<PAGE>
LEGGOONS, INC.
400 South Lindell
Vandalia, Missouri 63382
December 16, 1996
U.S. Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC 20549
RE: Form 10-KSB, Commission File No. 33-68570
Included with this letter is the electronic filing of Leggoons, Inc., Form
10-KSB for the year ended August 31, 1996. However, the Leggoons, Inc.,
the audited financial statements and related accountants' report as of and
for the year ended August 31, 1996, are not included in the filing.
As indicated on Leggoons, Inc., February 29, 1996, Form 10-QSB filed on
April 19, 1996, and May 31, 1996, Form 10-QSB filed on July 19, 1996,
Leggoons, Inc., during the fiscal year ended August 31, 1996, has
discontinued operations, except for the maintenance of the public shell, and
filed an assignment for the benefit of creditors. These two items raised
significant accounting issues that required extensive research and guidance
from our accountants, BDO Seidman, LLP. However, due to limited working
capital delaying the start of this process the final research for the
accounting treatment of these items is just now being completed.
BDO Seidman, LLP, has not finalized the Leggoons, Inc., audited financial
statements due to the fact that the final research of the accounting
treatment is just now being completed. In addition, they have requested that
payment for their services be made before they provide their accountants'
report on the financial statements as of and for the year ended August 31,
1996. I have agreed to honor their request in order to maintain a positive
working relationship with our accountants. The accountants' report for the
financial statements as of and for the year ended August 31, 1996, is
expected to be unqualified with a going concern explanatory paragraph.
This is consistent with the accountants' report that was issued for the
financial statements as of and for the year ended August 31, 1995.
It is the intention of Leggoons, Inc., to file an amended Form 10-KSB for the
year ended August 31, 1996, that includes the financial statements as of and
for the year ended August 31, 1996, and the related accountants' report, by
December 23, 1996.
Please feel free to call or fax me at (314) 441-3894 if you have any
questions.
Sincerely,
Steven D. Walters
Chief Financial Officer
<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended: August 31, 1996
Commission file number: 33-68570
LEGGOONS, INC.
--------------------------------------------------
(Exact name of registrant as specified in its charter)
MISSOURI 43-1239043
---------------------- ----------------------------------
(State of incorporation) (IRS Employer Identification number)
400 South Lindell, Vandalia, Missouri, 63382
---------------------------------------------------
(Address of principal executive offices and Zip Code)
(573) 594-6418
---------------------------------------------------
(Registrant's telephone number, inc luding area code)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Leggoons, Inc. Common Stock $.01 Par Value
Leggoons, Inc. Class A Warrants
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
--------- --------
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or informational
statements incorporated by reference in Part III of this form 10-KSB or any
amendment to this form 10-KSB. [ ]
Revenue's for the fiscal year ended August 31, 1996: $0
The aggregate market value of the voting stock held by non-affiliates of the
Registrant, based upon the closing average bid and asked price of the Common
Stock on November 30, 1996, as reported on the OTC Bulletin Board, was
$225,000.
Number of shares of common stock outstanding as of November 30, 1996:
2,787,000
Documents Incorporated by Reference: Exhibit's in Registrant's Annual Report
on Form 10-K filed on December 14, 1995, are incorporated by reference to the
exhibit index attached hereto. Exhibits in Registrant's Annual Report on
Form 10-K filed on November 29, 1994, are incorporated by reference to the
exhibit index attached hereto. Exhibits in Registrant's Registration
Statement on Form S-1 filed on October 28, 1993, are incorporated by
reference to the exhibit index attached hereto.
1
<PAGE>
LEGGOONS, INC.
Index to Annual Report
on Form 10-KSB
Part I Page
Item 1- Description of Business 3
Item 2- Description of Property 4
Item 3- Legal Proceedings 4
Item 4- Submission of Matters to a Vote
of Security Holders 4
Part II
Item 5- Market for Common Equity and
Related Stockholder Matters 4
Item 6- Plan of Operations 5
Item 7- Financial Statements 6
Item 8- Changes in and Disagreements
with Accountants on Accounting
and Financial Disclosure 6
Part III
Item 9- Directors, Executive Officers
and Compliance With Section 16(a)
of the Exchange Act 7
Item 10- Executive Compensation 8
Item 11- Security Ownership of Certain
Beneficial Owners and Management 8-9
Item 12- Certain Relationships and Related
Transactions 9
Part IV
Item 13- Exhibits, Financial Statement
Schedules and Reports on Form 8- 10
2
<PAGE>
PART I
Item 1. Description of Business
(a) Business Development
Leggoons, Inc. (the "Company") was organized under the laws of the State of
Missouri on September 1, 1981, as HANDY-TOP, INC. On April 20, 1983, the
Articles of Incorporation were amended to change the name of the corporation
to HTI Corporation. On May 28, 1993, the Articles of Incorporation were
amended to change the name of the corporation to Leggoons, Inc. In addition
to changing the Company's name, the May 28,1993, amendment to the Articles of
Incorporation increased the number of authorized shares of common stock from
40,000 to 10,000,000 and decreased the par value of the common stock from
$1.00 per share to $.01 per share. Also on May 28, 1993, the Company
declared a 14-for-1 stock split. Unless otherwise indicated, all share and
per share data are reflected on a post split basis throughout this Form
10-KSB.
On June 12, 1996, the Company transferred all of its assets and liabilities
to a third party assignee, under an "Assignment for the Benefit of Creditors"
(the "Assignment"). An Assignment is a business liquidation device
available as an alternative to bankruptcy. The third party assignee, a
Nebraska corporation, also named Leggoons, Inc. (the "Assignee"), will be
required to properly, timely, and orderly dispose of all remaining assets for
the benefit of creditors. The Company will continue to maintain its' status
as a shell corporation.
(b) Business of Issuer
The Company was engaged in the design, manufacture and distribution of
apparel and related accessories which are sold to better specialty and
department stores nationwide under the brands: Leggoons, CPO by Leggoons,
John Lennon Artwork Apparel and Snooggel. On January 19, 1996, the Company
entered into a Licensing Agreement with Robert Tamsky, a former director and
employee of the Company. Pursuant to the terms of the Licensing Agreement,
the Company granted Mr. Tamsky effective January 1, 1996, the right to use
the LEGGOONS trademark in connection with the design, production, marketing,
sales and sublicensing of all clothing, wearing apparel and accessories
bearing the "LEGGOONS" symbol. This right will continue until December 31,
1998, and may be extended thereafter each year for an additional year. In
consideration for the license, Mr. Tamsky, according to the Licensing
Agreement, shall pay to the Company a royalty of five percent of the net
sales of "LEGGOONS" products.
Also on January 19, 1996, the Company adopted a formal plan to discontinue
the designing, selling, manufacturing and distribution of its apparel
products. As part of such plan, the Company discontinued production on April
30, 1996, and intends to either sell or liquidate the operations within
twelve months of that date. On June 12, 1996, the Company transferred all of
its assets and liabilities to a third party assignee, under an "Assignment
for the Benefit of Creditors." Included in the Assignment were the rights
and obligations of the Licensing Agreement.
After the Assignment the Company is continuing its status as a public shell
corporation with the intention of marketing the shell for a merger or
acquisition in the future. The Company does not currently have any employees.
3
<PAGE>
Item 2. Description of Property
The Company is using office space provided by the Assignee at 400 South
Lindell, Vandalia, Missouri, to maintain its shell operations.
Item 3. Legal Proceedings
Not Applicable
Item 4. Submission of Matters to a Vote of Security Holders
Not Applicable
PART II
Item 5. Market for Common Equity and Related Stockholder Matters
(a) Market Information
The Common Stock is traded in the over-the-counter market and the range of
closing bid prices shown below is as reported by the OTC Bulletin Board. The
quotations shown reflect inter-dealer prices, without retail mark-up, mark-
down or commission and may not necessarily represent actual transactions.
Per Share Common Stock Bid Prices by Quarter
For the Fiscal Year Ended August 31, 1996
High Low
<TABLE>
<CAPTION>
<S> <C> <C>
First Quarter 1 7/8 3/4
Second Quarter 1 9/16 7/8
Third Quarter 1 9/16 5/16
Fourth Quarter 15/16 3/8
</TABLE>
Per Share Common Stock Bid Prices by Quarter
For the Fiscal Year Ended August 31, 1995
High Low
<TABLE>
<CAPTION>
<S> <C> <C>
First Quarter 1 1/4 7/8
Second Quarter 15/16 3/8
Third Quarter 5/8 3/8
Fourth Quarter 5/8 3/8
</TABLE>
(b) Holders of Common Equity
As of August 31, 1996, the Company estimates there were 350 beneficial
shareholders of the Company's Common Stock.
(c) Dividends
The Company has not declared or paid a cash dividend to stockholders since it
became a "C" corporation on November 18, 1993. The Board of Directors
presently intends to retain any earnings to finance Company operations and
does not expect to authorize cash dividends in the foreseeable future. Any
payment of cash dividends in the future will depend upon the Company's
earnings, capital requirements and other factors.
4
<PAGE>
Item 6. Plan of Operations
The Company is currently satisfying its cash requirements by obtaining
advances from its principal stockholder, James S. Clinton. Mr. Clinton is
also the President and a member of the Board of Directors of the Company.
Mr. Clinton has advised the Company that he will continue to provide cash
advances for operations for at least the next twelve months. It is
anticipated that the Company will employ one or two employees in the next
twelve months to provide for the procedures required to market the public
shell for merger or acquisition.
On May 22, 1996, the Company entered into an Addendum to the Stock Purchase
Agreement it initially entered into on September 5, 1995, with Infinitron
Investments International, Inc. of Vancouver B.C. ("Infinitron"). Pursuant
thereto 100% of the shares of common stock of Infinitron would be exchanged
for approximately 4,797,500 shares of common stock of the Company which would
represent approximately 95% of the post-split Company's outstanding common
stock. The Addendum provided, among other things, that Leggoons would use
its best efforts to obtain SEC clearance of its proxy statement by July 22,
1996, and Infinitron will use its best efforts to fully cooperate with the
Company in obtaining such clearance.
On July 3, 1996, counsel for Infinitron informed the Company that Infinitron
does not intend to proceed with the transactions contemplated by the Stock
Acquisition Agreement. Counsel for Infinitron stated that the basis for that
action was that he noted "a number of irregularities in the relationships and
dealings among the principals of Leggoons and Infinitron, " however he did not
provide any specifics relating to that allegation. The Company believes these
claims to be baseless and without merit.
Settlement negotiations have been completed, including approval by all
Infinitron and the Company of the settlement documents, which are currently
being circulated for signatures. Generally, under the terms of the
settlement, the Company is to receive $510,000 in cash over a period of six
months, along with 3% of Infinitron stock. The Infinitron stock will be held
for the benefit of the Company's shareholders as their "loss of the bargain"
under the Leggoons Inc., Infinitron proposed merger.
As of December 13, 1996, the settlement agreement has not been executed by
all parties. If, and when, this settlement agreement is executed the
Company will be able to determine how the proceeds of the settlement agreement
affect its plan of operations for the next twelve months.
5
<PAGE>
Item 7. Financial Statements
Financial statements for the two years ended August 31, 1996 and 1995 are
presented in a separate section of this report following Part IV.
Item 8. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
On November 3, 1995, the Company engaged the services of BDO Seidman in St.
Louis, Missouri, to provide an audit of its financial statements for the
fiscal year ended August 31, 1995. The former accountant, KPMG Peat Marwick
LLP in Omaha, Nebraska, declined to stand for re-election for the 1995
engagement. The independent auditors' reports for August 31, 1993 and 1994,
were modified as to uncertainties about the entity's ability to continue as a
going concern. The decision to change accountants was approved by the
Company's board of directors with the selection of the successor accountants.
The Company and its' former accountants had no disagreements during the fiscal
years ended August 31, 1993 and 1994, and through the date they declined to
stand for re-election.
6
<PAGE>
PART III
Item 9. Directors, Executive Officers and Compliance With Section 16(a) of
the Exchange Act
(a) Directors and Executive Officers
James S. Clinton, 56, Chief Executive Officer, President and Director of the
Company since 1983. Director of Eselco, Inc., an investor owned electric
utility.
Steven D. Walters, 29, Chief Financial Officer and Director of the Company
since 1994. Audit Supervisor/Senior in Certified Public Accounting firms from
1991 to 1994.
Larry D. Langston, 56, Director of the Company since 1983. Executive Vice
President of the Company from 1983 to 1995.
Richard F. Giannotti, 50, Director of the Company since 1995. Vice President
of Multi Financial Securities since 1995. Securities and Corporate Finance
with Regional Brokerage firms from 1991 to 1995.
(b) Compliance with Section 16(a) of the Exchange Act
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors, certain officers and persons holding 10% or more of the Company's
common stock to file reports regarding their ownership and regarding their
acquisitions and dispositions of the Company's common stock with the
Securities and Exchange Commission. The Company is unaware that any required
reports were not timely filed.
7
<PAGE>
Item 10. Executive Compensation
The following table sets forth information concerning compensation paid by
Leggoons, Inc. for services rendered during fiscal year 1996, 1995, and 1994
for the Chief Executive Officer and for each of the Company's other executive
officers whose annual salary and bonus exceeds $100,000.
Summary Compensation Table
--------------------------
Long-Term Compensation
---------------------------
Awards Payouts All
Annual Compensation Other
Name and Restricted LTIP Compen-
Principal Salary Bonus Other Stock Options/ Payouts sation
Position Year ($) ($) ($) ($) SARs(#) ($) ($)
----- ------ ----- ----- --------- ------- ------- -------
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
James S. 1996 -0- -0- -0- -0- -0- -0- -0-
Clinton, 1995 17,631 -0- -0- -0- -0- -0- -0-
President
and Chief 1994 38,200 -0- -0- -0- -0- -0- -0-
Executive
Officer
</TABLE>
Perquisites and other personal benefits are omitted because they do not exceed
either $50,000 or 10% of the total of annual salary and bonus for the named
executive officer.
Item 11. Security Ownership of Certain Beneficial Owners and Management
The following table sets forth, as of November 30, 1996, the beneficial
ownership of the Company's Common Stock by each person who is known by the
Company to own beneficially more than 5% of the issued and outstanding shares
of the Company's Common Stock.
Name and Address of Amount and Nature of Percent of
Beneficial Owner Beneficial Ownership Class
------------------ -------------------- ----------
<TABLE>
<CAPTION>
<S> <C> <C>
James S. Clinton 1,416,000 50.8%
30 Ginger Cove Road
Valley, NE 68064
Larry D. Langston 266,000 9.6%
301 W. Saint John
Vandalia, MO 63382
</TABLE>
8
<PAGE>
The following table shows, as of November 30, 1996, certain information with
respect to Leggoons, Inc. Common Stock beneficially owned by directors and
executive officers of the Company. Unless otherwise noted, all shares are
owned directly or indirectly with sole voting and investment power.
Name of Amount and Nature of Percent of
Beneficial Owner Beneficial Ownership1 Class
---------------- --------------------- ----------
<TABLE>
<CAPTION>
<S> <C> <C>
James S. Clinton2 1,416,000 50.8%
Larry D. Langston3 266,000 9.6%
Steven D. Walters2 1,000 -0-
Richard Giannotti3 1,000 -0-
All Directors and
Officers as a Group 1,684,000 60.4%
</TABLE>
1 Shares reported include shares owned by spouses of officers and directors.
No options to acquire any Leggoons, Inc. common stock are owned by any
officer or director.
2 Officer and director of the Company.
3 Director of the Company.
Item 12. Certain Relationships and Related Transactions
During fiscal 1995, the saliant details of certain transactions which
occurred between the Company and its officers and directors are set forth
below. With respect to each such transaction, the Company believes that the
terms of each transaction were approximately as favorable to the Company as
could have been obtained from an unrelated third party.
In January 1995, the Company authorized the issuance of 140,000 shares of
restricted common stock to James Clinton. At such time, Mr. Clinton was the
President and a member of the Board of Directors of the Company. Such
issuance was in consideration of the forgiveness by Mr. Clinton of $140,000
in debt owed by the Company to Mr. Clinton. The Board of Directors of the
Company, by unanimous written consent, deemed the issuance of such shares to
be fair and equitable in view of the book value and market value of the
Company's common stock.
In July 1995, the Company sold the useable assets of its facility in Omaha
to James S. Clinton, President of the Company, at the approximate market value
of the assets. No material gain or loss was incurred in the transaction.
The market value of the assets was determined by management analysis of the
assets in the transaction.
9
<PAGE>
PART IV
Item 13. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(a) Index to Financial Statements and Schedules
See index to financial statements and supporting schedules on page 11 of this
annual report on Form 10-KSB.
(b) Reports on Form 8-K
A Current Report on Form 8-K dated as of June 12, 1996, was filed with
respect to the sale of assets and liabilities to the Assignee in conjunction
with the Assignment for the Benefit of Creditors filed by the Company on June
12, 1996.
(c) Index to Exhibits
Any exhibits filed with the Securities and Exchange Commission will be
supplied upon written request of Steven D. Walters, Vice President of Finance,
Leggoons, Inc., 400 S. Lindell, Vandalia, MO 63382. A charge will be made to
cover copying costs. See Exhibit Index below.
Number Exhibit Description
3.1 Leggoons, Inc. Articles of Incorporation and Amendments,
incorporated by reference to Exhibit 3.1 of Leggoons, Inc.
Registration Statement on Form S-1 filed on October 28, 1993.
3.2 Leggoons, Inc. Bylaws Amended, incorporated by reference to
Exhibit 3.2 of Leggoons, Inc. Registration Statement on Form S-1
filed on October 28, 1993.
4.2 Class A Warrant Agreement, incorporated by reference to Exhibit
4.2 of Leggoons, Inc. Registration Statement on Form S-1 filed
on October 28, 1993.
10.1 Assignment for Benefit of Creditors, incorporated by reference to
Exhibit 10.1 of Leggoons, Inc., Form 8-K filed on June 27, 1996.
10
<PAGE>
LEGGOONS, INC.
INDEX TO FINANCIAL STATEMENTS
FILED WITH THE ANNUAL REPORT OF THE COMPANY ON FORM 10-KSB
FOR THE YEAR ENDED AUGUST 31, 1996
Balance Sheet F-1
Statements of Operations F-2
Notes to Interm Financial Statements F-3 - F-4
Proforma Balance Sheet F-4
Stock Purchase Agreement F-5
11
<PAGE>
LEGGOONS, INC.
BALANCE SHEET
(Unaudited)
August 31, 1996
ASSETS:
<TABLE>
<CAPTION>
<S> <C>
Total Assets $ 0
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Advances payable to stockholder 8,188
Accounts payable 12,339
------
Total current liabilities 20,527
Stockholders' Equity:
Common stock, $.01 par value,
authorized 10,000,000 shares;
issued and outstanding, 2,787,000 27,870
Preferred stock, $.01 par value,
authorized 5,000,000
shares; issued and outstanding -
none 0
Additional paid-in capital 3,522,792
Accumulated deficit (3,571,189)
Total stockholders' equity (20,527)
Total Liabilities and
Stockholders' Equity $ 0
---------
</TABLE>
F-1
See accompanying notes to interim financial statements
<PAGE>
LEGGOONS, INC.
STATEMENTS OF OPERATIONS
(Unaudited)
For the Years Ended August 31,
1996 1995
------------- -----------
<TABLE>
<CAPTION>
<S> <C> <C>
General and
administrative expenses 98,920 26,000
Loss from continuing operations (98,920) (26,000)
Discontinued operations:
Income (loss) from discontinued
apparel operations (289,302) (1,380,983)
Loss on disposal of apparel
operations, including a provision
of $150,000 for operating losses
during phase-out period (470,998) 0
Income (loss) from discontinued
operations (760,300) (1,380,983)
--------- ----------
Net loss $ ( 859,220) $ (1,406,983)
========= ==========
Loss from continuing operations
per share $ (.04) (.01)
-------- ---------
Net income (loss) per share $ (.31) (.51)
-------- ---------
Weighted average shares outstanding 2,787,000 2,734,500
========== ==========
</TABLE>
F-2
See accompanying notes to interim financial statements
<PAGE>
LEGGOONS, INC.
NOTES TO INTERIM FINANCIAL STATEMENTS
1. Unaudited Interim Periods:
The information furnished herein relating to interim periods has not been
audited by independent Certified Public Accountants. In the opinion of the
Company's management, the financial information in this report reflects any
adjustments that are necessary for a fair statement of results for the
interim periods presented in accordance with generally accepted accounting
principles. All such adjustments, except the recognition of the estimated
loss on disposal of the apparel operations (Note 2) and the recognition of
the assignment for the benefit of creditors (Note 4), are of a normal and
recurring nature. The accounting policies followed by the Company, and
additional footnotes, are set forth in the audited financial statements
included in the company's Annual Report Form 10-K filed with the SEC on
December 14, 1995.
2. Discontinued Operations
On January 19, 1996, the Company adopted a formal plan to discontinue the
designing, selling, manufacturing and distribution of its apparel products.
As part of such plan, the Company discontinued production on April 30, 1996
and will either sell or liquidate the operations within twelve months of
that date.
As a result, the Company recorded a second quarter charge of $565,720 to
write down the Company's assets to be sold to their estimated net realizable
values and to accrue for $150,000 of estimated operating losses through the
anticipated phase-out period. No income tax benefits have been allocated to
the Company's losses because there are no realizeable taxable benefits
available to allocate to the discontinued operations. No adjustment of the
carrying amount of the Company's trademark has been made, as the current
disposal plan contemplates retaining the trademark subject to the licensing
agreement discussed in Note 5.
3. Restructuring of Liabilities:
During the year ended August 31, 1996, the Company entered into agreements
with certain vendors under which those vendors agreed to reduce the aggregate
amount owed to them by the Company by up to seventy five percent in exchange
for the Company's commitment to pay the reduced amount over varying periods
through December, 1998. The Company has recognized a $94,723 gain from the
restructuring of these liabilities based on the payments that were made and
accepted in December 1995 through May 1996. This gain has been classified as
an adjustment to the loss on disposal of apparel operations in the statement
of operations.
F-3
<PAGE>
4. Assignment for the Benefit of Creditors:
On June 12, 1996, the Company transferred all of its assets and liabilities
to a third party assignee, under an "Assignment for the Benefit of Creditors.
" An Assignment is a business liquidation device available as an alternative
to bankruptcy. The third party assignee, a Nebraska corporation, also named
Leggoons, Inc. (the "Assignee"), will be required to properly, timely, and
orderly dispose of all remaining assets for the benefit of creditors. The
Company will continue to maintain its' status as a shell corporation.
Following is a proforma condensed balance sheet reflecting the effect of the
foregoing transaction as if it occurred on May 31, 1996:
LEGGOONS, INC.
Proforma Balance Sheet
May 31, Proforma
1996 May 31, 1996
------------- ------------
ASSETS (Unaudited) Adjustments (Unaudited)
Current Assets:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Cash $ 1,530 (1,530) $ 0
Accounts receivable 215,258 (215,258) 0
Inventories 162,756 (162,756) 0
------- ------- -----
Total current assets 379,544 (379,544) 0
======= ======= =====
Property, plant and
equipment, net 72,755 (72,755) 0
Trademarks, net 214,003 (214,003) 0
$666,302 (666,302) $ 0
======= ======= =====
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current Liabilities:
Note payable to bank $ 363,275 (363,275) $ 0
Note payable to stockholder 724,643 (724,643) 0
Current portion of
long-term debt 165,722 (165,722) 0
Accounts payable 306,791 (306,791) 0
Accrued expenses 98,522 (98,522) 0
Estimated loss on
discontinued operations 132,408 (132,408) 0
Total current liabilities 1,791,361 (1,791,361) 0
--------- ---------- -----
Stockholders' Equity:
Common stock 27,870 27,870
Preferred stock - -
Additional paid-in capital 2,390,070 1,125,059 3,515,129
Accumulated deficit (3,542,999) (3,542,999)
Total stockholders' equity (1,125,059) 0
--------- --------- ---------
$ 666,302 $ 0
========= ========= =========
</TABLE>
F-4
<PAGE>
5. Stock Purchase Agreement:
On May 22, 1996, the Company entered into an Addendum to the Stock
Purchase Agreement it initially entered into on September 5, 1995, with
Infinitron Investments International, Inc. of Vancouver B.C. ("Infinitron").
Pursuant thereto 100% of the shares of common stock of Infinitron would be
exchanged for approximately 4,797,500 shares of common stock of the Company
which would represent approximately 95% of the post-split Company's
outstanding common stock. The Addendum provides, among other things, that
Leggoons will use its best efforts to obtain SEC clearance of its proxy
statement by July 22, 1996, and Infinitron will use its best efforts to fully
cooperate with the Company in obtaining such clearance.
On July 3, 1996, counsel for Infinitron informed the Company that Infinitron
does not intend to proceed with the transactions contemplated by the Stock
Acquisition Agreement. Counsel for Infinitron stated that the basis for that
action was that he noted "a number of irregularities in the relationships and
dealings among the principals of Leggoons and Infinitron, " however he did not
provide any specifics relating to that allegation. The Company believes these
claims to be baseless and without merit.
Settlement negotiations have been completed, including approval by all
Infinitron and the Company of the settlement documents, which are currently
being circulated for signatures. Generally, under the terms of the
settlement, the Company is to receive $510,000 in cash over a period of six
months, along with 3% of Infinitron stock. The Infinitron stock will be held
for the benefit of the Company's shareholders as their "loss of the bargain"
under the Leggoons Inc., Infinitron proposed merger. As of December 13, 1996,
the settlement agreement has not been executed by all parties.
F-5
<PAGE>
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 on December 16,
1996.
LEGGOONS, INC.
By: /s/ James S. Clinton By: /s/ Steven D. Walter
---------------------- -----------------------
James S. Clinton Steven D. Walters
Chairman of the Board and President Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
/s/ James S. Clinton December 16, 1996
--------------------- -----------------
James S. Clinton Chairman of the Board, Date
President and Director
/s/ Larry Langston December 16, 1996
-------------------- -----------------
Larry Langston, Director Date
/s/ Steven D.Walters December 16, 1996
---------------------- -----------------
Steven D. Walters Vice President and Date
Director
12
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