UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

                                   (Mark One)
   [X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
               OF 1934 For the fiscal year ended December 31, 2004

   [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                                   ACT OF 1934


         For the transition period from               to
                                        --------------   --------------

                        Commission file number: 000-24835

                               LEGEND MOBILE, INC.
                 (Name of small business issuer in its charter)

           DELAWARE                                      38-3399098
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
 incorporation or organization)

          777 EISENHOWER PARKWAY, SUITE 102, ANN ARBOR, MICHIGAN 48108
               (Address of principal executive offices) (Zip Code)

                    Issuer's telephone number: (734) 389-0270

       Securities registered under Section 12(b) of the Exchange Act: NONE

         Securities registered under Section 12(g) of the Exchange Act:

                         COMMON STOCK, $0.001 PAR VALUE
                                (Title of class)

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 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 [ ]

Check  if no  disclosure  of  delinquent  filers  in  response  to  Item  405 of
Regulation S-B is contained in this form,  and no disclosure  will 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-KSB or any
amendment to this Form 10-KSB. [X]

State issuer's revenues for its most recent fiscal year: $ 18,208

State the aggregate market value of the voting and non-voting common equity held
by non-affiliates  computed by reference to the price at which the common equity
was sold,  or the average bid and asked  price of such  common  equity,  as of a
specified date within the past 60 days: $ 928,854 AS OF MARCH 31, 2005

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 18,577,079 AS OF MARCH 31, 2005

Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X]

<PAGE>

                                TABLE OF CONTENTS



                                                                            Page
                                                                            ----
PART I
            Item 1.  Description of Business...............................    3
            Item 2.  Description of Properties.............................    9
            Item 3.  Legal Proceedings.....................................    9
            Item 4.  Submission of Matters to a Vote of Security Holders...    9

PART II
            Item 5.  Market for Common Equity and Related Stockholder
                      Matters..............................................    9
            Item 6.  Management's Discussion and Analysis or Plan of
                      Operation............................................    9
            Item 7.  Financial Statements..................................   11
            Item 8.  Changes in and Disagreements With Accountants on
                       Accounting and Financial Disclosure.................   12
            Item 8A. Controls and Procedures...............................   12

PART III
            Item 9.  Directors, Executive Officers, Promoters and Control
                      Persons Compliance with Section 16(a) of the
                      Exchange Act.........................................   12
            Item 10. Executive Compensation................................   13
            Item 11. Security Ownership of Certain Beneficial Owners
                      and Management and Related Stockholder Matters.......   14
            Item 12. Certain Relationships and Related Transactions........   15
            Item 13. Exhibits and Reports on Form 8-K......................   16
            Item 14. Principal Accountants Fees and Services...............   17

Signatures.................................................................   18


                                       2
<PAGE>

                                     PART I

ITEM 1. DESCRIPTION OF BUSINESS.

CAUTIONARY  STATEMENT  FOR PURPOSES OF "SAFE HARBOR  PROVISIONS"  OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995.

Certain  statements  contained in this Annual Report on Securities  and Exchange
Commission  ("SEC")  Form 10-KSB  ("Form  10-KSB")  constitute  "forward-looking
statements" within the meaning of the Private  Securities  Litigation Reform Act
of 1995. These  statements  involve known and unknown risks,  uncertainties  and
other factors that may cause our or our  industry's  actual  results,  levels of
activity,  performance  or  achievements  to be  materially  different  than any
expressed or implied by these forward-looking  statements.  These statements may
be contained in our filings with the Securities and Exchange  Commission,  press
releases,  and  written or oral  presentations  made by our  representatives  to
analysts, rating agencies,  stockholders, news organizations and others. In some
cases, you can identify forward-looking statements by terminology such as "may,"
"will,"  "should,"  "intend",  "expects,"  "plans,"  "anticipates,"  "believes,"
"estimates," "predicts," "potential," "continue," or the negative of these terms
or other  comparable  terminology.  Although we believe that the expectations in
the  forward-looking  statements  are  reasonable,  we cannot  guarantee  future
results, levels of activity, performance or achievements.

                                  OUR BUSINESS

We are a developer  and  marketer of branded  mobile  phone  products  including
faceplates,  phone accessories,  SMS services, and mobile data applications.  We
intend to also market branded  accessories for digital music players such as the
iPod and handheld video games through our upcoming  website,  www.ipodmerch.com.
Through our subsidiary  Legend Credit,  Inc. (which we own 50%), we also develop
and  market  stored  value  cards  including  gift  cards  bearing  the Visa and
MasterCard logo. Legend Credit intends to develop and market additional  branded
consumer payment products  including debit cards,  gift cards, and credit cards.
Legend  Credit Inc.  is also  developing  a gift card  exchange  website  called
"Giftcardstoday.com".   Through  our  91%  subsidiary,   Legend  Studios,  Inc.,
(formerly  Fragrancedirect.com  Inc.),  we have entered  into a local  marketing
agreement  to operate  and asset  purchase  agreement  to  purchase  seven radio
stations in  Virginia,  West  Virginia,  and  Missouri on June 30,  2004.  These
agreements became the subject of litigation in February 2005.

                             OUR SOURCES OF REVENUE

SALES OF MOBILE PRODUCTS

We derive  limited  revenues  from the sale of covers  for  mobile  phones.  Our
suppliers require us to purchase these products and resell them to consumers and
wholesalers. We created products under our licenses from athletes, entertainers,
and popular trademarks.  We also sell a NASCAR-themed,  SMS-based text messaging
service called "Racemobile.com".  We also are seeking to sell mobile application
software either via  over-the-air  download or bundled with a particular  mobile
phone. These applications may be sold as a subscription or as a single download.

We have been developing  products for the iPod economy which will be marketed on
a website owned by the company called "iPodmerch.com".  The company will develop
branded  covers and  accessories  for the 10 million iPods that are currently in
use by consumers worldwide. The company is in discussions with various licensors
to secure  licenses  of popular  brands on iPod  cases.  We have also  secured a
suppliers  for products to be branded and resold.  We expect our  licensed  iPod
products will be sold in traditional retail channels as well as via our website.

We have also been in  discussions  with one of our suppliers to develop  branded
cases  for  mobile  game  devices  such as the new  mobile  version  of the Sony
Playstation.

SALES OF STORED VALUE CARDS

Through  Legend  Credit,  we  offer  branded  stored  value  cards  directly  to
consumers.  According a recent study by the American  Bankers  Association,  the
market for stored value cards is estimated at $300 billion annually.

                                       3
<PAGE>

We recently entered into a, two year license  agreement with Sanrio Inc. for the
rights to the popular  trademark  Hello Kitty for debit  cards,  prepaid  credit
cards,  and gift  cards.  Sanrio  develops,  distributes  and  licenses a unique
collection of over 12,000 gift, stationery and fashion accessory items for women
of all ages.  Today there are over 300 Sanrio  boutiques  throughout the Western
Hemisphere with 120 in the United States. In addition, Sanrio character products
including  Hello  Kitty  are  sold  in  over  10,000  U.S.  locations  including
department stores, specialty stores and national chain stores.

We are in  discussions  with  other  well known  brands  and  personalities  for
licenses for stored value cards.  Our  President  and Chief  Executive  Officer,
Peter  Klamka,  created  the  popular  KISS  Visa card in 1996.  To  obtain  new
licenses,  we make royalty  payments to licensors  such as  celebrities or other
well  recognized  brands who grant us the right to use their  trademarks  on our
stored value card products.  These  agreements have a term of one or more years.
The  compensation  paid is generally  based on a percentage of sales,  a fee for
each card sold, fee income  collected,  and breakage returned to us. We may have
to advance future compensation to a licensor as part of an agreement.

We recently entered into a contract with Bankfirst in which Bankfirst has agreed
to service future stored value card programs. Bankfirst has over $900 million in
assets  and  approximately  1,000  employees.  Additionally,  we  were  recently
approved by MasterCard  International as a Member Service Provider. We intend to
offer single use gift cards, reloadable debit cards, and secured credit cards.

We  recently  entered  into an  agreement  with  Global  Cash  Card  to  provide
additional  card  products.  Global Cash Card is a distributor  of card products
through First  Regional  Bank. We expect to offer a debit card without a Visa or
MasterCard logo through our association  with Global Cash Card.  Cards issued in
association  with  Global Cash Card can be reloaded at any of the 3,000 Ace Cash
Express  centers around the country.  The ease of card loading is one of the key
drivers of card profitability.

We have also entered into an agreement  with Cardware  Systems to provide a Visa
product for our current and future licensed brands.

We have also been working with an  international  bank to develop a Virtual Visa
product as well as a Visa  Electron  product  which can be used by  citizens  of
countries other than the United States.

We have also been in  discussions  to sublicense  our licenses to a bank network
for the retail sales of gift cards at bank branches.

Card revenue is generated by a fee for each card sold, a percentage  of the fees
charged to consumers for activities such as balance inquiries, cash advances and
ATM  withdrawals,  interchange  fees, lost and stolen card fees, card load fees,
and  monthly  maintenance  fees.  Each  card  program  depending  on the  target
audience,  requirements  of the  licensor,  and product  type has some or all of
these fees.

In addition to the gift market, there are approximately 60 million Americans who
do not have traditional  bank accounts and consequently are potential  customers
for  prepaid  products.  We are also  directing  our  products  towards the teen
audience who do not have access to traditional credit card products.

SALES OF PRODUCTS  FROM OUR WEBSITE  IPODMERCH.COM

We recently opened a website called  ipodmerch.com.  The site acts as a reseller
of  merchandise  for  digital  music  players  such as the  iPod  made by  Apple
Computer.  We expect to generate revenue from the sales of products to consumers
from this  site.We  also expect to offer  licensed  products  for digital  music
players.  We have been in  negotiations  with  several  well  known  brands  and
entertainers to use their image and trademarks on digital music accessories.  We
expect to sell these  proprietary  products through our website as well as other
means of  distribution  such as retail  sales and  through the  specific  artist
channels  such as  websites  and  concerts.  The  iPod is an  extremely  popular
consumer device. There are approximately 20 million iPods in circulation.

FEE INCOME FROM OUR WEBSITE GIFTCARDSTODAY.COM

We   expect   to   generate   fee   income   from   our   forthcoming   website,
Giftcardstoday.com.  The website will allow  consumers to buy,  sell,  and trade
unwanted gift cards.

                                       4
<PAGE>

The  popularity  of gift  cards  has  grown  significantly  in  recently  years.
According to industry  estimates,  nearly two thirds of all American adults said
they received or purchased a gift card in the last twelve months.  Sales of gift
cards are expected to reach $55.5 billion this year.

The site will allow  consumers to buy, sell, or trade unwanted  cards.  The site
will be open to all types of gift cards from any issuer.  We will  collect a fee
each time a card is sold or traded.

RADIO ACQUISITION

We recently changed the name of our 91% owned  subsidiary,  Fragrancedirect.com,
Inc.,  to  Legend  Studios,  Inc.  On June 30,  2004,  we  entered  into a local
marketing  agreement and an asset purchase  agreement with Quorum Radio Partners
of Virgina Inc. and Quorum  Communications  for seven radio stations.  Under the
local marketing  agreement,  we assumed operational and financial control of the
stations.  The asset purchase  agreement provided for purchase of the station by
Legend Studios at a future  closing .The stations are located in Virginia,  West
Virginia,  and  Missouri  and  consist  of the  following  three  AM and four FM
stations.:

KELE 1360 AM                Mt. Grove, Missouri

KELE 92.5 FM                Mt. Grove, Missouri

KOZX 98.1 FM                Mt. Grove, Missouri

WIQO  100.9 FM              White Sulfur Springs, West Virginia

WKEY 1340 AM                White Sulfur Springs, West Virginia

WSLW 1320 AM                White Sulfur Springs, West Virginia

WKCT 103.1 FM               Covington, Virginia.

In February 2005, the Quorum  entities  forced Legend Studios to cease operating
the radio stations and indicated that they were unwilling to proceed with Legend
Studios'  acquisition of the stations.  Consequently,  in February 2005,  Legend
Studios filed a lawsuit with the Supreme Court of New York County against Quorum
Radio  Partners,  Inc.,  Quorum  Radio  Partners of  Virginia,  Inc,  and Quorum
Communications, Inc. This lawsuit alleges that the defendants breached the asset
purchase  agreement  and local  marketing  agreement by Legend  Studios.  Legend
Studios seeks specific  performance of the  agreements,  as well as in excess of
$1.5 million in damages. The defendants have been served with the complaint, but
have not filed answers and may be subject to entry of a default judgment. Quorum
Radio Partners of Virginia,  Inc. filed a bankruptcy petition after being served
with the complaint, which stays Legend Studios' proceedings against that entity.

In February  2005,  Legend Studios filed a lawsuit with the Supreme Court of New
York County,  against  Quorum Radio  Partners,  Inc.,  Quorum Radio  Partners of
Virginia,  Inc, and Quorum  communications,  Inc. This lawsuit  alleges that the
defendants  breached the asset purchase agreement and local marketing  agreement
by Legend Studios.  Legend Studios seeks specific performance of the agreements,
as well as in excess of $1.5  million in  damages.  Defendants  have been served
with the complaint,  but have not filed answers and may be subject to entry of a
default  judgment.  Quorum Radio Partners of Virginia,  Inc., filed a bankruptcy
petition  after being served with the  complaint,  which stays  Legend  Studios,
proceedings against that entity.

Due to the terms of the local  marketing  agreement,  we are  entitled to record
revenues from all the Quorum  stations,  and we have included  those revenues in
previous  filings.  But  because  Quorum  Radio  Partners  filed for  bankruptcy
protection,  we were unable to gain access to Quorum's financial  statements for
purposes of  completing  our year-end  audit.  Based on Quorum  Radio  Partners'
bankruptcy  filing,  we estimate that revenue generated by Quorum's Virginia and
West Virginia stations in 2004 exceeded $500,000.  We were unable to gain access
to financial information for the Missouri properties, but we expect that we will
shortly do so as part of the discovery process in our pending litigation.

                                       5
<PAGE>

SALES OF RADIO ADVERTISING

If we prevail in our pending  litigation  with  Quorum  Radio  Partners,  Legend
Studio's  primary  source of revenue would be from the sale of  advertising  for
broadcast  on its  stations.  Depending  on the  format  of a  particular  radio
station, there are a predetermined number of advertisements broadcast each hour.
While  there may be shifts  from  time to time in the  number of  advertisements
broadcast   during  a   particular   time  of  the  day,  the  total  number  of
advertisements  broadcast  on a  particular  station  generally  does  not  vary
significantly  from year to year. Any change in our revenue,  with the exception
of those  instances where stations are acquired or sold, is generally the result
of pricing  adjustments,  which are made to ensure that the station  efficiently
utilizes available inventory.  We can give no assurances that we will prevail in
our litigation.

Advertising  rates charged by radio stations are based  primarily on a station's
ability to attract audiences in the demographic  groups targeted by advertisers,
the number of stations in the market competing for the same  demographic  group,
the supply of and  demand  for radio  advertising  time,  and other  qualitative
factors,  including  rates charged by competing  radio  stations  within a given
market.   Radio  rates  are  generally  highest  during  morning  and  afternoon
drive-time hours. Most advertising  contracts are short-term,  generally running
for only a few weeks.

We also expect to acquire restricted stock and services in exchange for airtime


                MARKETING AND PROMOTION OF MOBILE PHONE PRODUCTS

We continually  evaluate  numerous ways to reach our potential  customers and to
promote our products.  We intend to continue to promote our products through the
following means:

1.   On-site  promotions.  We are also negotiating to sell our NASCAR associated
products at stock car races.

2.   Develop  co-marketing and co-sales  promotions.  We are negotiating to sell
our mobile accessories through mobile phone carriers, mobile phone retailers and
distributors,

3.   Advertise  our   celebrity-branded   phones  and  mobile  software  through
traditional media such as radio, newspapers, magazines and television.

                  MARKETING AND PROMOTION OF STORED VALUE CARDS

We  evaluate  numerous  ways  to  reach  potential   customers  to  promote  our
stored-value  products.  We intend to continue to promote our products through a
number of avenues including:

1.   Affinity  relationships.  We seek to  develop  products  under  license  by
recognized  personalities,  brands, or affinity groups that have a large base of
customers  to market to. Our card  products are designed to appeal to a specific
segment of the market with customized designs, promotions, and fee schedules.

2.   Co-marketing  with brand  partners.  We marketed  the Hilary Duff Visa Gift
card with  Hollywood  Records  through an insert in the Hilary  Duff CD entitled
"Metamorphosis"  which  reached  approximately  one  million  consumers.  We are
currently exploring  co-marketing  opportunities with Sanrio and other licensees
for the Hello Kitty brand. We participated in several Hello Kitty events in 2004
and marketed our card  through  promotional  materials in the Hello Kitty retail
outlets.  Co-marketing  allows us to reach a  significant  number  of  consumers
interested in the brand cost effectively.

3.   Public  Relations.  We  adopt  a very  aggressive  posture  towards  public
relations for the launch of our card products.

4.   Internet  Marketing.  We employ  from time to time employ a firm to promote
the card  products  through  the  Internet  on popular  web site  related to the
particular brand.

5.   Gift with Purchase. We recently entered into a promotional agreement with a
leading  publisher of  magazines  that will allow us offer our  cardholders  and
potential  cardholders a year long  subscription  to popular  magazines with the
purchase of one of our stored  value  cards.  We expect to continue our magazine
promotions and other gift with purchase on future cards.

6.   Contests.  We bartered  cards with specific  dollar amounts in exchange for
advertising time on television, radio, and on popular teen sites.

7.   Event  Marketing.  We look for  opportunities  to  drive  sales of our card
products  at live events  including  concerts,  shopping  malls,  and  celebrity
appearances

                                       6
<PAGE>

                      GROWTH STRATEGY-MOBILE PHONE PRODUCTS

We believe we have unique  expertise  to develop  branded  products  for digital
music  players  such as the  iPod.  We have  consistently  been  able to  secure
licenses with recognized brands. We expect to be a leader in the area of branded
digital music accessories.

                          GROWTH STRATEGY-LEGEND CREDIT

We expect to  continue to license  leading  brands and  celebrities  with strong
affinity  bases.  The market for stored  value  cards is  expected to grow by an
estimated 20% in 2005. Legend will continue to offer  competitive  products that
appeal to specific segments of the card buying public. We will also look to grow
our business by offering  previous  buyers of Legend Credit card products  other
products such as reloadable cards, new card designs, and secured cards.

We are also  developing  products  such as the  Virtual  Visa  which  will allow
consumers to shop online safely and securely

                         GROWTH STRATEGY-LEGEND STUDIOS

We  intend  to focus on small  market  radio  and  television  stations  for the
foreseeable  future.  We intend to secure  and  maintain  positions  in  smaller
markets where we can achieve market  dominance.  Through  consolidation of radio
stations into clusters  (multiple formats and radio stations in a market) we can
become a more  efficient and cost  effective  supplier of marketing  channels to
local advertisers. Smaller markets also tend to face less competition from other
media, including satellite radio such as XM and Sirius.

We may also  explore the  acquisition  of small  market  television  stations or
business related to broadcast or entertainment content.

                      RISKS THAT MAY AFFECT FUTURE RESULTS

The following risk factors and other information  included in this Annual Report
should be carefully considered.  The risks and uncertainties described below are
not the only ones we face.  Additional  risks and  uncertainties  not  presently
known to us or that we currently  deem  immaterial  also may impair our business
operations.  If  any  of the  following  risks  actually  occur,  our  business,
financial  condition  and  operating  results  could  be  materially   adversely
affected.

WE HAVE AN ACCUMULATED DEFICIT AND ANTICIPATE FURTHER LOSSES.

We have incurred significant losses since we began doing business.  There can be
no  assurance  that our  services and  products  will ever  generate  sufficient
revenues or that our  operations  will ever be  profitable.  As of December  31,
2004, we had an accumulated deficit of $17,953,713. We expect to incur operating
losses for the near future until we can generate  sufficient  sales to cover our
operating expenses.

We have  generated  limited  revenues  to date from the  business we conduct and
there can be no assurance  that we will ever generate  sufficient  revenues from
the business we conduct to cover all of our operating  expenses.  We also expect
to  significantly  increase  our  operating  expenses  to  expand  our sales and
marketing  operations,  to fund greater  levels of product  development,  and to
develop  other  forms  of  revenue  generating  business  and  licensing  of our
proprietary materials to others.

WE RECEIVED AN OPINION FROM OUR  ACCOUNTANTS  FOR THE PERIOD ENDED  DECEMBER 31,
2004,  WHICH  RAISED  DOUBT ABOUT OUR  ABILITY TO CONTINUE  AFTER SUCH DATE AS A
GOING CONCERN.

Our  consolidated  financial  statements  for the year ended  December 31, 2004,
which are  included in this Form  10-KSB,  indicate  that there was  substantial
doubt as of December  31, 2004 about our ability to continue as a going  concern
due to  our  need  to  generate  cash  from  operations  and  obtain  additional
financing.  We have had a going  concern  opinion  from our  auditors  since our
inception in 1997.

                                       7
<PAGE>

WE NEED TO RAISE ADDITIONAL FUNDS TO FUND OUR BUSINESS OPERATIONS.

We need to raise  additional  funds  because  our cash flows  have  proven to be
insufficient  to fund  operations,  including  our  obligations  to pay  minimum
royalties under our licensing agreements.  Additionally,  we have several mobile
phone  licenses  which may  require  additional  payments.  Several of our trade
creditors  and  licensors  have  outstanding  balances  and may  elect to sue to
recover  their  amounts  owed.  Management  feels that these can be  defended or
settled on favorable terms. There can be no assurance that additional  financing
will be  available to us on  commercially  reasonable  terms,  or at all. We may
raise funds through equity or debt financings,  depending on our  opportunities.
If we raise  additional  funds by issuing equity  securities,  this will further
dilute the interests of our current  stockholders.  If we raise additional funds
by issuing  debt  securities,  we will be subject to the risks  associated  with
incurring substantial indebtedness,  including the risks that interest rates may
fluctuate and cash flow may be insufficient to pay principal and interest on any
such indebtedness.  We have no current  arrangements with respect to, or sources
of,  additional  financing,   and  it  is  not  anticipated  that  our  existing
stockholders will provide any portion of our future financing requirements.

WE MAY  NOT  BE  ABLE  TO  COMPETE  SUCCESSFULLY  IN THE  MOBILE  PHONE,  MOBILE
ACCESSORY,  MOBILE DATA AND GAMING, AND OPERATING SYSTEM SOFTWARE MARKETS.  THIS
WOULD HAVE A MATERIAL  ADVERSE EFFECT ON OR BUSINESS,  RESULTS OF OPERATIONS AND
FINANCIAL CONDITION.

As we attempt to expand into the mobile phone,  accessory,  and mobile  services
software markets, our future growth will depend on the commercial success of our
branded  accessory  products.  The markets for these  products  and services are
highly competitive and we expect competition to increase in the future.  Most of
our competitors in this market have significantly  greater financial,  technical
and  marketing  resources  than we do.  This  will make it  difficult  for us to
compete  successfully  in the  hand-held  device and operating  system  software
markets.

THE LOSS OF OUR CHIEF EXECUTIVE OFFICER'S SERVICES WOULD HAVE A MATERIAL ADVERSE
EFFECT ON US.

Our  success  will be largely  dependent  on the  efforts of Peter  Klamka,  our
Chairman,  President and Chief Executive  Officer,  and his ability to forge new
relationships with celebrities and to maintain such relationships, as well as to
oversee the development  and maintenance of our products.  Our success will also
be highly  dependent on Mr. Klamka's  ability,  as well as the ability of others
employed by us, to successful market new products and develop new products.  The
loss of his services  would have a material  adverse  effect on our business and
prospects.

We have not entered into an employment  agreement with Mr. Klamka and Mr. Klamka
has not entered into any agreement  restricting  his  involvement  in a business
which competes with us. As a result, Mr. Klamka is an  employee-at-will  and has
the right to leave us at any time. Mr. Klamka has informed us that he intends to
devote a  substantial  portion of his working  time to our  business and that he
also intends to devote a portion of his time to other business interests that do
not compete with our business.  In addition,  Mr. Klamka is not restricted  from
entering into a competing  business  after the term of his  employment  with us;
provided, however, that he would not be permitted to use proprietary information
and trade secrets  belonging to us. Our success will also be dependent  upon our
ability to hire and retain marketing, financial and other personnel. Competition
for qualified personnel is intense and there can be no assurance that we will be
able to hire or retain  additional  qualified  personnel.  The loss of our Chief
Executive Officer's service would have a material adverse effect on us .

EMPLOYEES

As of March 31, 2005, we had a total of four  full-time  employees.  None of our
employees is covered by a collective bargaining agreement.

                                       8
<PAGE>

ITEM 2. DESCRIPTION OF PROPERTY.

We currently  maintain our executive  offices,  consisting of 709 square feet of
space, at 777 Eisenhower Parkway,  Suite 102 in Ann Arbor, Michigan. The monthly
rent is $1,300. The lease expires on January 31, 2006.

ITEM 3. LEGAL PROCEEDINGS.

The company is party to legal  proceedings  from time to time. None of the legal
proceedings in management's opinion would have an adverse material impact on the
company.

We are a plaintiff in a case against Quorum Radio Partners,  Inc.,  Quorum Radio
Partners of  Virginia,  Inc,  and Quorum  communications,  Inc. and we expect to
secure a default judgment. See "Radio Acquisitions," above.

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

None.

                                     PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

MARKET INFORMATION

Our common stock is traded on NASD  Electronic  Bulletin  Board under the symbol
LGMB.  Prior to July 5, 2002,  it traded  under the symbol PTMN.  The  following
table sets forth the range of high and low bid  quotations for each of the prior
eight (8) fiscal  quarters.  The quotations  represent  inter-dealer  quotations
without  adjustment for retail  mark-ups,  mark-downs or commissions and may not
represent actual transactions.

FISCAL QUARTER ENDING                       HIGH BID          LOW BID

March 31, 2003.......................       $   1.11         $   0.12
June 30, 2003........................       $   0.35         $   0.10
September 30, 2003...................       $   0.44         $   0.20
December 31, 2003....................       $   0.36         $   0.23

March 31, 2004.......................       $   0.40         $   0.21
June 30, 2004........................       $   0.34         $   0.15
September 30, 2004...................       $   0.28         $   0.10
December 31, 2004....................       $   0.28         $   0.09

On March  31,  2005,  the  closing  bid price  for the  common  stock on the OTC
Bulletin Board was $0.05.

HOLDERS

As of March 31,  2005 there were 137 record  holders of our common  stock.  This
does not include shares held in street names.

DIVIDENDS

Since our inception, no cash dividends have been declared on our common stock.

SALES OF UNREGISTERED SECURITIES

In  October  2004,  we issued a total of  840,318  shares  of  common  stock for
consulting  services.  Theses securities were exempt from registration under the
Securities  Act of 1933,  as amended,  in reliance on  Regulation D  promulgated
thereunder.

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

FORWARD LOOKING STATEMENTS

This report contains certain  forward-looking  statements  within the meaning of
Section 27A of the  Securities  Act of 1933, as amended,  and Section 21E of the
Securities Exchange Act of 1934, as amended. Shareholders are cautioned that all
forward-looking  statements  involve risks and  uncertainty,  including  without
limitation, our ability to fully establish our proposed websites and our ability
to conduct  business  with Palm,  Inc. and be  successful  in selling  products.
Although we believe the assumptions  underlying the  forward-looking  statements
contained herein are reasonable, any of the assumptions could be inaccurate, and
therefore,  there  can  be no  assurance  that  the  forward-looking  statements
contained in the report will prove to be accurate.

                                       9
<PAGE>

GENERAL

The following  discussion and analysis  should be read in  conjunction  with our
consolidated  financial  statements  and  related  footnotes  for the year ended
December 31, 2004 elsewhere in this Annual Report on Form 10-KSB. The discussion
of results,  causes and trends  should not be construed to imply any  conclusion
that such results or trends will necessarily continue in the future.

We were  incorporated  in Delaware on January 13, 1998 and are the  successor to
Interactive  Entertainment Studio, Inc. (IES). IES was incorporated in the State
of  Nevada on May 27,  1997 and was  merged  into us in March  1998 for the sole
purpose of changing  the  domicile of the company to  Delaware.  This merger was
retroactively  reflected in the December 31, 1997 financial statements.  On June
27, 2002 we changed our name to Legend Mobile, Inc.

We are a developer  and  marketer of branded  mobile  phone  products  including
faceplates,  phone  accessories,  SMS  services,  and mobile data  applications.
Through our subsidiary  Legend Credit,  Inc. (which we own 50%), we also develop
and  market  stored  value  cards  including  gift  cards  bearing  the Visa and
Mastercard  logo. We derive limited  revenues from the sale of covers for mobile
phones.  Our suppliers  require us to purchase these products and resell them to
consumers and wholesalers. We created products under our licenses from athletes,
entertainers, and popular trademarks.

Since our inception,  we have incurred net losses of $17,953,172 and at December
31, 2004 current liabilities exceeded current assets by $2,675,281. In addition,
we are delinquent in certain payments due for license fees and notes payable. We
may be unable to continue in existence unless we are able to arrange  additional
financing and achieve profitable operations. We plan to raise additional capital
and expect to generate cash from the sale of Hello Kitty Debit  MasterCard  card
through Legend Credit, Inc.

On December  29,  2000,  we entered into a  three-year  license  agreement  with
Michael Jordan,  the National  Basketball  Association  player,  granting us the
right to use Mr.  Jordan's  name,  likeness  and  image in  connection  with the
proposed  advertisement,  promotion  and  sale  of  certain  branded  Palm  Inc.
products,  including the Palm Pilot series. In addition to the standard features
of Palm products,  we planned that the Michael Jordan edition include  branding,
identification and software  applications that will appeal to the market segment
associated  with Mr.  Jordan.  On June 27,  2002,  we entered  into a settlement
agreement  with  Michael  Jordan  pursuant  to  the  aforementioned  three  year
agreement.  The settlement calls for us to pay Mr. Jordan $468,750,  discontinue
making any reference to Jordan's  name,  image,  likeness and  endorsement,  and
returning any products  associated  with Mr.  Jordan's name. As a result of this
settlement  agreement,  we have recognized a gain of $111,662 which was included
in selling,  general and administrative  expenses in the statement of operations
for the year ended  December  31,  2002.  This gain  resulted  by  removing  the
remaining  license fee payable of $625,000,  offset by the  $468,750  accrual to
settle the agreement  and the return of $44,588 in inventory.  The amount due to
Mr. Jordan was to be paid $234,375 in October 2002 and the remaining $234,375 in
January  2003.  We have not made the payment due in October  2002 or the payment
due in January 2003.  Since we are in default on the amounts due to Mr.  Jordan,
we have accrued interest in accordance with the terms of the contract.

Our  business  model  is  to  grow  in  the  area  of  mobile  handsets,  mobile
applications, and digital music players. This business model includes seeking to
obtain  licenses with  well-known  motor  entertainment  figures,  develop large
promotional  programs that permit us to market our products more effectively and
develop other distribution channels.

On September 9, 2004,  Legend Credit  launched the Hello Kitty Debit  MasterCard
card . We have a 50% interest in Legend  Credit,  Inc.,  which is accounted  for
using the equity  method.  During the second  quarter of 2003, Mr. Peter Klamka,
our CEO and 50% owner of Legend Credit, contribute 10% of his ownership interest
in Legend Credit to us which brought our ownership in Legend Credit to 50%.

Significant Accounting Policies and Estimates
---------------------------------------------

Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations discusses the Company's consolidated financial statements, which have
been prepared in accordance with accounting principles generally accepted in the
United States of America. The preparation of these financial statements requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities at the date of the financial  statements and the reported

                                       10
<PAGE>

amounts of revenues and expenses during the reporting  period.  Management bases
its  estimates  and  judgments on  historical  experiences  and on various other
factors that are believed to be reasonable under the circumstances,  the results
of which form the basis for making  judgments about the carrying value of assets
and liabilities that are not readily apparent from other sources. Actual results
may differ from these estimates under different  assumptions or conditions.  The
most  significant  accounting  estimates  inherent  in  the  preparation  of the
Company's  financial  statements relate to the allowance for doubtful  accounts.
These accounting  policies are described at relevant sections in this discussion
and analysis and in the notes to the consolidated  financial statements included
in this Annual Report on Form l0-KSB for the year ended December 31, 2004.

Results of Operations
---------------------

Year ended December 31, 2004 vs. December 31, 2003

Revenue for the year ended  December 31, 2005 increased by $10,683 or 241 % from
$7,525  for the year  ended  December  31,  2003 to  $18,208  for the year ended
December 31, 2004.  Revenue for the year ended December 31, 2003 was principally
from  the  sale of the  Michael  Jordan  edition  of the  Palm  and the  sale of
faceplates for cellular  phones.  These sales  principally took place during the
first half of 2003. As a result of a settlement  agreement with Mr.  Jordan,  we
discontinued  selling any products  using the Michael  Jordan name,  likeness or
image  effective July 1, 2002.  Revenue for the year ended December 31, 2003 was
from the sale of faceplates for cellular phones.

Cost of revenue for the year ended December 31, 2004 decreased by $1,479 or 100%
from  $1,479_  for the year  ended  December  31,  2003 to $0 for the year ended
December 31, 2004.  The decrease is a direct  result of the decrease in revenue.
Cost of revenue as a  percentage  of revenue was 0% and 19.9% for the year ended
December  31, 2004 and 2003,  respectively.  The  faceplates  have a much higher
gross margin than did the Michael Jordan edition of the Palm.  During June 2002,
we sold 500 Michael Jordan edition Palms at a price substantially below our cost
that has resulted in negative gross margin.

Product  development  costs for the year ended December 31, 2004 stayed the same
From $0 from $0 for the year ended  December  31,  2003 to $0 for the year ended
December  31,  2004.  We did not have any money to spend on product  development
during the year ended December 31, 2003.

Selling,  general and  administrative  expenses for the year ended  December 31,
2004  increased by $16,161 or 1.3% from  $1,255,016  for the year ended December
31, 2003 to  $1,271,177  for the year ended  December  31,  2004.  A majority of
selling, general and administrative expenses in 2004 are related to professional
and consulting fees paid with shares of our common stock.

Interest  expense  and  financing  costs for the year ended  December  31,  2004
decreased by $39,987 or 18.0% from $222,255 for the year ended December 31, 2003
to $182,268 for the year ended  December 31, 2004. The difference is principally
due to a charge  taken of  $244,701  in the 3rd  quarter  of 2002  related  to a
warrant  issued to an investor  that  converted  his $300,000  note payable into
shares of common stock.

Equity loss in Legend  Credit,  Inc. was $36,458 for the year ended December 31,
2004. We own a 50% interest in Legend  Credit,  who started  selling Hilary Duff
Visa  gift card in  October  2003,  and the  Hello  Kitty  Debit  MasterCard  in
September  2004.  We account for Legend  Credit using the equity method and have
recorded  50%  of  Legend  Credits  loss  in  our  consolidated   statements  of
operations.

LIQUIDITY AND CAPITAL RESOURCES

In 2003, we raised $37,000 from the sale of our common stock .

We have incurred net losses since our inception of $17,953,172 . In order for us
to continue in existence,  we will have to raise additional  capital through the
sale of equity or debt or generate  sufficient  profits  from  operations,  or a
combination of both.

ITEM 7. FINANCIAL STATEMENTS.

See pages beginning with page F-1.

                                       11
<PAGE>

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

None

ITEM 8A. CONTROLS AND PROCEDURES.

As required by SEC rules, we have evaluated the  effectiveness of the design and
operation of our  disclosure  controls and  procedures  at the end of the period
covered by this report.  This  evaluation was carried out under the  supervision
and with the participation of our principal  executive officer,  who is also our
principal  financial officer.  Based on this evaluation,  we have concluded that
the  design  and  operation  of  our  disclosure  controls  and  procedures  are
effective.  There  were  no  changes  in our  internal  control  over  financial
reporting or in other factors that have materially  affected,  or are reasonably
likely to materially affect, our internal control over financial reporting.

Disclosure  controls and procedures are our controls and other  procedures  that
are  designed to ensure that  information  required to be disclosed by us in the
reports that we file or submit  under the  Exchange Act is recorded,  processed,
summarized  and reported,  within the time periods  specified in the SEC's rules
and forms.  Disclosure  controls and  procedures  include,  without  limitation,
controls  and  procedures  designed  to ensure that  information  required to be
disclosed  by us in  the  reports  that  we  file  under  the  Exchange  Act  is
accumulated and communicated to our management,  including  principal  executive
officer  and  principal  financial  officer,  as  appropriate,  to allow  timely
decisions regarding required disclosure.


                                    PART III

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

DIRECTORS AND EXECUTIVE OFFICERS

                    Our executive officers and directors are:

          NAME            AGE     POSITION
          ----            ---     --------

          Peter Klamka     36     Chairman of the Board, CEO, President,
                                  Treasurer & Secretary

The business experience,  principal  occupations and employment,  as well as the
periods of service,  of our sole director and executive  officer during the last
five years are set forth below.

Peter  Klamka has been our  Chairman  of the Board and Chief  Executive  Officer
since our inception in May 1997. In 1994, Mr. Klamka founded Wilshire Fragrance,
a company that developed and marketed men's fragrance  products.  Mr. Klamka was
the chief  executive  officer of Wilshire  Fragrance  from 1994 through 1996. In
connection with his fragrance business,  in 1996, Mr. Klamka developed,  what he
believes to have been one of the first authorized celebrity web sites, featuring
Anna Nicole Smith  promoting  fragrances  for  Wilshire  Fragrance.  Mr.  Klamka
continued  working on this web site until early 1997.  Mr.  Klamka  received his
Bachelor of Arts degree from the University of Michigan.

EMPLOYMENT AND CONSULTING AGREEMENTS

We have no  employment  or  other  written  agreement  with  Peter  Klamka,  our
President and Chief Executive Officer. Mr. Klamka has an oral agreement with the
Company  to  receive  a  base  salary  of  $175,000  per  year  and  such  other
compensation as the Board of Directors  shall  designate.  The Company  believes
that Mr.  Klamka  will  continue  to waive a portion of the base  salary for the
foreseeable future, although no assurance thereof can be given.

Mr. Klamka is involved in other business  ventures,  including the ownership and
management other private businesses.

We have no employment or other written agreement with Mr. Klamka.

                                       12
<PAGE>
<TABLE>
<CAPTION>

AUDIT COMMITTEE FINANCIAL EXPERT
--------------------------------

The audit committee is responsible  for  recommending  independent  auditors and
reviewing  management  actions  in  matters  relating  to audit  functions.  The
committee reviews, with independent auditors, the scope and results of its audit
engagement,  the system of  internal  controls  and  procedures  and reviews the
effectiveness of procedures intended to prevent violations of laws.

The audit  committee,  consistent  with the  Sarbanes-Oxley  Act of 2002 and the
rules adopted thereunder, meets with management and the auditors prior to filing
of  officers'  certifications  with the SEC to receive  information  concerning,
among other  things,  significant  deficiencies  in the design or  operation  of
internal controls.

Our  board  of  directors  currently  acts as our  audit  committee.  Our  audit
committee member is not "independent" in accordance with rule 4200(a)(14) of the
Nasdaq  Marketplace  Rules.  Our  board of  directors  does  not have an  "audit
committee  financial expert," within the meaning of that phrase under applicable
regulations  of the  Securities  and Exchange  Commission,  serving on the audit
committee.  The  board of  directors  believes  that  the  member  of the  audit
committee is financially  literate and  experienced  in business  matters and is
capable of (1) understanding  generally accepted accounting  principles ("GAAP")
and  financial  statements,  (2)  assessing  the  general  application  of  GAAP
principles  in  connection  with our  accounting  for  estimates,  accruals  and
reserves,   (3)  analyzing  and   evaluating  our  financial   statements,   (4)
understanding our internal controls and procedures for financial reporting,  and
(5) understanding audit committee  functions,  all of which are attributes of an
audit committee financial expert.  However, the board of directors believes that
no audit committee member has obtained these  attributes  through the experience
specified  in the  SEC's  definition  of  "audit  committee  financial  expert."
Further, as is the case with many small companies,  it would be difficult for us
to attract and retain board  members who qualify as "audit  committee  financial
experts," and  competition  for such  individuals is  significant.  The board of
directors  believes that its current audit committee is able to fulfill its role
under SEC regulations despite not having a designated "audit committee financial
expert."

CODE OF ETHICS

We have not yet adopted a code of ethics that applies to our principal executive
officers,   principal  financial  officer,   principal   accounting  officer  or
controller, or persons performing similar functions, since we have been focusing
our efforts on obtaining financing for the company. We expect to adopt a code by
the end of the current fiscal year.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section  16(a) of the  Securities  Exchange Act of 1934  requires our  officers,
directors, and persons who beneficially own more than 10% of our common stock to
file reports of  securities  ownership  and changes in such  ownership  with the
Securities and Exchange Commission ("SEC"). Officers, directors and greater than
10%  beneficial  owners are also  required  by rules  promulgated  by the SEC to
furnish us with copies of all Section 16(a) forms they file.

Based  solely  upon a review of the  copies of such  forms  furnished  to us, or
written  representations  that no Form 5 filings were required,  we believe that
during the fiscal year ended December 31, 2003,  there was  compliance  with all
Section 16(a) filing  requirements  applicable  to our  officers,  directors and
greater than 10% beneficial owners.

ITEM 10. EXECUTIVE COMPENSATION.

The  following  table  sets  forth  information  the  remuneration  of our chief
executive officer:

                                                SUMMARY COMPENSATION TABLE
-------------------------------------------------------------------------------------------------------------------
    NAME AND
    PRINCIPAL
    POSITION                     ANNUAL COMPENSATION                       LONG TERM COMPENSATION
------------------ ---------------------------------------------- ------------------------------------
                                                                           AWARDS            PAYOUTS
                                                                  ------------------------- ----------
                                                        OTHER      RESTRICTED   SECURITIES
                                                        ANNUAL       STOCK      UNDERLYING     LTIP      ALL OTHER
                    FISCAL                           COMPENSATION   AWARD(S)     OPTIONS/     PAYOUTS  COMPENSATION
                     YEAR    SALARY ($)   BONUS ($)       ($)          ($)       SARS (#)       ($)          ($)
------------------ -------- ------------ ----------- ------------ ------------ ------------ ---------- ------------
<S>                <C>      <C>          <C>         <C>          <C>          <C>          <C>        <C>
Peter Klamka, CEO    2004   $175,000 (1)   -0-            -0-          -0-         -0-          -0-         -0-
                     2003   $100,000 (2)   -0-            -0-          -0-        490,500       -0-         -0-
------------------ -------- ------------ ----------- ------------ ------------ ------------ ---------- ------------
</TABLE>

                                       13
<PAGE>
<TABLE>
<CAPTION>

(1)  In 2004, Mr. Klamka was not paid any of his salary,  the total $175,000 has
     been accrued
(2)  In 2003,  Mr.  Klamka was only paid  $11,080 of his salary,  the  remaining
     $88,920 has been accrued.


                               OPTION/SAR GRANTS IN LAST FISCAL YEAR
---------------------------------------------------------------------------------------------------

                                       INDIVIDUAL GRANTS
---------------------------------------------------------------------------------------------------
                  NUMBER OF SECURITIES     PERCENT OF TOTAL
                       UNDERLYING        OPTIONS/SARS GRANTED
                  OPTIONS/SARS GRANTED     TO EMPLOYEES IN      EXERCISE OR BASE
      NAME                (#)                FISCAL YEAR          PRICE ($/SH)     EXPIRATION DATE
---------------- ---------------------- ---------------------- ------------------ -----------------
<S>              <C>                    <C>                    <C>                <C>
  Peter Klamka          -0-                      0%                 $
---------------- ---------------------- ---------------------- ------------------ -----------------
</TABLE>

<TABLE>
<CAPTION>

             AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES
---------------- -------------------- -------------------- ---------------------- ----------------------
                                                            NUMBER OF SECURITIES
                                                                  UNDERLYING       VALUE OF UNEXERCISED
                                                                 UNEXERCISED           IN-THE-MONEY
                                                               OPTIONS/SARS AT        OPTIONS/SARS AT
                                                             FISCAL YEAR END (#)    FISCAL YEAR END ($)
                                                           ---------------------- ----------------------
                  SHARES ACQUIRED ON                            EXERCISABLE/           EXERCISABLE/
      NAME           EXERCISE (#)      VALUE REALIZED ($)       UNEXERCISABLE          UNEXERCISABLE
---------------- -------------------- -------------------- ---------------------- ----------------------
<S>              <C>                  <C>                  <C>                    <C>
  Peter Klamka           -0-                 -0-                1,240,500/-0-           260,505/-0-
---------------- -------------------- -------------------- ---------------------- ----------------------

</TABLE>

COMPENSATION OF DIRECTORS

Directors do not receive  compensation but are reimbursed for their expenses for
each meeting of the board that they attend.

STOCK OPTION PLANS

The Company  adopted the 1998 Stock  Option Plan and the Year 2000 Stock  Option
Plan (the  Plans),  which  provides  for the grant of options to  purchase up to
1,250,000  shares of the  Company's  common stock.  Under these Plans  incentive
stock options may be granted to employees and non-statutory stock options may be
granted to employees and non-employees. During the year ended December 31, 2003,
515,500 options were granted under this plan.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

The following  table sets forth certain  information  regarding our Common Stock
beneficially  owned on March 31,  2004 (i) each person who is known by us to own
beneficially  or exercise  voting or dispositive  control over 5% or more of our
Common Stock, (ii) each Director and (iii) all executive  officers and Directors
as a group. Except as otherwise indicated, all stockholders have sole voting and
investment  power with  respect to the shares  listed as  beneficially  owned by
them, subject to the rights of spouses under applicable community property laws.

                   Number of Shares                                  Percentage
Name and Address   Beneficially Owned           Class                of Class(1)
----------------   ------------------           -----                -----------

Peter Klamka            850,000         Series B preferred stock(2)      100%
                        147,775         Series C preferred stock(3)      100%
                      1,240,500(4)      Common                           6.6%


                                       14
<PAGE>
<TABLE>
<CAPTION>

(1)  Figures based on an estimated 18,577,079 shares of common stock outstanding
     as of December 31, 2005.

(2)  Series B preferred stock is entitled to 10 votes per share.

(3)  Series C preferred stock is entitled to 100 votes per share.

(4)  Includes 1,125,000 currently exercisable options to purchase  1,125,000,000
     shares of the Company's  common stock,  and 115,500  currently  exercisable
     warrants to purchase  115,500  shares of the Company's  common  stock.  The
     number of common  shares  beneficially  owned does not  included  1,884,174
     shares  transferred by Mr. Klamka to a limited  liability company owned and
     controlled by members of Mr. Klamka's family.


EQUITY COMPENSATION PLANS

As of December 31, 2004, our equity compensation plans were as follows:

------------------------------ ---------------------------- --------------------------- -------------------------
                                NUMBER OF SECURITIES TO BE   WEIGHTED AVERAGE EXERCISE
                                 ISSUED UPON EXERCISE OF      PRICE OF OUTSTANDING        NUMBER OF SECURITIES
                                  OUTSTANDING OPTIONS,        OPTIONS, WARRANTS AND      REMAINING AVAILABLE FOR
        PLAN CATEGORY              WARRANTS AND RIGHTS               RIGHTS                  FUTURE ISSUANCE
------------------------------ ---------------------------- --------------------------- -------------------------
<S>                            <C>                          <C>                         <C>
Equity compensation plans
approved by security holders            1,150,000                     $0.10                       None
------------------------------ ---------------------------- --------------------------- -------------------------

Equity compensation plans not
approved by security holders              None                         N/A                        None
------------------------------ ---------------------------- --------------------------- -------------------------

Total                                   1,150,000                     $0.10                       None
------------------------------ ---------------------------- --------------------------- -------------------------
</TABLE>

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

In June 1997, Mr.  Klamka,  the Company's  Chief  Executive  Officer,  purchased
2,117,008  shares of our Common Stock for an aggregate  purchase price,  paid by
delivery of a promissory  note of $2,117.01.  In June 1997 Chris  Giordano,  the
Company's former Chief Operating Officer, purchased 540,340 shares of our Common
Stock for an aggregate purchase price, paid by delivery of a promissory note, of
$540.34.  In June 1997  Michael  Giordano,  the brother of Mr.  Chris  Giordano,
purchased  300,000 shares of our Common Stock for an aggregate  purchase  price,
paid by delivery of a promissory  note, of $300.00.  All three  promissory notes
have been paid in full. Messrs.  Klamka, Chris Giordano and Michael Giordano are
each deemed to be founders and promoters of the Company.

In April 1998, Mr. Klamka provided the Company with a revolving credit line with
a maximum of $500,000  available.  In September  1998, the Board of Directors of
the Company authorized an increase in this line to $610,000, and in November and
December 1998,  further increases to $1,000,000 were authorized.  Loans drawn on
the credit  line bear  interest at a rate of 9% per annum from the date they are
made and are  payable  by May 2001.  Monies  loaned  were  used to make  certain
payments  to Niki  Taylor's  company,  to provide a payment  required  under the
Calendar  Agreement with Claudia Schiffer,  and for working capital.  In January
2000 the then current  balance of $548,500 owed to Mr. Klamka was converted into
110,000 shares of Common Stock.

                                       15
<PAGE>

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K.

(a) Exhibits to this Form 10-KSB:

REGULATION
S-B NUMBER                              EXHIBIT
---------- ---------------------------------------------------------------------
3.1        Certificate of Incorporation  of PTN Media,  Inc. dated as of January
           13, 1998 (1)

3.2        Certificate Of Decrease Of Class A Convertible Preferred Stock

3.3        Certificate Of Decrease of Class A Convertible Preferred Stock

3.4        Certificate Of Designations Of C Convertible Preferred Stock

3.5        By-Laws of PTN Media, Inc. (1)

4.2        PTN Media, Inc. 2000 Stock Option Plan (2)

10.1       Amendment to Palm, Inc. and PTN Media,  Inc.  Agreement of October 5,
           2000 (3)

10.2       License Agreement dated February 19, 2001 between 3 Wishes Production
           f/s/o Christina Aguilera and PTN Media, Inc. (3)

10.3       General  Agreement dated July 28, 2000,  between PTN Media,  Inc. and
           NeoHand, Inc. (4)

10.4       Partnering  Agreement dated October 27, 2000, between PTN Media, Inc.
           and TWEC.com, LLC (4)

10.5       Palm, Inc. OEM Partner  Agreement  dated October 5, 200,  between PTN
           Media, Inc. and Palm, Inc. (4)

10.6       Merchant and Partner Network Agreement dated May 8, 2000, between PTN
           Media, Inc. and Dynamic Trade Inc. (4)

10.7       License  Agreement dated January 4, 2001 between PTN Media,  Inc. and
           Michael Jordan (5)

10.8       License Supply and Distributor  Agreement between PTN Media, Inc. and
           Motorola, Inc. dated February 25, 2002 (6)

10.9       License Amendment between PTN Media, Inc. and Christina Aguilera (6)

21.1       List of Legend Mobile Subsidiaries (7)

31.1       Rule 13a-14(a)  Certification  of Chief  Executive  Officer and Chief
           Financial Officer (7)

32.1       Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant
           to Section 906 of the  Sarbanes-Oxley  Act of 2002 of Chief Executive
           Officer and Chief Financial Officer (7)

41.1       Consent of Independent Certified Public Accountants (7)


(1)  Incorporated by reference from the Company's Registration Statement on Form
     SB-2 (File #333-51933).

(2)  Incorporated  by reference from the Company's  Definitive  Proxy  Statement
     filed on July 24, 2000.

                                       16
<PAGE>

(3)  Incorporated  by reference  from the  Company's  Form 10-KSB for the fiscal
     year ended December 31, 2000.

(4)  Incorporated by reference from the Company's Registration Statement on Form
     S-3 filed on December 11, 2000.

(5)  Incorporated  by reference  from the  Company's  Form 8-K filed  January 9,
     2001.

(6)  Incorporated  by reference  from the Company's  Form 10-KSB filed April 16,
     2002

(7)  Filed herewith.

(b)  Reports on Form 8-K

None

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

AUDIT FEES

For the audited  fiscal years ended  December 31, 2004 and 2003,  our  principal
accountants  have  billed  approximately  $45,000  and  approximately   $40,000,
respectively,  for the audit of our annual financial  statements and Form 10-KSB
and review of financial statements included in our Form 10-QSB filings.

AUDIT-RELATED FEES

There were no fees billed for services  reasonably related to the performance of
the audit or review of our financial  statements outside of those fees disclosed
above under "Audit Fees" for fiscal years 2004 and 2003.

TAX FEES

There were not fees  billed for the fiscal  years  ended  December  31, 2004 and
2003, for tax compliance, tax advice, and tax planning services.

ALL OTHER FEES

There were no fees billed for services by our principal  accountant,  other than
those disclosed above.

PRE-APPROVAL POLICIES AND PROCEDURES

Prior to engaging our accountants to perform a particular service,  our board of
directors obtains an estimate for the service to be performed.



                                       17
<PAGE>



                                   SIGNATURES

In  accordance  with  Section 13 or 15(d) of the Exchange  Act,  the  registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                   LEGEND MOBILE, INC.



Date:   May 16, 2005               By:   /s/ Peter Klamka
                                       -----------------------------------------
                                       Peter Klamka, Chairman, President,
                                       Secretary and Chief Executive Officer


In  accordance  with the Exchange  Act, this report has been signed below by the
following  persons on behalf of the  registrant and in the capacities and on the
dates indicated.

      SIGNATURE                       TITLE                         DATE
      ---------                       -----                         ----

/s/ Peter Klamka               Chairman, President,             May 16, 2005
---------------------          Secretary and
Peter Klamka                   Chief Executive Officer
                               (Principal Executive
                               and Accounting Officer)



                                       18
<PAGE>


                      Legend Mobile, Inc. and Subsidiaries
                        Consolidated Financial Statements
                     Years Ended December 31, 2004 and 2003



                                    Contents

                                                                          Page
                                                                          ----

Report of Independent Registered Public Accounting Firm                   F-1

Financial Statements:

     Consolidated Balance Sheet as of December 31, 2004                   F-2

     Consolidated Statements of Operations for the years ended
          December 31, 2004 and 2003                                      F-3

     Consolidated Statement of Stockholders' Deficit for the years
          ended December 31, 2004 and 2003                                F-4

     Consolidated Statements of Cash Flows for the years ended
          December 31, 2004 and 2003                                   F-5 - F-6

     Notes to Consolidated Financial Statements                           F-7



                                       19
<PAGE>

E. Randall Gruber, CPA, PC
================================================================================
Certified Public Accountant
10805 Sunset Office Drive
St. Louis, Missouri  63127

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
             -------------------------------------------------------

To the Stockholders
Legend Investment Corporation
Ann Arbor, Michigan

We have audited the  accompanying  consolidated  balance  sheet of Legend Mobile
Inc.  and  subsidiaries  as of December  31,  2004 and the related  consolidated
statements  of  operations,  stockholders'  deficit and cash flows for the years
ended  December  31,  2004  and  2003.   These  financial   statements  are  the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements based on our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all  material  respects,  the  financial  position  of Legend  Mobile  Inc.  and
subsidiaries  as of  December  31,  2004 and the  consolidated  results of their
operations  and their cash flows for the years ended December 31, 2004 and 2003,
in conformity with accounting principles generally accepted in the United States
of America.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company will  continue as a going  concern.  As discussed in Note 1, the Company
has incurred  significant  net losses since its  inception,  has no  substantial
source of material revenue and has a working capital  deficit.  These conditions
raise  substantial  doubt  about the  Company's  ability to  continue as a going
concern.  Management's  plans in regard to these  matters are also  described in
Note 1. The  financial  statements  do not  include any  adjustments  that might
result from the outcome of this uncertainty.


E. Randall Gruber, CPA, PC
Certified Public Accountant

St. Louis, Missouri
May 12, 2005

                                      F-1

<PAGE>
<PAGE>
<TABLE>
<CAPTION>

                      Legend Mobile, Inc. and Subsidiaries

                           Consolidated Balance Sheet


                                                                      December 31,
                                                                          2004
                                                                      ------------
<S>                                                                   <C>

                                     ASSETS

CURRENT ASSETS:
     Cash                                                             $      1,518
                                                                      ------------
TOTAL CURRENT ASSETS                                                         1,518
                                                                      ------------

FIXED ASSETS, NET                                                            2,439
GOODWILL                                                                    48,188
                                                                      ------------
TOTAL ASSETS                                                          $     52,145
                                                                      ============


                      LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES:
     Accounts payable                                                      181,636
     Accrued expenses (including related party of $288,920)              1,014,517
     Accrued interest (including related party of $15,278)                 294,233
     Advances from officer                                                  19,163
     License fees payable                                                  200,000
     Notes payable                                                         676,250
     Note payable - officer                                                291,000
                                                                      ------------
TOTAL CURRENT LIABILITIES                                                2,676,799
                                                                      ------------

MINORITY INTEREST (Note 1)                                                    --

STOCKHOLDERS' DEFICIT
     Series A Preferred Stock; $0.001 par value; 1,000,000 shares
       authorized; 2,225 shares issued and outstanding                          22
     Series B Convertible Preferred Stock, $0.01 par value; 850,000
       shares authorized; 850,000 shares issued and outstanding              8,500
     Series C Convertible Preferred Stock, $0.01 par value; 147,775
       shares authorized; 147,775 shares issued and outstanding              1,478
     Common stock; $0.001 par value; 20,000,000 shares
       authorized; 16,513,721 shares issued and outstanding                 16,513
     Additional paid-in capital                                         15,458,305
     Stock subscription receivable                                        (156,300)
     Accumulated deficit                                               (17,953,172)
                                                                      ------------
TOTAL STOCKHOLDERS' DEFICIT                                             (2,624,654)
                                                                      ------------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT                           $     52,145
                                                                      ============

</TABLE>

                 The accompanying notes are an integral part of
                     these consolidated financial statements

                                       F-2
<PAGE>

                      Legend Mobile, Inc. and Subsidiaries

                      Consolidated Statements of Operations


                                                     Year Ended
                                            ----------------------------
                                            December 31,    December 31,
                                                2004            2003
                                            ------------    ------------

REVENUE                                     $     18,208    $      7,525

COST OF REVENUE                                     --             1,497
                                            ------------    ------------
GROSS PROFIT (LOSS)                               18,208           6,028
                                            ------------    ------------

EXPENSES:
     Selling, general and administrative       1,271,177       1,255,016
                                            ------------    ------------
TOTAL EXPENSES                                 1,271,177       1,255,016
                                            ------------    ------------

LOSS FROM OPERATIONS                          (1,252,969)     (1,248,988)

OTHER INCOME (EXPENSES):
     Interest expense and financing costs       (182,268)       (222,255)
     Equity loss in Legend Credit, Inc.          (36,458)         (8,002)
     Other income                                112,500            --
                                            ------------    ------------
TOTAL OTHER EXPENSES                            (106,226)       (230,257)
                                            ------------    ------------

LOSS FROM CONTINUING OPERATIONS             $ (1,359,195)   $ (1,479,245)

LOSS FROM DISCONTINUED OPERATIONS                (57,264)           --
                                            ------------    ------------

NET LOSS                                      (1,416,459)     (1,479,245)
                                            ============    ============

BASIC AND DILUTED LOSS PER COMMON SHARE
  LOSS FROM CONTINUING OPERATIONS           $      (0.09)   $      (0.15)
                                            ============    ============
  NET LOSS                                  $      (0.09)   $      (0.15)
                                            ============    ============


WEIGHTED AVERAGE NUMBER OF
  COMMON SHARES OUTSTANDING -
  BASIC AND DILUTED                           15,567,472       9,557,805
                                            ============    ============




                 The accompanying notes are an integral part of
                    these consolidated financial statements

                                       F-3
<PAGE>
<TABLE>
<CAPTION>

                      Legend Mobile, Inc. and Subsidiaries

                 Consolidated Statement of Stockholders' Deficit

                 For the Years Ended December 31, 2004 and 2003


                                                                  Preferred Stock
                             ---------------------------------------------------------------------------------------
                                      Series A                      Series B                      Series C
                             ---------------------------   ---------------------------   ---------------------------
                                Shares         Amount         Shares         Amount         Shares         Amount
                             ------------   ------------   ------------   ------------   ------------   ------------
<S>                          <C>            <C>            <C>            <C>            <C>            <C>
Balance, December 31, 2002          2,350   $         24           --     $       --             --     $       --

Shares issued in payment
 of professional fees                --             --             --             --             --             --
Shares issued in private
 placement, net                      --             --             --             --             --             --
Shares issued for
 financing costs                     --             --             --             --             --             --
Conversion of Series A
 preferred stock to
 common stock                        (125)            (2)          --             --             --             --
Issuance of Series B
 preferred stock for
 contribution of assets to
 Legend Credit, Inc.                 --          850,000          8,500           --             --             --
Fair value of warrants
 issued in connection with
 notes payable                       --             --             --             --             --             --
Fair value of warrants
 issued as penalty                   --             --             --             --             --             --
Fair value of warrants
 issued in connection with
 professional services               --             --             --             --             --             --
Repricing of vested
 options and warrants                --             --             --             --             --             --
Net loss                             --             --             --             --             --             --
                             ------------   ------------   ------------   ------------   ------------   ------------
Balance, December 31, 2003          2,225             22        850,000          8,500           --             --

Shares issued in payment
 of professional fees                --             --             --             --             --             --
Fair value of warrants
 issued as penalty                   --             --             --             --             --             --
Issuance of Series C
 preferred stock for
 contribution of
 additional ownership of
 Legend Credit, Inc.                 --             --             --             --          147,775          1,478
Repricing of vested
 options and warrants                --             --             --             --             --             --
Transfer of profit
 participation obligation            --
 to equity                           --             --             --             --             --             --

Net loss                             --             --             --             --             --             --
                             ------------   ------------   ------------   ------------   ------------   ------------
Balance, December 31, 2004          2,225   $         22        850,000   $      8,500        147,775   $      1,478
                             ============   ============   ============   ============   ============   ============

                                     Common Stock           Additional
                             ---------------------------      Paid-in      Shareholder    Accumulated
                                Shares         Amount         Capital      Receivable       Deficit        Total
                             ------------   ------------   ------------   ------------   ------------   ------------
Balance, December 31, 2002      8,579,936   $      8,580   $ 12,456,623   $   (156,300)  $(15,057,468)  $ (2,748,541)

Shares issued in payment
 of professional fees           3,264,670          3,264        962,273           --             --          965,537
Shares issued in private
 placement, net                   126,250            126         36,874           --             --           37,000
Shares issued for
 financing costs                   68,873             69         15,083           --             --           15,152
Conversion of Series A
 preferred stock to
 common stock                       2,500              3             (1)          --             --             --
Issuance of Series B
 preferred stock for
 contribution of assets to
 Legend Credit, Inc.                 --             --            6,300           --             --           14,800
Fair value of warrants
 issued in connection with
 notes payable                       --             --           24,890           --             --           24,890
Fair value of warrants
 issued as penalty                   --             --           13,685           --             --           13,685
Fair value of warrants
 issued in connection with
 professional services               --             --            2,429           --             --            2,429
Repricing of vested
 options and warrants                --             --           66,655           --             --           66,655
Net loss                             --             --             --             --       (1,479,245)    (1,479,245)
                             ------------   ------------   ------------   ------------   ------------   ------------
Balance, December 31, 2003     12,042,229         12,042     13,584,811       (156,300)   (16,536,713)    (3,087,638)

Shares issued in payment
 of professional fees           4,471,492          4,471        976,329           --             --          980,800
Fair value of warrants
 issued as penalty                   --             --            7,443           --             --            7,443
Issuance of Series C
 preferred stock for
 contribution of
 additional ownership of
 Legend Credit, Inc.                 --             --            2,222           --             --            3,700
Repricing of vested
 options and warrants                --             --         (112,500)          --             --         (112,500)
Transfer of profit
 participation obligation
 to equity                           --             --        1,000,000           --             --        1,000,000

Net loss                             --             --             --             --       (1,416,459)    (1,416,459)
                             ------------   ------------   ------------   ------------   ------------   ------------
Balance, December 31, 2004     16,513,721   $     16,513   $ 15,458,305   $   (156,300)  $(17,953,172)  $ (2,624,654)
                             ============   ============   ============   ============   ============   ============

</TABLE>

                 The accompanying notes are an integral part of
                     these consolidated financial statements

                                       F-4


<PAGE>
<TABLE>
<CAPTION>

                      Legend Mobile, Inc. and Subsidiaries

                      Consolidated Statements of Cash Flows

                                                                                Year Ended
                                                                       ----------------------------
                                                                       December 31,    December 31,
                                                                           2004            2003
                                                                       ------------    ------------
<S>                                                                    <C>             <C>
CASH FLOW FROM OPERATING ACTIVITIES FROM CONTINUING OPERATIONS:
   Net loss                                                            $ (1,359,195)   $ (1,479,245)
   Adjustment to reconcile net loss to net cash
     used in operating activities:
       Depreciation                                                           2,361           4,865
       Issuance of shares for license fees/services                         980,800         965,537
       Issuance of shares for financing costs                                  --            15,152
       Issuance of warrants for services/financing costs                      7,443          41,004
       Repricing of options and warrants                                   (112,500)         66,655
       Write down of prepaid operating agreement                             37,500            --
       Equity loss in Legend Credit, Inc.                                    36,458           8,002
   Changes in operating assets and liabilities:
     Accounts receivable                                                     13,748            --
     Deposits and prepaid expenses                                           12,500           2,226
     Other receivables                                                         --            30,610
     Accounts payable                                                         6,369         (35,616)
     Accrued expenses                                                       207,810         202,193
     Accrued interest                                                        94,278          78,999
                                                                       ------------    ------------
Net cash used in operating activities from continuing operations            (72,428)        (99,618)
                                                                       ------------    ------------

CASH FLOW FROM INVESTING ACTIVITIES FROM CONTINUING OPERATIONS:
   Payment for operating agreement                                          (50,000)           --
   Advances to Legend Credit, net                                           (89,136)           --
                                                                       ------------    ------------
Net cash used in investing activities from continuing operations           (139,136)           --
                                                                       ------------    ------------

CASH FLOW FROM FINANCING ACTIVITIES FROM CONTINUING OPERATIONS:
   Change in cash overdraft                                                    --              (131)
   Advances from officer, net                                               269,687          40,476
   Advances from related party                                                 --             2,932
   Proceeds from issuance of notes payable                                     --            20,000
   Proceeds from private placement offerings of common stock                   --            37,000
                                                                       ------------    ------------
Net cash provided by financing activities from continuing operations        269,687         100,277
                                                                       ------------    ------------

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                             58,123             659

NET CASH USED IN DISCONTINUED OPERATIONS                                    (57,264)           --

CASH, Beginning of year                                                         659            --
                                                                       ------------    ------------

CASH, End of year                                                      $      1,518    $        659
                                                                       ============    ============

</TABLE>

                 The accompanying notes are an integral part of
                     these consolidated financial statements

                                       F-5
<PAGE>

                      Legend Mobile, Inc. and Subsidiaries

                Consolidated Statements of Cash Flows (Continued)


Supplemental Schedule of Non-Cash Investing and Financing Activities:

         During 2004,  (i) the Company issued  4,471,492  shares of common stock
         for professional  services valued at $980,800,  (ii) the Company issued
         72,000  warrants to an investor as a penalty for paying the note on its
         due date valued at $7,443, (iii) the Company recognized other income of
         $112,500  as a result of change in the  value of  repriced  option  and
         warrants,   (iv)  the  Company   issued  147,775  shares  of  Series  C
         convertible  preferred  stock valued at $3,700 to the  Company's CEO in
         exchange for his additional  contribution  of a 10% ownership of Legend
         Credit,  Inc.,  and (v) the Company  transferred  a  $1,000,000  profit
         participation obligation to equity.

         During 2003,  (i) the Company issued  3,264,670  shares of common stock
         for professional  services valued at $965,537,  (ii) the Company issued
         2,500  shares of common  stock in  exchange  for 125 shares of Series A
         Preferred Stock, (iii) the Company issued 68,873 shares of common stock
         for financing costs valued at $15,083,  (iv) the Company issued 100,000
         warrants  as  interest  on a 45 day note  payable  whose  fair value is
         estimated to be $24,890,  (v) the Company issued 72,000  warrants to an
         investor  as a penalty  for paying  the note on its due date  valued at
         $13,685,  (vi) the Company  issued  25,000  warrants  for  professional
         services valued at $2,429,  (vii) the Company  repriced  800,000 option
         and  warrants  and took a charge to  earnings of $66,655 as a result of
         this repricing,  and (viii) the Company issued 850,000 shares of Series
         B convertible preferred stock valued at $14,800 to the Company's CEO in
         exchange for the contribution of certain assets to Legend Credit, Inc.







                                      F-6
<PAGE>


Note 1 - Organization and Significant Accounting Policies

         Organization and Lines of Business
         ----------------------------------

         Legend Mobile,  Inc.,  formerly,  PTN Media, Inc. (the "Company"),  was
         incorporated  in Delaware on January 13, 1998 and is the  successor  to
         Interactive  Entertainment  Studio, Inc. (IES). IES was incorporated in
         the State of Nevada on May 27,  1997 and was merged into the Company in
         March 1998 for the sole purpose of changing the domicile of the Company
         to Delaware.  This merger was  retroactively  reflected in the December
         31, 1997  financial  statements.  On June 27, 2002, the Company filed a
         Certificate of Amendment to its Certificate of  Incorporation  to amend
         the Company's Certificate of Incorporation name from PTN Media, Inc. to
         Legend Mobile, Inc.

         The  Company  is a  developer  and  marketer  of branded  mobile  phone
         products,  including faceplates,  phone accessories,  SMS services, and
         mobile data  applications.  Through the Company's 50% owned subsidiary,
         Legend Credit,  Inc.,  (formerly PTN Wireless,  Inc. ("Legend Credit"),
         the Company  also  develops and markets  stored value cards,  including
         gift cards bearing the Visa and MasterCard logo.  Effective  October 1,
         2004,  Mr.  Klamka,  the Company's CEO and 60% owner of Legend  Credit,
         contributed an additional 10% interest in Legend Credit to the Company.
         Legend  Credit  currently  markets  the Hello  Kitty  reloadable  debit
         MasterCard   card.   The   Hello   Kitty   card   is   sold   via   the
         www.hellokittycard.com.  Hello  Kitty  is one of  the  most  recognized
         animated  characters  in the world.  The  Company's  Hello  Kitty Debit
         MasterCard  card  generate  revenue by charging  cardholders a suite of
         fees including an initial  processing fee of up to $14.95,  a per month
         fee of up to  $2.95  and  an ATM  withdrawal  fee of up to  $1.50.  The
         Company  derives  limited  revenues  from the sale of covers for mobile
         phones.  The Company's  suppliers require it to purchase these products
         and resell them to  consumers  and  wholesalers.  The  Company  created
         products  under its licenses from athletes,  entertainers,  and popular
         trademarks.  The Company  also sells a  NASCAR-themed,  SMS-based  text
         messaging service called "Racemobile.com".  The Company also is seeking
         to sell mobile application software either via over-the-air download or
         bundled with a particular mobile phone.  These applications may be sold
         as a subscription or as a single download. The Company has entered into
         an  agreement  with the  American  Society of  Composers,  Authors  and
         Publishers  ("ASCAP") for the licensing of ringtones for mobile phones.
         ASCAP maintains the rights to 8 million copyrighted musical works.

         In February  2001,  the Company  formed Legend Credit as a wholly owned
         subsidiary.  On April 1, 2003,  Mr. Peter  Klamka,  CEO of the Company,
         contributed  the rights to an affinity  credit card business  valued at
         $37,000 to Legend Credit. Mr. Klamka's contribution has been determined
         pursuant to Accounting  Principles  Board Opinion No. 29,  "Nonmonetary
         Transactions,"  using his cost  basis in the  investment,  which is the
         most readily  determinable  cost.  In exchange  for this  contribution,
         Legend  Credit  issued  to Mr.  Peter  Klamka  60% of  the  issued  and
         outstanding shares of Legend Credit common stock and the Company issued
         to Mr. Klamka 850,000 shares of Series B convertible  preferred  stock.
         These issuances were valued at $22,200 and $14,800,  respectively.  The
         Company  retains a 40%  minority  interest  in Legend  Credit  which is
         accounted for using the equity method.  Effective  October 1, 2004, Mr.
         Klamka  contributed  an additional 10% interest in Legend Credit to the
         Company at was valued at $3,700 (10% of $37,000,  the original value of
         the affinity credit card business).

         In July 1999,  the  Company  formed,  Legend  Studios,  Inc.  (formerly
         FragranceDirect.com,   Inc.)  ("Legend  Studios"),   a  majority  owned
         subsidiaries.  Through this entity, the Company sold fragrance products
         over the Internet.  On June 28, 2004,  the Company,  through its Legend
         Studios  subsidiary,  entered  into a  definitive  agreement  to  begin
         operating seven radio stations owned by Quorum Radio Partners, Inc. and
         Quorum  Radio  Partners  of  Virginia,  Inc.  Under  the  terms  of the
         agreement,  Legend Studios will operate for a 12-month term,  beginning
         July 1, 2004,  seven  stations  located in Virginia,  West Virginia and
         Missouri.  Legend  Studios paid  $50,000  pursuant to the terms of this
         agreement to operate the ratio stations  which is being  amortized over
         for a 12-month  period.  In the 4th quarter of 2004, the Company claims
         that the  owners of the radio  stations  failed to honor the  operating
         agreement  by  failing  to allow  the  Company  to  control  the  radio
         stations. As a result, the Company has expensed the unamortized portion
         of  the  $50,000  payment  pursuant  to  the  operating  agreement  and
         discontinued the recognition of revenue since the Company was no longer
         able to control the radio operations. (See Note 11).

                                       F-7
<PAGE>

         Basis of Presentation
         ---------------------

         The accompanying  consolidated  financial statements have been prepared
         in conformity  with  accounting  principles  generally  accepted in the
         United States of America, which contemplate continuation of the Company
         as a going concern.  The Company incurred a net loss for the year ended
         December  31, 2004 of  $1,416,459  and at  December  31,  2004,  had an
         accumulated  deficit of $17,953,172  and a working  capital  deficit of
         $2,675,281. In addition, the Company generates minimal revenue from its
         operations and is in default on the payment of note payable and license
         fee payable obligations. These conditions raise substantial doubt as to
         the  Company's   ability  to  continue  as  a  going   concern.   These
         consolidated  financial  statements do not include any adjustments that
         might result from the outcome of this uncertainty.  These  consolidated
         financial  statements  do not include any  adjustments  relating to the
         recoverability and classification of recorded asset amounts, or amounts
         and  classification  of liabilities  that might be necessary should the
         Company be unable to continue as a going concern.

         The Company plans to take the following  steps that it believes will be
         sufficient  to provide  the  Company  with the  ability to  continue in
         existence.  The Company,  through its subsidiary,  Legend Credit, Inc.,
         continues  to sell  branded  debit  cards.  The Company is also seeking
         additional  equity  capital to expand its cellular  phones  faceplates,
         mobile data services, and mobile applications business.

         Principles of Consolidation
         ---------------------------

         The accompanying consolidated financial statements include the accounts
         of the Company and its 91%-owned subsidiary, Legend Studios and its 50%
         owned subsidiary, Legend Credit.

         Stock Based Compensation
         ------------------------

         SFAS No. 123,  "Accounting for Stock-Based  Compensation,"  establishes
         and encourages the use of the fair value based method of accounting for
         stock-based compensation  arrangements under which compensation cost is
         determined using the fair value of stock-based  compensation determined
         as of the date of grant and is recognized over the periods in which the
         related services are rendered.  The statement also permits companies to
         elect to continue using the current  intrinsic value accounting  method
         specified  in  Accounting  Principles  Board  ("APB")  Opinion  No. 25,
         "Accounting  for Stock Issued to Employees," to account for stock-based
         compensation.  The Company has elected to use the intrinsic value based
         method and has  disclosed  the pro forma effect of using the fair value
         based  method to account  for its  stock-based  compensation  issued to
         employees. For options granted to employees where the exercise price is
         less than the fair value of the stock at the date of grant, the Company
         recognizes an expense in accordance with APB 25. For non-employee stock
         based compensation the Company recognizes an expense in accordance with
         SFAS No. 123 and values the equity  securities  based on the fair value
         of the security on the date of grant. For stock-based  awards the value
         is based on the market  value for the stock on the date of grant and if
         the stock has restrictions as to transferability a discount is provided
         for lack of  tradability.  Stock  option  awards are  valued  using the
         Black-Scholes option-pricing model.

         If the Company had elected to recognize compensation expense based upon
         the fair value at the grant date for awards under the Stock Option Plan
         consistent  with  the  methodology  prescribed  by SFAS  No.  123,  the
         Company's net loss and loss per share would be reduced to the pro forma
         amounts indicated below for the year ended December 31, 2004 and 2003:

                                                         2004          2003
                                                     -----------   -----------
         Net loss
           As reported                               $(1,416,459)  $(1,479,245)
           Compensation recognized under APB 25                -        66,655
           Compensation recognized under SFAS 123              -      (103,965)
                                                     -----------   -----------
                      Pro forma                      $(1,416,555)  $(1,516,555)
                                                     ===========   ===========
         Basic and diluted loss per common share:
           As reported                               $     (0.09)  $     (0.15)
           Pro forma                                 $     (0.09)  $     (0.16)

                                       F-8
<PAGE>

         The fair value for these  options  was  estimated  at the date of grant
         using  a   Black-Scholes   option  pricing  model  with  the  following
         weighted-average  assumptions for 2003:  risk-free interest rate of 3.5
         %; dividend  yields of 0%;  volatility  factors of the expected  market
         price of the  Company's  common stock of 134%;  and a weighted  average
         expected life of the option of 3 years. In 2003, the Company recognized
         an expense of $2,429 related to options issued to non-employees.

         Use of Estimates
         ----------------

         The preparation of consolidated financial statements in conformity with
         accounting  principles  generally  accepted  in the  United  States  of
         America  requires  management to make  estimates and  assumptions  that
         affect the reported  amounts of assets and  liabilities and disclosures
         of contingent  assets and  liabilities at the date of the  consolidated
         financial  statements and the reported  amounts of revenue and expenses
         during the reporting periods. As of December 31, 2004, the Company used
         estimates  in   determining   the  value  of  common  stock  issued  to
         consultants  for  services.  Actual  results  could  differ  from these
         estimates.

         Fair Value of Financial Instruments
         -----------------------------------

         For certain of the Company's  financial  instruments,  including  cash,
         accounts  payable,  accrued  expenses,  accrued  interest,  license fee
         payable and advances from  officer,  the carrying  amounts  approximate
         fair value due to their short  maturities.  The amounts shown for notes
         payable also  approximate fair value because current interest rates and
         terms  offered to the Company for similar  debt are  substantially  the
         same.

         Cash and Cash Equivalents
         -------------------------

         For purposes of the statements of cash flows,  the Company defines cash
         equivalents  as all highly  liquid debt  instruments  purchased  with a
         maturity of three months or less, plus all certificates of deposit.

         Concentration of Credit Risk
         ----------------------------

         Financial  instruments,   which  potentially  subject  the  Company  to
         concentrations of credit risk,  consist of cash. The Company places its
         cash with high quality  financial  institutions and at times may exceed
         the FDIC $100,000  insurance limit. The Company extends credit based on
         an evaluation of the customer's financial condition,  generally without
         collateral.  Exposure to losses on receivables is principally dependent
         on each  customer's  financial  condition.  The  Company  monitors  its
         exposure for credit losses and  maintains  allowances  for  anticipated
         losses, as required.

         Fixed Assets
         ------------

         Fixed  assets are  recorded  at cost.  Depreciation  is  provided  on a
         straight-line  basis  over  estimated  useful  lives of the  assets  as
         follows:

                  Computer equipment        3 years
                  Furniture and fixtures    5 years

         Expenditures  for  maintenance and repairs are charged to operations as
         incurred  while renewals and  betterments  are  capitalized.  Gains and
         losses on disposals are included in the results of operations.

         Impairment of Long-Lived Assets
         -------------------------------

         In  October  2001,  the FASB  issued  SFAS  No.  144,  "Accounting  for
         Impairment or Disposal of Long-Lived Assets", which supersedes SFAS No.
         121,  "Accounting  for the  Impairment  of  Long-Lived  Assets  and for
         Long-Lived  Assets to Be Disposed Of", and the accounting and reporting
         provision   of  APB   Opinion   No.   30,"Reporting   the   Results  of
         Operations-Reporting  the  Effects  of  Disposal  of  a  Segment  of  a
         Business, and Extraordinary,  Unusual and Infrequently Occurring Events
         and  Transactions",  for the disposal of a segment of a business.  This

                                       F-9
<PAGE>

         statement also amends ARB No. 51, "Consolidated  Financial Statements",
         to eliminate the exception to consolidation  for a subsidiary for which
         control is likely to be impaired. SFAS No. 144 requires that long-lived
         assets  to be  disposed  of by sale,  including  those of  discontinued
         operations,  be measured at the lower of carrying  amount or fair value
         less cost to sell,  whether  reported in  continuing  operations  or in
         discontinued  operations.  SFAS  No.  144  broadens  the  reporting  of
         discontinued  operations  to include all  components  of an entity with
         operations  that can be  distinguished  from the rest of the entity and
         that will be eliminated from the ongoing  operations of the entity in a
         disposal  transaction.  SFAS No. 144 also establishes a "primary-asset"
         approach to determine  the cash flow  estimation  period for a group of
         assets and  liabilities  that  represents  the unit of accounting for a
         long-lived asset to be held and used. The Company's  adoption effective
         January  1,  2002  did not  have a  material  impact  to the  Company's
         financial position or results of operations.

         Intangible Assets
         -----------------

         Intangible  assets  consist of goodwill  acquired  with the increase in
         ownership of Legend Credit. In accordance with SFAS No. 142,  "Goodwill
         and Other Intangible  Assets," the Company evaluates  intangible assets
         and other long-lived assets for impairment, at least on an annual basis
         and  whenever  events or changes  in  circumstances  indicate  that the
         carrying  value may not be recoverable  from its estimated  future cash
         flows.  Recoverability of intangible assets and other long-lived assets
         is measured by comparing their net book value to the related  projected
         undiscounted  cash  flows from these  assets,  considering  a number of
         factors   including   past   operating   results,   budgets,   economic
         projections,  market trends and product  development cycles. If the net
         book value of the asset  exceeds the related  undiscounted  cash flows,
         the asset is  considered  impaired,  and a second test is  performed to
         measure the amount of impairment loss.

         Revenue Recognition
         -------------------

         The  Company  generates  revenue  from the sale of  products on its web
         sites and through other channels,  the sale of  advertisements on radio
         stations it operated and service fees from the sale of debit cards. The
         Company  recognizes revenue for these product sales when the product is
         shipped to the customer.  The Company recognizes revenue from the radio
         stations  it  operated  when  advertisements  were  aired.  The Company
         recognizes service fee revenue from the sale of debit cards at the time
         the customer is sent the debit card.  Shipping  and handling  costs are
         recorded as revenue and related costs are charged to cost of sales.

         Income Taxes
         ------------

         The Company  accounts for income taxes in accordance with SFAS No. 109,
         "Accounting  for Income  Taxes."  Deferred  taxes are  provided  on the
         liability  method  whereby  deferred  tax  assets  are  recognized  for
         deductible  temporary  differences,  and deferred tax  liabilities  are
         recognized for taxable temporary differences. Temporary differences are
         the differences  between the reported amounts of assets and liabilities
         and their tax bases.  Deferred  tax assets are  reduced by a  valuation
         allowance  when, in the opinion of  management,  it is more likely than
         not  that  some  portion  or all of the  deferred  tax  assets  will be
         realized.  Deferred  tax assets and  liabilities  are  adjusted for the
         effects of changes in tax laws and rates on the date of enactment.

         Earnings (Loss) Per Share
         -------------------------

         The Company  reports  earnings (loss) per share in accordance with SFAS
         No. 128,  "Earnings  per  Share."  Basic  earnings  (loss) per share is
         computed by dividing income (loss) available to common  shareholders by
         the  weighted  average  number  of  common  shares  available.  Diluted
         earnings (loss) per share is computed  similar to basic earnings (loss)
         per share  except  that the  denominator  is  increased  to include the
         number of additional  common shares that would have been outstanding if
         the  potential  common  shares had been  issued  and if the  additional
         common shares were dilutive.  Diluted earnings (loss) per share has not
         been  presented  since the effect of the assumed  conversion of options
         and  warrants to purchase  common  shares  would have an  anti-dilutive
         effect.  The following  potential common shares have been excluded from
         the  computation  of  diluted  net loss per  share  for the year  ended

                                      F-10
<PAGE>
<TABLE>
<CAPTION>

         December  31,  2004  and  2003  because  the  effect  would  have  been
         anti-dilutive:
                                                                  2004          2003
                                                              -----------   -----------
<S>                                                           <C>           <C>
         Conversion of Series A preferred stock                    44,500        44,500
         Conversion of Series B convertible preferred stock     8,500,000     8,500,000
         Conversion of Series C convertible preferred stock    14,777,500          --
         Stock options issued to employees and consultants
             under the Company's stock option plan              1,150,000     1,150,000
         Stock options issued outside of plan                        --            --
         Warrants issued to officers                              231,000       231,000
         Warrants issued for services                              50,000       450,000
         Warrants issued with notes                               100,000        80,000
         Warrants issued for penalty/interest                     234,000       262,000
         Warrants issued with note conversion                     300,000       500,000
                                                              -----------   -----------
                                                               25,387,000    11,217,500
</TABLE>

         Comprehensive Loss
         ------------------

         SFAS No. 130, "Reporting Comprehensive Loss," establishes standards for
         the reporting and display of comprehensive income and its components in
         the  financial  statements.  For the year ended  December  31, 2004 and
         2003,  the  Company  does  not  have  items  that   represented   other
         comprehensive  income  and,  accordingly,   has  not  included  in  the
         statement of stockholders' equity the change in comprehensive loss.

         Minority Interest
         -----------------

         Minority interest represents the minority  shareholders'  proportionate
         share of the equity of Legend  Studios.  During the year ended December
         31, 2000, the Company sold 410,000 or 17% of the common stock of Legend
         Studios.  Legend Studios,  on a stand-alone  basis, had a shareholders'
         deficit. As a result, the Company's  investment in Legend Studios had a
         negative  carrying  value.  The  increase in  capitalization  of Legend
         Studios  resulting  from the sale of 410,000  shares of common stock to
         outside investors benefited the Company in that it reduced the negative
         carrying  value  of  the  Company's   investment  in  Legend   Studios.
         Accordingly,   the  Company  has   accounted  for  the  change  in  its
         proportionate  share  of  Legend  Studios'  equity  resulting  from the
         issuance of stock to outside  investors as an increase in shareholders'
         equity  and  a  reduction  in  minority   interest   liability  in  the
         consolidated  financial  statements.  During 2001,  three of the Legend
         Studios shareholders  exchanged 173,999 shares of Legend Studios common
         stock for 173,999  shares of the Company's  common stock.  During 2002,
         one of the Legend Studios shareholders exchanged 1,000 shares of Legend
         Studios  common stock for 1,000 shares of the  Company's  common stock.
         The  accompanying  consolidated  financial  statements do not reflect a
         minority interest  liability as of December 31, 2004 as Legend Studios,
         on a stand-alone  basis,  had a stockholders'  deficit as of such date.
         The  accompanying  consolidated  statements of operations for the years
         ended December 31, 2004 and 2003 do not reflect the minority interest's
         share of Legend  Studios'  losses for said years as the related accrual
         would  result  in the  Company's  recordation  of a  minority  interest
         receivable.

         In addition,  during the year ended  December 31, 2004,  the  Company's
         ownership in Legend  Credit  increased to 50%  resulting in the Company
         consolidating  the  financial  statement  of  Legend  Credit  with  the
         Company.  The  accompanying  consolidated  financial  statements do not
         reflect a minority interest liability as of December 31, 2004 as Legend
         Credit, on a stand-alone basis, had a stockholders'  deficit as of such
         date. The  accompanying  consolidated  statements of operations for the
         year ended  December  31, 2004 do not reflect the  minority  interest's
         share of Legend  Credits'  losses for 2004 as the related accrual would
         result in the Company's recordation of a minority interest receivable.

                                      F-11
<PAGE>

         Reclassification
         ----------------

         Certain  reclassifications  have  been  made to the  2003  balances  to
         conform to the 2004 presentation.

         Recently Issued Accounting Pronouncements
         -----------------------------------------

         In March 2004, the FASB approved the consensus  reached on the Emerging
         Issues   Task  Force   (EITF)   Issue  No.   03-1,   "The   Meaning  of
         Other-Than-Temporary   Impairment   and  Its   Application  to  Certain
         Investments."  The  objective of this Issue is to provide  guidance for
         identifying   impaired   investments.   EITF  03-1  also  provides  new
         disclosure   requirements   for  investments  that  are  deemed  to  be
         temporarily  impaired.  In September 2004, the FASB issued a FASB Staff
         Position  (FSP)  EITF  03-1-1  that  delays the  effective  date of the
         measurement and  recognition  guidance in EITF 03-1 until after further
         deliberations  by the FASB. The disclosure  requirements  are effective
         only for annual  periods  ending after June 15,  2004.  The Company has
         evaluated the impact of the adoption of the disclosure  requirements of
         EITF 03-1 and does not believe it will have an impact to the  Company's
         overall combined results of operations or combined financial  position.
         Once  the  FASB  reaches  a  final  decision  on  the  measurement  and
         recognition  provisions,  the Company  will  evaluate the impact of the
         adoption of EITF 03-1.

         In November  2004, the FASB issued SFAS No. 151  "Inventory  Costs,  an
         amendment  of ARB No. 43,  Chapter 4 (" SFAS No. 151".  The  amendments
         made by  SFAS  151  clarify  that  abnormal  amounts  of idle  facility
         expense,  freight,  handling  costs,  and wasted  materials  (spoilage)
         should  be  recognized  as  current-period   charges  and  require  the
         allocation  of fixed  production  overheads to  inventory  based on the
         normal capacity of the production facilities. The guidance is effective
         for inventory  costs incurred  during fiscal years beginning after June
         15, 2005. Earlier application is permitted for inventory costs incurred
         during fiscal years  beginning after November 23, 2004. The Company has
         evaluated  the impact of the adoption of SFAS 151, and does not believe
         the impact will be  significant  to the  Company's  overall  results of
         operations or financial position.

         In December  2004,  the FASB issued SFAS No.152,  "Accounting  for Real
         Estate Time-Sharing Transactions-an amendment of FASB Statements No. 66
         and 67" ("SFAS 152") SFAS 152 amends SFAS No. 66, "Accounting for Sales
         of Real Estate",  to reference the financial  accounting  and reporting
         guidance for real estate time-sharing  transactions that is provided in
         AICPA  Statement of Position  (SOP) 04-2,  "Accounting  for Real Estate
         Time-Sharing   Transactions".   SFAS  152  also  amends  SFAS  No.  67,
         "Accounting  for Costs and  Initial  Rental  Operations  of Real Estate
         Projects", to state that the guidance for (a) incidental operations and
         (b) costs incurred to sell real estate  projects does not apply to real
         estate time-sharing  transactions.  The accounting for those operations
         and costs is subject to the guidance in SOP 04-2. SFAS 152 is effective
         for  financial  statements  for fiscal years  beginning  after June 15,
         2005, with earlier  application  encouraged.  The Company has evaluated
         the impact of the adoption of SFAS 152, and does not believe the impact
         will be  significant  if  any,  to the  Company's  overall  results  of
         operations or financial  position since the Company does not enter into
         such transactions.

         In  December  2004,   the  FASB  issued  SFAS  No.153,   "Exchanges  of
         Nonmonetary  Assets, an amendment of APB Opinion No. 29, Accounting for
         Nonmonetary Transactions." The amendments made by SFAS 153 are based on
         the principle that  exchanges of nonmonetary  assets should be measured
         based  on  the  fair  value  of  the  assets  exchanged.  Further,  the
         amendments eliminate the narrow exception for nonmonetary  exchanges of
         similar  productive  assets and replace it with a broader exception for
         exchanges of nonmonetary assets that do not have commercial  substance.
         Previously,  Opinion 29 required that the accounting for an exchange of
         a  productive  asset for a similar  productive  asset or an  equivalent
         interest in the same or similar productive asset should be based on the
         recorded  amount of the asset  relinquished.  Opinion  29  provided  an

                                      F-12
<PAGE>

         exception to its basic measurement principle (fair value) for exchanges
         of  similar  productive  assets.  That  exception  required  that  some
         nonmonetary  exchanges,   although  commercially  substantive,   to  be
         recorded on a carryover  basis.  By focusing the exception on exchanges
         that lack commercial substance,  the FASB believes SFAS No.153 produces
         financial  reporting that more  faithfully  represents the economics of
         the  transactions.  SFAS  No.153 is  effective  for  nonmonetary  asset
         exchanges  occurring in fiscal periods  beginning  after June 15, 2005.
         Earlier  application  is  permitted  for  nonmonetary  asset  exchanges
         occurring in fiscal periods  beginning after the date of issuance.  The
         provisions of SFAS No.153 shall be applied  prospectively.  The Company
         has  evaluated  the impact of the  adoption  of SFAS 153,  and does not
         believe the impact will be significant to the Company's overall results
         of operations or financial position.

         In  December  2004,  the  FASB  issued  SFAS  No.123   (revised  2004),
         "Share-Based  Payment"  ("SFAS  123(R)").   SFAS  123(R)  will  provide
         investors  and other users of financial  statements  with more complete
         and neutral  financial  information by requiring that the  compensation
         cost  relating to  share-based  payment  transactions  be recognized in
         financial  statements.  That  cost will be  measured  based on the fair
         value of the equity or liability instruments issued. SFAS 123(R) covers
         a wide range of share-based  compensation  arrangements including share
         options,  restricted  share  plans,   performance-based  awards,  share
         appreciation  rights,  and employee share purchase  plans.  SFAS 123(R)
         replaces SFAS No. 123, "Accounting for Stock-Based  Compensation",  and
         supersedes  APB  Opinion  No.  25,  "Accounting  for  Stock  Issued  to
         Employees".  SFAS 123, as  originally  issued in 1995,  established  as
         preferable a  fair-value-based  method of  accounting  for  share-based
         payment transactions with employees.  However, that Statement permitted
         entities the option of  continuing to apply the guidance in Opinion 25,
         as long as the  footnotes to financial  statements  disclosed  what net
         income would have been had the preferable  fair-value-based method been
         used.  Public  entities  (other  than  those  filing as small  business
         issuers)  will be required to apply SFAS 123(R) as of the first interim
         or annual  reporting  period  that  begins  after June 15,  2005.  This
         pronouncement is effective for the Company, a small business issuer, as
         of the  first  interior  annual  reporting  period  that  begins  after
         December 15, 2005. The Company has evaluated the impact of the adoption
         of SFAS 123(R),  and does not believe the impact will be significant to
         the Company's overall results of operations or financial position.

Note 2 - Fixed Assets

        Fixed assets at December 31, 2004 consisted of the following:

                                                                 2004
                                                             -----------
                  Computer equipment                         $    49,478
                  Furniture and fixtures                           3,452
                                                             -----------
                                                                  52,930
                  Less accumulated depreciation                  (50,491)
                                                             -----------

                           Total                             $     2,439
                                                             ===========

         Depreciation expense for the years ended December 31, 2004 and 2003 was
         $2,361 and $4,865, respectively.


Note 3 - Investment in/Consolidation of Legend Credit, Inc.

         On April 1, 2003, the Company's CEO, Mr. Peter Klamka,  contributed the
         rights to an affinity credit card business at his historical cost basis
         of  $37,000  to  Legend  Credit.  Mr.  Klamka's  contribution  has been
         determined  pursuant to  Accounting  Principles  Board  Opinion No. 29,
         "Nonmonetary  Transactions,"  using his cost  basis in the  investment,
         which is the most  readily  determinable  cost.  In  exchange  for this
         contribution,  Legend  Credit  issued to Mr. Peter  Klamka,  60% of the
         issued and outstanding shares of common stock and the Company issued to
         Mr. Klamka 850,000 shares of Series B convertible  preferred stock that
         were valued at $22,200 and $14,800, respectively, pro rata based on the
         percentage of interest  owned.  Effective  October 1, 2004,  Mr. Klamka
         contributed  an additional 10% interest in Legend Credit to the Company
         at was valued at $3,700  (10% of  $37,000,  the  original  value of the
         affinity credit card  business).Mr.  Klamka received  147,775 shares of

                                      F-13
<PAGE>

         the Company's Series C convertible preferred stock in exchange for this
         contribution.   Effective   October  1,   2004,   the   Company   began
         consolidating  the  operations  of  Legend  Credit.  Summary  financial
         information  of  Legend  Credit  as of and for the  nine  months  ended
         September 30, 2004 is below:

                  Cash                                  $       455
                  Total current assets                  $    14,203
                  Total assets                          $    16,510
                  Total current liabilities             $    90,659
                  Total stockholders' deficit           $   (74,148)

                  Revenue                               $    29,305
                  Gross profit                          $     4,945
                  Net loss                              $   (91,143)

Note 4 - Accrued Expenses

         Accrued expenses at December 31, 2004, consist of the following:

               Michael Jordan settlement                $    655,908
               Accrued salary to officer                     288,920
               Accrued legal judgment                         31,000
               Other accrued expenses                         38,689
                                                        ------------
                                                        $  1,014,517

Note 5 - Notes Payable - Related Party

         As of September 30, 2004,  the Company  converted  $291,000 of advances
         from its CEO, Mr.  Klamka,  into a note payable that bears  interest at
         21% per annum and is payable  upon  demand.  As of December  31,  2004,
         accrued interest related to this note amounted to $15,278.

Note 6 - Notes Payable

         In July and August  1997,  the  Company  received  $56,250  through the
         issuance of 8% promissory  notes and common stock purchase  warrants to
         acquire Company stock.  The notes and accrued  interest are payable one
         year from the date of issuance  or the closing of an equity  funding of
         the Company of a minimum of $500,000, whichever is sooner. In 1999, one
         of the note  holders  converted  $25,000  of  principal  and  $5,500 of
         accrued  interest into 6,100 shares of the Company's  common stock. The
         remainder  of the notes,  which  amounts to  $31,250,  continues  to be
         outstanding  notwithstanding the fact that payments owed by the Company
         thereunder are now past due.  Interest  accrued as of December 31, 2004
         aggregated to $16,000.

         In July and August of 1999, the Company's Subsidiaries,  Legend Studios
         issued 10% promissory notes aggregating to $160,000.  The notes are due
         the earlier of one year or the completion of an initial public offering
         of Legend Studios common stock.  In addition,  Legend Studios issued to
         the note  holders  an  aggregate  of  96,000  two-year  stock  purchase
         warrants to purchase  Legend  Studios  common stock at $3.50 per share.
         During the year ended  December  31, 2002,  two note holders  converted
         principal  and accrued  interest  of $35,000  and  $13,358  into 48,358
         shares of the Company's common stock. As of December 31, 2004, $125,000
         of these notes and accrued  interest of $67,709 are still  outstanding.
         These notes are in default at December 31, 2004.

         In August  2001,  the Company  issued  notes  payable for  $100,000 and
         $300,000  which  were  due in 60 days  and 14  days,  respectively.  In
         connection  with the issuance of the $300,000 note, the Company granted
         the note  holders an  aggregate  of 80,000  warrants  to  purchase  the
         Company's common stock at $1 per share. The Company has determined that
         the fair value of these  warrants to be $99,317 and has  recognized the
         expense in the  accompanying  statement of  operations  during the year
         ended  December 31, 2001. The Company used the  Black-Scholes  model to
         determine  the  fair  value  of  these   warrants  with  the  following
         assumptions:  (i) dividend  yield of 0%, (ii)  expected  volatility  of
         118%,  (iii)  weight-average  risk-free  interest rate of approximately
         4.0%,  and (iv)  expected  life of 3 years.  In July 2002,  the Company
         converted the $300,000 note into 300,000 shares of its common stock and
         issued  300,000  warrants to purchase the Company's  common stock at $1
         per share.  The value of the warrants issued of $244,701 was determined

                                      F-14
<PAGE>

         using the  Black-Scholes  model and this  amount has been  recorded  as
         financing costs in the accompanying  statement of operations during the
         year ended  December 31, 2002. The following  assumptions  were used to
         determine the fair value of these 300,000 warrants:  (i) dividend yield
         of 0%, (ii) expected volatility of 129%, (iii) weight-average risk-free
         interest rate of approximately 3.5%, and (iv) expected life of 5 years.
         The  Company did not repay the  $100,000  note on its due date (and has
         not yet repaid the note) and issued the investor during the years ended
         December  31, 2004,  2003 and 2002,  respectively,  72,000,  72,000 and
         90,000  warrants as a penalty  valued at $7,443,  $13,685 and  $80,870,
         respectively.

         In September  2002,  the Company issued a note payable in the amount of
         $400,000  that accrues  interest at 10% per annum.  The  principal  and
         accrued  interest is to be repaid one-half on February 28, 2003 and the
         remaining  balance  on May 31,  2003.  The  Company  has not  made  the
         February 28, 2003 nor the May 31, 2003 payments. Interest accrued as of
         December  31,  2004  amounted  to  $93,333.  This note is in default at
         December 31, 2004.

         In October  2003,  the Company  issued a note  payable in the amount of
         $20,000.  The note was due 45 days  after  issuance.  This note has not
         currently  been repaid.  There is no stated  interest rate on the note,
         but the Company did issue to the investor  100,000 warrants to purchase
         shares of the Company's  common stock for $0.35 per share.  The Company
         used the  Black-Scholes  model  to  determine  the fair  value of these
         100,000 warrants with the following assumptions:  (i) dividend yield of
         0%, (ii) expected volatility of 118%, (iii) weighted-average  risk-free
         interest rate of approximately 3.5%, and (iv) expected life of 3 years.
         The  value of these  warrants  of  $24,890  was has  been  recorded  as
         interest expense in the accompany consolidated statements of operations
         during the year ended  December  31,  2003.  This note is in default at
         December 31, 2004.

Note 7 - Advances to/from related parties

         In 2003,  the  Company's  CEO advanced  $40,476 to the  Company.  These
         advances  are  non-interest  bearing and are payable  upon  demand.  In
         addition,  in 2003 the  Company's  minority  owned  subsidiary,  Legend
         Credit  advanced  $2,932  to  the  Company.  These  advances  are  also
         non-interest bearing and payable upon demand.

         In 2004,  the  Company's  CEO  advanced an  additional  $269,687 to the
         Company.  During 2004, $291,000 of these advances were converted into a
         note payable (see Note 5).

Note 8 - Profit Participation Obligation

         On  November  22,  2000  the  Company  issued a  promissory  note to an
         investor in the amount of  $1,000,000.  The note bore interest at 9.25%
         and was due on April 1, 2001.  The holder of the note had the option of
         converting  the  note  to  a  royalty   participation   certificate  or
         converting into shares of the Company's common stock at a 20% discount.
         In  addition,  the holder of the note was issued a two-year  warrant to
         purchase  100,000  shares of the  Company's  common  stock at $3.00 per
         share.

         During 2001, the note holder converted the full amount of the note into
         a profit  participation  obligation  that  provides  for the  holder to
         receive 7.5% of the profits from the sale of the Claudia  Schiffer Palm
         Pilot,  the Michael Jordan Palm Pilot and any other  celebrity  branded
         Palm Pilot that the Company sells. In connection with this  conversion,
         the Company  issued the holder a warrant to purchase  200,000 shares of
         the Company's  common stock at $1.50.  The warrant  expires three years
         from the date of grant. The $1,000,000 profit participation  obligation
         will be reduced as profits payments are made to the holder.

         Due to the  lack of  communication  with  the  holder  of  this  profit
         participation  obligation and the Company has  discontinued the sale of
         Palm  products  and does not expect to sell them in the future,  during
         2004 the  Company  removed  the  profit  participation  obligation  and
         recorded a corresponding increase to additional paid in capital.

Note 9 - Stockholders' Deficit

         Series A Preferred Stock
         ------------------------

         The Company has 1,000,000 shares of $0.001 par value Series A Preferred
         Stock  ("Series  A")  authorized  of which 2,225  shares are issued and
         outstanding  at  December  31,  2004.  Each  share  of  Series A can be
         converted into 20 shares of common stock.

         Series B Convertible Preferred Stock
         ------------------------------------

         The Company has 850,000  shares of $0.01 par value Series B Convertible
         Preferred  Stock  authorized  of which  850,000  shares  are issued and

                                      F-15
<PAGE>

         outstanding at December 31, 2004.

         In the event of a voluntary or involuntary liquidation,  dissolution or
         winding  up of the  Company,  prior to the time  the  Series B  becomes
         convertible  into  common  shares,  the  holders  of  Series B shall be
         entitled to $0.01 per share. In the event of a voluntary or involuntary
         liquidation,  dissolution  or winding up of the Company  after the time
         the Series B becomes  convertible  into common  shares,  the holders of
         Series B shall be entitled  to share with the  holders of common  stock
         pari  passu in the assets of the  Company,  on an as  converted  basis,
         whether such assets are capital or surplus of any nature.  The Series B
         shall be  convertible  upon the  earlier  to occur of: (i) the date the
         Company generates net profits in any two consecutive fiscal quarters or
         (ii) April 1, 2006.

         The  conversion  of  Series B shall be on the  basis of ten  shares  of
         common  stock for one Series B share,  as may be adjusted  from time to
         time. Upon  conversion,  the holder of the Series B will be required to
         pay to the Company a  conversion  price for each share of common  stock
         equal to $0.10.

         The holders of the Series B shall vote on all matters  with the holders
         of the common  stock  (and not as a separate  class) on a ten votes per
         share  basis.  The holders of the Series B shall be entitled to receive
         all  notices  relating  to  voting as are  required  to be given to the
         holders of the common stock.

         During 2003, the Company issued to Mr. Peter Klamka, the Company's CEO,
         850,000 shares of Series B as consideration  for the contribution of an
         affinity credit card business to Legend Credit. (See Note 3)

         Series C Convertible Preferred Stock
         ------------------------------------

         The Company has 147,775  shares of $0.01 par value Series C Convertible
         Preferred  Stock  authorized  of which  147,775  shares  are issued and
         outstanding at December 31, 2004.

         In the event of a voluntary or involuntary liquidation,  dissolution or
         winding  up of the  Company  prior  to the time  the  Series C  becomes
         convertible  into  common  shares,  the  holders  of  Series C shall be
         entitled to $0.01 per share. In the event of a voluntary or involuntary
         liquidation,  dissolution  or winding up of the Company  after the time
         the Series C becomes  convertible  into common  shares,  the holders of
         Series C shall be  entitled  to share  with the  holders  of  shares of
         common stock and Series B convertible preferred stock pari passu in the
         assets of the Company,  on an as converted  basis,  whether such assets
         are  capital  or  surplus  of any  nature.  . The  Series  C  shall  be
         convertible  upon the  earlier  to occur of:  (i) the date the  Company
         generates  net profits in any two  consecutive  fiscal  quarters;  (ii)
         April 1,  2006;  or (iii) any date that the  market  price per share of
         common stock equals or exceeds $0.50.

         The  conversion  of  Series C shall be on the  basis of ten  shares  of
         common  stock for one Series C share,  as may be adjusted  from time to
         time. Upon  conversion,  the holder of the Series C will be required to
         pay to the Company a  conversion  price for each share of common  stock
         equal to $0.10.

         The holders of the Series C shall vote on all matters  with the holders
         of the common  stock  (and not as a separate  class) on a ten votes per
         share  basis.  The holders of the Series C shall be entitled to receive
         all  notices  relating  to  voting as are  required  to be given to the
         holders of the common stock.

         During 2004, the Company issued to Mr. Peter Klamka, the Company's CEO,
         147,775 shares of Series C as consideration  for the contribution of an
         additional 10% ownership in Legend Credit. (See Note 3)

                                      F-16
<PAGE>

         Common Stock
         ------------

         Effective January 12, 2004, the Company increased its authorized $0.001
         par value common stock from 10,000,000 to 20,000,000 shares.

         In January 2003,  the Company issued 20,000 shares of common stock in a
         private placement  offering that resulted in gross proceeds of $20,000.
         Also, in January 2003, the Company issued 25,000 shares of common stock
         as payment for  services  valued at $20,166.  The value was  determined
         using the market  value of the  Company's  stock at the date the shares
         were issued.

         In February  2003,  the Company issued 2,500 shares of common stock for
         the conversion of 125 shares of Series A.

         In May 2003,  the  Company  issued  100,000  shares of common  stock as
         payment for services valued at $16,000.  The value was determined using
         the market  value of the  Company's  stock at the date the shares  were
         issued.

         In June 2003,  the Company  issued  106,250 shares of common stock in a
         private placement offering that resulted in gross proceeds of $17,000.

         In July 2003,  the Company  issued  68,873  shares of common  stock for
         financing costs valued at $15,152.  The value was determined  using the
         market value of the Company's stock at the date the shares were issued.

         In July, August and September 2003, the Company issued 1,560,000 shares
         of common stock for services valued at $477,700. The value was based in
         the market value of the Company's common stock on the date of issuance.

         In October and December 2003, the Company  issued  1,579,670  shares of
         common  stock for services  valued at $451,671.  The value was based in
         the market value of the Company's common stock on the date of issuance.

         In January 2004,  the Company issued  3,048,674  shares of common stock
         for services  valued at $723,134.  The value was  determined  using the
         market value of the Company's stock at the date the shares were issued.

         In February 2004, the Company issued 350,000 shares of common stock for
         services valued at $106,000.  The value was determined using the market
         value of the Company's stock at the date the shares were issued.

         In March 2004,  the Company  issued  222,500 shares of common stock for
         services valued at $55,625.  The value was determined  using the market
         value of the Company's stock at the date the shares were issued.

         In August 2004,  the Company  issued  10,000 shares of common stock for
         services  valued at $1,800.  The value was determined  using the market
         value of the Company's stock at the date the shares were issued.

         In October 2004,  the Company issued 840,318 shares of common stock for
         services valued at $94,241.  The value was determined  using the market
         value of the Company's stock at the date the shares were issued.

         Stock Option Plan

         The Company  adopted the 1998 Stock Option Plan and the Year 2000 Stock
         Option Plan (the  Plans),  which  provides  for the grant of options to
         purchase up to 1,250,000  shares of the Company's  common stock.  Under
         these Plans  incentive  stock  options may be granted to employees  and
         non-statutory   stock   options  may  be  granted  to   employees   and
         non-employees.





                                      F-17
<PAGE>

         The following is table summarizes the options and warrants outstanding:

                                              Weighted-               Weighted-
                                    Stock     Average                 Average
                                   Option     Exercise                Exercise
                                    Plan        Price      Warrants     Price
                                  ---------   ---------   ---------   ---------
         Balance, December 31,
           2002                   1,175,000   $    2.34   1,651,000   $    1.93
           Granted                  515,500   $    0.10     172,000   $    0.62
           Exercised                      -   $       -           -   $       -
           Canceled                (540,500)  $    2.10    (300,000)  $    3.00
                                  ---------               ---------


         Balance, December 31,
           2003                   1,150,000   $    0.10   1,523,000   $    1.46
           Granted                        -   $       -      72,000   $    1.00
           Exercised                      -   $       -           -   $       -
           Canceled                       -   $       -    (680,000)  $    2.32
                                  ---------               ---------

         Balance, December 31,
           2004                   1,150,000   $    0.10     915,000   $    0.78
                                  =========               =========

         Exercisable, December
           31, 2004               1,150,000   $    0.10     915,000   $    0.78
                                  =========               =========

         The weighted average remaining  contractual life of options outstanding
         issued under the Plans is 6.32 years at December 31, 2004. The exercise
         price  for all  options  outstanding  under the  Stock  Option  Plan at
         December  31,  2003 is $0.10.  In April  2003,  the  Company  re-priced
         800,000  vested  option and  warrants  and took a charge to earnings of
         $66,655 as a result of this  re-pricing  No  compensation  expense  was
         recognized as a result of the issuance of stock options during the year
         ended  December 31, 2003.  There were no options issued during the year
         ended December 31, 2004

         For options  granted  during the year ended December 31, 2003 where the
         exercise  price  equaled the stock price at the date of the grant,  the
         weighted-average   fair  value  of  such  options  was  $0.08  and  the
         weighted-average exercise price of such options was $0.10. For the year
         ended  December  31,  2003,  there  were no options  granted  where the
         exercise price was greater than the stock price at the date of grant or
         where the  exercise  price was less than the stock price at the date of
         grant.

         The weighted average remaining contractual life of warrants outstanding
         is 1.38 years at December 31, 2004. The exercise price for the warrants
         outstanding at December 31, 2004 range from $0.10 to $1.13.

Note 10 - Income Taxes

         Deferred  income  taxes  reflect  the  net  tax  effects  of  temporary
         differences  between the carrying amounts of assets and liabilities for
         financial  statement  purposes  and the  amounts  used for  income  tax
         purposes.   Significant   components  of  the  Company's  deferred  tax
         liabilities and assets as of December 31, 2004 are as follows:

             Deferred tax assets:
                   Federal net operating loss                    $   5,009,000
                   State net operating loss                            264,000
                   Equity instruments issued for compensation          724,000
                                                                 -------------

             Total deferred tax assets                               5,997,000
                   Less valuation allowance                         (5,997,000)
                                                                 -------------

                                                                 $        --
                                                                 =============

         At December 31, 2004,  the Company had federal and state net  operating
         loss   ("NOL")   carryforwards   of   approximately   $14,732,000   and
         $13,202,000,  respectively.  Federal NOLs could,  if unused,  expire in

                                      F-18
<PAGE>

         varying amounts in the years 2012 through 2019.  State NOLs, if unused,
         could expire in varying amounts from 2012 through 2019.

         The valuation  allowance increased by $508,000 and $701,000 during 2004
         and 2003,  respectively.  The  Company  has  provided a 100%  valuation
         allowance  on the  deferred  tax assets at December  31, 2004 to reduce
         such asset to zero,  since there is no assurance  that the Company will
         generate  future taxable income to utilize such asset.  Management will
         review  this  valuation  allowance  requirement  periodically  and make
         adjustments as warranted.

         The  reconciliation  of the  effective  income tax rate to the  federal
         statutory  rate for the years  ended  December  31, 2004 and 2003 is as
         follows:
                                                            2004         2003
                                                         ----------   ----------

            Federal income tax rate                         (34.0%)      (34.0%)
            State tax, net of federal benefit                (2.0%)       (2.0%)
            Equity instruments issued for compensation       27.9%        23.5%
            Increase in valuation allowance                   8.1%        12.5%
                                                         ----------  -----------

            Effective income tax rate                         0.0%         0.0%
                                                         ==========  ===========

Note 11 - Commitments and Contingencies

         Leases
         ------

         The following is a schedule by years of future minimum rental  payments
         required under operating leases that have non-cancelable lease terms in
         excess of one year as of December 31, 2003:

                 Year ending December 31,
                     2005                           $     15,600
                     2006                                  1,300
                                                    ------------

                                                    $     16,900
                                                    ============

         Rent expense amounted to $9,145 and $8,147 for the years ended December
         31, 2004 and 2003

         Litigation
         ----------

         Legend  Studios,  Inc. vs. Quorum Radio  Partners,  Inc.,  Quorum Radio
         Partners of Virginia, Inc. and Quorum Communications, Inc.

         Legend Studios lawsuit arises from  defendants'  breach of the parties'
         Asset Purchase  Agreement and Time Brokerage  Agreement that govern the
         sale,  programming,  operations  and revenues of certain radio stations
         (KELE-AM,  KELE-FM, WIQO, WKEY and WKCI). Legend Studios seeks specific
         performance of the agreements,  as well as in excess of $1.5 million in
         damages.  Defendants have been served with the complaint,  but have not
         filed  answers  and may be subject to entry of  default.  Quorum  Radio
         Partners of Virginia,  Inc., however, filed a bankruptcy petition after
         being  served  with  the  complaint,   which  stays  Legend   Studios's
         proceedings solely against that entity.

         In the ordinary course of business, the Company is generally subject to
         claims, complaints, and legal actions. At December 31, 2004, management
         believes that the Company is not a party to any action which would have
         a  material  impact on its  financial  condition,  operations,  or cash
         flows.




                                      F-19