1460290--5/3/2010--Alaska_Pacific_Energy

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Risks Related to Our Business We were incorporated on January 13, 2005 and have a limited operating history. There is no basis upon which you can evaluate our proposed business and prospects and to date we have been involved primarily in organizational activities and obtaining our Option to Purchase Claims Agreement. Newly formed mineral exploration companies encounter extraordinary risks, and unforeseen problems As a newly formed mineral exploration company, we will be required to implement our proposed business, and if we are unable to do so you will lose your investment in the shares As a newly formed mineral exploration company, we will be required to anticipate and handle potential growth and we may not be able to do so in which event you will lose your investment in the shares. Because of the limited capital available to us for the foreseeable future, we may not have sufficient capital to fully implement our business plan. If we need to raise additional funds, the funds may not be available when we need them. We may be required to provide rights senior to the rights of our shareholders in order to attract additional funds and if we use equity securities to raise additional funds dilution to our shareholders will occur If we fail to make required payments under the Option Agreement we will lose the right to the Claims. If our exploration program provides results indicating a commercially viable mineral deposits exist within the Subject Claims we will be required to raise substantial additional capital or locate a joint venture partner in order to achieve production and generate revenue from such deposits. Most, if not all, of our competition will be from larger, more well established and better financed companies, and if we are unable to successfully compete with other companies our business will fail We currently have no employees other than our directors and one consultant who serve on a part-time basis, we pay our president but no other officers any cash compensation, and if they were to leave our employ, our business could fail. None of our officers or directors has any experience in the mining industry. We may be unable to attract or retain employees in which event our business could fail. As a result of the speculative nature of mineral property exploration, there is substantial risk that no commercially exploitable minerals will be found and our business will fail There are inherent dangers involved in mineral exploration, and, as a result, there is a risk that we may incur liability or damages as we conduct our business If our exploration program is able to confirm commercial concentrations of molybdenum on our Claims, we are unable to provide any assurance that we will be able to successfully place any of the Claims into commercial production Because access to our Claims can be restricted by inclement weather, we may be delayed in implementing or continuing with our exploration, as well as, with any future mining efforts As we undertake exploration of our Claims, we will be subject to compliance of government regulation that may increase the anticipated time and cost of our exploration program Market factors in the mining business are out of our control. As a result, we may not be able to market any minerals that may be found. Risks Related to Our Common Stock There may be only an limited or no market for our Common Stock. The trading price of our common stock may fluctuate significantly and stockholders may have difficulty reselling their shares. Our common stock is subject to the "penny stock" rules of the SEC and FINRA's sales practice requirements, which may limit a stockholder's ability to buy and sell our stock. A decline in the price of our common stock could affect our ability to raise further working capital and adversely impact our operations. Our directors and officers reside outside the United States 93.3% of our shares of Common Stock are controlled by Principal Stockholders and Management. Even taking into account the limitations of Rule 144, the future sales of restricted shares could have a depressive effect on the market price of the Company s securities in any market, which may develop. If shareholders sell a large number of shares all at once or in blocks, the value of our shares would most likely decline. Our auditors have expressed substantial doubt about our ability to continue as a going concern

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1460290--5/3/2010--Alaska_Pacific_Energy_Corp