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 ACTOF 1934for the fiscal year ended December 31, 2005o
TRANSITION REPORT UNDER SECTION 13
  OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from ___________________
  to __________________ Commission file
number: 0-566LE@P TECHNOLOGY, INC.
(Name of small business issuer in its charter) DELAWARE

65-0769296(State or other
  jurisdiction of
  Incorporation or organization)

(I.R.S. Employer
  Identification No.)5601 N. DIXIE HIGHWAYSUITE 411FORT LAUDERDALE,
  FLORIDA

33334(Address of principal executive offices)

(Zip Code)  Registrants telephone number:
(954) 771-1772Securities registered under Section 12(b) of the
  Exchange Act:
NoneSecurities registered under Section 12(g) of the
  Exchange Act:
Class A Common Stock, par value $.20 Check whether the issuer is not required to file
reports pursuant to Section 13 or 15(d) of the Exchange Act. o Check whether the issuer
(1) has 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 o Check if there is no
disclosure of delinquent filers in response to Item 405 of Regulation S-B
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 Indicate by checkmark whether the registrant is a
shell company as defined in Rule 12b-2 of the Exchange Act. o The issuers revenues for its fiscal year ended
December 31, 2005 were $0. The aggregate market
value of the common equity held by non-affiliates as of March 15, 2006 was
approximately $139,821 based on the $0.07 closing bid price for the common
stock quoted on the OTC Bulletin Board on such date. For purposes of this
computation, all executive officers and directors of the registrant have been
deemed to be affiliates. Such determination should not be deemed to be an
admission that such directors and officers are, in fact, affiliates of the
registrant. The number of shares of
Class A Common Stock of the issuer outstanding as of March 15, 2006 was
33,781,203. The number of shares of Class B Common Stock of the issuer
outstanding as of March 15, 2006 was 25,000. DOCUMENTS
INCORPORATED BY REFERENCE Certain portions of the
issuer Proxy Statement for its Annual Meeting of Stockholders pursuant to
Regulation 14A of the Securities Exchange Act of 1934, which will be filed with
the Commission subsequent to the date hereof, are incorporated by reference
into Part III of this Form 10-KSB. Transitional Small Business Disclosure Format:
YesoNox    FORM
10-KSB INDEX

PAGEGENERALPART
        I
    
    
    4ITEM
        1.
    DESCRIPTION
        OF BUSINESS
    
    4ITEM
        2.
    DESCRIPTION
        OF PROPERTY
    
    7ITEM
        3.
    LEGAL
        PROCEEDINGS
    
    7ITEM
        4.
    SUBMISSION
        OF MATTERS TO A VOTE OF SECURITY HOLDERS
    
    8PART
        II
    
    
    8ITEM
        5.
    MARKET
        FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS, AND SMALL BUSINESS
        ISSUER PURCHASES OF EQUITY SECURITIES
    
    8ITEM
        6.
    MANAGEMENTS
        PLAN OF OPERATION
    
    9ITEM
        7.
    FINANCIAL
        STATEMENTS AND SUPPLEMENTARY DATA
    
    11ITEM
        8.
    CHANGES
        IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
    
    11ITEM
        8A.
    CONTROLS
        AND PROCEDURES
    
    12PART
        III
    
    
    13ITEM
        9.
    DIRECTORS,
        EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION
        16 (a) OF THE EXCHANGE ACT
    
    13ITEM
        10.
    EXECUTIVE
        COMPENSATION
    
    13ITEM
        11.
    SECURITY
        OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
        MATTERS
    
    13ITEM
        12.
    CERTAIN
        RELATIONSHIPS AND RELATED TRANSACTIONS
    
    13ITEM
        13.
    EXHIBITS,
        FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
    
    13ITEM
        14.
    PRINCIPAL
        ACCOUNTANT FEES AND SERVICES
    
    172

FORWARD-LOOKING STATEMENTS



Certain statements in this Annual Report on Form 10-KSB, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives and expected operating results, and the assumptions upon which those statements are based, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements generally are identified by the words believes, project, expects, anticipates, estimates, intends, strategy, plan, may, will, would, will be, will continue, will likely result, and similar expressions. Forward-looking
statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause the actual results of Le@P Technology, Inc. (the Company)  to differ materially from these forward-looking statements. Factors, risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements (the Cautionary Statements), are listed below. This is not an exhaustive list of all cautionary statements. Based on the nature of the Companys operations, these factors, risks and uncertainties relate not only to the Company, but also to its Partner Companies.



        The ability to raise capital,
        The ability to execute its business strategy in a very competitive environment,
        The degree of financial leverage,
        The ability to control future operating and other expenses,
        Risks associated with the capital markets and investment climate,
        Risks associated with acquisitions and the integration thereof,
        Risks associated with the Company being considered an investment company under the Investment Company Act of 1940,
        Contingent liabilities, and
        Other risks referenced from time to time in the Companys filings with the Securities and Exchange Commission.All subsequent written and oral forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these Cautionary Statements. The Company does not undertake any obligations to release publicly any revisions to such forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.



3





PART I

ITEM 1.
DESCRIPTION OF BUSINESSBusiness

Prior to September 26,
2002, Le@P Technology, Inc. (Le@P or the Company) focused on the
acquisition of, and strategic investments in, companies providing services in
health care and life sciences, with particular emphasis on information
technology companies. Emerging companies into which the Company invested during
this period are sometimes referred to herein as Partner Companies. On
September 26, 2002, after an ongoing reevaluation by management and the Board of
Directors of the Companys operating strategy and in light of difficulties
associated with investment in emerging companies and the significant decline in
market value or failure of many of such companies, the Board of Directors
determined to cease for the foreseeable future investigating or consummating
further investment and acquisition opportunities.

On January 10, 2005, the
Company disposed of its most significant investment in a Partner Company 
Healthology, Inc. (Healthology)  resulting in the receipt by the Company of
more than $3,300,000 in cash plus 17,347 shares of restricted common stock of
iVillage Inc. (iVillage). In light of this increase in funds available for
investment, on March 16, 2005 the Board of Directors of the Company decided to
actively seek opportunities for the Company to make new investments or
acquisitions, whether in health care, life sciences or other industries, but
only in the form of controlling interests in the companies invested in or
acquired or other types of investments which would not cause the Company to be
required to register as an investment company pursuant to the Investment
Company Act of 1940, as amended (the 40 Act). The Company may also make
other acquisitions or investments outside of its normal business plan in order
to achieve other objectives, including investments necessary to maintain its
exclusion from regulation as an investment company under the 40 Act.

The Company has written
off its existing investments in its Partner Companies over the last few years.
The Company believes that the activities of its initial Partner Companies were
adversely affected by, among other things, the general economic slowdown in the
United States economy and the September 11, 2001 terrorist attacks on the
United States.

As of December 31, 2005,
the Company had cash of $3.3 million, which it received from the sale of its Healthology stock in January 2005. The other significant
 assets of the Company are the 17,347 shares of
restricted common stock of iVillage (the restriction expires in January 2007) and
its ownership of certain land in Broward County, Florida (the Real Property).
The Real Property is zoned light industrial and consists of approximately one
and one-third acres. The Company entered into a two year lease (with an
additional one year option) of the property with an unrelated party effective July
10, 2005.

Competition

Le@P operates in a highly
competitive, rapidly evolving business environment for the identification of
prospects for future acquisition or investment. Competitors include a wide
variety of companies, investment funds and other organizations, many with
greater financial and technical resources than Le@P. Competitors for
acquisition or investment include public and private venture capital firms and
private equity funds, mutual funds and private individuals.

Investment
in Healthology

Le@Ps first healthcare
information technology investment was completed in March 2000, with the
purchase of a 21% interest in Healthology, a privately held health-media
company. Le@P purchased 3,200,000 shares of the Series A Convertible Voting
Preferred Stock (Healthology Preferred Stock) of Healthology (the
Healthology

4

Transaction) for
$3,200,000 in cash (plus approximately $300,000 of related costs) then representing
an approximate 21% interest in the issued shares of Healthology. Subsequent to
the purchase of the interest in Healthology, the Company transferred 160,573
shares of Healthology Preferred Stock to third parties in satisfaction of
certain obligations of the Company.

As a result of a third
partys investment in Healthology during August 2000, the Companys equity
interest was reduced to approximately 15% of the issued and outstanding shares
of Healthology. On February 5, 2001, Le@P purchased 800,000 shares of
Healthology common stock for $1,000,000 pursuant to a put option which had been
granted to Healthology, increasing Le@Ps interest to approximately 18%.

In 2002, the Company
wrote off its investment in Healthology (whose 2001 audited financial statements
were subject to a going concern qualification) due to the latters continuing
operating losses and its inability to successfully raise additional equity or
debt financing or effect a merger or joint venture arrangement to obtain
additional sources of funds .

Throughout 2003 and 2004,
the Company continued to monitor its investment in Healthology, which finally
attained profitability in 2003. In the latter half of 2004, the Company
participated in negotiations for a possible sale of Healthology to iVillage,
which came to a successful conclusion in January 2005. On January 10, 2005, the
Company completed the disposition of its entire investment in Healthology
pursuant to: (i) a Stock Exchange and Merger Agreement dated as of January 7,
2005 among Healthology, iVillage, Virtue Acquisition Corporation and certain
stockholders of Healthology, including the Company (the Merger Agreement) and
(ii) a Stock Purchase Agreement, dated as of the same date (the Stock Purchase
Agreement), between the Company and Steven Haimowitz (Haimowitz), the Chief
Executive Officer and a principal stockholder of Healthology. The Merger
Agreement and the Stock Purchase Agreement provided for the acquisition by
iVillage of all the outstanding capital stock of Healthology. Pursuant to the
Merger Agreement, the 3,050,880 shares of Healthology Preferred Stock held by
the Company were converted into $3,050,880 in cash. Pursuant to the Stock
Purchase Agreement, the Company sold its 800,000 shares of Healthology common
stock to Haimowitz, who, pursuant to the Merger Agreement, exchanged a portion
of such Healthology common stock for 17,347 shares of iVillage restricted
common stock and received $347,413 in cash for the remainder of such common
stock. Haimowitz, as consideration for the sale of Healthology common stock
pursuant to the Stock Purchase Agreement, paid the $347,413 in cash and
transferred the 17,347 shares of iVillage restricted common stock (which were
assigned an aggregate value of $99,745 (fair market value) in the transaction)
to the Company.

Investment
Company Act Considerations

The exclusion on which
the Company is currently relying to avoid registration under the 40 Act
provides that no more than 40% of the value of the Companys total assets
(exclusive of government securities and cash items) may consist of, and no more
than 40% of its net income after taxes may be derived from, investments in
securities (other than, among other things, government securities or securities
of wholly-owned and majority-owned subsidiaries and certain companies
controlled primarily by the Company). Since registration and regulation as an
investment company are inconsistent with the Companys business objectives and
plans, it would have a materially adverse effect on the Company if it were
determined to be an investment company under the 40 Act.

The Company measures its
relative asset holdings as of the end of each fiscal quarter to determine that
it is not subject to registration and regulation under the 40 Act. The Company
believes that based on its current asset mix and the terms and relative values
of its investments, it is not an investment company.

If in the future the
relative values of the Companys investment securities to total assets
otherwise adversely change, and the Company does not qualify for some other
exclusion or exemption from investment company status, the Company may be
required to take further significant business actions that are contrary to its
business objectives and plans in order to avoid registration and regulation as
an investment company. For example, as was the case with the acquisition of the
Real Property, the Company might be compelled to acquire additional assets that
it might not otherwise have acquired, be forced to forego opportunities to
acquire interests in companies that it might otherwise wished to have acquired
or be forced to sell or refrain from selling such interests or assets. In the
alternative or in addition, the Company might find it necessary to sell
investment securities for which there may be little or no market at prices and
on terms that the Company would not otherwise have considered to be
satisfactory.

5

History
of Le@P Technology, Inc.

The Company was organized
in March 1997 under the laws of the State of Delaware under the name Seal
Holdings Corporation. In June 1997, a reincorporation merger was effected
pursuant to which Seal Fleet, Inc., a Nevada corporation and the predecessor to
the Company (Seal Fleet), was merged into the Company. Seal Fleet was
originally incorporated in November 1969 under the name First National
Corporation. On April 2, 1999 the name of the Company was changed to OH,
Inc. and on July 5, 2000 it was further changed to Le@P Technology, Inc.
When used in this report, the terms Le@P and the Company refer to Le@P
Technology, Inc. and its predecessor described above and their respective
subsidiaries.

Employees

Le@P currently has one part-time employee.

6

ITEM 2.
DESCRIPTION OF PROPERTYOn October 1, 1999, Le@P
entered into a lease with an affiliate of its majority stockholder, M. Lee
Pearce, MD (together with his affiliates, the Majority Stockholder) for 2,060
square feet of space for its corporate offices in Fort Lauderdale, Florida. The
lease expired December 31, 2004, and the Company is currently leasing the space
on a month-to-month basis. The monthly rental payment is $4,000 per month.

Investment
in Real Property

Effective September 28,
2001, the Majority Stockholder sold Real Property in Broward County, Florida to
the Company in exchange for notes payable. The purchase price for the Real
Property was determined by an independent third-party appraisal. The notes
payable consist of a short-term promissory note in the amount of $37,500 due
and paid in November 2001 and a long-term note and mortgage (the Long-Term
Note) in the principal amount of $562,500 due on September 28, 2006, and
bearing interest at the rate of 7% per annum due and payable first on September
28, 2004 and monthly thereafter. On October 12, 2004, the Company paid accrued
interest on the Long-Term Note of $118,125 and continues to pay the regular
monthly interest payments. On March 17, 2006, the Company replaced the original
long-term $562,500 note with a new long-term note in the principal amount of
$562,500. The new note bears interest at the rate of 7% per annum and the
principal and interest are due in one lump on January 8, 2008.

The Real Property is
zoned light industrial and consisted of approximately one and one-third acres
and three buildings that collectively consist of approximately 8,200 square
feet. The buildings were demolished in August 2003, and in connection therewith
the Company recognized an impairment loss equal to the book value of the
buildings in the amount of $75,000 in the three month period ended June 30,
2003. On October 21, 2004, the Company entered into a two-month lease
 to rent the property to an unrelated party. On June
15, 2005, the Company entered into a two-year lease (with an additional one year option) to rent the property to an
unrelated party. The Company recognized approximately $4,000 and $17,000 in
rental income under these leases for the years 2004 and 2005 respectively that
is reflected as other income in the accompanying 2005 Consolidated Financial
Statements. The Company has no plans to sell or develop the Real Property .

ITEM 3.
LEGAL PROCEEDINGSThe Company is involved
in litigation relating to the offshore supply business conducted prior to
August 14, 1996 by certain subsidiaries of the Company which are now inactive.
The cases were filed against such subsidiaries and other ship-owning companies
based on the alleged exposure of 64 former seamen to maritime asbestos and
other toxic substances while working on vessels operated by such companies as
part of an industry wide series of similar claims. On May 1, 1996, the claims
against the Companys subsidiaries and the other defendants were
administratively dismissed subject to reinstatement against one or more
specific defendants upon a specific showing that a plaintiff suffers from an
asbestos-related disease and that he was exposed to asbestos containing
products on the vessels operated by such defendant(s). Since such date, none of
the cases against the Companys subsidiaries have been reinstated. During the
past five years, the Company has incurred between $700 and $3,600 per year in
legal fees monitoring the status of the claims against the Companys
subsidiaries. The Company believes it carried sufficient insurance coverage for
any claims. At the present time, the Company does not believe such cases are
likely to have a material adverse impact upon the Company. However, there can
be no assurance that one or more plaintiffs will not be successful in
reinstating claims or that the insurance coverage would cover such claims against
the Companys subsidiaries, which could result in the incurrence by the
Companys subsidiaries of material defense or settlement costs.

As of December 31, 2005,
the Company is not involved in any other claims or lawsuits.

7

ITEM 4.
SUBMISSION OF MATTERS TO A VOTE OF
  SECURITY HOLDERSNo matter was submitted
to a vote of security holders during the fourth quarter of the year ended
December 31, 2005.

PART
II

ITEM 5.
MARKET FOR COMMON EQUITY AND
  RELATED STOCKHOLDER MATTERS, AND SMALL BUSINESS ISSUER PURCHASES OF EQUITY
  SECURITIESThe Companys Class A
Common Stock is traded on the OTC Bulletin Board (OTCBB), under the symbol
LPTC. The following table sets forth the range of high and low bid prices per
share of the Companys Class A Common Stock for each of the quarters during the
years ended December 31, 2004 and 2005, as reported on the OTCBB system. The
quotations reflect inter-dealer prices, without retail mark-up, mark-down or
commission and may not represent actual transactions.

PRICE
  PERIOD

HIGH

LOW2004First
Quarter

$
.03

$
.01Second
Quarter


.17


.03Third
Quarter


.15


.05Fourth
Quarter


.08


.032005First
Quarter


.12


.08Second
Quarter


.13


.07Third
Quarter


.12


.09Fourth
Quarter


.10


.08There is no public market
for the Class B Common Stock or the Series B Preferred Stock, all of which are
issued to entities beneficially owned by the Majority Stockholder.

Holders

The number of
stockholders of record as of March 15, 2006, was 898 for the Class A Common
Stock.

Dividends

The Company has not paid
and has no plans to declare or pay dividends, in cash or otherwise, in the
foreseeable future. Any changes in those plans in the future will depend on
earnings, if any, of the Company, its financial requirements and other factors.
Further, payment of dividends on the Companys Class A Common Stock will only
be made after payment of current and accumulated dividends on the Companys
Series B Preferred Stock. At December 31, 2005, dividends of $1,368,500 were
accumulated and not paid on the Series B Preferred Stock.
8

Equity
Compensation Plan Information

The
following table sets forth summary information regarding equity compensation
 plans approved and not approved by the Companys stockholders.

Plan
  Category

Number of
  securities to
  be issued upon exercise
  of outstanding options,
  warrants and rights

Weighted
  average
  exercise price of 
  outstanding options,
  warrants and rights

Number of securities
  remaining available for
  future issuanceEquity compensation
  plans approved by
  security holders

952,500

$1.41

4,374,500Equity compensation
  plans not approved
  by security holders

500,000

$1.41

TOTAL

1,452,500

$1.41

4,374,500The equity
compensation plans approved by the Companys stockholders consist of four
stock options plans: (i) 1999 Le@P Technology, Inc. Long Term Incentive Plan
(1999 Plan), (ii) Le@P Technology, Inc. 1998 Incentive Option Plan
(1998 Plan), (iii) Le@P Technology, Inc. Incentive Option Plan
(1997 Plan), and (iv) Le@P Technology, Inc. Long Term Incentive Plan
(1996 Plan and collectively, the Plans). All options
under the 1998 Plan, the 1997 Plan and the 1996 Plan have been granted. All of
the foregoing Plans were approved by the Companys stockholders.

The equity compensation plans not approved by the Companys
stockholders consist of an aggregate of 500,000 options. The Company granted
500,000 stock options outside of the terms of the Companys Plans in the
years ended December 31, 2001 and December 31, 2002. Three former non-employee
directors of the Company received a total of 300,000 options on May 7, 2002 that
expire five years after the date of grant. One former employee received 200,000
options on September 26, 2001 that expire ten years after the date of grant.

ITEM 6.
MANAGEMENTS PLAN OF OPERATIONBusiness
Strategy

On January 10, 2005, the
Company disposed of its investment in Healthology, resulting in the receipt by
the Company of more than $3.3 million in cash plus 17,347 shares of restricted
common stock of iVillage Inc. resulting in a gain of approximately $3.4
million. In light of this increase in funds available for investment, on March
16, 2005 the Board of Directors of the Company determined to actively seek
opportunities for the Company to make new investments or acquisitions (whether
in health care, life sciences or other industries), but only in the form of
controlling interests in the companies invested in or acquired or other types
of investments which would not cause the Company to be required to register as
an investment company pursuant to the 40 Act.

The Company may also make
other acquisitions or investments outside of its normal business plan in order
to achieve other objectives, including investments necessary to maintain its
exclusion from regulation as an investment company under the 40 Act.


Company
Liquidity and Cash Requirements

Since the fourth
quarter of 1999, the Company has funded its operations and its investments
through proceeds from affiliates of Dr. Pearce pursuant to a commitment
dated September 30, 1999 to provide or arrange for funding of up to ten million
dollars (the Funding Arrangement) and certain working capital loans.
Through March 15, 2006, the
9

Company had received an aggregate of $8.475 million
pursuant to this Funding Arrangement. On March 31, 2000, the Company and
Dr. Pearce agreed that all funds contributed pursuant to the Funding
Arrangement would be treated as a subscription for additional shares of the
Companys Class A Common Stock at the purchase price of $5.25 per share.
Accordingly, through March 15, 2006, an aggregate of 1,614,285 shares of Class A
Common Stock had been issued to Dr. Pearce or his affiliates pursuant to
such agreement.

Through December 31, 2005,
the Company received working capital loans totaling $2,814,487 from the Majority
Stockholder. These loans are evidenced by unsecured notes, bearing interest at
the prime and are due and payable in one sum on March 15, 2006. As of March 15,
2006, there was $3,141,460.56 of principal and accrued interest due on these
loans. These loans are separate from the $10 million Funding Arrangement.

On March 17, 2006 the Company entered into an Exchange and Termination Agreement
(Exchange Agreement) with the M. Lee Pearce 2005 Irrevocable Trust
(2005 Trust), of which the Majority Stockholder is the sole
beneficiary, whereby all principal and accrued interest due on the Notes will be
converted into 31,414,706 shares of the Companys Class A Common Stock (the
Shares), at an effective conversion price of $0.10 per share. The
2005 Trust also agreed to extend the Maturity Date of the Notes until May 12,
2006 or the closing date of this transaction (the Closing
Date). The Notes will continue to bear interest at the prime rate until
the Closing Date. In consideration, the Company has agreed to terminate the
Funding Arrangement. One of the conditions to the Exchange Agreement is that the
Company reduce the par value of its Class A Common Stock from $0.20 per share to
$0.01 per share. The Company has scheduled its next Annual Meeting of
Stockholders for May 12, 2006 and will include a proposal in its Annual Proxy
Statement in which it asks its stockholders to approve a reduction in the par
value of its Class A Common Stock from $0.20 per share to $0.01 per share. The
2005 Trust is the Companys largest stockholder, beneficially owning approximately
94.5% of the Companys Class A Common Stock, and the Trust has indicated
that it will vote in favor of this proposal. As such, it is expected that the
closing of the Exchange Agreement will take place on or about May 12, 2006.

On March 17, 2006, the Company refinanced a note for its Real Property in Broward
County, Florida. The Companys subsidiary purchased the Real Property from Bay Colony
Associates, Ltd. (Bay Colony), an entity wholly-owned by the Majority
Stockholder in exchange for a mortgage and not payable in the amount of $562,500 (Note)
on September 28, 2001. The Note bore interest at the rate of 7% per annum, which interest
payable monthly after September 28, 2004, and the maturity date was September 28, 2006.
The Company paid accrued interest of $118,125 on October 12, 2004 and continued to make monthly
interest payments thereafter. On March 17, 2006, Bay Colony agreed to extend the maturity date
of the Note until January 8, 2008 and to defer all interest payments until the
maturity date. Except for the foregoing, all other terms and conditions of the Note remain
the same and principal and interest on the Note are due in one lump sum payment on January 8, 2008.



On January 10, 2005, the Company received cash proceeds in excess of $3.3
million from the disposition of its investment in Healthology. The Company
anticipates that the $3.3 million in proceeds from the Healthology disposition
will be sufficient to cover operating expenses through 2006. The Company may
seek to raise additional capital in order to make additional investments or
acquisitions beyond those that can be funded from the foregoing resources or to
engage in any other business activity.

  Because the
    Company does not have any active business operations to generate cash flow
    funding for operations once the funds received from the disposition of Healthology
    are exhausted and/or the working capital loans mature, the Company will need
    to raise additional cash. There can be no assurance that the Company will
    be successful in such efforts. Any financing activities by the Company could
    result in substantial dilution of existing equity positions and increased
    interest expense. Transaction costs to the Company in connection with any
    such activities may also be significant.

Changes
in Financial Condition and Results of Operations

The discussion below
relates to material changes in financial condition during the year ended
December 31, 2005 compared with December 31, 2004 and to material changes in
results of operations when comparing the years ended December 31, 2005 to
December 31, 2004. All amounts in the discussion below are approximate.

Financial Condition at
December 31, 2005 Compared to December 31, 2004

Total assets increased to
$3.8 million as of December 31, 2005 compared to $591,003 as of December 31,
2004. The increase in total assets is primarily a result of the approximately
$3.3 million in cash proceeds and
10

approximately $140,000 in restricted
iVillage, Inc. common stock that the Company received from the Healthology
sale.

Total liabilities
increased to $3.7 million as of December 31, 2005 compared to $3.5 million as
of December 31, 2004. This increase in liabilities is primarily a result of
accrued interest of approximately $187,000.

Results of Operations for
the Year Ended December 31, 2005 (fiscal 2005) Compared to the Year Ended
December 31, 2004 (fiscal 2004)

Operating expenses for
fiscal 2005 were $345,757 compared to $320,180 for fiscal 2004, an increase of
approximately $26,000 from the year ended December 31, 2004. General and
administrative expenses decreased by approximately $42,000 during fiscal 2005
primarily due to a decrease in the directors and officers insurance premium of
approximately $9,000, a decrease in office rent of approximately $11,000, a
decrease in travel expenses of approximately $8,300, and a decrease in doc
stamp taxes on loans of approximately $7,000. As a result of the foregoing, the
Companys operating loss for fiscal 2005 was $345,757 compared to an operating
loss of $320,180 for fiscal 2004.

The Companys net income
for fiscal 2005 was $2.98 million compared to a net loss of $470,729 in fiscal
2004. The Companys net income was primarily a result of the $3.46 million gain
on the sale of the Healthology stock and interest and other income of
approximately $97,000 which was received from interest of approximately $73,000
earned on the Healthology proceeds and rental income of approximately $17,000
on the Real Property.

Critical
Accounting Estimates

The application of GAAP
involves the exercise of varying degrees of judgement. While the resulting
accounting estimates will, by definition, not always precisely equal the
related actual results, some of these estimates involve more judgment than
others.

Accounting for the
Impairment or Disposal of Long-Lived Assets


In October 2001, the
Financial Accounting Standards Board (FASB) issued Statement No. 144,
Accounting for the Impairment or Disposal of Long-Lived Assets. FASB
Statement No. 144 addresses significant issues relating to the implementation
of FASB Statement No. 121, Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to Be Disposed Of, and develops a single accounting
model, based on the framework established in FASB Statement No. 121 for
long-lived assets to be disposed of by sale, whether such assets are or are not
deemed to be a business. FASB Statement No. 144 also modifies the accounting
and disclosure rules for discontinued operations. The standard was adopted on
January 1, 2002.

Off-Balance
Sheet Arrangements

As of December 31, 2005,
the Company did not have any material off-balance sheet arrangements that have
or are reasonably likely to have a material effect on the current or future
financial condition, results of operations, liquidity, or capital resources.


ITEM 7.
FINANCIAL STATEMENTS AND
  SUPPLEMENTARY DATAThe following consolidated financial statements of the
Company and report of independent auditors required by this item are filed
herewith as Exhibit F and are incorporated herein by this reference.

ITEM
        8.
    CHANGES
        IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURENone11

ITEM
        8A.
    CONTROLS
        AND PROCEDURESThe Company maintains
systems of disclosure controls and procedures and internal controls and
procedures for financial reporting designed to provide reasonable assurance as
to the reliability of its published financial statements and other disclosures
included in this Annual Report on Form 10-KSB. The Board of Directors,
operating through its Audit Committee, provides oversight to the financial
reporting process.

On December 30, 2005, an
evaluation was performed under the supervision and with the participation of the
Companys Audit Committee and management, including the Acting Principal
Executive Officer and the Acting Principal Financial Officer, of the
effectiveness of the design and operation of the Companys disclosure controls
and procedures. Based on that evaluation, the Companys audit committee and
management, including the Acting Principal Executive Officer and Acting
Principal Financial Officer, concluded that the Companys disclosure controls
and procedures were effective as of December 31, 2005.

There were no significant
changes in the Companys internal controls or in other factors that could
significantly affect these controls subsequent to the date of such evaluation.
There were no changes in the Companys internal controls that occurred during
the fourth fiscal quarter that has materially affected, or is reasonably likely
to materially affect, the Companys internal controls over financial reporting.

12

PART III

ITEM 9.
DIRECTORS, EXECUTIVE OFFICERS,
  PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16 (A) OF THE EXCHANGE
  ACT.Given that the Company is
not presently engaged in active operations and has no full time executive
officers, the Company has not adopted a Code of Ethics applicable to its
officers, including its principal executive officer, principal financial
officer, principal accounting officer or controller and any other persons
performing similar functions. Except as provided above, the information called
for by Part III, Item 9, regarding the Companys directors is included in
its Proxy Statement relating to its annual meeting of stockholders, which involves the election of directors, and is
incorporated herein by reference. The Proxy Statement will be filed within 120
days of December 31, 2005, the Companys year-end.

ITEM 10.
EXECUTIVE COMPENSATIONInformation called for by
Part III, Item 10, is included in the Companys Proxy Statement relating to its annual
meeting of stockholders, which involves the election of directors and is incorporated herein by reference. The Proxy
Statement will be filed within 120 days of December 31, 2005, the Companys
year-end.

ITEM 11.
SECURITY OWNERSHIP OF CERTAIN
  BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERSInformation called for by
Part III, Item 11, is included in the Companys Proxy Statement relating to its annual
meeting of stockholders, which involves the election of directors and is incorporated herein by reference. The Proxy
Statement will be filed within 120 days of December 31, 2005, the Companys
year-end.

ITEM 12.
CERTAIN RELATIONSHIPS AND RELATED
  TRANSACTIONSInformation called for by
Part III, Item 12, is included in the Companys Proxy Statement relating to its annual
meeting of stockholders, which involves the election of directors and is incorporated herein by reference. The Proxy
Statement will be filed within 120 days of December 31, 2005, the Companys
year-end.

ITEM 13.
EXHIBITS, FINANCIAL STATEMENT
  SCHEDULES, AND REPORTS ON FORM 8-K.(a)(1)
Financial StatementsReference is made to the Index set forth on Page F-1
  of this Annual Report on Form 10-KSB.(a)(2)
Financial Statement SchedulesAll schedules have been omitted because they are
  inapplicable or the information is provided in the consolidated financial
  statements, including the notes thereto.(a)(3)
Exhibits13

EXHIBIT
        DESCRIPTION3.1.1
        Certificate of Incorporation of Le@P Technology, Inc., filed March 20, 1997 with the Delaware Secretary of State (incorporated by reference to Appendix B to the Companys Definitive Proxy Statement for the Annual Meeting of Stockholders, as filed with the Securities Exchange Commission (the SEC) April 11, 1997).3.1.2
        Certificate of Ownership and Merger of Seal Holdings Corporation filed with the Delaware Secretary of State on June 13, 1997.*3.1.3
        Certificate of Preferred Stock Designation of Le@P Technology, Inc. filed with the Delaware Secretary of State on March 23, 1999 (incorporated by reference to Exhibit 3.3 to the Companys Current Report on Form 8-K, as filed with the SEC on April 19, 1999).3.1.4
        Certificate of Amendment to Certificate of Incorporation of Le@P Technology, Inc. filed June 21, 1999 with the Delaware Secretary of State (incorporated by reference to Exhibit 3.1.3 to the Companys Annual Report on Form 10-KSB for the year ended December 31, 1999, as filed with the SEC on March 30, 2000).3.1.5
        Certificate of Designation, Preferences, Rights and Limitations of 10% Cumulative Non-Voting Series B Preferred Stock of Le@P Technology, Inc. filed with the Delaware Secretary of State on November 15, 1999 (incorporated by reference to Exhibit 4 to the Companys Quarterly Report on Form 10-QSB for the quarter ended September 30, 1999, as filed with the SEC on November 15, 1999).3.1.6
        Certificate of Amendment to Certificate of Incorporation of Le@P Technology, Inc. filed July 5, 2000 with the Delaware Secretary of State (incorporated by reference to Exhibit 3 to the Companys Quarterly Report on Form 10-QSB for the quarter ended June 30, 2000, as filed with the SEC on August 14, 2000).3.2
        Bylaws of Le@P Technology, Inc.(incorporated by reference to Appendix C to the Companys Proxy Statement for the Annual Meeting of Shareholders of Le@P Fleet, Inc. held May 14, 1997, as filed with the SEC on April 11, 1997).10.1
        Funding Arrangement by M. Lee Pearce, M.D. (incorporated by reference to Exhibit 99.1  to the Companys Current Report on Form 8-K, as filed with the SEC on October 15, 1999).10.2
        Subscription Agreement dated March 30, 2000 with M. Lee Pearce, M.D. (incorporated by refernce to Exhibit 10.2 in the Companys Annual Report on From 10-KSB for the fiscal year ended December 31, 2000, as filed with the SEC on March 30, 2001).10.3
        1999 Long Term Incentive Plan (incorporated by reference to Exhibit B to the Companys Definitive Proxy Statement for its Annual Meeting of Stockholders as filed with the SEC on June 4, 1999).10.4
        1998 Incentive Option Plan (incorporated by reference to Exhibit A to the Companys Definitive Proxy Statement for its Annual Meeting of Stockholders as filed with the SEC on June 8, 1998).10.5
        1997 Incentive Option Plan (incorporated by reference to Appendix A to the Companys Definitive Proxy Statement for its Annual Meeting of Shareholders as filed with the SEC on April 11, 1997).10.6
        Amended 1996 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.3 to the Companys Form 10-Q for the quarter ended March 31, 1997 as filed with the SEC on May 15, 1997).14

10.7
    Promissory
        Note dated September 28, 2001, in the principal amount of $712,500, executed
        by Parkson Property LLC (incorporated by reference to Exhibit 10.3 to
        the Companys Current Report on Form 8-K as filed with the SEC on
        October 18, 2001).10.8
    Promissory
        Note dated November 5, 2002, in the principal amount of $1,755,710.65,
        issued to the M. Lee Pearce 1998 Irrevocable Trust, replacing certain
        promissory notes issued in 2001 and 2002 (incorporated by reference to
        Exhibit 10.1 to the Companys Quarterly Report on Form 10-QSB for
        the quarter ended September 30, 2002, as filed with the SEC on November
        14, 2002).10.9
    Promissory
        Note dated January 30, 2003, in the principal amount of $65,000 issued
        to the M. Lee Pearce 1998 Irrevocable Trust (incorporated by reference
        to Exhibit 10.18 in the Companys Annual Report on Form 10-KSB for
        the fiscal year ended December 31, 2002 as filed with the SEC on March
        31, 2003).10.10
    Promissory
        Note dated March 14, 2003, in the principal amount of $75,000 issued to
        the M. Lee Pearce 1998 Irrevocable Trust (incorporated by reference to
        Exhibit 10.19 in the Companys Annual Report on Form 10-KSB for the
        fiscal year ended December 31, 2002, as filed with the SEC on March 31,
        2003).10.11
    Promissory
        Note dated April 23, 2003, in the principal amount of $55,000 issued to
        the M. Lee Pearce 1998 Irrevocable Trust (incorporated by reference to
        Exhibit 10.1 in the Companys Quarterly Report on Form 10-QSB for
        the quarter ended March 31, 2003, as filed with the SEC on May 15, 2003).10.12
    Written
        Consent to Action dated May 6, 2003 extending the due date of a note to
        January 15, 2005 (incorporated by reference to Exhibit 10.2 in the Companys
        Quarterly Report on Form 10-QSB for the quarter ended March 31, 2003,
        as filed with the SEC on May 15, 2003).10.13
    Promissory
        Note dated June 30, 2003, in the principal amount of $71,000 issued to
        the M. Lee Pearce 1998 Irrevocable Trust (incorporated by reference to
        Exhibit 10.1 in the Companys Quarterly Report on Form 10-Q for the
        quarter ended June 30, 2003 as filed with the SEC on August 8, 2003).10.14
    Promissory
        Note dated July 24, 2003, in the principal amount of $80,000 issued to
        the M. Lee Pearce 1998 Irrevocable Trust (incorporated by reference to
        Exhibit 10.2 in the Companys Quarterly Report on Form 10-Q for the
        quarter ended June 30, 2003 as filed with the SEC on August 8, 2003).10.15
    Promissory
        Note dated November 3, 2003, in the principal amount of $37,000 issued
        to M. Lee Pearce, M.D. (incorporated by reference to Exhibit 10.22 in
        the Companys Annual Report on Form 10-KSB for the fiscal year ended
        December 31, 2003, as filed with the SEC on March 22, 2004).10.16
    Promissory
        Note dated December 8, 2003, in the principal amount of $30,000 issued
        to M. Lee Pearce, M.D. (incorporated by reference to Exhibit 10.23 in
        the Companys Annual Report on Form 10-KSB for the fiscal year ended
        December 31, 2003, as filed with the SEC on March 22, 2004).10.17
    Promissory
        Note dated December 29, 2003, in the principal amount of $25,000 issued
        to M. Lee Pearce, M.D. (incorporated by reference to Exhibit 10.24 in
        the Companys Annual Report on Form 10-KSB for the fiscal year ended
        December 31, 2003 as filed with the SEC on March 22, 2004).10.18
    Promissory
        Note dated March 11, 2004, in the principal amount of $2,295,464.65 issued
        to the M. Lee Pearce 1998 Irrevocable Trust (incorporated by reference
        to Exhibit 10.25 in the Companys Annual Report on Form 10-KSB for
        the fiscal year ended December 31, 2003 as filed with the SEC on March
        22, 2004).15

10.19
    Promissory
        Note dated March 11, 2004, in the principal amount of $93,022.03 issued
        to M. Lee Pearce, M.D.( incorporated by reference to Exhibit 10.26 in
        the Companys Annual Report on Form 10-KSB for the fiscal year ended
        December 31, 2003 as filed with the SEC on March 22, 2004).10.20
    Promissory
        Note dated March 12, 2004, in the principal amount of $38,000 issued to
        M. Lee Pearce M.D. ( incorporated by reference to Exhibit 10.27 in the
        Companys Annual Report on Form 10-KSB for the fiscal year ended
        December 31, 2003 as filed with the SEC on March 22, 2004).10.21
    Promissory
        Note dated April 14, 2004, in the principal amount of $126,000 issued
        to M. Lee Pearce, M.D.(incorporated by reference to Exhibit 10.28 in the
        Companys Quarterly Report on Form 10-QSB for the quarter ended March
        31, 2004, as filed with the SEC on May 12, 2004).10.22
    Promissory
        Note dated July 6, 2004, in the principal amount of $23,000 issued to
        M. Lee Pearce, M.D. (incorporated by reference to Exhibit 10.1 in
        the Companys Quarterly Report on Form 10-QSB for the quarter ended
        June 30, 2004, as filed with the SEC on August 13, 2004).10.23
    Promissory
        Note dated August 6, 2004, in the principal amount of $35,000 issued to
        M. Lee Pearce, M.D.(incorporated by reference to Exhibit 10.1 in the Companys
        Quarterly Report on Form 10-QSB for the quarter ended September 30, 2004,
        as filed with the SEC on November 15, 2004).10.24
    Promissory
        Note dated October 11, 2004, in the principal amount of $140,000 issued
        to M. Lee Pearce, M.D. (incorporated by reference to Exhibit 10.2 in the
        Companys Quarterly Report on Form 10-QSB for the quarter ended September
        30, 2004, as filed with the SEC on November 15, 2004).10.25
    Promissory
        Note dated November 18, 2004, in the principal amount of $29,000 issued
        to M. Lee Pearce, M.D. (incorporated by reference to Exhibit 10.32 in
        the Companys Annual Report on Form 10-KSB for the fiscal year ended
        December 31, 2004, as filed with the SEC on March 30, 2005).10.26
    Promissory
        Note dated December 2, 2004, in the principal amount of $35,000 issued
        to M. Lee Pearce, M.D. (incorporated by reference to Exhibit 10.33 in
        the Companys Annual Report on Form 10-KSB for the fiscal year ended
        December 31, 2004, as filed with the SEC on March 30, 2005).10.27
    Stock
        Exchange and Merger Agreement dated as of January 7, 2005 among Healthology,
        Inc., iVillage, Inc., Virtue Acquisition Corporation and certain stockholders
        of Healthology, Inc., including the Company (incorporated by reference
        to Exhibit 10.34 in the Companys Annual Report on Form 10-KSB for
        the fiscal year ended December 31, 2004, as filed with the SEC on March
        30, 2005).10.28
    Stock
        Purchase Agreement dated as of January 7, 2005 between the Company and
        Steven Haimowitz (incorporated by reference to Exhibit 10.35 in the Companys
        Annual Report on Form 10-KSB for the fiscal year ended December 31, 2004,
        as filed with the SEC on March 30, 2005).10.29
    Exchange
        and Termination Agreement dated March 17, 2006, effective as of March
        15, 2006, between Le@P Technology, Inc. and the M. Lee Pearce 2005 Irrevocable
        Trust (incorporated by reference to Exhibit 10.1 in the Companys
        Current Report on Form 8-K as filed with the SEC on March 21, 2006).10.30
    Fairness
        Opinion dated March 15, 2006 issued by Stenton Leigh Valuation Group,
        Inc. on March 16, 2006 (incorporated by reference to Exhibit 10.2 in the
        Companys Current Report on Form 8-K as filed with the SEC on March
        21, 2006).16

10.31
    Promissory
        Note dated March 17, 2006 in the principal amount of $562,500 executed
        by Parkson Property, LLC in favor of Bay Colony Associates, Ltd. (incorporated
        by reference to Exhibit 10.3 in the Companys Current Report on Form
        8-K as filed with the SEC on March 21, 2006).21
    Subsidiaries
        of the Registrant.*31.1
    Certification
          of the Acting Principal Executive Officer relating to Periodic Financial
          Report pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*31.2
    Certification
        of the Acting Principal Financial Officer relating to Periodic Financial
        Report pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*32.1
    Certification
        of the Acting Principal Executive Officer of Periodic Financial Report
        Pursuant to 18 U.S.C. Section 1350.*32.2
    Certification
        of the Acting Principal Financial Officer of Periodic Financial Report
        Pursuant to 18 U.S.C. Section 1350.**
        Filed herewith.(b)
        Reports on Form 8-KNone.


ITEM
          14.
        PRINCIPAL ACCOUNTANT FEES AND SERVICESInformation called for by Part III, Item 14, regarding principal accountant fees
and services, is included in the Companys Proxy Statement relating to its annual meeting of stockholders, which involves the election of directors, and is incorporated herein by reference. The Proxy Statement will be filed within 120 days of December 31, 2005, the Companys year-end.



17

SIGNATURES

Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.

LE@P TECHNOLOGY, INC.By:
/s/ Timothy C. LincolnTimothy C. Lincoln,Acting Principal Executive OfficerBy:
/s/ Mary E. ThomasMary E. Thomas,Acting Principal Financial OfficerDated: March 27, 2006

Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has
been signed below by the following persons on behalf of the Company and in the
capacities and on the dates indicated.

SIGNATURE

TITLE

DATE/s/ Timothy C. Lincoln

Acting Principal Executive Officer and Director

March 27, 2006Timothy C. Lincoln/s/ Mary Thomas

Acting Principal Financial Officer and Director

March 27, 2006Mary Thomas/s/ Mayra Diaz

Director

March 27, 2006Mayra Diaz18

Exhibit
F

INDEX
TO CONSOLIDATED FINANCIAL STATEMENTS

Le@P
  Technology, Inc. and Subsidiaries

PAGEReport
  of Independent Registered Public Accounting Firm

F-2Consolidated
  Balance Sheets as of December 31, 2005 and 2004

F-3Consolidated
  Statements of Operations for the years ended December 31, 2005 and 2004

F-5Consolidated
  Statements of Stockholders Equity (Deficit) for the years ended December 31,
  2005 and 2004

F-6Consolidated
  Statements of Cash Flows for the years ended December 31, 2005 and 2004

F-7Notes
  to Consolidated Financial Statements

F-8F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of
Le@P Technology, Inc.

We have audited the
accompanying consolidated balance sheets of Le@P Technology, Inc. and
Subsidiaries as of December 31, 2005 and 2004 and the related consolidated
statements of operations, stockholders equity (deficit), and cash flows for
the years then ended. These consolidated financial statements are the
responsibility of the Companys management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.

We conducted our audits
in accordance with the 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 consolidated financial
statements are free of material misstatements. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the
consolidated 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
consolidated financial statements referred to above present fairly, in all
material respects, the consolidated financial position of Le@P Technology, Inc.
and Subsidiaries as of December 31, 2005 and 2004, and the consolidated results
of their operations and their cash flows for the years then ended in conformity
with accounting principles generally accepted in the United States of America.

/s/ Berkowitz Dick Pollack & Brant, LLP


Fort Lauderdale, FloridaFebruary 8, 2006, except for Note 16, as to which the
date is March 22, 2006

F-2

Le@P Technology,
Inc. and Subsidiaries

Consolidated
Balance Sheets

December 31,2005

2004AssetsCurrent assets:Cash

$
3,133,203

$
23,088Due from
related
  party


21,191


3,250Prepaid
expenses
  and other current assets


9,167


31,917Total current
  assets


3,163,561


58,255Property and
  equipment, net


516,798


532,048iVillage, Inc.
  investment, available for sale


139,123


Other assets


700


700Total assets

$
3,820,182

$
591,003See
notes to consolidated financial statements.

F-3

Le@P Technology,
Inc. and Subsidiaries

Consolidated
Balance Sheets (continued)

December 31,2005

2004Liabilities
  and stockholders equity (deficit)Current
  liabilities:Accounts
payable

$
16,798

$
13,205Accrued
  professional fees


62,355


50,000Accrued
  compensation and related liabilities


3,650


2,810Short-term
notes
  payable to related party


2,814,487


Short-term
  accrued interest payable to related party


284,894


324Total current
  liabilities


3,182,184


66,339Long-term notes
  payable to related party


562,500


3,376,987Long-term
  accrued interest payable to related party





97,951Total
  liabilities


3,744,684


3,541,277Commitments and
  contingenciesStockholders
  equity (deficit):Preferred
stock,
  par value $0.001 per share. Authorized 25,000,000 shares. Issued and
  outstanding 2,170 shares at December 31, 2005 and 2004


2,170,000


2,170,000Class A common
  stock, par value $0.20 per share. Authorized 99,975,000 shares. Issued
  33,766,053 shares at December 31, 2005 and 2004


6,753,211


6,753,211Class B common
  stock, par value $0.20 per share. Authorized, issued and outstanding 25,000
  shares at December 31, 2005 and 2004


5,000


5,000Additional
  paid-in capital


26,401,913


26,401,913Accumulated
  deficit


(35,244,543
)

(38,230,938
)Accumulated
  other comprehensive income


39,377


Treasury stock,
  at cost, 84,850 shares at December 31, 2005 and 2004


(49,460
)

(49,460
)Total
  stockholders equity (deficit)


75,498


(2,950,274
)Total
  liabilities and stockholders equity (deficit)

$
3,820,182

$
591,003See
notes to consolidated financial statements.

F-4

Le@P Technology,
Inc. and Subsidiaries

Consolidated
Statements of Operations

Year
        ended December 31,2005
    
    2004Revenue
    
    $
    
    
    $
    Expenses:Salaries
        and benefits
    
    
    59,044
    
    
    37,656Professional
        fees
    
    
    130,955
    
    
    85,235General
        and administrative
    
    
    155,758
    
    
    197,289Total
        expenses
    
    
    345,757
    
    
    320,180Operating
        loss
    
    
    (345,757
    )
    
    (320,180
    )Interest
        and other income
    
    
    96,713
    
    
    4,104Interest
        expense
    
    
    (226,102
    )
    
    (154,653
    )Gain
        on sale of Healthology, Inc.
    
    
    3,461,541
    
    
    Income
        (loss) before provision for income taxes
    
    
    2,986,395
    
    
    (470,729
    )Provision
        for income taxes
    
    
    
    
    
    Net
        income (loss)
    
    $
    2,986,395
    
    $
    (470,729
    )Net
        income (loss) attributable to common stockholders
    
    $
    2,769,395
    
    $
    (687,729
    )Basic
        net income (loss) per share:Net
        income (loss) per share:
    
    $
    0.09
    
    $
    (0.01
    )Net
        income (loss) attributable to common stockholders
    
    $
    0.08
    
    $
    (0.02
    )Diluted
        net income (loss) per share:Net
        income (loss) per share
    
    $
    0.09
    
    $
    (0.01
    )Net
        income (loss) attributable to common stockholders
    
    $
    0.08
    
    $
    (0.02
    )Basic
        weighted average shares outstanding
    
    
    33,706,203
    
    
    33,706,203Diluted
        weighted average shares outstanding
    
    
    35,158,703
    
    
    33,706,203See
notes to consolidated financial statements.

F-5

Le@P Technology, Inc. and SubsidiariesConsolidated Statements of Stockholders Equity (Deficit)

Preferred
  Stock

Class A and Class B
  Common Stock

Additional
  Paid-in

Accumulated

Treasury

Accumulated
  Other
  ComprehensiveShares

Amount

Shares

Par Value

Capital

Deficit

Stock

Income

TotalBalance at
  December 31, 2003


2,170

$
2,170,000


33,791,053

$
6,758,211

$
26,401,913

$
(37,217,289
)
$
(49,460
)
$


$
(2,479,545
)Net loss

















(470,729
)







(470,729
)Balance at
  December 31, 2004


2,170


2,170,000


33,791,053


6,758,211


26,401,913


(38,230,938
)

(49,460
)




(2,950,274
)Net income

















2,986,395








2,986,395Unrealized gain
  on investment, net of tax























39,377


39,377Balance at
  December 31, 2005


2,170

$
2,170,000


33,791,053

$
6,758,211

$
26,401,913

$
(35,244,543
)
$
(49,460
)
$
39,377

$
75,498See notes to consolidated financial statements.

F-6

Le@P Technology,
Inc. and Subsidiaries

Consolidated
Statements of Cash Flows

Year ended December 31,2005

2004Cash
  flows from operating activities:Net income
  (loss)

$
2,986,395

$
(470,729
)Adjustments to
  reconcile net income (loss) to net cash used in operating activities:Depreciation


15,250


19,101Gain on sale of
  investment in Healthology, Inc.


(3,461,541
)

Changes in
  operating assets and liabilities:Due from
related
  party


(17,941
)

818Prepaid
expenses
  and other current assets


22,749


(13,233
)Accounts
payable


3,593


7,479Accrued
  professional fees


12,355


18,441Accrued
  compensation and related liabilities


840


(11,753
)Accrued
interest
  payable to related party


186,619


(87,066
)Net cash used in
  operating activities


(251,681
)

(536,942
)Cash
  flows from investing activities:Purchase of
  certificates of deposits


(3,000,000
)

Proceeds on sale
  of certificates of deposits


3,000,000


Net proceeds on
  sale of investment in Healthology, Inc.


3,361,796


Net cash
  provided by investing activities


3,361,796


Cash
  flows from financing activitiesProceeds from
  notes payable to related party





539,777Net cash
  provided by financing activities





539,777Net change in
  cash


3,110,115


2,835Cash at
  beginning of year


23,088


20,253Cash at end of
  year

$
3,133,203

$
23,088Supplemental
  disclosure of cash flow information:Cash paid during
  year for: Interest

$
42,827

$
127,492Cash paid during
  year for: Income taxes

$


$
Schedule
  of noncash investing and financing activities:Gain on sale of
  investment

$
3,461,541

$
Less: Net amount
  received in cash

$
(3,361,796
)
$
Amount received
  in form of iVillage, Inc. common stock

$
99,745

$
See
notes to consolidated financial statements.

F-7

Le@P
Technology, Inc. and SubsidiariesNotes to Consolidated Financial Statements

1.       The
Company

Le@P Technology, Inc. and
Subsidiaries (Le@P or the Company), formerly known as Seal Holdings
Corporation and Subsidiaries, is a holding company that was formerly focused on
the acquisition of, and strategic investments in, companies providing services
in health care and life sciences (with particular interest in information
technology companies). On April 2, 1999, the name of the Company was changed to
OH, Inc. and on July 5, 2000 it was further changed to Le@P Technology,
Inc. On September 26, 2002, the Board of Directors determined to cease for the
foreseeable future investigating or consummating further investment and
acquisition opportunities.

On January 10, 2005, the
Company disposed of its investment in Healthology, Inc. (Healthology),
resulting in the receipt by the Company of more than $3,300,000 in cash plus
17,347 shares of restricted common stock of iVillage Inc. (iVillage). In
light of this increase in funds available for investment, on March 16, 2005 the
Board of Directors of the Company determined to actively seek opportunities for
the Company to make new investments or acquisitions (whether in health care,
life sciences or other industries), but only in the form of controlling
interests in the companies invested in or acquired or other types of investments
which would not require the Company to register as an investment company
pursuant to the Investment Company Act of 1940, as amended (the 40 Act).

2.       Summary
of Significant Accounting Policies

Consolidation

The accompanying
consolidated financial statements (the financial statements) include the
accounts of Le@P Technology, Inc. and its wholly-owned subsidiaries. All
significant intercompany accounts and transactions are eliminated in
consolidation. Investments in investment or acquisition candidates (Partner
Companies) in which Le@P owns 50% or less of the outstanding voting
securities, and in which significant influence is exercised, are accounted for
under the equity method. Significant influence is presumed at a 20% ownership
level; however, Le@P applies the equity method for investments in which it
acquires less than 20% of the voting interest if it exerts significant
influence through representation on the investees Board of Directors or
through other means. All other investments for which the Company does not have
the ability to exercise significant influence or where the Company is not the
primary beneficiary (as defined under FASB Interpretation No. 46R Variable
Interest Entities) are accounted for on the cost method. Such investments are
stated at the lower of cost or net realizable value. During 2005 and 2004 the
Company accounted for its investments under the cost method.

Income
Taxes

The Company accounts for
income taxes under Financial Accounting Standards Board (FASB) No. 109,
Accounting for Income Taxes. Deferred income tax assets and liabilities are
determined based upon differences between financial reporting and tax basis of
assets and liabilities and are measured using the enacted tax rates and laws
that will be in effect when the differences are expected to reverse.

No provision for income
taxes has been recorded due to utilization of net operating loss carryforwards
to date. The Company has recorded a full valuation allowance for any deferred
tax assets that have resulted from its unused net operating loss carryforwards.

Recent
Accounting Pronouncements

In December 2004, the
FASB issued FASB Statement No. 123R, Share-Based Payment. This Statement is a
revision of FASB Statement No. 123, Accounting for Stock-Based Compensation.
This Statement supersedes APB Opinion No. 25, Accounting for Stock Issued to
Employees, and its related implementation guidance. This Statement establishes
standards for the accounting for transactions in which an entity exchanges its equity
instruments for goods or services. It also addresses transactions in which an
entity incurs liabilities in exchange for

F-8

goods or services that
are based on the fair value of the entitys equity instruments or that may be
settled by the issuance of those equity instruments. This Statement focuses
primarily on accounting for transactions in which an entity obtains employee
services in share-based payment transactions. This Statement requires that the
cost resulting from all share-based payment transactions be recognized in the
financial statements. This Statement establishes fair value as the measurement
objective in accounting for share-based payment arrangements and requires all
entities to apply a fair-value-based measurement method in accounting for
share-based payment transactions with employees. This Statement is effective
for public entities that file as small business issuers as of the beginning of
the first interim or annual reporting period that begins after December 15,
2005, and for nonpublic entities as of the beginning of the first annual
reporting period that begins after December 15, 2005. The Company is still
assessing the impact, if any, the Statement will have on the Companys
financial statements.

In December 2004, the
FASB issued FASB Statement No. 153 (FASB 153), Exchanges of Nonmonetary
Assets, an amendment of APB Opinion No. 29 (ABP 29). This Statement
addresses the measurement of exchanges of nonmonetary assets. It eliminates the
exception from fair value measurement for nonmonetary exchanges of similar
productive assets in paragraph 21 (b) of APB 29 and replaces it with an
exception for exchanges that do not have commercial substance. This Statement
is effective for nonmonetary asset exchanges occurring in fiscal periods beginning
after June 15, 2005. The Company does not believe the adoption of this
Statement will have any material impact on the Companys financial statements.

Cash and
Cash Equivalents

The Company considers all
highly liquid investments purchased with an original maturity of three months
or less to be cash equivalents.

Property
and Equipment

Property and equipment
are recorded at cost. Depreciation is computed using the straight-line method
over the estimated useful lives of the assets which range from 3-9 years.

Use of
Estimates

The preparation of
financial statements in conformity with accounting principles generally
accepted in the United States of America requires management to make estimates
and assumptions that effect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.

Financial
Instruments

The Companys financial
instruments primarily consisting of cash, due from related parties, iVillage,
Inc. investment, accounts payable, accrued professional fees, accrued
compensation and related liabilities and notes payable approximate fair value
as of December 31, 2005 and 2004.

Stock
Based Compensation

In December 2002, the
FASB issued FASB Statement No. 148, Accounting for Stock Based
Compensation-Transition and Disclosure. FASB Statement No. 148 amends FASB
Statement No. 123, Accounting for Stock-Based Compensation, to provide
alternative methods of transition for a voluntary change to the fair value
based method of accounting for stock-based employee compensation. In addition,
FASB Statement No. 148 amends the disclosure requirements of FASB Statement No.
123 to require prominent disclosures in both annual and interim financial
statements about the method of accounting for stock-based employee compensation
and the effect of the method used on reported results.

The Company applies APB
No. 25 (accounting for stock issued to employees) and related interpretations
in accounting for stock options granted to employees. Had the Company applied
FASB Statement No. 123, there would be no proforma effect on the 2005 and 2004
net income (loss) from the outstanding options.

F-9

There were no options granted during the years ended
December 31, 2005 and 2004.

3.       Operating
Losses and Cash Flow Deficiencies

The Company has
experienced operating losses and deficiencies in operating cash flows. Until
the Company has operations or other revenue generating activities to be
self-sufficient, the Company will remain dependent upon other sources of
capital. In the past, such capital has come from the Companys Majority
Stockholder and the proceeds from the Healthology sale.

On September 30, 1999,
the Companys Chairman and majority stockholder agreed to provide Le@P,
directly or through his affiliates (collectively, the Majority Stockholder),
funding of up to $10,000,000 to be used to fund working capital requirements
and future acquisitions, as approved by the Companys Board of Directors (the
Funding Commitment) and as further discussed in Note 5 herein. Through
December 31, 2005, the Company had received $8,475,000 of the Funding
Commitment and working capital notes aggregating $2,814,487 from the Majority Stockholder.
The notes are not part of the Funding Commitment. As of December 31, 2005,
$1,525,000 was available to the Company pursuant to the Funding Commitment. On
January 10, 2005, the Company completed the disposition of its entire
investment in Healthology. The Company received $3,050,880 for the Companys
3,050,880 shares of Healthology Series A Convertible Voting Preferred Stock,
and 17,347 shares of iVillage restricted common shares and $347,413 for the
Companys 800,000 shares of Healthology common stock. See Note 16 for subsequent events.

The Company anticipates
that the proceeds from the Healthology disposition will be sufficient to cover
operating expenses through the next twelve months.

4.       Investments

Healthology

On March 27, 2000, the Company
purchased an approximate 21% interest in the issued shares of Healthology
(computed on an as-converted basis). Healthology is a privately held,
health-media company based in New York, NY that produces and distributes
original healthcare content generated by health professionals. The Company
acquired approximately 3,200,000 shares of Healthology Series A Convertible
Voting Preferred Stock (Healthology Preferred Shares) at a total cost of
approximately $3,500,000. The Company obtained the funds for the Healthology
acquisition through a capital contribution from its Majority Stockholder
pursuant to the Funding Commitment described in Note 5 herein. Subsequent to
the purchase of the interest in Healthology, the Company transferred 160,573
shares of Healthology Preferred Stock to third parties in satisfaction of
certain obligations of the Company.

On February 5, 2001,
Healthology exercised a put option and Le@P purchased 800,000 shares of
Healthology common stock for $1,000,000.

The audited financial
statements of Healthology as of and for the year ended December 31, 2000
contained a going concern explanatory paragraph and its financial statements as
of and for the year ended December 31, 2001 reflected a net loss of
approximately $5,000,000. Healthologys plans for the years ended December 31,
2002 and 2001, included raising additional equity or debt financing,
investigating the possibility of merger or joint venture arrangements to obtain
additional sources of funds, and scaling back operations. Healthology was
unsuccessful in such endeavors to obtain financing and continued to experience
significant losses. As a result of these factors, the Company believed its
investment in Healthology was materially impaired and further reduced the value
of its investment by $1,354,358 during 2001. During 2002, Healthology was
unsuccessful in its endeavors to form a merger or joint venture arrangement,
and suffered continued losses amounting to approximately $988,000. Accordingly,
the Company wrote-off its remaining investment of approximately $115,000 in the
quarter ended December 31, 2002.

F-10

For the year ended
December 31, 2003, Healthologys unaudited net income was $1,087,000. As the
Company records its investments under the cost method of accounting, the book value
of the Companys investment in Healthology remained at zero.

On January 7, 2005,
Healthology entered into a Stock Exchange and Merger Agreement with iVillage,
and the Company completed the disposition of its entire investment in
Healthology on January 10, 2005 pursuant to that agreement and a
related Stock Purchase Agreement (Note 1).

5.       Funding
Commitment

In connection with the
Funding Commitment as of December 31, 2005, the Majority Stockholder has
contributed $8,475,000 to the Company. Of this amount, approximately $4,544,000
was to fund the investment in Healthology and related transaction expenses, and
the remaining balance was substantially used to fund operating expenses. In
consideration of these contributions, the Company issued in previous years, 1,614,284 shares of
the Companys Class A Common Stock to the Majority Shareholder at a purchase
price of $5.25 per share.

As of December 31, 2005,
a balance amounting to $1,525,000 (the Additional Funds) was available to the
Company pursuant to the Funding Commitment. On March 30, 2000, the Board of
Directors of the Company and the Majority Stockholder agreed that all funds
contributed pursuant to the Funding Commitment including such Additional Funds,
represent a subscription for additional shares of the Companys Class A Common
Stock at $5.25 per share (an aggregate of 290,476 shares when the remaining
$1,525,000 is contributed). See Note 16 for subsequent events.

6.       Property
and Equipment

Property
and equipment consists of the following:

December 31,2005

2004Land

$
510,000

$
510,000Leasehold improvements


17,842


17,842Equipment and software


49,524


49,524Furniture and fixtures


84,553


84,553661,919


661,919Less accumulated depreciation


145,121


129,871$
516,798

$
532,0487.       Commitments
and Contingencies

Legal
Proceedings

The Company is involved
in litigation relating to the offshore supply business conducted prior to
August 14, 1996 by certain subsidiaries of the Company which are now inactive.
The cases were filed against such subsidiaries and other ship-owning companies
based on the alleged exposure of 64 former seamen to maritime asbestos and
other toxic substances while working on vessels operated by such companies as
part of an industry wide series of similar claims. On May 1, 1996, the claims
against the Companys subsidiaries and the other defendants were
administratively dismissed subject to reinstatement against one or more
specific defendants upon a specific showing that a plaintiff suffers from an
asbestos-related disease and that he was exposed to asbestos containing
products on the vessels operated by such defendant(s). Since such date, none of
the cases against the Companys subsidiaries

F-11

have been reinstated. At
the present time, the Company does not believe such cases are likely to have a
material adverse impact upon the Company.

The Company is also
involved from time to time in various other claims and lawsuits in the ordinary
course of its current or prior business, none of which the Company anticipates
would have a material adverse effect on its financial condition or results of
operations.

8.       Related
Party Transactions

The Companys Majority
Stockholder, directly or indirectly, owns a number of real estate entities with
which the Company has done or currently does business. At December 31, 2005,
the Company was leasing administrative office space from one such real estate
entity. This lease expired December 31, 2004, and the Company is currently
leasing the space on a month-to-month basis at approximately $4,000 per month.

The Company rented out a
portion of the administrative space to other related entities on a
month-to-month basis during 2005, resulting in net rent expense amounting to
approximately $5,112 for the year ended December 31, 2005.

Due from related party
represents amounts due from the Companys Majority Stockholder in relation to
certain services performed on his behalf by the Companys part-time employee.

Through December 31,
2005, the Company had received loans amounting to $2,814,487 from the Majority
Stockholder. The proceeds of loans were being used for working capital
purposes. The loans are evidenced by promissory notes, which pay interest at
the prime rate (7.25% at December 31, 2005). Principal and interest on the
loans are due and payable in one lump sum on March 15, 2006. These notes are not
part of the funding commitment. See Note 16 for subsequent events.

Effective September 28,
2001, the Majority Stockholder contributed land and buildings in Broward
County, Florida to the Company in exchange for a note payable. The land and
buildings have been recorded at fair value as determined by an independent
third-party appraisal. The note payable consists of a short-term promissory
note in the amount of $37,500 which was due and paid on November 28, 2001 and a
longer-term note and mortgage in the amount of $562,500 due in one lump sum on
September 28, 2006. See Note 16 for subsequent events. Both notes bear
interest at the rate of 7% per annum. All accrued but unpaid interest on the
longer-term note was due September 28, 2004 with regular monthly interest
payments to be made thereafter. The Company paid the accrued interest of
$118,125 on October 12, 2004, and continues to pay the regular monthly interest
payments.

The land is zoned light
industrial and consists of approximately one and one-third acres. On July 16,
2003, the Board of Directors determined that it was in the best interest of the
Company to demolish the existing buildings. The demolition of the buildings
took place in August 2003. FASB Statement No. 144, Accounting for the
Impairment or Disposal of Long-Lived Assets, requires that long-lived assets
be reviewed for impairment whenever events or changes in circumstances indicate
that the carrying amount of an asset may not be recoverable. As a result, the
Company recognized an impairment loss equal to the book value of the buildings
in the amount of $75,000. On October 21, 2004, the Company entered into a
short-term two month lease to rent the property to an unrelated party. On June
15, 2005, the Company entered into a three-year lease to rent the property to
an unrelated party. The Company recognized approximately $17,000 and $4,000 in
rental income under these leases for the years 2005 and 2004, respectively,
that is reflected as other income in the accompanying financial statements. The
Company has no plans to sell or develop the Real Property.

The interest expense
included in the 2005 and 2004 consolidated financial statements relates to
interest charged on the indebtedness due to the Majority Stockholder.

F-12

9.       Stock
Based Compensation

Options may be granted to
Company employees, directors and consultants under various stock option plans.
All options granted under the plans through December 31, 2005 have been at
prices which have been equal to or greater than the fair market value of the
Companys common stock at the date of grant. At December 31, 2005, the Company
had reserved 4,374,500 shares of Class A common stock for possible future
issuance under its stock option plans. Option activity under the Companys
plans is summarized below:

2005

2004Shares

Weighted
  Average
  Exercise Price

Shares

Weighted
  Average
  Exercise PriceOutstanding at beginning of year


1,452,500


$
1.41



1,452,500

$
1.41Options granted













Options forfeited













Outstanding at end of year


1,452,500


$
1.41



1,452,500

$
1.41Options exercisable at year-end


1,452,500


$
1.41



1,452,500

$
1.41Shares available for future grant


4,374,500







4,374,500The following table summarizes information about stock
options outstanding at December 31, 2005:

Stock Options Outstanding

Stock Options ExercisableExercise Price

Number of
  Options

Weighted
  Average
  Remaining
  Contractual
  Life

Weighted
  Average
  Exercise Price

Number of
  Options

Weighted
  Average
  Exercise Price$0.50


300,000

1.3


$
0.50



300,000


$
0.50$1.00


240,000

4.9


$
1.00



240,000


$
1.00$1.75


860,000

2.7


$
1.75



860,000


$
1.75$3.00


52,500

4.2


$
3.00



52,500


$
3.00$0.50 - $3.00


1,452,500

3.5


$
1.41



1,452,500


$
1.41F-13

10.        Net
Income (Loss) Per Share

Basic and diluted
earnings per share for the years ended December 31, 2005 and 2004 are computed
using the following information:

For the year ended
  December 31,2005

2004BASIC
  EARNINGS PER SHARE COMPUTATION:NUMERATOR:Net income
  (loss)

$
2,986,395

$
(470,729
)Dividends
  (undeclared) on cumulative preferred stock


(217,000
)

(217,000
)Net income
  (loss) attributable to common stock

$
2,769,395

$
(687,729
)DENOMINATOR:Average number
  of common shares outstanding


33,706,203


33,706,203DILUTED
  EARNINGS PER SHARE COMPUTATION:NUMERATOR:Net income
  (loss)

$
2,986,395

$
(470,729
)Dividends
  (undeclared) on cumulative preferred stock


(217,000
)

(217,000
)Net income
  (loss) attributable to common stockholders

$
2,769,395

$
(687,729
)DENOMINATOR:Average number
  of common shares outstanding


33,706,203


33,706,203Incremental
  shares for assumed exercise of securities


1,452,500


(a
)Total shares


35,158,703


33,706,203(a)
The weighted average shares of common stock
  outstanding are not adjusted for potential effects of the Companys stock
  options because of their antidilutive effect.11.        Preferred
Stock

The Certificate of
Incorporation of the Company, as amended, authorizes the issuance of 25,000,000
shares of Preferred Stock, $.001 par value of which 2,500 shares have been
designated as Series B 10% Cumulative Preferred Stock, $.001 par value, (the
Series B Preferred Stock). The Series B Preferred Stock is nonvoting and
nonconvertible. Dividends on the Series B Preferred Stock are cumulative and
accrue at a rate of 10% per annum on the preferred stocks stated value of
$1,000 per share and must be paid before any dividends may be paid on any other
class of common or preferred stock. No other class of common or preferred stock
may be redeemed or repurchased nor may the Series B Preferred Stock be altered
or modified without the approval of the holders of the Series B Preferred
Stock. Effective November 15, 1999, the Company issued 2,170 shares of the
Series B Preferred Stock to the majority shareholder in exchange for
$2,170,000, which had previously been contributed to the Company. At December
31, 2005 dividends of $1,368,500 were accumulated on the Series B Preferred
Stock. Such amount will be accrued and charged to retained earnings, if any, or
additional paid-in capital when declared by the Companys Board of Directors.

12.        Class
B Common Stock

The Company has 25,000
shares of Class B Common Stock outstanding. Such shares are held by an
affiliate of the Companys majority shareholder and enable the holder to elect
a majority of the Board of Directors of the Company, otherwise the Class B
Common Stock is identical to the Companys Class A Common Stock.

13.        Income
Taxes

Significant components of
the Companys net deferred income taxes are as follows:

Year ended December 31,2005

2004Deferred tax assets:Net operating loss carryforwards

$
1,929,103

$
3,198,722Accruals


107,737


37,356Stock -based compensation


29,991


29,991Other


1,558


4,675Deferred tax assets


2,068,421


3,270,744Less valuation allowance


(2,068,421
)

(3,270,744
)Net deferred tax assets

$


$
A reconciliation of the U.S. statutory federal income
tax rate to the effective income tax rate (benefit) follows:

F-14

Year ended December 31,2005

2004U.S. Federal Statutory rate


34.00
%

34.00
%State income taxes, net of federal benefit


3.63


3.63Change in valuation allowance


(40.26
)

(26.65
)Non-deductible items


(0.00
)

(0.01
)Other


2.63


(10.97
)0.00
%

0.00
%FASB No. 109 requires a
valuation allowance to reduce the deferred tax assets reported if, based on the
weight of the evidence, it is more likely than not that some portion or all of
the deferred tax assets will not be realized. After consideration of the
evidence, both positive and negative, management has determined that a
$2,068,421 valuation allowance at December 31, 2005 is necessary to reduce the
deferred tax assets to the amount that will more likely than not be realized.
The change in the valuation allowance for the current year is $1,202,323. At December
31, 2005, the Company has available net operating loss carryforwards of
approximately $5,100,000 expiring at various times through 2023.

14.        Valuation
and Qualifying Accounts

A summary of the activity
in the Companys valuation and qualifying accounts is as follows:

Description

Balance at
  Beginning of
  Period

Charged to
  Costs and
  Expenses

Write-offs

Other
  Changes

Balance at
  End of
  PeriodDeferred tax
  asset valuation allowanceYear ended
  December 31, 2004

$
3,145,310

$
125,434





$
3,270,744Year ended
  December 31, 2005

$
3,270,744

$
1,202,323





$
2,068,42115.        Concentration
of credit risk

The Company maintains
cash balances at a high credit quality financial institution which at times
exceeds the federally insured amounts. As of December 31, 2005 and 2004,
approximately $3,033,000 and $0, respectively, exceeded the federally insured
amount.

16.        Subsequent
events

Subsequent to December
31, 2005, the Company issued 100,000 shares of the Corporations authorized
unissued Class A Common shares to an unrelated party at the price of $0.10 per
share and other consideration. The transaction increased the outstanding shares of Class A Common stock
from 33,681,203 to 33,781,203.

On March 17, 2006 the
Company entered into an Exchange and Termination Agreement with the Majority
Shareholder whereby the working capital loans and accrued interest (through March 2006) which were
due the Majority Shareholder on the maturity date of March 15, 2006 (the
Maturity Date) totaling $3,141,470 are to be converted into newly issued
shares of the Companys Class A Common Stock (the Shares), at an effective
conversion price of $0.10 per share. The Maturity Date of the Notes is extended
until May 12, 2006 or the date on which the next Annual Shareholder Meeting of
the Company is held (the Closing Date), and the Notes will continue to bear
interest at the prime rate until the Closing Date. In consideration for the
Majority Shareholder to extend the applicable Maturity Date of the Notes until
the Closing Date and to accept the Shares as full payment for the Notes, the
Company has agreed to terminate the funding arrangement contained in the letter
dated September 30, 1999, as amended on March 31, 2000 (collectively, the
Funding Commitment). (see Note 5)

A $562,500 note due to the majority shareholder
 was replaced with a new note on March 17, 2006. The new note
extends the due date to January 8, 2008 from September 28, 2006. The note bears
interest at 7% per annum, and the total accrued interest and principal are due
in one lump sum on the maturity date of January 8, 2008.

F-15