10-K 1 g6795.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-K ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended January 31, 2013 Advanced Technologies Group, Ltd. (Exact name of registrant as specified in its charter) Nevada 0-30987 80-0987213 (State of (Commission (I.R.S. Employer Incorporation) File Number) Identification Number) 331 Newman Springs Road, Suite 143, Red Bank, NJ 07701 (Address of principal executive offices) (Zip Code) 732-784-2801 (Registrant's Telephone Number) Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: Common Stock $.0001 par value (Title of Class) Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. [ ] Yes [X] No Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. [ ] Yes [X] No 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. [X] Yes [ ] No Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). [X] Yes [ ] No Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (ss.229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X] Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [ ] Smaller reporting company [X] Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). [ ] Yes [X] No State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant's most recently completed second fiscal quarter. The aggregate market value based on the average bid and asked price on the over-the-counter market of the Registrant's Common Stock, ("Common Stock") held by non-affiliates of the Company was $183,244 as at July 31, 2012. There were 14,415,735 outstanding shares of Common Stock as of January 31, 2013. APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS: Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. [ ] Yes [ ] No DOCUMENTS INCORPORATED BY REFERENCE Not Applicable FORM 10-K ADVANCED TECHNOLOGIES GROUP, LTD. TABLE OF CONTENTS PART I Forward Looking Statements 3 Item 1. Business 3 Item 1A. Risk Factors 7 Item 1B. Unresolved Staff Comments 10 Item 2. Properties 10 Item 3. Legal Proceedings 10 PART II Item 4. Mine Safety Disclosures 12 Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 12 Item 6. Selected Financial Data 13 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operation 14 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 16 Item 8. Financial Statements and Supplementary Data 16 Changes in and Disagreements With Accountants on Accounting and Item 9. Financial Disclosure 16 Item 9A. Controls and Procedures 17 Item 9B. Other Information 18 PART III Item 10. Directors, Executive Officers and Corporate Governance 18 Item 11. Executive Compensation 20 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 22 Item 13. Certain Relationships and Related Transactions, and Director Independence 22 Item 14. Principal Accounting Fees and Services 23 PART IV Item 15. Exhibits and Financial Statement Schedules 24 Signatures 25 2 FORWARD LOOKING STATEMENTS Some of the information contained in this Annual Report may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations and projections about future events. The words "estimate," "plan," "intend," "expect," "anticipate" and similar expressions are intended to identify forward-looking statements which involve, and are subject to, known and unknown risks, uncertainties and other factors which could cause the Company's actual results, financial or operating performance, or achievements to differ from future results, financial or operating performance, or achievements expressed or implied by such forward-looking statements. Projections and assumptions contained and expressed herein were reasonably based on information available to the Company at the time so furnished and as of the date of this filing. All such projections and assumptions are subject to significant uncertainties and contingencies, many of which are beyond the Company's control, and no assurance can be given that the projections will be realized. Potential investors are cautioned not to place undue reliance on any such forward-looking statements, which speak only as of the date hereof. Unless otherwise required by law, the Company undertakes no obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. Important factors that could cause actual results to differ materially from our expectations ("Cautionary Statements") include, but are not limited to, those set forth under the heading "Risk Factors" in this Annual Report. ITEM 1. BUSINESS CORPORATE HISTORY FXDIRECT Advanced Technologies Group, Ltd. (the "Company," "ATG," "we," "us" or "our") was incorporated in the State of Nevada in February 2000. In January 2001, the Company purchased 100% of the issued and outstanding shares of FX3000, Inc. (formerly Oxford Global Network, Ltd.), a Delaware corporation, the designer of the FX3000 currency trading software platform. The FX3000 software program is a financial real time quote and money management platform for use by independent foreign currency traders. In March 2002, the Company transferred its FX3000 software program to FX Direct Dealer, LLC ("FX Direct") a joint venture company that markets the FX3000 software program. The Company received a 25% interest in the joint venture in return for the transfer. The remaining 75% of the joint venture was owned by Tradition, N.A. ("Tradition"), a subsidiary of Compagnie Financiere Tradition, a major Swiss-based financial company. On December 29, 2006, Tradition sold 80% of its 75% membership interest in the joint venture to the Chairman of the Board of Directors of Tradition. Tradition NA retained a 15% membership interest. 3 On January 26, 2009, the Company entered into a purchase and sale agreement (the "Purchase Agreement"), by and among the Company, FX Direct as purchaser (the "Purchaser"), MaxQ Investments, LLC ("MaxQ") which was the majority member of the Purchaser and Tradition, the remaining member of the Purchaser, pursuant to which the Company agreed to sell (the "Sale") its approximate 25% membership interest (the "Membership Interest") in FX Direct to FX Direct. The Agreement provided that it was effective as of December 31, 2008, as a result of which the Company was not entitled to receive any allocations of profit, loss or distributions from FX on account of its Membership Interest after such date. On March 17, 2009, the Company completed the Sale of the Membership Interest to FX Direct. The aggregate purchase price of the Membership Interest was approximately $26,000,000, of which $9,000,000 was paid in cash at the closing of the Sale and the remaining $17,000,000 was paid in 36 equal monthly installments of $472,222.22, bearing interest at the rate of 10% per annum and evidenced by a subordinated promissory note (the "Subordinated Note") that was issued pursuant to a Cash Subordinated Loan Agreement ("Loan Agreement"). The Company previously received approximately $250,000 from the Purchaser in full satisfaction of amounts owed to the Company for providing certain services to the Purchaser. MOVEIDIOT.COM Effective as of July 20, 2009, the Company entered into an Asset Purchase Agreement with Dan Khasis, LLC ("Seller"), pursuant to which ATG acquired all of the rights to Seller's website "MoveIdiot.com" and the related software for a purchase price of $57,000 plus the issuance to Seller of 25,000 restricted shares of Common Stock. In addition, Seller was entitled to receive up to an additional 50,000 restricted shares of Common Stock if certain membership goals for the MoveIdiot.com website were met in the 12 months following the closing; however, the goals were not met. MoveIdiot.com was designed to enable individuals and businesses to keep track of their property on-line. The software program enables users to manage their possessions on-line and print automatically generated labels that are sealable to be used in the event of moving from one location to another. The Company had not received any revenues from MoveIdiot.com through the date of this report. On or about August 1, 2012, the Company received a letter from the operator of the MoveIdiot.com website claiming that the Company owed it approximately $85,000 in unpaid service fees, which claim was subsequently settled for $46,525. At present, the MoveIdiot.com website is not in operation and the Company is evaluating whether or not to continue the development of this website. SEC CIVIL ACTION AND SETTLEMENT On June 23, 2010, the SEC filed the SEC Action against ATG, and its officers in the United States District Court for the Southern District of New York. The SEC secured provisional relief in the form of an order (the "Asset Freeze Order") freezing the defendants' assets and prohibiting destruction, concealment or alteration of records pending final disposition of the action, to which the defendants consented, with certain carve outs for payments of 4 necessary corporate and personal expenses. In October 2010, the defendants reached an agreement in principle with the SEC to settle the action in its entirety, which was approved by the Court in January 2011. Under the SEC Settlement, defendants consented to judgment in the total amount of $19,186,536.32, of which approximately $14.8 million was paid within 14 days following entry of the judgment and the balance was paid in nine monthly installments following the entry of judgment. The defendants also agreed to pay $500,000 to satisfy the costs of the administration of the Plan of Distribution under the SEC Settlement. The Asset Freeze Order was lifted in November 2011. As of January 31, 2013, the holders of an aggregate of 711,916 shares of Series A preferred stock, 1,474,459 shares of Series B preferred stock and 4,533,231 shares of common stock had submitted approved claims under the Plan and the Company's transfer agent is in the process of cancelling such shares. Neither the Company nor its predecessor has been involved in a bankruptcy, receivership or similar proceeding. DESCRIPTION OF BUSINESS GENERAL The Company's business centers around the development and/or acquisition of new technologies that in management's opinion provide a novel or significantly improved methodology to solve existing problems, meet current demands among business and which have the potential for commercialization. MOVEIDIOT.COM Effective a of July 20, 2009, the Company entered into an Asset Purchase Agreement with Dan Khasis, LLC ("Seller"), pursuant to which the Company acquired all of the rights to Seller's website "MoveIdiot.com" and the related software for a purchase price of $57,000 plus the issuance to Seller of 25,000 restricted shares of Common Stock. MoveIdiot.com was designed to enable individuals and businesses to keep track of their property on-line. The software program enables users to manage their possessions on-line and print automatically generated labels that are sealable to be used in the event of moving from one location to another. The Company had not received any revenues from the operation of the MoveIdiot.com website through the date of this report. On or about August 1, 2012, the Company received a letter from the operator of the MoveIdiot.com website claiming that the Company owed it approximately $85,000 in unpaid service fees, which claim was subsequently settled for $46,525. At present, the MoveIdiot.com website is not in operation and the Company is evaluating whether or not to continue the development of this website. 5 COMPETITION The market for new, Internet-based technologies is evolving rapidly, and will be intensely competitive reacting quickly to the accelerating pace of technological change. The Company faces competition in this market sector from a broad sector of companies in many diverse fields whose primary focus is to identify problems and to create new technological solutions for these problems. Further, the search to acquire new technology developed by other for commercialization is also an intensely competitive area. In its efforts to acquire new technology the Company will be competing with many companies in a wide range of industries, most of whom have greater financial resources than the Company and greater market recognition. GOVERNMENT REGULATION We are not currently subject to direct regulation by any domestic or foreign governmental agency, other than regulations applicable to businesses generally, and laws or regulations directly applicable to access to online commerce. However, due to the increasing popularity and use of the Internet and other online services, it is possible that a number of laws and regulations may be adopted with respect to the Internet or other online services covering issues such as user privacy, pricing, content, copyrights, distribution, and characteristics and quality of products and services. Furthermore, the growth and development of the market for online commerce may prompt more stringent consumer protection laws that may impose additional burdens on those companies conducting business online. The adoption of any additional laws or regulations may decrease the growth of the Internet or other online services, which could, in turn, decrease the demand for our products and services and increase our cost applicability to the Internet and other online services of existing laws in various jurisdictions governing issues such as property ownership, sales and other taxes and personal privacy is uncertain and may take years to resolve. INTELLECTUAL PROPERTY AND PROPRIETARY RIGHTS We regard our current and future copyrights, service marks, trademarks, trade dress, trade secrets and similar intellectual property as critical to our success. We intend to rely on trademark and copyright law, trade secret protection and confidentiality and/or license agreements with our employees, users, partners and others to protect our proprietary rights. Effective trademark, service mark, copyright and trade secret protection may not be available in every country in which we may operate to provide services online. Therefore, the steps we take to protect our proprietary rights may be inadequate. We currently hold various web domain names relating to our products and services, including the "MoveIdiot.com" domain name in the United States. Governmental agencies and their designees generally regulate the acquisition and maintenance of domain names and this regulation is subject to change. Governing bodies may establish additional top-level domains, appoint additional domain name registrars or modify the requirements for holding domain names. As a result, we may be unable to acquire or maintain relevant domain names in all countries in which we intend to conduct business. 6 There has been substantial litigation in the software and Internet industries regarding intellectual property rights. It is possible that, in the future, third parties can claim that we, or our current or potential future products, infringe on their intellectual property. We expect that software product developers will increasingly be subject to infringement claims as the number of products and competitors in our industry segment grows and the functionality of products in industry segments overlaps. Any claims, with or without merit, could be time-consuming, result in costly litigation, cause product licensing delays, require us to license or pay royalties for certain products in order to continue to sell our products, or pay substantial damages. Licensing or royalty agreements, if required, may not be available on terms acceptable to us or at all. As a result, our business could be harmed. EMPLOYEES As of January 31, 2013, we had two employees. In addition, the Company utilizes the services of consultants to provide technology, marketing and other services to the company on a project or as needed basis. SEC REPORTS We file annual, quarterly, current and other reports and information with the SEC. These filings can be viewed and downloaded from the Internet at the SEC's website at www.sec.gov. These reports are also available to be read and copied at the SEC's public reference room located at Judiciary Plaza, 100 F Street, N.E., Washington, D.C. 20549. The public may obtain information on the operation of the public reference room by calling the SEC at 1-800-SEC-0330. ITEM 1A. RISK FACTORS The following factors, in addition to other information contained on incorporated by reference in this Form 10-K, should be considered carefully. Our business, financial condition or results of operations could be materially adversely affected by any of these risks. The risks described below are not the only risks facing our company. Additional risks and uncertainties that we are not aware of or that we currently believe are immaterial may also adversely affect our business, financial condition, results of operation and liquidity. The trading price of our shares of Common Stock could decline due to any of these risks, and you may lose all or part of your investment. THE COMPANY HAS A LIMITED HISTORY OF OPERATIONS ON WHICH TO JUDGE ITS FUTURE PERFORMANCE. Since July 2009, the Company's principal business activity has been the development of the MoveIdiot.com website. However, the Company had not received any revenues from the operation of MoveIdiot.com through the date of this report. At present, the MoveIdiot.com website is not in operation and the Company is evaluating whether or not to continue the development of this website. 7 The Company is subject to all of the risks inherent in the establishment of a new business, including the absence of a significant operating history, lack of market recognition and limited banking and financial relationships. A SUBSTANTIAL PORTION OF THE COMPANY'S CASH RESOURCES WERE REQUIRED FOR THE PAYMENT OF THE SEC SETTLEMENT. Under the terms of the SEC Settlement, the Company consented to a judgment against it in the amount of $19,186,536.32 and has agreed to pay $500,000 to satisfy the costs of administering the Plan of Distribution under the Settlement Agreement. As of January 31, 2012, the Company had fully funded its obligations under the SEC Settlement thereby substantially reducing the Company's cash resources. The SEC Settlement prohibits ATG and one of its officers from participating in any unregistered sales of securities for a five year period with the officer being further prohibited from participating in any "penny stock offering," which in general means an offering where the price per share is less than $5.00. These restrictions will make it more difficult for ATG to raise funds to support its ongoing business operations. THE COMPANY IS LARGELY DEPENDENT ON ITS MANAGEMENT. The Company is largely dependent upon the personal efforts of its current management, the loss of any of which could have a material adverse effect upon the Company's business and prospects. The Company does not have key-man life insurance upon the life of any of its officers or directors. Additionally, as the Company implements its commercial operations, it will require the services of additional skilled personnel. There can be no assurance that the Company can attract persons with the requisite skills and training to meet its future needs or, even if such persons are available, that they can be hired on terms favorable to the Company. MANAGEMENT MAY NOT BE ABLE TO CONTROL THE COMPANY'S COSTS AND EXPENSES. With respect to the Company's development of its technologies and the implementation of commercial operations, the Company cannot accurately project or give any assurance, with respect to management's ability to control the Company's development and operating costs and/or expenses. Consequently, if management is not able to adequately control costs and expenses, such operations may not generate any profit or may result in operating losses. THE COMPANY MAY BE ADVERSELY AFFECTED BY REGULATORY CHANGES. At present, none of the business segments where the Company plans to operate have significant government regulation that could be expected to adversely affect the commercialization of the Company's technologies. However, all of the Company's present technology is related to the Internet and it is possible that the current federal, state or local laws and regulations which apply to the Internet and which relate to services the Company plans to offer 8 its customers, may change in the future. Although it is not possible to predict the extent of any such changes, and although management is not aware of any pending adverse changes in the regulations applicable to its planned business operations, it is possible that future or unforeseen changes may have an adverse impact upon the Company's ability to continue or expand operations as presently planned. THE COMPANY MAY NOT BE ABLE TO PROTECT ITS INTELLECTUAL PROPERTY RIGHTS. The Company's success will depend in significant part on certain methodologies it plans to utilize in connection with the commercial applications for its newly acquired technology and on proprietary intellectual property rights it has and may in the future develop. The Company plans to rely on a combination of nondisclosure and other contractual arrangements and trade secrets, copyright, patent and trademark laws to protect its proprietary rights and the proprietary rights of third parties from whom the Company may licenses intellectual property. The Company also plans to enter into confidentiality agreements with its employees and consultants and limits access to, and distribution of, proprietary information. There can be no assurance that the steps planned by the Company in this regard will be adequate to deter misappropriation of proprietary information or that the Company will be able to detect unauthorized use and take appropriate steps to enforce its intellectual property rights. SUBSTANTIAL LITIGATION REGARDING INTELLECTUAL PROPERTY RIGHTS EXISTS IN THE SOFTWARE INDUSTRY. WE EXPECT THAT SOFTWARE PRODUCTS MAY BE INCREASINGLY SUBJECT TO THIRD-PARTY INFRINGEMENT CLAIMS AS THE NUMBER OF COMPETITORS IN OUR INDUSTRY SEGMENTS GROWS AND THE FUNCTIONALITY OF PRODUCTS IN DIFFERENT INDUSTRY SEGMENTS OVERLAPS. Third parties may make a claim of infringement against us with respect to our products and technology or claims that our intellectual property rights are invalid. Any claims, with or without merit, could: * be time-consuming to defend; * result in costly litigation; * divert management's attention and resources; * delay product delivery, or * result in substantial damage awards. In addition, if our products were found to infringe a third party's proprietary rights, we could be required to enter into royalty or licensing agreements in order to continue to be able to sell our products. Royalty or licensing agreements, if required, may not be available on terms acceptable to us or at all. A successful claim of product infringement against us and our failure or inability to license the infringed or similar technology could have a material adverse effect on our business. 9 THE COMPANY DOES NOT ANTICIPATE PAYING DIVIDENDS ON ITS COMMON STOCK. The Company has not paid any dividends on its Common Stock nor, by reason of its contemplated financial requirements, does it anticipate paying any dividends upon its Common Stock in the foreseeable future. A LOW MARKET PRICE MAY SEVERELY LIMIT THE POTENTIAL MARKET FOR OUR COMMON STOCK. Our Common Stock is currently trading at a price substantially below $5.00 per share, subjecting trading in the stock to certain SEC rules requiring additional disclosures by broker-dealers. These rules generally apply to any equity security that has a market price of less than $5.00 per share, subject to certain exceptions (a "penny stock"). Such rules require the delivery, prior to any penny stock transaction, of a disclosure schedule explaining the penny stock market and the risks associated therewith and impose various sales practice requirements on broker-dealers who sell penny stocks to persons other than established customers and institutional or wealthy investors. For these types of transactions, the broker-dealer must make a special suitability determination for the purchaser and have received the purchaser's written consent to the transaction prior to the sale. The broker-dealer also must disclose the commissions payable to the broker-dealer, current bid and offer quotations for the penny stock and, if the broker-dealer is the sole market maker, the broker-dealer must disclose this fact and the broker-dealer's presumed control over the market. Such information must be provided to the customer orally or in writing before or with the written confirmation of trade sent to the customer. Monthly statements must be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stock. The additional burdens imposed upon broker-dealers by such requirements could discourage broker-dealers from effecting transactions in our Common Stock. THE MARKET PRICE OF YOUR SHARES WILL BE VOLATILE. The stock market price of technology companies like the Company has been volatile. Securities markets may experience price and volume volatility. The market price of our stock may experience wide fluctuations that could be unrelated to our financial and operating results. Such volatility or fluctuations could adversely affect your ability to sell your shares and the value you might receive for those shares. ITEM 1B. UNRESOLVED STAFF COMMENTS Not Applicable. ITEM 2. DESCRIPTION OF PROPERTY Since August 2008, the Company's office has been located at 331 Newman Springs Road, Suite 143, Red Bank, NJ, and its telephone number is 732-784-2801. This is a shared office facility that provides the Company with access to office services on an as needed basis at a monthly fee of $150 to $250 per month, depending upon our level of usage of the services provided by the facility operator. ITEM 3. LEGAL PROCEEDINGS On June 23, 2010, the SEC filed a civil enforcement action (the "SEC Action") against ATG, and its officers Alexander Stelmak and Abelis Raskas in the United States District Court for the Southern District of New York ("the Court"). The SEC's Complaint alleged that between 1997 and 2006 the defendants raised $14,741,760.76 from investors through a series of illegal unregistered offerings of the securities of ATG and its predecessor companies, Oxford Global Network, Ltd., and Luxury Lounge, Inc. The SEC alleged that, in connection with 10 these offerings, the defendants violated the securities registration requirements of Sections 5(a) and 5(c) of the Securities Act. The SEC sought disgorgement of all alleged ill-gotten gains, plus prejudgment interest thereon, for a total of $24,990,124 as well as additional relief. ATG, Stelmak and Raskas each served Answers to the Complaint in which they denied liability and asserted affirmative defenses. The SEC secured provisional relief in the form of an order (the "Asset Freeze Order") freezing the defendants' assets and prohibiting destruction, concealment or alteration of records pending final disposition of the action, to which the defendants consented, with certain carve outs for payments of necessary corporate and personal expenses. The Asset Freeze Order was lifted in November 2011 In October 2010, the defendants reached an agreement in principle with the SEC to settle (the "SEC Settlement") the action in its entirety, which received the final approval of the Commission on December 30, 2010. On January 13, 2011, the Court issued an Order setting a schedule to effectuate the settlement and approve a Plan of Distribution. The Court also entered, as part of the SEC Settlement, final judgments and consents for ATG, and the individual defendants. Under the SEC Settlement, defendants consented to judgment in the total amount of $19,186,536.32, of which approximately $14.8 million was paid within 14 days following entry of the judgment and the balance was paid in nine monthly installments following the entry of judgment. Such funds are to be distributed to investors who participated in the unregistered offerings at issue pursuant to a Plan of Distribution that was submitted to the Court by the SEC in March 2011 and approved by the Court in September 2011. The SEC has agreed that the Plan of Distribution will require the surrender and cancellation of shares of any investor who participates in the SEC Settlement and who continues to own shares in ATG. ATG has agreed to pay $500,000 to satisfy the costs of the administration of the Plan. As of January 31, 2013, the holders of an aggregate of 711,916 shares of Series A preferred stock, 1,474,459 shares of Series B preferred stock and 4,533,237 shares of common stock had submitted approved claims under the Plan and the Company's transfer agent is in the process of cancelling such shares. ATG and Stelmak consented to judgment against them in the full amount of $19,186,536.32, and have agreed to certain prohibitions, including for Stelmak and ATG, a permanent injunction against future violations of Section 5(a) and 5(c) of the Securities Act, and for Stelmak a five year ban from participating in any offering of penny stock. Stelmak and ATG also have accepted civil penalties of $6,500 and $65,000, respectively. Raskas, for his part, consented to judgment of $4,749,948.03 of the total $19,186,536.32 judgment at issue. As no penalties or restrictions were sought against Raskas, none are contained in his proposed judgment. The SEC has agreed that all settlement funds (except the civil penalty for Stelmak) will be paid by ATG, with Raskas (only to the limited extent of his liability) and Stelmak responsible for any shortfall. 11 PART II ITEM 4. MINE SAFETY DISCLOSURES Not Applicable. ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY AND RELATED STOCKHOLDER MATTERS Our Common Stock is traded in the over-the-counter market and quoted on the OTC-Bulletin Board under the symbol "AVGG." The trading for the Common Stock has been sporadic and the market for the Common Stock cannot be classified as an established trading market. The following table sets out the high and low bid information for the Common Stock as reported by the OTC Bulletin Board for each period/quarter indicated in US$: Calendar Period High Bid(1) Low Bid(1) --------------- ----------- ---------- 2011 First Quarter $0.05 $0.04 Second Quarter 0.04 0.02 Third Quarter 0.02 0.03 Fourth Quarter 0.01 0.01 2012 First Quarter $0.03 $0.01 Second Quarter 0.03 0.01 Third Quarter 0.03 0.01 Fourth Quarter 0.01 0.01 (1) The quotations set out herein reflect inter-dealer prices without retail mark-up, mark-down or commission and may not necessarily reflect actual transactions. (b) As of January 31, 2013, there were 130 holders of record of the Common Stock. (c) There have been no cash dividends declared to date on the Common Stock and there are no plans to do so. There are no restrictions that limit the ability to pay dividends on common equity other than the dependency on the Company's revenues, earnings and financial condition. 2010 EQUITY INCENTIVE PLAN On March 5, 2010, the Board of Directors adopted the Company's 2010 Equity Incentive Plan (the "Plan"). The Plan is administered by the Board of Directors and provides for the grant of stock options, stock appreciation rights and restricted stock grants. The Plan includes an initial reserve of 3,000,000 shares of our common stock that will be available for issuance under the Plan, subject to adjustment to reflect stock splits and similar events. Shares that are subject to issuance upon exercise of an option but cease to be subject to such option for any reason (other than exercise of such option), and shares that are subject to an award that is granted but is subsequently forfeited, or that are subject to an award that terminates without shares being issued, will again be available for grant and issuance under the Plan. The Plan is further described in Item 5 of the Company's Annual Report on Form 10-K for the fiscal year ended January 31, 2011. 12 PART III ITEM 6. SELECTED FINANCIAL DATA Our selected consolidated financial data presented below for each of the fiscal years in the two-year period ended January 31, 2013, and the balance sheet data at January 31, 2013 and 2012 have been derived from consolidated financial statements, which have been audited by Donahue Associates, L.L.C. The selected financial data should be read in conjunction with our consolidated financial statements for each of the years in the two-year period ended January 31, 2013, and Notes thereto, which are included elsewhere in this Annual Report. STATEMENT OF OPERATIONS DATA:

~~STATEMENT OF OPERATIONS DATA:~~ 31-Jan-1213 31-Jan-1112 ------------ ------------ ~~GENERAL~~General ~~AND~~and ~~ADMINISTRATIVE~~administrative ~~EXPENSES~~expenses: Salaries and benefits $ ~~170~~193,000 $ ~~528~~170,~~037~~000 Consulting 57,850 20,000 ~~362,407~~ General administration 202,292 90,693 ~~1,043,719~~ ------------ ------------ ~~TOTAL~~Total ~~GENERAL~~general ~~AND~~and ~~ADMINISTRATIVE~~administrative ~~EXPENSES~~expenses 0 280,693 ~~1,934,163~~ ------------ ------------ Net loss from operations ~~280,693~~ (1453,~~934,163~~242) 280,693 ------------ ------------ ~~OTHER~~Other ~~REVENUES~~revenues ~~AND~~and ~~EXPENSES~~expenses: Interest income 20 27,556 ~~979,726 Gain on short term investments 0 398,111 ------------ ------------~~ Net loss before provision for income taxes (~~253~~453,~~137~~222) (~~556~~253,~~326~~137) ------------ ------------ Provision for income taxes 0 (1,200,000) ~~1,200,000~~ ------------ ------------ Net income (loss) before extraordinary item (1,453,~~137~~222) ~~643,674 ------------ ------------ EXTRAORDINARY ITEM: SEC settlement net of taxes 0~~ (131,~~840~~453,~~675~~137) ------------ ------------ Net loss $ (1,453,~~137~~222) $ (131,~~197~~453,~~001~~137) ============ ============ ~~BASIC~~Basic & fully diluted net income (loss) per common share: Net income (loss) per share before extraordinary item $ (0.~~08) $ 0.~~03 ~~Extraordinary item 0 (0.73~~) ~~------------ ------------ BASIC NET LOSS PER SHARE~~ $ (0.08) $Weighted ~~(0.70)~~average ~~============~~of ~~============~~common ~~WEIGHTED~~shares ~~AVERAGE OF COMMON SHARES OUTSTANDING~~outstanding: Basic 1816,~~948~~663,~~966~~718 18,~~920~~948,~~037~~966 Fully diluted 16,663,718 18,948,966 ~~21,292,037~~ BALANCE SHEET DATA: 2013 2012 ~~2011~~ ------------ ------------ Total assets $ 21,~~153~~353,~~444~~029 $ 82,~~325~~153,~~156~~444 Total liabilities $ ~~605~~257,~~173~~980 $ 5605,~~323,748~~173 Total Shareholders' equity $ 1,~~548~~095,~~271~~049 $ 31,~~001~~548,~~408~~271

13 ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION BACKGROUND The Company was incorporated in the State of Nevada in February 2000. In January 2001, the Company purchased 100% of the issued and outstanding shares of FX3000, Inc. (formerly Oxford Global Network, Ltd.), a Delaware corporation, the designer of the FX3000 currency trading software platform. The FX3000 software program is a financial real time quote and money management platform for use by independent foreign currency traders. In March 2002, the Company transferred its FX3000 software program to FX Direct Dealer, LLC ("FX Direct") a joint venture company that markets the FX3000 software program. The Company received a 25% interest in the joint venture in return for the transfer. On January 26, 2009, the Company entered into a purchase and sale agreement (the "Purchase Agreement"), pursuant to which the Company agreed to sell (the "Sale") its approximate 25% membership interest (the "Membership Interest") in FX Direct to FX Direct. The Agreement provided that it was effective as of December 31, 2008, as a result of which the Company was not entitled to receive any allocations of profit, loss or distributions from FX on account of its Membership Interest after such date. On March 17, 2009, the Company completed the Sale of the Membership Interest to FX Direct. The aggregate purchase price of the Membership Interest was approximately $26,000,000, of which $9,000,000 was paid in cash at the closing of the Sale and the remaining $17,000,000 was paid in 36 equal monthly installments of $472,222.22, pursuant to a subordinated promissory note bearing interest at the rate of 10% per annum, that was issued pursuant to a Cash Subordinated Loan Agreement ("Loan Agreement"). Effective as of July 20, 2009, the Company entered into an Asset Purchase Agreement with Dan Khasis, LLC ("Seller"), pursuant to which the Company acquired all of the rights to Seller's website "Moveidiot.com" and the related software for a purchase price of $57,000 plus the issuance to Seller of 25,000 restricted shares of Common Stock. On June 23, 2010, the SEC filed the SEC Action against ATG, and its officers in the United States District Court for the Southern District of New York. The SEC secured provisional relief in the form of an order (the "Asset Freeze Order") freezing the defendants' assets and prohibiting destruction, concealment or alteration of records pending final disposition of the action, to which the defendants consented, with certain carve outs for payments of necessary corporate and personal expenses. In October 2010, the defendants reached an agreement in principle with the SEC to settle the action in its entirety, which was approved by the Court in January 2011. Under the SEC Settlement, defendants consented to judgment in the total amount of $19,186,536.32, of which approximately $14.8 million was paid within 14 days following entry of the judgment and the balance was paid in nine monthly installments following the entry of judgment. The defendants also agreed to pay $500,000 to satisfy the costs of the administration of the Plan of Distribution under the SEC Settlement. The Asset Freeze Order was lifted in November 2011. 14 The Company had not received any revenues from the operation of the MoveIdiot.com website through the date of this report. On or about August 1, 2012, the Company received a letter from the operator of the MoveIdiot.com website claiming that the Company owed it approximately $85,000 in unpaid service fees, which claim was subsequently settled for $46,525. At present, the MoveIdiot.com website is not in operation and the Company is evaluating whether or not to continue the development of this website. RESULTS OF OPERATIONS For the reasons discussed above under Background, the Company did not generate any revenues in the fiscal year ended January 31, 2013 ("Fiscal 2013") or the fiscal year ended January 31, 2012 ("Fiscal 2012"). Total general and administrative expenses were $453,242 in Fiscal 2013, as compared to $280,693 in Fiscal 2012. The increase in general and administrative expenses in Fiscal 2013 was primarily due to an increase in professional fees and administrative expenses related to the implementation of the SEC Settlement. Other revenues and expenses in Fiscal 2013 included interest income of $20, related to the Company's cash balances. Other revenues and expenses in the Fiscal 2012 included interest income of $27,556 related to the Company's cash balances and the Subordinated Note. The decrease in interest income in the Fiscal 2013 primarily reflects the decrease in the remaining principal balance of the Subordinated Note. In Fiscal 2012, the Company recorded a reversal of a deferred tax asset in the amount of $1,200,000 and there was no similar charge recorded in fiscal 2013. As a result of the foregoing, the Company had a net loss of ($453,222) in Fiscal 2013, as compared to a net loss of ($1,453,137) in Fiscal 2012. LIQUIDITY AND CAPITAL RESOURCES At January 31, 2013, the Company had cash on hand of $1,342,513, compared with cash on hand of $1,185,519 at January 31, 2012. On March 17, 2009, the Company completed the Sale of its Membership Interest to FX Direct. The aggregate purchase price of the Membership Interest was approximately $26,000,000, of which $9,000,000 was paid in cash at the closing of the Sale and the remaining $17,000,000 was paid in 36 equal monthly installments of $472,222.22, pursuant to a subordinated promissory note bearing interest at the rate of 10% per annum, that was issued pursuant to a Cash Subordinated Loan Agreement ("Loan Agreement"). The Company also received approximately $250,000 from the Purchaser in full satisfaction of amounts owed to the Company for providing certain services to the Purchaser. In May 2012, FX Direct exercised its right to repurchase the Company's remaining .01% interest in FX Direct for a purchase price of $5,000. 15 Under the terms of the SEC Settlement, the Company has consented to a judgment against it in the amount of $19,186,536.32 and has agreed to pay $500,000 to satisfy the costs of administering the Plan of Distribution under the Settlement Agreement. As of October 31, 2011, the full amount of the settlement had been delivered to the SEC. The SEC Settlement prohibits the Company and one of its officers from participating in any unregistered sales of securities for a five year period with the officer being further prohibited from participating in any "penny stock offering," which in general means an offering where the price per share is less than $5.00. These restrictions will make it more difficult for the Company to raise funds to support its ongoing business operations. CASH FLOWS For Fiscal 2013, net cash used in operating activities was $799,224 compared to net cash used in operation activities $702,096 in Fiscal 2012, with the increase relating primarily to an increase in the Company's general and administrative expenses. For Fiscal 2013, net cash provided by investing activities decreased to $956,218 as compared to net cash provided by investing activities of $1,877,115 in Fiscal 2012, with the decrease resulting primarily from the reduction in payments under the Subordinated Note as the remaining balance was fully paid in Fiscal 2013. For the fiscal years ended January 31, 2013 and 2012, there were no material cash amounts used in or provided by financing activities. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK At January 31, 2013, the Company had no outstanding borrowings under loan facilities. ITEM 8. FINANCIAL STATEMENTS See F Pages ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE There have been no changes in accountants or any disagreements with accountants on any matter of accounting principles or practices or financial statement disclosures during the two years ended January 31, 2013. 16 ITEM 9A. CONTROLS AND PROCEDURES (a) EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES. Our principal executive officer and our principal financial officer evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934 as amended) as of the end of the period covered by this report. Based on that evaluation, such principal executive officer and principal financial officer concluded that, the Company's disclosure control and procedures were not effective as of the end of the period covered by this report because of the material weakness described below. (b) MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING. Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange act Rules 13a-15(f) under the Securities Exchange Act of 1934, as amended. Under the supervision of management and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. At present, due to its limited scope of operations, the Company only has two full time employees, only one of whom, our chief financial officer, is involved in overseeing our financial reporting process. We have determined that this deficiency caused by the limited staffing constitutes a material weakness in the area of segregation of duties and adequacy of personnel. Based on our evaluation of internal control over financial reporting, our management concluded that our internal control over financial reporting was not effective as of January 31, 2013. This annual report does not include an attestation report of the Company's registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the Company's registered public accounting firm pursuant to an exemption for smaller reporting companies under Section 989G of the Dodd-Frank Wall Street Reform and Consumer Protection Act. (c) CHANGE IN INTERNAL CONTROL OVER FINANCIAL REPORTING. No change in our internal control over financial reporting occurred during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect our internal control over financial reporting. 17 (d) OTHER. We believe that a controls system, no matter how well designed and operated, can not provide absolute assurance that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected. Therefore, a control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Our disclosure controls and procedures are designed to provide such reasonable assurances of achieving our desired control objectives, and, for the reasons described above, our principal executive officer and principal financial officer have concluded, as of January 31, 2013, that our disclosure controls and procedures were not effective. ITEM 9B. OTHER INFORMATION None. PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE The following table sets forth as of the date hereof, with respect to each of the Company's directors and executive officers their position and their ages: Name Age Position ---- --- -------- Alex Stelmak 64 Chief Executive Officer, Chairman of the Board and Chief Financial Officer Stan Mashov 44 Vice President, Chief Technology Officer and Director Dr. Abel Raskas 72 President, Senior Marketing Director and Director The following is a brief summary of the Directors and Officers including their business experiences for the past five years. ALEX J. STELMAK, CHAIRMAN AND CHIEF EXECUTIVE OFFICER Mr. Stelmak has been Chief Executive Officer, Chairman of the Board and Chief Financial Officer of the Company since 2001 and was a founder of the Company's subsidiary FX3000, Inc. He has over twenty years of experience in operation and management, building highly successful financial services firms. Mr. Stelmak has served as President of Commonwealth Capital Group, Ltd., a financial advisory and investment-banking firm that has been engaged as a consultant to the Company. From 1996 to 1998, he served as the President of Oxford Holdings - a Registered Commodities Broker/Dealer principally engaged in providing managed currency-trading programs for Institutional and private clients. Mr. Stelmak holds a BS degree in Business Administration with a major in accounting. He also holds the U.S. Equivalent of Master Degree in Economics. 18 Mr. Stelmak's experience in founding and managing several business enterprises provides our Board with executive leadership and management experience. STAN MASHOV, VICE PRESIDENT AND CHIEF TECHNOLOGY OFFICER Mr. Mashov has been Vice President, Chief Technology Officer and a Director of the Company since 2001 and was a founder of the Company's subsidiary FX3000, Inc. He has also served in the same capacity for Oxford since its formation in September 1997. Mr. Mashov has been mainly responsible for the design, development and implementation of the FX3000 on-line currency trading software platform. Mr. Mashov has been employed by FX Direct since 2006. Prior to joining the Company, Mr. Mashov served as Chief Analyst and Currency Trader for Oxford Holdings, a company principally engaged in providing managed currency trading programs for individual investors. Mr. Mashov received his Degree in Accounting from Berkeley College. Mr. Mashov's experience in software development provides our Board with technical expertise in connection with the evaluation and development of software and internet-based business opportunities. DR. ABEL RASKAS, PRESIDENT/SENIOR MARKETING DIRECTOR Dr. Raskas has been President, Senior Marketing Director and a Director of the Company since 2001. He is also Founder and President of Luxury Lounge, Inc. - an Internet wholesaler and retailer of luxury and premium quality goods and services which is a subsidiary of the Company. Prior to establishing Luxury Lounge, Inc. Dr Raskas served as Vice President of Trimol Group, Ltd., a Publicly Held company engaged in the business of producing specialized documents through patented software. As a Principal of Trimol Group, Ltd, Dr. Raskas was instrumental in bringing the Company to the Public Market. Prior to joining Trimol, from 1991 to 1998, he was a Principal and Vice President of Ocean Bridge International, Ltd., a company principally engaged in commercial finance and International trade with Eastern European countries. From 1980 to 1986 Dr. Raskas was the Founder and Principal of ABDATA Independence, Inc., a computer service bureau that was acquired in 1986 by Sandata Corp. Following the sale of ABDATA, Dr. Raskas remained a director of Marketing for Sandata Corp. until 1991. During this same period Dr. Raskas managed a data processing school and was one of the founders of CAIS Systems, a computer advertising information system. From 1966 through 1979 Dr. Raskas was an independent consultant in the design and implementation of management information systems ("MIS") to different industries. Dr. Raskas holds the equivalent of a Doctorate Degree in business management and computer science from St. Petersburg University (received in 1973). He has authored 20 articles and one book all in the field of business management and computer science. Dr. Raskas' experience as a corporate executive and his business and academic background in computer science provides our Board with business and technical expertise. 19 LEGAL MATTERS Messrs. Stelmak and Raskas were defendants in the SEC Action. See Item 3 "Legal Matters." BOARD OF DIRECTORS Our Board of Directors consists of three members. Directors serve until the next annual meeting of stockholders and until their successors are qualified and elected. The officers serve at the will of the Board of Directors. There are no family relationships among the officers and directors of the Company. There are at present no committees of the Board of Directors. In lieu of an audit committee, the Company's Board of Directors assumes the responsibilities that would normally be those of an audit committee. Given the limited scope of the Company's operations to date, the Board of Directors does not at present have a director that would qualify as an audit committee financial expert under the applicable federal securities law regulations. There are no agreements that a director will resign at the request of another person and the above named Directors are not acting on behalf of nor will act on behalf of another person. CODE OF ETHICS Due to the limited nature of the company's operations and the limited number of employees, the Company has not adopted a Code of Ethics. SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE Pursuant to Section 16(a) of the Securities Exchange Act of 1934, our Directors, executive officers and beneficial owners of more than 10% of the outstanding Common Stock are required to file reports with the Securities and Exchange Commission concerning their ownership of and transactions in our Common Stock and are also required to provide to us copies of such reports. Based solely on such reports and related information furnished to us, we believe that in fiscal 2013 all such filing requirements were complied with in a timely manner by all Directors and executive officers ITEM 11. EXECUTIVE COMPENSATION The following table sets forth the annual salary, bonuses and all other compensation awards and pay outs on account of our Chief Executive Officer and our one other officer who earned in excess of $100,000 per annum for services rendered to us during the fiscal years ended January 31, 2013 and 2012. 20 SUMMARY COMPENSATION TABLE

Change in Pension Value and Non-Equity Nonqualified All Incentive Deferred Other Name and Plan Compen- Compen- Principal Stock Option Compen- sation sation Position Year Salary(1) Bonus Awards Awards sation Earnings (1)(2) Total ------------ ---- ------ ----- ------ ------ ------ -------- ------ ----- Alex ~~2012~~2013 $ 6284,~~500~~000 -- $ -- -- -- -- ~~$82,500~~-- $~~145~~ 84,000 Stelmak, CEO ~~2011~~2012 $~~250~~ 62,~~000~~500 -- $~~22,500~~ -- -- -- $ -- $~~272~~82,500 $145,000 Dr. Abel Raskas, ~~2012~~2013 $ 6284,~~500~~000 -- $ -- -- -- -- ~~$82,500~~-- $~~145~~ 84,000 President ~~2011~~2012 $~~250~~ 62,~~000~~500 -- ~~$22,500~~ -- -- -- $ -- $~~272~~82,500 $145,000

---------- (1) The Company's employment agreements with Messrs. Stelmak and Raskas expired in April 2011. Effective as of May 1, 2011, Messrs. Stelmak and Raskas are compensated at the rate of $7,000 per month. (2) Includes amounts payable for health insurance, home office expenses and transportation costs. OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

---------- (1) The restricted shares of common stock listed in the table vested on March 5, 2013. 21 COMPENSATION PURSUANT TO PLANS The Company does not have any pension or profit sharing plans. COMPENSATION TO DIRECTORS All of our directors are also officers who do not receive separate compensation for serving as directors. The compensation of Messrs Raskas and Stelmak is set forth above in the Summary Compensation Table. EMPLOYMENT CONTRACTS Effective as of May 1, 2011, Messrs. Stelmak and Raskas are compensated at the rate of $7,000 per month. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table sets forth as of January 31, 2013 the Common Stock ownership of each person and /or group known by the Company to be the beneficial owner of five percent or more of the Company's Common Stock, each director individually, and all officers and directors as a group. Each person has sole voting and investment with respect to the shares of Common Stock shown, and all ownership is of record and beneficial. Number of Name Shares Owned (1) Percent Owned ---- ---------------- ------------- Alex Stelmak 4,479,476 (2) 31.1% Stan Mashov 887,778 (2) 6.2% Dr. Abel Raskas 4,479,476 (2) 31.1% Officers & Directors as a Group (3 Persons) 9,846,730 (2) 68.4% ---------- (1) Based upon 14,415,735 issued and outstanding shares of Common Stock on January 31, 2013. (2) Includes 30,000 shares of restricted common stock granted to each of Messrs. Stelmak, Raskas and Mashov on March 5, 2010 that vested on March 5, 2013. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS On March 5, 2010, the Board granted 90,000 restricted shares of Common Stock (the "Restricted Stock") to each officer and director (Messrs. Stelmak, Raskas and Mashov). The Restricted Stock vested in three equal annual installments on the first, second and third anniversaries of the grant date. 22 ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES The following table shows the audit fees we were billed by Donohue Associates, L.L.C. for fiscal 2013 and 2012: 2013 2012 ------ ------ Audit fees $9,000 $9,000 Audit fees were for the audit of our annual financial statements, review of financial statements included in our 10-Q quarterly reports, and services that are normally provided by independent auditors in connection with our other filings with the SEC. This category also includes advice on accounting matters that arose during, or as a result of, the audit or review of our interim financial statements. As part of its duties, our Board pre-approves audit and non-audit services performed by our independent auditors in order to assure that the provision of such services does not impair the auditors' independence. Our Board does not delegate to management its responsibilities to pre-approve services performed by our independent auditors. 23 ITEM 15. EXHIBITS (a) Financial Statements See "Index to Consolidated Financial Statements" set forth on page 34. (b) Exhibits Incorp by Exhibit Ref. to Number Exh. Description ------ ---- ----------- 3.1 3.1(1) Articles of Incorporation of the Registrant, as amended 3.2 3.2(1) By-laws of the Registrant 10.1 3.3(2) Amendment to and Plan of Reorganization 10.2 10.1(3) FX Direct Purchase and Sale Agreement 10.3 (4) Cash Subordinated Loan Agreement 10.4 99.1(6) MoveIdiot.com Asset Purchase Agreement 10.5 10.1(7) Equity Incentive Plan 31.1 * Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by Alex Stelmak, as Chief Executive Officer 31.2 * Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by Alex Stelmak, as Chief Financial Officer 32.1 * Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by Alex Stelmak, as Chief Executive Officer and Chief Financial Officer 101 * The following materials from the Advanced Technologies Group, Ltd. Annual Report on Form 10-K for the fiscal year ended January 31, 2013 formatted in Extensible Business Reporting Language (XBRL): (i) the Statements of Operations, (ii) the Balance Sheets, (iii) the Statements of Cash Flows, (iv) Statement of Stockholders' (Deficit) and (v) related notes. #101.INS XBRL Instance Document. #101.SCH XBRL Taxonomy Extension Schema Document. #101.CAL XBRL Taxonomy Extension Calculation Linkbase Document. #101.LAB XBRL Taxonomy Extension Label Linkbase Document. #101.PRE XBRL Taxonomy Extension Presentation Linkbase Document. #101.DEF XBRL Taxonomy Extension Definition Linkbase Document. In accordance with Rule 406T of Regulation S-T, these interactive data files are deemed "not filed" for purposes of section 18 of the Exchange Act, and otherwise are not subject to liability under that section. ---------- * Filed herewith + Employee Compensation Agreement (1) Registrant's Registration Statement on Form 10-KSB File No. 000-30987. (2) Registrant's Current Report on Form 8-K filed on January 22, 2001. (3) Registrant's Current Report on Form 8-K filed on January 30, 2009. (4) Included as Exhibit C to Exhibit 10.2. (5) Intentionally Omitted. (6) Registrant's Current Report on Form 8-K filed on July 22, 2009. (7) Registrant's Current Report on Form 8-K filed on March 8, 2010. 24 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Amendment to the Report to be signed on its behalf by the undersigned, thereunto duly authorized. ADVANCED TECHNOLOGIES GROUP, LTD. Dated: April 24, 2013 By: /s/ Alex Stelmak ------------------------------------------------- Alex Stelmak Chief Executive Officer and Director Executive Officer, Principal Financial Officer and Principal Accounting Officer) Dated: April 24, 2013 By: /s/ Abel Raskas ------------------------------------------------- Abel Raskas President and Director Pursuant to the requirements of the Securities Exchange Act of 1934, this Amendment to the Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. Dated: April 24, 2013 By: /s/ Alex Stelmak ------------------------------------------------- Alex Stelmak Director Dated: April 24, 2013 By: /s/ Abel Raskas ------------------------------------------------- Abel Raskas Director Dated: April 24, 2013 By: /s/ Stan Mashov ------------------------------------------------- Stan Mashov Director 25 ADVANCED TECHNOLOGIES GROUP, LTD. AND SUBSIDIARIES INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Page ---- Report of Independent Registered Public Accounting Firm F-2 Consolidated Balance Sheets as of January 31, 2013 and January 31, 2012 F-3 Consolidated Statements of Operations for the years ended January 31, 2013 and January 31, 2012 F-4 Consolidated Statements of Cash Flows for the years ended January 31, 2013 and January 31, 2012 F-5 Consolidated Statements of Changes in Stockholders' Equity (Deficit) for the years ended January 31, 2013 and January 31, 2012 F-6 Notes to Consolidated Financial Statements F-7 F-1 DONAHUE ASSOCIATES, LLC CERTIFIED PUBLIC ACCOUNTANTS REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Shareholders and the Board of Directors Advanced Technologies Group, Ltd We have audited the accompanying consolidated balance sheets of Advanced Technologies Group, Ltd as of January 31, 2013 and 2012, and the related consolidated statements of operations, consolidated stockholders' equity, and consolidated cash flows for each of the two years in the period ended January 31, 2013. 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 audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. 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 consolidated 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 Advanced Technologies Group, Ltd as of January 31, 2013 and 2012, and the consolidated results of its operations and its cash flows for each of the two years in the period ended January 31, 2013, in conformity with U.S. generally accepted accounting principles. /s/ Donahue Associates LLC ------------------------------------ Donahue Associates LLC Monmouth Beach, New Jersey April 11, 2013 F-2 Advanced Technologies Group, Ltd. Consolidated Balance Sheets As of January 31, 2013 and January 31, 2012

31-Jan-1213 31-Jan-1112 ------------ ------------ ASSETS ~~CURRENT~~Current ~~ASSETS~~assets: Cash $ 1,~~185~~342,~~519~~513 $ 121,~~576~~185,519 Subordinated note receivable 0 956,218 ~~5,666,668 Deferred tax asset 0 1,200,000 Prepaid taxes 0 488,575~~ ------------ ------------ ~~TOTAL~~Total ~~CURRENT~~current ~~ASSETS~~assets $ 1,342,513 $ 2,141,737 ~~7,367,819~~Other ~~------------ ------------ OTHER ASSETS~~assets: ~~Subordinated note receivable- non current portion 0 944,444~~ Investment in FX Direct Dealer 5,000 5,000 Trademark- net 4,841 5,449 ~~6,054~~ Fixed assets- net 675 1,258 ~~1,839~~ ------------ ------------ ~~TOTAL~~Total ~~ASSETS~~assets $ 21,~~153~~353,~~444~~029 $ 82,~~325~~153,~~156~~444 ============ ============ LIABILITIES AND SHAREHOLDERS' EQUITY ~~(DEFICIT)~~Current ~~CURRENT LIABILITIES~~liabilities: Accounts payable & accrued expenses $ ~~597~~250,~~377~~184 $ 5597,~~313,876~~377 ------------ ------------ ~~TOTAL~~Total ~~CURRENT~~current ~~LIABILITIES~~liabilities 250,184 597,377 ~~5,313,876 ------------ ------------~~ Shareholder advance payable 7,796 97,~~872~~796 ------------ ------------ ~~TOTAL~~Total ~~LIABILITIES~~liabilities 257,980 605,173 ~~5,323,748 SHAREHOLDERS~~Shareholders' ~~EQUITY~~equity: Series A preferred stock, one share convertible to one share of common; non-participating, authorized 1,000,000 shares at stated value of $3 per share, issued and outstanding 762,081 shares 1at January 31,~~712~~ 2012 and 50,~~601~~165 at January 31, 2013 111,120 1,712,601 Series B preferred stock, one share convertible to one share of common; non-participating, authorized 7,000,000 shares at stated value of $3 per share, issued and outstanding 1,609,955 shares 4at January 31,~~384~~ 2012 and 135,~~754~~496 at January 31, 2013 374,865 4,384,754 Common stock - $.0001 par value, authorized 100,000,000 shares, issued and outstanding, 18,948,966 shares at January 31, ~~2011~~2012 and 1814,~~948~~415,~~966~~729 at January 31, ~~2012~~2013 1,~~895~~442 1,895 Additional paid in capital 3238,~~823~~435,~~815~~638 32,823,815 Accumulated deficit (37,~~374~~828,~~794~~016) (3537,~~921~~374,~~657~~794) ------------ ------------ ~~TOTAL~~Total ~~SHAREHOLDERS~~shareholders' ~~EQUITY~~equity 1,~~548~~095,~~271~~049 31,~~001~~548,~~408~~271 ------------ ------------ ~~TOTAL~~Total ~~LIABILITIES~~Liabilities & ~~SHAREHOLDERS~~Shareholders' ~~EQUITY~~Equity $ 21,~~153~~353,~~444~~029 $ 82,~~325~~153,~~156~~444 ============ ============

See the notes to the financial statements. F-3 Advanced Technologies Group, Ltd. Consolidated Statements of Operations For the Years Ended January 31, 2013 and January 31, 2012

~~2012~~31-Jan-13 ~~2011~~31-Jan-12 ------------ ------------ ~~GENERAL~~General ~~AND~~and ~~ADMINISTRATIVE~~administrative ~~EXPENSES~~expenses: Salaries and benefits $ ~~170~~193,000 $ ~~528~~170,~~037~~000 Consulting 57,850 20,000 ~~524,407~~ General administration 202,392 90,693 ~~881,719~~ ------------ ------------ ~~TOTAL~~Total ~~GENERAL~~general & ~~ADMINISTRATIVE~~administrative ~~EXPENSES~~expenses 453,242 280,693 ~~1,934,163~~ ------------ ------------ Net loss from operations (~~280~~453,~~693~~242) (1280,~~934,163~~693) ~~OTHER~~Other ~~REVENUES~~revenues ~~AND~~and ~~EXPENSES~~expenses: Interest income 20 27,556 ~~979,726 Gain on short term investments 0 398,111~~ ------------ ------------ Net income (loss) before provision for income taxes (~~253~~453,~~137~~222) (~~556~~253,~~326~~137) Provision for income taxes 0 (1,200,000) ~~1,200,000~~ ------------ ------------ Net income (loss) ~~before~~$ ~~extraordinary item~~ (1,453,~~137~~222) ~~643,674 EXTRAORDINARY ITEM: S.E.C settlement, net of tax (See Note 1) 0 (13,840,675) ------------ ------------ NET INCOME (LOSS)~~ $ (1,453,137) ~~$(13,197,001)~~ ============ ============ ~~BASIC~~Basic & ~~FULLY~~fully ~~DILUTED~~diluted ~~NET~~net ~~INCOME~~income (~~LOSS~~loss) ~~PER~~per ~~COMMON~~common ~~SHARE~~share: Net income (loss) per share before extraordinary item $ (0.~~08) $ 0.~~03 ~~Extraordinary item 0.00 (0.73~~) ~~------------ ------------ BASIC NET INCOME (LOSS) PER SHARE~~ $ (0.08) $Weighted ~~(0.70)~~average ~~============~~of ~~============~~common ~~WEIGHTED~~shares ~~AVERAGE OF COMMON SHARES OUTSTANDING~~outstanding: Basic 1816,~~948~~663,~~966~~718 18,~~920~~948,~~037~~966 Fully diluted 1816,~~948~~663,~~966~~718 18,~~920~~948,~~037~~966

See the notes to the financial statements. F-4 Advanced Technologies Group, Ltd. Consolidated Statements of Cash Flows For the Years Ended January 31, 2013 and January 31, 2012

~~2012~~31-Jan-13 ~~2011~~ 31-Jan-12 ----------- ------------ ~~OPERATING~~Operating ~~ACTIVITIES~~Activities: Net income (loss) $ (1,453,~~137~~222) $ (131,~~197~~453,~~001~~137) Adjustments to reconcile net income (loss) items not requiring the use of cash: Amortization 608 605 ~~606~~ Depreciation ~~581~~583 581 ~~Salary expense 0 67,500~~ Changes in other operating assets and liabilities : ~~Accounts payable & accrued expenses (938,720) 5,225,795~~ Deferred tax asset ~~1,200,000~~0 (1,200,000) Prepaid taxes 0 488,575 ~~(16,833)~~Accounts ~~Income~~payable ~~taxes~~& ~~payable~~accrued 0expenses (~~156~~347,~~576~~193) ~~Deferred income taxes payable 0~~ (5938,~~346,422~~720) ------------ ------------ ~~NET~~Net ~~CASH~~cash ~~USED~~used BYby ~~OPERATIONS~~operations (~~702~~799,~~096~~224) (14702,~~622,350~~096) ~~INVESTING~~Investing ~~ACTIVITIES~~activities: ~~Sale of securities 0 6,220,498~~ Proceeds from note receivable 956,218 1,877,115 ~~5,666,666~~ ------------ ------------ ~~NET~~Net ~~CASH~~cash ~~PROVIDED~~provided BYby ~~INVESTING~~investing ~~ACTIVITIES~~activities 956,218 1,877,115 ~~11,887,164~~Financing ~~FINANCING ACTIVITIES~~Activities: Advances received (paid) shareholders 0 (2,076) 0 ------------ ------------ ~~NET~~Net ~~CASH~~cash ~~USED~~used BYby ~~FINANCING~~financing ~~ACTIVITIES~~activities 0 (2,076) 0 ------------ ------------ Net increase (decrease) in cash during the year 156,994 1,172,943 ~~(2,735,186)~~ Cash balance at beginning of the year 1,185,519 12,576 ~~2,747,762~~ ------------ ------------ ~~CASH~~Cash ~~BALANCE~~balance ATat ~~JANUARY~~January ~~31ST~~31st $ 1,~~185~~342,~~519~~513 $ 121,~~576~~185,519 ============ ============ ~~SUPPLEMENTAL~~Supplemental ~~DISCLOSURES~~disclosures OFof ~~CASH~~cash ~~FLOW~~flow ~~INFORMATION~~information: Interest paid during the ~~period~~year $ 0 $ 0 Income taxes paid during the ~~period~~year $ 0 $ ~~156,576~~0

See the notes to the financial statements. F-5 Advanced Technologies Group, Ltd. Consolidated Statement of Changes in Shareholders' Equity For the Years Ended January 31, 2013 and January 31, 2012

Common Common Preferred Preferred Paid in Accumulated Shares Par Value Shares Value Capital Deficit Total ------ --------- ------ ----- ------- ------- ----- Balance at January 31, ~~2010~~2011 18,~~486~~948,~~535~~966 $ 1,~~849~~895 2,372,036 $ 6,097,355 $32,~~715~~823,~~950~~815 $(2235,~~684~~921,~~245~~657) $~~16,130,909~~ ~~Stock dividend paid 192~~3,~~431 19 40~~001,~~392~~408 ~~(40,411) 0 Issued shares for services 270,000 27 67,473 67,500~~ Net loss (131,~~197~~453,~~001~~137) (131,~~197~~453,~~001~~137) ----------- ------- ---------- ----------- ----------- ------------ ----------- Balance at January 31, ~~2011~~2012 18,948,966 $ 1,895 2,372,036 $ 6,097,355 $32,823,815 $(3537,~~921~~374,~~657~~794) 3$ 1,~~001~~548,~~408~~271 ~~Net~~Shares ~~loss~~retired (14,533,237) (453) (2,~~137~~186,375) (15,611,370) 5,611,823 0 Net loss (453,~~137~~222) (453,222) ----------- ------- ---------- ----------- ----------- ------------ ----------- Balance at January 31, ~~2012~~2013 1814,~~948~~415,~~966~~729 $ 1,~~895~~442 2185,~~372,036~~661 $6 485,~~097,355~~985 $3238,~~823~~435,~~815~~638 ($(37,~~374~~828,~~794~~016) $ 1,~~548~~095,~~271~~049 =========== ======= ========== =========== =========== ============ ===========

See the notes to the financial statements. F-6 Advanced Technologies Group, Ltd. Notes to the Consolidated Financial Statements For the Years Ended January 31, 2013 and January 31, 2012 1. ORGANIZATION OF THE COMPANY AND SIGNIFICANT ACCOUNTING PRINCIPLES Advanced Technologies Group, Ltd. (the Company) was incorporated in the State of Nevada in February 2000. In January 2001, the Company purchased 100% of the issued and outstanding shares of FX3000, Inc., a Delaware corporation, which owned the rights to the FX3000, a spot foreign currency trading software platform. The FX3000 software program was a real time quote and money management platform used by independent spot foreign currency traders. In March 2002, the Company sold the FX3000 software program, for a 25% interest in a joint venture with Tradition NA, a subsidiary of Compagnie Financiere Tradition, a publicly held Swiss corporation. The Company and Tradition formed FX Direct Dealer LLC (FXDD), a Delaware company that marketed the FX3000 software to independent foreign currency traders. In March 2009, the Company sold its 25% interest in the joint venture to FXDD for $26 million. In June 2010, the United States District Court of the Southern District of New York granted an asset freeze to the Securities and Exchange Commission (SEC) freezing most of the Company's assets. The asset freeze was granted based upon allegations by the SEC that the Company had raised approximately $15 million from 2001 to 2002 by improperly selling shares of its common stock. The SEC action sought disgorgement of all Company profits earned from the sale of the FXDD interest. In October 2010, the Company reached an agreement with the SEC to settle the action in its entirety, which received the final approval of the SEC on December 30, 2010. Under the settlement agreement, the Company consented to a judgment in the total amount of $19,186,536, of which $14,883,400 was paid in January 2011. The balance was payable in nine monthly installments ending in October 2011. The funds collected by this judgment were to be distributed to the investors who participated in the unregistered offerings pursuant to a Plan of Distribution approved by the United States District Court for the Southern District of New York in March 2011. During fiscal year 2013, the funds collected by the judgment were distributed to these shareholders and the Company retired 4,533,237 common shares. In addition, 711,916 preferred A shares and 1,474,459 preferred B shares were retired during fiscal year 2013. All the common and preferred shareholders that participated in the S.E.C. settlement have been paid in full as of January 31, 2013. Effective as of July 20, 2009, the Company entered into an Asset Purchase Agreement with Dan Khasis, LLC ("Seller"), pursuant to which ATG acquired all of the rights to Seller's website "MoveIdiot.com" and the related software for a purchase price of $57,000 plus the issuance to Seller of 25,000 restricted shares of Common Stock. In addition, Seller was entitled to receive up to an additional 50,000 restricted shares of Common Stock if certain membership goals for the MoveIdiot.com website were met in the 12 months following the closing; however, the goals were not met. F-7 MoveIdiot.com was designed to enable individuals and businesses to keep track of their property on-line. The software program enables users to manage their possessions on-line and print automatically generated labels that are sealable to be used in the event of moving from one location to another. The Company had not received any revenues from MoveIdiot.com through the date of this report. On or about August 1, 2012, the Company received a letter from the operator of the MoveIdiot.com website claiming that the Company owed it approximately $85,000 in unpaid service fees, which claim was subsequently settled for $46,525. At present, the MoveIdiot.com website is not in operation and the Company is evaluating whether or not to continue the development of this website. USE OF ESTIMATES - The preparation of the consolidated financial statements in conformity with generally accepted accounting principles requires management to make reasonable estimates and assumptions that affect the reported amounts of the assets and liabilities and disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses at the date of the financial statements and for the period they include. Actual results may differ from these estimates. CASH - For the purpose of calculating changes in cash flows, cash includes all cash balances and highly liquid short-term investments with an original maturity of three months or less. SUBORDINATED NOTE RECEIVABLE - The subordinated loan receivable from FXDD results from the sale of the Company's interest in the joint venture in 2009. The estimated fair value of the subordinated loan receivable from FXDD is based upon the discounting of the future cash flows from the asset using a risk adjusted lending rate form loans of similar in risk and duration. At January 31, 2013 and January 31, 2012, the fair value of the subordinated loan receivable was $-0- and $956,218, respectively. The Company was paid in full in fiscal year 2013. FIXED ASSETS - Office equipment is stated at cost. Depreciation expense is computed using the straight-line method over the estimated useful life of the asset, which managements estimates to be three years. LONG LIVED ASSETS - The Company reviews for the impairment of long-lived assets whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss would be recognized when estimated future cash flows expected to result from the use of the asset and its eventual disposition is less than its carrying amount. INCOME TAXES - The Company accounts for income taxes in accordance with generally accepted accounting principles which require an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed annually for differences between financial statement and income tax bases of assets and liabilities that will result in taxable income or deductible expenses in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. F-8 Valuation allowances are established when necessary to reduce deferred tax assets and liabilities to the amount expected to be realized. Income tax expense is the tax payable or refundable for the period adjusted for the change during the period in deferred tax assets and liabilities. The Company follows the accounting requirements associated with uncertainty in income taxes using the provisions of Financial Accounting Standards Board (FASB) ASC 740, INCOME TAXES. Using that guidance, tax positions initially need to be recognized in the financial statements when it is more likely than not the positions will be sustained upon examination by the tax authorities. It also provides guidance for derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. As of January 31, 2013 and January 31, 2012, the Company has no uncertain tax positions that qualify for either recognition or disclosure in the financial statements. All tax returns from fiscal years 2009 to 2012 are subject to IRS audit. 2. FAIR VALUE OF FINANCIAL INSTRUMENTS FAIR VALUE MEASUREMENTS under generally accepted accounting principles clarifies the principle that fair value should be based on the assumptions market participants would use when pricing an asset or liability and establishes a fair value hierarchy that prioritizes the information used to develop those assumptions. Under the standard, fair value measurements are separately disclosed by level within the fair value hierarchy as follows. Level 1 - Quoted prices in active markets for identical assets or liabilities. Level 2 - Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 - Unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement is disclosed and is determined based on the lowest level input that is significant to the fair value measurement. Cash, subordinated note receivable, and accounts payables and accrued expenses in the balance sheet are estimated to approximate fair market value at January 31, 2013 and January 31, 2012 because of their short term nature. F-9 3. NET LOSS PER SHARE Basic net income (loss) per share has been computed based on the weighted average of common shares outstanding during the years. Diluted net income (loss) per share gives the effect of outstanding preferred stock which is convertible into common stock (see Note 4). For fiscal years 2013 and 2012, the effects of the convertible preferred stock equivalents were excluded from the calculation of fully diluted loss per share since its inclusion would be anti-dilutive. The calculation for net income (loss) per share is as follows. 31-Jan-13 31-Jan-12 ------------ ------------ Net income (loss) $ (453,222) $ (1,453,137) ============ ============ Basic & fully diluted shares outstanding (weighted average) 16,663,718 18,948,966 Basic income (loss) per share $ (0.03) $ (0.08) 4. PREFERRED STOCK CLASS A PREFERRED STOCK: Class A preferred stock has a stated value of $3 per share. Holders of the Class A preferred stock are entitled to receive a common stock dividend of 13% of the outstanding Class A shares on an annual basis based on a value of $3 per share. The Class A preferred stock is convertible into common stock at a conversion ratio of one preferred share for one common share. CLASS B PREFERRED STOCK: Class B preferred stock has a stated value of $3 per share. Holders of the Class B preferred stock are entitled to receive a common stock dividend of 6% of the outstanding Class B shares on an annual basis based on a value of $3 per share. The Class B preferred stock is convertible into common stock at a conversion ratio of one preferred share for one common share. F-10 5. INCOME TAXES Provision for income taxes is comprised of the following: 31-Jan-13 31-Jan-12 ----------- ----------- Net income (loss) before provision for income taxes $ (453,222) $ (253,137) =========== =========== Current tax expense: Federal $ 0 $ 0 State 0 0 ----------- ----------- Total 0 0 Less deferred tax benefit: Tax loss carry forwards (5,119,260) (4,757,929) Change in valuation allowance 1,200,000 Less allowance for tax recoverability 5,119,260 4,757,929 ----------- ----------- Provision for income taxes $ 0 $ 1,200,000 =========== =========== Deferred tax asset: Tax loss carry forwards $ 5,119,260 $ 4,757,929 Less valuation allowance (5,119,260) (4,757,929) ----------- ----------- Net deferred tax asset $ 0 $ 0 =========== =========== Note: The deferred tax benefits arising from the timing differences expires in fiscal years 2032 and 2033 and may not be recoverable upon the purchase of the Company under current IRS statutes. 6. COMMITMENTS AND CONTINGENCIES In purchasing MoveIdiot.com, as discussed more fully in Note 1, the Company has agreed to issue an additional 50,000 restricted shares of its common stock to the developers of the software of MoveIdiot.com in the event certain revenue targets are met. 7. CONCENTRATION OF CREDIT RISK The Company is substantially reliant on the efforts of the chief executive officer and the president of the Company. A withdrawal of these efforts would have a material adverse effect on the Company's future plans and operations. The Company has balances in banks that are in excess of insured amounts. 8. SUBSEQUENT EVENTS The Company has made a review of material subsequent events from January 31, 2013 through the date of this report and found no material subsequent events reportable during this period. F-11

31-Jan-12 31-Jan-11 ------------ ------------ Net income (loss) before extraordinary item $ (1,453,137) $ 643,674 Extraordinary item- S.E.C. settlement 0 (13,840,675) ------------ ------------ NET INCOME (LOSS) $ (1,453,137) $(13,197,001) ============ ============ Basic & fully diluted shares outstanding (weighted average) 18,948,966 18,920,037 Basic income (loss) per share before extraordinary item $ (0.08) $ 0.03 Extraordinary item- S.E.C. settlement 0 (0.73) ------------ ------------ BASIC & FULLY DILUTED LOSS PER SHARE $ (0.08) $ (0.70) ============ ============ 3. PREFERRED STOCK CLASS A PREFERRED STOCK: Class A preferred stock has a stated value of $3 per share. Holders of the Class A preferred stock are entitled to receive a common stock dividend of 13% of the outstanding Class A shares on an annual basis based on a value of $3 per share. The Class A preferred stock is convertible into common stock at a conversion ratio of one preferred share for one common share. CLASS B PREFERRED STOCK: Class B preferred stock has a stated value of $3 per share. Holders of the Class B preferred stock are entitled to receive a common stock dividend of 6% of the outstanding Class B shares on an annual basis based on a value of $3 per share. The Class B preferred stock is convertible into common stock at a conversion ratio of one preferred share for one common share. 4. INCOME TAXES Provision for income taxes is comprised of the following: 31-Jan-12 31-Jan-11 ------------ ------------ NET INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES $ (253,137) $ (556,326) ============ ============ CURRENT TAX EXPENSE: Federal $ 0 $ 0 State 0 0 ------------ ------------ TOTAL $ 0 $ 0 ============ ============ LESS DEFERRED TAX BENEFIT: Tax loss carry-forwards $ (4,757,929) $ (4,907,245) Change in valuation allowance 1,200,000 0 Less allowance for tax recoverability 4,757,929 3,707,245 ------------ ------------ PROVISION FOR INCOME TAXES $ 1,200,000 $ (1,200,000) ============ ============ DEFERRED TAX ASSET: Tax loss carry forwards $ 4,757,929 $ 4,907,245 Less valuation allowance (4,757,929) (3,707,245) ------------ ------------ NET DEFERRED TAX ASSET $ 0 $ 1,200,000 ============ ============

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