Austin Chalk Oil and Gas, Ltd., formerly KNW Networks, Inc., has no operations or productive assets. The Company may seek to find one or more profitable business opportunities when market and financial conditions are more favorable. It has generated no revenues since inception. The Company remained substantially dormant in 2003 and expects to remain dormant during at least part of 2004. It did not engage in any capital formation activities or business operations during the first half of 2004.