SECURITIES AND EXCHANGE COMMISSION
Washington, D.D. 20549
(Mark One)
[X] Quarterly report pursuant to Section
13 or 15(d) of the Securities Exchange Act of
1934
For the quarterly period ended September 30, 1999
or
[ ] Transition report pursuant to Section
13 or 15(d) of the Securities Exchange Act of
1934
For the transition period from to
Commission file number 2-97360-A
LIGHT MANAGEMENT GROUP, INC.
(Exact name of registrant as specified in its
charter)
Nevada 59-2091510
(State or jurisdiction (I.R.S. Employer
of incorporation Identification No.)
or organization)
Suite 301
3060 Mainway
Burlington, Ontario L7M 1A3
305-771-5255
(Registrant's telephone number, including
area code)
(Former Address, if changed since last
report)
Indicate by check mark whether the
registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the
preceding 12 months (or for such that the
registrant was required to file such
reports), and (2) has shorter period been
subject to such filing requirements for the
past 90 days.
Yes X No
APPLICABLE ONLY TO ISSUERS INVOLVED IN
BANKRUPTCY.
Indicate by check mark whether the
registrant has filed all documents and
reports required to be filed by Sections 12,
13 or 15(d) of the Securities Exchange Act of
1934 subsequent to the distribution of
securities under a plan confirmed by a court.
Yes No
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares
outstanding of each of the issuer's classes
of common stock, as of the latest practicable
date.
As of September 30, 1999, approximately
16,988,510 shares of the Registrant's Common
Stock, $.01 par value, were outstanding.
Part I - Financial Information.
Item 1. Financial Statements.
LIGHT MANAGEMENT GROUP INC.
CONSOLIDATED BALANCE SHEET
(NOT AUDITED) As at September 30 1999
<TABLE>
<C> <C>
1999
$ Cdn
- ----------------------------------------------------------------------------------------------------
ASSETS
CURRENT
Accounts receivable 1,537,345
Inventory 112,314
Prepaid expenses and deposits 17,152
- ----------------------------------------------------------------------------------------------------
1,666,811
CAPITAL ASSETS (Note 3) 1,293,467
INTANGIBLE ASSETS 3,709,978
- ----------------------------------------------------------------------------------------------------
6,670,256
LIABILITIES
CURRENT
Bank indebtedness 40,011
Accounts payable 443,109
Accrued liabilities 15,000
Income taxes payable 41,000
Due to shareholder 38,352
Current portion of long term bank loan 45,034
- ----------------------------------------------------------------------------------------------------
622,506
- ----------------------------------------------------------------------------------------------------
LONG TERM BANK LOAN (Note 4) 195,148
LOANS PAYABLE (Note 4) 128,053
- ----------------------------------------------------------------------------------------------------
945,707
- ----------------------------------------------------------------------------------------------------
STOCKHOLDERS' EQUITY
COMMON STOCK (Note 5) 4,606,804
ADDITIONAL PAID IN CAPITAL 1,022,858
RETAINED EARNINGS 94,887
- ----------------------------------------------------------------------------------------------------
5,724,549
- ----------------------------------------------------------------------------------------------------
6,670,256
- ----------------------------------------------------------------------------------------------------
(See accompanying Notes to Financial Statements)
</TABLE>
<PAGE>
LIGHT MANAGEMENT GROUP INC.
CONSOLIDATED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
(NOT AUDITED) for the quarter ended September 30, 1999
$ Cdn
<C> <C>
REVENUE
Income from operations 1,355,108
Interest and other income 272
- ----------------------------------------------------------------------------------------------------
1,355,380
- ----------------------------------------------------------------------------------------------------
EXPENSES
Advertising and promotion 36,946
Amortization 8,486
Bank charges and interest 58,035
Cost of sales 461,926
Insurance 2,674
Office and general 20,930
Professional fees 204,709
Rent 47,987
Repairs and maintenance 2,751
Salaries and fringe costs 188,068
Telephone 9,719
Travel 44,818
Utilities 13,143
Write-off of amount due from company related through
common shareholders 119,301
- ----------------------------------------------------------------------------------------------------
1,219,493
- ----------------------------------------------------------------------------------------------------
NET INCOME before income taxes 135,887
- ----------------------------------------------------------------------------------------------------
Income taxes 41,000
- ----------------------------------------------------------------------------------------------------
NET INCOME 94,887
- ----------------------------------------------------------------------------------------------------
(See accompanying Notes to Financial Statements)
</TABLE>
<PAGE>
LASER SHOW SYSTEMS (CANADA) LTD.
CONSOLIDATED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
(NOT AUDITED) for the quarter ended September 30, 1999
$ Cdn
<C> <C>
- ----------------------------------------------------------------------------------------------------
CASH RESOURCES PROVIDED BY (USED IN);
OPERATING ACTIVITIES
Net income 94,887
Items not involving cash:
Amortization 8,486
Write-off of amount due from company related through
common shareholders 119,301
- ----------------------------------------------------------------------------------------------------
222,674
Changes in non-cash working capital (Note 8) (1,129,350)
- ----------------------------------------------------------------------------------------------------
(906,676)
- ----------------------------------------------------------------------------------------------------
FINANCING ACTIVITIES
- ----------------------------------------------------------------------------------------------------
Long term bank loan 240,182
Increase in loans payable 128,053
Increase in contributed surplus 1,022,858
Issuance of common shares 4,606,804
Advances made to company related through common shareholders (119,301)
- ----------------------------------------------------------------------------------------------------
4,971,920
- ----------------------------------------------------------------------------------------------------
INVESTING ACTIVITIES
Purchase of capital assets (1,301,953)
Purchase of intangible assets (3,709,978)
- ----------------------------------------------------------------------------------------------------
(5,011,931)
- ----------------------------------------------------------------------------------------------------
DECREASE IN CASH (40,011)
CASH, BEGINNING OF YEAR -
- ----------------------------------------------------------------------------------------------------
CASH DEFICIENCY, END OF YEAR (40,011)
- ----------------------------------------------------------------------------------------------------
(See accompanying Notes to Financial Statements)
</TABLE>
Item 2. Managements Discussion and Analysis
of Financial Condition and Results of
Operations.
LIGHT MANAGEMENT GROUP INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -
(Not Audited)
- ------------------------------------------------------------------------------
1 COMMENCEMENT OF OPERATIONS
The consolidated corporation is primarily involved in the development
and sale of advanced laser projection systems and in the general
technology of light management and the development and sale of public
advertising.
2 SIGNIFICANT ACCOUNTING POLICIES
These financial statements have been prepared by management in
accordance with generally accepted accounting principles and include
the following significant accounting policies:
All statements are expressed in Canadian dollars.
USE OF ESTIMATES -
The preparation of financial statements in accordance with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amount of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amount of revenues and expenses
during the reported period. These estimates are reviewed periodically
and, as adjustments become necessary, they are reported in earnings in
the period in which they become known.
CAPITAL ASSETS AND AMORTIZATION -
Capital assets are recorded at cost. Amortization is provided for at the
following methods and rates which are designed to charge the cost of
capital assets to income over their estimated useful lives:
Equipment 20% diminishing balance
Equipment under development 30% diminishing balance
Furniture and fixtures 20% diminishing balance
Computer equipment 30% diminishing balance
Leasehold improvements 20% straight line
LIGHT MANAGEMENT GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Not Audited) Continued
- ------------------------------------------------------------------------------
2. (Continued)
All costs associated with acquiring, developing and testing the
advanced laser projection systems have been capitalized as part of the
cost of equipment under development.
No amortization has been recorded on the equipment under
development as it was still in the development stage, and was
not yet available for use as at September 30, 1999.
INTANGIBLE ASSETS -
Intangible assets consist of $6,183 for patents and rights to the laser
projection systems and are recorded at cost and goodwill on purchase
of subsidiary of $3,669,058.
No amortization has been recorded on the patents and rights as the
equipment was still in the development stage, and was not yet available
for use at September 30, 1999.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
3 CAPITAL ASSETS
- --------------------------------------------------------------------------------------------------------------------
Accumulated
Cost amortization Net
$ Cdn $ Cdn $ Cdn
<C> <C> <C> <C>
Equipment 317,979 5,023 312,956
Equipment under development 966,786 - 966,786
Furniture and fixtures 4,373 774 3,599
Computer equipment 11,303 2,469 8,834
Leasehold improvements 1,512 220 1,292
- --------------------------------------------------------------------------------------------------------------------
1,301,953 8,486 1,293,467
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
LIGHT MANAGEMENT GROUP INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -
(Not Audited) (Continued)
- --------------------------------------------------------------------------------
4 LOANS PAYABLE
Bank loan is secured by an assignment on equipment. It is repayable
over 64 months at $3,752.84 monthly plus interest at 2.5% over
prime.
Loans payable are unsecured and bear interest at 12%. Since the
lenders have indicated that they will not request payment in the next
year, the amounts have been classified as a non current liability.
5 COMMON STOCK
AUTHORIZED -
100,000,000 common shares
ISSUED -
16,988,510 common shares
6 RELATED PARTY TRANSACTIONS
Since July 1997, a total of $178,800 of consulting and management
fees have been incurred by the company and the previously operating
company known as Laser Show Systems International, Inc. to a
company related through a common shareholder. All of these amounts
have been capitalized as part of the cost of equipment under
development.
7 FINANCIAL INSTRUMENTS
FAIR VALUE OF FINANCIAL INSTRUMENTS -
The fair values of accounts receivable, deposits, bank indebtedness,
accounts payable and accrued liabilities are assumed to approximate
their carrying amounts because of their short term to maturity.
LIGHT MANAGEMENT GROUP INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -
(Not Audited) (Continued)
- --------------------------------------------------------------------------------
7. Continued
FOREIGN EXCHANGE RISK -
The company purchases its laser projection systems in U.S. dollars and
is therefore subject to foreign exchange fluctuations. As at September
30,1999, accounts payable included $250,000 in U.S. dollars regarding
the purchase of the laser projection systems.
8 CHANGES IN NON-CASH WORKING CAPITAL
$ Cdn
Accounts receivable (1,537,345)
Inventory (112,314)
Prepaid expenses and deposits (17,152)
Accounts payable 443,109
Accrued liabilities 15,000
Income tax payable 41,000
Due to shareholder 38,352
- --------------------------------------------------------------------------------
(1,129,350)
9 LITIGATION
The company and some of its officers are being sued by a shareholder
of a company that formerly had a contractual relationship with
LaserShow Systems, Moscow, who owned patents that have been
transferred to LaserShow Systems (U.K.), with whom the Company
has a purchase agreement.
The company and its officers deny all allegations and intend to
vigorously defend the charges and expects to be successful in the
litigation and does not expect that the litigation to adversely
affect the financial performance of the company.
10. REVENUE
Income from operations reported under Revenue includes amounts
invoiced, whether or not those amounts have been paid.
Part II - Other Information
Signatures
Pursuant to the requirements of the
Securities Exchange Act of 1934, the
registrant has duly caused this report to be
signed on its behalf by the undersigned there
unto duly authorized.
Light Management Group, Inc.
(Registrant)
Date /s/ Donald Iwacha
President
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> SEP-30-1999
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 1537345
<ALLOWANCES> 0
<INVENTORY> 112314
<CURRENT-ASSETS> 1666811
<PP&E> 1301953
<DEPRECIATION> 8486
<TOTAL-ASSETS> 6670256
<CURRENT-LIABILITIES> 622506
<BONDS> 0
0
0
<COMMON> 4606804
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 5724549
<SALES> 1355108
<TOTAL-REVENUES> 1355380
<CGS> 461926
<TOTAL-COSTS> 461926
<OTHER-EXPENSES> 757567
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 135887
<INCOME-TAX> 41000
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 94887
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
