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, 2001.

[ ]      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                                     75-2727932
(State or other jurisdiction                      (I.R.S. Employer
of incorporation or organization)                 Identification No.)

     3060 MAINWAY, SUITE 301, BURLINGTON, ONTARIO, CANADA          L7M 1A3
     ----------------------------------------------------------------------
      (Address of principal executive offices)                   (Zip Code)


                                 (905) 319-1111
                 ----------------------------------------------
                 Issuer's telephone number, including area code


Securities registered under Section 12(b) of the Act:  None

Securities registered under Section 12(g) of the Exchange Act: COMMON STOCK,
$0.0001 PAR VALUE (Title of class)

     Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 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.

              Yes X    No
                 ---     ---

     Check if 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 reference in Part III of this Form 10-KSB
or any amendment to this Form 10KSB. [ ]

     Issuer's  revenues  for the  fiscal  year ended  December  31,  2001,  were
$1,123,493.

     Aggregate market value of voting stock held by non-affiliates of the issuer
as of April 8, 2002 was $2,631,639.20.

     Number of shares of common stock, $0.0001 par value, outstanding on April
8, 2002, was 30,240,246.


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                                TABLE OF CONTENTS

PART I                                                                         1
     ITEM 1.   DESCRIPTION OF BUSINESS                                         1
     ITEM 2.   DESCRIPTION OF PROPERTY                                         5
     ITEM 3.   LEGAL PROCEEDINGS                                               5
     ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS             5

PART II                                                                        5
     ITEM 5.   MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS        5
     ITEM 6.   MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION       8
     ITEM 7.   FINANCIAL STATEMENTS                                           10
     ITEM 8.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
               ACCOUNTING AND FINANCIAL DISCLOSURE                            11

PART III                                                                      11
     ITEM 9.   DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
               PERSONS; COMPLIANCE WITH SECTION 16(A) OF HE EXCHANGE ACT      11
     ITEM 10.  EXECUTIVE COMPENSATION                                         11
     ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
               AND MANAGEMENT                                                 12
     ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                 12
     ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K                               13

INDEX TO EXHIBITS                                                             15

<PAGE>

Forward-Looking Statements

CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE
SECURITIES  LITIGATION REFORM ACT OF 1995: Certain  statements  included in this
report, including,  without limitation,  statements contained under the captions
"Item 1.  Description  of Business"  and "Item 6.  Management's  Discussion  and
Analysis or Plan of Operation,"  and such other  statements,  except  historical
facts,  regarding the Company's financial position,  business strategy and plans
of management for future operations, may constitute "forward looking statements"
within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section  21E  of  the  Securities  Exchange  Act  of  1934,  as  amended.  These
statements,  which  include,  but are not  limited to,  words such as  "expect,"
"anticipate,"   "estimate,"   "plan,"   "project"  and  "intend"  are  based  on
management's beliefs and assumptions,  and on information currently available to
management and involve certain known and unknown risks,  uncertainties and other
factors which may cause these  statements to be  materially  different  from any
future  results,  performance  or  achievements  expressed  or  implied by these
forward-looking  statements.  Such factors include,  among others, the Company's
ability to finance its  operations  and the  ability to obtain  such  financing,
uncertainties relating to the integration of acquired businesses and operations,
the Company's ability to successfully  implement its business plan and integrate
any  proposed  and  future  business  arrangements;  potential  fluctuations  in
financial results,  dependence on product  development,  rapid technological and
market change,  failure to complete the  manufacture of products on schedule and
on budget, uncertainties relating to business and economic conditions in markets
in which the Company operates or which relate to customer plans and commitments;
dependence on intellectual property rights; the competitive environment in which
the Company  operates and such other risks as detailed  from time to time in the
Company's  periodic reports filed with the United States Securities and Exchange
Commission and other regulatory authorities.

                                     PART I

ITEM 1.   DESCRIPTION OF BUSINESS

              OVERVIEW

Light Management Group, Inc. ("LMG" or the "Company") was organized under the
laws of the State of Nevada on April 20, 1998 under the name Triton Acquisition
Corporation ("Triton"). Triton officially changed its name to Light Management
Group, Inc. on February 23, 2000.

LMG, through wholly owned subsidiaries, develops new applications for optical
and light technologies. LMG offers products based on its proprietary
acousto-optic deflection and related non-diode laser, photonics and optic
technologies. These technologies are used in the fiber optic communications,
biomedical, out-of-home advertising, industrial and aerospace markets. LMG's
research and development provides ideation, patenting and development of new
products.


<PAGE>

LMG is pursuing strategic partnerships, license agreements and acquisitions to
optimize, integrate and develop new applications for its laser technology in
major urban markets. Five areas have been identified for application
development:

     o    visual media (including outdoor advertising);
     o    digital communications;
     o    industrial equipment;
     o    aerospace; and
     o    bio-medical.

LMG focuses on three business strategies:

     o    increasing research through joint ventures and increasing the number
          of contracts established with corporate partners;
     o    establishing market position by patenting the full range of our
          products and designs; and
     o    establishing market leadership by acquiring strategic, forward-looking
          partners.

LMG's growth has thus far been effected through mergers and acquisitions of
technology companies which complement LMG's acousto-optic management and laser
technologies.

The subsidiaries create synergies by which LMG hopes to increase sales and
utilize the advertising of its new laser technology which is marketed towards
the advertising industry. LMG's subsidiaries give it the ability to increase its
capabilities in technology, advertising, European operations and research and
development.

              PRODUCTS AND SERVICES

On May 18, 1999, LMG acquired as a wholly owned subsidiary, Laser Show Systems
(Canada), LTD ("Laser"), a Canadian corporation. 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.

Laser began operations on August 1, 1997 and seeks to provide leading edge laser
products, utilizing the best technologies from around the world.

Laser provides installation, service and creative graphics services for systems
of light projections in a colorful and attractive design that is utilized as a
marketing technique. With up to 1024 points per object, Laser's RGB
Laser-Projection System ("RGB-LPS") can display objects with 256 different
colors from a palette of 16.7 million colors. Each palette can be changed


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<PAGE>

continuously to get smooth color changes, fades, color cycling, etc. 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. Software features allow objects to be positioned, rotated, sized, scaled,
and distorted. It can also map objects onto surfaces (i.e., a logo can be put on
a waving flag). The software and laser allow the appearance of animated text to
fly through the air and/or over a landscape. The applications for this product
are numerous, including entertainment packages, display of logos, and
advertising.

LMG anticipates the market for its RGB-LPS to include outdoor advertising
companies, property management companies, and specialty properties such as
resorts and entertainment centers. Property management companies own and manage
properties such as retail malls, large commercial buildings with retail
components, and specialty sites. Laser intends to either sell the RGB-LPS units
or to market them on a lease/revenue sharing arrangement with the above clients
through its own sales group or associated agent companies. While LSSI's (Russia)
RGB-LPS patent is only valid in Russia, LMG currently has multiple patents
pending in the United States and intends to secure world wide patents on its
technology.

Three patents were filed during the year 2000 with the United States Patent and
Trademark Office. These patents relate to the following products: (1) an
Acousto-Optical Switch for Fiber Optic Lines as part of an all optical fiber
communication network; (2) an Information Compressor for Fiber Optic Lines,
which is an invention that relates to wavelength division multiplexing in fiber
optic systems; and (3) a Fiber Optic Display Screen, which is capable of
displaying still and moving video images, particularly a graphic image in an
array of pixels generated by the RGB-LPS. In addition to filing in the United
States, the patents have been filed according to the Patent Co-operation Treaty
(PCT) in countries outside the United States. At present, the patent
applications are under examination and patents have not been granted.

Through LMG's wholly owned subsidiary, Exclusive Advertising, Inc.
("Exclusive"), LMG holds the exclusive contract to sell advertising space on
Toronto's GO Transit system which services the Greater Toronto Area and carries
more than 40,000,000 commuters every year. Exclusive's primary and sole activity
has been the marketing of advertising space on Toronto's GO Transit system, but
it intends to expand both its geographic area and scope of target advertisers.

On April 20, 2001, LMG announced the creation of a new subsidiary, Optico Luz
SA. The focus of Optico Luz SA is the "growth of the fiber optic and
telecommunications industry in South America and other Spanish-speaking
countries". "Optico Luz SA will work as a strategic partner with several optical
components and network companies with an already-established presence in this
region of the world." Optico Luz SA announced on March 4, 2002 that it had
signed a Distribution Contract with Master Distributor Esoluciones S.A. to
re-sell NetScreen Technologies products in Ecuador.


                                       3
<PAGE>

              EUROPEAN OPERATIONS

LMG is committed to providing ideation, new product development and to acquiring
the equipment and patent rights owned by other companies, which is why it
acquired Laser Show Systems Investments, Ltd. (United Kingdom) ("Laser UK"), and
incorporated LSSI (Russia) as a 99% owned subsidiary. Laser UK's primary
activity is contracting its laser equipment to advertisers and companies in the
entertainment field in Europe.

Laser UK allows LMG to contract with companies to provide the display of
advertisements as well as the production of laser shows throughout Europe, and
it facilitates contracts for product manufacturing in Europe. Although LSSI
(Russia) enables LMG to conduct operations in Russia, it has been inactive to
date.

              RESEARCH AND DEVELOPMENT

On January 14, 2000, the Company acquired all of the common stock of 1028177
Ontario, Ltd., d/b/a Light Research and Development ("LRD"). LRD is the research
entity through which the Company conducts its research and development of new
optic, laser and related technologies. LRD is operated by a high quality
research team, led by Dr. Donald Iwacha, Ph.D., Dr. Arkadi Rozenchtein, Ph.D.,
and Dr. Gennadii Ivtsenkov. In addition to the development of new ideas and
concepts, through LRD, the Company will focus on developing new applications
using LMG's acousto-optic technology in five targeted growth areas: digital
communications; visual media (e.g., outdoor advertising); industrial equipment;
aerospace; and bio-medical. LRD intends to build product prototypes and
commercially viable working models which it expects to develop into new leading
technologies and products.

In the ensuing period, LRD introduced the Acousto-Optic Deflector (AOD) Switch
for the Communications market on December 20, 2000. In 2001, Letters of Intent
were signed with a number of companies, including Empyrean Communications, Inc.,
France Telecom, FibreWired Burlington Hydro Communications (FWBHC), and the
Boeing Company to evaluate the switch. The decision was made to focus on the
latter two opportunities. Successful Phase I and II testing has been done at
FWBHC. Phase III testing is in progress.

In addition, the company introduced the first Ultra-violet (UV) Scanner using
Acousto-Optic Deflection technology at the OFC Conference in Anaheim in March of
2001. In the ensuing period, work has proceeded to assess the suitable markets
for the technology. This has included working with research institutions in
Canada. An Agreement was reached with the Baylor College of Medicine to supply a
Scanner to the College for testing and evaluation in research projects at the
College.


                                       4
<PAGE>

ITEM 2.   DESCRIPTION OF PROPERTY

LMG does not own any real estate. It currently leases all facilities, other than
home offices for sales representatives, and maintains a Canadian office and a
Research and Development facility in Burlington, Ontario. LMG's executive
offices are located in Burlington, Ontario, Canada, and in Atlanta, Georgia.

LMG has a month to month lease with Omega Holdings, Bahamas, Ltd. ("Omega"), a
significant shareholder of LMG, for its Canadian office, for a monthly rent of
$3,300.00. Barrington Simon, the Chief Financial Officer and a director of the
Company, owns 38% of Omega and also has a 38% ownership interest in the entity
that owns the remaining 62% of Omega. The Company negotiated the terms of this
lease on an arms-length basis. LMG leases space for the R&D facility in
Burlington, Ontario at 889 Fraser Drive from Rasda Holdings, Ltd. The term of
the lease is from March 2000 to March 2005 and the monthly rent is $1,390.00.

LMG also leases 4,321 square feet of space in a suburb of Atlanta, Georgia at
5300 Oakbrook Parkway, Norcross, Georgia 30093 from AP Southeast Portfolio
Partners, LP, a Delaware limited partnership d/b/a Highwoods Properties. The
term of the lease is March 1, 2001 through February 28, 2006 and the monthly
rent is $5,673.94.

In management's opinion, these leased properties are adequately covered by
insurance. As the properties are leased, insurance coverage is on contents and
liability.

ITEM 3.   LEGAL PROCEEDINGS

The Company knows of no material pending or threatened legal proceedings
involving the Company or any of its subsidiaries.

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were voted on during the fourth quarter of the Company's fiscal year
ended December 31, 2001.

                                     PART II

ITEM 5.   MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

The Company's Articles of Incorporation were amended on July 27, 2001 to
authorize the issuance of 200,000,000 shares of Common Stock, with a par value
of $0.0001 (the "Common



                                       5
<PAGE>

Stock"). As of April 8, 2002, the number of issued and outstanding shares of
Common Stock was 30,240,246, which shares were held of record by approximately
823 stockholders.

LMG's Common Stock is currently trading on the NASD OTC-BB under the symbol
"LMGR". The high and low closing trading prices for its common stock for each
fiscal quarter since January 1, 2000, are listed in the following table. The
prices in the table reflect inter-dealer prices, without retail markup, markdown
or commission and may not represent actual transactions.

      Fiscal Quarter       High Closing Price      Low Closing Price
---------------------------------------------------------------------------
     1st Quarter 2000            $16.31                   $1.75
     2nd Quarter 2000            $7.187                  $2.687
     3rd Quarter 2000             $4.00                  $2.218
     4th Quarter 2000             $3.75                  $0.875
     1st Quarter 2001             $2.97                   $1.50
     2nd Quarter 2001             $1.86                   $1.14
     3rd Quarter 2001             $1.40                   $0.32
     4th Quarter 2001             $0.51                   $0.25
     1st Quarter 2002             $0.35                   $0.15
     2nd Quarter 2002             $0.17                   $0.13

On April 8, 2002, LMG's common stock closing trade price was $0.13 per share.

DIVIDENDS

LMG has not declared any cash dividends on its Common Stock for the last three
years and does not anticipate paying any dividends on its Common Stock in the
foreseeable future. The payment of dividends on the Common Stock is within the
discretion of the board of directors and will depend on our earnings, capital
requirements, financial condition and other relevant factors. LMG intends to
fully honor its future obligation to pay dividends on any shares of Common Stock
issued pursuant to this Offering.

RECENT SALES OF UNREGISTERED SECURITIES

During the year ended 2001, the Company issued a total of 83,000 shares of its
common stock as signing bonuses to officers and employees. These shares were
valued at $50,990. The issuance of such shares was based, in part, upon
representations and warranties of such individuals, including a representation
as to their status as "accredited" investors (as such term is defined in Rule
501(a) of


                                       6
<PAGE>

Regulation D under the Securities Act of 1933, as amended (the "Securities
Act")). These sales were exempt from the registration requirements of the
Securities Act pursuant to Regulation D promulgated by the Securities and
Exchange Commission (the "SEC") under Section 4(2) of the Securities Act.

During the year ended 2001, the Company issued a total of 648,000 shares of its
common stock in consideration for consulting and other services provided to the
Company by various independent parties. These shares were valued at
approximately $631,920. The issuance of such shares was based, in part, upon
representations and warranties of such individuals, including a representation
as to their status as "accredited" investors (as such term is defined in Rule
501(a) of Regulation D under the Securities Act. These sales were exempt from
the registration requirements of the Securities Act pursuant to Regulation D
promulgated by the SEC under Section 4(2) of the Securities Act.

On March 1, 2001, the Company settled $4,800,000 of debt to Omega Holdings,
Bahamas, Ltd. Of this amount, a loan payable of $3,200,000 was settled by the
Company's issuance of 2,766,798 shares of Series A Preferred Stock (the
"Preferred Stock"). Each share of Preferred Stock has voting rights equal to 2.5
shares of Common Stock, shall not be redeemable or convertible by the Company,
and shall entitle the holder to receive a cumulative annual dividend of $0.08
per share. The Preferred Stock shall be convertible into Common Stock at any
time by the holder on a one-for-one basis. The remaining $1,600,000 in debt was
settled in exchange for 1,855,072 shares of Common Stock valued at $2,365,000.
As a result, the Company recorded an extraordinary loss on extinguishment of
debt of $765,000. The issuance of the Common Stock and the Preferred Stock was
based, in part, upon representations and warranties of such individual,
including a representation as to its status as an "accredited" investor (as such
term is defined in Rule 501(a) of Regulation D under the Securities Act. This
sale was exempt from the registration requirements of the Securities Act
pursuant to Regulation D promulgated by the SEC under Section 4(2) of the
Securities Act.

On May 12, 2000, the Company filed two registration statements on Form S-4 with
the SEC registering an aggregate of 550,000 shares of Common Stock in connection
with that certain Agreement and Plan of Merger dated March 24, 2000 between the
Company and Exclusive Advertising, Inc. and that certain Agreement and Plan of
Merger dated April 17, 2000 between the Company and Laser Show Investments, LTD
(United Kingdom). Neither registration statement was or has been declared
effective by the SEC.


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<PAGE>

ITEM 6.     MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

GENERAL

The  following  discussion  should  be read in  conjunction  with the  financial
statements,  including  the notes  thereto,  included  in this form  10-KSB as a
separate section (Item 7).

We have  experienced  growth in the scope of our operations,  our technology and
our revenues  since we became focused in the non-diode  laser and  acousto-optic
industry in May 1999.  Much of our growth has been effected  through mergers and
acquisitions,  as our  operations are now conducted  through five  subsidiaries,
three  of  which  were  acquired  externally.  We  expect  to  continue  to grow
internally, as our technological products become more well known and are sold in
increasing quantities, and externally, as we seek to effect other acquisitions.

As  referenced  in  Item  1,  we  have  introduced  two  products  based  on the
Acousto-Optic  Deflector  (AOD)  technology  - a Switch  for the  Communications
market  and an  Ultra-Violet  (UV)  Scanner  for  the  nanotechnology  materials
processing and bio-medical markets.  Evaluation and testing of these products is
ongoing with expected  commercialization  in 2002. The  difficulties in the high
technology  sector,  particularly  communications,  has presented  challenges in
advancing new technologies in the market.  Nonetheless,  LMG is committed to the
products and their expected benefits.

In the current  climate for the high  technology  sector,  funding is one aspect
that requires  constant  attention for many  companies.  The Company has been in
discussions  with  various  private  and  public  lenders.  In  light  of  these
discussions,  the Company anticipates that it will have the funding necessary to
meet its cash requirements by the end of the second quarter. The Company expects
to use the money to address  operating  requirements  as well as to fund ongoing
product research, development and testing.

ACQUISITION OF RAW MATERIALS

Our current goal is to expand our product sales. For this to occur, we must have
the raw materials our products  require.  These raw materials  include laser and
switch products and technologies. We are considering raising capital in either a
private or public offering to provide for the purchase of these raw materials.

RESULTS OF OPERATIONS

Year Ended December 31, 2001 Compared To Year Ended December 31, 2000

REVENUES - The Company had sales  revenues of $711,630 for its fiscal year ended
December  31, 2000 as compared to  $1,096,674  for the year ended  December  31,
2001. This increase in revenues is the result of advertising  revenue  generated
from  operations  of Exclusive  Advertising.

GROSS PROFIT (LOSS) - Gross Profit  decreased  from $151,232 for the fiscal year
ended December 31, 2000 to a loss of $116,587 for the fiscal year ended December
31, 2001.  Management  has  determined  that the market value of  inventories is
lower than cost, resulting in a charge to cost of sales of $244,000.  After this
adjustment, inventory value of $300,000 was recorded as at December 31, 2001.


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<PAGE>

OPERATING  EXPENSES - The  operating  expenses  incurred  by the Company for its
fiscal year ended December 31, 2000 were  $7,901,630  compared to $5,917,204 for
the year ended December 31, 2001. This decrease in expenses  include  $3,780,623
in non-cash  compensation  and an expense of $390,384  relating to the Company's
settlement  of  litigation  that  occurred in year 2000.  The  general  expenses
increased by $1,268,176 as a result of the opening of the Head Office in Georgia
and additional  personnel  hired in the Research  Department.  In addition,  the
Company recorded an extraordinary loss of $765,000 on extinguishment of debt.

IMPAIRMENT  CHARGE - LONG LIVED ASSETS - Management  has  evaluated its carrying
value  for  the  goodwill  that  resulted  from  the  acquisition  of  Exclusive
Advertising,  Inc. Management has reasonably  estimated that expected cash flows
from future revenues would not substantiate  such carrying value, and determined
that an  impairment in value had occurred.  Therefore,  an impairment  charge of
approximately $1,300,000 was taken by the Company at December 31, 2001.

NET INCOME  (LOSS) - As a result of the  above,  the net loss for the year ended
December 31, 2001, was  $6,759,086,  as compared to a loss of $9,357,186 for the
year ended December 31, 2000.

CURRENT LIQUIDITY AND CAPITAL RESOURCES

The Company has financed its cash requirements primarily through borrowings from
related  parties  and  sales  of  common  shares.  Net  cash  used in  operating
activities was $742,376.

As of December 31, 2001, the working  capital  deficiency was  $2,038,000.  This
lack of  liquidity,  in addition to our net losses for the years ended  December
31, 2001 and 2000, resulted in the Company's  independent  auditors including an
explanatory  paragraph in their  report on our  financial  statements,  included
elsewhere herein, about our ability to continue as a going concern.

Our  current  assets,  as of  December  31,  2001,  are  $622,628 as compared to
$1,906,503  as of December 31, 2000.  The bulk of this amount is in inventory of
$300,000 and prepaid  expenses of $231,728.  We expect our current asset balance
to  increase  during 2001 in  conjunction  with our  expected  increase in sales
revenue.

Our accounts  payable  increased to $907,809 and accrued expenses also increased
to $849,451 as of  December  31,  2001,  as compared to $236,978  and  $191,730,
respectively,  as of December  31,  2000.  Proceeds of  borrowings  from related
parties were $717,167 during the year ended December 31, 2001.

Shareholder's  deficit as of  December  31,  2001 was  $219,546,  as compared to
equity of $75,544 as of December 31, 2000.

At December 31, 2001,  we had $25,000 in cash used to secure the line of credit.
We will need to raise  additional  capital  to fund our  operations  and  future
acquisitions  and it is anticipated  that we will seek such  additional  funding
through public or private equity or debt financing.


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<PAGE>


ITEM 7.   FINANCIAL STATEMENTS


                          LIGHT MANAGEMENT GROUP, INC.

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Independent Auditors' Report.......................................F-1

Consolidated Balance Sheet.........................................F-2

Consolidated Statements of Operations..............................F-3

Consolidated Statement of Stockholders' Equity (Deficit)...........F-4

Consolidated Statements of Cash Flows..............................F-5

Notes to Consolidated Financial Statements..................F-6 - F-16



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<PAGE>


                          INDEPENDENT AUDITORS' REPORT

To the Board of Directors
Light Management Group, Inc.

We have audited the accompanying  consolidated balance sheet of Light Management
Group, Inc and subsidiaries as of December 31, 2001 and the related consolidated
statements of operations,  changes in  stockholders'  equity  (deficit) and cash
flows for the year then  ended  December  31,  2001 and  2000.  These  financial
statements   are  the   responsibility   of  the   Company's   management.   Our
responsibility  is  to  express  an  opinion  on  these  consolidated  financial
statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform our 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
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
consolidated  financial  statement  presentation.  We  believe  that our  audits
provide a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the consolidated  financial position of Light Management
Group,  Inc. and  subsidiaries  as of December 31,  2001,  and the  consolidated
results  of their  operations  and their  cash  flows  for the year  then  ended
December 31, 2001 and 2000, in conformity with accounting  principles  generally
accepted in the United States of America.

The accompanying  financial  statements have been prepared  assuming the Company
will  continue as a going  concern.  As discussed in Note 2(a) to the  financial
statements,  the Company has incurred net losses of approximately $6,759,000 and
$9,357,000  for the  years  ended  December  31,  2001 and  2000,  respectively.
Additionally,  the Company had a working  capital  deficiency  of  approximately
$2,038,000  at December  31, 2001,  which  creates  substantial  doubt about the
Company's  ability  to  continue  as a going  concern.  Management's  plans with
respect  to these  matters  are also  described  in Note  2(a) to the  financial
statements.  The accompanying  consolidated  financial statements do not include
any adjustments that might result from the outcome of this uncertainty.

                                          /s/ Feldman Sherb & Co., P.C.
                                          Feldman Sherb & Co., P.C.
                                          Certified Public Accountants

New York, New York
April 16, 2002

<PAGE>

                          LIGHT MANAGEMENT GROUP, INC.

                           CONSOLIDATED BALANCE SHEET

                                DECEMBER 31, 2001

<TABLE>
<CAPTION>

                                     ASSETS                                                      2001
                                     ------                                                      ----
<S>                                                                                         <C>
CURRENT ASSETS:
    Restricted cash                                                                         $      25,000
    Accounts receivable (net of allowance of $19,000)                                              65,900
    Inventories                                                                                   300,000
    Prepaid expenses and other current assets                                                     231,728
                                                                                            -------------
      TOTAL CURRENT ASSETS                                                                        622,628

PROPERTY AND EQUIPMENT - net of accumulated depreciation                                          291,094

GOODWILL - net                                                                                  1,000,000

PATENTS - net                                                                                     584,160

                                                                                            -------------
TOTAL ASSETS                                                                                $   2,497,882
                                                                                            =============

                      LIABILITIES AND STOCKHOLDERS' DEFICIT
                      -------------------------------------

CURRENT LIABILITIES:
    Accounts payable                                                                        $     907,809
    Accrued expenses                                                                              849,451
    Notes payable - bank                                                                           76,996
    Loans payable                                                                                 162,727
    Due to officers                                                                               446,909
    Notes payable - related party                                                                 216,989
                                                                                            -------------
      TOTAL CURRENT LIABILITIES                                                                 2,660,881

    Notes payable - bank (net of current portion)                                                  56,547
                                                                                            -------------
      TOTAL LIABILITIES                                                                         2,717,428
                                                                                            -------------

STOCKHOLDERS' DEFICIT:
    Preferred Stock - $.0001 par value, 10,000,000  authorized shares, 2,766,798 shares
     issued and outstanding                                                                           277
    Common stock - $.0001 par value, 200,000,000
     authorized shares, 23,818,995  shares issued and outstanding                                   2,382
    Additional paid in capital                                                                 18,855,588
    Deferred compensation                                                                        (553,624)
    Accumulated deficit                                                                       (18,401,301)
    Accumulated other comprehensive loss                                                         (122,868)
                                                                                            -------------
      TOTAL STOCKHOLDERS' DEFICIT                                                                (219,546)
                                                                                            -------------

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT                                                 $   2,497,882
                                                                                            =============
</TABLE>

                 See notes to consolidated financial statements.


                                       F-2

<PAGE>

                           LIGHT MANAGEMENT GROUP, INC

                      CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                                    Years Ended
                                                                         ------------------------------
                                                                           December 31,   December 31,
                                                                         --------------  -------------
                                                                              2001           2000
                                                                         --------------  -------------
<S>                                                                      <C>             <C>
SALES                                                                    $  1,096,674    $    711,630

COST OF SALES                                                               1,213,261         560,398
                                                                         ------------    ------------

GROSS PROFIT (LOSS)                                                          (116,587)        151,232
                                                                         ----------------------------

EXPENSES
     Selling, general and administrative expenses (exclusive of             3,484,255       2,216,079
       non-cash salaries and services reported below)
     Purchased research and development                                            --         630,000
     Litigation expenses                                                           --         390,384
     Impairement in Goodwill                                                1,303,790              --
     Non-cash Salaries, Interest and Services                                 613,790       4,394,413
     Depreciation and amortization                                            515,369         270,754
                                                                         ------------    ------------

TOTAL OPERATING EXPENSES                                                    5,917,204       7,901,630
                                                                         ----------------------------

LOSS FROM OPERATIONS                                                       (6,033,791)     (7,750,398)

INTEREST EXPENSE                                                               84,870       1,606,788
                                                                         ------------    ------------

LOSS BEFORE EXTRAORDINARY ITEM                                             (6,118,661)     (9,357,186)

EXTRAORDINARY ITEM - loss on extinguishment of debt                          (765,000)             --
                                                                         ------------    ------------

NET LOSS BEFORE TAX BENEFIT                                                (6,883,661)     (9,357,186)

INCOME TAX BENEFIT                                                            124,575              --
                                                                         ------------    ------------

NET LOSS                                                                   (6,759,086)     (9,357,186)

PREFERRED STOCK DIVIDEND                                                     (221,344)             --
                                                                         ------------    ------------

NET LOSS APPLICABLE TO COMMON STOCK                                      $ (6,980,430)   $ (9,357,186)
                                                                         ============    ============

NET LOSS PER SHARE - BASIC AND DILUTED
    Loss before extraordinary item                                       $      (0.28)   $      (0.48)
    Extraordinary item                                                          (0.03)             --
                                                                         ------------    ------------
NET LOSS PER SHARE                                                       $      (0.31)   $      (0.48)
                                                                         ============    ============

Weighted Average Shares Used in Computation - Basic and diluted            22,573,165      19,605,250
                                                                         ============    ============
</TABLE>

                 See notes to consolidated financial statements.


                                       F-3

<PAGE>

                           LIGHT MANAGEMENT GROUP, INC

       CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)

<TABLE>
<CAPTION>

                                               Preferred Stock              Common Stock           Additional
                                         -------------------------------------------------------    Paid in         Deferred
                                              Shares        Amount       Shares         Amount      Capital       Compensation
                                         ---------------------------------------------------------------------------------------
<S>                                           <C>       <C>           <C>           <C>          <C>              <C>
 Balance, December 31, 1999                        -       $      -   17,096,672    $     1,710  $   1,708,655    $          -

 Signing bonuses given to officers
  and employees                                                          383,000             38      1,008,886               -

 Shares issued for acquisition of research
 and development from 1028177 Ontario Ltd.                               360,000             36        629,964               -

 Shares issued for acquisition of LSS UK                                 897,600             90        646,334               -

 Shares issued for consulting services                                   755,000             76      1,803,925               -

 Shares issued for acquisition of
    Exclusive Advertising Inc.                                           500,000             50      2,499,950               -

 Shares issued for legal services                                        111,500             11        236,997               -

 Exercise of options                                                     482,538             48        373,760               -

 Options granted: excess of market price
    over exercise price                                                        -              -      2,128,000               -

 Stock rights issued to Omega Financial
 Corp. for loan to Company                                                     -              -      1,439,596               -

 Employees' deferred compensation                                              -              -              -        (721,074)

 Foreign currency translation adjustment                                       -              -              -               -

 Net Loss                                                                      -              -              -               -

                                         ---------------------------------------------------------------------------------------
 Balance, December 31, 2000                                           20,586,310          2,059     12,476,067        (721,074)


 Conversion of related party loan to
 common stock                                                          1,855,072            185      1,599,815

 Conversion of related party loan to
 preferred stock                              2,766,798         277                                  3,199,723

 Shares issued for services and interest                                 648,000             65        631,855         (45,640)

 Signing bonuses given to officers
 and employees                                                            83,000              8         50,982          (7,280)

 Sale of shares for cash                                                 649,186             65        132,146

 Cancellation of shares                                                   (2,573)             -

 Cancellation of debt                                                                                  765,000

 Amortization of deferred compensation                                                                                 220,370

 Foreign currency translation adjustment

 Net loss

                                         ---------------------------------------------------------------------------------------
 Balance, December 31, 2001                   2,766,798    $    277   23,818,995    $     2,382  $  18,855,588    $   (553,624)
                                         =======================================================================================

<PAGE>
<CAPTION>

                                                Other                          Total
                                            Comprehensive    Accumulated   Stockholders's   Comprehensive
                                                Loss           Deficit    Equity (Deficit)      Loss
                                             ------------------------------------------------------------
<S>                                          <C>           <C>              <C>             <C>
 Balance, December 31, 1999                  $         -   $  (2,285,029)   $   (574,664)   $          -

 Signing bonuses given to officers
  and employees                                        -               -       1,008,924               -

 Shares issued for acquisition of research
 and development from 1028177 Ontario Ltd.             -               -         630,000               -

 Shares issued for acquisition of LSS UK               -               -         646,424               -

 Shares issued for consulting services                 -               -       1,804,001               -

 Shares issued for acquisition of
    Exclusive Advertising Inc.                         -               -       2,500,000               -

 Shares issued for legal services                      -               -         237,008               -

 Exercise of options                                   -               -         373,808               -

 Options granted: excess of market price
    over exercise price                                -               -       2,128,000               -

 Stock rights issued to Omega Financial
 Corp. for loan to Company                             -               -       1,439,596               -

 Employees' deferred compensation                      -               -        (721,074)              -

 Foreign currency translation adjustment         (39,293)              -         (39,293)        (39,293)

 Net Loss                                              -      (9,357,186)     (9,357,186)     (9,357,186)

                                             ------------------------------------------------------------
 Balance, December 31, 2000                      (39,293)    (11,642,215)         75,544      (9,396,479)
                                                                                            =============

 Conversion of related party loan to
 common stock                                                                  1,600,000

 Conversion of related party loan to
 preferred stock                                                               3,200,000

 Shares issued for services and interest                                         586,280

 Signing bonuses given to officers
 and employees                                                                    43,710

 Sale of shares for cash                                                         132,211

 Cancellation of shares                                                                -

 Cancellation of debt                                                            765,000

 Amortization of deferred compensation                                           220,370

 Foreign currency translation adjustment         (83,575)                        (83,575)        (83,575)

 Net loss                                                     (6,759,086)     (6,759,086)     (6,759,086)

                                             ------------------------------------------------------------
 Balance, December 31, 2001                  $  (122,868)  $ (18,401,301)   $   (219,546)   $ (6,842,661)
                                             ============================================================

</TABLE>

                 See notes to consolidated financial statements.


                                      F-4
<PAGE>

                          LIGHT MANAGEMENT GROUP, INC
                     CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>

                                                                                                     Years Ended
                                                                                         --------------------------------
                                                                                            Dec. 31            Dec. 31
                                                                                         --------------------------------
                                                                                              2001               2000
                                                                                         --------------     -------------
<S>                                                                                       <C>                <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net loss                                                                               $(6,759,086)       $(9,357,186)
   Adjustments to reconcile net loss to net cash used in operating activities:
     Depreciation and amortization                                                            515,369            270,754
     Extraordinary item - loss on cancellation of debt                                        765,000                  -
     Impairement in goodwill                                                                1,303,790                  -
     Write down of inventories                                                                244,000                  -
     Stock issued for salaries                                                                 43,710          1,008,924
     Stock issued for legal services                                                                -            237,008
     Stock issued for consulting services                                                      91,280          1,020,481
     Stock issued for investor relation services                                              478,800                  -
     Stock issued for interest expense                                                         16,200                  -
     Stock rights issued to Omega Financial Corp.                                                   -          1,439,596
     Acquisition of research and development with stock                                             -            630,000
     Options granted: excess of market price over exercise price                                    -          2,128,000

   Changes in assets and liabilities (net of effect of acquisitions):
     Accounts receivable                                                                      619,833            680,305
     Inventories                                                                              430,508           (334,508)
     Prepaid and other current assets                                                         (40,702)           743,086
     Deferred compensation                                                                    220,370                  -
     Accounts payable                                                                         670,831           (373,531)
     Accrued expenses                                                                         657,721           (401,852)
                                                                                          -----------        -----------
NET CASH USED IN OPERATING ACTIVITIES                                                        (742,376)        (2,308,923)
                                                                                          -----------        -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
     Purchase of property, plant and equipment                                                (66,515)          (263,480)
     Purchase of patents                                                                            -           (700,000)
                                                                                          -----------        -----------
NET CASH USED IN INVESTING ACTIVITIES                                                         (66,515)          (963,480)
                                                                                          -----------        -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
     Proceeds from (repayment of) note payable - bank                                          12,852            (22,630)
     Proceeds from loans payable - related parties                                            717,167          2,976,461
     Proceeds from exercise of stock options                                                        -            373,808
     Sale of common stock                                                                     132,211                  -
                                                                                          -----------        -----------
NET CASH PROVIDED BY FINANCING ACTIVITIES                                                     862,230          3,327,639
                                                                                          -----------        -----------

EFFECT OF EXCHANGE RATE CHANGES ON CASH                                                       (83,575)                 -

NET INCREASE (DECREASE) IN CASH                                                               (30,236)            55,236

CASH -  Beginning of year                                                                      55,236                  -
                                                                                          -----------        -----------
CASH  - End of year                                                                       $    25,000        $    55,236
                                                                                          ===========        ===========
SUPPLEMENTAL INFORMATION OF CASH FLOW INFORMATION:
   Cash paid for interest                                                                 $    68,670        $    17,190
                                                                                          ===========        ===========
   Cash paid for taxes                                                                    $         -        $         -
                                                                                          ===========        ===========
NON-CASH FINANCING AND INVESTING ACTIVITIES:
 Related party debt converted to preferred stock                                          $ 3,200,000        $         -
                                                                                          ===========        ===========
 Related party debt converted to common stock                                             $ 1,600,000        $         -
                                                                                          ===========        ===========
 Shares issued for acquisition of LSS UK                                                  $         -        $   646,424
                                                                                          ===========        ===========
 Shares issued for acquisition of Exclusive Advertising, Inc.                             $         -        $ 2,500,000
                                                                                          ===========        ===========

</TABLE>

                 See notes to consolidated financial statements


                                      F-5

<PAGE>


                           LIGHT MANAGEMENT GROUP INC.

                          NOTES TO FINANCIAL STATEMENTS

                     YEARS ENDED DECEMBER 31, 2001 AND 2000

1.   ORGANIZATION AND SIGNIFICANT EVENTS

     Triton  Acquisition  Corporation  (formerly Triton Asset Management,  Inc.)
     ("Triton") was originally  incorporated  on March 4, 1985 under the laws of
     the State of Florida  as Vyquest  International  Capital,  Inc.  Triton was
     formed  for  the  purpose  of  seeking,  investigating,  and if  warranted,
     acquiring an interest in or merging with a suitable on-going entity.

     In 1989, Triton changed its corporate name to Triton Asset Management, Inc.
     In  1991,  concurrent  with  a  pending  transaction,  Triton  changed  its
     corporate name to Bio-Chem  Technology,  Inc. This pending  transaction did
     not consummate and, in 1993, Triton failed to file the required reports and
     pay the requisite  fees to the State of Florida and its  corporate  charter
     was revoked. In September 1997, Triton reinstated its corporate charter and
     changed its corporate name back to Triton Asset Management, Inc.

     On  December  28,  1998,  Triton  changed its State of  Incorporation  from
     Florida  to Nevada by means of a merger  with and into  Triton  Acquisition
     Corporation,  a  Nevada  Corporation  formed  solely  for  the  purpose  of
     effecting the reincorporation and on February 23, 2000, changed its name to
     Light  Management  Group,  Inc.  ("Light").   Light,  through  wholly-owned
     subsidiaries, develops new applications for optical and light technologies.
     Light is authorized to issue 100,000,000  shares of $.0001 par value common
     stock.

     On May 13 1999, Light acquired 100% of the outstanding stock of Laser Shows
     Systems   Canada  and  its  97%  owned   subsidiary   Laser  Shows  Systems
     International.

     On January 14, 2000,  Light acquired all the issued and outstanding  shares
     of 1028177 Ontario Limited.

     On  March  24,  2000,  Light  acquired  all of the  outstanding  shares  of
     Exclusive  Advertising  Inc.,  a  company  incorporated  under  the laws of
     Ontario, Canada.

     On March 29, 2000,  Light acquired all of the  outstanding  shares of Laser
     Show  Systems  Investment,  Ltd. UK, a company  incorporated  in the United
     Kingdom), ("LSS UK").

     In addition,  the Company incorporated three companies,  which to date have
     been inactive,  LMGR Switch  Technologies,  Inc., Optico Luz S.A., Inc. and
     LSSI (Russia),  a company owned 99% by the Company.  LSSI Russia was formed
     to facilitate the conduct of business in Russia.  Optico Luz S.A., Inc. was
     formed to facilitate the conduct of business in South America.

     Hereinafter,  all of the aforementioned companies are collectively referred
     to as the "Company".


                                       F-6
<PAGE>

2.   SUMMARY OF Significant Accounting Policies

     a.   Basis of  Presentation - The  accompanying  financial  statements have
          been prepared  assuming the Company will continue as a going  concern.
          The Company has incurred net losses of  approximately  $6,759,000  and
          $9,360,000   for  the  years  ended   December   31,  2001  and  2000,
          respectively.   Additionally,   the  Company  had  a  working  capital
          deficiency of  approximately  $2,038,000  at December 31, 2001,  which
          creates substantial doubt about the Company's ability to continue as a
          going  concern.  The  recovery  of assets and  continuation  of future
          operations  are  dependent  upon  the  Company's   ability  to  obtain
          additional  debt or  equity  financing  and its  ability  to  generate
          revenues  sufficient to continue pursuing its business  purposes.  The
          Company is actively  pursuing  financing to fund future operations and
          acquisitions.  The accompanying  consolidated  financial statements do
          not include any adjustments that might be necessary should the Company
          be unable to continue as a going concern.

     b.   Use  of  Estimates  -The   preparation  of  financial   statements  in
          conformity  with generally  accepted  accounting  principles  requires
          management to make estimates and assumptions  that effect the reported
          amounts of assets and liabilities and disclosure of contingent  assets
          and  liabilities  at the  date  of the  financial  statements  and the
          reported amounts of revenue and expenses during the reporting  period.
          Actual results could differ from those estimates.

     c.   Basis of Consolidation - The Consolidated financial statements include
          the accounts of the Company and its wholly owned  subsidiaries,  Laser
          Shows Systems  International,  Inc., Laser Show Systems (Canada) Ltd.,
          Exclusive  Advertising,  Inc. (all Canadian  Corporations),  and Laser
          Shows  Systems  Investments,   Inc.  (a  United  Kingdom  corporation)
          collectively   referred   to  as  the   "Company."   All   significant
          intercompany   transactions  and  balances  have  been  eliminated  in
          consolidation.

     d.   Goodwill - Goodwill  represents  the  aggregate  excess of the cost of
          companies acquired over the fair value of their net assets at dates of
          acquisition and it is being amortized on the straight-line method over
          15 years.

     e.   Amortization  of Patents - The  patents are being  amortized  over its
          expected useful life of 4 years.

     f.   Net loss per  share - Basic  loss per  share  is  computed  using  the
          weighted average number of shares of outstanding common stock. Diluted
          per share amounts where applicable also include the effect of dilutive
          common stock equivalents from the assumed exercise of stock options.

     g.   Cash and cash  equivalents - For the purposes of the statement of cash
          flows,  the  Company  considers  all highly  liquid  debt  instruments
          purchases  with  a  maturity  of  three  months  or  less  to be  cash
          equivalents.


                                      F-7
<PAGE>

     h.   Inventories - Inventories are recorded at the lower of cost or market.
          Cost is determined using the first-in first-out method.

     i.   Depreciation - Fixed assets are depreciated on the  straight-line  and
          accelerated  methods  over the  estimated  useful lives of the related
          assets, which ranges from 3 to 5 years.

     j.   Recognition of Revenue - Income from sales of goods is recognized when
          the orders are completed and shipped,  provided that collection of the
          resulting  receivable is reasonably  assured.  In circumstances  where
          there is significant  uncertainty to reasonably estimate the extent of
          payments to be  received,  the Company uses the cost  recovery  method
          whereby revenue is recorded only when collection occurs.

     k.   Advertising - The Company expenses  advertising costs at the time that
          advertising  begins  to  run.  Advertising  costs  were  $428,034  and
          $600,387 for the years ended December 31, 2001 and 2000, respectively.

     l.   Research  and  Development  Expenditures  - Research  and  development
          expenditures  are  charged  to income as  incurred.  Such  costs  were
          $647,377 and $279,156 for the years ended  December 31, 2001 and 2000,
          respectively.

     m.   Comprehensive  Income - The Company has adopted Statement of Financial
          Accounting  Standards  No. 130 ("SFAS 130")  "Reporting  Comprehensive
          Income",  which  establishes  standards  for  reporting and display of
          comprehensive   income,  its  components  and  accumulated   balances.
          Comprehensive  income is  defined  to  include  all  changes in equity
          except those resulting from investments by owners and distributions to
          owners. Among other disclosures,  SFAS No. 130 requires that all items
          that are required to be recognized under current accounting  standards
          as a component of  comprehensive  income be reported in the  financial
          statements  that  are  displayed  with the  same  prominence  as other
          financial  statements.   Comprehensive  income  is  displayed  in  the
          statement  of  stockholders'  equity  and in the  balance  sheet  as a
          component of stockholders' equity.

     n.   Stock-based  Compensation - The Company  accounts for all transactions
          under which employees,  officers and directors receive shares of stock
          or  options  in the  Company  in  accordance  with the  provisions  of
          Accounting  Principles  Board  Opinion No. 25,  "Accounting  for Stock
          Issued to Employees,"  ("APB 25"), under which no compensation cost is
          recognized.  The Company  adopted  Statements of Financial  Accounting
          Standards  No. 123  ("SFAS  No.  123"),  "Accounting  for  Stock-Based
          Compensation," for disclosure  purposes,  and has adopted the proforma
          disclosure requirements of SFAS 123. Accordingly,  no compensation has
          been  recognized  in the  results  of  operations  for  the  employee,
          officers and directors  stock plan other than for options issued at an
          exercise  price below market price,  to  non-employees  for consulting
          services or to debt providers that had stock or options attached.


                                      F-8
<PAGE>

     o.   Foreign Currency  Translation - Assets and liabilities of subsidiaries
          operating in foreign  countries are translated into U.S. dollars using
          both  the  exchange  rate  in  effect  at the  balance  sheet  date or
          historical  rate, as applicable.  Results of operations are translated
          using the average exchange rates  prevailing  throughout the year. The
          effects of exchange rate fluctuations on translating  foreign currency
          assets and liabilities into U.S. dollars are included in stockholders'
          equity (Accumulated other comprehensive  loss), while gains and losses
          resulting  from  foreign   currency   transactions   are  included  in
          operations.

     p.   Income  Taxes - The  Company  accounts  for  income  taxes  under  the
          provisions  of Statement of Financial  Accounting  Standards  No. 109,
          "Accounting  for Income  Taxes" (SFAS No. 109).  SFAS No. 109 requires
          the  recognition of deferred tax assets and  liabilities  for both the
          expected  impact of differences  between the financial  statements and
          tax basis of assets and  liabilities,  and for the expected future tax
          benefit to be derived  from tax loss and tax  credit  carry  forwards.
          SFAS No. 109  additionally  requires the  establishment of a valuation
          allowance to reflect the  likelihood  of  realization  of deferred tax
          assets.

     q.   Accounting  for  Long-Lived  Assets - The Company  reviews  long-lived
          assets for impairment  whenever  circumstances  and situations  change
          such that there is an indication that the carrying  amounts may not be
          recovered.  At December 31, 2001, the Company  believes that there has
          been no impairment of its  long-lived  assets except for its goodwill,
          which has been written down to $1,000,000.

     r.   Fair Value of Financial Instruments - The carrying amounts reported in
          the balance sheet for cash,  trade  receivables,  accounts payable and
          accrued  expenses  approximate  fair  value  based  on the  short-term
          maturity of these  instruments.  The carrying  amount of the Company's
          borrowings  approximate  fair  value  based on the  prevailing  market
          interest rates.

     s.   New Accounting Standards

          (i)  In July, 2001, the Financial  Standards Board issued Statement of
               Financial   Accounting   Standard   ("SFAS  No.  141)   "Business
               Combinations"  and SFAS No. 142 "Goodwill and Intangible  Assets"
               ("SFAS  No.  142").  SFAS No.  141  requires  that  all  business
               combinations initiated after June 30, 2001 be accounted for using
               purchase   method  of   accounting   and  prohibits  the  use  of
               pooling-of-interest  method for such  transactions.  SFAS No. 142
               applies to all  goodwill  and  intangible  assets  acquired  in a
               business  combination.  Under  the new  standard,  all  goodwill,
               including  goodwill  acquired  before initial  application of the
               standard  should  not be  amortized  but  should  be  tested  for
               impairment  at least  annually at the  reporting  unit level,  as
               defined in the  standard.  Intangible  assets other than goodwill
               should be  amortized  over their  useful  lives and  reviewed for
               impairment in  accordance  with SFAS No. 121. The new standard is
               effective  for fiscal years  beginning  after  December 15, 2001.
               During the year ended  December  31, 2001,  the Company  expensed
               approximately $171,000 for the amortization of goodwill.


                                      F-9
<PAGE>

          (ii) In August 2001, the FASB issued Statement of Financial Accounting
               Standards No. 144 ("SFAS 144"), "accounting for the Impairment or
               Disposal of Long-lived Assets".  SFAS 144 superceded Statement of
               Financial  Accounting  Standards  No.  121,  "accounting  for the
               Impairment of Long-lived Assets and Assets to be Disposed of" and
               the accounting and reporting provisions of Accounting  Principles
               Board  Opinion No. 30,  "reporting  the Results of  Operations  -
               Reporting the Effects of Disposal of a Segment of a Business, and
               Extraordinary,  Unusual  and  Infrequently  Occurring  Events and
               Transaction".  SFAS 144 also amends Accounting  Research Bulletin
               No. 51,  "Consolidated  Financial  Statements,"  to eliminate the
               exception to consolidation  for a subsidiary for which control is
               likely  to be  temporary.  The  provision  of  SFAS  144  will be
               effective for fiscal years beginning after December 15, 2001. The
               Company has not yet  determined  the effect SFAS 144 will have on
               its  financial  position  or  results  of  operations  in  future
               periods.

3.   INVENTORIES

     Inventories consist of the following at December 31, 2001:

               Raw Material              $ 39,000
               Finished Goods             261,000
                                     --------------
                                         $300,000
                                     ==============

     The  Company  believes  that at December  31, 2001 the market  value of the
     inventories are lower than cost. Accordingly,  the inventories were written
     down by $244,000 and reflected as charge in cost of sales.

4.   PROPERTY AND EQUIPMENT

     Property and equipment consists of the following at December 31, 2001:

                                          Estimated
                                         Useful life     Amount
                                         -----------     ------
           Equipment                     5 years       $ 263,715
           Furniture and fixtures        5 years          39,351
           Leasehold improvements        5 years          85,107
           Computers                     3 years          74,447
           Automobiles                   3 years           4,831
                                                        ---------
                                                          467,451
                Less: accumulated depreciation            176,357
                                                        ---------
                                                       $  291,094
                                                        =========


                                      F-10
<PAGE>

5.   GOODWILL

     Goodwill  represents the excess of the cost of companies  acquired over the
     fair value of their net assets at dates of acquisition.  On March 24, 2000,
     the  Company   acquired  all  of  the   outstanding   shares  of  Exclusive
     Advertising,  Inc. for 500,000 shares of the Company's  common stock valued
     at $5 per share or  $2,500,000.  On March 29,  2000 all of the  outstanding
     shares of stock of Laser  Systems,  Inc. UK was  acquired  for $700,000 and
     897,600  shares of the Company's  stock valued at $646,424 for an aggregate
     purchase price of $1,346,424.  All of the above  acquisitions were recorded
     under the purchase method of accounting.

     At December  31, 2001,  the Company  evaluated  its carrying  value for the
     goodwill that resulted from the acquisitions of above companies. Management
     has determined  that it could not reasonably  estimate  expected cash flows
     from future  revenues to  substantiate  such carrying  value and determined
     that an impairment in value had occurred.  Therefore,  an impairment charge
     of approximately $1,300,000 was taken by the Company at December 31, 2001.

6.   NOTES PAYABLE - BANK LOANS

     At  December  31,  2001,  the  Company  has a bank loan  requiring  monthly
     payments of $2,356 plus  interest at 2.5% above prime (6.5% at December 31,
     2001), maturing in 2004, secured by certain equipment. In addition, in July
     2001,  the Company  obtained a $50,000  revolving line of credit payable on
     demand  bearing  interest at 1.0% above prime (5.75% at December 31, 2001),
     from a bank secured by a $25,000 certificate of deposit. As of December 31,
     2001,  approximately  $49,000 is  outstanding  under  such line.  The notes
     mature as follows:

            Year Ending
            December 31                            Amount
            -----------                         ------------

                2002                            $  76,996
                2003                               28,274
                2004                               28,273
                                                ---------
                                                  133,543
            Less: current portion                  76,996
                                                ---------
            Long-term balance                   $  56,547
                                                =========

7.   RELATED PARTY TRANSACTIONS

     a.   DUE TO OFFICERS

          Due to officers  on the  accompanying  balance  sheet  represents  the
          balance  owed to two  officers  of the  Company  for  advances  to and
          expenses paid on behalf of the Company.  Such balance is interest-free
          and payable upon demand.


                                      F-11
<PAGE>

     b.   NOTES PAYABLE - RELATED PARTY

          The  balance  of $216,989  is due to a  principal  shareholder  of the
          Company,  which is a corporation.  The Chief Executive  Officer of the
          Company is also a shareholder of the lending company.  Such balance is
          evidenced  by notes  bearing  interest  at 4% per annum.  The  balance
          payable at  December  31, 2000 was  $4,853,935.  In March,  2001,  the
          Company settled  $3,200,000 of its loans payable by issuing  2,766,798
          shares of Series A cumulative  Preferred Stock convertible into common
          stock on a  one-for-one  basis.  Furthermore,  the Company  settled an
          additional  $1,600,000  of its loans  payable to by issuing  1,855,072
          shares of common stock valued at $2,365,000. As a result of the latter
          transaction,  the   Company   recorded   an   extraordinary   loss  on
          extinguishment of debt of $765,000.

8.   STOCK OPTIONS

     During the year ended  December 31,  2000,  the Company  granted  1,474,285
     options to the Company's Chief Executive  Officer to purchase the Company's
     common stock at exercise  prices  ranging from $.25 to $2.73.  Such options
     vest upon grant and expire in five years.  The Company recorded a charge to
     earnings of $2,128,000 in connection with such grants for the excess of the
     market price of the  Company's  stock at the date of grant and the exercise
     price. In addition,  27,650 options were granted to the Company's President
     at an exercise price of $2.73.

     During the year ended  December  31,  2001,  the  Company  granted  980,892
     options to two  officers of the Company to purchase  the  Company's  common
     stock at weighted average exercise prices ranging from $0.90 to $1.99. Such
     options vest upon grant and expire in three years.

                                                         Weighted
                                                          average
                                         Options       Exercise price
                                       -------------   ---------------
      Balance at January 1, 2000            -          $     -
      Granted                             1,501,935              1.68
      Exercised                           (482,538)              0.77
                                       -------------   ---------------
      Balance at December 31, 2000        1,019,387              2.11
      Granted                               980,892              1.43
      Exercised                             -                -
                                       -------------   ---------------
      Balance at December 31, 2001        2,000,279    $         1.78
                                       =============   ===============

     The following is  additional  information  related to the  Company's  stock
     options as of December 31, 2001.

      Exercise               Weighted Average
        Price    Outstanding     Remaining      Weighted Average   Exercisable
        Range      Options    Contractual Life   Exercise Price      Options
     ---------------------------------------------------------------------------
     $0.90-2.73   2,000,279      2.82 years          $1.78          2,002,097



                                      F-12
<PAGE>

     For  disclosure  purposes  the fair  value of each  stock  option  grant is
     estimated on the date of grant using the Black-Scholes option-pricing model
     with the  following  weighted  average  assumptions  used for stock options
     granted for the year ended December 31, 2001 and 2000.

                                                 2001               2000
                                                 ----               ----

         Annual dividends                   $    0.00         $     0.00
         Expected volatility                      159%               398%
         Risk-free interest rate                  3.1%               5.7%
         Expected option lives                 3 Years           3 Years

     The Weighted average fair value of the stock options granted was $1,153,000
     and   $4,653,000   for  the  years  ended   December  31,  2001  and  2000,
     respectively.

     Had compensation cost for the Company's two option plans been determined in
     accordance  with SFAS 123, the  Company's net loss and loss per share would
     have been increased to the pro forma amounts  indicated  below for the year
     ended December 31, 2001 and 2000.

                                                         2001         2000
                                                     --------------------------
           Net loss:                  As reported $  (6,759,086)   (9,357,186)
                                      Pro forma   $  (7,912,353)  (11,712,384)
           Net loss per share:
              Basic and diluted       As reported $       (0.31)        (0.48)
              Basic and diluted       Pro forma   $       (0.35)        (0.60)

9.   COMMITMENTS

     a)   The  Company  has a  five-year  employment  agreement  with its  Chief
          Executive  Officer,  which  commenced  May 1, 1999,  and  provided for
          annual compensation of $250,000. Beginning January 1, 2001, the annual
          compensation was increased to $500,000. During the year ended December
          31, 2001,  the Company  paid  $250,000 and the balance of $250,000 has
          been  accrued.  In  addition,  such officer is granted on January 1 of
          each year,  options  equivalent  to three times the  officer's  annual
          salary  divided by 125% of the closing price of the  Company's  common
          stock on December 31 of the prior year.  Such  options vest upon grant
          and expire in two years.

     b)   The Company has an  employment  agreement  with its  President,  which
          commenced  in July,  1999,  and provided  for annual  compensation  of
          $107,000.  Beginning  August 1,  2001,  the  annual  compensation  was
          increased  to $160,000.  In  addition,  such officer is granted on the
          anniversary  of the  agreement,  options  equivalent  to two times the
          officer's  annual salary divided by the closing price of the Company's
          common stock on the close of business on such date.

     c)   The  Company  subleases  its  office  from  a  related  company  on  a
          month-to-month basis and leases its research and development premises,
          various  computer  equipments  and  two  automobiles  under  operating
          leases. The Company also leases office space in Atlanta,  Georgia. The
          lease  commenced  on March  1,  2001,  with  total  lease  commitments
          aggregating   $351,201   through  February  2006.  The  minimum  lease
          commitment  under these operating lease agreements for the duration of
          the lease are as follows:


                                      F-13
<PAGE>

                            Years ended
                           December 31,            Amount
                     --------------------------    --------
                               2002              $  83,590
                               2003                 80,031
                               2004                 82,620
                               2005                 77,105
                               2006                 12,645

10.  INCOME TAXES

     The Company has  experienced  losses since the year ended December 31, 1996
     and any resultant  deferred tax asset from such losses would be offset by a
     corresponding  valuation allowance, as the realization of such asset cannot
     be predicted at this time. A  significant  portion of these carry  forwards
     may be  subject  to  limitations  on  annual  utilization  due  to  "equity
     structure shifts" or "owner shifts" involving "5 percent  stockholders" (as
     defined in the Internal  Revenue Code),  which may result in more than a 50
     percent change in ownership.

     The income tax benefit for year ended  December  31, 2001 and 2000  differs
     from the amount computed by applying the statutory  federal income tax rate
     to loss before income taxes is as follows:

                                                          2001         2000
                                                       -----------   -----------
       Income tax benefit computed at statutory rate  $ 2,340,000   $ 3,181,000
       Deductions for which no benefit derived         (2,340,000)   (3,181,000)
       Refundable credit for research and development     125,000        -
                                                       -----------   -----------
       Income tax benefit                             $   125,000   $    -
                                                       ===========   ===========

11.  NON-CASH SALARIES AND SERVICES

a)   2001
     ----
     During the year ended December 31, 2001, the Company issued shares of stock
     to various  employees and consultants.  An aggregate of 731,000 shares were
     issued for  approximately  $683,000 of salaries,  signing bonus,  interest,
     consulting and investor relations services.  Certain of these costs are for
     services to be provided in the future and accordingly, prepaid compensation
     of  approximately  $53,000 is  reflected  as a  reduction  of equity in the
     accompanying financial statements.

b)   2000
     ----

     During the year ended December 31, 2000, the Company issued shares of stock
     to various employees and consultants. An aggregate of 1,249,500 shares were
     issued for  approximately  $3,050,000  of  salaries,  consulting  and legal
     services.  Certain of these  costs are for  services  to be provided in the
     future and accordingly,  prepaid compensation of approximately $721,000 was
     reflected as a reduction of equity in the accompanying financial statements
     of which  approximately  $220,000  was  amortized  during  the  year  ended
     December 31, 2001. In addition, the Company recorded $2,128,000 in non-cash
     compensation  for the  difference  in the market price at the date of grant
     and the exercise price of options granted to the Company's Chief


                                      F-14
<PAGE>

     Executive  Officer.   Total  non-cash  salaries  and  services   aggregated
     $4,394,413 in the accompanying statement of operations.

13.  MAJOR CUSTOMER

     During the year ended December 31, 2001, one customer  accounted for 43% of
     the Company's sales. Such customer accounted for 48% of the Company's sales
     in the year ended December 31, 2000.

14.  SEGMENT AND GEOGRAPHIC INFORMATION

     The Company views its operations as principally  two segments,  advertising
     and  sales of laser and  related  lighting  equipment.  All  revenues  were
     derived from Canadian  entities.  The segments share a common workforce and
     office   headquarters,   which  preclude  an  allocation  of  all  overhead
     components.   Overhead  items  that  are  specifically  identifiable  to  a
     particular  segment  are applied to such  segment.  The  Company's  segment
     information for the years ended December 31, 2001 and 2000 are as follows:

<TABLE>
<CAPTION>
                                                               Sale of
                                                                lasers
                                                                 and
                                                               related
                                                              lighting
                                          Advertising         equipment       Corporate       Consolidated
                                          -----------         ---------       ---------       ----------
<S>                                        <C>                <C>              <C>            <C>
      Year ended December 31, 2001
        Sales to unaffiliated customers    $    624,544       $  472,129       $    -         $ 1,096,673
        Interest Expense                          8,893           28,400           47,577          84,870
        Depreciation and amortization            39,958           42,415          432,996         515,369
        Segment assets                          168,981          526,131        1,802,770       2,497,882
        Long lived asset expenditures                 -           31,458           35,057          66,515
        Segment loss                           (52,258)         (474,707)      (6,232,121)     (6,759,086)

      Year ended December 31, 2000
        Sales to unaffiliated customers    $    368,452       $  343,178       $    -         $   711,630
        Interest Expense                         12,928           17,590        1,576,270       1,606,788
        Depreciation and amortization            31,060           36,715          202,979         270,754
        Segment assets                          259,690         4,949,960         324,751       5,534,401
        Long lived asset expenditures             1,320          262,160                -         263,480
        Segment loss                          (129,918)       (1,076,525)      (8,150,743)     (9,357,186)

</TABLE>

15.  STOCK PURCHASE AGREEMENT

     On July 25, 2001, the Company  entered into an agreement to purchase 51% of
     the stock of a company for  $5,000,000.  The purchase price will consist of
     cash for  $2,500,0000  and the balance  from the  issuance of shares of the
     Company's common stock. The transaction has not yet been closed.


                                      F-15
<PAGE>

16.  CAPITAL CONTRIBUTION

     During April 2001, an  individual  and others  acknowledged  to the Company
     that they were in violation of certain  securities  laws  involving  "Short
     Swing  Profits"  and have  agreed to return  to the  Company  approximately
     $152,000 which will be recorded as a contribution of capital to the Company
     when received. As of December 31, 2001, no action has yet been taken.


                                      F-16

<PAGE>

ITEM 8.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
          FINANCIAL DISCLOSURE

On December 11, 2000, the client-auditor relationship between the Company and
James E. Slayton, C.P.A. ("Slayton") ceased and the Company engaged Feldman,
Sherb & Co., P.C. ("Feldman") as its independent accountants for the fiscal year
ending December 31, 2000. The Company decided to change auditors because it
sought greater international experience than that provided by Slayton. Slayton's
reports on the consolidated financial statements of the Company for fiscal year
1999 did not contain any adverse opinion or a disclaimer of opinion, and was not
qualified or modified as to uncertainty, audit scope or accounting principles.
During fiscal year 1999 and the subsequent interim period preceding the
dismissal of Slayton, there were no disagreements with Slayton regarding any
matters of accounting principles or practices, financial statement disclosure or
auditing scope or procedure, which disagreements, if not resolved to the
satisfaction of Slayton, would have caused Slayton to make reference to the
subject matter of the disagreements in connection with its report. As reflected
in the Company's report on Form 8-K for the event dated December 11, 2000, the
Company provided Slayton with a copy of this disclosure and expected him to
furnish a letter addressed to the Securities and Exchange Commission stating
whether he agrees with the statements made herein and, if not, stating the
respects in which he does not agree.

                                    PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
        WITH SECTION 16(A) OF THE EXCHANGE ACT

The  information  called for by this Item shall be set forth  under the  caption
"Directors,  Executive Officers,  Promoters and Control Persons; Compliance with
Section 16(a) of the Exchange Act" in Item 9 of the Company's  amendment to this
Form  10-KSB to be filed  with  respect to this  annual  report on or before the
120th day after the end of the Company's fiscal year ended December 31, 2001 and
is incorporated herein by reference.

ITEM 10. EXECUTIVE COMPENSATION

The  information  called for by this Item shall be set forth  under the  caption
"Executive  Compensation"  in Item 10 of the  Company's  amendment  to this Form
10-KSB to be filed with respect to this annual report on or before the 120th day
after the end of the  Company's  fiscal  year  ended  December  31,  2001 and is
incorporated herein by reference.


                                       11
<PAGE>

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The  information  called for by this Item shall be set forth  under the  caption
"Security  Ownership of Certain  Beneficial Owners and Management" in Item 11 of
the  Company's  amendment  to this Form 10-KSB to be filed with  respect to this
annual report on or before the 120th day after the end of the  Company's  fiscal
year ended December 31, 2001 and is incorporated herein by reference.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The  information  called for by this Item shall be set forth  under the  caption
"Certain  Relationships  and Related  Transactions"  in Item 12 of the Company's
amendment to this Form 10-KSB to be filed with respect to this annual  report on
or  before  the  120th day after  the end of the  Company's  fiscal  year  ended
December 31, 2001 and is incorporated herein by reference.


                                       12
<PAGE>

ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K

(a)  Index to Exhibits.

              NUMBER  DESCRIPTION

               10.1   Settlement and Waiver Agreement dated March 1, 2001
                      between the Company and Omega Holdings, Bahamas, Ltd. in
                      the aggregate principal amount of $3.2 million.*
               10.2   Settlement and Waiver Agreement dated March 1, 2001
                      between the Company and Omega Holdings, Bahamas, Ltd. in
                      the aggregate principal amount of $1.6 million.*
               10.3   Settlement Agreement dated December 14, 2000 between the
                      Company and Barrington Simon*
               10.4   Employment Agreement dated July 19, 1999 between the
                      Company and Dr. Donald Iwacha.*
               10.5   Employment Agreement dated May 1, 1999 between the Company
                      and Barrington Simon.*

* Filed herewith.

(b)  Reports on Form 8-K.

                   (1) A Report on Form 8-K (Item 9) was filed on February 15,
              2002 concerning revenue projections found in a recent analyst's
              report on the Company.


                                       13
<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, this 19th day of April, 2002.

                                                Light Management Group, Inc.



                                                By:/s/ Donald Iwacha
                                                   -----------------------------
                                                Name:    Dr. Donald Iwacha
                                                Title:   President and CEO

In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.

Signature                            Title                         Date
---------                            -----                         ----

/s/ Donald Iwacha          President                          April 19, 2002
-------------------------  Chief Executive Officer
Dr. Donald Iwacha


/s/ Barrington Simon       Chairman of Board of Directors     April 19, 2002
-------------------------  Chief Financial Officer
Barrington Simon


/s/ Ian Brock              Director                           April 19, 2002
------------------------
Ian Brock


                           Director                           April ___, 2002
------------------------
Dr. Arkadi Rozenchtein


                                       14
<PAGE>

                                INDEX TO EXHIBITS

            NUMBER  DESCRIPTION

               10.1   Settlement and Waiver Agreement dated March 1, 2001
                      between the Company and Omega Holdings, Bahamas, Ltd. in
                      the aggregate principal amount of $3.2 million.*
               10.2   Settlement and Waiver Agreement dated March 1, 2001
                      between the Company and Omega Holdings, Bahamas, Ltd. in
                      the aggregate principal amount of $1.6 million.*
               10.3   Settlement Agreement dated December 14, 2000 between the
                      Company and Barrington Simon.*
               10.4   Employment Agreement dated July 19, 1999 between the
                      Company and Dr. Donald Iwacha.*
               10.5   Employment Agreement dated May 1, 1999 between the Company
                      and Barrington Simon.*

* Filed herewith.