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LGHL.OB > SEC Filings for LGHL.OB > Form 10QSB on 19-Nov-2007All Recent SEC Filings

Show all filings for LOGICA HOLDINGS INC | Request a Trial to NEW EDGAR Online Pro

Form 10QSB for LOGICA HOLDINGS INC


19-Nov-2007

Quarterly Report


ITEM 2. MANAGAMENT DISCUSSION AND ANALYSIS

Logica Holdings Inc (the "Company"), initially known as Rising Fortune Incorporated, was incorporated in the State of Nevada on March 7, 1995. The Company was inactive between the years 1996 and 2003. On November 19, 2003, the Company amended its Articles of Incorporation to change its name to Maximum Awards Inc, Inc. July 27, 2007 the company amended its Articles of Incorporation again to change its name to Logica Holdings Inc.

On December 9, 2003, the company acquired 100% of the outstanding shares of Maximum Awards Pty Ltd., an Australian company engaged in the business of operating a consumer rewards program known as Maximum Awards. Under the Maximum Awards program, consumers earn points by purchasing products and services offered by the company and its program partners. Accumulated points then can be redeemed in order to acquire additional desired products or services from the same list of such items offered by the company. The company operates its program in Australia and has done so since October 2002. In anticipation of this transaction the company's articles of incorporation were amended on November 19, 2003 to change the name of the company to Maximum Awards, Inc.

The acquisition of Maximum Awards Pty Ltd resulted in a change of control of the company and was accounted for as a recapitalization of Maximum Awards Pty Limited. The business of Maximum Awards Pty Ltd was, at this point, business of the company.

On June 1st, 2004, the company acquired 100% of the issued and outstanding shares of Travel Easy Holidays Pty Ltd ("Travel Easy") and Global Business Group Pty Ltd ("Global Business"). These corporations are involved in the travel industry and mail order industries and were acquired to add to the company's rewards program operations by providing an in-house travel agency and a consumer products retailer.

Travel Easy is an Australian proprietary limited corporation. Travel Easy was organized under the law of the Province of Queensland, Australia on July 19, 2002. Travel Easy is engaged in the business of providing travel agent services and its operations are located in the company's offices in Brisbane, Queensland, Australia. Prior June 1, 2004, Travel Easy was owned by Maxwell Thomas, the company's chief executive officer, and Michael Sullivan, a director of the company. Mr. Thomas owned 60% of Travel Easy and Mr. Sullivan owned 40%.

Under terms of the acquisition agreement between the company and Mr. Thomas, the company acquired Travel Easy for $1.00 Australian. Travel Easy now is a wholly-owned subsidiary of the company.

Global Business also is an Australian proprietary limited corporation. Global business was organized under the law of the Province of Queensland, Australia in June 2003. Global Business does business under the name Easy Shopper Direct and is engaged in the business of selling consumer goods on-line and through published catalogs and its operations are located in the company's offices in Brisbane, Queensland, Australia. Prior to June 1, 2004, Global Business was owned by Maxwell Thomas, the company's chief executive officer, and Michael Sullivan, a director of the company. Mr. Thomas owned 60% of Global Business and Mr. Sullivan owned 40%. Under terms of the acquisition agreement

between the company and Mr. Thomas, the company acquired Global Business for $1.00 Australian. Global Business now is a wholly-owned subsidiary of the company. Because both Travel Easy and Global Business were acquisitions under common control, the financial statements have been prepared by including the accounts of both Travel Easy and Global Business and have been accounted as a business combination with the net assets of Maximum Awards (Pty) Ltd. and the Company brought forward at their historical basis. . The financial statements, including the comparatives, reflect the accounts of Maximum Awards, Travel Easy and Global Business.

On July 9, of 2007, the company acquired Plays On The Net Plc and its subsidiary, Plays On The Net Inc, and it also acquired Curtain Rising Inc and Anne's World Limited, for a total consideration of 12,000,000 shares of common stock.

The acquisition of these companies resulted in a change of control of the company and was accounted for as a reverse merger. The businesses of Plays on the Net, Curtain Rising and Anne's World are now the business of the company.

Plays On The Net Plc was incorporated in London (United Kingdom) on May 23, 2006. The company began as an online database for unpublished playwrights. A platform for writers to share their work, to communicate with fellow dramatists and to explore new ideas, it has since grown into an extensive retail site for book, audio downloads and all-round theatre information site.

Plays On The Net Inc was incorporated in Ontario (Canada) on July 27, 2006. It is a fully owned subsidiary of Plays On the Net Plc and is considered as the North American arm of its parent company which also develops from time to time websites for sale to third parties.

Anne's World Limited was incorporated in Ontario (Canada) on August 3, 2006. The company obtained the license for a secure social networking website for children. The website is an interactive virtual world for young people, secured with cutting-edge biometric technology in the form of a personal fingerprint reader.

Curtain Rising Inc was incorporated in Ontario (Canada) on October 19, 2006. The company main activity is an online database for theatres and a by-weekly online theatre magazine. Organized by city, the concept was a user-friendly search engine which would enable theatergoers to locate productions, venues and information with ease.

On July 27, 2007, the Company amended its articles of incorporation and changed its name to Logica Holdings Inc.

On September 30, 2007, the Company sold of 100% of its Australian subsidiaries; Maximum Awards Pty Limited, Travel Easy Holidays Pty Ltd and Global Business Group Pty Ltd to an Australian company based in Brisbane called Eko Group Pty Limited.

Results for the three months ended September 30, 2007.

         Revenues for the three months ended September 30, , 2007 increased by
$168,170 from $0 for the three months ended September 30, , 2006 to $168,170 for

the three months ended September 30, , 2007. The increase in revenues was due to the fact that company had no revenues for the same period of the previous year.

Cost of sales which comprises the cost of services contracted for third party website development. The cost of sales for the period September 30, 2007 was $114,156 apposed to $0 for the period September 30, 2006. The gross profit for the quarter was $54,014.

The Company's overhead costs for the quarter decreased by $14,132 from $221,004 for the quarter September 30, , 2006 to $206,872 for the quarter ended September 30, 2007. The general and administration costs decreased by $28,325, the legal and professional fees increased by $5,016 and the depreciation costs also increased $9,176 due to a substantial increase in property, equipment and software. The net loss from continuing operations decreased by $ 68,705 from $(221,536) for the three months ended 2006 to $(152,831) for the same period of 2007.

On September 30, 2007, the Company sold all of the issued and outstanding shares of the Australian subsidiaries to the Purchaser in consideration of $1.00 US and the assumption of the Assets, liabilities and combined debt. The combined net asset value of the subsidiaries at the time of the disposal was $(194,223). The debt in the Australian companies amounted to $(1,147,425); hence the gain from the sale including the $1.00 consideration was $1,341,649.

The discontinued operations net of taxes included a loss of $(31,666), a gain on the sale of $ 1,341,649 and the impairment of goodwill amounting to $(4,999,724). The net loss from the discontinued operations was $(3,689,741).

The comprehensive loss including the discontinued operations and the foreign currency translation adjustment was $(3,842,870) or $(0.27) per share based on 14,374,802 weighted average shares outstanding for the three months ended September 30, 2007 compared to a loss of $(213,682) or $(0.10) per share based on 2,160,133 weighted average shares outstanding for the three months ended September 30, ,2006.

Results for the nine months ended September 30, 2007.

Revenues for the nine months ended September 30, 2007 increased by $168,170 from $0 for the nine months ended September 30, 2006 to $168,170 for the nine months ended September 30, 2007. The increase in revenues was due to the fact that company had no revenues for the same period of the previous year.

Cost of sales which comprises the cost of services contracted for third party website development. The cost of sales for the nine months ended September 30, 2007 was $114,156 apposed to $0 for the same period September 30, 2006. The gross profit for the nine months was $54,014.

The Company's overhead costs for the nine months increased by $ 429,282 from $ 354,174 for the nine months ended September 30, 2006 to $ 783,456 for the same of 2007. The general and administration costs increased by $ 390,449, the legal and professional fees increased by $ 17,490 and the depreciation costs also increased $ 21,343 due to a substantial increase in property, equipment and software. The net loss from continuing operations increased by $374,390 from $(355,025) for the nine months ended 2006 to $(729,415) for the same period of 2007.

On September 30, 2007, the Company sold all of the issued and outstanding shares of the Australian subsidiaries to the Purchaser in consideration of $1.00 US and the assumption of the Assets, liabilities and combined debt. The combined net asset value of the subsidiaries at the time of the disposal was $(194,223). The debt in the Australian companies amounted to $(1,147,425); hence the gain from the sale including the $1.00 consideration was $1,341,649.

The discontinued operations net of taxes included a loss of $(31,666), a gain on the sale of $ 1,341,649 and the impairment of goodwill amounting to $(4,999,724). The net loss from the discontinued operations was $(3,689,741).

The comprehensive loss including the discontinued operations and the foreign currency translation adjustment was $(4,419,960) or $(0.26) per share based on 16,827,000 weighted average shares outstanding for the nine months ended September 30, 2007 compared to a loss of $(342,440) or $(0.16) per share based on 2,163,460 weighted average shares outstanding for the three months ended September 30, ,2006.

LIQUIDITY AND CAPITAL RESERVES

Through the nine months ended September 30, 2007 we have relied on advances of $1,289,012 from our principal shareholder and we have converted all of this debt into restricted common stock. As of September 30, 2007, the Company had cash of $58,956 and a working capital deficit of $168,850.

It is the Company's intention to seek additional equity or debt which we plan to use to use for working capital and to implement a marketing program to increase awareness of our businesses and to expand our operations.

For the period ended September 30, 2007, the Company derived 100% of its income from website development for third parties. The company's long term growth lies in the monthly or annual subscription model to Annesdiary.com, online shopping and affiliate revenue through Anne's World Limited, the online shopping and banner advertising as well as advertising revenues coming from the Curtain Rising by-weekly magazine and finally the online book and audio download, as well as affiliate revenues through Plays On The Net. The company's target market is mainly North America, Japan and most other English speaking nations in the world.

Depending upon market conditions, the company may not be successful in raising sufficient additional capital for it to achieve its business objectives. In such event, the business, prospects, financial condition, and results of operations could be materially adversely affected.

The Company's executive offices are now based in Toronto (Canada) and has a fully time staff of eight.

There is no guarantee that the Company will be successful in its attempt to raise capital sufficient to meet its cash requirements for the next twelve months. If the company is not successful in its effort to raise sufficient capital to meet its cash requirements, the business will fail and the company will cease to do business.

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