As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

11/28/07  W Technologies, Inc.              10KSB       7/31/07    5:315K                                   Westridge Busine… Inc/FA

Document/Exhibit                   Description                      Pages   Size 

 1: 10KSB       Annual Report -- Small Business                     HTML    235K 
 2: EX-31.1     Certification of Principal Executive Officer        HTML     10K 
 3: EX-31.2     Certification of Principal Financial Officer        HTML     10K 
 4: EX-32.1     Certification of Principal Executive Officer        HTML      7K 
 5: EX-32.2     Certification of Principal Financial Officer        HTML      7K 

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-KSB

[X]      Annual Report Under Section 13 or 15(d) of the

Securities Exchange Act of 1934

For the fiscal period ended July 31, 2007

[ ]      Transition Report Under Section 13 or 15(d) of the

Securities Exchange Act of 1934

For the transition period from ___________ to ___________

Commission File Number: 000-24520

W Technologies, Inc.

----------------------------------------------------

(Exact name of small business issuer in its charter)

                 Delaware                                          04-302177

-------------------------------                        -------------------

(State or other jurisdiction of                        (I.R.S. Employer

          incorporation or organization)                        Identification No.)

                   5052 South Jones Blvd, Ste. 100, Las Vegas, Nevada 89118

                 ------------------------------------------------------------

                          (Address of principal executive offices)(Zip Code)

(702) 967-6000

 ------------------------------------------------

(Issuer's telephone number, including area code)

Winning Edge International, Inc.

------------------------------------------------

(Former name, former address and former fiscal year, if changed since last report)

Securities registered under Section 12(b) of the Act:  None

Securities registered under Section 12(g) of the Act:

Common Stock, $.0001 Par Value

------------------------------

(Title of Class)

Check whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such  reports) and (2) has been subject  to such filing requirements for the past 90 days. YES [X] NO [ ]

Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B contained in this form, and no disclosure will be contained, to the best of issuer's knowledge, in definitive proxy or information statements incorporated  by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB. [ ]

Indicate by check mark whether the issuer is a shell company (as defined in Rule 12b-2 of the Exchange Act).  YES [ ]  NO [X]

State issuer's revenues for its most recent fiscal year.  $5,863,137.

The aggregate market value of the voting stock held by non-affiliates of the registrant as of November 1, 2007 was approximately $4,318,875, based upon the closing price per share of the Common Stock of $0.003 on that date.

The number of shares outstanding of the issuer's Common Stock as of November 1, 2007: Common Stock, $.0001 Par Value 130,396,450 shares.  The Company also has 502,000,000 shares issued to its treasury as security  under the terms of a note payable. These shares would not become outstanding unless the Company defaults on the term of this note.  

 

 

                                                                                                    TABLE OF CONTENTS

                                    Page

PART I ..................................................................  3

Item 1.  Description of Business .......................................  3

Item 2.  Description of Property ........................................  3

Item 3.  Legal Proceedings ..............................................  4

Item 4.  Submission of Matters to a Vote of Security Holders ............  5

PART II .................................................................  5

Item 5.  Market for Common Equity and Related Stockholder Matters .......  5

Item 6.  Management's Discussion and Analysis of Financial Condition

         and Results of Operations......................................  6

Item 7.  Financial Statements ..........................................  9

Item 8.  Changes in and Disagreements with Accountants on

         Accounting and Financial Disclosure ........................... 10

Item 8A. Controls and Procedures ....................................... 10

Item 8B. Other Information ............................................. 11

PART III ................................................................ 11

Item 9.  Directors, Executive Officers, Promoters and Control

         Persons; Compliance with Section 16(a) of the Exchange Act .... 11

Item 10. Executive Compensation ........................................ 14

Item 11. Security Ownership of Certain Beneficial Owners and

         Management and Related Stockholder Matters..................... 11

Item 12. Certain Relationships and Related Transactions ................ 17

Item 13. Exhibits and Reports on Form 8-K .............................. 18

Item 14. Principal Accountant Fees and Services ........................ 22

SIGNATURES .............................................................. 23

 

Financial Statements .................................................. F-1

 

2

PART I

ITEM 1. DESCRIPTION OF BUSINESS

OVERVIEW

     W Technologies, Inc., formally known as Winning Edge International, Inc. and GWIN, Inc. (the "Company"), is headquartered in Las Vegas, Nevada.  The Company recently completed the sale of all of its operating assets to Betbrokers, PLC. (“Betbrokers”) and discontinued its operations.  The Company is now in the process of settling outstanding debts and liabilities with the proceeds of the asset sale.  Once all debts are settled, the Company will evaluate whether to seek a new business opportunity through an acquisition or to dissolve.  Prior to the asset sale, the Company produced television, radio, and web-based programming related to sports and gaming and provided sports handicapping analysis and advice to sports bettors worldwide through its wholly-owned subsidiary, Global SportsEDGE, Inc.  Global SportsEDGE provided professional handicapping advice on professional football games played by the National Football League ("NFL"), professional basketball games played by the National Basketball Association (“NBA”), college football and basketball games, major-league baseball, hockey, NASCAR, and golf. All information and advice was provided for entertainment purposes only.

CORPORATE INFORMATION

     We were originally incorporated in Nevada in 1986.  We reincorporated in Massachusetts in 1987 and reincorporated in Delaware in 1996.  In July 2001, we acquired our sports handicapping business, which we operate through our wholly-owned subsidiary, Global SportsEDGE, Inc., a Delaware corporation.

     Effective August 22, 2002, we changed our name to GWIN, Inc. and the Board of Directors also approved a change in our fiscal year from a calendar year to one beginning August 1 and ending July 31 effective July 31, 2002.

     Effective September 21, 2006 the company changed its name to Winning Edge International, Inc. to better reflect the brand associated with the nationally aired television and radio programming called “The Winning Edge” or “Wayne Allyn Root’s Winning EDGE”.

     In September 2007, the Company completed the sale of all of the Company’s operating assets, including the business of Global SportsEDGE, Inc. to PLC ("Betbrokers"). Management of the Company had determined it was unable to support the Company’s ongoing expenses and repay debt.  Management determined the Company would have to either cease operations or sell assets to a third party.  The Company was able to locate a buyer for the Company’s assets and business and completed the sale effective on September 26, 2007. As consideration for the sale of the operating assets, the Company received 64,356,435 shares of Betbrokers stock; Betbrokers stock trades on the London Stock Exchange Alternative Investment Market known as the “AIM.”  On October 20, 2007 the Company changed its name to W Technologies, Inc. as part of the agreement reached with Betbrokers.  The Company is now in the process of settling its outstanding obligations. If the Company is able to successfully settle existing obligations, the Company will distribute any remaining assets to the Company’s shareholders of record as of September 26, 2007.

 

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Business

             Once all debts are settled, the Company’s management will evaluate the direction the Company will take.  Management may determine to liquidate and dissolve the Company or to seek other business opportunities.  At this time, management is focused on trying to settle debts through the liquidation of the Betbrokers’ stock.  In connection with the agreement reached with Betbrokers there are certain restrictions on the sale of the Betbrokers’ stock, therefore management is unable to determine the ultimate amount of proceeds that will be received from the stock sale or the timing of such sales. Management anticipates that it will take more than a year to complete the sale of the Betbrokers’ stock.  Due to the amount of debt the Company owes, shareholders may not receive any proceeds from the stock sales.

 

 

If management is able to settle all existing debts, management may seek other business opportunities.  At this time, the nature and timing of any such opportunities is unknown and may not come to fruition.

EMPLOYEES

     With the sale of our assets, we have terminated all full-time employees.  Three of our prior officers continue to work with the Company as part of the ongoing settlement of debts and evaluation of the future direction of the Company.  

CUSTOMERS

     None of our customers comprise a significant portion of our revenues.

ITEM 2. DESCRIPTION OF PROPERTY

     We previously leased approximately 7,536 square feet of office space for our corporate headquarters and sales office in Las Vegas, Nevada; the lease for this facility required monthly base rental payments of $14,261.  As part of the asset sale with Betbrokers, they entered into a new lease agreement for this space and the Company was released from future obligations.

ITEM 3. LEGAL PROCEEDINGS

     The Company previously owned a patent (U.S. Patent # 6,260,019 – Web-based Prediction Marketplace) that is a method and apparatus for facilitating electronic commerce between suppliers of predictions and consumers of predictions which it believes is being infringed by many of its competitors.  This patent was assigned to Betbrokers as part of the asset sale.  The Company has entered into a licensing and patent enforcement agreement with General Patent Corporation International (“GPCI”) to license and defend the Company’s patent. In August of 2006 the Company, through GPCI, filed lawsuits against certain companies and individuals to enforce the patent which claimed infringement and sought damages on the unauthorized use of the Company’s proprietary technology.  Any amounts received from the settlement or successful litigation of these claims would be for the benefit of Betbrokers.

 

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     From time to time, we may become involved in litigation relating to claims arising in the ordinary course of business.

ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITIES HOLDERS

     On August 23, 2007 the Company’s shareholders approved the following items: 1) Selling essentially all of the assets to Betbrokers and 2) changing the name of the Company from Winning Edge International, Inc. to W Technologies Inc.

PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     Our common stock has traded on the Over-The-Counter ("OTC") Bulletin Board under the symbol "WNED" since September 20, 2006. Prior, the company traded under the symbol “GWNI” since September 6, 2002.  Beginning on November 15, 2007 the Company’s stock as W Technologies, Inc. will trade as WTCGE. The table below sets forth for the periods indicated the high and low bid prices per share of our Common Stock, as reported by the OTC Bulletin Board. Quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission, and may not represent actual transactions.

 

                                                  HIGH       LOW

         Fiscal Year ended July 31, 2007

           Fourth Quarter ....................   $ ..005      .003

           Third Quarter .....................   $ .005      .003

           Second Quarter ....................   $ ..02       .01

           First Quarter .....................   $ .05       ..02

  

         Fiscal Year ended July 31, 2006

           Fourth Quarter ....................   $ .05       .02

           Third Quarter .....................   $ .05       .03

           Second Quarter ....................   $ .06       .03

           First Quarter .....................   $ .05       .04

     We consider our common stock to be thinly traded and any reported sale prices may not be a true market-based valuation of our common stock. On November 1, 2007 the closing price of our common stock, as reported on the OTC was $0.003. There were approximately 461 holders of record of the Company's common stock at that date.

     We have not paid any cash dividends since our inception.  Though management intends to distribute any proceeds from the asset sale to Betbrokers which are in excess of required debt payments, there can be no assurance as to the amount of any such distribution, if any, or when it would be made.

 

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RECENT SALES OF UNREGISTERED SECURITIES

    During the year ended July 31, 2007, we issued 514,000,000 shares of common stock. Included in this are 10,000,000 shares issued in connection with redemptions of warrants, 1,000,000 shares issued for services and 500,000 shares issued for debt renewal. Additionally 1,500,000 options were issued to three independent directors and 500,000 warrants were issued to an outside creditor for renewal of debt. Additionally the Company pledged 502,500,000 shares of common stock (treasury shares) in the event of default under a loan the Company entered into in September 2006 in the amount of $655,000.

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

     THIS ANNUAL REPORT ON FORM 10-KSB CONTAINS "FORWARD-LOOKING STATEMENTS," WHICH ARE BASED ON OUR CURRENT EXPECTATIONS, ASSUMPTIONS, ESTIMATES AND PROJECTIONS ABOUT OUR BUSINESS AND OUR INDUSTRY.  WORDS SUCH AS "BELIEVE,"  "ANTICIPATE," "EXPECT,"  "INTEND," "PLAN,"  "WILL,"  "MAY," AND OTHER SIMILAR EXPRESSIONS IDENTIFY FORWARD-LOOKING STATEMENTS. IN ADDITION, ANY STATEMENTS THAT REFER TO EXPECTATIONS, PROJECTIONS OR OTHER CHARACTERIZATIONS OF FUTURE EVENTS OR CIRCUMSTANCES ARE FORWARD-LOOKING STATEMENTS. THESE FORWARD-LOOKING STATEMENTS ARE SUBJECT TO CERTAIN RISKS AND UNCERTAINTIES,                           

THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE REFLECTED IN THE FORWARD-LOOKING STATEMENTS. FACTORS THAT MIGHT CAUSE SUCH A DIFFERENCE INCLUDE, BUT ARE NOT LIMITED TO, WHETHER OR NOT OUR PRODUCTS ARE ACCEPTED BY THE MARKETPLACE AND THE PACE OF ANY SUCH ACCEPTANCE, OUR ABILITY TO OBTAIN FINANCING TO MAINTAIN OUR OPERATIONS, CHANGING ECONOMIC CONDITIONS AND OTHER FACTORS, SOME OF WHICH WILL BE OUTSIDE OUR CONTROL. YOU ARE CAUTIONED NOT TO PLACE UNDUE   RELIANCE ON THESE FORWARD-LOOKING STATEMENTS, WHICH RELATE

ONLY TO EVENTS AS OF THE DATE ON WHICH THE STATEMENTS ARE MADE. WE UNDERTAKE NO OBLIGATION TO PUBLICLY REVISE THESE FORWARD-LOOKING STATEMENTS TO REFLECT EVENTS OR CIRCUMSTANCES THAT ARISE AFTER THE DATE HEREOF.  YOU SHOULD REFER TO AND CAREFULLY REVIEW THE INFORMATION IN FUTURE DOCUMENTS WE FILE WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

With the closing of the asset sale to Betbrokers the Company has ceased all business operations.  The Company is in the process of settling debts through the sale of the Betbrokers stock received as consideration in the asset sale.  Management anticipates that it may take over a year to completely settle all debts because of holding period and lock-up restrictions related to the Betbrokers stock.

 

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RESULTS OF OPERATIONS

The following discussion of results of operations will not be relevant to a reader in analyzing future operations.  With the sale of all of the operating assets of the Company, the Company will not be engaged in the prior business and the future operating costs and revenues, if any, will be substantially different then prior operating costs and revenues.

 

COMPARISON OF THE YEAR ENDED JULY 31, 2007 TO THE YEAR ENDED JULY 31, 2006.

      The operating losses for the years ended July 31, 2007, and July 31, 2006 were $1,052,867 and $784,596 respectively.  The increased loss for fiscal year 2007 is primarily due to increased operating expenses including commissions of $183,897, advertising costs of $173,304 and professional fees of $172,407. The increased operating expenses are partially offset by an increase of $262,213 in total revenue.  

      Our net losses for the years ended July 31, 2007, and July 31, 2006 were $1,198,504 and $1,204,726 respectively.  The net loss declined $6,222 from the year ended July 31, 2006 compared to the year ended July 31, 2007 primarily because of a decrease in non-cash costs of financing.

      Revenue from sales of sports handicapping information and advertising combined for the years ended July 31, 2007 and July 31, 2006 were $5,863,137 and $5,600,923, respectively.  The advertising revenue for the same periods were $778,117 and $815,716, respectively and revenues from sports handicapping information were $5,085,020 and $4,785,207, respectively. Advertising revenues decreased due to legal challenges that made it more difficult for poker sites to advertise in the United States. Handicapping sales increased due to better viewer response to the television program during the football season.

      Total handicapping fees for the years ended July 31, 2007, and July 31, 2006 were $507,790 and $455,282 respectively.  Handicapping fees are based on a percentage of handicapping information sales and are in line with handicapping revenues.

      Advertising expense for the year ended July 31, 2007 and July 31, 2006 were $1,547,169 and $1,373,865, respectively. The higher advertising expense for the year included a new cross-marketing campaign along with the media buys in major markets around the country.

      Commission expense for the years ended July 31, 2007 and July 31, 2006 were $2,007,952 and $1,824,055, respectively. Commissions are a set percentage of sales based sales revenue plus variable amounts for sales managers and are in line with the increase in handicapping revenues.

      Salaries and wages expense for the years ended July 31, 2007 and July 31, 2006 were $1,180,864 and $1,241,510, respectively.  The decrease is attributable to eliminating a mid-level manager position.

 

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      Professional fees for the years ended July 31, 2007, and July 31, 2006 were $301,395 and $128,988, respectively. The increase is due to increased costs of consultants associated with financing and raising capital.

      General and administrative expenses for the years ended July 31, 2007 and July 31, 2006 were $1,329,903 and $1,313,053, respectively.

 

SUMMARY OF CASH FLOWS FOR THE TWELVE MONTHS ENDED JULY 31, 2007

Cash decreased approximately $203,127 during the twelve months ended July, 2007.  The decrease was a result of payments on long-term debt and lease obligations of $395,514 and operating losses, net of the effect of cash proceeds from the issuance of notes payable.

OPERATING ACTIVITIES

Net cash used in operating activities increased from the cash provided of $43,067 in the twelve months ended July 31, 2006 to $519,418 cash used in the twelve months ended July 31, 2007.  This change is due to a significant decrease in deferred revenue in combination with a decrease in services and settlements paid with common stock and warrants.   

  

INVESTING ACTIVITIES

Net cash used in investing activities increased from $9,110 during the twelve months ended July 31, 2006 to $28,195 during the twelve months ended July 31, 2007.

FINANCING ACTIVITIES

Net cash provided by financing activities increased from $100,679 cash used during the twelve months ended July 31, 2006 to $344,486 during the twelve months ended July 31, 2007.  This increase in proceeds provided by financing activities is due to the issuance of notes payable of $740,000.  Included in the amount for the twelve months ended July 31, 2007, $395,514 was paid on long term convertible debt and lease obligations.

LIQUIDITY AND CAPITAL RESOURCES

Our working capital deficit as of July 31, 2007 was $2,120,243 as compared to a working capital deficit of $1,132,667 as of July 31, 2006.  Of the July 31, 2006 amount, $418,961 represents revenues from sales which will not be recognized until after July 31, 2007, and are recorded as current liabilities until earned.  We are currently trying to settle existing debts.  Due to the restrictions on the sale of the Betbrokers stock, this may take over a year.  Additionally, there is no guarantee that the proceeds from the sale of the Betbrokers stock will be sufficient to cover all of our existing debts.  If we are unable to pay off all existing debts, the Company will be forced to completely liquidate and pay creditors only a portion of what they are owed.  Additionally, shareholders would receive nothing from the sale of the Betbrokers stock.  At this time the final proceeds from the sale of the Betbrokers stock is unknown.

 

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CRITICAL ACCOUNTING POLICIES

     The discussion and analysis of our financial condition and results of operations were based upon the consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States.  The preparation of these financial statements requires us to make estimates and judgments that affect the reported amount of assets, liabilities, revenues and expenses.  Our significant accounting policies are described in Note 2 to our consolidated financial statements.  In response to SEC Release No. 33-8040, "Cautionary Advice Regarding

 

Disclosure About Critical Accounting Policies," we have identified certain policies as being of particular importance to the portrayal of our financial position and results of operations that require the application of significant judgment by management.  We analyze our estimates, including those related to revenue recognition, valuation of equity issuances, and contingencies and potential litigation, and base our estimates on historical experience and various other assumptions that we believe reasonable under the circumstances.  

                                  

Actual results may differ from these estimates under different assumptions or conditions.  We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of our financial statements.

REVENUE RECOGNITION

     Our handicapping service contracts with clients vary substantially in length from a single sporting event to entire seasons.  We recognize the revenue from service contracts ratably, as the services are rendered in proportion to the total services to be provided under the term of the contracts.  Payments received in advance for these services are recorded as deferred revenues under current liabilities.

     Revenue from advertising agreements is recognized ratably over the period of the agreements.

STOCK OPTIONS AND SIMILAR EQUITY INSTRUMENTS

The Company has adopted Statement of Financial Accounting Standards No. 123 (revised 2004), Share-Based Payment, (“FAS 123(R)”) which requires the measurement and recognition of compensation expense for all share-based payment awards made to employees and directors; including employee stock options based on estimated fair values.  FAS 123(R) supersedes the Company’s previous accounting under Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees (“APB 25”) for periods beginning in fiscal 2006. In March 2005, the SEC issued Staff Accounting Bulletin No. 107 (“SAB 107”) relating to FAS 123(R). The Company has applied the provisions of SAB 107 in its adoption of FAS 123(R).

 

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The Company adopted FAS 123(R) using the modified prospective transition method, which requires the application of the accounting standard as of August 1, 2005, the first day of the Company’s fiscal year 2006. The Company’s Consolidated Financial Statements as of and for the fiscal year ended July 31, 2006 reflects the impact of FAS 123(R). In accordance with the modified prospective transition method, the Company’s Consolidated Financial Statements for prior periods have not been restated to reflect, and do not include, the impact of FAS 123(R).

ITEM 7.  FINANCIAL STATEMENTS.

     The financial statements of the Company are set forth immediately following the signature page to this Form 10-KSB and are incorporated herein by reference.

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

         FINANCIAL DISCLOSURE.

None

ITEM 8A. CONTROLS AND PROCEDURES.

     Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we have evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of the period to which this filing relates, and, based upon their evaluation, our principal executive officer and principal financial officer have concluded that these controls and

procedures are effective. There were no significant changes in our internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation.

     Disclosure controls and procedures are our controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

 

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ITEM 8B.  OTHER INFORMATION.

None

 

PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;

COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.

EXECUTIVE OFFICERS AND DIRECTORS

     Set forth below is certain information concerning our executive officers and directors, including their age as of November 1, 2007. Our directors serve for a term of two years or until their successors are elected and qualified. Our officers serve at the discretion of our board of directors.  There are no family relationships among our directors and officers.

        NAME                AGE                   TITLE

        ----                ---                   -----

Wayne Allyn Root            45    Chairman of the Board and Chief Executive

                                  Officer

Douglas R. Miller           61    President, Chief Operating Officer,

                                  Secretary and Director

Jeff Johnson                49    Chief Financial Officer

Robert Seale                65    Director, Audit Committee(chair)

Roger Aspey-Kent            63    Director

Roger L. Harrison           64    Director

     WAYNE ALLYN ROOT has served as our Chief Executive Officer and Chairman of our Board of Directors since our reorganization in July 2001. From 1999 to 2001, Mr. Root served as Chairman and Chief Executive Officer of our subsidiary, Global SportsEDGE, Inc. From 1990 to 1999, Mr. Root served as a sports handicapper for National Sports Service.  Mr. Root holds a B.A. from Columbia University.  Mr. Root does not hold a directorship in any other public company.  

     DOUGLAS R. MILLER has served as our President, Chief Operating Officer, Secretary and a director since our reorganization in July 2001. Mr. Miller has also served as our Chief Financial Officer from November 2001 to April 2003. From 1999 to 2001, Mr. Miller

served as President of our subsidiary, Global SportsEDGE, Inc. From 1998 to 1999, Mr. Miller was the Chief Financial Officer of Body Code International, an apparel manufacturer.  Mr. Miller holds a B.A. degree in economics from the University of Nebraska, and an MBA degree from Stanford University. Mr. Miller is a director of Players Network (OTCBB: PNTV).

 

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     JEFF JOHNSON has served as Chief Financial Officer of the Company since May 2003. From 1995 to 2002 Mr. Johnson was the Chief Financial Officer for KNPR Radio.  Mr. Johnson was the Chief Financial Officer for Display Ad for 3 years and prior to that Mr. Johnson was with the national public accounting firms of Laventhal & Horwath and Coopers and Lybrand.  Mr. Johnson does not hold a directorship in any public company.

ROBERT L. SEALE has been a member of the Board of Directors since January 1, 2004.  Currently, Mr. Seale is a Principal with GIF Services, Inc., a Manager of the portfolios of state and local governments.  From January 1999 until December 2002, Mr. Seale served as Managing Director of Gabelli Fixed Income, LLC where he was responsible for managing their $2.0 billion portfolio as a senior executive.   From 1991 until 1999 he served as the Nevada State Treasurer where he was responsible for investing the State's $2.1 billion portfolio and managing $28 billion in annual cash flow, and debt issuances.  From 1981 until 1990 he was the Managing Partner for Pangborn & Co. CPA's in Reno, Nevada.  He graduated with a Bachelor of Science in Accountancy from California State Polytechnic University in 1964.

ROGER ASPEY-KENT has been a member of the Board of Directors since January 1, 2004.  He is currently an executive director of a property development company based in Cyprus and also a non-executive director of a technology systems company based in London.  He is an executive partner of Falcon Capital which is in the venture capital business operating in various locations throughout Europe.  From 1985 until 1990 he worked in general management of Credit Commercial de France, in London.  From 1980 until 1985 he worked as a senior associate director of Societe Generale, Merchant Banking. While at Societe Generale he served as senior corporate finance advisor for equity strategy and he was responsible for corporate syndications in London and Southeast Asia and for aerospace business development in Asia.  From 1963 until 1967 he worked as a corporate finance executive at Lazard Brothers & Co. Ltd in London where he was responsible for corporate finance activity in developing markets. Mr. Aspey-Kent currently serves as a director of EIG Technology Ltd and Marrakesh Properties Ltd.

 

     ROGER L. HARRISON has been a member of the Board of Directors since January 15, 2004.  Since the early 1980's Mr. Harrison has been involved in creating, producing and directing films.  Since 1999 he has been working on twenty-three projects, three of which are currently considered "hot": Cousins (Jerry Lee Lewis, Mickey Gilley, Jimmy Swaggart biopic); The Las Vegas Showgirls Meet the Furry Hamsters from Hell (a Mel Brooks-type spoof); and a documentary on capitalism and the republic form of democracy called "The Perfect Incubator."  He is also on the creative team for Sony's upcoming feature film Police Woman, starring Queen Latifah.  Prior to his involvement with films, Mr. Harrison worked for approximately fourteen years in the securities industry as an account executive with seven years at Merrill Lynch, three years as Regional Manager with E.F. Hutton & Co., and four years with A.G. Edwards.  His first film project was The Chosen which he produced during 1981-1983.  The Chosen was the winner of the Christopher Award; best film and best actor (Rod Steiger) at the Montreal Film Festival; and the New York Film Critics, best screenplay and best director awards.

     Our Board of Directors held three (3) meetings during the fiscal year ended July 31, 2007.  Each Director attended at least 75% of the aggregate number of meetings held by the Board of Directors during the time each such Director was a member of the Board.

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DIRECTOR COMPENSATION

     Commencing in February 2004, our non-employee directors began receiving $1,000 for each meeting of our Board of Directors they attend in person.  These fees may be paid in cash or with restricted shares of common stock at the discretion of the Company.  We also reimburse our directors for out-of-pocket expenses incurred to attend meetings of the board.

 

     Our executive officers hold office until the next annual meeting of directors. There are no known arrangements or understandings between any director or executive officer and any other person pursuant to which any of the above-named executive officers or directors was selected as an officer or director.

COMMITTEES

     We have two standing committees: the audit committee and the compensation committee.

AUDIT COMMITTEE

     Our current Audit Committee was formed during February 2004.  It attends to and reports to our Board of Directors with respect to matters regarding our independent registered public accounting firm, including, without limitation: annual review of their registration; approving the firm to be engaged as our independent registered public accounting form for the next fiscal year; reviewing with our independent registered public accounting firm the scope and results of their audit and any related management letter; consulting with our independent registered public accounting firm and our management with regard to our accounting methods and adequacy of our internal controls over financial reporting; approving the professional services rendered by our independent registered public accounting firm; reviewing the independence, management consulting services and fees of our independent registered public accounting firm; inquiring about significant risks or exposures and methods to minimize such risk; ensuring effective use of audit resources; and preparing and supervising the Securities and Exchange Commission reporting requirements.  Our Audit Committee currently consists of Robert L. Seale and Roger Aspey-Kent.  The audit committee met two (2) times during the fiscal year.

COMPENSATION COMMITTEE

     Our Compensation Committee was formed during February 2004 to attend to and report to our Board of Directors with respect to the appropriate compensation of our directors and executive officers and is responsible for administering all of our employee benefit plans.  The Compensation Committee currently consists of Robert L. Seale and Roger L. Harrison.  The compensation committee met one (1) time during the fiscal year.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

     Based solely on a review of Forms 3 and 4 and amendments thereto furnished to us during our most recent fiscal year, and Forms 5 and amendments thereto furnished to us with respect to our most recent fiscal year and certain representations, no persons who were either a director, officer, or beneficial owner of more than 10% of our common stock, failed to file on a timely basis reports required by Section 16(a) of the Exchange Act during the most recent fiscal year.

 

13

CODE OF ETHICS

     The Board of Directors adopted a Code of Ethics in October 2004, which applies to all of the Company's Executive Officers, Directors and employees.  A copy of the Code of Ethics was attached to our Annual Report on Form 10-KSB for the year ended July 31, 2004.

 

ITEM 10. EXECUTIVE COMPENSATION

 

     The following table sets forth information regarding the executive compensation for the Company's CEO and President during the fiscal years ended July 31, 2007 and July 31, 2006 and each other officer(s) who had total annual salary and bonus in excess of $100,000 during such years.

Name and Principal Position	Year	Salary	Commission	Stock Award	Option Award	Non-Equity IncentivePlan Compensation	All Other Compensation	Total
Wayne Allyn Root, Chairman & CEO	2007 2006	$175,000 $175,000	$334,628 $325,443	0 0	0 0	0 0	0 0	0 0
Douglas R. Miller, President	2007 2006	$ 195,000 $ 195,000	0 0	0 0	0 0	0 0	0 0	0 0
Jeff Johnson, CFO	2007 2006	$139,000 $125,000	0 0	0 0	0 0	0 0	0 0	0 0

Options

The Company has not issued any options to the three employees listed above during the prior two fiscal years.

EMPLOYMENT AGREEMENTS

      

     On July 31, 2004, the Company entered into a four-year employment agreement with Wayne Allyn Root pursuant to which Mr. Root is serving as the Company's Chief Executive Officer and Chairman of the Board of Directors.

His  compensation includes: (a) a base salary of $175,000 per year, (b) handicapping fees/commissions during the first year equal to 10% of Mr. Root's handicapping revenues received by the Company, (c) a restricted stock grant in the amount of 4,000,000 shares of the Company's common stock where the stock vests at the rate of 2,000,000 shares at signing and 666,666 shares vesting on July 31, 2005, 666,667 vesting July 31, 2006 and 666,667 vesting July 31, 2007; (d) compensation in the event of a change in ownership or control of the Company, either friendly or hostile, which includes a minimum annual base salary of $250,000, a handicapping fee of 12% versus the 10% described above, and all unvested shares will immediately vest; and other employee benefits provided to senior executives of the Company. The agreement also includes an agreement to indemnify Mr. Root, non-compete provisions and a provision regarding payments in the event of termination of Mr. Root's employment.

 

14

As part of the asset sale to Betbrokers, Mr. Root has entered into an employment agreement with Betbrokers and his emplyment by the Company ended by mutual consent.

EQUITY INCENTIVE PLAN

     A resolution adopting and approving an Equity Incentive Plan (the "Plan"), reserving 25,000,000 shares of common stock for issuance under the Plan was approved on August 18, 2006. On September 19, 2006, the consenting stockholders signed a consent, whereby they approved the adoption of the Plan. Under the Plan, options may be issued to directors, officers, key employees, consultants, agents, advisors, and independent contractors who are in a position to contribute materially to the prosperity of the Company. The Plan provides for the issuance of both incentive stock options, or ISOs, and non-qualified stock options, or NQSOs. ISOs are issued to employees and NQSOs are generally issued to non-employees. The number of shares that are subject to ISOs is limited to the discretion of the Board.

     Our board administers the Plan but may delegate such administration to a committee, which shall consist of at least two members of the board. The board or the committee has the authority to determine the number of options to be granted, when the options may be exercised and the exercise price of the options. Options may be granted for terms not exceeding ten years from the date of the grant, except for options granted to persons holding in excess of 10% of the common stock, in which case the options may be granted for a term not to exceed five years from the date of the grant.                                  

     The board believes that the Plan will provide greater flexibility in structuring compensation arrangements with management, consultants and employees, and will provide an equity incentive for those who are awarded shares under the Plan. The issuance of common stock as an award under the Plan may have a financially dilutive effect depending on the price paid for such shares, and an absolute dilutive effect due to the increase in issued and outstanding shares.

     At July 31, 2007, 1,500,000 options were outstanding.

     During the fiscal year ended July 31, 2007, the Company granted 1,500,000 options.

 

15

                                 Equity Compensation Plan Information

                            Number of

                            securities to be

                            issued upon                               Number of

                            exercise of         Weighted-average      securities

                            outstanding         exercise price of     remaining

                            options, warrants   outstanding options,  available for

Plan category               and rights          warrants and rights   future issuance

--------------              -----------------   --------------------  ---------------

                                   (a)                  (b)                 (c)

Equity compensation

plans approved by security

holders                      1,500,000 Common          $0.02           2,000,000

Equity compensation

plans not approved by

security holders                  None                  N/A                None

                            ----------------           -----          ----------------

Total                           0 Common               $0.00             0 Common

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

          AND RELATED STOCKHOLDER MATTERS

     The following table sets forth the number and percentage of shares of our $.0001 value common stock owned beneficially, as of November 26, 2007, by any person, who is known by us to be the beneficial owner of 5% or more of such common stock, by all Directors and Executive Officers individually, and by all Directors and Executive Officers as a group. For purposes of the chart, the Company has used 130,396,450 shares outstanding and has not included the 502,000,000 treasury shares which securitize one note payable.  If the Company defaults on this note, the shares would be disbursed to CSI Business Services, Inc. making them the largest shareholder of the Company.  If these shares were to be issued, there would be a change in control of the Company with CSI Business Services, Inc. becoming the controlling shareholder.  Such a change in control would limit the Company’s ability to use net operating losses in future periods to offset income. Information as to beneficial ownership is based upon statements furnished to us by such persons.

                                    Amount of

Name and Address                    Beneficial              Percentage

of Beneficial Owner (1)             Ownership               of Class

-----------------------            --------------           ----------

Wayne Allyn Root                   10,555,928 (2)              8.1%

Douglas R. Miller                   4,767,370 (3)              3.7%

Roger Aspey-Kent                      703,000 (4)               *

Robert L. Seale                        20,000                   *

Roger L. Harrison                      20,000                   *

Jeff Johnson                            -0-                    -0-

All Officers and Directors         16,066,298                 12.4%

as a group (6 persons)

_______________

* Less than one percent.

 

16

(1)  Unless otherwise noted, the address for each named beneficial owner is 5052 South Jones Blvd., Las Vegas, Nevada 89188.

(2)  Does not include 462,222 preferred shares that can be converted to 4,622,220 shares of common stock.

(3)  Includes 1,611,568 shares held directly by Mr. Miller; and 3,155,802 shares held in the name of the Kerlee Intervivos Trust of which Mr.  Miller is a beneficiary.

(4)  Includes 345,000 shares held directly by Roger Aspey-Kent and 358,000 shares underlying currently exercisable warrants.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     In September 2002, we entered into an agreement with Newmarket Investments, PLC ("Newmarket"), which was then a convertible  debenture holder,  which provided that Newmarket invest an additional  $700,000 in the Company by amending the existing $500,000 convertible  debenture held by Newmarket to reflect a principal amount of $1,200,000. The anti-dilution provisions on the combined $1,200,000 convertible debenture provide that 5,802,199 additional shares be issued upon conversion.  The total Newmarket convertible debenture shares upon conversion were 9,230,769. Newmarket elected to convert the entire debenture into restricted stock of the company in the second quarter of 2004.  In addition, the Company agreed to exchange an existing warrant held by Newmarket to acquire 1,000,000 shares of common stock at $1.00 per share for a warrant to acquire 3,000,000 shares of common stock at $0.13 per share.  This Warrant expired on August 31, 2005. Newmarket also extended an unsecured standby credit facility of $250,000 with a 16% annual interest rate that was originally payable on March 31, 2003. At July 31, 2007, the Company had an outstanding balance including interest of $196,897.  In connection with these transactions, we also issued to Newmarket a three-year option to purchase 1,500,000 shares at a price per share of $0.50.  The option expired July 31, 2006.  The CEO of Newmarket is a former director of the Company.

     In May 2004, the Company issued 1,190,625 shares of restricted common stock to Wayne A. Root, CEO, and 200,000 shares to an assignee of Mr. Root as payment of $111,250 payable resulting from accrued handicapping commissions due.

     In December 2004, the Company issued 1,000,000 shares of restricted common stock to Wayne A. Root as compensation for his personal guaranty of a $600,000 loan to the Company and for his pledging all of his common stock as collateral for the loan.

     In July of 2006 the company redeemed $208,000 of debt owed to Wayne Root for 462,222 preferred shares. The preferred shares can be converted into 4,622,220 common shares at the option of the holder at any time over the following 36 months.

     The Company has a convertible debenture, originally in the amount of $600,000. The outstanding balance as of July 31, 2007, is approximately $172,000. The principal of the debt is to be repaid at the rate of $18,200 per month plus monthly interest. The note originally matured in October of 2007. At the discretion of the Company this note may be repaid in cash or through the issuance of common stock. The company previously registered 9,969,900 common shares for potential conversion. At July 31, 2007 no shares have been issued to pay this debt, or fulfill conversion requests. Additionally CEO Wayne Root has personally guaranteed this note. As part of the asset sale dated September 26, 2007 this note was extended.

 

17

In September of 2006 the company entered into a $655,000 short term loan with a private investor. The note has an 18% interest rate and a maturity date of June 30, 2007. As collateral, the Company made a general pledge agreement, giving a security interest in the assets of the company including a specific credit card reserve account. Additionally, the Company pledged 502,000,000 shares of Common Stock in the event of default.  CEO Wayne Root also pledged his 462,222 Preferred Shares in the event of default. As part of the asset sale dated September 26, 2007 the note was extended.

In June the Company received a loan in the amount of $25,000 from Director Harrison. This loan has a due date of August 31, 2007.

ITEM 13.  EXHIBITS

     The following exhibits are filed as part of this annual report:

EXHIBITS.

Number     Description

2.         Agreement and Plan of Reorganization dated July 6, 2001

           between Global Sports & Entertainment, Inc. and Turfclub.com,

           Inc. (1)

3.1        Certificate of Incorporation of GWIN, as amended (1)

3.2        Bylaws of GWIN (5)

4.1        Certificate of Designations of Series C Preferred Stock and

           Series C Stock Purchase Agreement  (1)

4.2        Form of Indenture representing 5% Convertible Debentures (1)

4.3        Form of Indenture representing 13% Convertible Debentures (4)                                     

4.4        Form of Common Stock Purchase Warrant included with 5%

           Convertible Debenture Units (4)

10.1       Financial Advisory Agreement dated September 10, 2001 between

           the GWIN and Keating Investments, LLC  (1)

10.2       Executive Services Agreement dated December 6, 1999 between

           GWIN and Mr. Miller  (1)

 

18

10.3       Executive Services Agreement dated December 6, 1999 between GWIN

           and Mr. Root  (1)

10.4       Sports Personality Agreement dated March 2, 2000 between GWIN

           and Mr. Root (1)

10.5       Term sheet with British Bloodstock Agency, dated August 21,

           2002 (4)

10.6       Agreement describing voting agreement between Mr. Manner and Mr.

           Root regarding Mr. Keating's board rights  (2)

10.7       Common Stock Purchase Warrant issued to Keating Investments,

           LLC (1)

10.8       Debenture Purchase Agreement dated September 19, 2001 between

           GWIN and Mr. Root (1)

10.9       5% Convertible Debenture dated September 19, 2001 issued to Wayne

           Allyn Root (1)

10.11      Common Stock Purchase Warrant issued to Mr. Root  (1)

10.12      Debenture Purchase Agreement dated August 31, 2001 between GWIN

           and Mr. Manner (1)

10.13      5% Convertible Debenture dated September 19, 2001 issued to Mr.

           Manner (1)

10.14      Common Stock Purchase Warrant issued to Mr. Manner  (1)

10.15      Common Stock Purchase Warrant dated September 4, 2001 between

           GWIN and Keating Partners, L.P. (1)

10.16      Common Stock Purchase Warrant issued to Keating Partners, L.P.(1)

10.17      Promissory Note dated October 23, 2000 issued to Mr. Root (1)

10.18      Letter Agreement dated July 5, 2001 between GWIN and Keating

           Investments, LLC (1)

10.19      Series C Preferred Stock Purchase Agreement dated July 10, 2001

           between Trilium Holdings Ltd. and the Company (1)

10.20      Promissory Note dated November 12, 2001 issued to Mr. Keating.(3)

10.21      Promissory Note dated November 12, 2001 issued to Mr. Root.(3)

                                       

10.22      Securities Purchase Agreement dated June 29, 2002 between  

           Laurus Master Fund, Ltd. and GWIN (4)

 

19

10.23      2002 Equity Incentive Plan (6)

10.24      Employment Agreement with Wayne Allyn Root dated July 31, 2003 (8)

10.25      Employment Agreement with Douglas R. Miller dated July 31, 2004  

           (10)

10.26      Employment Agreement with Wayne Allyn Root dated July 31, 2004

           (10)

10.27      Securities Purchase Agreement with Laurus Master Fund, Ltd.

           Dated October 29, 2004 (9)

10.28      Secured Convertible Term Note payable to Laurus Master Fund, Ltd.

           For $600,000 (9)

10.29      Amendment to the Asset Purchase Agreement and Undertaking and Covenant by and

           Among Winning Edge International, Inc., Global Sports Edge, Inc., Wayne Allyn

           Root and Betbrokers, PLC (10)

10.30      Amendment, Termination Agreement and Mutual Release-Winning Edge and CSI

           Business Finance, Inc. (10)

10.31      Pledge and Security Agreement-CSI Business Finance, Inc. (10)

10.33      Amendment to Promissory Note-Laurus Family of Funds, LLC (10)

10.34      Amendment to the Asset Purchase Agreement by and Among Winning Edge

           International, Inc., Global Sports Edge, Inc., Wayne Allyn Root and

           Betbrokers, PLC (11)

10.35      Asset Purchase Agreement by and Among Winning Edge International, Inc., Global

           Sports Edge, Inc., Wayne Allyn Root and Betbrokers, PLC (13)

14         Code of Ethics (11)

21.1       List of Subsidiaries (4)

31.1       Certification of Chief Executive Officer pursuant to Section

           302 of the Sarbanes-Oxley Act of 2002 - Filed herewith

           electronically

31.2       Certification of Chief Financial Officer pursuant to Section

           302 of the Sarbanes-Oxley Act of 2002 - Filed herewith

           electronically

32.1       Certification of Chief Executive Officer pursuant to 18 U.S.C.

           Section 1350 - Filed herewith electronically

32.2       Certification of Chief Financial Officer pursuant to 18 U.S.C.

           Section 1350 - Filed herewith electronically

 

20

(1) Incorporated by reference to the similarly described exhibit included with the registrant's Quarterly Report for quarter ended September 30, 2001 filed with the SEC on November 19, 2001.

(2) Described in Exhibit 2.1

(3) Incorporated by reference to the similarly described exhibit included with the registrant's Annual Report for the year ended December 31, 2001 filed with the SEC on April 1, 2002 and amended on May 15, 2002.

(4) Incorporated by reference to the similarly described exhibit included with the registrant's registration statement on Form SB 2, 333 99599, filed on September 13, 2002.

(5) Unavailable in electronic format, but will be mailed upon request free of charge.

(6) Incorporated by reference to the Registrants Definitive Information Statement filed with the SEC on July 21, 2002.

                                      

(7) Incorporated by reference to GWIN, Inc. annual report on Form 10 K for the year ended July 31, 2002, as filed with the SEC on October 28, 2002.

(8) Incorporated by reference to GWIN, Inc. annual report on Form 10 KSB for the year ended July 31, 2003, as filed with the SEC on November 10, 2003.

 

(9) Incorporated by reference to the similarly described exhibits included with the Registrant's Form 8-K dated December 1, 2004, as filed with the SEC on December 2, 2004.

(10)  Incorporated by reference to the Registrant’s Form 8-K dated September 26, 2007.

(11)

Incorporated by reference to the Registration’s Form 8-K dated September 6, 2007

(12)

Incorporated by reference to the Registrant’s Form 8-K dated July 3, 2007.

(13) Incorporated by reference to GWIN, Inc. Annual Report on Form 10-KSB for the year ended July 31, 2004, as filed with the SEC on November 1, 2005.

 

21

ITEM 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES

AUDIT FEES

     The aggregate fees billed by Moore Stephens, P.C. for professional services related to the audit of the Company's consolidated financial statements for the fiscal years ended July 31, 2007 and 2006 were $88,500 and $68,500 respectively.

AUDIT RELATED FEES

     The aggregate fees billed by Moore Stephens P.C. for audit related services for the fiscal years ended July 31, 2007 and 2006 were $-0- and $-0-, respectively.

TAX SERVICES

     The aggregate fees billed by Moore Stephens P.C. for tax services for the fiscal years ended July 31, 2007 and 2006 were $-0- and $5,335 respectively.

ALL OTHER SERVICES

     There were no fees billed by Moore Stephens P.C. for other services for the fiscal years ended July 31, 2007 and 2006.

 

22

                           

SIGNATURES

     In accordance with Section 13 of the Exchange Act, the Registrant caused this Report to be signed on its behalf by the undersigned, there unto duly authorized on November 27, 2007.

                                     Winning Edge International, Inc.

                                      By: /s/ Wayne Allyn Root

                                         -----------------------------------

                                         Wayne Allyn Root, Chief Executive

                                         Officer

     In accordance with the requirements of Section 13 of the Exchange Act, this Report has been signed below by the following persons on behalf of the Registrant on November __, 2007 and in the capacities indicated.

/s/ Wayne Allyn Root

---------------------------------------------------

Wayne Allyn Root, Chairman, Chief Executive Officer

(Principal Executive Officer)

/s/ Jeff Johnson

---------------------------------------------------

Jeff Johnson, Chief Financial Officer

(Principal Financial and Accounting Officer)

/s/ Douglas Miller

---------------------------------------------------

Douglas Miller, Director

/s/ Robert Seale

---------------------------------------------------

Robert Seale, Director

/s/ Roger Aspey-Kent

---------------------------------------------------

Roger Aspey-Kent, Director

/s/ Roger Harrison

---------------------------------------------------

Roger Harrison, Director

 

23

Winning Edge International, Inc.

Financial Statements

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and Board of Directors of W Technologies, Inc.

We have audited the accompanying consolidated balance sheet of W Technologies, Inc. (formerly known as Winning Edge International, Inc. and GWIN, Inc.) and subsidiaries as of July 31, 2007, and the related consolidated statements of operations, cash flows and stockholders' deficit for each of the two fiscal years in the period then ended. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.  Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting.  Accordingly, we express no such opinion.  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 W Technologies, Inc. and subsidiaries as of July 31, 2007, and the consolidated results of their operations and their cash flows for each of the two fiscal years in the period then ended, in conformity with U.S. generally accepted accounting principles.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the consolidated financial statements, the Company has experienced losses from operations, and has a working capital deficiency and accumulated deficit that raise substantial doubt about its ability to continue as a going concern.  Management's plans in regard to these matters are also described in Notes 3 and 16.  The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

As disclosed in Note 16 to the financial statements, the Company effectively ceased all operations effective September 26, 2007, when an asset sale was completed..

                                 /s/ MOORE STEPHENS, P.C.

                                 Certified Public Accountants.

Cranford, New Jersey

November 28, 2007

F-1

 

 

PART 1:

FINANCIAL INFORMATION

ITEM 1.

CONSOLIDATED FINANCIAL STATEMENTS

                                       W TECHNOLOGIES, INC

CONSOLIDATED BALANCE SHEET
July  31, 2007
ASSETS
Current assets:
Cash						$            2,621
Accounts receivable						31,831
Deposits						166,316
Total Current Assets						200,768
Property and equipment (net)						24,258
Equipment held under capital leases (net)						3,300
Deposits and other assets						19,605
Deferred financing fee						2,583
Total assets						$        250,514
						--------------------
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Current portion of long-term debt, less unamortized discount of $ 9,816						$        802,417
Notes payable – related parties						390,614
Deferred revenue						418,961
Accounts payable						618,718
Bank overdraft						90,301
Total Current Liabilities						2,321,011
Long term capital lease						482
Total liabilities						$    2,321,493
Stockholders' deficit:
Preferred stock - $0.0001 par value; 5,000,000 shares authorized; 462,222 shares issued and outstanding						46
Common stock - $0.0001 par value; 750,000,000 shares authorized; 632,396,450 issued, of which 502,500,000 are Treasury shares						63,240
Additional paid in capital						27,821,123
Treasury stock						(50,250)
Accumulated deficit						(29,905,138)
Total stockholders’ deficit						(2,070,979)
Total liabilities and stockholders’ deficit						$       250,514

                                                                                                                                                                   ----------------------

                                                                                         F-2

                                The accompanying notes are an integral part of the financial statements.

                                W TECHNOLOGIES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

			Year ended July 31
			2007		2006
Net revenue - services			$      5,085,020		$      4,785,207
Revenues - advertising			778,117		815,716
Total revenues			5,863,137		5,600,923
Handicapping fees			178,961		129,839
Handicapping fees – related party			328,829		325,443
Advertising expense			1,547,169		1,373,865
Commissions			2,007,952		1,824,055
Salaries and wages			1,180,864		1,241,510
Professional fees			301,395		128,988
General and administrative			1,329,903		1,313,053
Depreciation expense			40,931		48,766
Total operating expense			6,916,004		6,385,519
Operating (loss)			(1,052,867)		(784,596)
Non-cash financing costs			(10,000)		-
Settlement income			74,243		179,200
Interest (expense), including amortization of debt discount			(186,798)		(110,483)
Other non-cash cost of financing			-		(465,771)
Interest (expense) – related parties			(23,082)		(23,076)
Net (loss)			(1,198,504)		(1,204,726)
Basic and diluted (loss) per share of common stock			$   (0.01)		$  (0.01)
Basic weighted shares of common stock outstanding			129,896,450		118,396,450
F-3

                                  The accompanying notes are an integral part of the financial statements.

W TECHNOLOGIES, INC.

CONSOLIDATED STATEMENT OF CASH FLOWS

					2007		2006
Cash flows - operating activities:
Net (loss)					$   (1,198,504)		$  (1,204,726)
Adjustments to reconcile net (loss) to net cash used in operations:
Depreciation					40,931		48,766
Services and settlements paid with common stock and warrants					173,725		550,417
Amortization of Prepaid Expense-Related parties					--		6,667
Interest expense – issuance of common stock					10,000		--
Interest expense – issuance of warrants					--		3,370
Interest expense – amortization of debt discount					39,210		39,216
Non-Cash Financing Fees					--		123,104
Decrease (increase) in:
Accounts receivable					116,100		132,518
Prepaid expenses					92,600		(53,567)
Other assets					127,273		206,408
Deposits					19,530		99,303
Deferred financing fees					10,334		10,333
Increase (decrease) in:
Deferred revenue					(566,491)		(97,908)
Accounts payable					331,853		25,452
Bank overdraft					90,301		--
Notes payable – related parties					193,718		153,714
Total adjustments					679,086		1,138,689
Total cash (used in) provided by operating activities					(519,418)		43,067
Cash flows - investing activities:
Purchase of fixed assets					(28,195)		(9,110)
Total cash used in investing activities					(28,195)		(9,110)
Cash flows - financing activities:
Proceeds from issuance of notes payable					740,000		101,000
Payments on long-term debt and lease obligations					(395,514)		(201,679)
Total cash provided by (used in) financing activities					344,486		(100,679)
Net (decrease) in cash					(203,127)		(66,722)
Cash - beginning of  periods					205,748		272,470
Cash - end of  periods					$             2,621		$        205,748

                                                                                                         F-4

                                                   The accompanying notes are an inegral part of the financial statements.

SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:

For the twelve months ended July 31, 2007 and 2006, the Company paid $0 for taxes and $168,571 for interest and $0 for taxes and $79,532 for interest, respectively. The Company issued stock and warrants in payment for professional services and settlement costs. For the twelve months ended July 31, 2007 and 2006, the Company issued 3,300,000 shares of common stock and 14,603,381 shares of common stock, respectively, for services.

During the twelve months ended July 31, 2006, the Company settled a claim against a vendor for a total of $179,200.  This settlement consisted of forgiven indebtedness of $129,200 and $50,000 of payments in kind which were used and recorded to expense. The Company also issued shares of convertible preferred stock and warrants to Wayne Root for the forgiveness of $208,000 in salary and commissions. The Company also entered into a three year capital lease for office equipment with payments of $317 per month during the year ended July 31, 2006; the principle portion of this lease, which totaled approximately $11,000, is non-cash in nature and excluded from the cash flow schedule.

 

                                                                                              W TECHNOLOGIES, INC.

CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT        For the Years Ended July 31,2007

		Series A            Convertible
		Preferred	Stock	Common	Shares					Total
		No. of		No. of		Paid-In	Pre-Paid Expense	Treasury Stock	Accumulated	Stockholders
		Shares	$	Shares	$	Capital	Related Party	$	Deficit	Deficit
Balance – July  31, 2005				103,788,069	$10,380	$26,739,156	(6,667)	--	($27,501,908)	($759,039)

Issuance of stock to retire debentures		--	--	250,050	25	29,981	--	--	--	30,006
Issuance of stock  for services		--	--	14,358,331	1,435	548,982	--	--	--	550,417
Issuance of preferred stock for service		462,222	46	--	--	207,954	--	--	--	208,000
Issuance of stock for cash		--	--	--	--	--	--	--	--	--
Interest expense from issuance of warrants		--	--	--	--	3,370	--	--	--	3,370
Amortization of pre-paid expense – related party		--	--	--	--	--	6,667	--	--	6,667
Issuance of warrant		--	--	--	--	109,104	--	--	--	109,104
Net (loss) for the twelve months ended July 31, 2006		--	--	--	--	--	--	--	(1,204,726)	(1,204,726)
Balance – July  31, 2006		462,222	$46	118,396,450	$11,840	$27,638,547	--	--	($28,706,634)	($1,056,201)

Issuance of stock on exercise of warrants		--	--	10,000,000	1,000	124,000	--	--	--	125,000
Issuance of stock  for services		--	--	1,000,000	100	19,900	--	--	--	20,000
Issuance of treasury stock		--	--	502,500,000	50,250	--	--	(50,250)	--	--
Issuance of warrants		--	--	--	--	2,806	--	--	--	2,806
Issuance of options for services		--	--	--	--	25,920	--	--	--	25,920
Interest expense from issuance of debentures		--	--	500,000	50	9,950	--	--	--	10,000
Net (loss) for the twelve months ended July 31, 2007		--	--	--	--	--	--	--	(1,198,504)	(1,198,504)
Balance – July  31, 2007		462,222	$46	632,396,450	$63,240	$27,821,123	--	($50,250)	($29,905,138)	($2,070,979)

                                                                                                                  F-5

                                                      The accomapying notes are an integral part of the financial information.

 

 

W TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

[1] ORGANIZATION AND CHANGES IN CONTROL OF COMPANY

W Technologies, Inc. and subsidiaries, formerly known as Winning Edge International, Inc. and GWIN, Inc. (the "Company") provided professional handicapping advice on professional football games played by the National Football League ("NFL"), professional basketball games played by the National Basketball Association ("NBA"), and college football and basketball games, major-league baseball, hockey, NASCAR, and golf.  It advertised such services through the production of branded television, radio, and web-based programming related to sports and gaming.  Substantially all activities of the Company were performed through its wholly-owned subsidiary, Global SportsEDGE, Inc. ("EDGE").

The Company was engaged in a highly seasonal business, with the majority of sales related to football and basketball handicapping.  Due to this seasonality, quarterly results may vary materially between the football and basketball seasons [concentrated in the first and second fiscal quarters] and the remainder of the year [the third and fourth fiscal quarters].

In September 2007, the Company completed the sale of all of the Company’s operating assets, including the business of Global SportsEDGE, Inc. to Betbrokers PLC (“Betbrokers”).  Management of the Company had determined it was unable to fund operations and pay debts as they became due.  Management determined the Company would have to either cease operations or sell assets to a third party.  Management was able to locate a buyer for the Company’s assets and operations and completed the sale on September 26, 2007.  As consideration for the sale of the operating assets, the Company received

64,356,435 shares of Betbrokers stock; Betbrokers stock trades on the London Stock Exchange Alternative Investment Market known as the “AIM.” On October 20, 2007 the Company changed its name to W Technologies, Inc. as part of the agreement reached with Betbrokers.  The Company is now in the process of settling its outstanding obligations.  If the Company is able to successfully settle existing obligations, the Company will distribute any remaining assets to the Company’s shareholders of record as of September 26, 2007.

 

F-6

[2] SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION -

The consolidated financial statements include the accounts of the Company and its subsidiary, EDGE, as well as several inactive subsidiaries.  All significant inter-company accounts and transactions have been eliminated in consolidation.

REVENUE RECOGNITION -

Our service contracts with clients vary substantially in length from a single sporting event to entire seasons.  We recognize the revenue from service contracts ratably, as the services are rendered in proportion to the total services to be provided under the contracts.  It is important to note that while revenue from service contracts is deferred and recognized as the service is delivered, the bulk of the costs associated with generating that revenue including advertising, commissions, and handicapping fees are expensed in the quarter that the service contract is generated. On July 31, 2007, the Company had received $377,294 in payment for handicapping services not rendered by that date.  This amount is recorded as a current liability.

Revenue from advertising agreements is recognized ratably over the period of the agreements. As of July 31, 2007 deferred revenue from advertising agreements was $41,667. This amount is recorded as a current liability.

OPERATING COSTS AND EXPENSES -

Handicappers' fees and sales representatives' compensation and related expenses are charged to operations as incurred.

USE OF ESTIMATES -

 

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

CASH AND CASH EQUIVALENTS -

The Company considers all highly liquid investments, with a maturity of three months or less when purchased, to be cash equivalents. At July 31, 2007, the Company did not have any cash equivalents. Cash is deposited in federally insured bank accounts.

PROPERTY AND EQUIPMENT AND DEPRECIATION -

Property and equipment are stated at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, which range from 3 to 5 years.

 

F-7

 

Routine maintenance and repair costs are charged to expense as incurred and renewals and improvements that extend the useful life of the assets are capitalized.  Upon sale or retirement, the cost and related accumulated depreciation are eliminated from the respective accounts and any resulting gain or loss is reported as income or expense.

BASIC AND DILUTED LOSS PER COMMON SHARE -

The Company has adopted Statement of Financing Accounting Standards ("SFAS") No. 128, "Earnings Per Share."  Under SFAS 128, loss per common share is computed by dividing net loss available to common stockholders by the weighted-average number of common shares outstanding during the period.  In the Company's present position diluted loss per share is the same as basic loss per share. Securities that could potentially dilute earnings per share in the future include the issuance of common stock in settlement of notes payable and the exercise of stock options and warrants. For the year ended July 31, 2007 and the year ended July 31, 2006 the number of common stock equivalents excluded from the calculation, because they were anti-dilutive, was 22,478,033 and 30,678,053, respectively.

STOCK OPTIONS AND SIMILAR EQUITY INSTRUMENTS -

The Company has adopted Statement of Financial Accounting Standards No. 123 (revised 2004), “Share-Based Payment,” (“FAS 123(R)”) which requires the measurement and recognition of compensation expense for all share-based payment awards made to employees and directors; including employee stock options based on estimated fair values.  FAS 123(R) supersedes the Company’s previous accounting under Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees” (“APB 25”) for periods beginning in fiscal 2006. In March 2005, the SEC issued Staff Accounting Bulletin No. 107 (“SAB 107”) relating to FAS 123(R). The Company has applied the provisions of SAB 107 in its adoption of FAS 123(R).  

                                   

ADVERTISING EXPENSES -

The Company expenses advertising costs as incurred. Advertising expenses consist primarily of costs related to the production and distribution of our television and radio programming.  Total advertising costs for the years ended July 31, 2007 and 2006 amounted to $1,547,169 and $1,373,865, respectively.

INCOME TAXES -

Pursuant to SFAS No. 109, "Accounting for Income Taxes," income tax expense [or benefit] for the year is the sum of deferred tax expense [or benefit] and income taxes currently payable [or refundable]. Deferred tax expense [or benefit] is the change during the year in a company's deferred tax liabilities and assets. Deferred tax liabilities and assets are determined based on differences between financial reporting and tax bases of assets and liabilities, and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse.

 

F-8

[3] GOING CONCERN

The accompanying financial statements have been prepared in conformity with generally accepted accounting principles which contemplate the continuation of the Company as a going concern and realization of assets and settlement of liabilities and commitments in the normal course of business. For the year ended July 31, 2007, the Company has a loss from operations of $1,052,867, a working capital deficiency of  $2,120,243 and an accumulated deficit of  $29,905,138.  These conditions raise substantial doubt about the Company's ability to continue as a going concern.

In September 2007, the Company completed the sale of all of the Company’s operating assets, including the business of Global SportsEDGE, Inc. to Betbrokers.  Management of the Company had determined it was unable to fund operations and pay debts as they became due.  Management determined the Company would have to either cease operations or sell assets to a third party.  Management was able to locate a buyer for the Company’s assets and operations and completed the sale on September 26, 2007.  As consideration for the sale of the operating assets, the Company received 64,356,435 shares of Betbrokers stock; Betbrokers stock trades on the London Stock Exchange Alternative Investment Market known as the “AIM.” On October 20, 2007 the Company changed its name to W Technologies, Inc. as part of the agreement reached with Betbrokers.  The Company is now in the process of settling its outstanding obligations.  If the Company is able to successfully settle existing obligations, the Company will distribute any remaining assets to the Company’s shareholders of record as of September 26, 2007.

[4] CONCENTRATIONS OF CREDIT RISKS

The Company places its cash with high credit quality institutions to limit its credit exposure.  At July 31, 2007 the Company had no funds in excess on insured limits at financial institutions.

                                      

(5) PROPERTY AND EQUIPMENT

The following details the composition of property and equipment:

 

                                                 Accumulated

At July 31, 2007                      Cost       Depreciation      Net

                             -----------  ------------ -----------

Television Studio Set

             $172,332     $162,190   $ 10,142

Office Equipment and Other      433,895      419,779     14,116

           ------------ ------------ -----------

TOTALS                         $606,227     $581,969    $24,258

 

       

 

Depreciation expense, excluding assets under capital lease obligations, for the years ended July 31, 2007 and July 31, 2006 amounted to $36,824 and $44,366, respectively.

 

F-9

 

 

(6) DEPOSITS AND OTHER ASSETS

Deposits and other assets comprised the following:

                                                           

                                                                                                                                                                  July 31

                                                              2007

Deposits with credit card processors

            $166,316

Real estate deposit

                                

  18,105

Deposits with telephone service

 

   1,500

                  

--------

Total

      $185,921

Less current portion

      (166,316)

               

Total deposits and other assets

   

  19,605

  ======

(7) LONG-TERM DEBT

Long-term debt is as follows:

 

       July 31,

         2007

-------------

Convertible note (13%)

    $ 181,900  

Convertible notes (18%)

     541,638  

Other notes (12% - 18%)

     85,000  

Capital lease – current

     3,695  

Capital lease – long term

      482  

     

    ---------

Total

      812,715  

Less amounts reflected as current liabilities

     (802,417) 

Less current portion of debt discount

       (9,816) 

---------

  482  

Less – non-current portion of debt discount

                   -0-  

---------

TOTAL LONG-TERM DEBT

$ 482  

        =========

 

F-10

 

Following is a summary of property held under capital leases:

Accumulated

Cost

Depreciation

   Net

--------

---------------

---------

At July 31, 2007

Office fixtures and equipment

$347,571

         $344,271

 $3,300

Depreciation of assets under capital leases charged to expense for the years ended July 31, 2007 and July 31, 2006 was $4,107 and $4,440 respectively.

Minimum future lease payments under capital leases are included as a component of long-term debt .  Payments for each of the next three fiscal years and in the aggregate are:

2008

  $3,739

2009

     483

Thereafter

      0 

Total Minimum Lease Payments

         

 

  $4,222

Less:  Amount Representing Interest

           (45)

 --------

               

Present Value of Net Minimum Lease Payments

                    $4,177        

Less:  Current Portion

  (3,695)

 --------

Long-term portion

 

  $  482

 ========

Debt at July 31, 2007, excluding capital leases, matures as follows:

          

          2008                             802,417

          Thereafter                         --

                                          --------

        TOTAL                             $802,417

                                          ========

Debt

The 13% Convertible Note (in the original principal balance amount of $600,000) is partially secured by a security interest in certain deposits with the credit card processors of the Company (Note 6).

The scheduled short term monthly principal payment due to the lender is $18,181. At July 31, 2007 the Company was in arrears in the amount of $54,545. In connection with the sale of assets to Betbrokers the maturity date was extended and the interest rate was reset to 20%. The remaining balance of $181,900 is due in 2008. At the discretion of the Company, this note can be repaid by cash or by the issuance of common stock.

 

F-11

The company has $28,750 remaining principal balance (originally $115,000) on the unsecured note to a private investor originally due September 30, 2006. The Company negotiated an extension of the note to November 1, 2007 and is currently negotiating a further extension.

During the year ended July 31, 2007 the Company received a loan in the original principal balance of $655,000 at an interest rate of 18%, due June 30, 2007. The Company pledged all operating assets and 502,500,000 shares of common stock (issued to the Company as treasury shares) to secure this loan. The CEO of the Company, Wayne Allyn Root, also pledged his 462,222 Preferred Shares in the event of default. In connection with the sale of assets to Betbrokers the due date of this loan was extended to June 26, 2008.

During the year ended July 31, 2007 the Company received two loans from J. Wright totaling $60,000 at an interest rate of 12%, due July 31, 2007. In connection with the sale of assets to Betbrokers the principal amount was changed to $65,000 and the interest rate changed to 18%.  The due date of the new loan was extended to June 30, 2008

During the year ended July 31, 2007 the Company received a loan from Director Roger Harrison in the amount of $25,000 at an interest rate of 18%, due August 31, 2007.

[8] RELATED PARTY NOTES PAYABLE

Related party notes and accounts payable are as follows:

                                                         July 31, 2007

Unsecured standby credit facility  

 (16%), at July 31, 2007                                   $196,897

Due to Betbrokers

150,000

Due to CEO (Wayne Allyn Root)

 43,718

                                                          --------

Total notes                                                $390,615

                                                           --------

Less: Accrued interest on unsecured standby credit

facility        

 52,275

                                                           --------

TOTAL NOTES AND ACCOUNTS PAYABLE - RELATED PARTIES         $338,340

                                                           ========

The $144,622 principal and $52,275 in interest are due on demand to Newmarket Investments, Plc, an entity which is associated with a former director of the Company.

F-12 

[9] ACCOUNTS PAYABLE

Accounts payable as of July 31, 2007 is as follows:

   July 31, 2007

Trade payables

$313,711

Accrued payroll

 168,553

Accrued commissions

  41,655

Accrued interest

  17,799

Other accrued liabilities

  77,000

--------

TOTAL ACCOUNTS PAYABLE

$618,718

========

[10] STOCKHOLDERS' DEFICIT

During the years ended July 31, 2007 and 2006 the following securities activity occurred:

COMMON STOCK AND WARRANTS –

During the year ended July 31, 2007, we issued 514,000,000 shares of common stock. Included in this amount are 10,000,000 shares for exercised warrants, and 1,000,000 restricted shares issued for services rendered and 500,000 shares as consideration for loan extensions. During 2007 the Company issued 502,500,000 shares of common stock as treasury shares. These shares were placed in escrow in accordance with the CSI Business Finance, Inc. loan.

During the year ended July 31, 2006, we issued 14,603,381 shares of common stock. Included in this debt are 2,333,331 shares issued in connection with employment agreements with key officers, 250,050 to redeem debt, 12,000,000 shares for payment of services rendered. We also issued 10,000,000 shares of warrants in connection with a services rendered contract.  The value of these warrants was estimated using the Black-Scholes-Merton valuation model, and the valuation was computed as being $109,104.  This amount was expensed as a component of non-cash financing fees.

OPTIONS – At July 31, 2007 the Company had 1,500,000 options outstanding to the three independent directors at an exercise price of $0.02. At July 31, 2006 the company had no options outstanding.

WARRANTS – At July 31, 2007 the Company had 300,000 warrants outstanding to an individual at an exercise price of $0.02. These warrants were issued in accordance loan agreements.

PREFERRED STOCK - The Company is authorized to issue up to 5,000,000 shares of blank-check preferred stock under its certificate of incorporation, and at July 31, 2006 we designated and issued an officer 462,222 series “A” preferred shares to redeem debt.  These preferred shares can be converted on demand for 4,622,222 shares of common stock within a three year period.  They also have preferential voting rights equivalent to 115,555,500 common shares; there are no other preferences related to these shares.

 

F-13

CONVERTIBLE DEBENTURES - During the fiscal year ended July 31, 2006 the Company converted convertible debentures of $25,500 for 275,050 shares.

At July 31, 2007 and July 31, 2006 the Company had a total of 9,969,900 shares underlying its outstanding convertible debentures.

 

OPTIONS AND WARRANTS AT JULY 31, 2007

     STOCK OPTIONS                                    Weighted-Average

                                         Shares        Exercise Price

                                        ---------     ----------------

Outstanding at July 31, 2005             1,810,000       $  0.05

Granted                                        -0-          -0-

Exercised                                      -0-          -0-

Canceled                                 1,810,000          0.05

                                         ---------          -----

Outstanding at July 31, 2006                   -0-       $  -0-

Granted                                  1,500,000          0.02

Exercised                                      -0-          -0-

Canceled                                       -0-          -0-

                                         ---------          -----

OUTSTANDING AT JULY 31, 2007             1,500,000       $   0.02

                                         =========          =====

EXERCISABLE AT JULY 31, 2007             1,500,000       $   0.02

                                         =========          =====

The following table summarizes information about stock options at July 31, 2007:

           Weighted-Average Outstanding and Exercisable Stock Options

                     Remaining      Weighted-Average

     Shares       Contractual Life  Exercise Price

      ---------      ----------------     --------------

1,500,000            3 years           $0.02

The Black-Scholes-Merton option valuation model was developed for use in estimating the fair value of options. In addition, option valuation models require the input of highly subjective assumptions including the expected stock price volatility.

     WARRANTS                                       Weighted-Average

                                         Shares     Exercise Price

                                        ----------  ----------------

Outstanding at July 31, 2005            8,569,667       $ .28

Granted                                10,000,000         .02

Exercised                              (        0)        .00

Canceled                               (2,483,734)        .36

OUTSTANDING AT JULY 31,2006            16,085,933      $  .08

                                        ----------      -----

EXERCISABLE AT JULY 31,2006            16,085,933      $  .08

                                        ----------      -----

                                        ----------      -----

Outstanding at July 31, 2006            16,085,933        .08

Granted                                    300,000        .02

Exercised                              (10,000,000)       .01

Canceled                               ( 1,486,266)       .08

OUTSTANDING AT JULY 31,2007              4,899,667      $ .03

                                        ----------      -----

EXERCISABLE AT JULY 31,2007              4,899,667      $ .03

 

F-14

 

 

The following table summarizes information about warrants at July 31, 2007:

             Weighted-Average Outstanding and Exercisable Warrants

                       Remaining      Weighted-Average   Weighted-Average

Exercise Prices        Warrants       Contractual Life    Exercise Price

---------------        ---------      ----------------   ----------------

$0.02 - $ .46          4,899,667           3 years             $0.03

The Black-Scholes-Merton option valuation model was developed for use in estimating the fair value of warrants. In addition, warrant valuation models require the input of highly subjective assumptions including the expected stock price volatility.

At July 31, 2007 the Company had a total of 9,969,900 shares underlying its convertible debentures and these shares are included in the fully diluted shares outstanding of 150,888,237.

 

[11] PROVISION FOR INCOME TAXES

At July 31, 2007, the Company had generated tax operating losses (assuming all operating loss carry-forwards will be available) that total approximately $17,000,000. Such loss carry-forwards will expire at various dates through 2027.  At July 31, 2007, based on the amount of operating loss carry-forwards, the Company would have had a deferred tax asset of approximately $7,100,000.  Because of the uncertainty that the Company will generate income in the future sufficient to fully or partially utilize these carry-forwards, a valuation allowance of $7,100,000 has been established.  This allowance includes an increase of $400,000 related to operations during the year ended July 31, 2007. Accordingly, no net deferred tax asset is reflected in these financial statements.

The Company has issued equity securities at various times since inception.  A change in ownership, as defined by Section 382 of the Internal Revenue Code, caused by such issuances of equity would limit the availability of these losses to offset future taxable income, if any.  Management believes that there has been no such change of ownership and that all generated tax operating losses remain available to offset future taxable income, if any.

As part of a previous acquisition, the Company acquired net operating losses of approximately $10,640,000.  Pursuant to Section 382 of the Internal Revenue Code, utilization of these losses will be limited to approximately $240,000 subject to a maximum annual utilization of approximately $15,000 per year through 2021. At July 31, 2007, the Company would have a deferred tax asset of approximately $77,000 from these acquired losses.

 

F-15

Because of the uncertainty that the Company would generate income in the future sufficient to fully or partially utilize these carry-forwards, a valuation allowance of approximately $77,000 has been established.  This allowance includes a decrease of approximately $5,000 related to the expiration of acquired operating losses. Accordingly, no net deferred tax asset is reflected in these financial statements.

[12] NEW AUTHORITATIVE ACCOUNTING PRONOUNCEMENTS

The Company does not anticipate the adoption of recently issued accounting pronouncements to have a significant effect on the Company's results of operations, financial position or cash flows.

[13] COMMITMENTS AND CONTINGENCIES

CAPITAL LEASES -

Minimum future lease payments under capital leases are included as a component of long-term debt (see Note 7). This lease was assigned to Betbrokers as part of the asset sale.

OPERATING LEASES – At July 31, 2007, the Company has one operating lease for office space that expires in January 2010.  .  The lease has a monthly payment obligation of $14,521 increasing annually, based on the CPI.

Approximate minimum future rental payments under non-cancelable operating leases having remaining terms in excess of one year as of July 31, 2006 are as follows:

Year ending

 Operating

July 31,

   Leases

--------------

------------

2008  

   174,252

2009

   174,252

Thereafter

    87,126

-------------

Total

        $ 435,630

=============

Rent expense for the years ended July 31, 2007 and July 31, 2006 was $186,773 and $151,961, respectively, and was charged to operations.  This lease was assigned to Betbrokers as part of the asset sale.

 

F-16

 

[14] LEGAL MATTERS

   The Company previously owned a patent (U.S. Patent # 6,260,019 – Web-based Prediction Marketplace) that is a method and apparatus for facilitating electronic commerce between suppliers of predictions and consumers of predictions which it believes is being infringed by many of its competitors.  This patent was assigned to Betbrokers as part of the asset sale.  The Company has entered into a licensing and patent enforcement agreement with General Patent Corporation International (“GPCI”) to license and defend the Company’s patent. In August of 2006 the Company, through GPCI, filed lawsuits against certain companies and individuals to enforce the patent which claimed infringement and sought damages on the unauthorized use of the Company’s proprietary technology.  Any amounts received from the settlement or successful litigation of these claims would be for the benefit of Betbrokers.

 

In the normal course of business, the Company is exposed to a number of asserted and unasserted potential claims.  

[15] FAIR VALUE OF FINANCIAL INSTRUMENTS

SFAS No. 107, "Disclosure About Fair Value of Financial Instruments," requires disclosing fair value, to the extent practicable, for financial instruments which are recognized or unrecognized in the balance sheet. The fair value of the financial instruments disclosed herein is not necessarily representative of the amount that could be realized or settled, nor does the fair value amount consider the tax consequences of realization or settlement.

In assessing the fair value of these financial instruments, the Company used a variety of methods and assumptions, which were based on estimates of market conditions and risks existing at that time. For certain instruments, including cash and cash equivalents, related party and trade and notes payable, it was assumed that the carrying amount approximated fair value for the majority of these instruments because of their short maturities.

The fair value of long-term debt is based upon current rates at which the Company could borrow funds with similar remaining maturities. It was assumed that the carrying amount approximated fair value for these instruments.

[16] SUBSEQUENT EVENT

In September 2007, the Company completed the sale of all of the Company’s operating assets, including the operations of EDGE Inc., to Betbrokers.  Management of the Company had determined it was unable to support the Company’s ongoing expenses and repay debt at maturity.  Management determined the Company would have to either cease operations or sell assets to a third party.  The Company was able to locate a buyer for the Company’s operating assets and completed the sale on September 26, 2007.  As consideration for the sale of the operating assets, the Company received 64,356,435 shares of Betbrokers stock; Betbrokers stock trades on the London Stock Exchange Alternative Investment Market known as the “AIM.”  On October 20, 2007 the Company changed its name to W Technologies, Inc. as part of the agreement reached with Betbrokers.  The Company is now in the process of settling its outstanding obligations.  If the Company is able to successfully settle existing obligations, the Company will distribute any remaining assets to the Company’s shareholders of record on September 26, 2007. All subsequent transactions would be ignored in a distribution.

 In September of 2006 the Company entered into a $655,000 short term loan with a private investor. The note has an 18% interest rate and a maturity date of June 30, 2007.  As collateral, the Company made a general pledge agreement, giving a security interest in the assets of the Company including a specific credit card reserve account. Additionally, the Company pledged 502,500,000 shares of Common Stock in the event of default.  CEO Wayne Root also pledged his 462,222 Preferred Shares in the event of default. On September 26, 2007 the company amended the loan to extend for nine months, secured by 10,000,000 shares of Betbrokers stock. As of October 1,2007 the outstanding balance on the note was $456,522.

 

F-17

On September 26, 2007 the company amended the existing Laurus Master Fund, Ltd note for 11 months and changing the interest rate from 13% to 20%. As of October 1, 2007 the outstanding balance on the note was $181,818.

In connection with the sale of assets to Betbrokers the principal amount of the Wright note was changed to $65,000 and the interest rate changed to 18%.  The due date of the new loan was extended to June 30, 2008.