SOURCE: Legend Mobile

May 18, 2005 10:56 ET

Legend Mobile Comments on 10K Filing

DETROIT, MI -- (MARKET WIRE) -- May 18, 2005 -- Legend Mobile, Inc. (OTC BB: LGMBE) today announced that it has filed its annual report on Form 10-KSB for the year ended December 31, 2004.

Legend Mobile's delay in filing its annual report was due to its inability to timely obtain information regarding the approximately $750,000 of revenues generated in 2004 by certain Virginia, West Virginia, and Missouri radio stations that its wholly owned subsidiary, Legend Studios, Inc., was operating on behalf of the Quorum Radio Partners, Inc. and Quorum Radio Partners of Virginia, Inc. Consequently, Legend Mobile's annual report does not include those revenues, even though previous filings with the SEC did include such revenues.

In 2004, Legend Studios and the Quorum entities entered into a local marketing agreement providing for Legend Studios to operate the radio stations (KELE-AM, KELE-FM, WIQO, WKEY and WKCI). The parties also entered into an asset purchase agreement providing for Legend Studios' acquisition of the radio stations at a future closing. In February 2005, the Quorum entities forced Legend Studios to cease operating the stations and indicated that they were unwilling to proceed with Legend Studios' acquisition of the stations. Consequently, in February 2005 Legend Studios filed a lawsuit in the Supreme Court of New York County against Quorum Radio Partners, Inc., Quorum Radio Partners of Virginia, Inc, and Quorum Communications, Inc. alleging that the defendants breached the asset purchase agreement and local marketing agreement. Legend Studios seeks specific performance of the agreements, as well as in excess of $1.5 million in damages.

The defendants have been served with the complaint, but have not filed answers and may be subject to entry of a default judgment. Quorum Radio Partners of Virginia, Inc. has filed a bankruptcy petition, which serves to stay Legend Studios' proceedings against that entity. Legend Studios will continue to aggressively pursue its claims against the Quorum entities.

Legend Mobile believes that given the terms of the local marketing agreement, it is entitled to record the radio station revenues. The Quorum entities have, however, refused to cooperate with Legend Mobile's audit. In order to avoid being removed from the OTC Bulletin Board, Legend Mobile has opted to file now its annual report on Form 10-KSB, even though it omits the radio station revenues.

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