Business

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

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

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

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

Competition

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

Investment in Healthology

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

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

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

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

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

Investment Company Act Considerations

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

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

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

History of Le@P Technology, Inc.

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

Employees

Le@P currently has one part-time employee.