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 June 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 June 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 June 30, 1999
<TABLE>
<C> <C>
1999
$
- ----------------------------------------------------------------------------------------------------
ASSETS
CURRENT
Accounts receivable 609,615
Inventory -
Prepaid expenses and deposits 13,106
- ----------------------------------------------------------------------------------------------------
622,721
CAPITAL ASSETS (Note 3) 1,249,101
INTANGIBLE ASSETS 2,510,467
- ----------------------------------------------------------------------------------------------------
4,399,810
LIABILITIES
CURRENT
Bank indebtedness 63,762
Accounts payable 180,700
Accrued liabilities 155,570
Income taxes payable
Due to shareholder 241,859
Current portion of long term bank loan 19,624
- ----------------------------------------------------------------------------------------------------
661,515
- ----------------------------------------------------------------------------------------------------
LONG TERM BANK LOAN (Note 4) 165,306
LOANS PAYABLE (Note 4) 41,701
- ----------------------------------------------------------------------------------------------------
868,522
- ----------------------------------------------------------------------------------------------------
STOCKHOLDERS' EQUITY
COMMON STOCK (Note 5) 2,482,933
ADDITIONAL PAID IN CAPITAL 784,669
RETAINED EARNINGS 263,626
- ----------------------------------------------------------------------------------------------------
3,531,288
- ----------------------------------------------------------------------------------------------------
4,399,810
- ----------------------------------------------------------------------------------------------------
(See accompanying Notes to Financial Statements)
</TABLE>
<PAGE>
LIGHT MANAGEMENT GROUP INC.
CONSOLIDATED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
(NOT AUDITED) for the quarter ended June 30, 1999
$
<C> <C>
REVENUE
Income from operations 593,108
Interest and other income 21,935
- ----------------------------------------------------------------------------------------------------
615,043
- ----------------------------------------------------------------------------------------------------
EXPENSES
Advertising and promotion 30,923
Amortization 2,223
Bank charges and interest 31,139
Cost of sales 147,693
Insurance 2,287
Office and general 5,577
Professional fees 6,344
Rent 12,966
Repairs and maintenance 1,757
Salaries and fringe costs 9,095
Telephone 6,829
Travel 6,521
Utilities 8,941
Write-off of amount due from company related through
common shareholders 79,121
- ----------------------------------------------------------------------------------------------------
351,416
- ----------------------------------------------------------------------------------------------------
NET INCOME before income taxes 263,626
- ----------------------------------------------------------------------------------------------------
Income taxes --
- ----------------------------------------------------------------------------------------------------
NET INCOME 263,626
- ----------------------------------------------------------------------------------------------------
(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 June 30, 1999
$
<C> <C>
- ----------------------------------------------------------------------------------------------------
CASH RESOURCES PROVIDED BY (USED IN);
OPERATING ACTIVITIES
Net income 263,626
Items not involving cash:
Amortization 2,223
Write-off of amount due from company related through
common shareholders 79,121
- ----------------------------------------------------------------------------------------------------
344,970
Changes in non-cash working capital (Note 8) (395,316)
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
FINANCING ACTIVITIES
- ----------------------------------------------------------------------------------------------------
Long term bank loan 194,930
Increase in loans payable 41,701
Increase in contributed surplus 784,669
Issuance of common shares 2,482,993
Advances made to company related through common shareholders 241,859
- ----------------------------------------------------------------------------------------------------
3,746,152
- ----------------------------------------------------------------------------------------------------
INVESTING ACTIVITIES
Purchase of capital assets (1,249,101)
Purchase of intangible assets (2,510,467)
- ----------------------------------------------------------------------------------------------------
(3,759,568)
- ----------------------------------------------------------------------------------------------------
DECREASE IN CASH (63,762)
CASH, BEGINNING OF YEAR -
- ----------------------------------------------------------------------------------------------------
CASH DEFICIENCY, END OF YEAR (63,762)
- ----------------------------------------------------------------------------------------------------
(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.
These Consolidated Financial Statements include the accounts of two wholly
owned subsidiaries, Laser Show Systems Inc. and Exclusive Advertising Inc.
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:
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 ion 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
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.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-
Continued
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 June
30, 1999.
INTANGIBLE ASSETS-
Intangible assets consist of $4,218 for patents and rights to the laser
projection systems and are recorded at cost and goodwill on the purchase of
subsidiary of $2,506,249 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 June 30, 1999.
COMPARATIVE FIGURES
No comparative figures for June 30, 1998 have been provided as the com-
pany substantially changed its business focus and the prior years numbers would
be misleading.
3. CAPITAL ASSETS
<TABLE>
<CAPTION>
Accumulated
Cost amortization Net
<S> <C> <C> <C>
Equipment $309,900 0 $ 306,987
Equipment under development 560,685 -- 560,685
Furniture and Fixtures 2,983 388 2,595
Computer Equipment 7,710 1,684 6,026
Leasehold Improvements 1,032 151 881
</TABLE>
4. LOANS PAYABLE
Bank loan is secured by an assignment on equipment. It is repayable over 64
months at $2,560.60 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.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-
Continued
5. COMMON STOCK
AUTHORIZED ISSUED
100,000,000 COMMON SHARES 16,988,510 COMMON SHARES
6 RELATED PARTY TRANSACTIONS
Since July 1997, a total of $121,965 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.
8. CHANGES IN NON-CASH WORKING CAPITAL
$
Accounts Receivable (609,615.00)
Inventory 0.00
Prepaid expenses and deposits (13,106.00)
Accounts Payable 71,835.00
Accrued Liabilities 155,570.00
Income tax payable 0.00
Due to Shareholder 0.00
(395,316.00)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -
Continued
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 have denied all allegations and intend to
vigorously defend the charges. The Company expects to be successful in the
litigation and resolve the dispute in the foreseeable future.
10. REVENUE
Income from operations reported under Revenue included amounts invoiced,
whether or not those amounts have been paid.
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
March 22,2000 /s/ Donald Iwacha
President
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> JUN-30-1999
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 609615
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 622721
<PP&E> 882310
<DEPRECIATION> 2223
<TOTAL-ASSETS> 4399810
<CURRENT-LIABILITIES> 661515
<BONDS> 0
0
0
<COMMON> 2482993
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 3531288
<SALES> 593108
<TOTAL-REVENUES> 615043
<CGS> 147693
<TOTAL-COSTS> 147693
<OTHER-EXPENSES> 203723
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 263626
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 263626
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
