UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 2011
Or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _________ to _____________
Commission file number: 000-50294
LEGACY TECHNOLOGY HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
Colorado 84-1426725
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State or other jurisdiction of I.R.S. Employer
incorporation or organization Identification No.
|
7609 Ralston Road, Arvada, CO 80002
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(303) 422-8127
Securities registered pursuant to Section 12(b) of the Act:
Title of each class registered Name of each exchange
on which registered
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Not Applicable Not Applicable
|
Securities registered pursuant to Section 12(g) of the Act:
Common Stock
(Title of Class)
Indicate by check mark if the registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Act. Yes |_| No |X|
Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act. |_|
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.
Yes |X| No |_|
Indicate by check mark whether the registrant has submitted electronically and
posted on its corporate Web site, if any, every Interactive Data File required
to be submitted and posted pursuant to Rule 405 of Regulation S-T (ss. 232.405
of this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit and post such files).
Yes |_| No |_|
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (ss. 229.405 of this chapter) is not contained herein, and
will not be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K.
|X|
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
definitions of "large accelerated filer," "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act. (Check One).
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 Exchange Act). Yes |X| No |_|
The aggregate market value of voting stock held by non-affiliates of the
registrant does not have an aggregate market value, since the common stock of
the registrant does not trade on any market, at the time of this filing.
There were 3,731,772 shares outstanding of the registrant's Common Stock as of
September 28, 2012.
Page
TABLE OF CONTENTS
PART I
ITEM 1 Business 1
ITEM 1 A. Risk Factors 5
ITEM 1 B. Unresolved Staff Comments 10
ITEM 2 Properties 10
ITEM 3 Legal Proceedings 10
ITEM 4 Mine Safety Disclosures 10
PART II
ITEM 5 Market for Registrant's Common Equity, Related Stockholder Matters and
Issuer jPurchases of Equity Securities 10
ITEM 6 Selected Financial Data 11
ITEM 7 Management's Discussion and Analysis of Financial Condition and Results of
Operations 11
ITEM 7 A. Quantitative and Qualitative Disclosures About Market Risk 14
ITEM 8 Financial Statements and Supplementary Data 14
ITEM 9 Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure 14
ITEM 9 A. Controls and Procedures
ITEM 9 A(T). Controls and Procedures 14
ITEM 9B Other Information 15
PART III
ITEM 10 Directors, Executive Officers, and Corporate Governance 16
ITEM 11 Executive Compensation 18
ITEM 12 Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters 20
ITEM 13 Certain Relationships and Related Transactions, and Director Independence 22
ITEM 14 Principal Accounting Fees and Services 22
PART IV
ITEM 15 Exhibits, Financial Statement Schedules 23
SIGNATURES 24
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EXPLANATORY NOTE
Legacy Technology Holdings, Inc., (the "Company"), is filing this amendment to
its annual report on Form 10-K for the year ended December 31, 2011 filed with
the Securities and Exchange Commission on October 10, 2012, for the purpose of
including the accountant's report pursuant to Rule 2-02 of Regulation S-X.
This amendment does not reflect events occurring after the original filing.
Except for the foregoing amended information, this Form 10-K/A continues to
speak as of the date of the original filing and the Company has not otherwise
updated disclosures contained therein or herein to reflect events that occurred
at a later date.
Note about Forward-Looking Statements
This From 10-K contains forward-looking statements, such as statements relating
to our financial condition, results of operations, plans, objectives, future
performance and business operations. These statements relate to expectations
concerning matters that are not historical facts. These forward-looking
statements reflect our current views and expectations based largely upon the
information currently available to us and are subject to inherent risks and
uncertainties. Although we believe our expectations are based on reasonable
assumptions, they are not guarantees of future performance and there are a
number of important factors that could cause actual results to differ materially
from those expressed or implied by such forward-looking statements. By making
these forward-looking statements, we do not undertake to update them in any
manner except as may be required by our disclosure obligations in filings we
make with the Securities and Exchange Commission under the Federal securities
laws. Our actual results may differ materially from our forward-looking
statements.
PART I
ITEM 1. BUSINESS
General
The following is a summary of some of the information contained in this
document. Unless the context requires otherwise, references in this document to
"Legacy" or the "Company" are to Legacy Technology Holdings, Inc.
HISTORY OFLEGACY TECHNOLOGY HOLDINGS, INC.
Legacy Technology Holdings, Inc. (the "Company") was incorporated in Colorado in
January, 1997. The Company was originally named Life USA, Inc. On May 20, 2008,
the Company changed its name to Legacy Technology Holdings, Inc. by filing an
amendment to its Article of Incorporation. The Company was organized to engage
in any activity or business not in conflict with the laws of the State of
Colorado or of the United States of America. As a result of the name change, the
Company's trading symbol on the Over-the-Counter Bulletin Board was changed to
"LTHO".
The Company entered into an Agreement and Plan of Merger with LTH Acquisition
Corporation ("LTH Acquisition"), a wholly-owned subsidiary of the Company, and
World Peace Technologies, Inc. ("World Peace") on June 17, 2008. As part of the
merger, World Peace Technologies, Inc., a Colorado corporation, was merged with
LTH Acquisition and World Peace was the surviving entity of the merger.
The Company closed the World Peace Acquisition on August 1, 2008, with the
receipt of the audited financial statements of World Peace. As part of the
amended Agreement and Plan of Merger, the Company issued 9,000,000 shares of its
restricted common stock the shareholders of World Peace.
World Peace was involved in the technology development business that specializes
in the development of technologies and products and possible applications to the
military. In July 2009, the Company discontinued the operations of World Peace
due to a failure to secure financing and contracts.
On July 8, 2009, Mr. David Kutchinski resigned as the Chief Executive Officer
and Director of the Company. In addition, Messrs. Mike Pick and Robert Thompson,
resigned as directors of the Company. In connection with their resignations,
6,275,231 shares of the Company's common stock were returned to the Company and
cancelled.
1
On December 7, 2009, the Company, after a complaint filed by a shareholder and
pursuant to a Notice and Court Order issued by the District Court, El Paso
County, Colorado, held a Special Meeting of its Shareholders in order to elect
an officer and a director of the Company, after the resignation of the Company's
former officers and directors in July 2009, without replacement.
At such meeting, a quorum was waived in accordance with the Notice and Court
Order and Colorado Revised Statutes. At the meeting, Mr. Larry Henson was
elected the sole director of the Company and the Chief Executive Officer.
On October 20, 2010, Mr. Henson resigned as the Chief Executive Officer of the
Company and Mr. Redgie Green was appointed the new Chief Executive Officer and
to the Board of Directors of the Company. On October 20, 2010, Mr. Henson
resigned as a director of the Company.
The Company, since July of 2009, has focused its efforts on the completion of
its past due audits and the filing of its financial reports with the Securities
and Exchange Commission (SEC). After such filings have been completed the
Company intends to focus its efforts on the development of operations through an
acquisition. At the time of this filing, the Company has not identified any such
acquisitions or taken any efforts to identify such candidates.
We intend to seek, investigate and, if such investigation warrants, acquire an
interest in business opportunities presented to us by persons or firms which
desire to seek the advantages of an issuer who has complied with the Securities
Act of 1934 (the "1934 Act"). We will not restrict our search to any specific
business, industry or geographical location, and we may participate in business
ventures of virtually any nature. This discussion of our proposed business is
purposefully general and is not meant to be restrictive of our unlimited
discretion to search for and enter into potential business opportunities. We
anticipate that we may be able to participate in only one potential business
venture because of our lack of financial resources.
We may seek a business opportunity with entities which have recently commenced
operations, or that desire to utilize the public marketplace in order to raise
additional capital in order to expand into new products or markets, to develop a
new product or service, or for other corporate purposes. We may acquire assets
and establish wholly owned subsidiaries in various businesses or acquire
existing businesses as subsidiaries.
We expect that the selection of a business opportunity will be complex. Due to
general economic conditions, rapid technological advances being made in some
industries and shortages of available capital, we believe that there are
numerous firms seeking the benefits of an issuer who has complied with the 1934
Act. Such benefits may include facilitating or improving the terms on which
additional equity financing may be sought, providing liquidity for incentive
stock options or similar benefits to key employees, providing liquidity (subject
to restrictions of applicable statutes) for all stockholders and other factors.
Potentially, available business opportunities may occur in many different
industries and at various stages of development, all of which will make the task
of comparative investigation and analysis of such business opportunities
extremely difficult and complex. We have, and will continue to have, essentially
no assets to provide the owners of business opportunities. However, we will be
able to offer owners of acquisition candidates the opportunity to acquire a
controlling ownership interest in an issuer who has complied with the 1934 Act
without incurring the cost and time required to conduct an initial public
offering.
2
The analysis of new business opportunities will be undertaken by, or under the
supervision of, our Board of Directors. We intend to concentrate on identifying
preliminary prospective business opportunities which may be brought to our
attention through present associations of our director, professional advisors or
by our stockholders. In analyzing prospective business opportunities, we will
consider such matters as (i) available technical, financial and managerial
resources; (ii) working capital and other financial requirements; (iii) history
of operations, if any, and prospects for the future; (iv) nature of present and
expected competition; (v) quality, experience and depth of management services;
(vi) potential for further research, development or exploration; (vii) specific
risk factors not now foreseeable but that may be anticipated to impact the
proposed activities of the company; (viii) potential for growth or expansion;
(ix) potential for profit; (x) public recognition and acceptance of products,
services or trades; (xi) name identification; and (xii) other factors that we
consider relevant. As part of our investigation of the business opportunity, we
expect to meet personally with management and key personnel. To the extent
possible, we intend to utilize written reports and personal investigation to
evaluate the above factors.
We will not acquire or merge with any company for which audited financial
statements cannot be obtained within a reasonable period of time after closing
of the proposed transaction.
Acquisition Opportunities
In implementing a structure for a particular business acquisition, we may become
a party to a merger, consolidation, reorganization, joint venture, or licensing
agreement with another company or entity. We may also acquire stock or assets of
an existing business. Upon consummation of a transaction, it is probable that
our present management and stockholders will no longer be in control of us. In
addition, our sole director may, as part of the terms of the acquisition
transaction, resign and be replaced by new directors without a vote of our
stockholders, or sell his stock in us. Any such sale will only be made in
compliance with the securities laws of the United States and any applicable
state.
It is anticipated that any securities issued in any such reorganization would be
issued in reliance upon exemption from registration under application federal
and state securities laws. In some circumstances, as a negotiated element of the
transaction, we may agree to register all or a part of such securities
immediately after the transaction is consummated or at specified times
thereafter. If such registration occurs, it will be undertaken by the surviving
entity after it has successfully consummated a merger or acquisition and is no
longer considered an inactive company. The issuance of substantial additional
securities and their potential sale into any trading market which may develop in
our securities may have a depressive effect on the value of our securities in
the future. There is no assurance that such a trading market will develop.
While the actual terms of a transaction cannot be predicted, it is expected that
the parties to any business transaction will find it desirable to avoid the
creation of a taxable event and thereby structure the business transaction in a
so-called "tax-free" reorganization under Sections 368(a)(1) or 351 of the
Internal Revenue Code (the "Code"). In order to obtain tax-free treatment under
the Code, it may be necessary for the owner of the acquired business to own 80%
or more of the voting stock of the surviving entity. In such event, our
stockholders would retain less than 20% of the issued and outstanding shares of
the surviving entity. This would result in significant dilution in the equity of
our stockholders.
As part of our investigation, we expect to meet personally with management and
key personnel, visit and inspect material facilities, obtain independent
analysis of verification of certain information provided, check references of
management and key personnel, and take other reasonable investigative measures,
to the extent of our limited financial resources and management expertise. The
manner in which we participate in an opportunity will depend on the nature of
the opportunity, the respective needs and desires of both parties, and the
management of the opportunity.
3
With respect to any merger or acquisition, and depending upon, among other
things, the target company's assets and liabilities, our stockholders will in
all likelihood hold a substantially lesser percentage ownership interest in us
following any merger or acquisition. The percentage ownership may be subject to
significant reduction in the event we acquire a target company with assets and
expectations of growth. Any merger or acquisition can be expected to have a
significant dilutive effect on the percentage of shares held by our
stockholders.
We will participate in a business opportunity only after the negotiation and
execution of appropriate written business agreements. Although the terms of such
agreements cannot be predicted, generally we anticipate that such agreements
will (i) require specific representations and warranties by all of the parties;
(ii) specify certain events of default; (iii) detail the terms of closing and
the conditions which must be satisfied by each of the parties prior to and after
such closing; (iv) outline the manner of bearing costs, including costs
associated with the Company's attorneys and accountants; (v) set forth remedies
on defaults; and (vi) include miscellaneous other terms.
As stated above, we will not acquire or merge with any entity which cannot
provide independent audited financial statements within a reasonable period of
time after closing of the proposed transaction. If such audited financial
statements are not available at closing, or within time parameters necessary to
insure our compliance within the requirements of the 1934 Act, or if the audited
financial statements provided do not conform to the representations made by that
business to be acquired, the definitive closing documents will provide that the
proposed transaction will be voidable, at the discretion of our present
management. If such transaction is voided, the definitive closing documents will
also contain a provision providing for reimbursement for our costs associated
with the proposed transaction.
Competition
We believe we are an insignificant participant among the firms which engage in
the acquisition of business opportunities. There are many established venture
capital and financial concerns that have significantly greater financial and
personnel resources and technical expertise than we have. In view of our limited
financial resources and limited management availability, we will continue to be
at a significant competitive disadvantage compared to our competitors.
Investment Company Act 1940
Although we will be subject to regulation under the Securities Act of 1933, as
amended, and the 1934 Act, we believe we will not be subject to regulation under
the Investment Company Act of 1940 (the "1940 Act") insofar as we will not be
engaged in the business of investing or trading in securities. In the event we
engage in business combinations that result in us holding passive investment
interests in a number of entities, we could be subject to regulation under the
1940 Act. In such event, we would be required to register as an investment
company and incur significant registration and compliance costs. We have
obtained no formal determination from the SEC as to our status under the 1940
Act and, consequently, any violation of the 1940 Act would subject us to
material adverse consequences. We believe that, currently, we are exempt under
Regulation 3a-2 of the 1940 Act.
INTELLECTUAL PROPERTY
We do not hold any patents or patent applications.
4
EMPLOYEES
As of the date hereof, Mr. Green serves as our Chief Executive Officer and
acting Chief Financial Officer. We do not have an employment agreement with Mr.
Green. We have no other employees.
ITEM 1A. RISK FACTORS
GENERAL BUSINESS RISK FACTORS
Legacy business is a development stage company and unproven and therefore risky.
The Company has only very recently adopted the business plan described herein
and above. Potential investors should be made aware of the risk and difficulties
encountered by a new enterprise, especially in view of the intense competition
from existing businesses in the industry.
The Company has a lack of revenue history and investors cannot view Legacy's
past performance since it is a start-up company.
The Company was formed on February 13, 1997 for the purpose of engaging in any
lawful business and has now adopted a plan to engage in the acquisition of
another business. The Company has had no revenues in the last two years. The
Company is not profitable and the business effort is considered to be in an
early development stage. Legacy must be regarded as a new or development venture
with all of the unforeseen costs, expenses, problems, risks and difficulties to
which such ventures are subject.
Legacy may have a shortage of working capital in the future which could
jeopardize the Company's ability to carry out its business plan.
The Company's capital needs consist primarily of expenses related to, general
and administrative and potential business acquisitions and compliance with SEC
reporting requirements and could exceed $75,000 in the next twelve months. Such
funds are not currently committed, and the Company's cash as of the date of the
filing of this Form 10K, is less than $200.
Legacy has no funds, and such funds will not be adequate to carry out any
business plan, at this time. The Company's ultimate success depends upon its
ability to raise additional capital. The Company has not investigated the
availability, source, or terms that might govern the acquisition of additional
capital and will not do so until it determines a need for additional financing.
If the Company needs additional capital, it has no assurance that funds will be
available from any source or, if available, that they can be obtained on terms
acceptable to the Company. If not available, Legacy operations will be limited
to those that can be financed with its modest capital.
Legacy has no operating history and no revenues and it may be unlikely that the
Company will raise that additional working capital from its financing
activities. At the time of this filing, no such funds have been raised.
5
The Company may in the future issue more shares which could cause a loss of
control by its present management and current stockholders.
Legacy may issue further shares as consideration for the cash or assets or
services out of its authorized but unissued common stock that would, upon
issuance, represent a majority of the voting power and equity of the Company.
The result of such an issuance would be those new stockholders and management
would control the Company, and persons unknown could replace the Company's
management at this time. Such an occurrence would result in a greatly reduced
percentage of ownership of Legacy by its current shareholders, which could
present significant risks to investors.
Legacy will depend upon management but it will have limited participation of
management.
The Company currently has one individual who is serving as its officer and
director for up to 5 hours per week each on a part-time basis. The Company's
director is also acting as its sole officer. The Company will be heavily
dependent upon his skills, talents, and abilities, as well as several
consultants to Legacy, to implement the Company's business plan, and may, from
time to time, find that the inability of the officer, director and chosen
consultants to devote his full-time attention to Legacy business results in a
delay in progress toward implementing the Company's business plan. Once Legacy
is able to complete its proposed source capital raising, other consultants may
be employed on a part-time basis under a contract to be determined. Because
investors will not be able to manage the Company's business, they should
critically assess all of the information concerning Legacy officers and
directors.
The Company's officer and director may have conflicts of interests as to
corporate opportunities which it may not be able or allowed to participate in.
Presently there is no requirement contained in the Company's Articles of
Incorporation, Bylaws, or minutes which requires officers and directors of its
business to disclose to the Company's business opportunities which come to their
attention. Legacy's officer and director does, however, have a fiduciary duty of
loyalty to the Company to disclose to it any business opportunities which come
to his attention, in his capacity as an officer and/or director or otherwise.
Excluded from this duty would be opportunities which the person learns about
through his involvement as an officer and director of another company. Legacy
has no intention of merging with or acquiring business opportunity from any
affiliate or officer or director.
We intend to pursue the acquisition of an operating business.
Our sole strategy is to acquire an operating business. Successful implementation
of this strategy depends on our ability to identify a suitable acquisition
candidate, acquire such company on acceptable terms and integrate its
operations. In pursuing acquisition opportunities, we compete with other
companies with similar strategies. Competition for acquisition targets may
result in increased prices of acquisition targets and a diminished pool of
companies available for acquisition. Acquisitions involve a number of other
risks, including risks of acquiring undisclosed or undesired liabilities,
acquired in-process technology, stock compensation expense, diversion of
management attention, potential disputes with the seller of one or more acquired
entities and possible failure to retain key acquired personnel. Any acquired
entity or assets may not perform relative to our expectations. Our ability to
meet these challenges has not been established.
6
Scarcity of and competition for, business opportunities and combinations.
We believe we are an insignificant participant among the firms which engage in
the acquisition of business opportunities. There are many established venture
capital and financial concerns that have significantly greater financial and
personnel resources and technical expertise than we have. Nearly all such
entities have significantly greater financial resources, technical expertise and
managerial capabilities than us and, consequently, we will be at a competitive
disadvantage in identifying possible business opportunities and successfully
completing a business combination. Moreover, we will also compete in seeking
merger or acquisition candidates with numerous other small public companies. In
view of our limited financial resources and limited management availability, we
will continue to be at a significant competitive disadvantage compared to our
competitors.
We have not executed any formal agreement for a business combination or other
transaction and have established no standards for business combinations.
We have not executed any formal arrangement, agreement or understanding with
respect to engaging in a merger with, joint venture with or acquisition of a
private or public entity. There can be no assurance that we will be successful
in identifying and evaluating suitable business opportunities or in concluding a
business combination. We have not identified any particular industry or specific
business within an industry for evaluation. There is no assurance we will be
able to negotiate a business combination on terms favorable, if at all. We have
not established a specific length of operating history or specified level of
earnings, assets, net worth or other criteria which we will require a target
business opportunity to have achieved, and without which we would not consider a
business combination. Accordingly, we may enter into a business combination with
a business opportunity having no significant operating history, losses, limited
or no potential for earnings, limited assets, negative net worth or other
negative characteristics.
We may depend upon outside advisors, who may not be available on reasonable
terms and as needed.
To supplement the business experience of our officers and directors, we may be
required to employ accountants, technical experts, appraisers, attorneys, or
other consultants or advisors. Our Board without any input from stockholders
will make the selection of any such advisors. Furthermore, it is anticipated
that such persons may be engaged on an "as needed" basis without a continuing
fiduciary or other obligation to us. In the event we consider it necessary to
hire outside advisors, we may elect to hire persons who are affiliates, if they
are able to provide the required services.
The Company has agreed to indemnification of officers and directors as is
provided by Colorado Revised Statute and such indemnification is limited.
Colorado Revised Statutes provide for the indemnification of the Company's
directors, officers, employees, and agents, under certain circumstances, against
attorney's fees and other expenses incurred by them in any litigation to which
they become a party arising from their association with or activities on Legacy
behalf. The Company will also bear the expenses of such litigation for any of
its directors, officers, employees, or agents, upon such person's promise to
repay Legacy therefore if it is ultimately determined that any such person shall
not have been entitled to indemnification. This indemnification policy could
result in substantial expenditures by the Company that it may be unable to
recoup.
7
Colorado Revised Statutes exclude personal liability of the Company's directors
and its stockholders for monetary damages for breach of fiduciary duty except in
certain specified circumstances. Accordingly, Legacy will have a much more
limited right of action against its directors that otherwise would be the case.
This provision does not affect the liability of any director under federal or
applicable state securities laws.
RISK FACTORS RELATED TO LEGACY'S STOCK
The regulation of penny stocks by SEC and FINRA may discourage the tradability
of the Company's securities.
Legacy is a "penny stock" company. None of its securities currently trade in any
market and, if ever available for trading, will be subject to a Securities and
Exchange Commission rule that imposes special sales practice requirements upon
broker-dealers who sell such securities to persons other than established
customers or accredited investors. For purposes of the rule, the phrase
"accredited investors" means, in general terms, institutions with assets in
excess of $5,000,000, or individuals having a net worth in excess of $1,000,000
or having an annual income that exceeds $200,000 (or that, when combined with a
spouse's income, exceeds $300,000). For transactions covered by the rule, the
broker-dealer must make a special suitability determination for the purchaser
and receive the purchaser's written agreement to the transaction prior to the
sale. Effectively, this discourages broker-dealers from executing trades in
penny stocks. Consequently, the rule will affect the ability of purchasers in
this offering to sell their securities in any market that might develop
therefore because it imposes additional regulatory burdens on penny stock
transactions.
In addition, the Securities and Exchange Commission has adopted a number of
rules to regulate "penny stocks". Such rules include Rules 3a51-1, 15g-1, 15g-2,
15g-3, 15g-4, 15g-5, 15g-6, 15g-7, and 15g-9 under the Securities and Exchange
Act of 1934, as amended. Because the Company's securities constitute "penny
stocks" within the meaning of the rules, the rules would apply to the Company
and to its securities. The rules will further affect the ability of owners of
shares to sell its securities in any market that might develop for them because
it imposes additional regulatory burdens on penny stock transactions.
Shareholders should be aware that, according to Securities and Exchange
Commission, the market for penny stocks has suffered in recent years from
patterns of fraud and abuse. Such patterns include (i) control of the market for
the security by one or a few broker-dealers that are often related to the
promoter or issuer; (ii) manipulation of prices through prearranged matching of
purchases and sales and false and misleading press releases; (iii) "boiler room"
practices involving high-pressure sales tactics and unrealistic price
projections by inexperienced sales persons; (iv) excessive and undisclosed
bid-ask differentials and markups by selling broker-dealers; and (v) the
wholesale dumping of the same securities by promoters and broker-dealers after
prices have been manipulated to a desired consequent investor losses. The
Company's management is aware of the abuses that have occurred historically in
the penny stock market. Although the Company does not expect to be in a position
to dictate the behavior of the market or of broker-dealers who participate in
the market, management will strive within the confines of practical limitations
to prevent the described patterns from being established with respect to Legacy
securities.
Legacy will pay no foreseeable dividends in the future.
Legacy has not paid dividends on its common stock and do not ever anticipate
paying such dividends in the foreseeable future.
8
Our Securities are not currently eligible for sale under Rule 144 and any future
sales of our securities may be adversely affected by our failure to file all
reports required by the Exchange Act.
All of the outstanding shares of common stock held by the Company's present
officers, directors, and affiliate stockholders are "restricted securities"
within the meaning of Rule 144 under the Securities Act of 1933, as amended. As
restricted Shares, these shares may be resold only pursuant to an effective
registration statement or under the requirements of Rule 144 or other applicable
exemptions from registration under the Act and as required under applicable
state securities laws.
Rule 144, as promulgated under the Securities Act is not available for the
resale of securities, initially issued by a shell company (reporting or
non-reporting) or a former shell company, unless certain conditions are
satisfied. We are a shell company. As a result, our securities cannot be resold
under Rule 144 unless certain conditions are met. These conditions are:
o the issuer of the securities has ceased to be a shell company;
o the issuer is subject to the reporting requirements of section 13 or 15(d)
of the Exchange Act;
o the issuer has filed all reports and other materials required to be filed
by Section 13 or 15(d) of the Exchange Act, as applicable, during the
preceding 12 months, other than Form 8-K reports; and
o one year has elapsed since the issuer has filed current "Form 10
information" with the Commission reflecting its status as an entity that is
no longer a shell company.
The only way for our securities to be eligible for resale prior to the
conditions of Rule 144 being met, is for us to have registered them with the SEC
on a Registration Statement on Form S-1 and such registration being declared
effective by the SEC. At the time of this filing, management has no plans to
file a registration statement with the SEC.
A sale under Rule 144 or under any other exemption from the Act, if available,
or pursuant to subsequent registration of shares of common stock of present
stockholders, may have a depressive effect upon the price of the common stock in
any market that may develop.
Legacy stock will in all likelihood be thinly traded and as a result you may be
unable to sell at or near ask prices or at all if you need to liquidate your
shares.
The shares of Legacy common stock, if listed, may be thinly-traded on the Pink
Sheets, meaning that the number of persons interested in purchasing the
Company's common shares at or near ask prices at any given time may be
relatively small or non-existent. This situation is attributable to a number of
factors, including the fact that Legacy is a small company which is relatively
unknown to stock analysts, stock brokers, institutional investors and others in
the investment community that generate or influence sales volume, and that even
if it came to the attention of such persons, they tend to be risk-averse and
would be reluctant to follow an unproven, early stage company such as Legacy or
purchase or recommend the purchase of any of the Company's Securities until such
time as Legacy became more seasoned and viable. As a consequence, there may be
periods of several days or more when trading activity in the Company's
Securities is minimal or non-existent, as compared to a seasoned issuer which
has a large and steady volume of trading activity that will generally support
continuous sales without an adverse effect on Securities price. Legacy cannot
give you any assurance that a broader or more active public trading market for
the Company's common Securities will develop or be sustained, or that any
trading levels will be sustained. Due to these conditions, the Company can give
investors no assurance that they will be able to sell their shares at or near
ask prices or at all if they need money or otherwise desire to liquidate their
securities of the Company.
9
ITEM 1B. UNRESOLVED STAFF COMMENTS
Not Applicable.
ITEM 2. PROPERTIES
Legacy offices are temporarily located in Arvada, Colorado at 7609 Ralston Road,
Arvada, Colorado 80002, which is the address of its corporate counsel.
Legacy does not own any property, real or otherwise.
ITEM 3. LEGAL PROCEEDINGS
In May 2008 a complaint was filed in the District Court for the County of
Boulder, Colorado by product suppliers of the Company (the "Plaintiffs") seeking
collection of trade accounts due in the approximate amount of $127,000 plus
collection costs. Research of the account by Plaintiff's counsel effectively
reduced this amount to approximately $64,000, which is included in the Company's
balance sheet liabilities. The case is ongoing at the present time.
ITEM 4. MINE AND SAFETY DISCLOSURE.
Not Applicable.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES
Market Information
Starting May 31, 2006, the Company's shares were traded on the Over-the-Counter
Bulletin Board Market under the trading symbol "LFIU ". On May 2008, as a result
of the Company changing its name to Legacy Technology, Inc, the trading symbol
was changed to "LTHO." As result of the Company's failure to meet the current
financial reporting requirements the common stock was transferred to trading on
the OTC Markets Pink Sheets. The table below sets forth the high and low bid
prices of the Registrant's common stock for the periods indicated. Such prices
are inter-dealer prices, without mark-up, mark-down or commissions and do not
necessarily represent actual sales.
2011 High Low
---- ------- ------
March 31, 2011 $ 0.30 $0.13
June 30, 2011 0.25 0.22
September 30, 2011 0.30 0.25
December 31, 2011 0.25 0.25
2010 High Low
---- ------- ------
March 31, 2010 $ 0.12 $0.11
June 30, 2010 0.10 0.06
September 30, 2010 0.06 0.06
December 31, 2009 0.13 0.13
|
10
As of December 31, 2011, there were approximately 100 shareholders of record of
the Company's common stock.
Dividend Policy
Holders of Legacy common stock are entitled to receive such dividends as may be
declared by Legacy board of directors. The Company has not declared or paid any
dividends on Legacy common shares and it does not plan on declaring any
dividends in the near future. The Company currently intends to use all available
funds to finance the operation and expansion of its business.
Recent Sales of Unregistered Securities
The Company did not make any unregistered sales of its securities during the
period of January 1, 2011 through December 31, 2011.
Issuer Purchases of Equity Securities
Legacy did not repurchase any shares of its common stock during the year ended
December 31, 2011.
ITEM 6. SELECTED FINANCIAL DATA
Not applicable.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion should be read in conjunction with our unaudited
financial statements and notes thereto included herein. In connection with, and
because we desire to take advantage of, the "safe harbor" provisions of the
Private Securities Litigation Reform Act of 1995, we caution readers regarding
certain forward looking statements in the following discussion and elsewhere in
this report and in any other statement made by, or on our behalf, whether or not
in future filings with the Securities and Exchange Commission. Forward-looking
statements are statements not based on historical information and which relate
to future operations, strategies, financial results or other developments.
Forward looking statements are necessarily based upon estimates and assumptions
that are inherently subject to significant business, economic and competitive
uncertainties and contingencies, many of which are beyond our control and many
of which, with respect to future business decisions, are subject to change.
These uncertainties and contingencies can affect actual results and could cause
actual results to differ materially from those expressed in any forward looking
statements made by, or on our behalf. We disclaim any obligation to update
forward-looking statements.
The independent registered public accounting firm's report on the Company's
financial statements as of December 31, 2011, and for each of the years in the
two-year period then ended, includes a "going concern" explanatory paragraph,
that describes substantial doubt about the Company's ability to continue as a
going concern.
11
PLAN OF OPERATIONS
The Company entered into an Agreement and Plan of Merger with LTH Acquisition
Corporation ("LTH Acquisition"), a wholly-owned subsidiary of the Company, and
World Peace Technologies, Inc. ("World Peace") on June 17, 2008. As part of the
merger, World Peace Technologies, Inc., a Colorado corporation, was merged with
LTH Acquisition and World Peace was the surviving entity of the merger.
World Peace was involved in the technology development business that specializes
in the development of technologies and products and possible applications to the
military. In July 2009, the Company discontinued the operations of World Peace
due to a failure to secure financing and contracts.
The Company has focused its efforts, since July of 2009, has focused its efforts
on the completion of its past due audits and the filing of its financial reports
with the Securities and Exchange Commission (SEC). After such filings have been
completed the Company intends to focus its efforts on the development of
operations through an acquisition. At the time of this filing, the Company has
not identified any such acquisitions or taken any efforts to identify such
candidates.
We intend to seek, investigate and, if such investigation warrants, acquire an
interest in business opportunities presented to us by persons or firms which
desire to seek the advantages of an issuer who has complied with the Securities
Act of 1934 (the "1934 Act"). We will not restrict our search to any specific
business, industry or geographical location, and we may participate in business
ventures of virtually any nature. This discussion of our proposed business is
purposefully general and is not meant to be restrictive of our unlimited
discretion to search for and enter into potential business opportunities. We
anticipate that we may be able to participate in only one potential business
venture because of our lack of financial resources.
We will need substantial additional capital to support our proposed business
acquisitions. We have no revenues. We have no committed source for any funds as
of date here. No representation is made that any funds will be available when
needed. In the event funds cannot be raised when needed, we may not be able to
carry out our business plan, may never achieve sales or royalty income, and
could fail in business as a result of these uncertainties.
The independent registered public accounting firm's report on the Company's
financial statements as of December 31, 2011, and for each of the years in the
two-year period then ended, includes a "going concern" explanatory paragraph,
that describes substantial doubt about the Company's ability to continue as a
going concern.
RESULTS OF OPERATIONS
For the Years Ended December 31, 2011 and December 31, 2010
During the years ended December 31, 2011 and 2010, Legacy did not recognize any
revenues from its operational activities.
During the year ended December 31, 2011, the Company incurred operational
expenses of $29,787 compared to operational expenses of $13,514 during the year
ended December 31, 2010. The $16,273 increase was a result of the Company's
focus and work to bring current its financial reports with the Securities and
Exchange Commission (SEC). Management expects that legal expenses and accounting
expenses will experience growth in future periods due to the Company's
activities which continue to be focus on the completion of its past due audits
and the filing of its financial reports with the SEC.
12
During the years ended December 31, 2011 and 2010, the Company incurred interest
expense of $112,456 and $112,456, respectively.
During the year ended December 31, 2011, the Company recognized net losses of
$137,719 compared to a net loss during the year ended December 31, 2010 of
$125,970. The increase of $11,749was a result of the $16,273 increase in
operational expenses combined with the $4,524 gain on debt relief.
LIQUIDITY
At December 31, 2011, the Company did not have any current assets and had total
current liabilities of $1,680,798 consisting of accounts payable of $266,997,
accrued liabilities of $689,813, advance payable of $62,356 and notes payable of
$661,632. At December 31, 2011, the Company has a working capital deficit of
$1,680,798.
The Company will be reliant upon shareholder loans or private placements of
equity to fund any kind of operations. Legacy has secured no sources of loans or
private placements, at this time.
During the year ended December 31, 2011, the Company did not use cash in its
operations. During the years ended December 31, 2011, the net losses of
$137,719, which were not reconciled for any non-cash items during the year.
During the year ended December 31, 2011, accounts payable and accrued
liabilities increased by $142,243.
During the year ended December 31, 2010, the Company did not use cash in its
operations. During the years ended December 31, 2010, the net losses of
$125,970, which were not reconciled for any non-cash items during the year.
During the year ended December 31, 2010, accounts payable and accrued
liabilities increased by $125,970.
During the years ended December 31, 2011 and 2010, the Company did not use or
receive funds from its investing activities.
During the years ended December 31, 2011 and 2010, the Company did not receive
or use funds in its financing activities.
Short Term.
On a short-term basis, Legacy has not generated any revenue or revenues
sufficient to cover operations. For short term needs the Company will be
dependent on receipt, if any, of offering proceeds.
Capital Resources
The Company has only common stock as its capital resource.
Legacy has no material commitments for capital expenditures within the next
year, however if operations are commenced, substantial capital will be needed to
pay for participation, investigation, exploration, acquisition and working
capital.
Need for Additional Financing
Legacy does not have capital sufficient to meet its cash needs. The Company will
have to seek loans or equity placements to cover such cash needs. Once a
business acquisition is completed, the Company's needs for additional financing
is likely to increase substantially.
13
No commitments to provide additional funds have been made by the Company's
management or other stockholders. Accordingly, there can be no assurance that
any additional funds will be available to Legacy to allow it to cover the
Company's expenses as they may be incurred.
Legacy has no revenues. The Company has no committed source for any funds as of
the date hereof. No representation is made that any funds will be available when
needed. In the event funds cannot be raised when needed, Legacy may not be able
to carry out its business plan, may never achieve sales or royalty income, and
could fail in business as a result of these uncertainties.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Legacy operations do not employ financial instruments or derivatives which are
market sensitive. Short term funds are held in non-interest bearing accounts and
funds held for longer periods are placed in interest bearing accounts. Large
amounts of funds, if available, will be distributed among multiple financial
institutions to reduce risk of loss. The Company's cash holdings do not generate
interest income.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The audited financial statements of Legacy Technology Holdings, Inc. for the
years ended December 31, 2011 and 2010 appear on page F-1.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
The Company maintains a system of disclosure controls and procedures that are
designed for the purposes of ensuring that information required to be disclosed
in the Company's SEC reports is recorded, processed, summarized, and reported
within the time periods specified in the SEC rules and forms, and that such
information is accumulated and communicated to the Company's management,
including the Chief Executive Officer as appropriate to allow timely decisions
regarding required disclosure.
Management, after evaluating the effectiveness of the Company's disclosure
controls and procedures as defined in Exchange Act Rules 13a-14(c) as of
December 31, 2011 (the "Evaluation Date") concluded that as of the Evaluation
Date, the Company's disclosure controls and procedures were effective to ensure
that material information relating to the Company would be made known to them by
individuals within those entities, particularly during the period in which this
annual report was being prepared and that information required to be disclosed
in the Company's SEC reports is recorded, processed, summarized, and reported
within the time periods specified in the SEC's rules and forms.
ITEM 9A(T). CONTROLS AND PROCEDURES
MANAGEMENT'S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING.
14
Legacy's management is responsible for establishing and maintaining adequate
internal control over financial reporting for the company in accordance with as
defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. The Company's
internal control over financial reporting is designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with generally
accepted accounting principles. The Company's internal control over financial
reporting includes those policies and procedures that:
(1) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of
the Company's assets;
(2) provide reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles, and that the Company's
receipts and expenditures are being made only in accordance with
authorizations of Legacy's management and directors; and
(3) provide reasonable assurance regarding prevention or timely detection
of unauthorized acquisition, use or disposition of the Company's assets
that could have a material effect on Legacy's financial statements.
Management's assessment of the effectiveness of the registrant's internal
control over financial reporting is as of the year ended December 31, 2011. The
Company believes that internal control over financial reporting is ineffective,
due to a lack of accounting staff. The Company does not have the financial
ability to hire additional accounting staff, at this time.
Because of its inherent limitations, internal control over financial reporting
may not prevent or detect misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.
This annual report does not include an attestation report of the Company's
registered public accounting firm regarding internal control over financial
reporting. Management's report was not subject to attestation by the Company's
registered public accounting firm pursuant to temporary rules of the Securities
and Exchange Commission that permit the Company to provide only management's
report in this annual report.
There was no change in the Company's internal control over financial reporting
that occurred during the fiscal quarter ended December 31, 2011, that has
materially affected, or is reasonably likely to materially affect, its internal
control over financial reporting.
ITEM 9B. OTHER INFORMATION
Not applicable.
15
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The following table sets forth information as to persons who currently serve as
Legacy's directors or executive officers as of September 28, 2012.
Name Age Position
---------------------------- ---------------- ----------------------------------
Redgie Green 59 Chief Executive Officer, Acting
Chief Financial Officer and Sole
Director
|
On October 20, 2010, Mr. Henson resigned as the Chief Executive Officer of the
Company and Mr. Redgie Green was appointed the new Chief Executive Officer and
to the Board of Directors of the Company. On October 21, 2010, Mr. Henson
resigned as a director of the Company.
Legacy officers are elected by the board of directors at the first meeting after
each annual meeting of Legacy shareholders and hold office until their
successors are duly elected and qualified under Legacy bylaws.
The director named above will serve until the next annual meeting of Legacy
stockholders. Thereafter, directors will be elected for one-year terms at the
annual stockholders' meeting. Officers will hold their positions at the pleasure
of the board of directors absent any employment agreement. There is no
arrangement or understanding between the directors and officers of Legacy and
any other person pursuant to which any director or officer was or is to be
selected as a director or officer.
The Company's officer spends up to 5 hours per week on Legacy's business at this
time.
Biographical Information
Current Officer and Director
Redgie Green - Chief Executive Officer and Director
On October 20, 2010, Mr. Reginald Green was appointed the Chief Executive
Officer and a Director of the Company.
Mr. Green has served as the Chief Executive Officer of Sun River Energy, Inc.
since January 2009 through August 3, 2010. From January 2009 through October
2009, he served as the President of Sun River Energy, Inc. He has served as a
director of Sun River Energy, Inc. from 1998 through October 2010. Mr. Green was
co-owner and operator of Green's B&R Enterprises, a wholesale donut baker since
1983. He has been an active investor in small capital and high-tech adventures
since 1987. Mr. Green was a director of Colorado Gold & Silver, Inc. in 2000. He
was a director for Houston Operating Company in late 2004 until December 2004.
He recently served as a director for Mountains West Exploration, Inc. in 2005.
He is a Director of Concord Ventures, Inc. since 2006. He has served as a
director of ASPI, Inc. from 2006 through the fall of 2009 and was been appointed
as an officer and director of Captech Financial, Inc. in May 2006. He served as
a director of Baymark Technologies, Inc. 2005-2006.
16
Former Officer and Director
Larry Henson - Former Chief Executive Officer and Director
On December 7, 2009, Mr. Larry Henson was appointed the Chief Executive Officer
and a Director of the Company he served as such till October 20, 2010.
Mr. Henson graduated from the University of Georgia with a BBA in Marketing and
Accounting in 1970. He has been a Licensed General Contractor in Florida since
1973. Over the last 35 years he has been involved in building and developing
properties in Florida, Georgia and South Carolina.
Annual Meeting
The annual meeting of Legacy stockholders is expected to be held at a future
date. This will be an annual meeting of stockholders for the election of
directors. The annual meeting will be held at the Legacy' principal office or at
such other place as permitted by the laws of the State of Colorado and on such
date as may be fixed from time to time by resolution of Legacy board of
directors.
Committees of the Board of Directors
Legacy is managed under the direction of its board of directors.
Executive Committee
Legacy does not have an executive committee, at this time.
Audit Committee
Legacy does not have an audit committee at this time.
Conflicts of Interest - General.
The Company's directors and officers are, or may become, in their individual
capacities, officers, directors, controlling shareholder and/or partners of
other entities engaged in a variety of businesses. Thus, there exist potential
conflicts of interest including, among other things, time, efforts and
corporation opportunity, involved in participation with such other business
entities. While each officer and director of the Company's business is engaged
in business activities outside of its business, the amount of time they devote
to Legacy business will be up to approximately 5 hours per week.
Conflicts of Interest - Corporate Opportunities
Presently no requirement contained in the Company's Articles of Incorporation,
Bylaws, or minutes which requires officers and directors of the Company's
business to disclose to Legacy business opportunities which come to their
attention. The Company's officers and directors do, however, have a fiduciary
duty of loyalty to Legacy to disclose to it any business opportunities which
come to their attention, in their capacity as an officer and/or director or
otherwise. Excluded from this duty would be opportunities which the person
learns about through his involvement as an officer and director of another
company. The Company has no intention of merging with or acquiring an affiliate,
associate person or business opportunity from any affiliate or any client of any
such person.
17
ITEM 11. EXECUTIVE COMPENSATION
The following table sets forth the compensation paid to officers and board
members during the fiscal years ended December 31, 2011 and 2010. The table sets
forth this information for Legacy, including salary, bonus, and certain other
compensation to the Board members and named executive officers for the past
three fiscal years and includes all Board Members and Officers as of December
31, 2011.
SUMMARY EXECUTIVES COMPENSATION TABLE
-------------------- -------- -------- ------- -------- -------- ------------ -------------- ------------- --------
Non-equity Non-qualified
incentive deferred
Stock Option plan compensation All other
Salary Bonus awards awards compensation earnings compensation Total
Name & Position Year ($) ($) ($) ($) ($) ($) ($) ($)
-------------------- -------- -------- ------- -------- -------- ------------ -------------- ------------- --------
-------------------- -------- -------- ------- -------- -------- ------------ -------------- ------------- --------
Redgie Green,
Chief Executive 2011 0 0 0 0 0 0 0 0
Officer (1) 2010 0 0 0 0 0 0 0 0
-------------------- -------- -------- ------- -------- -------- ------------ -------------- ------------- --------
Larry Henson, 2011 0 0 0 0 0 0 0 0
-------------------- -------- -------- ------- -------- -------- ------------ -------------- ------------- --------
-------------------- -------- -------- ------- -------- -------- ------------ -------------- ------------- --------
|
(1) Mr. Redgie Green was appointed the Chief Executive Officer of the Company
on October 20, 2010.
(2) Mr. Larry Henson was appointed the Chief Executive Officer of the Company
on December 7, 2009, he resigned the position on October 20, 2010.
OPTION/SAR GRANTS IN THE LAST FISCAL YEAR
Legacy does not have a stock option plan as of the date of this Form 10K. There
was no grant of stock options to the Chief Executive Officer and other named
executive officers during the fiscal year ended December 31, 2011.
Employment Agreements and Termination of Employment and Change-In-Control
Arrangements
None of the Company's officers, directors, advisors, or key employees is
currently party to employment agreements with the Company. The Company has no
pension, health, annuity, bonus, insurance, stock options, profit sharing or
similar benefit plans; however, the Company may adopt such plans in the future.
There are presently no personal benefits available for directors, officers, or
employees of the Company.
Compensation Committee Interlocks and Insider Participation
The Legacy board of directors in its entirety acts as the compensation committee
for the Company. Mr. Green is the Chief Executive Officer and the sole Director
of the Company.
18
Director Compensation
The Company does not pay any Directors fees for meeting attendance.
The following table sets forth certain information concerning compensation paid
to the Company's directors during the year ended December 31, 2011:
----------------- ---------- ---------- ----------- --------------- ---------------- --------------- --------
Fees Non-equity Non-qualified
earned incentive deferred
Name or paid Stock plan compensation All other
in cash awards Option compensation earnings compensation Total
($) ($) awards ($) ($) ($) ($) ($)
----------------- ---------- ---------- ----------- --------------- ---------------- --------------- --------
----------------- ---------- ---------- ----------- --------------- ---------------- --------------- --------
Redgie Green $ -0- $ -0- $ -0- $ -0- $ -0- $ -0- $ -0-
----------------- ---------- ---------- ----------- --------------- ---------------- --------------- --------
----------------- ---------- ---------- ----------- --------------- ---------------- --------------- --------
|
All of the Company's officers and/or directors will continue to be active in
other companies. All officers and directors have retained the right to conduct
their own independent business interests.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Legacy officers and directors are indemnified as provided by the Colorado
Revised Statutes and the bylaws.
Under the Colorado Revised Statutes, director immunity from liability to a
company or its shareholders for monetary liabilities applies automatically
unless it is specifically limited by a company's Articles of Incorporation. The
Company's Articles of Incorporation do not specifically limit the directors'
immunity. Excepted from that immunity are: (a) a willful failure to deal fairly
with Legacy or its shareholders in connection with a matter in which the
director has a material conflict of interest; (b) a violation of criminal law,
unless the director had reasonable cause to believe that his or her conduct was
lawful or no reasonable cause to believe that his or her conduct was unlawful;
(c) a transaction from which the director derived an improper personal profit;
and (d) willful misconduct.
The Company's bylaws provide that it will indemnify the directors to the fullest
extent not prohibited by Colorado law; provided, however, that it may modify the
extent of such indemnification by individual contracts with the directors and
officers; and, provided, further, that the Company shall not be required to
indemnify any director or officer in connection with any proceeding, or part
thereof, initiated by such person unless such indemnification: (a) is expressly
required to be made by law, (b) the proceeding was authorized by the board of
directors, (c) is provided by the Company, in sole discretion, pursuant to the
powers vested under Colorado law or (d) is required to be made pursuant to the
bylaws.
The Company's bylaws provide that it will advance to any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that he is or was a director or officer of
the Company, or is or was serving at the request of Legacy as a director or
executive officer of another company, partnership, joint venture, trust or other
enterprise, prior to the final disposition of the proceeding, promptly following
request therefore, all expenses incurred by any director or officer in
connection with such proceeding upon receipt of an undertaking by or on behalf
of such person to repay said amounts if it should be determined ultimately that
such person is not entitled to be indemnified under the bylaws or otherwise.
19
The Company's bylaws provide that no advance shall be made by Legacy to an
officer except by reason of the fact that such officer is or was the Company's
director in which event this paragraph shall not apply, in any action, suit or
proceeding, whether civil, criminal, administrative or investigative, if a
determination is reasonably and promptly made: (a) by the board of directors by
a majority vote of a quorum consisting of directors who were not parties to the
proceeding, or (b) if such quorum is not obtainable, or, even if obtainable, a
quorum of disinterested directors so directs, by independent legal counsel in a
written opinion, that the facts known to the decision-making party at the time
such determination is made demonstrate clearly and convincingly that such person
acted in bad faith or in a manner that such person did not believe to be in or
not opposed to the best interests of the Company.
EQUITY COMPENSATION PLAN INFORMATION
The Company has not established an equity compensation plan or Incentive Stock
Option Plan.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS.
The following table sets forth information with respect to the beneficial
ownership of Legacy outstanding common stock by:
o each person who is known by Legacy to be the beneficial owner of five
percent (5%) or more of Legacy common stock;
o Legacy chief executive officer, its other executive officers, and each
director as identified in the "Management -- Executive Compensation"
section; and
o all of the Company's directors and executive officers as a group.
Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or investment
power with respect to securities. Shares of common stock and options, warrants
and convertible securities that are currently exercisable or convertible within
60 days of the date of this document into shares of the Company's common stock
are deemed to be outstanding and to be beneficially owned by the person holding
the options, warrants or convertible securities for the purpose of computing the
percentage ownership of the person, but are not treated as outstanding for the
purpose of computing the percentage ownership of any other person.
20
The information below is based on the number of shares of Legacy common stock
that Legacy believes was beneficially owned by each person or entity as of
December 31, 2011.
Amount and
Name and Address of Nature of
Title of Class Beneficial Owner* Beneficial Owner Percent of Class (1)
------------------------ -------------------------- ------------------ --------------------- Redgie Green,
Common shares Chief Executive Officer
& Director -0- 0%
Common shares Ken Leitmayr 1,231,008 32.98%
Common shares Michael A. Littman (2) 341,140 9.14%
Common shares Janine Krueter 275,229 7.37%
Common shares Jeffrey McEvoy 275,229 7.37%
Common shares Steve Parkinson 200,000 5.35%
------------------------ -------------------------- ------------------ ---------------------
All Directors and
Executive Officers as a
Group (1 person) 0 0%
------------------ ---------------------
|
*Address: c/o 7609 Ralston Road, Arvada, CO 80002.
(1) At December 31, 2011, the Company had 3,731,772 shares of its common stock
issued and outstanding.
(2) Mr. Littman owns 241,140 shares of common stock directly and 100,000 shares
indirectly through his wife.
The information below is based on the number of shares of Legacy common stock
that Legacy believes was beneficially owned by each person or entity as of
September 28, 2012.
Amount and Nature
Name and Address of Beneficial Owner of Beneficial Percent of Class
Title of Class (2) Owner* (1)
------------------------ --------------------------------------- ------------------- --------------------
------------------------ --------------------------------------- ------------------- --------------------
Common shares Redgie Green, 0 0%
Chief Executive Officer & Director
Common shares Ken Leitmayr 1,231,008 32.98%
Common shares Michael A. Littman (3) 341,140 9.14%
Common shares Janine Krueter 275,229 7.37%
Common shares Jeffrey McEvoy 275,229 7.37%
Common shares Steve Parkinson 200,000 5.35%
------------------------ --------------------------------------- ------------------- --------------------
All Directors and Executive Officers 0 0%
as a Group (1 person)
------------------- --------------------
|
(1) At September 28, 2012, the Company had 3,731,772 shares of its common stock
issued and outstanding.
21
(2) C/O 7609 Ralston Road, Arvada, CO 80002.
(3) Mr. Littman owns 241,140 shares of common stock directly and 100,000 shares
indirectly through his wife.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Other than the transactions discussed below, the Company has not entered into
any transaction nor is there any proposed transactions in which any of the
founders, directors, executive officers, shareholders or any members of the
immediate family of any of the foregoing had or is to have a direct or indirect
material interest.
During the years ended December 31, 2011 and 2010, the Company had no reportable
related party transactions.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
GENERAL. Ronald Chadwick, PC is the Company's principal auditing accountant
firm. The Company's Board of Directors has considered whether the provisions of
audit services is compatible with maintaining Chadwick's independence.
The following table represents aggregate fees billed to the Company for the
years ended December 31, 2011 and 2010 by Ronald Chadwick, P.C.
Year Ended December 31,
2011 2010
----------------------------- -----------------------------
Audit Fees $5,000 $5,000
Tax Fees $0 $0
All Other Fees $0 $0
----------------------------- -----------------------------
Total Fees $5,000 $5,000
|
All audit work was performed by the auditors' full time employees.
22
PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
The following is a complete list of exhibits filed as part of this Form 10K.
Exhibit number corresponds to the numbers in the Exhibit table of Item 601 of
Regulation S-K.
(a) Audited financial statements for years ended December 31, 2011 and 2010
(b) Exhibit No. Description
----------- -----------
31.1 Certification of Chief Executive Officer pursuant to Section 302 of the
Sarbanes-Oxley Act*
32.1 Certification of Principal Executive Officer pursuant to Section 906 of the
|
*Filed herewith.
23
RONALD R. CHADWICK, P.C.
Certified Public Accountant
2851 South Parker Road, Suite 720
Aurora, Colorado 80014
Telephone (303)306-1967
Fax (303)306-1944
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Board of Directors
Legacy Technology Holdings, Inc.
Arvada, Colorado
I have audited the accompanying consolidated balance sheets of Legacy Technology
Holdings, Inc. (a development stage company) as of December 31, 2011 and 2010,
and the related consolidated statements of operations, stockholders' deficit and
cash flows for the years then ended, and for the period from May 8, 2008
(inception of the development stage) through December 31, 2011. These financial
statements are the responsibility of the Company's management. My responsibility
is to express an opinion on these financial statements based on my audit.
I conducted my audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that I plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. I believe that my audit provides a reasonable
basis for my opinion.
In my opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Legacy
Technology Holdings, Inc. as of December 31, 2011 and 2010, and the consolidated
results of its operations and its cash flows for the years then ended, and for
the period from May 8, 2008 (inception of the development stage) through
December 31, 2011 in conformity with accounting principles generally accepted in
the United States of America.
The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 2 to the
financial statements, the Company has suffered recurring losses from operations
and has a working capital deficit and stockholders' deficit. These conditions
raise substantial doubt about its ability to continue as a going concern.
Management's plans in regard to these matters are also described in Note 2. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
Aurora, Colorado
R. Chadwick, P.C.
October 3, 2012
/s/Ronald R. Chadwick
---------------------
RONALD R.CHADWICK, P.C.
|
F-1
LEGACY TECHNOLOGY HOLDINGS, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEETS
December 31, December 31,
2011 2010
----------------- -----------------
Total Assets $ - $ -
================= =================
Liabilities and Stockholders' Deficit
Current liabilities
Accounts payable $ 266,997 $ 241,734
Accrued expenses 689,813 577,357
Advances payable 62,356 62,356
Notes payable 661,632 661,632
----------------- -----------------
Total Current Liabilities 1,680,798 1,543,079
----------------- -----------------
Stockholders' Deficit
Common stock, $0.0001 par value; 100,000,000 shares 373 373
authorized; 3,731,772 shares issued and outstanding
Additional paid-in capital (1,163,027) (1,163,027)
Deficit accumulated during the development stage (518,144) (380,425)
----------------- -----------------
Total Stockholders' Deficit (1,680,798) (1,543,079)
----------------- -----------------
Total Liabilities and Stockholders' Deficit $ - $ -
================= =================
See the accompanying notes to these consolidated financial statements.
|
F-2
LEGACY TECHNOLOGY HOLDINGS, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Year Ended May 8, 2008
December 31, (Inception) to
2011 2010 12/31/2011
--------------------------- ------------------
Revenue:
Sales $ - $ - $ -
--------------------------- ------------------
Operational expenses:
General and administrative 29,787 13,514 198,175
--------------------------- ------------------
Total operational expenses 29,787 13,514 198,175
--------------------------- ------------------
Loss from operations (29,787) (13,514) (198,175)
--------------------------- ------------------
Other income (expense):
Gain on debt relief 4,524 - 68,005
Interest expense (112,456) (112,456) (387,974)
--------------------------- ------------------
Total other expense (107,932) (112,456) (319,969)
--------------------------- ------------------
Net Loss $ (137,719) $ (125,970) $ (518,144)
=========================== ==================
Per share information
Net (loss) per common share
Basic $ (0.03) $ (0.03)
Fully diluted (0.03) (0.03)
---------------------------
Weighted average number of common
stock outstanding 3,731,772 3,731,772
---------------------------
See the accompanying notes to these consolidated financial statements.
|
F-3
LEGACY TECHNOLOGY HOLDINGS, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT
Additional
Common Stock paid-in
Number of shares Amount Capital
------------------- -------------- -----------------
Balances at December 31, 2006* - $ - $ -
Net income (loss) for the year - - -
------------------- -------------- -----------------
Balances at December 31, 2007* - - -
Issuance of Founders common stock - cash 4,800,000 480 5,120
Issuance of Founders common stock - services 4,200,000 420 3,780
Stock issued for Net Liabilities - reverse merger 1,007,003 101 (1,197,555)
Capital contribution - related party - - 25,000
Net income (loss) for the year - - -
------------------- -------------- -----------------
Balance as of December 31, 2008* 10,007,003 1,001 (1,163,655)
------------------- -----------------------------------
Cancellation of shares (6,275,231) (628) 628
Net income (loss) for the year - - -
------------------- -------------- -----------------
Balance as of December 31, 2009 3,731,772 373 (1,163,027)
------------------- -------------- -----------------
Net income (loss) for the year - - -
------------------- -------------- -----------------
Balance as of December 31, 2010 3,731,772 373 (1,163,027)
------------------- -------------- -----------------
Net income (loss) for the year - - -
------------------- -------------- -----------------
Balance as of December 31, 2011 3,731,772 $ 373 $(1,163,027)
=================== ============== =================
* As restated for reverse merger on July 18, 2008
See the accompanying notes to these consolidated financial statements.
|
F-4
LEGACY TECHNOLOGY HOLDINGS, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT
(continued)
Deficit accum
During
Development
Stage Totals
---------------- ----------------
Balances at December 31, 2006* $ - $ -
Net income (loss) for the year - -
---------------- ----------------
Balances at December 31, 2007* - -
Issuance of Founders common stock - cash - 5,600
Issuance of Founders common stock - services - 4,200
Stock issued for Net Liabilities - reverse merger - (1,197,454)
Capital contribution - related party - 25,000
Net income (loss) for the year (98,782) (98,782)
---------------- ----------------
Balance as of December 31, 2008* (98,782) (1,261,436)
---------------- ----------------
Cancellation of shares - -
Net income (loss) for the year (155,673) (155,673)
---------------- ----------------
Balance as of December 31, 2009 (254,455) (1,417,109)
---------------- ----------------
Net income (loss) for the year (125,970) (125,970)
---------------- ----------------
Balance as of December 31, 2010 (380,425) (1,543,079)
---------------- ----------------
Net income (loss) for the year (137,719) (137,719)
---------------- ----------------
Balance as of December 31, 2011 $ (518,144) $ (1,680,798)
================ ================
* As restated for reverse merger on July 18, 2008
See the accompanying notes to these consolidated financial statements.
|
F-5
LEGACY TECHNOLOGY HOLDINGS, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF CASH FLOWS
May 8, 2008
For the Year Ended (Inception) to
December 31, December 31,
2011 2010 2011
--------------- --------------- ---------------
Cash Flows from Operating Activities:
Net Loss $ (137,719) $ (125,970) $ (518,144)
Adjustments to reconcile net loss to net cash used
in operating activities from
continuing operations:
Gain on debt relief (4,524) - (68,005)
Compensatory Stock issuance - - 4,200
Changes in operating assets and liabilities:
Increase in Accounts Payable and Accrued Liabilities 142,243 125,970 484,494
--------------- --------------- ---------------
Net Cash Provided (Used) by Operating Activities - - (97,455)
--------------- --------------- ---------------
Cash Flows from Investing Activities:
Net Cash Provided by Investing Activities - - -
--------------- --------------- ---------------
Cash Flows from Financing Activities:
Capital contribution for related parties - - 25,000
Sale of common stock - - 5,600
Proceeds from advance payables - - 62,356
--------------- --------------- ---------------
Net Cash Provided (used) by Financing Activities - - 92,956
--------------- --------------- ---------------
Net (Decrease) Increase in Cash - - (4,499)
Cash and Cash Equivalents - Beginning of Period - - 4,499
--------------- --------------- ---------------
Cash and Cash Equivalents - End of Period $ - $ - $ -
=============== =============== ===============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest expense $ - - -
=============== =============== ===============
Cash paid for income taxes $ - - -
=============== =============== ===============
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING
AND FINANCING ACTIVITIES:
Common shares issued in reverse merger $ - $ - $ (1,197,454)
=============== =============== ===============
See the accompanying notes to these consolidated financial statements.
|
F-6
LEGACY TECHNOLOGY HOLDINGS, INC. AND SUBSIDIARY
(A Development Stage Enterprises)
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2011 and 2010
NOTE 1. Business, Basis of Presentation and Significant Accounting Policies:
Business:
Legacy Technology Holdings, Inc. (the "Company" and/or "Legacy") was
incorporated in Colorado in January, 1997. The Company was originally named Life
USA, Inc. On May 20, 2008, the Company changed its name to Legacy Technology
Holdings, Inc. by filing an amendment to its Article of Incorporation. The
Company was organized to engage in any activity or business not in conflict with
the laws of the State of Colorado or of the United States of America. As a
result of the name change, the Company's trading symbol on the Over-the-Counter
Bulletin Board was changed to "LTHO".
Neuro Nutrition, the Company's wholly owned subsidiary, was incorporated on July
23, 2004 in the State of Colorado, and has been in the development stage since.
World Peace, the Company's wholly owned subsidiary was incorporated in the State
of Colorado on May 8, 2008.
Basis of Presentation:
Development Stage Enterprise
The Company has not earned any significant revenues from its limited operations.
Accordingly, the Company's activities have been accounted for as those of a
"Development Stage Enterprise" Among the disclosures required by are that the
Company's financial statements be identified as those of a development stage
company, and that the statements of operation, stockholders' equity (deficit)
and cash flows disclose activity since the date of the Company's inception.
Principles of Consolidation
The accompanying consolidated financial statements include the accounts of
Legacy and its wholly-owned subsidiaries, Neuro Nutrition, Inc. and Legacy
Technology Holdings (formerly World Peace Technologies, Inc.) All significant
inter-company balances and transactions have been eliminated in consolidation.
Significant Accounting Policies:
Cash and Cash Equivalents
The Company maintains the majority of its cash accounts at a commercial bank.
The total cash balance is insured by the Federal Deposit Insurance Corporation
("FDIC") up to $100,000 per commercial bank. As of December 31, 2011 and 2010,
the Company had zero amounts in excess of the FDIC insured limits. For purposes
of the statement of cash flows, the Company considers all cash and highly liquid
investments with initial maturities of three months or less to be cash
equivalents.
F-7
Estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affects 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 expenses during the reporting
period. Such estimates may be materially different from actual financial
results. Significant estimates include the recoverability of long-lived assets
and the collectability of accounts receivable.
Revenue Recognition
Revenue Recognition is recognized when earned. Sales revenue is recognized at
the date of shipment to customers when a formal arrangement exists, the price is
fixed or determinable, the delivery is completed, no other significant
obligations of the Company exist and collectability is reasonably assured.
Payments received before all of the relevant criteria for revenue recognition
are satisfied are recorded as unearned revenue.
Net Loss per Share
Basic net loss per common share is calculated by dividing the net loss
applicable to common shares by the weighted average number of common and common
equivalent shares outstanding during the period. For the years ended December
31, 2011 and 2010, there were no potential common equivalent shares used in the
calculation of weighted average common shares outstanding as the effect would be
anti-dilutive because of the net loss.
Stock-Based Compensation
The Company adopted the provisions of and accounts for stock-based compensation
using an estimate of value in accordance with the fair value method. Under the
fair value recognition provisions of this statement, stock-based compensation
cost is measured at the grant date based on the fair value of the award and is
recognized as expense on a straight-line basis over the requisite service
period, which generally is the vesting period. The Company elected the
modified-prospective method, under which prior periods are not revised for
comparative purposes. The valuation method applies to new grants and to grants
that were outstanding as of the effective date and are subsequently modified.
Fair Value of Financial Instruments
The carrying amount of accounts payable, accrued expenses, convertible
promissory notes are considered to be representative of their respective fair
values because of the short-term nature of these financial instruments.
Other Comprehensive Income
The Company has no material components of other comprehensive income (loss) and
accordingly, net loss is equal to comprehensive loss in all periods.
F-8
Income Taxes
Provision for income taxes represents actual or estimated amounts payable on tax
return filings each year. Deferred tax assets and liabilities are recorded for
the estimated future tax effects of temporary differences between the tax basis
of assets and liabilities and amounts reported in the accompanying balance
sheets, and for operating loss and tax credit carry forwards. The change in
deferred tax assets and liabilities for the period measures the deferred tax
provision or benefit for the period. Effects of changes
in enacted tax laws on deferred tax assets and liabilities are reflected as
adjustment to the tax provision or benefit in the period of enactment.
Recent Accounting Pronouncements
In July 2010, the Financial Accounting Standards Board ("FASB") issued Proposed
Accounting Standard Update (Topic 450) - Disclosure of Certain Loss
Contingencies. This amendment would lower the current disclosure threshold and
broaden the current disclosure requirements to provide adequate and timely
information to assist users in assessing the likelihood, potential magnitude,
and potential timing (if known) of future cash outflows associated with loss
contingencies. For public entities, the new guidance would be effective for
fiscal years ending after December 15, 2010, and interim and annual periods in
subsequent fiscal years. The Company is currently evaluating the impact of the
future adoption of the Update.
There were various other accounting standards and interpretations issued in 2010
and 2011, none of which are expected to have a material impact on the Company's
financial position, operations or cash flows.
NOTE 2. Going Concern:
In the Company's Annual Report on Form 10-K for the fiscal year ended December
31, 2011, the Report of the Independent Registered Public Accounting Firm
includes an explanatory paragraph that describes substantial doubt about the
Company's ability to continue as a going concern. The Company's financial
statements for the years ended December 31, 2011 and 2010 have been prepared on
a going concern basis, which contemplates the realization of assets and the
settlement of liabilities and commitments in the normal course of business. The
Company reported a net loss of $137,719 for the year ended December 31, 2011,
and an accumulated deficit of $518,144 as of December 31, 2011. At December 31,
2011, the Company had a working capital deficit of $1,680,798.
The future success of the Company is likely dependent on its ability to attain
additional capital, or to find an acquisition to add value to its present
shareholders and ultimately, upon its ability to attain future profitable
operations. There can be no assurance that the Company will be successful in
obtaining such financing, or that it will attain positive cash flow from
operations. Management believes that actions presently being taken to revise the
Company's operating and financial requirements provide the opportunity for the
Company to continue as a going concern.
F-9
NOTE 3. Notes Payable:
The Company's outstanding non-convertible notes payable on December 31,
2011 and 2010, consisted of:
$ 15,080 Note Payable issued to an investor. Due upon demand.
Interest rate is 8%
6,19 Other Notes Payable
10,353 Note payable, issued to vendor. Due upon demand
--------
$ 31,632 Total notes payable outstanding on December 31, 2011
======= and 2010.
|
NOTE 4. Convertible Notes Payable:
Convertible notes payable as of December 31, 2011 and 2010 consisted of the
following:
$ 50,000 Note payable 1, convertible into 151,515 shares with
conversion feature expiring in May 2008,
due September 30, 2006, incurring interest at 25%,
attached to the note are 151,515 warrants exercisable
at $0.625 per share, which expired in 2008. The note
is secured by a subordinated pledge of inventory and
accounts receivable.
$ 25,000 Note payable 2, convertible into 50,000 shares of Neuro
Nutrition, Inc. with conversion feature expiring at
end 2007, due September 7, 2006, incurring interest
at 10%.
$ 50,000 Note payable 1, convertible into 151,515 shares with
conversion feature expiring in May 2008,
due September 30, 2006, incurring interest at 25%,
attached to the note are 151,515 warrants exercisable
at $0.625 per share, which expired in 2008. The note
is secured by a subordinated pledge of inventory and
accounts receivable.
$ 75,000 Note payable 4, convertible into 227,273 shares with
conversion feature expiring in May 2008,
due September 30, 2006, incurring interest at 25%,
attached to the note are 227,273 warrants exercisable
at $0.625 per share, which expired in 2008. The note
is secured by a subordinated pledge of inventory and
accounts receivable.
$ 20,000 Note payable 5, convertible into 40,000 shares of Neuro
Nutrition, Inc. anytime at Holder's option, due
February 28, 2007, incurring interest at 20%,attached
to the note are 40,000 warrants for Neuro
Nutrition, Inc. common stock exercisable at
$0.65 per share.
$ 50,000 Note payable 6, convertible into 100,000 shares of
Neuro Nutrition, Inc. anytime at Holder's option, due
February 28, 2007, incurring interest at 20%, attached
to the note are 100,000 warrants for Neuro Nutrition,
Inc. common stock exercisable at $0.65 per share.
$ 75,000 Note payable 7, convertible into 150,000 shares of
Neuro Nutrition, Inc. with conversion feature
expiring in May 2008, due May 27, 2006, incurring
interest at 10%, attached to the note are 150,000
warrants for Neuro Nutrition, Inc. exercisable at $0.625
per share, which expired in 2008.
|
F-10
$ 50,000 Note payable 8, convertible into 100,000 shares with
conversion feature expiring in November 2008, due
November 11, 2006, incurring interest at 10%, attached to
the note are 200,000 warrants exercisable at $0.625 per
share, which expired in 2008.
$ 50,000 Note payable 8, convertible into 100,000 shares with
conversion feature expiring in November 2008, due
November 11, 2006, incurring interest at 10%, attached to
the note are 200,000 warrants exercisable at $0.625 per
share, which expired in 2008.
$ 5,000 Note payable 10, convertible into 10,000 shares with
conversion feature expiring in November 2008, due
November 11, 2006, incurring interest at 10%, attached to
the note are 20,000 warrants exercisable at $0.625 per
share, which expired in 2008.
$ 50,000 Note payable 11, convertible into 100,000 shares anytime
at Holder's option, due December 7, 2006, incurring
interest at 10%, attached to the note are 200,000
warrants exercisable at $0.625 per share, which
expired in 2008.
$ 25,000 Note payable 12, convertible into 50,000 shares anytime
at Holder's option, due February 20, 2007, incurring
interest at 10%, attached to the note are 100,000
warrants exercisable at $0.75 per share, which
expired in 2008.
$ 5,000 Note payable 13, convertible into 10,000 shares anytime
at Holder's option, due February 28, 2007, incurring
interest at 10%, attached to the note are 20,000
warrants exercisable at $0.75 per share, which
expired in 2008.
$ 50,000 Note payable 14, convertible into 125,000 shares
anytime at Holder's option, due September 12, 2006,
incurring interest at 25%, attached to the note are
250,000 warrants exercisable at $0.75 per share,
which expired in 2008. This note is secured by
inventory and accounts receivable.
$ 50,000 Note payable 15, convertible into 125,000 shares anytime
at Holder's option, due September 12, 2006,
incurring interest at 25%, attached to the
note are 250,000 warrants exercisable at
$0.75 per share, which expired in 2008. This
note is secured by inventory and accounts receivable.
--------
$630,000 Total Convertible notes payable. All these notes, with
======== the exception of notes 1, 3, 4, 14 and 15 are unsecured.
|
As of December 31, 2011, all of the convertible notes described above are in
default.
F-11
NOTE 5. Stock Options and Warrants:
At December 31, 2011 and 2010 the Company had common stock purchase warrant
activity as described below.
Non-employee stock options
The Company accounts for non-employee stock options under ASC 718, whereby
option costs are recorded based on the fair value of the consideration received
or the fair value of the equity instruments issued, whichever is more reliably
measurable. Unless otherwise provided for, the Company covers option exercises
by issuing new shares.
The Company's subsidiary Neuro Nutrition, Inc. at the beginning of 2010 had
140,000 common stock purchase warrants outstanding. The warrants are to be
effectively granted for exercise upon conversion by the warrant holder of an
accompanying note payable into common stock, which said note the holder can
convert anytime at his option. The warrant holder has two years after effective
grant date to exercise the warrants, at a price of $.625 per share. No Neuro
Nutrition, Inc. warrants were exercised or expired in 2011 or 2010, leaving a
2011 year end balance of 140,000 warrants.
Employee stock options
The Company accounts for employee stock options under ASC 718. Unless otherwise
provided for, the Company covers option exercises by issuing new shares. There
were no employee stock options issued or outstanding in 2010 or 2011.
NOTE 6. Taxes:
The Company is subject to foreign and domestic income taxes. The Company has had
no income, and therefore has paid no income tax.
Deferred income taxes arise from temporary timing differences in the recognition
of income and expenses for financial reporting and tax purposes. The Company's
deferred tax assets consist entirely of the benefit from net operating loss
(NOL) carry-forwards. The NOL carry forwards expire in various years through
2030. The Company's deferred tax assets are offset by a valuation allowance due
to the uncertainty of the realization of the NOL carry-forwards. NOL
carry-forwards may be further limited by a change in company ownership and other
provisions of the tax laws.
F-12
The Company's deferred tax assets, valuation allowance, and change in valuation
allowance are as follows:
Estimated NOL
Carry-forward Valuation Net Tax
Period Ending benefit Allowance Benefit
December 31, 2010 $76,085 $(76,085) -
Estimated NOL
Carry-forward Valuation Net Tax
Period Ending benefit Allowance Benefit
December 31, 2011 $103,629 $(103,629) -
|
NOTE 7 - Legal Proceedings:
In May 2008 a complaint was filed in the District Court for the County of
Boulder, Colorado by product suppliers of the Company (the "Plaintiffs") seeking
collection of trade accounts due in the approximate amount of $127,000 plus
collection costs. Research of the account by Plaintiff's counsel effectively
reduced this amount to approximately $64,000, which is included in the Company's
balance sheet liabilities. The case is ongoing at the present time.
F-13
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
LEGACY TECHNOLOGY HOLDINGS, INC.
Dated: October 10, 2012
By:/s/Redgie Green
----------------------------------------
Redgie Green, Chief Executive Officer, Acting
Chief Accounting Officer & Director
|
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.
Dated: December 18, 2012
LEGACY TECHNOLOGY HOLDINGS, INC.
/s/Redgie Green
-----------------------------------------------------
Redgie Green, Chief Executive Officer, Acting Chief Accounting
Officer & Director
|
24
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