SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-KSB
Annual Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report December 31, 1999
LIGHT MANAGEMENT GROUP, INC.
(Exact name of registrant as specified in its charter)
Nevada
(State or other jurisdiction of incorporation or organization)
002-97360-A
(Commission File Number)
59-2091510
(I.R.S. Employer Identification Number)
Suite 301, 3060 Mainway Drive
Burlington, Ontario, Canada L7M 1A3
(Address of Principal Executive Offices, including ZIP Code)
Registrant's telephone number, including area code:
(905) 319-1111
U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-KSB
(Mark One)
[X] Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934 for the fiscal year ended December 31, 1999
[ ] Transition report under Section 13 or 15(d) of the Securities Exchange Act
of 1934 for the transition period from to
Commission file number: 002-97360-A
Light Management Group, Inc.
(Name of small business issuer in its charter)
Nevada
(State or other jurisdiction of incorporation or organization)
592091510
(I.R.S. Employer Identification No.)
3060 Mainway Drive, Suite 301
Burlington, Ontario
Canada, L7M 1A3
(Address of principal executive offices) (Zip Code)
Issuer's telephone number: (905) 319-1111
Securities registered pursuant to Section 12(b) of the Act:
Title of each class: Common
Name of Each exchange on which registered: None
Securities registered pursuant to Section 12(g) of the Act:
_________________________________
Check whether the issue (1) filed all reports required to be filed by
Section 13 o4 15(d) of the Exchange Act during the past 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.
[X] Yes [ ] No
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by referenced in Part III of this Form
10-KSB or any amendment to this Form 10-KSB [X]
Issuer's revenues for the year ended December 31, 1999 were $1,171,348.00.
The aggregate market value of voting stock held by non-affiliates of the
Registrant as of July 1, 1999 was approximately $36,500,000.
(Issuers involved in bankruptcy proceedings during the past five years)
Check whether the issuer has filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court.
[ ] Yes [ ] No
(Applicable only to corporate registrants)
On December 31, 1999, approximately 16,988,510 shares of the Registrant's Common
Stock, $.01 par value, were outstanding.
Documents Incorporated by Reference
(1) Financial Statements for December 31, 1999 Part I
(2) Except for the historical information presented, the matters discussed
in this Form 10-KSB include forward-looking statements that involve risks and
uncertainties. The Company's actual results could differ materially from those
discussed herein. Factors that could cause or contribute to such differences
include, but are not limited to, those discussed under the caption "Factors
That May Affect Future Results" under "Management's Discussion and Analysis
of Financial Condition and Results of Operations" in the Company's 1999
Financial Statements, which is incorporated by reference in this Form 10-KSB.
Transitional Small Business Disclosure Format (check one):
[ ] Yes [X] No
PART I
Item I. Business
Introduction
Light Management Group, Inc. ("LMG") was organized under the laws of the
State of Nevada on April 20, 1998 under the name Triton Acquisition Corporation
("Triton"). Triton changed its name to LMG by filing a Certificate of Amendment
of Articles of Incorporation with the State of Nevada on February 23, 2000 and a
Form 8-K with the Securities and Exchange Commission on May 28, 1999. On May
18, 1999, LMG executed an Exchange Agreement and Plan of Reorganization with
Laser Show Systems (Canada), LTD ("Laser"), a Canadian corporation, by which LMG
acquired Laser as a wholly owned subsidiary of Light. Laser was incorporated
in Ontario Canada in September 1998. Laser's primary activity has been directed
toward using a patented technique to acoustically manage light. Laser sells and
markets this system of light projections that emanate graphics in a colorful and
attractive design that is utilized as a marketing technique. The current
officers of the Company were appointed by the Board of Directors.
The Company
Light Management Group, Inc. is a publicly traded corporation that develops
new applications for optical and sound technologies. Through one of its
subsidiaries, Laser Show Systems (Canada) Ltd., LMG has developed and
patented acousto-optical management technology - a state-of-the-art laser
projection system.
LMG is pursuing strategic partnerships, license agreements and acquisitions
to optimize, integrate and develop applications for its laser technology in
major urban markets. Five key areas have been identified for application
development: visual media (including outdoor advertising); digital
communications; industrial equipment; aerospace, and bio-medical.
Laser Show Systems began operations on August 1, 1997 and is currently in a
second-stage growth phase, focusing on product development and market planning.
Its mission is to provide leading edge laser products, utilizing the best
technologies from around the world.
Laser's RGB Laser-Projection System (RGB-LPS) of light projection produces
graphic images in colorful and attractive designs that are utilized to market
products on large-scale billboards. Objects can be displayed in 256 different
colors with smooth color changes, fading, color cycling, etc. Software features
of the RGB-LPS allow for images to be positioned, rotated, sized, scaled,
distorted and morphed. The acousto-optic laser projection system works by a
raster imaging process and allows for the projected images to be three-
dimensional in appearance and to be active over the full screen size without
"ghosting" or trailing of the laser image.
Laser sees the market for its RGB-LPS as outdoor advertising companies,
property management companies, and specialty properties such as resorts and
entertainment centers. The property management companies own and manage
properties such as retail malls, large commercial buildings with retail
components, and specialty sites. Laser will either market the RGB-LPS on a
lease/revenue sharing arrangement with the above clients through its own
sales group and associated agent companies, or through selling the units.
With the establishment of LMG and its subsidiary companies in 1999, efforts
began in the last two months of 1999 on new product ideation. The new product
ideation is based on the patented acousto-optic and related technology possessed
by Laser. The first end use markets are in the active advertising and fiber-
optic communications markets.
Financial Information about Industry Segments, Backlog, etc. The financial
statements required by this item are included in the Company's 1999 Financial
Statements and are incorporated by reference.
Item 2. Properties
LMG is currently leasing all facilities, other than home offices for sales
representatives of the various operating units. The Company currently maintains
Canadian offices in Burlington, Ontario and Vancouver, British Columbia. The
Company's executive offices are located in Burlington, Ontario, Canada.
Item 3. Legal Proceedings
A previous lawsuit with a former shareholder of Laser has been amicably
resolved. No material legal proceedings are pending to which LMG or any of its
property is subject and to the knowledge of LMG, there are no other proceedings
threatened.
Item 4. Submission of Matters to a Vote of Security Holders
The following matters were submitted to a vote of the Company's security
holders during the fourth quarter of its fiscal year ended December 31, 1999:
Date and Type of Meeting
No matters were voted on during the fourth quarter of the Company's fiscal
year.
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters
The Company is currently trading, OTC, with the high bid at $6.75 per share
and the low bid of $.10 per share during the last quarter. Additional
information required by this item may be found in the Company's 1999 Financial
Statements and is incorporated herein by reference.
Item 6. Management's Discussion and Analysis or Plant of Operation.
The Company has terminated discussions with DJL Capital regarding
financing. The Company is currently in discussions with other companies to
develop the financing of its products.
NOTE 1 - HISTORY AND ORGANIZATION OF THE COMPANY
The Company is organized under the laws of the State of Nevada, as
Light Management Group Inc. The Company is authorized to issue 100,000,000
shares of $.0001 par value common stock. The Company has issued and outstanding
16,988,510 shares of its common stock.
In May of 1999, the Company purchased the outstanding stock of
Laser Shows Systems (Canada), Inc.
The Company formerly reported as a developmental stage company. The
Company is producing significant revenues from its planned principal operations
and is not now considered a development stage company.
The Company issued 2,650,000 shares of common stock, in error, which
is being returned to the Company.
NOTE 2 - ACCOUNTING POLICIES AND PROCEDURES
Accounting polices and procedures have been determined except as
follows:
1. The Company uses the accrual method of accounting, recording
revenues when invoiced and there is a realistic expectation of receiving payment
2. Basic earnings per share is computed using the weighted average
number of shares of common stock outstanding. There were no items which would
have diluted earnings per share.
3. The Company has adopted December 31 as its fiscal year end.
4. The Company has not yet adopted any policy regarding payment of
dividends. No dividends have been paid since inception.
5. The Company has not yet adopted all accounting pronouncements
issued. The effect on the financial statements is deemed insignificant
and immaterial and there were no adjustments made to the financial statements.
6. Organization costs were expensed in 1999 to conform with
accounting policies.
7. The Company records its inventory at cost.
8. The preparation of financial statements in conformity with
generally accepted accounting principles requires that management make estimates
and assumptions which affect the reported amounts of assets and liabilities as
at the date of the financial statements and revenues and expenses for the period
reported. Actual results may differ from these estimates.
9. The cost of plant and equipment is recorded at cost and
depreciated over the estimated useful life of the equipment utilizing the
straight line method of depreciation. The amount of depreciation recorded
during this period was $54,345.00.
10. The Company's Statement of Cash Flows is reported utilizing
cash (currency on hand and demand deposits) and cash equivalents (short-term,
highly liquid investments). The Company's Statement of Cash Flows is reported
utilizing the indirect method of reporting cash flows. There were no cash
equivalents during the reporting period.
11. The Company has adopted FASB 109 for reporting income taxes. The
Company's marginal tax rate is 30% with an effective tax rate for 1999 of 0%.
12. The Company's financial statements are stated in US Dollars.
The balance sheet was translated as at December 31, 1999. The income statement
was translated at an average exchange rate for the year of 1999.
NOTE 3 - GOING CONCERN
The Company's financial statements are prepared using the generally
accepted accounting principles applicable to a going concern, which contemplates
the realization of assets and liquidation of liabilities in the normal course
of business. Previously, the Company had no source of revenue and financial
reports included an explanatory paragraph regarding going concern. The Company
is now generating revenues through operations which exceed its expected
operating expenses for the next twelve months.
NOTE 4 - RELATED PARTY TRANSACTION
Since July 1997, a total of $178,800 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 they were used in
purchasing equipment.
NOTE 5 - LONG TERM COMMITMENTS
Equipment is secured by a bank loan. It is repayable over 64 months
at $3,753.84 monthly plus interest at 2.5% over prime. Other 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.
NOTE 6 - FOREIGN EXCHANGE RISK
The Company purchases its laser projection systems in U.S. dollars and
is therefore subject to foreign exchange fluctuations.
NOTE 7 - LITIGATION
The Company and some of its officers were 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 denied all allegations and vigorously
defended the charges. The litigation has since been resolved.
NOTE 8 - SUBSEQUENT EVENTS
On March 24, 2000, the Company completed the purchase of a 100%
interest in Exclusive Advertising Inc. (Exclusive). Terms of the purchase
called for the issuance of 500,000 shares in the Company at a deemed value of
$5.00 per share.
Exclusive is an Ontario incorporated company active in advertising on
the GO transit system of Ontario. It has an exclusive contract to provide such
advertising. The contract has 14 years left and has a renewal clause for a
further five years. During 1999, the Company advanced Exclusive $115,085.00
which are shown on these statements as accounts receivable.
Item 7. Financial Statements.
The consolidated financial statements required by this item are included in
the Company's 1999 Financial Statements and are incorporated by reference. The
Company's 1999 Financial Statements are not to be deemed filed as part of this
Form 10-KSB Annual Report. The report of the Company's Independent Auditors on
the Company's consolidated financial statements is included in the Company's
1999 Financial Statements and is incorporated by reference. The report of the
Company's Independent Auditors on the financial statement schedule required by
this item is included herein.
Item 8. Changes In and Disagreements with Accountants on Accounting and
Financial Disclosures
Not applicable.
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act.
At December 31, 1999, LMG had 12 directors, officers and employees.
LIGHT MANAGEMENT GROUP
BARRINGTON L. SIMON, C.G.A., Chairman, CEO, age 53. Mr. Simon has been
Chief Executive Officer and Director of the Issuer since May 19, 1999. Mr.
Simon attended a general business degree program at the Stratford Technical
College England. Upon immigration to Canada he received recognition and the
designation Certified General Account. Mr. Simon has worked for many reputable
companies such as Mercantile Bank of Canada (currently known as Citibank),
Halton Credit Union, Colortron Photo Services, Taylor Leibow Chartered
Accountant and PPG Canada Limited. In addition to working for the above
companies, he has owned and operated his own financial services company.
BRYAN LATIMER, Director, age 34. Mr. Latimer, has successfully owned and
operated an automobile dealership specializing in the exportation of vehicles,
fleet leasing and specialty application vehicles. In addition to being a member
of the Chamber of Commerce of Burlington Ontario Canada, Mr. Latimer is
registered with the Ontario Minister of Consumer and Commercial Relations,
currently known as the OMVIC. Prior to owning his business, Mr. Latimer
worked for Daymond Vynal Products, a division of Red Path Sugar, as a
distribution coordinator.
IAN BROCK, Director, age 61. Mr. Brock comes to the Company with a sales
background working with such companies as York International, as Sales Manager,
GE Technical, as Sales Manager, Phillips Industries Engineered Productions,
as Sales Engineer and American Standard Engineered Productions, as Sales
Engineer. Mr. Brock is currently Pastor of the Brock Faith Ministries in
Ontario Canada.
DONALD IWACHA, PhD, President, age 53. Mr. Iwacha
GREG AMOR, Chief Financial Officer, age 45.
LASER SHOW SYSTEMS (CANADA), LTD.
BARRINGTON L. SIMON, Chairman and CEO (see above).
ARCADI ROZENCHTEIN, Ph.D., Director of Science, age 53.
Item 10. Executive Compensation.
Other than information provided in the Company's 1999 Financial Statements
incorporated herein, executive officers and directors have received no other
compensation.
Item 11. Security Ownership of Certain Beneficial Owners and Management.
<TABLE>
<CAPTION>
Title of Class (1) Name and (2) Amount and (3)Percent of Class
Address of Nature of
Beneficial Owner Beneficial Ownership
<S> <C> <C> <C>
Common Barrington L. Simon 4,786,023 28.1%
601 Tomahawk Cres
Ancaster, Ontario
Canada, L9G 3T4
Common Brian Lattimer 300,000 1.76%
967 Glenwood Ave.
Burlington, Ontario
Canada, L7L 2K1
Common Ian Brock 20,000 Less than 1%
2164 Allonbury Cres
Burlington, Ontario
Canada
</TABLE>
Item 12. Certain Relationships and Related Transactions.
Not applicable.
Item 13. Exhibits and Reports on Form 8-K.
The following documents are filed as part of this Form 10-K Annual Report:
1) Financial Statements
<PAGE>
Light Management Group Inc.
CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1999
TABLE OF CONTENTS
PAGE
INDEPENDENT AUDITORS' REPORT.......................................... F-1
BALANCE SHEET......................................................... F-2,3
STATEMENT OF OPERATIONS............................................... F-4
STATEMENT OF STOCKHOLDERS' EQUITY..................................... F-5
STATEMENT OF CASH FLOWS............................................... F-6
NOTES TO FINANCIAL STATEMENTS......................................... F-7
<PAGE>
James E. Slayton, CPA
================================================
2858 W EST Market Street
Suite C
FAIRLAWN, Ohio 44333
INDEPENDENT AUDITORS' REPORT
Board of Directors March 16, 2000
Light Management Group Inc. (the Company)
I have audited the Consolidated Balance Sheet of Light Management Group Inc.
as of December 31, 1999, and the related Consolidated Statements of Operations,
Stockholders' Equity and Cash Flows for the year ending December 31, 1999.
These financial statements are the responsibility of the Company's management.
My responsibility is to express an opinion on these financial statements based
on my audit.
I conducted my audit in accordance with generally accepted auditing
standards. Those standards require that I plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis evidence supporting
the amounts and disclosures in the financial statement presentation. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. I believe that my audit provides a reasonable basis for my
opinion.
In my opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Light Management Group, Inc.
at December 31, 1999, and the results of its operations and cash flows for the
year ended in conformity with generally accepted accounting principles.
James E. Slayton, CPA
Ohio License ID# 04-1-15582
F-1
<PAGE>
Light Management Group Inc.
CONSOLIDATED BALANCE SHEET
as at December 31, 1999
<TABLE>
<S> <C>
ASSETS
Current Asset
Cash in Bank 1,362.00
Receivables 1,366,038.00
Prepaid Expenses 11,227.00
Other Current Assets 7,000.00
---------------------
Total Current Assets 1,385,627.00
OTHER ASSETS
Property and Equipment (net of depreciation) 1,008,632.00
--------------------
Total Other Assets 1,008,632.00
TOTAL ASSETS 2,394,259.00
============================================================
</TABLE>
See accompanying notes to financial statements
F-2
<PAGE>
Light Management Group Inc.
CONSOLIDATED BALANCE SHEET
as at December 31, 1999
<TABLE>
<S> <C>
LIABILITIES & EQUITY
Current Liabilities
Accounts Payable 609,147.00
Accrued Liabilities 30,662.00
-------------------
Total Current Liabilities 639,809.00
Non Current Liabilities
Due to Omega 145,093.00
Loans Payable 86,401.00
-------------------
Total Non Current Liabilities 231,494.00
EQUITY
Common Stock, authorized 100,000,000 common shares; common
shares; issued and outstanding at 12/31/99, 16,988,510 662,147.00
Additional paid in capital 708,735.00
Retained Earnings 297,167.00
Total Stockholders' Equity 1,668,049.00
-------------------
TOTAL LIABILITIES & OWNER'S EQUITY 2,539,352.00
===================
</TABLE>
See accompanying notes to financial statements
F-3
<PAGE>
Light Management Group Inc.
CONSOLIDATED STATEMENT OF OPERATIONS
FOR YEAR ENDING DECEMBER 31, 1999
<TABLE>
<S> <C>
REVENUE
Sales $1,171,348.00
COSTS AND EXPENSES
General and Administrative 270,810.00
Management Salaries 145,833.00
Salaries and Wages 160,518.00
Advertising 100,151.00
Depreciation Expense 54,345.00
Interest Expense 40,942.00
Total Costs and Expenses 772,599.00
Other Income (Expense):
Net Income or (Loss) $398,749.00
Weighted average number of common shares outstanding 15,568,611
Net Earnings Per Share 0.03
</TABLE>
See accompanying notes to financial statements
F-4
<PAGE>
Light Management Group Inc.
(A Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR YEAR ENDING
December 31, 1999
<TABLE>
<CAPTION>
Additional Retained Total
Common Stock Paid-in Earnings or Stockholder's
Shares Amount Capital (Deficit) Equity
<S> <C> <C> <C> <C> <C>
Balance December 31, 1998 7,950,000 $ 795.00 $100,787.00 ($101,582.00) 0.00
--------------------------------------------------------------------------------
Issued for cash 9,038,510 904.00 1,268,396.00 1,269,300.00
Net Income January 1, 1999 to
December 31, 1999 398,749.00 398,749.00
--------------------------------------------------------------------------------
Balance
December 31, 1999 16,988,510 $1,699.00 $1,369,183.00 $297,167.00 $1,668,049.00
================================================================================
</TABLE>
See accompanying notes to financial statements
F-5
<PAGE>
Light Management Group Inc.
STATEMENT OF CASH FLOWS
FOR YEAR ENDING DECEMBER 31, 1999
<TABLE>
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income from operations 398,749.00
Adjustments to reconcile net income to net cash provided
Depreciation Expense 54,345.00
Increase in current assets (1,384,265.00)
Increase (Decrease) in current liabilities 639,809.00
Net Cash provided by Operating Activities (291,362.00)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of Property and Equipment (1,208,070.00)
Net cash provided by investing activities (1,208,070.00)
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of Capital Stock 1,269,300.00
Increase in Loans Payable 231,494.00
Net cash provided by financing activities 1,500,794.00
Net increase (decrease) in cash 1,362.00
Cash and cash equivalents, beginning of period 0.00
Cash and cash equivalents, end of year 1,362.00
</TABLE>
See accompanying notes to financial statements
F-6
<PAGE>
Light Management Group Inc.
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - HISTORY AND ORGANIZATION OF THE COMPANY
The Company is organized under the laws of the State of Nevada, as
Light Management Group Inc. The Company is authorized to issue 100,000,000
shares of $.0001 par value common stock. The Company has issued and outstanding
16,988,510 shares of its common stock.
In May of 1999, the Company purchased the outstanding stock of
Laser Shows Systems (Canada), Inc.
The Company formerly reported as a developmental stage company.
The Company is producing significant revenues from its planned principal
operations and is not now considered a development stage company.
The Company's transfer agent issued 2,650,000 shares of common stock
in error, which is being returned to the Company.
NOTE 2 - ACCOUNTING POLICIES AND PROCEDURES
Accounting polices and procedures have been determined except as
follows:
1. The Company uses the accrual method of accounting, recording
revenues when invoiced and there is a realistic expectation of receiving
payment.
2. Basic earnings per share is computed using the weighted average
number of shares of common stock outstanding. There were no items which would
have diluted earnings per share.
3. The Company has adopted December 31 as its fiscal year end.
4. The Company has not yet adopted any policy regarding payment of
dividends. No dividends have been paid since inception.
5. The Company has not yet adopted all accounting pronouncements
issued. The effect on the financial statements is deemed insignificant
and immaterial and there were no adjustments made to the financial statements.
6. Organization costs were expensed in 1999 to conform with
accounting policies.
7. The Company records its inventory at cost.
8. The preparation of financial statements in conformity with
generally accepted accounting principles requires that management make estimates
and assumptions which affect the reported amounts of assets and liabilities as
at the date of the financial statements and revenues and expenses for the period
reported. Actual results may differ from these estimates.
9. The cost of plant and equipment is recorded at cost and
depreciated over the estimated useful life of the equipment utilizing the
straight line method of depreciation. The amount of depreciation recorded
during this period was $54,345.00.
F-7
<PAGE>
Light Management Group, Inc.
NOTES TO FINANCIAL STATEMENTS
CONTINUED
10. The Company's Statement of Cash Flows is reported utilizing
cash (currency on hand and demand deposits) and cash equivalents (short-term,
highly liquid investments). The Company's Statement of Cash Flows is reported
utilizing the indirect method of reporting cash flows. There were no cash
equivalents during the reporting period.
11. The Company has adopted FASB 109 for reporting income taxes. The
Company's marginal tax rate is 30% with an effective tax rate for 1999 of 0%.
12. The Company's financial statements are stated in US Dollars.
The balance sheet was translated as at December 31, 1999. The income
statement was translated at an average exchange rate for the year of 1999.
NOTE 3 - GOING CONCERN
The Company's financial statements are prepared using the generally
accepted accounting principles applicable to a going concern, which contemplates
the realization of assets and liquidation of liabilities in the normal course
of business. Previously, the Company had no source of revenue and financial
reports included an explanatory paragraph regarding going concern. The
Company is now generating revenues through operations which exceed its
expected operating expenses for the next twelve months.
NOTE 4 - RELATED PARTY TRANSACTION
Since July 1997, a total of $178,800 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 they were used in
purchasing equipment.
NOTE 5 - LONG TERM COMMITMENTS
Equipment is secured by a bank loan. It is repayable over 64 months
at $3,753.84 monthly plus interest at 2.5% over prime. Other 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.
NOTE 6 - FOREIGN EXCHANGE RISK
The Company purchases its laser projection systems in U.S. dollars
and is therefore subject to foreign exchange fluctuations.
F-8
<PAGE>
Light Management Group, Inc.
NOTES TO FINANCIAL STATEMENTS
CONTINUED
NOTE 7 - LITIGATION
The Company and some of its officers were being sued by a shareholde
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 denied all allegations and vigorously
defended the charges. The litigation has since been resolved.
NOTE 8 - SUBSEQUENT EVENTS
On March 24, 2000, the Company completed the purchase of a 100%
interest in Exclusive Advertising Inc. (Exclusive). Terms of the purchase
called for the issuance of 500,000 shares in the Company at a deemed value of
$5.00 per share.
Exclusive is an Ontario incorporated company active in advertising on
the GO transit system of Ontario. It has an exclusive contract to provide such
advertising. The contract has 14 years left and has a renewal clause for a
further five years. During 1999, the Company advanced Exclusive $115,085.00
which are shown on these statements as accounts receivable.
F-9
<PAGE>
James E. Slayton, CPA
- --------------------------------------------------------------------------------
2858 West Market Street
Suite C
Fairlawn, Ohio 44333
1-330-864-3553
To Whom It May Concern:
The firm of James E. Slayton, Certified Public Accountant consents to
the inclusion of my report of December 31, 1999, on the Consolidated Financial
Statements of Light Management Group Inc. from January 31, 1999 through December
31, 1999, in any filings that are necessary now or in the near future to be
filed with the U. S. Securities and Exchange Commission.
Professionally,
James E. Slayton, CPA
Ohio License ID # 04-1-15582
<PAGE>
Signatures
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
Light Management Group, Inc.
By: /s/ Donald Iwacha
Donald Iwacha
President
Date: April 12, 2000
