Leader Capital Corp.

Allegations: ACTION BROUGHT FORTH AGAINST LEADER CAPITAL CORP AND JOHN LEKAS BY THE IDAHO DEPARTMENT OF FINANCE ALLEDGING VIOLATIONS OF CERTAIN PROVISIONS OF THE IDAHO SECURITIES ACT. Status: Final Summary: (1) JOHN LEKAS AND LEADER CAPITAL CORP NEITHER ADMIT NOR DENY THE ALLEGATIONS IN PLAINTIFF'S VERFIED COMPLAINT;(2)JOHN LEKAS IS DISMISSED FROM THIS SUIT, WITHOUT PREJUDICE; (3)LEADER CAPITAL SHALL PAY RESTUTION IN THE SUM OF $12,825.00 (PAID 6/8/05); (4)LEADER CAPITAL SHALL PAY CIVIL PENALTIES IN THE SUM OF $20,000.00 (PAID 6/8/05) AS WELL AS EXPERT WITNESS FEES INCURRED.

Allegations: THE NASD ALLEGED THAT THE COMPREHENSIVE ANTI-MONEY LAUNDERING PROGRAM ADOPTED BY LEADER CAPITAL CORP. HAD NOT BEEN DEVELOPED AND IMPLEMENTED IN A SUFFICIENTLY TIMELY MANNER. Status: Final Sanction Detail: THE NASD IMPOSED A $10000.00 FINE. OF THAT AMOUNT, $2500.00 WAS PAID JUNE 10,2005. THE REMAINDER WILL BE PAID IN INSTALLMENTS OF $500/MONTH BEGINNING AUGUST 22, 2005. Summary: ON 2/23/05, LEADER CAPITAL CORP ("LEADER") AGREED TO A LETTER OF ACCEPTANCE, WAIVER AND CONSENT (THE "AWC"). PURSUANT TO THE TERMS OF THE AWC, LEADER CONSENTED TO THE FINDINGS OF THE NASD-WITHOUT ADMITTING OR DENYING THE ALLEGATIONS OR FINDINGS-THAT BETWEEN 4/24/02 AND 1/15/04, LEADER FAILED TO DEVELOP AND IMPLEMENT THE ANIT-MONEY LAUNDERNIG PROGRAM ("AML PROGRAM") REQUIRED BY THE BANK SECRECY ACT. AS PROVIDED FOR BY THE NASD, LEADER ATTACHED A STATEMENT OF MITIGATING CIRCUMSTANCES AND A STATMENT OF CORRECTIVE ACTION TO THE AWC CLARIFYING THAT: (1)LEADER HAS OPERATED IN GOOD FAITH AND ANY FAILURE REGARDING DEVELOPMENT AND IMPLEMENTATION OF AN AML PROGRAM WAS UNINTENTIONAL; (2)LEADER HAS NO INFORMAL OR FORMAL DISCIPLINARY HISTORY WITH THE NASD OTHER THAN THAT ASSOCIATED WITH THIS CORRECTIVE ACTION; (3)LEADER HAS CLEARING ARRANGEMENTS WITH TWO LARGE INSTITUTIONS ACCORDING TO WHICH THOSE INSTIUTIONS HANDLE ALL THE MONEY IN TRANSACTIONS ON BEHALF OF LEADER'S CLIENTS; (4)NO REPORTED INCIDENTS OF MONEY LAUNDERING OCCURRED AS A RESULT OF LEADER'S INADVERTENT FAILURE TO ADOPT WRITTEN AML POLICIES AND NO INVESTOR HAS SUFFERED ANY LOSS; (5) IN JANUARY 2004, LEADER ADOPTED ITS COMPREHENSIVE AML PROGRAM