a work program over the next 3 years that will consist of field studies, well workovers, shooting seismic and the drilling of a new well. Failure by the Company in implementing the work program may cause the Company to lose its interest in the licenses. The Company may request the conversion of the License to a 30 year production Lease. In the event of a substantial increase in daily production that occurs as a result of the work program. The Company estimates the work program expenditures at approximately $4,500,000.

There are currently 53 idle wells which the Company believes can be excellent workover candidates.

On March 17, 2008, the Company borrowed $250,000 from TomCo. The loan is payable upon demand and accrued interest at a rate if 2% per annum.

Asset Retirement Obligation

We record an asset retirement obligation in accordance with FAS 143. We measure the liability to plug our oil and gas wells at the end of their economic lives and to restore the land in compliance with all applicable regulations at its fair value at the balance sheet date. We consult with specialists operating our oil and gas property and other professionals in the industry to determine estimated cost in current dollars for the asset retirement obligation. We record accretion expense as the change in present value of discounted cash flow needed to satisfy our future asset retirement obligation. We review our fair value estimates annually and record results of the change in the estimates of the fair value as a change in the capitalized cost of the asset and as a change in the asset retirement obligation. We revise our annual accretion expense schedule accordingly. We use US Department of Labor annual Producer Price Index for the oil and gas machinery and equipment to calculate future cash flow for our asset retirement obligation. We use our cost of capital to calculate the present value of the future cash flow. Below is a schedule of the changes in the obligation over the three months ended March 31, 2008 and December 31, 2007.



	March 31, 2008		December 31, 2007
Beginning asset retirement obligation	$	12,746	$	12,256
Additions related to new property		-
Liabilities settled
Accretion				490
Ending asset retirement obligation	$	12,746	$	12,746

Note 5 Equipment

Equipment at March 31, 2008 and 2007 included:



	March 31,		December 31,
	2008			2007
Office and computer equipment	$	23,429		$	21,818
Less: accumulated depreciation		(21,761)			(21,395)
Equipment, net	$	1,668		$	423

Depreciation expense for the three months ended March 31, 2008, and 2007, was $366 and $366 respectively.

Note 6 Advances

In January 2008 Tomco advanced the Company $75,000 as an advance against fees to be incurred in its Heletz-Kokhav License.

Note 7 Notes And Loans Payable - Related Party

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 $149,619 and $137,244 at March 31, 2008 and December 31, 2007, 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 the Company.

Note 8 Notes Payable Officer

As of March 31 31, 2008 an Officer of the Company loaned the Company $66,100. The loan is payable upon demand and accrues interest at a rate of 10% per annum.

Note 9 Notes Payable

On March 17, 2008, the Company borrowed $250,000 from TomCo. The loan is payable upon demand and accrued interest at a rate if 2% per annum.

Note 10. Capitalization and Equity

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.

On March 23, 2008, the board of directors adopted resolutions providing for the designation of the Company’s series A preferred stock, $0.001 par value. Holders of the Series A Preferred Stock are entitled, among other things, to (i) ten (10) votes for each share of Series A Preferred Stock owned on the record date for the determination of shareholders entitled to vote, on all matters submitted to the Company’s shareholders, (ii) convert shares of Series A Preferred Stock into fully paid and non-assessable shares of the Company’s common stock, at their option at any time and from time to time beginning from the date of issuance, in an amount equal to two (2) shares of common stock for each one (1) share of Series A Preferred Stock surrendered, and (iii) a preferential payment in cash of $0.0025 per share of Series A Preferred Stock owned, out of assets of the Company legally available therefore upon the liquidation, dissolution or winding up of the business of the Company, whether voluntary or involuntary, before the payment or setting apart for payment of any amount for, or the distribution of any assets of the Company to the holders of (a) any other class or series of capital stock of the Company, the terms of which expressly provide that the holders of Series A Preferred Stock should receive preferential payment with respect to such distribution (to the extent of such preference), and (b) the Company’s stock.

B. Common Stock

See Note 11B.

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 1.00 British pound ("GBP") 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.

Prior to December 31, 2006, we sold all of our non-escrowed Langley shares. The Langley shares are listed on the London Stock Exchange with the symbol LPI. We could freely trade the Langley shares we owned, subject to the escrow described below. As part of the transaction, Langley entered into a "lock-up" agreement with us by which it 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 were held in escrow for two years following the closing. The return to Langley of the Langley escrow shares was determined and valued this way:

The acquisition of the Langley stock closed on October 8, 2004. For the escrow return, we computed the Avenue common stock Market Value as the average of the ten closing bid prices on the ten trading days immediately preceding the two year anniversary of the Langley acquisition close. We calculated the percentage decrease of Avenue Group, Inc.'s Market Value from the Avenue Group, Inc.'s closing price determined at the Langley acquisition close. We multiplied the percentage decrease by the total number of shares of Langley stock originally acquired. Because this calculation exceeded the 3,028,634 shares in the Langley escrow, we sold all of the escrow shares back to Langley at a price of one pence per share, a total of 30,286.34 British Pounds, or US$57,286. The above calculation was determined by the agreement for the acquisition of the Langley stock.

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 on December 31, 2004.

Langley's assets consist almost entirely of micro cap securities of companies including ours and companies similar to us. We could not assure that any of these companies would be successful. Much of our working capital during 2005 was 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.

In 2006 and 2005, we sold 3,028,634 and 2,300,000 shares of Langley held by us for proceeds of $57,286 and $654,975, respectively. We used the proceeds from the sale of these shares to fund our working capital requirements.

In January, 2007, we sold our remaining interest in Langley 728,635 shares for approximately $199,600.

Also see Note 2D and Note 3.

C. Preferred Stock

Note 11. 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 grant options under the Plan to our officers, directors, employees and consultants.

Beginning January 1, 2006, our stock option plan is subject to the provisions of Statement No 123(R), Share-Based Payments. Under the provisions of this standard, employee and director stock-based compensation expense is measured using fair value. In 2005 and earlier our stock option plan was subject to the provisions of Statement No 123, Accounting for Stock-Based compensation. Under the provisions of the old standard, employee and director stock-based compensation expense were 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. In 2005 and earlier we had elected to account for our employee and director stock-based awards under the provisions of APB Opinion No. 25. Under APB Opinion No. 25, compensation cost for stock options was 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 2006 and 2005 we had option activity in the following transactions:

In March 2004, we entered into a three year part-time, non-exclusive consulting 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 this 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.

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 accounted for the extension as the issuance of a new option to a non-employee in accordance with the provisions of Statement 123 and the consensus of the

Emerging Issues Task Force of the FASB in Issue No. 96-18, Accounting for Equity Instruments that are Issued to Other Than Employees for Acquiring or in Conjunction with Selling, Goods or Services. That accounting resulted in a charge to operations of $2,500,000 in connection with this extension. The options expire April 30, 2008.

On February 7, 2007, Avenue Group, Inc. entered in to a consulting agreement with Dov Amir in connection with its oil and gas activities. Pursuant to this agreement Mr. Amir received $5,000 as a bonus, and will be compensated at the rate of $5,000 per month. In addition, he will receive an option, with immediate vesting, at $.02 the beginning of each month to purchase 50,000 shares of the Company's stock at the prevailing market rate. For the year ended December 31 2007, he received an option for 400,000 shares with an exercise price of $.02 per share. Compensation expense for these options were valued using the Black-Scholes method and was calculated to be $8,000 and is included in the Statement of

Operations for the year ended December 31, 2007.

See also Note 10B.

As of March 31, 2008, the total future compensation expense related to non-vested options not yet recognized in the consolidated statement of operations is $0.

For the year ended December 31, 2005, the Company accounted for option grants to employees and employee consultants using the intrinsic method of Accounting in accordance with Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees" ("APB 25"). Under the intrinsic value method of accounting, no compensation expense was recognized in the Company's consolidated statements of operations when the exercise price of the company's employee stock option grant equaled the market price of the underlying common stock on the date of grant and the measurement date of the option grant is certain. Accordingly, for the year ended December 31, 2005, the Company disclosed the proforma amounts of compensation expense, and its effect on net loss per share for the year then ended, if the Company accounted for its employee stock options under the fair value recognition provision of FAS 123.

Under SFAS 123R, the company remeasures the intrinsic value of the options at the end of each reporting period until the options are exercised, cancelled or expire unexercised. As of March 31, 2008, a total of 400,000 options with a weighted average exercise price of $0.02 and a weighted remaining life of 5 years are outstanding.

B. Other Agreements

Separation Agreement

On February 7, 2005, Jonathan Herzog, our former Executive Vice President and member of our Board of Directors, resigned from all positions he held with us.

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 Agreements 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.

Agreements with Directors and Officers

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.

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 received from us $2,500 per month, 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 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 received $10,000 per month and received options to purchase up to 600,000 shares of our common stock at $0.06 per share. These options vested in July 2005 and are for a term of five years commencing as of that date. 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.

On June 21, 2006, the terms of Mr. Singer's compensation were modified. Effective June 1, 2006, all further options ceased, and Mr. Singer received stock grants that vested at the rate of 100,000 share per month as a Director and 100,000 shares per month for each month as a consultant. In addition, Mr. Singer received a one time stock grant of 800,000 shares. Pursuant to this new arrangement, Mr. Singer earned 200,000 grant shares per month for the period June 1, 2006 through December 31, 2006 (seven months) for a total of 1,400,000 shares. Together with the one time grant of 800,000 shares, Mr. Singer has earned 2,200,000 grant shares. The Company record a liability of $62,000 for the value of these shares if common stock at December 31, 2006. In June 2007 the Company issued the 2,200,000 shares of common stock to Mr. Singer.

In 2006 we recorded stock-based compensation expense of $11,000 for Mr. Singer, using the quoted market price for the company's stock. Mr. Singer resigned as an officer and director on January 16, 2007. He continues as a consultant and to be paid cash consulting fees as described above

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 $5,000 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 an additional 700,000 shares in March 2006, valued at $27,500. Mr. Bar-Ner continues to serve as a director.

On June 21, 2006, the terms of Mr. Bar-Ner compensation were modified. Effective June 1, 2006, all further options ceased, and Mr. Bar-Ner received stock grants that vested at the rate of 200,000 share per month as a Director. In addition, Mr. Bar-Ner received a one time stock grant of 800,000 shares. Pursuant to this new arrangement, Mr. Bar-Ner earned 200,000 grant shares per month for the period June 1, 2006 through January 31, 2007 (eight months) for a total of 1,600,000 shares. Together with the one time grant of 800,000 shares, Mr. Bar-Ner has earned 2,200,000 grant shares. The Company record a liability of $62,000 for the value of these shares if common stock at December 31, 2006. In June 2007 the Company issued a total of 2,400,000 shares of common stock to Mr. Singer.

On June 1, 2005, we entered into an employment agreement with Mendel Mochkin to serve as Vice President and Secretary. The initial term of the agreement expires on May 1, 2007, but renews automatically for an additional 12 months unless either we or Mendel Mochkin give written notice to the other of its or his election not to renew the agreement at least 120 days prior to the end of the initial or any renewal term. The agreement provides for an annual base salary of $104,000, but only requires that Mendel Mochkin devote 100 hours per month to our business, and permits him to perform services for others not engaged in a business which is in competition with us. It also provides for the grant to Mendel Mochkin (i) upon the commencement of his employment of an option to purchase 2,400,000 shares of common stock at $0.05 per share, and (ii) on the first anniversary of the commencement of his employment of an option to purchase an additional 2,400,000 shares at $0.10 per share. The options vest at the rate of 200,000 shares per month and may be exercised for a term of five years from the date of vesting. If we terminate his employment "without cause" or he resigns for "good reason", he is entitled to severance pay in an amount equal his base salary for the remainder of the initial or renewal term, as the case may be.

On March 23, 2008, the Company and Ledger Holdings Pty Ltd., executed a directorship and consulting agreement, effective April 1, 2008 pursuant to which Levi Mochkin, the managing director and beneficial owner of all of the equity interests in Ledger, will continue to serve as the chairman of the Company’s board of directors and its chief executive officer. As compensation for his service as chairman of the Company’s board of directors, the Levi Agreement provides that Levi Mochkin will be paid $5,000 per month. In addition, an option to purchase 120,000 shares of the Company’s common stock at an exercise price of $0.005 per share will be granted to Ledger. The option will vest in monthly tranches of 10,000 shares, commencing April 1, 2008, and each 10,000 share tranche will expire on the fifth anniversary of its vesting

Pursuant to the Levi Agreement, Levi Mochkin will also serve as the Company’s chief executive officer for a two year term, commencing April 1, 2008. As compensation for his service he will receive $25,000 per month. In addition, 2,400,000 shares of the Company’s common stock and 12,500,000 of the Company’s newly designated Series A Preferred Stock will be issued to Ledger.

On March 23, 2008, the Company and MEM Energy Partners, LLC, a limited liability company formed under the laws of Delaware (“MEM”), executed a directorship and consulting agreement (the “Mendel Agreement”), pursuant to which Mendel Mochkin, the managing director and registered owner of all of the equity interests in MEM, was appointed to serve as a member of the Company’s board of directors and an oil and gas and general business consultant to the Company. Mendel Mochkin, who is 34 years, has served as the Company’s vice-president since June 2005.

As compensation for his service he will be paid $2,500 per month. In addition, an option to purchase 120,000 shares of the Company’s common stock at an exercise price of $0.005 per share will be granted to MEM. The option will vest in monthly tranches of 10,000 shares, effective April 1, 2008, and each 10,000 share tranche will expire on the fifth anniversary of its vesting.

Pursuant to the agreement he will also serve as an oil and gas and general business consultant to the Company for a term of one year, effective April 1, 2008. As compensation for his service as a consultant, the Mendel Agreement provides that Mendel Mochkin will be paid per month. As a signing bonus, 2,400,000 shares of the Company’s common stock and an option to purchase 2,400,000 shares of the Company’s common stock at an exercise price of $0.005 per share, will be granted to MEM. The option will vest in monthly tranches of 200,000 shares, commencing March 23, 2008, and each 200,000 share tranche will expire on the fifth anniversary of its vesting. In addition, 12,500,000 of the Company’s newly designated Series A Preferred Stock will be issued to MEM.

Note 10 Segments

For the three Months ended March 31, 2008 and 2007, we operated only in the oil and gas business. As such we have only one segment and all of our operations as shown in the financial statements relate to that business.

Note 11 Subsequent Events

On April 1, 2008, the Company and Tomco completed an agreement whereby TomCo acquired a 50% effective economic interest in Avenue's rights to the Heletz-Kokhav License and the Iris License which were awarded to the Company by the Israel Petroleum Commission (the “IPC”).

Pursuant to the terms of the agreement, TomCo has:

– paid the Company $1,000,000;

– agreed to issue in May 2008 to the Company 12,618,615 million ordinary shares of 0.5 pence each in the Company ("Ordinary Shares") valued at approximately US$500,000 at a price of 2p per share with a one year sale restriction;

– paid to the Company $107,000 which represent 50 percent of costs incurred to date in relation to the Licenses;

– agreed to assume 100 percent of the costs associated with implementing the three year work program covering the Phase 1 period of the Licenses, up to a maximum of US$4.5 million;

– agreed to pay a further $1,500,000 to the Company upon the successful conversion of the Licenses into a production lease;

– agreed to pay a further $5,000,000 to the Company upon recoverable reserves being certified at 10 million barrels or more by an independent reservoir engineering firm.

ITEM 2.

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

The following discussion and analysis should be read in conjunction with our audited consolidated financial statements as of December 31, 2007 and related notes included in this report. This report contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. The statements contained in this report that are not historic in nature, particularly those that utilize terminology such as "may," "will," "should," "expects," "anticipates," "estimates," "believes," or "plans" or comparable terminology are forward-looking statements based on current expectations and assumptions.

Various risks and uncertainties could cause actual results to differ materially from those expressed in forward-looking statements. Factors that could cause actual results to differ from expectations include, but are not limited to, those set forth under the section "Risk Factors" set forth in this report.

The forward-looking events discussed in this annual report, the documents to which we refer you and other statements made from time to time by us or our representatives, may not occur, and actual events and results may differ materially and are subject to risks, uncertainties and assumptions about us. For these statements, we claim the protection of the "bespeaks caution" doctrine. All forward-looking statements in this document are based on information currently available to us as of the date of this report, and we assume no obligation to update any forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results to differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements.

Overview

We were incorporated in Delaware on February 2, 1999 under the name I.T. Technology Inc. In January 2003, we changed our corporate name to Avenue Group, Inc. We are engaged in oil and gas exploration and development through our wholly-owned operating subsidiary, Avenue Energy, Inc. and our wholly-owned Israel subsidiary, Avenue Energy Israel LTD. (“AEI”). Avenue Energy Inc owns 100% of Avenue Appalachia, Inc. ("AAI") which has a 10% General Partner Interest and a 31.8% Limited Partner interest in Avenue Appalachia 2006 LP ("2006 LP"). Avenue Energy Israel LTD owns 100% of the Heletz-Kokhav license and 50% of the Iris License in Israel, 2 petroleum exploration licenses in Israel.

From inception until November 2002, 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. (OTCBB:RGRP) (“ROO”) and Stampville.com Inc.’s operations are inactive.

During 2002, we determined to broaden our strategic focus and pursue a broader range of potential growth and investment strategies. 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.

Our strategy is to acquire a portfolio of oil and gas assets. This includes the generation and acquisition of low risk drilling opportunities in the US and to acquire entry-level high impact oil and gas reserves abroad.

Our business activities during 2007 were principally devoted to our oil and gas operations in Israel and in the West Virginia area of the Appalachian Basin. In 2007 we refocused our efforts seeking lower risk oil and Gas exploration and production opportunities in the US and Israel.

In September, 2007 the Petroleum Commissioner of Israel (the “IPC”) formally issued to AEI 100% of the Heletz-Kokhav license covering a large part of the Heletz Field. In February, 2008, the Petroleum Commissioner of Israel issued to AEI 50% of the Iris license covering the remaining part of the Heletz Field. Lapidoth-Heletz LP, a Limited Partnership listed on the Tel Aviv stock exchange, was issued the other 50% of the Iris License. According to the terms of the Licenses, Avenue agreed to a work program over the next 3 years that will consist of field studies, well workovers, shooting seismic and the drilling of a new well. Failure by Avenue in implementing the work program may cause Avenue to lose its interest in the licenses. Avenue may request the conversion of the License to a 30 year production Lease in the event of a substantial increase in daily production that occurs as a result of the work program. Avenue estimates the work program expenditures at approximately $4,500,000.

On January 16, 2008, Avenue Group, Inc. (the “Company”) and Avenue Energy Israel (“AEI”) entered into a non-binding Letter of Intent (the “LOI”) with TomCo Energy Plc (“TomCo”) pursuant to which TomCo agreed acquire a 50% interest in the Heletz-Kokhav License and a 25% interest in the Iris License (the “Licenses”) which was awarded to AEI by the Israel Petroleum Commission.

Upon execution of the LOI, TomCo paid the Company a non-refundable security deposit in the amount of $75,000. This security deposit was to be credited towards other amounts to which TomCo is obligated under the terms of the LOI.

The closing of the transaction contemplated by the agreement is subject to the satisfaction of certain conditions, including without limitation, obtaining any necessary consents or approvals from the IPC and/or any other Isreali governmental authority, and the payment of the security deposit by TomCo to the Company.

Upon closing, TomCo shall earn a 50% net working interest (after deduction of certain expenses and royalties), by assuming 100% of the costs associated with implementing the 3 year work program up to $4.5 million. In addition, at closing TomCo will pay the Company $1million and an additional equivalent of $500,000 restricted shares of TomCo. The agreement also sets forth certain payments to be made by TomCo which are contingent upon the successful conversion by the Company of the License into a production lease and recoverable reserves being certified at 10 million barrels or more as verified by an independent geologist.

On March 17, 2008, the Company borrowed $250,000 from TomCo. The loan is payable upon demand and accrued interest at a rate if 2% per annum. The loan is also offset against Tomco’s commitment as part of the agreement.

On April 3, 2008, the Company and Tomco, completed the agreement.

In 2008, Management intends to focus our activities on re-developing the Heletz field. This includes restarting the 6 wells that were shut in by Lapidoth as of May, 2007, reviewing plugged wells that are candidates for workovers and collecting and reviewing field and production data for additional upside opportunities.

Results of Operations

For the three months ended March 31 2008 compared to three months ended March 31, 2007

During 2007, our activity was principally devoted to oil and gas activities in the State of Israel arising out of the granting of the Heletz Field Licenses by the Israel Petroleum Commission.

We generated $3,722 in revenue for the three months ended March 31, 2008, as compared to $14,938 for the three months ended March 31, 2007. The decrease in revenue is primarily due a reduction of JKK's production from the Karakilise lease.

The net loss for the three months ended March 31, 2008 was $382,926 compared to a net loss of $176,332 for the three months ended March 31, 2007. During the three months ended March 31, 2008 period, selling, general and administrative expense increased by $195,412, primarily due to an increase in consulting fees as the Company expands it operation in Israel.

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 $382,926 and $176,332 and a negative cash flow from operations of $195,117 and $192,208 for the three months ended March 31, 2008 and 2007, respectively. We have an accumulated deficit of $34,624,048 and $34,241,122 as of March 31, 2008 and December 31, 2007, respectively. We cannot offer any assurance 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 March 31, 2008, we had cash of $36,190 and a working capital deficit of $939,568 as compared to $9,918 in cash and working capital of $555,397 as of December 31, 2007. Much of our working capital during 2007 to date has been generated through the sale of shares of ROO and Langley Park.

Our cash and cash equivalents increased by $26,272 from $9,918 as of December 31, 2007 to $36,190 as of March 31, 2008. The increase in cash and cash equivalents was Company receiving a $250,000 note payable.

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 farm-outs, new debt or equity financing to finance its ongoing operations. We anticipate requiring significant additional capital in order to fund Avenue Energy's anticipated oil and gas related

activities in the State of Israel and in Appalachia, the acquisition and exploration of oil and gas leases and licenses located elsewhere and to fund corporate overhead expenditures. During 2008, we intend to continue to seek additional capital in order to meet our cash flow and working capital requirements. 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.

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.

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 areas. Actual results could differ materially from the estimates in the following areas:

The carrying amount of our oil and gas property and impairment losses related to the 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 2005, we recorded an impairment loss of $1,563,343 as a result of our review of our remaining property in Turkey. In 2004, we had recorded an impairment losses of $2,128,126 in connection with licenses that had either lapsed or been relinquished. Based on production and other data available at December 31, 2004, we had concluded that the December 31, 2004, carrying amount of our oil property, after the impairment losses, was properly stated. However, with the production and other data obtained during 2005, we concluded in 2005 that we needed to record an additional impairment loss.

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 impairment charges on our Turkish oil and gas property prior to the 2005 charges. The charges prior to 2005 were made based on significantly different facts and circumstances than the 2005 charge.

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 2005 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 impairment charge are discussed in Results of Operations, above, and in financial statement Note 4.

Recent Accounting Pronouncements

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements”. The objective of SFAS 157 is to increase consistency and comparability in fair value measurements and to expand disclosures about fair value measurements. SFAS 157 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. SFAS 157 applies under other accounting pronouncements that require or permit fair value measurements and does not require any new fair value measurements. The provisions of SFAS No. 157 are effective for fair value measurements made in fiscal years beginning after November 15, 2007. The adoption of this statement is not expected to have a material effect on the Company's future reported financial position or results of operations.

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

n/a

ITEM 4.

CONTROLS AND PROCEDURES

Management of the Company is responsible for establishing and maintaining an adequate system of internal control over financial reporting (as such term is defined in Rules 13a-15(f)). Under the supervision and with the participation of Levi Mochkin, our Chief Executive Officer, we conducted an evaluation and effectiveness of the design and operation of our disclosure controls and procedures as defined in Rules 13(a)-15(e) and 15(d)-15(e) under the Securities and Exchange Act of 1934, as amended (the "Exchange Act") as of the end of the period covered by this report (the "Evaluation Date"). Based on this evaluation, our acting chief executive officer concluded that, as of the Evaluation Date, our disclosure controls and procedures are effective such that the information relating to us required to be disclosed with our with the Securities and Exchange Commission ("SEC") reports is (i) recorded, processed, summarized and reported within the time period specified in SEC rules and forms, and (ii) is accumulated and communicated to our management, including our acting chief executive officer, as appropriate to allow timely decisions requiring timely disclosure.

Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes of accounting principles generally accepted in the United States. Because of its inherit limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving their control objectives. In evaluating the effectiveness of our internal control over financial reporting, our management used the criteria set forth in "Internal Control - Integrated Framework", issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO"). Based on this evaluation, our management concluded, as of December 31, 2007, our internal control over financial reporting was not effective based on those criteria. The following material weaknesses were identified from our evaluation:

Due to the small size and limited financial resources, the Company's Chief Executive Officer, Executive Vice President and a Consultant are the only individuals involved in the accounting and financial reporting. As a result, there is no segregation of duties in the accounting function, leaving all aspects of financial reporting and physical control of cash in the hands of the same individual, our acting chief executive officer. This lack of segregation of duties represents a material weakness. We will continue periodically review our disclosure controls and procedures and internal control over financial reporting and make modifications from time to time considered necessary or desirable.

This quarterly report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the SEC that permit us to provide only management's report in this annual report.

There was no change to our internal controls or in other factors that could affect these controls during our last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1.

LEGAL PROCEEDINGS

We are currently not a party to any legal proceedings. 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.

ITEM 1A.

RISK FACTORS

There are no material changes from the risk factors previously disclosed in the Registrant’s Form 10-K filed on March 31, 2008.

ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The Company’s Board of Directors has approved the issuance of 2,400,000 shares of the Company’s common stock and 12,500,000 shares of the Company’s Series A Preferred Stock to Ledger Holdings Pty, Ltd. pursuant to the terms of a Directorship and Consulting Agreement with Ledger Holdings Pty Ltd. dated March 23, 2008.

Also on March 23, 2008, the Company’s Board of Directors approved the issuance of a signing bonus of 2,400,000 shares of the Company’s common stock and an option to purchase 2,400,000 shares of the Company’s common stock at an exercise price of $0.005 pursuant to MEM Energy Partners, LLP pursuant to the terms of a Directorship and Consulting Agreement with MEM Energy Partners, LLC.

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES

None

ITEM 4.

SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None

ITEM 6.

EXHIBITS


Exhibit Number		Description
3.1		Certificate of Incorporation of I.T. Technology, Inc., incorporated by reference to Exhibit 3.1 to the Registrant's Registration Statement on Form SB-2 (File No. 333-30364) dated February 14, 2000.

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

3.3		Amendment to Certificate of Incorporation, incorporated by reference to Exhibit 1 to the Registrant's Form 8-K, dated December 27, 2000.

3.4		Amendment to the Registrant's By-laws adopted November 6, 2000, incorporated by reference to Exhibit 3.4 of the Registrant's Form 10-KSB for the year ended December 31, 2000.

3.5		Amendment to the Registrant's By-laws adopted November 8, 2001 incorporated by reference to Exhibit 3.5 of the Registrant's Form 10-QSB for fiscal quarter ended September 30, 2001.

3.6		Amendment to the Registrant's bylaws dated June 25, 2002, incorporated by reference to Exhibit 3.6 to the Registrant's Form 10-QSB for the fiscal quarter ended June 30, 2002.

4.1		Certificate of Designation, Powers, Preferences and Rights of Series A Preferred Stock filed with the Secretary of State of Delaware on April 16, 2008 incorporated by reference to the Registrant’s Form 8-K filed with the SEC on April 16, 2008.



10.1		2000 Stock Option Plan, incorporated by reference to Exhibit 10.6a of the Registrant's Form 10-KSB for the year ended December 31, 2000.

10.2		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 Registrant's Form 10-KSB for the year ended December 31, 2002.

10.3		Option Agreement dated April, 2002, incorporated by reference to Exhibit 10.11 to the Registrant's Form 10-KSB for the year ended December 31, 2002.

10.4		Asset Purchase Agreement dated January 14, 2002, incorporated by reference to Exhibit 10.21 of the Registrant's Form 10-KSB for the year ended December 31, 2001.

10.5		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 Registrant's Form 8-K dated May 2, 2002.

10.6		Farmin Participation Agreement dated November 14, 2002, incorporated by reference to Exhibit 10.27 of the Registrant's Form 8-K dated November 25, 2002.

10.7		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 Registrant's Form 8-K dated January 6, 2003.

10.8		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 Registrant's Form 8-K dated January 6, 2003.

10.9		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 Registrant's Form 10-QSB for the fiscal quarter ended June 30, 2003.

10.10		Employment Agreement by and between Avenue Group, Inc. and Steven Gordon dated March 8, 2004, incorporated by reference to Exhibit 10.33 of the Registrant's Form 10-KSB for the year ended December 31, 2003.

10.11		Option Agreement by and between Avenue Group, Inc. and Steven Gordon dated March 8, 2004, incorporated by reference to Exhibit 10.33(a) of the Registrant's Form 10-KSB for the year ended December 31, 2003.

10.12		Option Agreement by and between Avenue Group, Inc. and Steven Gordon dated March 8, 2004, incorporated by reference to Exhibit 10.33(b) of the Registrant's Form 10-KSB for the year ended December 31, 2003.

10.13		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 Registrant's Form 8-K dated January 2, 2004.

10.14		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 Registrant's Form 8-K dated January 2, 2004), incorporated by reference to Exhibit 10.36 of the Registrant's Form 10-KSB for the year ended December 31, 2003.

10.15		Separation Agreement dated as of February 1, 2005 by and among the Registrant and Jonathan Herzog, incorporated by reference to Exhibit 99.1 of the Registrant's Form 8-K dated February 11, 2005.

10.16		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 Registrant's Form 8-K dated February 11, 2005.


10.17		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 Registrant's Form 8-K dated February 11, 2005.

10.18		Employment Agreement by and between the Registrant and Mendel Mochkin dated as of June 1, 2005, incorporated by reference to Exhibit 10.1 of the Registrant's Form 10-QSB for the fiscal quarter ended March 31, 2006.

10.19		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 Registrant's Form 10-KSB for the year ended December 31, 2004.

10.20		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 Registrant's Form 10-QSB for the fiscal quarter ended March 31, 2005.

10.21		Indemnification and Release Agreement, dated September 21, 2006, between Avenue Energy, Inc. and Aladdin Middle East Ltd., incorporated by reference to Exhibit 99.1 of the Registrant's Form 8-K filed October 13, 2007.

10.22		Revised Compensation Letter, dated August 7, 2006 between the Registrant and Ambassador Uri Bar-Ner, incorporated by reference to Exhibit 10.2 of the Registrant's Form 10-QSB for the fiscal quarter ended June 30, 2006.

10.23		Revised Compensation Letter, dated August 7, 2006 between the Registrant and Norman J. Singer, incorporated by reference to Exhibit 10.3 of the Registrant's Form 10-QSB for the fiscal quarter ended June 30, 2006.

10.24		Directorship and Consulting Agreement entered into March 23, 2008 between the Registrant and Ledger Holdings Pty Ltd., incorporated by reference to Exhibit 10.24 of the Registrant’s Form 8-K filed with the SEC on April 16, 2008.

10.25		Directorship and Consulting Agreement entered into March 23, 2008 between the Registrant and MEM Energy Partners, LLC, incorporated by reference to Exhibit 10.25 of the Registrant’s Form 8-K filed with the SEC on April 16, 2008.

10.26		Farmout Agreement - Heletz-Kokhav License dated April 1, 2008 by and among Avenue Group, Inc., Avenue Energy Israel Ltd., TomCo Energy PLC and Luton-Kennedy Ltd. *

14.		Code of Ethics For Principal Executive Officers And Senior Financial Officers, incorporated by reference to Exhibit 14 of the Registrant's Form 10-KSB for the year ended December 31, 2003.

21.		List of Subsidiaries, incorporate by reference to Exhibit 21.1 of the Registrant’s Form 10-KSB for the year ended December 31, 2007.

31.1		Certification of Levi Mochkin, Chief Executive Officer, required by Rule 13a-14(a) or Rule 15d-14(a) of The Exchange Act.*

31.2		Certification of Levi Mochkin, Principal Financial Officer, required by Rule 13a-14(a) or Rule 15d-14(a) of The Exchange Act.*

32.1		Certification of Levi Mochkin, Chief Executive Officer, required by Rule 13a-14(a) or Rule 15d-14(a) of The Exchange Act and Section 1350 of chapter 63 of Title 18 of The United States Code.*

32.2		Certification of Levi Mochkin, Principal Financial Officer, required by Rule 13a-14(a) or Rule 15d-14(a) of The Exchange Act and Section 1350 of chapter 63 of Title 18 of The United States Code.*

*Filed herewith

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New York, State of New York, on June 5, 2008.


	AVENUE GROUP, INC.


	By:	/s/ Levi Mochkin
		Levi Mochkin
		Chairman of the Board, President and Chief Executive Officer (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)