---

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
20549

Form 10-Q

(Mark One)

[ x ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2009

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________to __________

Commission file number 000-30299

LIGHTSCAPE TECHNOLOGIES
INC.(Exact name of registrant as specified in its
charter)

|Nevada                                                               | 98-0217653                          
|-------------------------------------------------------------------- | ------------------------------------
|(State or other jurisdiction of incorporation or
      organization) | (I.R.S. Employer Identification No.)

18/F., 318 Hennessy Road, W Square, Wanchai, Hong
Kong(Address of principal executive offices)

(852) 2546-1808(Registrants telephone number,
including area code)

N/A(Former name, former address and former
fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such 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 [ ]

Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of large accelerated filer,
accelerated filer and smaller reporting company in Rule 12b-2 of the
Exchange Act.

|Large accelerated filer [ ]                                                   | Accelerated filer [ ]          
|----------------------------------------------------------------------------- | -------------------------------
|Non-accelerated filer [ ] (Do not check if a smaller
      reporting company) | Smaller reporting company [ x ]

Indicate by check mark whether the registrant is a shell company
(as defined in Rule 2b-2 of the Exchange Act). Yes [ ] No[ x ]

APPLICABLE ONLY TO CORPORATE ISSUERS:

---

- 2 -

Indicate the number of shares outstanding of each of the
issuers classes of common stock, as of the latest practicable date: 55,876,410
shares of common stock issued and outstanding as of August 1, 2009.

PART I - FINANCIAL INFORMATION

|**Item 1.**                       | Unaudited Consolidated
      Financial Statements.                                                                                    
|--------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------
|                                  | Consolidated Balance Sheets as at June 30, 2009
      and March 31, 2009                                                              
|                                  | Consolidated Statements of
      Operations and Comprehensive Loss for the three months ended June 30, 2009
      and 2008            
|                                  | Consolidated Statements of Changes in
      Shareholders Equity and Comprehensive Loss for the three months ended
      June 30, 2009
|                                  | Consolidated Statements of Cash
      Flows for the three months ended June 30, 2009 and 2008                                         
|                                  | Notes to Unaudited Consolidated Financial
      Statements                                                                            
|**Item 2.**                       | Managements Discussion and
      Analysis of Financial Condition and Results of Operations.                                          
|**Item 3.**                       | Quantitative and Qualitative Disclosures
      About Market Risk.                                                                     
|**Item
      4T.**                | Controls and Procedures.                                                                                                              
|PART II - OTHER
      INFORMATION
|**Item 1.**                       | Legal Proceedings.                                                                                                                    
|**Item 1A.**                      | Risk Factors.                                                                                                                         
|**Item 2.**                       | Unregistered Sales of Equity
      Securities and Use of Proceeds.                                                                    
|**Item 3.**                       | Defaults Upon Senior Securities.                                                                                                      
|**Item 4.**                       | Submission of Matters to a
      Vote of Security Holders.                                                                            
|**Item 5.**                       | Other Information.                                                                                                                    
|**Item 6.**                       | Exhibits.                                                                                                                             

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- 3 -

Item 1. Financial Statements.

|LIGHTSCAPE TECHNOLOGIES INC. AND SUBISIDIARIES
|----------------------------------------------
|INTERIM CONSOLIDATED FINANCIAL STATEMENTS     
|FOR THE THREE MONTHS ENDED JUNE 30, 2009      
|UNAUDITED                                     

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- 4 -

|LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIES
|---------------------------------------------
|                                             
|CONSOLIDATED BALANCE SHEETS                  
|Expressed in US
      dollars                

|                                                                                |  | June 30,    |  |  | March 31,  | 
|------------------------------------------------------------------------------- |  | ----------- |  |  | ---------- | 
|                                                                                |  | 2009        |  |  | 2009       | 
|                                                                                |  | (Unaudited) |  |  |            | 
|                                                                                |  | $           |  |  | $          | 
|ASSETS                                                                          |  |             |  |  |            | 
|Current assets:                                                                 |  |             |  |  |            | 
|Cash and cash
      equivalents                                                 |  | 149,549     |  |  | 381,643    | 
|Accounts receivable, net of
      allowance for doubtful accounts of            |  |             |  |  |            | 
|$1,433,816 on
      June 30, 2009 and $1,287,843 on March 31, 2009              |  | 2,880,353   |  |  | 2,239,228  | 
|Costs and estimated earnings in
      excess of billings on uncompleted         |  |             |  |  |            | 
|contracts                                                                       |  | 821,349     |  |  | 673,313    | 
|Prepaid expenses and other
      current assets                                 |  | 2,202,946   |  |  | 1,817,215  | 
|Inventories 
      LED                                                         |  | 1,264,975   |  |  | 1,264,975  | 
|Inventories  others (see Note
      5) , including valuation allowance of      |  | 2,251,938   |  |  | 2,274,552  | 
|$162,800 on June
      30, 2009 and $162,782 on March 31, 2009                  |  |             |  |  |            | 
|Current assets of discontinued
      operations                                 |  | 516,034     |  |  | 591,921    | 
|                                                                                |  |             |  |  |            | 
|Total current assets                                                            |  | 10,087,144  |  |  | 9,242,847  | 
|                                                                                |  |             |  |  |            | 
|Intangible assets, net                                                          |  | 849,059     |  |  | 969,282    | 
|Goodwill                                                                        |  | 4,476,574   |  |  | 4,476,574  | 
|Plant and equipment, net                                                        |  | 2,459,567   |  |  | 2,529,141  | 
|Out-of-home advertising equipment, net                                          |  | 2,209,077   |  |  | 2,213,808  | 
|Construction in progress  Out-of-home advertising
      equipment              |  | 266,250     |  |  | 266,250    | 
|Deferred cost                                                                   |  | 115,518     |  |  | 111,132    | 
|Accounts receivable, due after one year and net of
      allowance for doubtful |  |             |  |  |            | 
|accounts of $Nil on June 30, 2009 and
      $145,871 on March 31, 2009          |  | 72,956      |  |  | 200,890    | 
|Prepaid expenses and other current assets  due after one
      year            |  | 511,337     |  |  | 511,277    | 
|Net investment in sales-type leases of
      discontinued operations            |  | 20,439      |  |  | 36,359     | 
|                                                                                |  |             |  |  |            | 
|                                                                                |  | 10,980,777  |  |  | 11,314,713 | 
|                                                                                |  |             |  |  |            | 
|TOTAL ASSETS                                                                    |  | 21,067,921  |  |  | 20,557,560 | 
|                                                                                |  |             |  |  |            | 
|LIABILITIES AND SHAREHOLDERS EQUITY                                            |  |             |  |  |            | 
|Current liabilities:                                                            |  |             |  |  |            | 
|Short-term bank
      borrowings                                                |  | 699,369     |  |  | 55,266     | 
|Secured loan                                                                    |  | 137,524     |  |  | -          | 
|Trade payables                                                                  |  | 821,787     |  |  | 689,945    | 
|Amount due to a director                                                        |  | 658,496     |  |  | 745,501    | 
|Accrued expenses
      and other current liabilities                            |  | 1,543,779   |  |  | 1,284,239  | 
|Obligations under capital leases
       current portion                        |  | 3,037       |  |  | 2,904      | 
|Income tax
      payable                                                        |  | 10,521      |  |  | 10,062     | 
|Current liabilities of
      discontinued operations                            |  | 216,142     |  |  | 166,953    | 
|                                                                                |  |             |  |  |            | 
|Total current liabilities                                                       |  | 4,090,655   |  |  | 2,954,870  | 
|                                                                                |  |             |  |  |            | 
|Non-current liabilities:                                                        |  |             |  |  |            | 
|Obligations
      under capital leases  non-current portion                    |  | 5,050       |  |  | 5,313      | 
|Secured loan  non-current
      portion                                        |  | 137,523     |  |  | -          | 

---

- 5 -

|Long-term bank
      borrowings |  | 50,488    |  |  | 62,158    | 
|------------------------------- |  | --------- |  |  | --------- | 
|Total non-current liabilities   |  | 193,061   |  |  | 67,471    | 
|Total liabilities               |  | 4,283,716 |  |  | 3,022,341 | 

|LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIES
|---------------------------------------------
|                                             
|CONSOLIDATED BALANCE SHEETS (continued)      
|Expressed in US
      dollars                

|                                                           |  | June 30,    |   |  | March 31,   |  
|---------------------------------------------------------- |  | ----------- | - |  | ----------- | -
|                                                           |  | 2009        |   |  | 2009        |  
|                                                           |  | (Unaudited) |   |  |             |  
|                                                           |  | $           |   |  | $           |  
|                                                           |  |             |   |  |             |  
|COMMITMENTS (see Note 17)                                  |  |             |   |  |             |  
|                                                           |  |             |   |  |             |  
|Shareholders equity:                                      |  |             |   |  |             |  
|Common stock                                               |  |             |   |  |             |  
|Authorized:                                                |  |             |   |  |             |  
|800,000,000 common shares, par value $0.001 per share      |  |             |   |  |             |  
|100,000,000 preferred shares, par value $0.001 per share   |  |             |   |  |             |  
|Issued and
      outstanding:                              |  |             |   |  |             |  
|55,876,410 common shares at June 30, 2009 and at March 31, |  |             |   |  |             |  
|2009                                                       |  | 55,876      |   |  | 55,876      |  
|Additional paid-in capital                                 |  | 34,140,708  |   |  | 34,140,708  |  
|Common stock warrants (see Note 20)                        |  | 344,673     |   |  | 344,673     |  
|Other reserves                                             |  | 28,944      |   |  | 28,944      |  
|Accumulated other comprehensive income                     |  | 1,115,400   |   |  | 1,077,354   |  
|Accumulated deficit                                        |  | (19,973,655 | ) |  | (19,219,220 | )
|Total shareholders equity                                 |  | 15,711,946  |   |  | 16,428,335  |  
|Noncontrolling interest                                    |  | 1,072,259   |   |  | 1,106,884   |  
|Total Equity                                               |  | 16,784,205  |   |  | 17,535,219  |  
|                                                           |  |             |   |  |             |  
|TOTAL LIABILITIES AND SHAREHOLDERS EQUITY                 |  | 21,067,921  |   |  | 20,557,560  |  

The accompanying notes are an integral part of these
consolidated financial statements.

---

- 6 -

|LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIES                                 
|------------------------------------------------------------------------------
|                                                                              
|CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
      LOSS (UNAUDITED)
|Expressed in US
      dollars (except for number of common shares)            

|                                                                                       |  | Three Months Ended |  
|-------------------------------------------------------------------------------------- |  | ------------------ | -
|                                                                                       |  | June 30,           |  
|                                                                                       |  | 2009               |  
|                                                                                       |  | $                  |  
|Revenues:                                                                              |  |                    |  
|Advertising revenue                                                                    |  | 188,625            |  
|LED solutions revenue                                                                  |  | 855,433            |  
|Other revenue                                                                          |  | 446,594            |  
|                                                                                       |  |                    |  
|Total net revenues                                                                     |  | 1,490,652          |  
|                                                                                       |  |                    |  
|Cost of revenues:                                                                      |  |                    |  
|Cost of sales of Advertising
      revenue                                             |  | (39,272            | )
|Cost of sales of LED solutions revenue                                                 |  | (640,648           | )
|Costs of Other revenue (i)                                                             |  | (373,870           | )
|                                                                                       |  |                    |  
|Total cost of revenues                                                                 |  | (1,053,790         | )
|                                                                                       |  |                    |  
|Gross profit                                                                           |  | 436,862            |  
|                                                                                       |  |                    |  
|Bad debts                                                                              |  | -                  |  
|Amortization                                                                           |  | (120,844           | )
|Depreciation                                                                           |  | (77,087            | )
|Selling and marketing expenses                                                         |  | (238,393           | )
|General and administrative expenses                                                    |  | (835,427           | )
|                                                                                       |  |                    |  
|Loss from operations                                                                   |  | (834,889           | )
|Interest expense                                                                       |  | (1,951             | )
|Interest income                                                                        |  | 159                |  
|Other income                                                                           |  | 62,829             |  
|Other expenses                                                                         |  | (15,055            | )
|                                                                                       |  |                    |  
|Loss from continuing operations before
      income tax and noncontrolling interests   |  | (788,907           | )
|Income tax provision                                                                   |  | (3                 | )
|                                                                                       |  |                    |  
|Net loss from continuing operations before noncontrolling
      interests              |  | (788,910           | )
|Less: net income attributable to the
      noncontrolling interests                    |  | 34,625             |  
|                                                                                       |  |                    |  
|Net loss from continuing operations
      attributable to Lightscape Technologies Inc. |  | (754,285           | )
|                                                                                       |  |                    |  
|Discontinued operations                                                                |  |                    |  
|Net (loss) from discontinued operations, net
      of income taxes                     |  | (150               | )
|                                                                                       |  |                    |  
|(Loss) on discontinued operations                                                      |  | (150               | )
|                                                                                       |  |                    |  
|Net loss attributable to Lightscape Technologies Inc.                                  |  | (754,435           | )
|                                                                                       |  |                    |  
|Other comprehensive income                                                             |  |                    |  
|Foreign currency translation
      adjustment arising during the period                |  | 38,046             |  

---

- 7 -

|Comprehensive loss                                         |  | (716,389   | ) |  | (840,567   | )
|---------------------------------------------------------- |  | ---------- | - |  | ---------- | -
|                                                           |  |            |   |  |            |  
|Loss per share                                             |  |            |   |  |            |  
|- Basic and diluted                                        |  |            |   |  |            |  
|Continuing operations                                      |  | (0.01      | ) |  | (0.02      | )
|Discontinued operations                                    |  | (0.00      | ) |  | (0.00      | )
|Total                                                      |  | (0.01      | ) |  | (0.02      | )
|                                                           |  |            |   |  |            |  
|Weighted average number of common shares
      outstanding |  |            |   |  |            |  
|- Basic and diluted                                        |  | 55,876,410 |   |  | 55,876,410 |  

(i) Includes depreciation of plant and equipment of $84,899 for
the three months ended June 30, 2009 and $65,591 for the three months ended June
30, 2008.

The accompanying notes are an integral part of these
consolidated financial statements.

---

- 8 -

|LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIES                                     
|----------------------------------------------------------------------------------
|                                                                                  
|CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY
      AND COMPREHENSIVE
|LOSS FOR THE THREE MONTHS ENDED JUNE 30, 2009 (UNAUDITED)                         
|Expressed in US
      dollars (except for number of common shares)                

|               |  |               |  |  |        |  |  |          |  |  |            |  |  |                     |  |  | Total Accumulated Other
      Comprehensive Income And |  |  |             |   |  |               |  
|-------------- |  | ------------- |  |  | ------ |  |  | -------- |  |  | ---------- |  |  | ------------------- |  |  | ------------------------------------------------------ |  |  | ----------- | - |  | ------------- | -
|               |  | Common Shares |  |  |        |  |  |          |  |  |            |  |  | Accumulated Deficit |  |  |                                                        |  |  |             |  
|               |  |               |  |  |        |  |  |          |  |  |            |  |  |                     |  |  |                                                        |  |  |             |   |  |               |  
|               |  |               |  |  |        |  |  |          |  |  |            |  |  |                     |  |  |                                                        |  |  |             |   |  |               |  
|               |  |               |  |  |        |  |  |          |  |  |            |  |  |                     |  |  | Accumulated                                            |  |  |             |   |  | Total         |  
|               |  |               |  |  |        |  |  |          |  |  |            |  |  |                     |  |  | Other                                                  |  |  |             |   |  | Accumulated   |  
|               |  |               |  |  |        |  |  |          |  |  |            |  |  |                     |  |  | Comprehensive                                          |  |  |             |   |  | Comprehensive |  
|               |  |               |  |  |        |  |  |          |  |  |            |  |  |                     |  |  | Income - Foreign                                       |  |  |             |   |  | (Loss) Income |  
|               |  |               |  |  |        |  |  | Common   |  |  | Additional |  |  |                     |  |  | Currency                                               |  |  |             |   |  | And           |  
|               |  |               |  |  |        |  |  | Stock    |  |  | Paid-In    |  |  |                     |  |  | Translation                                            |  |  | Accumulated |   |  | Accumulated   |  
|               |  | Number        |  |  | Amount |  |  | Warrants |  |  | Capital    |  |  | Other               |  |  | Adjustment                                             |  |  | Deficit     |   |  | Deficit       |  
|               |  |               |  |  |        |  |  |          |  |  |            |  |  | Reserves            |  |  |                                                        |  |  |             |   |  |               |  
|               |  |               |  |  |        |  |  |          |  |  |            |  |  |                     |  |  |                                                        |  |  |             |   |  |               |  
|Balance at     |  |               |  |  |        |  |  |          |  |  |            |  |  |                     |  |  |                                                        |  |  |             |   |  |               |  
|March 31, 2009 |  | 55,876,410    |  |  | 55,876 |  |  | 344,673  |  |  | 34,140,708 |  |  | 28,944              |  |  | 1,077,354                                              |  |  | (19,219,220 | ) |  | (18,141,866   | )
|               |  |               |  |  |        |  |  |          |  |  |            |  |  |                     |  |  |                                                        |  |  |             |   |  |               |  
|Foreign        |  |               |  |  |        |  |  |          |  |  |            |  |  |                     |  |  |                                                        |  |  |             |   |  |               |  
|currency       |  |               |  |  |        |  |  |          |  |  |            |  |  |                     |  |  |                                                        |  |  |             |   |  |               |  
|translation    |  |               |  |  |        |  |  |          |  |  |            |  |  |                     |  |  |                                                        |  |  |             |   |  |               |  
|adjustment     |  | -             |  |  | -      |  |  | -        |  |  | -          |  |  | -                   |  |  | 38,046                                                 |  |  | -           |   |  | 38,046        |  
|Net loss       |  | -             |  |  | -      |  |  | -        |  |  | -          |  |  | -                   |  |  | -                                                      |  |  | (754,435    | ) |  | (754,435      | )
|Noncontrolling |  |               |  |  |        |  |  |          |  |  |            |  |  |                     |  |  |                                                        |  |  |             |   |  |               |  
|interest       |  |               |  |  |        |  |  |          |  |  |            |  |  |                     |  |  |                                                        |  |  |             |   |  |               |  
|               |  |               |  |  |        |  |  |          |  |  |            |  |  |                     |  |  |                                                        |  |  |             |   |  |               |  
|Balance at     |  |               |  |  |        |  |  |          |  |  |            |  |  |                     |  |  |                                                        |  |  |             |   |  |               |  
|June 30, 2009  |  | 55,876,410    |  |  | 55,876 |  |  | 344,673  |  |  | 34,140,708 |  |  | 28,944              |  |  | 1,115,400                                              |  |  | (19,973,655 | ) |  | (18,858,255   | )

The accompanying notes are an integral part of these
consolidated financial statements.

---

- 9 -

|LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIES    
|-------------------------------------------------
|                                                 
|CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
|Expressed in US
      dollars                    

|                                                                                  |  | Three Months   |  
|--------------------------------------------------------------------------------- |  | -------------- | -
|                                                                                  |  | Ended June 30, |  
|                                                                                  |  | 2009           |  
|                                                                                  |  | $              |  
|Cash flows from continuing operating
      activities:                            |  |                |  
|Net loss                                                                          |  | (754,435       | )
|Net loss from discontinued operations, net
      of income taxes                  |  | (150           | )
|Net loss from continuing operations                                               |  | (754,285       | )
|                                                                                  |  |                |  
|Adjustment to reconcile net loss from continuing operations
      to              |  |                |  
|net cash (used in) generated from
      continuing operating activities:          |  |                |  
|Amortization of intangible
      assets                                           |  | 120,844        |  
|Depreciation
      expense                                                        |  | 161,985        |  
|Bad debts expense                                                                 |  | -              |  
|Net income
      attributable to the noncontrolling interest                      |  | (34,625        | )
|Changes in operating assets and liabilities, net of
      acquisitions:           |  |                |  
|Decrease (increase) in
      operating assets:                                    |  |                |  
|Accounts receivable, net of
      allowance for doubtful debts                    |  | (491,307       | )
|Costs and
      estimated earnings in excess of billings on uncompleted contracts |  | (148,036       | )
|Prepaid expenses and other
      current assets                                   |  | (368,346       | )
|Inventories                                                                       |  | 22,898         |  
|Increase (decrease) in operating
      liabilities:                               |  |                |  
|Trade payables                                                                    |  | 210,442        |  
|Accrued expenses and other
      current liabilities                              |  | 388,748        |  
|Income tax
      payable                                                          |  | -              |  
|                                                                                  |  |                |  
|Net cash provided by (used in) continuing
      operating activities              |  | (891,681       | )
|Net cash provided by (used in) discontinued operating
      activities            |  | (8,370         | )
|Net cash (used in) provided by operating
      activities                         |  | (900,051       | )
|                                                                                  |  |                |  
|Cash flows from investing activities:                                             |  |                |  
|Purchase of plant and equipment                                                   |  | (38,560        | )
|Purchase of out-of-home advertising
      equipment                               |  | (110,254       | )
|Purchase of intangible asset                                                      |  | (622           | )
|Addition to deferred cost                                                         |  | (4,385         | )
|                                                                                  |  |                |  
|Net cash (used in) investing activities of
      continuing operations            |  | (153,821       | )
|Net cash provided by investing activities of discontinued
      operations        |  | -              |  
|Net cash (used in) investing activities                                           |  | (153,821       | )

---

- 10 -

|LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIES                      
|-------------------------------------------------------------------
|                                                                   
|CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
      (continued)
|Expressed in US
      dollars                                      

|                                                                         |  | Three Months   |  
|------------------------------------------------------------------------ |  | -------------- | -
|                                                                         |  | Ended June 30, |  
|                                                                         |  | 2009           |  
|                                                                         |  | $              |  
|                                                                         |  |                |  
|Cash flows from financing activities:                                    |  |                |  
|Inception of bank loan                                                   |  | 771,208        |  
|Repayment of bank loans                                                  |  | (143,998       | )
|Inception of secured loan                                                |  | 271,428        |  
|Repayment of capital lease obligations                                   |  | (499           | )
|Advance from (repayment to) a director                                   |  | (87,006        | )
|                                                                         |  |                |  
|Net cash provided by financing activities of continuing
      operations |  | 811,133        |  
|Net cash (used in) financing activities of
      discontinued operations |  | -              |  
|Net cash provided by financing activities                                |  | 811,133        |  
|                                                                         |  |                |  
|Effect of foreign exchange rate changes                                  |  | 2,090          |  
|                                                                         |  |                |  
|Net decrease in cash and cash equivalents                                |  | (240,649       | )
|Cash and cash equivalents at beginning of
      the period               |  | 390,198        |  
|                                                                         |  |                |  
|Cash and cash equivalents at end of the
      period (a)                 |  | 149,549        |  
|                                                                         |  |                |  
|Supplemental disclosure of cash flows
      information                  |  |                |  
|Interest expense paid                                                    |  | 1,951          |  
|Income taxes paid                                                        |  | 6,429          |  

(a) Includes $Nil and $35,790 of cash that is included on the
balance sheet with Current assets from discontinued operations as of June 30,
2009 and June 30, 2008, respectively.

The accompanying notes are an integral part of these
consolidated financial statements.

---

- 11 -

LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS JUNE
30, 2009

NOTE 1. ORGANIZATION AND NATURE OF OPERATIONS

Lightscape Technologies Inc. (Lightscape or the Company)
was incorporated under the laws of the State of Nevada. On April 20, 2007, the
Company changed its name from Global Innovative System Inc. to Lightscape
Technologies Inc. The Company is a holding company, and together with its
subsidiaries (the Group) is principally engaged in three business activities:
(i) light-emitting diode (LED) out-of-home (OOH) advertising, (ii) LED
solutions and (iii) others including lighting source products.

NOTE 2. SUMMARY OF PRINCIPAL ACCOUNTING POLICIES

Principle of Consolidation and Basis of Presentation

The accompanying consolidated financial statements of the Group
are stated in United States dollars and have been prepared in accordance with
generally accepted accounting principles in the United States of America and
include the financial statements of the Company and its majority-owned
subsidiaries. All significant intercompany transactions and balances are
eliminated on consolidation.

The accompanying unaudited consolidated financial statements as
of June 30, 2009 and for the three months ended June 30, 2009 and 2008 have been
prepared in accordance with generally accepted accounting principles and with
the instructions to Form 10-Q and Regulation S-X applicable to smaller reporting
companies. In the opinion of management, these unaudited consolidated financial
statements include all adjustments considered necessary to make the financial
statements not misleading. The results of operations for the three months ended
June 30, 2009 are not necessarily indicative of the results for the full fiscal
year ending March 31, 2010. The unaudited consolidated interim financial
statements should be read in conjunction with the Groups audited consolidated
financial statements and notes thereto for the year ended March 31, 2009 as
reported in Form 10-K.

Certain of the June 30, 2008 and March 31, 2009 comparative
figures have been reclassified to conform to the current period presentation.
These reclassifications had no impact on previously reported financial position,
results of operations or cash flows.

Use of Estimates

The preparation of financial statements requires management to
make estimates and assumptions that affect 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 revenues and expenses
during the reported period. Actual results could differ from those
estimates.

Cash and Cash Equivalents

Cash and cash equivalents consist of cash on hand and demand
deposits which are unrestricted as to withdrawal and use, and which have
maturities of three months or less when purchased. Cash and cash equivalents as
of June 30, 2009 and March 31, 2009 of $149,549 and $381,643, respectively,
consist of cash on hand and current accounts and savings accounts with
respective banks, without any time or demand deposits.

---

- 12 -

LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS JUNE
30, 2009

NOTE 2. SUMMARY OF PRINCIPAL ACCOUNTING POLICIES
(continued)

Accounts Receivables and Allowance for Doubtful
Accounts

The Company performs certain credit evaluation procedures and
does not require collateral for financial instruments subject to credit risk.
The Company believes that credit risk is limited because the Company routinely
assesses the financial strength of its customers and, based upon factors
surrounding the credit risk of its customers, establishes an allowance for
uncollectible accounts receivable. As a consequence, the Company believes that
its accounts receivable credit risk exposure beyond such allowances is limited.
The Company recognizes an allowance for doubtful accounts to ensure accounts
receivable are not overstated due to uncollectibility and are maintained for all
customers based on a variety of factors, including the length of time the
receivables are past due, significant onetime events and historical experience.
An additional reserve for individual accounts is recorded when the Company
becomes aware of a customers inability to meet its financial obligation, such
as in the case of bankruptcy filings or deterioration in the customers
operating results or financial position. If circumstances related to customers
change, estimates of the recoverability of receivables would be further
adjusted. As of June 30, 2009 and March 31, 2009, the allowance for doubtful
accounts was approximately $1,433,816 and $1,287,843, respectively.

Inventories

Inventories are stated at the lower of cost or market value.
Cost is determined on the first-in, first-out basis. Write-down of potentially
obsolete or slow-moving inventory is recorded based on managements analysis of
inventory levels and the Companys assessment of estimated obsolescence based
upon assumptions about future demand and market conditions. Further write-down
of the value may be required in the future if there is rapid technological and
structural change in the industry. This may reduce the results of operations of
the Company.

Goodwill

Prior to April 1, 2009, the Company accounted for acquisitions
of business in accordance with SFAS No. 141 Business Combinations, which
results in the recognition of goodwill when the purchase price exceeds the fair
value of net assets acquired. As of April 1, 2009, the Company accounts for
business acquisitions in accordance with SFAS No. 141R Business Combinations,
which is a revision of SFAS No. 141. Goodwill is not subject to amortization but
will be subject to periodic evaluation for impairment. Goodwill is stated in the
consolidated balance sheet at cost less accumulated impairment loss (see Note
9).

Intangible Assets

The Company acquired certain intangible assets through the
acquisition of subsidiaries. These intangible assets are comprised of
trademarks, customer lists and relationships, unfulfilled purchase orders,
completed technology for the production of Aihua Ultra-High Pressure Mercury
(AHP) lamps and High Intensity Discharge (HID) lamps, a customer base and a
distributor base. The acquired trademarks were determined to have indefinite
useful lives which are not subject to amortization, unless and until the useful
lives are determined to no longer be indefinite.

The estimation of the useful lives of the trademarks, completed
technologies for the production of AHP and HID, distributor base, customer lists
and relationships are affected by factors such as a change in demand,
unanticipated competition change in technology, legislative action that results
in an uncertain or an adverse change in the regulatory environment or changes in
distribution channels and business climate.

Software and licenses are recognized as intangible assets at
cost less accumulated amortization. These assets are generally amortized over
three years.

---

- 13 -

LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS JUNE
30, 2009

NOTE 2. SUMMARY OF PRINCIPAL ACCOUNTING POLICIES
(continued)

Impairment of Long-Lived Assets

The Company reviews long-lived assets for potential impairment
based on a review of projected undiscounted cash flows associated with these
assets. Long-lived assets are included in impairment evaluations when events and
circumstances exist that indicate the carrying amount of these assets may not be
recoverable. Measurement of impairment losses for long-lived assets that the
Company expects to hold and use is based on the estimated fair value of the
assets. Therefore, future changes in the Companys strategy and other changes in
its operations could impact the projected future operating results that are
inherent in estimates of fair value, resulting in impairments in the future.
Additionally, other changes in the estimates and assumptions, including the
discount rate and expected long-term growth rate, which drive the valuation
techniques employed to estimate the fair value of long-lived assets could change
and, therefore, impact the assessments of impairment in the future (see Note
9).

Plant and Equipment and Construction in Progress

Plant and equipment is recorded at cost less accumulated
depreciation. Depreciation is provided on a straight-line basis over the
estimated useful lives of the assets. Estimated useful lives of equipment are as
follows:

|Testing equipment                 | 4 years                                                      
|--------------------------------- | -------------------------------------------------------------
|Office equipment                  | 3 - 4 years                                                  
|Furniture and fixtures            | 3 - 4 years                                                  
|Leasehold improvements            | shorter of 4 years or the remaining terms of
      the leases
|Motor vehicles                    | 5 - 7 years                                                  
|Moulds                            | 3 years                                                      
|Factory machinery and equipment   | 10 - 16 years                                                
|Out-of-home advertising equipment | 10 - 12 years                                                

Construction in progress is stated at cost which comprises all
direct costs incurred in relation to the construction.

The cost of construction in progress will not be depreciated
until the construction is completed and the assets are transferred to a specific
category of plant and equipment and put into service.

Expenditures for repairs, maintenance and minor renewals and
betterments are expensed as incurred.

Deferred Costs

Deferred costs relates to costs which enable OOH advertising
LED display and equipment to operate and commence its income generating
activities. However, the costs cannot be capitalized because they are not
directly related to bringing the equipment to its existing condition and
location. Examples are license fee for OOH advertising and prepaid rental. The
costs incurred are initially recorded as a deferred cost within the non-current
assets section of the balance sheet, and the deferred costs are subsequently
recorded as a cost of sales when the Company recognizes revenue for the related
OOH advertising revenue, in accordance with the matching principle.

---

- 14 -

LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS JUNE
30, 2009

NOTE 2. SUMMARY OF PRINCIPAL ACCOUNTING POLICIES
(continued)

Net Investment in Sales - Type Leases

At the time a sales-type lease is consummated, the Company
records the gross finance receivable, less unearned income. Unearned income is
recognized as lease income using the interest method over the term of the lease
and is included as financing revenue in the Companys consolidated statements of
operations. The Company reviews minimum lease payments receivable for
collectability on a periodic basis. The review consists primarily of an analysis
based upon current information available about the customer as well as the
current economic environment, value of leased assets net of repossession cost
and prior history. Impairment is measured using the fair value of the leased
assets when foreclosure is probable. Using this information, the Company
determines the expected cash flow for the receivable and calculates a
recommended estimate of the potential loss and the probability of loss. For
those accounts in which the loss is probable, the Company records a specific
reserve.

Revenue Recognition

The Company recognizes revenue when it has persuasive evidence
of an arrangement, the product has been delivered and installed or the services
have been provided to the customer, the sales price is fixed or determinable,
and collectability is reasonably assured. In addition to the aforementioned
general policy, the following are specific revenue recognition policies for each
major category of revenue.

Advertising LED related Out-of-Home advertising
revenue from advertising services, net of agency rebates and commissions, is
recognized ratably over the period in which the advertisement is displayed.
Prepayments for the advertising services are deferred and recognized as revenue
when the advertising services are rendered.

LED solutions- The Company sells its products directly
to end users and through distributors. Revenue is recognized when the product is
delivered to the customer and all other revenue recognition criteria are met.
Revenues for LED solutions activities provided on a supply and build basis and
for consultancy services for which the revenue generation process lasts for
several months are recognized on the percentage-of-completion method, measured
either by the ratio of costs incurred up to a given date to estimated total
costs for each contract, or by an assessment from a quantity surveyor as
appointed by our customers.

Contract costs include all direct material, direct labor,
subcontracting and other costs and those indirect costs related to contract
performance, such as indirect salaries and wages, equipment repairs and
depreciation, insurance and payroll taxes. Administrative and general expenses
are charged to expense as incurred. Provisions for estimated losses on
uncompleted contracts are made in the period in which such losses are
determined. Changes in job performance, job conditions and estimated
profitability, including those changes arising from contract penalty provisions
and final contract settlements may result in revisions to costs and income and
are recognized in the period in which the revisions are determined. An amount
attributable to contract claims is included in revenues when realization is
probable and the amount can be reliably estimated. The Company generally
provides a one-year warranty for workmanship under its contracts. Warranty
claims historically have been inconsequential.

The asset, Costs and estimated earnings in excess of billings
on uncompleted contracts represents revenues recognized in excess of amounts
billed on these contracts. The liability Billings in excess of costs and
estimated earnings on uncompleted contracts represents billings in excess of
revenues recognized on these contracts.

Others This includes sales of lighting source
products, rental income, commission and service income and sales-type lease
income.

---

- 15 -

LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS JUNE
30, 2009

NOTE 2. SUMMARY OF PRINCIPAL ACCOUNTING POLICIES
(continued)

Revenue Recognition (continued)

Regarding sales of lighting source products, the Company sells
its products directly to end users and through distributors. Revenue is
recognized when the product is delivered to the customer and all other revenue
recognition criteria are met. Revenue from rentals and operating leases without
any acceptance provisions is recognized on a straight-line basis over the term
of the rental or lease. Revenue regarding commission and service income is
recognized when services are rendered. Revenue from sales-type leases is
recognized over the term of the lease, using the effective interest method.

The following table summarizes operating revenue and related
cost of sales regarding other revenue as included in the consolidated statements
of operations and comprehensive loss:

|                                                               |  | Three Months Ended |  
|-------------------------------------------------------------- |  | ------------------ | -
|                                                               |  | June 30,           |  
|                                                               |  | 2009               |  
|                                                               |  | $                  |  
|Other revenue                                                  |  |                    |  
|Lighting source products                                       |  | 446,594            |  
|Commission and service income                                  |  | -                  |  
|                                                               |  |                    |  
|Total net revenues                                             |  | 446,594            |  
|                                                               |  |                    |  
|Cost of sales of other revenue:                                |  |                    |  
|Cost of sales of Lighting source products                      |  | (328,243           | )
|Cost of sales of Lighting
      source products  depreciation |  | (45,627            | )
|Cost of commission and service income                          |  | -                  |  
|                                                               |  |                    |  
|Total cost of revenues                                         |  | (373,870           | )

Income Taxes

Deferred tax assets and liabilities are recognized for the
future tax consequences attributable to differences between the carrying amounts
of existing assets and liabilities and their respective tax bases as well as
operating loss and tax credit carry forwards. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be
recovered or settled. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in income in the period that includes the
enactment date. Valuation allowances are established when it is more likely than
not that some or all of the deferred tax assets will not be realized.

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- 16 -

LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS JUNE
30, 2009

NOTE 2. SUMMARY OF PRINCIPAL ACCOUNTING POLICIES
(continued)

Accounting for Uncertainty in Income Taxes

In June 2006, the Financial Accounting Standards Board (FASB)
issued Interpretation No. 48, Accounting for Uncertainty in Income Taxes - an
Interpretation of FASB Statement No. 109 (FIN 48). FIN 48 is intended to
clarify the accounting for uncertainty in income taxes recognized in a companys
financial statements and prescribes the recognition and measurement of a tax
position taken or expected to be taken in a tax return. FIN 48 also provides
guidance on de-recognition, classification, interest and penalties, accounting
in interim periods, disclosure and transition.

Under FIN 48, it is a two-step process for valuation of a tax
position. Step one is to determine whether it is more-likely-than-not that a tax
position will be sustained upon examination, including the resolution of any
related appeals or litigation based on the technical merits of that position.
Step two is to measure a tax position that meets the more-likely-than-not
threshold to determine the amount of benefit to be recognized in the financial
statements. A tax position is measured at the largest amount of benefit that is
greater than 50% likely of being realized upon ultimate settlement.

Tax positions that previously failed to meet the
more-likely-than-not recognition threshold should be recognized in the first
subsequent period in which the threshold is met. Previously recognized tax
positions that no longer meet the more-likely-than-not criteria should be
de-recognized in the first subsequent financial reporting period in which the
threshold is no longer met.

Foreign Currency Translation

The functional currency of the Company is Hong Kong dollars
(HKD). Transactions in other currencies are recorded in HKD at the rates of
exchange prevailing when the transactions occur. Monetary assets and liabilities
denominated in other currencies are measured in HKD at rates of exchange in
effect at the balance sheet dates. Exchange gains and losses are recorded in the
consolidated statements of operations as a component of current period
earnings.

For financial reporting purposes, the financial statements of
the Company which are prepared using the functional currency have been
translated into United States dollars. Assets and liabilities are translated at
the exchange rates at the balance sheet dates and revenue and expenses are
translated at the average exchange rate for the period and stockholders equity
is translated at historical exchange rates. Any translation adjustments
resulting from the translation are included in foreign currency translation
adjustment in accumulated other comprehensive income, a component of
stockholders equity.

Segment Information

The Companys segment reporting is prepared in accordance with
SFAS No. 131, Disclosures about Segments of an Enterprise and Related
Information (SFAS 131). The management approach required by SFAS 131 requires
that the internal reporting structure used by management for making operating
decisions and assessing performance be used as the source for presenting the
Groups reportable segments.

Fair Value of Financial Instruments

The carrying amounts of cash and cash equivalents, trade
receivables, short-term debt and trade payables approximate their fair values
due to the short-term maturity of these instruments. The fair value of long-term
debts and capital lease obligations approximate their carrying values based on
interest rates currently available to the Company.

---

- 17 -

LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS JUNE
30, 2009

NOTE 2. SUMMARY OF PRINCIPAL ACCOUNTING POLICIES
(continued)

Comprehensive Income

Comprehensive income includes all changes in equity during a
period except those resulting from investments by owners and distributions to
owners.

Stock-based Payment

The Company adopted SFAS No. 123R, Share-Based Payment (SFAS
123R) using the modified prospective method. Under SFAS 123R, equity
instruments issued to employees for their services are measured at the
grant-date fair value and recognized in the statement of operations over the
service period.

The Company accounts for stock options and stock issued to
non-employees for goods or services in accordance with the fair value method of
SFAS 123R, which recognizes the value of such services at the fair value of the
equity instrument or of the goods or services, whichever is more readily
determinable.

Basic and Diluted Earnings (Loss) per Share

The Company reports basic earnings per share in accordance with
SFAS No. 128, Earnings Per Share. Basic earnings per share is computed using
the weighted average number of shares outstanding during the periods presented.
The weighted average number of shares of the Company represents the common stock
outstanding during the period. Diluted earnings per share is based on the
assumption that if there is no anti-dilutive effect on the basic earnings per
share, all dilutive convertible notes, options and warrants were converted or
exercised. Dilution is computed by applying the treasury stock method. Under
this method, options and warrants are assumed to be exercised at the beginning
of the year (or at the time of issuance, if later), and as if funds obtained
thereby were used to purchase common stock at the average market price during
the period.

Fair Value Disclosure

Effective April 1, 2008, the Company adopted SFAS No. 157,
Fair Value Measurements (SFAS No. 157). SFAS No. 157 clarifies the
definition of fair value, prescribes methods for measuring fair value and
establishes a fair value hierarchy to classify the inputs used in measuring fair
value as follows:

Level 1-Inputs are unadjusted quoted prices in active markets
for identical assets or liabilities available at the measurement date.

Level 2-Inputs are unadjusted quoted prices for similar assets
and liabilities in active markets, quoted prices for identical or similar assets
and liabilities in markets that are not active, inputs other then quoted prices
that are observable, and inputs derived from or corroborated by observable
market data.

Level 3-Inputs are unobservable inputs which reflect the
reporting entity's own assumptions on what assumptions the market participants
would use in pricing the asset or liability based on the best available
information.

The adoption of SFAS No. 157 did not have a material impact on
our fair value measurements as the Company does not have any balance sheet
components deemed financial assets or liabilities.

Advertising Expense

Advertising costs are expensed as incurred. Advertising expense
for the three months ended June 30, 2009 and 2008 was approximately $3,342 and
$17,270, respectively.

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- 18 -

LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS JUNE
30, 2009

NOTE 2. SUMMARY OF PRINCIPAL ACCOUNTING POLICIES
(continued)

Recent Accounting Pronouncements

In April 2009, the FASB issued FASB Staff Position (FSP) SFAS
No. 141(R)-1, Accounting for Assets Acquired and Liabilities Assumed in a
Business Combination That Arise from Contingencies. (FSP SFAS 141R-1). FSP
SFAS 141(R)-1 amends and clarifies SFAS 141(R) to address application issues on
initial recognition and measurement, subsequent measurement and accounting, and
disclosure of assets and liabilities arising from contingencies in a business
combination. FSP SFAS 141(R)-1 is effective for assets and liabilities arising
from contingencies in business combinations for which the acquisition date is on
or after the beginning of the first annual reporting period beginning on or
after December 15, 2008. The Company does not expect the adoption of FSP SFAS
141(R)-1 to have a material impact on its consolidated financial statements.

In April 2009, the SEC issued Staff Accounting Bulletin No. 111
(SAB 111). SAB 111 amends and replaces SAB Topic 5.M. in the SAB Series
entitled Other Than Temporary Impairment of Certain Investments in Debt and
Equity Securities. SAB 111 maintains the SEC staffs previous views related to
equity securities and amends Topic 5.M. to exclude debt securities from its
scope. The Company does not expect the implementation of SAB 111 to have a
material impact on its consolidated financial statements.

In May 2009, the FASB issued SFAS No. 165, Subsequent Events
(SFAS 165) to provide guidance on when a subsequent event should be recognized
in the financial statements. Subsequent events that provide additional evidence
about conditions that existed at the date of the balance sheet should be
recognized at the balance sheet date. Subsequent events that provide evidence
about conditions that arose after the balance sheet date but before financial
statements are issued, or are available to be issued, are not required to be
recognized. The date through which subsequent events have been evaluated must be
disclosed as well as whether it is the date the financial statements were issued
or the date the financial statements were available to be issued. For
nonrecognized subsequent events which should be disclosed to keep the financial
statements from being misleading, the nature of the event and an estimate of its
financial effect, or a statement that such an estimate cannot be made, should be
disclosed. The standard is effective for interim or annual periods ending after
June 15, 2009. This pronouncement was adopted by the Company effective June 30,
2009, and the adoption of this new standard did not have a material effect on
its consolidated financial position, results of operations or cash flows. The
Company has evaluated subsequent events through August 19, 2009, the date the
consolidated financial statements were issued.

In June 2009, the FASB issued SFAS No. 166, Accounting for
Transfers of Financial Assets  an amendment of FASB Statement No. 140 (SFAS
166). SFAS 166 limits the circumstances in which a financial asset should be
derecognized when the transferor has not transferred the entire financial asset
by taking into consideration the transferors continuing involvement. The
standard requires that a transferor recognize and initially measure at fair
value all assets obtained (including a transferors beneficial interest) and
liabilities incurred as a result of a transfer of financial assets accounted for
as a sale. The concept of a qualifying special-purpose entity is removed from
SFAS 140 along with the exception from applying FASB Interpretation Number
(FIN) 46(R). The standard is effective for the first annual reporting period
that begins after November 15, 2009, for interim periods within the first annual
reporting period, and for interim and annual reporting periods thereafter.
Earlier application is prohibited. The Company does not expect SFAS 166 to have
a material impact on its consolidated financial statements.

---

- 19 -

LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS JUNE
30, 2009

NOTE 2. SUMMARY OF PRINCIPAL ACCOUNTING POLICIES
(continued)

Recent Accounting Pronouncements (continued)

In June 2009, the FASB issued SFAS No. 167, Amendments to FASB
Interpretation No. 46(R) (SFAS 167). The standard amends FIN 46(R) to require
a company to analyze whether its interest in a variable interest entity (VIE)
gives it a controlling financial interest. A company must assess whether it has
an implicit financial responsibility to ensure that the VIE operates as designed
when determining whether it has the power to direct the activities of the VIE
that significantly impact its economic performance. Ongoing reassessments of
whether a company is the primary beneficiary is also required by the standard.
SFAS 167 amends the criteria to qualify as a primary beneficiary as well as how
to determine the existence of a VIE. The standard also eliminates certain
exceptions that were available under FIN 46(R). SFAS 167 is effective as of the
beginning of each reporting entitys first annual reporting period that begins
after November 15, 2009, for interim periods within that first annual reporting
period, and for interim and annual reporting periods thereafter. Earlier
application is prohibited. Comparative disclosures will be required for periods
after the effective date. The Company does not expect SFAS 167 to have a
material impact on its consolidated financial statements.

In June 2009, the FASB issued SFAS No. 168, The FASB
Accounting Standards Codification and the Hierarchy of Generally Accepted
Accounting Principles  a replacement of FASB Statement No. 162 (SFAS 168).
SFAS 168 establishes the FASB Accounting Standards Codification as the source of
authoritative generally accepted accounting principles for nongovernmental
entities. SFAS 168 is effective for interim and annual periods ending after
September 15, 2009, and is not expected to have a material impact on the
Companys consolidated financial statements.

In June 2009, the SEC issued Staff Accounting Bulletin No. 112
(SAB 112). SAB 112 revises or rescinds portions of the interpretative guidance
included in the codification of SABs in order to make the interpretive guidance
consistent with current generally accepted accounting principles. The Company
does not expect the adoption of SAB 112 to have a material impact on its
consolidated financial statements.

NOTE 3. COSTS AND ESTIMATED EARNINGS IN EXCESS OF BILLINGS
ON UNCOMPLETED CONTRACTS

Costs and estimated earnings in excess of billings on
uncompleted contracts as of June 30, 2009 and March 31, 2009 are summarized as
follows:

June 30,
    
    
    March 31,2009
    
    
    2009(Unaudited)$
    
    
    $Cumulative costs incurred on uncompleted
      contracts
    
    1,381,034
    
    
    761,574Cumulative estimated earnings to date
    
    517,179
    
    
    377,4201,898,213
    
    
    1,138,994Less: Billings to date
    
    1,076,864
    
    
    465,681821,349
    
    
    673,313


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- 20 -

LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS JUNE
30, 2009

NOTE 4. PREPAID EXPENSES AND OTHER CURRENT ASSETS

Prepaid expenses and other current assets consist of the
following:

June 30,
    
    
    March 31,2009
    
    
    2009(Unaudited)Presented in current assets:
    
    $
    
    
    $Trade deposits
    
    51,291
    
    
    51,291Rental, utilities and other deposits
    
    340,483
    
    
    380,365Prepaid expenses
    
    305,658
    
    
    397,495Other receivables
    
    949,572
    
    
    432,182Contract surety bond refundable deposit
    
    44,605
    
    
    44,605Other receivable regarding disposal of
      property, plant and equipment
    
    511,337
    
    
    511,2772,202,946
    
    
    1,817,215Presented in noncurrent assets:Other receivables
    
    511,337
    
    
    511,277


NOTE 5. INVENTORIES

Inventories  others by major category are summarized as
follows:

June 30,
    
    
    March 31,2009
    
    
    2009(Unaudited)$
    
    
    $Raw materials
    
    267,504
    
    
    290,338Work in progress
    
    1,193,322
    
    
    1,195,181Finished goods
    
    791,112
    
    
    789,0332,251,938
    
    
    2,274,552


Inventories  LED by major category are summarized as
follows:

June 30,
    
    
    March 31,2009
    
    
    2009(Unaudited)$
    
    
    $Finished goods
    
    1,264,975
    
    
    1,264,975


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- 21 -

LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS JUNE
30, 2009

NOTE 6. PLANT AND EQUIPMENT, NET

Plant and equipment consist of the following:

June 30,
    
    
    March 31,2009
    
    
    2009(Unaudited)$
    
    
    $Testing equipment
    
    381
    
    
    382Office equipment
    
    588,790
    
    
    577,273Furniture and fixtures
    
    29,904
    
    
    29,633Leasehold improvements
    
    377,850
    
    
    339,018Motor vehicles
    
    66,543
    
    
    66,153Factory machinery and equipment
    
    3,060,122
    
    
    3,059,764Total
    
    4,123,590
    
    
    4,072,223Less: Accumulated depreciation
    
    (1,664,023
    )
    
    (1,543,082
    )Plant and equipment, net
    
    2,459,567
    
    
    2,529,141


Equipment held under capital leases and included above is
summarized as follows:

June 30,
    
    
    March 31,2009
    
    
    2009(Unaudited)$
    
    
    $Motor vehicle
    
    14,990
    
    
    14,335Less: Accumulated depreciation
    
    (7,745
    )
    
    (6,690
    )Equipment, net held under capital leases
    
    7,245
    
    
    7,645


NOTE 7. OUT-OF-HOME ADVERTISING EQUIPMENT, NET

OOH advertising equipment consists of the following:

June 30,
    
    
    March 31,2009
    
    
    2009(Unaudited)$
    
    
    $OOH advertising LED display
    
    2,024,745
    
    
    1,991,995OOH advertising visual, audio and related equipment
    
    249,064
    
    
    238,189Total
    
    2,273,809
    
    
    2,230,184Less: Accumulated depreciation
    
    (64,732
    )
    
    (16,376
    )OOH advertising equipment, net
    
    2,209,077
    
    
    2,213,808


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- 22 -

LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS JUNE
30, 2009

NOTE 8. CONSTRUCTION IN PROGRESS - OUT-OF-HOME ADVERTISING
EQUIPMENT

OOH construction in progress consists of the following:

June 30,
    
    
    March 31,2009
    
    
    2009(Unaudited)$
    
    
    $Cost incurred related to construction of an
      OOHadvertising LED display in China
    
    266,250
    
    
    266,250


NOTE 9. GOODWILL AND INTANGIBLE ASSETS, NET

Goodwill was recognized upon to the acquisition of equity
interests in Beijing Illumination (Hong Kong) Limited (Beijing Illumination)
and Lightscape Technologies (Macau) Limited (Lightscape Macau) and represents
the costs of the investments over the estimated fair value of the underlying net
assets acquired.

Changes to goodwill during the three months ended June 30, 2009
and the year ended March 31, 2009 are as follows:

June 30,
    
    
    March 31,2009
    
    
    2009(Unaudited)$
    
    
    $Balance at the beginning of the period
    
    4,476,574
    
    
    4,476,574Impairment losses recognized
    
    -
    
    
    -Balance at the end of the period
    
    4,476,574
    
    
    4,476,574


Impairment Losses on Goodwill for Investment in Beijing
Illumination

Management takes full responsibility for valuing the assets and
the liabilities of the acquired entity, and has carefully reviewed the
reasonableness of the basis of valuation, valuation assumptions and valuation
methodology, in particular the use of the income approach, which is also known
as the discounted cash flow method (DCF). The fair value of goodwill and
intangible assets were determined by applying a discount rate (the cost of
capital) in the DCF model to determine the net present value of our acquired
subsidiarys future expected cash flows.

Intangible Assets

Intangible assets arise from the acquisition of interests in
subsidiaries. The costs of the intangible assets were determined during the
allocation of the purchase prices based on the estimated fair values of the
assets acquired and liabilities assumed as of the date of acquisition. Acquired
intangible assets consist of the following:

---

- 23 -

LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS JUNE
30, 2009

NOTE 9. GOODWILL AND INTANGIBLE ASSETS, NET
(continued)

Intangible Assets (continued)

|                                 |  | June 30, 2009 |  |  | March 31, 2009 |  
|-------------------------------- |  | ------------- |  |  | -------------- | -
|                                 |  |               |  |  | Accumulated    |  
|                                 |  |               |  |  | amortization   |  
|                                 |  |               |  |  | and            |  
|                                 |  | Cost          |  |  | impairment     |  
|                                 |  | $             |  |  | $              |  
|Subject to amortization          |  |               |  |  |                |  
|Completed technology  AHP       |  | 1,172,616     |  |  | (1,172,616     | )
|Completed technology  HID       |  | 1,214,012     |  |  | (996,631       | )
|Software and license (i)         |  | 651,429       |  |  | (606,596       | )
|Customer lists and relationships |  | 45,797        |  |  | (25,161        | )
|Distributors list                |  | 179,351       |  |  | (179,351       | )
|Total                            |  | 3,263,205     |  |  | (2,980,355     | )
|                                 |  |               |  |  |                |  
|Not subject to amortization      |  |               |  |  |                |  
|Trademark                        |  | 566,209       |  |  | -              |  
|                                 |  |               |  |  |                |  
|Total                            |  | 3,829,414     |  |  | (2,980,355     | )

|(i) | including an addition of $622 during the three
      months ended June 30, 2009.
|--- | --------------------------------------------------------------------------------

Amortization expenses charged to net loss from operations for
the three months ended June 30, 2009 and 2008 were approximately $120,844 and
$205,700 respectively. Anticipated amortization expense for each of the
following five years is as follows:

Twelve months ending June 30,
    
    $2010
    
    262,7682011
    
    8,0302012
    
    5,1562013
    
    4,5802014
    
    2,316282,850


NOTE 10. BANK BORROWINGS

Bank borrowings include two term loans each borrowed from DBS
Bank and OCBC Bank, respectively, by Media AV, with principal of Singapore
Dollars (SGD) SGD100,000, SGD50,000, SGD50,000 and SGD70,000, or $68,761,
$34,381, $34,381 and $48,133, respectively. The commencement dates are April 3,
2007, June 27, 2008, February 1, 2007 and February 19, 2009, respectively. The
loans are repayable by 36, 24, 60 and 48 monthly installments, and incur
interest at an annual rate of 12.5%, 12.5%, 13.12% and 13.38%, respectively.
These loans are secured by a deed of guarantee and indemnity by a director of
Media AV.

---

- 24 -

LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS JUNE
30, 2009

NOTE 10. BANK BORROWINGS (continued)

On April 2, 2009, the Company, through its wholly-owned
subsidiary Lightscape Technologies (Greater China) Limited (LTGC), obtained an
installment loan of $771,208 (HKD6,000,000) from DBS Bank (Hong Kong) Limited
(DBS Bank) under the Special Loan Guarantee Scheme of The Government of the
Hong Kong Special Administrative Region (HKSAR Government). The loan is
repayable over 12 equal monthly installments, at an interest rate of 2% per
annum over the prime lending rate, which is currently 5.25%, from May 12, 2009
to April 12, 2010. The installment loan is secured by a Special Loan Guarantee
issued by the HKSAR Government for an amount equal to 70% of the loan, a
Guarantee and Indemnity for an unlimited amount duly executed by a director of
the Company and a director of LTGC, and a Guarantee and Indemnity for an
unlimited amount duly executed by Tech Team Investment Limited, the immediate
holding company of LTGC. As of June 30, 2009, 2 of 12 installments have been
repaid to DBS Bank on the respective monthly due dates.

The following is a summary of future repayments related to bank
borrowings for the next five years:

Twelve months ending June 30,
    
    $2010
    
    699,3692011
    
    23,0952012
    
    19,1862013
    
    8,2072014
    
    -749,857


NOTE 11. OBLIGATIONS UNDER CAPITAL LEASES

June 30,
    
    
    March 31,2009
    
    
    2009(Unaudited)$
    
    
    $Total minimum lease payments, with $nil
      representing interest
    
    8,087
    
    
    8,217Less: Current portion of obligations under capital leases
    
    3,037
    
    
    (2,904
    )Long-term portion of obligations under
      capital leases
    
    5,050
    
    
    5,313


The following is a summary of future minimum lease payments
under capital leases as of June 30, 2009:

Twelve months ending June 30,
    
    $2010
    
    3,0372011
    
    3,0372012
    
    2,0132013
    
    -8,087


The Company entered into capital lease arrangements for leasing
a second hand truck used in its operations. The lease is for a term of five
years. For the three months ended June 30, 2009, the capital lease arrangement
was on an interest bearing basis. The leases are on a fixed repayment basis and
require no contingent rental payments. The interest expenses incurred on these
capital leases were $178 and $nil for the three months ended June 30, 2009 and
2008, respectively.

---

- 25 -

LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS JUNE
30, 2009

NOTE 12. OTHER RESERVES

The other reserves represent the statutory surplus reserve of
the Companys subsidiaries in the Peoples Republic of China (PRC).

Statutory Surplus Reserve

In accordance with the relevant laws and regulations of the PRC
and the subsidiaries articles of association, the subsidiaries are required to
appropriate 10% of their net income, after offsetting any prior years losses,
to the statutory surplus reserve. When the balance of such reserve reaches 50%
of the PRC subsidiaries share capital, any further appropriation is
optional.

The statutory surplus reserve can be used to offset prior
years losses, if any, and may be converted into share capital by issuing new
shares to shareholders in proportion to their existing shareholding or by
increasing the par value of the shares currently held by them, provided that the
remaining balance of the reserve after such issue is not less than 25% of share
capital. The statutory surplus reserve is non-distributable.

NOTE 13. FOREIGN CURRENCY TRANSACTION LOSS

Foreign currency transaction losses of $6,313 and $27,885 for
the three months ended June 30, 2009 and 2008, respectively, were included in
determining net losses.

NOTE 14. INCOME TAX

As of June 30, 2009 and March 31, 2009, the components of
deferred tax assets and liabilities were as follows:

At June 30,
    
    
    At March 31,2009
    
    
    2009(Unaudited)$
    
    
    $Deferred tax assets- tax losses
    
    2,722,116
    
    
    2,383,469- valuation allowance
    
    (2,402,447
    )
    
    (2,207,858
    )Net deferred tax assets
    
    319,669
    
    
    175,611Deferred tax liabilities- Tax depreciation allowance in excess of book
    
    (319,669
    )
    
    (175,611
    )depreciation and amortizationNet deferred tax
    
    -
    
    
    -


For the operating loss carry forwards of approximately
$12,510,855 as of June 30, 2009, $1,123,292, $211,696, $298,181, $1,355,338 and
$1,038,053 will expire in 2010, 2011, 2012, 2013 and 2014, respectively, and the
remainder of $8,484,295 will be carried forward indefinitely.

---

- 26 -

LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS JUNE 30,
2009

NOTE 14. INCOME TAX (continued)

As at June 30, 2009, upon confirmation of additional
depreciation allowance regarding capital expenditure on OOH LED display, the
Company had accumulated net operating loss carryforwards for Hong Kong income
tax purposes of approximately $7,975,549 that are available to offset future
taxable income. The Company also has accumulated net operating loss
carryforwards for Singapore income tax purposes of approximately $508,747 that
are available to offset future taxable income. Realization of the net operating
loss carryforwards is dependent upon future profitable operations. Accordingly,
management has adjusted the valuation allowance during the three months ended
June 30, 2009 to reduce the deferred tax asset associated with the net operating
loss carryforwards to $319,669 at June 30, 2009.

Additionally, as of June 30, 2009, upon expiry of certain net
operating loss and adjustment in respect of agreeing with agreed tax losses per
Tax Authority of China, the Company had accumulated net operating loss
carryforwards for Chinese tax purposes of approximately $605,046. Realization of
the Chinese tax net operating loss carryforwards is dependent on future
profitable operations, as well as a maximum five-year carryforward period.
Accordingly, management has adjusted valuation allowance to reduce the deferred
tax associated with the net operating loss carryforwards to zero at June 30,
2009. These tax losses yield deferred tax assets of approximately $151,262 as of
June 30, 2009.

The components of profit (loss) before income tax and
noncontrolling interests are as follows:

Three Months Ended June 30,2009
    
    
    2008$
    
    
    $Hong Kong
    
    (632,095
    )
    
    (912,071
    )Macau
    
    (2,383
    )
    
    (42,375
    )Singapore
    
    79,062
    
    
    (46,905
    )United States
    
    (93,657
    )
    
    -Mainland, the PRC
    
    (28,554
    )
    
    -(677,627
    )
    
    (1,001,351
    )


Tax laws applicable to the Company and its subsidiaries are as
follows:

- Tech Team Holdings Limited (TTHL) is a tax-exempted company incorporated
  in the Cayman Islands.
- Under the current BVI law, Tech Team (China) Limiteds, Tech Team
  Investment Limiteds and Powerland Technology Limiteds income are not subject
  to taxation.
- Lightscape Technologies Inc. and Tomi Fuji Energy Pte. Limited also had no
  assessable profits earned or had tax losses brought forward to offset current
  period assessable profit during the periods presented.
- No provision for PRC income tax has been made as Tech Team Development
  (Zhuhai) Limited (TT (Zhuhai)) had no assessable profits earned during the
  three months ended June 30, 2009 and 2008. Preferential tax treatment has been
  agreed with the relevant tax authorities and TT(Zhuhai) is exempted from PRC
  income tax in the first two profitable years and is subject to half of the
  standard statutory tax rate of 15% in the subsequent three years. However, as
  TT (Zhuhai) derived no taxable profits since its commencement of operations,
  this preferential tax treatment has expired and it is required to pay a tax
  rate of 25% from January 1, 2008 onward.

---

- 27 -

LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS JUNE
30, 2009

NOTE 14. INCOME TAX (continued)

- Pursuant to the relevant laws and regulations in the PRC, Beijing Aihua
  New Enterprise Lighting Appliance Company Limited (Beijing Aihua) is
  exempted from PRC enterprise income tax for two years starting from its first
  profitable year from January 2004 to December 2005. After it became a wholly
  foreign owned enterprise, Beijing Aihua is required to pay an effective tax
  rate of 12%, a 50% reduction from its normal tax rate of 24%, from January
  2006 to December 2008. From January 1, 2009 onward, Beijing Aihua is required
  to pay a normal 25% tax rate.
- Beijing Illumination is a Hong Kong company which is subject to a tax on
  profits of 16.5% from April 1, 2008 onward.
- Lightscape Macau is a company incorporated in Macau Special Administrative
  Region, which is subject to progressive tax rates to a maximum rate of 12%.
- Media AV International PTE Limited is a company incorporated in Singapore,
  which is subject to an 18% tax rate on its normal chargeable income. Effective
  from year of assessment 2008 (financial year ended March 31, 2009), a partial
  tax exemption is given to companies on normal chargeable income (excluding
  Singapore franked dividends) of up to SGD300,000, as follows: 75% of the first
  SGD10,000 of normal chargeable income, or at an effective tax rate of 4.5%;
  and 50% of the next SGD290,000 of normal chargeable income, or at an effective
  tax rate of 9%.
- Other companies are dormant and had no assessable profits earned during
  the periods presented.

Income tax expense (credit) for the three months ended June 30,
2009 and 2008 represents the provision for income tax in the following
jurisdictions:

Three Months Ended June 30,2009
    
    
    2008$
    
    
    $Current taxes:Hong Kong
    
    -
    
    
    -Macau
    
    -
    
    
    -Singapore
    
    -
    
    
    -Mainland, PRC
    
    3
    
    
    -3
    
    
    -


FIN 48 clarifies the application of SFAS No. 109, Accounting
for Income Taxes, by defining a criterion that an individual income tax
position must meet for any part of the benefit of that position to be recognized
in an enterprises financial statements and provides guidance on measurement,
derecognition, classification, accounting for interest and penalties, accounting
in interim periods, disclosure and transition.

The Company recognizes that virtually all tax positions in the
jurisdictions in which it operates are not free of some degree of uncertainty
due to tax law and policy changes by the state. However, the Company cannot
reasonably quantify political risk factors and thus must depend on guidance
issued by current state officials.

Based on all known facts and circumstances and current tax law,
the Company believes that the total amount of unrecognized tax benefits as of
June 30, 2009 is not material to its results of operations, financial condition
or cash flows. The Company also believes that the total amount of unrecognized
tax benefits as of June 30, 2009, if recognized, would not have a material
effect on its effective tax rate. The Company further believes that there are no
tax positions for which it is reasonably possible, based on current tax law and
policy to which we are subject, that the unrecognized tax benefits will
significantly increase or decrease over the next 12 months producing,
individually or in the aggregate, a material effect on the Companys results of
operations, financial position or cash flows.

---

- 28 -

LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS JUNE
30, 2009

NOTE 15. DISCONTINUED OPERATIONS

The Company accounts for its discontinued operations under the
provisions of SFAS No. 144, Accounting for the Impairment or Disposal of
Long-Lived Assets (SFAS 144). Accordingly, the results of operations and the
related charges for discontinued operations have been classified as (Loss) from
discontinued operations, net of income taxes on the accompanying Consolidated
Statements of Operations. Assets and liabilities of the discontinued operations
have been reclassified and reflected on the accompanying Consolidated Balance
Sheets as Current assets of discontinued operations and Current liabilities
of discontinued operations. For comparative purposes, all prior periods
presented have been restated to reflect the reclassifications on a consistent
basis.

During the year ended March 31, 2008, in order to more
effectively utilize the financial and other resources within other business
units, including the LED out-of-home advertising business and LED solutions
business, the Company decided to exit the energy-savings solutions business. No
further energy-savings products will be developed, nor will the Company provide
further energy management consulting services.

The Company accounts for its discontinued operations under the
provisions of SFAS No. 144, Accounting for the Impairment or Disposal of
Long-Lived Assets (SFAS 144). Accordingly, the results of operations and the
related charges for discontinued operations have been classified as (Loss) from
discontinued operations, net of income taxes on the accompanying Consolidated
Statements of Operations. Assets and liabilities of the discontinued operations
have been reclassified and reflected on the accompanying Consolidated Balance
Sheets as Current assets of discontinued operations and Current liabilities
of discontinued operations. For comparative purposes, all prior periods
presented have been restated to reflect the reclassifications on a consistent
basis.

During the year ended March 31, 2008, in order to more
effectively utilize the financial and other resources within other business
units, including the LED out-of-home advertising business and LED solutions
business, the Company decided to exit the energy-savings solutions business. No
further energy-savings products will be developed, nor will the Company provide
further energy management consulting services.

Remaining assets of the energy savings segment include only
certain receivables and lease receivables less unearned interests under
sales-type leases. Except for the collection of these receivables, the Company
will no longer have any significant continuing involvement in the energy-savings
segment. Therefore, the energy savings segment has been classified as
discontinued operations in accordance with SFAS 144.

Furthermore, the Company has determined to dispose of
construction in progress that was to be used for the production of a proposed
product line of its lighting source business. This asset has been stated at fair
value less costs to sell and is included with current assets of discontinued
operations on the accompanying Consolidated Balance Sheets.

Revenues and net profit (loss) from discontinued operations of
the energy savings business and disposal of construction in progress is as
follows:

Three Months Ended June 30,2009
    
    
    2008$
    
    
    $Operating revenue
    
    5,063
    
    
    1,494Pre-tax (loss) from discontinued operations
    
    (150
    )
    
    (13,946
    )Income tax credit (expense)
    
    -
    
    
    -Net (loss) from discontinued operations
    
    (150
    )
    
    (13,946
    )


---

- 29 -

LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS JUNE
30, 2009

NOTE 16. CONCENTRATION OF CREDIT RISK

As of June 30, 2009 and March 31, 2009, the Company has a
credit risk exposure of uninsured cash in banks of $58,933 and $51,707
(including cash of discontinued operations of $8,555), respectively. The Company
does not require collateral or other securities to support financial instruments
that are subject to credit risk.

Subsequent to the measures taken by the Hong Kong Monetary
Authority on October 14, 2008 to use the Exchange Fund to guarantee the
repayment of all customer deposits held in Authorised Financial Institutions in
Hong Kong, following the principles of the existing Deposit Protection Scheme,
assurance is made to depositors that their money is fully protected. Hence, as
of June 30, 2009 cash of $60,450 (including cash of discontinued operations of
$Nil) out of a total of $60,450 (including cash of discontinued operations of
$Nil) of the Companys cash held with banks in Hong Kong is now subject to no
credit risk.

On October 16, 2008, the Singapore government announced a
guarantee on deposits of individual and non-bank customers in banks, financial
companies and merchant banks in Singapore until year-end 2010. The guarantee is
backed by $100 billion (SGD $150 billion) of Singapore government reserves.
Hence, as of June 30, 2009 all of the Companys cash held with banks in
Singapore amounting to $7,129 is now subject to no credit risk.

The Company establishes an allowance for doubtful accounts
primarily based upon the age of the receivables and factors surrounding the
credit risk of specific customers.

For the three months ended June 30, 2009, one customer
accounted for approximately 21.3% of the Companys total revenues. As of June
30, 2009, there is one customer whose account receivable to the Company
accounted for 15.2% of total accounts receivable.

The Company relies on supplies from numerous vendors. For the
three months ended June 30, 2009, one vendor accounted for approximately 18% of
total supply purchases.

The Companys business, assets and operations are currently
focused on the LED out-of-home advertising business and the sales of LED
solutions and specialty lighting source products in Hong Kong, China, Singapore
and Macau, and accordingly, are affected to a significant degree by any
economic, political and legal developments in those regions.

NOTE 17. COMMITMENTS

Leases

The Company has operating lease agreements principally for its
office facilities and factory buildings. Such leases have remaining terms of
approximately 0.25 to 2.05 years. The following is a summary of future minimum
lease payments under operating leases as of June 30, 2009. Rental expense was
$86,835 and $65,630 for the three months ended June 30, 2009 and 2008,
respectively.



Twelve months ending June 30,
    
    $2010
    
    827,2972011
    
    586,103Thereafter
    
    34,6951,448,095


---

- 30 -

LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS JUNE
30, 2009

NOTE 17. COMMITMENTS (continued)

Royalties

Pursuant to a supplier agreement (the Agreement) dated March
8, 2006, entered into between Beijing Illumination and an independent third
party, the independent third party appointed Beijing Illumination as a
non-exclusive licensed OEM manufacturer with rights to make and distribute
certain products worldwide. Beijing Illumination shall pay to the independent
third party, during the term of the Agreement, 7% of gross revenues of certain
products sold to customers or distributors other than this independent third
party. Such royalty payments shall survive for five years after the termination
of the Agreement. No such royalty payment was accounted for or paid during the
three months ended June 30, 2009.

NOTE 18. RELATED PARTY BALANCES AND TRANSACTIONS

Related Party Transactions

In 2004, the Company acquired Tomi Fuji Energy Management
Services Limited (TFEMS) by issuing shares of its own stock to TFEMS holding
company, Tomi Fuji Corporation Limited (TFCL). The owner of TFCL guaranteed
certain net profits of TFEMS for the period from the date of acquisition in
early January 2005 to June 30, 2005 (the guaranteed period). TFEMS net
profits during the guarantee period fell short of the guaranteed amount by
approximately $605,000. Management is considering taking appropriate actions to
recoup the damages thereon from the guarantor.

The Company acquired Lightscape Macau in 2006 by payment of
$1,550 (Macau Pataca (MOP) MOP12,400) and issuance of 1,200,000 shares of the
Company upon the condition that Lightscape Macau would make a net profit of not
less than $2,564,103 (HK$20,000,000) for the period from October 1, 2006 to
September 30, 2007 (the guarantee period). Lightscape Macau had a loss during
the guaranteed period and management is taking action to cancel the 1,200,000
shares issued.

Related Party Balances

The amounts due to a director represents cash advances from
them and are unsecured, non-interest bearing and have no fixed repayment terms.
The balances related to such advances are as follows:

June 30,
    
    
    March 31,2009
    
    
    2009(Unaudited)$
    
    
    $Amount due to a director:Mr. Bondy Tan
    
    658,496
    
    
    745,501


NOTE 19. SEGMENT INFORMATION

The Company is engaged in three main business segments: (i) LED
out-of-home advertising, (ii) LED solutions and (iii) others including lighting
source products. These represent the Companys reportable segments.

The accounting policies of the operating segments are the same
as those described in the Summary of Principal Accounting Policies (see Note 2).
The Company evaluates performance based on profit or loss from operations,
excluding corporate, general and administrative expenses.

---

- 31 -

LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS JUNE
30, 2009

NOTE 19. SEGMENT INFORMATION (continued)

|                                                                                    |  | Three Months Ended June 30, |  
|----------------------------------------------------------------------------------- |  | --------------------------- | -
|                                                                                    |  | 2009                        |  
|                                                                                    |  | $                           |  
|Segment revenues from external customers:                                           |  |                             |  
|Advertising                                                                         |  | 188,625                     |  
|LED solutions                                                                       |  | 855,433                     |  
|Other                                                                               |  | 446,594                     |  
|                                                                                    |  | 1,490,652                   |  
|                                                                                    |  |                             |  
|Operating profit (losses):                                                          |  |                             |  
|Advertising                                                                         |  | (30,596                     | )
|LED solutions                                                                       |  | (498,142                    | )
|Other                                                                               |  | (260,169                    | )
|Loss from continuing operations before
      income tax and noncontrolling interest |  | (788,907                    | )

June 30,
    
    
    March 31,2009
    
    
    2009(Unaudited)$
    
    
    $Segment assets:Advertising
    
    3,855,821
    
    
    3,856,166LED solutions
    
    5,893,097
    
    
    7,476,596Other
    
    10,782,532
    
    
    8,605,13320,531,450
    
    
    19,937,895Assets of discontinued operations
    
    536,471
    
    
    619,66521,067,921
    
    
    20,557,560Capital expenditures:Advertising
    
    110,254
    
    
    1,575,671LED solutions
    
    39,182
    
    
    738,186Other
    
    -
    
    
    3,521149,436
    
    
    2,317,378


Geographical Information:

Three Months Ended June 30,2009
    
    
    2008$
    
    
    $Total sales:Mainland, the PRC
    
    508,556
    
    
    645,646Hong Kong
    
    759,629
    
    
    650,751Singapore
    
    81,428
    
    
    -India
    
    102,689
    
    
    26,001Mexico
    
    -
    
    
    230,407USA
    
    22,118
    
    
    -Others
    
    16,232
    
    
    5,9011,490,652
    
    
    1,558,706


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- 32 -

LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS JUNE
30, 2009

NOTE 19. SEGMENT INFORMATION (continued)

The location of the Companys long-lived assets is as
follows:

June 30,
    
    
    March 31,2009
    
    
    2009(Unaudited)$
    
    
    $Hong Kong
    
    5,622,617
    
    
    5,707,921Singapore
    
    549,151
    
    
    560,958Mainland, the PRC
    
    4,204,277
    
    
    4,297,30910,376,045
    
    
    10,566,188


One customer accounts for 21.3% and 14.8% of operating revenue
of the LED solutions segment for the three months ended June 30, 2009 and 2008
respectively, while none of the customers of the other segments accounts for
more than 10% of operating revenue for the three months ended June 30, 2009 and
2008.

NOTE 20. WARRANTS

In connection with the placement of 9,375,000 shares completed
on March 17, 2008, the Company issued warrants to Roth Capital Partners, LLC,
the placement agent, to purchase up to 656,250 shares of the Companys common
stock (representing 7% of the shares placed) as compensation for its placement
services. The warrants have a term of five years, are exercisable immediately
upon issuance and have an exercise price of $0.80 per share.

The warrants have been accounted for as common stock warrants
at fair value in the amount of $344,673, which forms part of shareholders
equity, with the corresponding charge debited directly to additional paid-in
capital, for the year ended March 31, 2008. The valuation of the warrants was
performed by management in accordance with Generally Accepted Valuation
Methodologies, including but not limited to, the discounted cash flow method,
the Black-Scholes-Merton option pricing model, and the Binomial option model, as
required by SFAS No. 123 (revised 2004) Share-Based Payment issued by the
FASB.

The following key valuation parameters have been used in
assessing the fair value of the warrants:

|Parameter               | For the Year Ended March 31, 2008
|----------------------- | ---------------------------------
|Stock price             | $1.11                            
|Exercise price          | $0.80                            
|Risk-free rate          | 2.44%                            
|Nature of the warrants  | Call                             
|Expected life           | 5 years                          
|Expected volatility     | 112.62%                          
|Expected dividend yield | 0.00%                            
|Early exercise behavior | 150% of the exercise price       

NOTE 21. SECURED LOAN

On May 13, 2009, the Company obtained a secured loan under a
working capital facility of $271,428 from a third party financial institution.
The loan is repayable over 24 equal monthly installments, at an interest rate of
9.17% effective per annum from the date of drawdown. It is secured by a joint
and several guarantee from two directors of subsidiaries of the Company and a
bankers guarantee of $67,857 for a period of 27 months from the date of
drawdown.

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- 33 -

The following is a summary of future repayments related to the
secured loan:

Twelve months ending June 30,
    
    $2010
    
    137,5242011
    
    137,523275,047


Item 2. Managements Discussion and Analysis of Financial
Condition and Results of Operations.

FORWARD-LOOKING STATEMENTS

Forward-Looking Statements

This quarterly report contains
forward-looking statements as that term is defined in Section 27A of the United
States Securities Act of 1933 and Section 21E of the United States Securities
Exchange Act of 1934. These statements relate to future events or our future
financial performance. In some cases, you can identify forward-looking
statements by terminology such as may, should, intends, expects,
plans, anticipates, believes, estimates, predicts, potential, or
continue or the negative of these terms or other comparable terminology. These
statements are only predictions and involve known and unknown risks,
uncertainties and other factors, including the risks in the section entitled
Risk Factors, which may cause our or our industrys actual results, levels of
activity or performance to be materially different from any future results,
levels of activity or performance expressed or implied by these forward-looking
statements.

Although we believe that the
expectations reflected in the forward-looking statements are reasonable, we
cannot guarantee future results, levels of activity or performance. Except as
required by applicable law, including the securities laws of the United States,
we do not intend to update any of the forward-looking statements to conform
these statements to actual results.

Use of Certain Defined Terms

In this quarterly report and
unless otherwise specified, all dollar amounts are expressed in United States
dollars, all references to common shares refer to the common shares in our
capital stock and the terms we, us and our refer to Lightscape
Technologies Inc. and our subsidiaries.

Company Overview

We were incorporated under the
laws of the State of Nevada under the name Legacy Bodysentials Inc. on
September 14, 1995. On September 25, 1996, we changed our name to Legacy
Minerals Inc. and on May 18, 1998, we changed our name to Global Commonwealth
Inc. On November 12, 1999, we changed our name to Global Innovative Systems
Inc. and on April 23, 2007, we changed our name to Lightscape Technologies
Inc. The name change became effective with the OTC Bulletin Board at the
opening for trading on April 23, 2007 under the new stock symbol LTSC.

We are a holding company for
subsidiaries engaged in three main business activities: (i) light-emitting diode
(LED) out-of-home advertising, (ii) LED solutions and (iii) other lighting
source products. During the three months ended June 30, 2009, approximately 13%
of our revenue was derived from our LED out-of-home advertising business, 57%
from our LED solutions business and 30% from other business.

LED Out-of-Home Advertising Business

We design, install and operate
LED out-of-home advertising billboards. We are building and expanding our LED
out-of-home advertising network (i) through billboard installations which we
complete and operate independently, and (ii) through installations which we
complete and operate through partnerships and/or joint ventures with major
property owners and developers in Asia. We generate revenue by selling
advertising space on our LED out-of-home media network to advertisers. We have
established and are continuing to establish advertising

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- 34 -

sales channels for our LED out-of-home advertising network by
forming strategic partnerships with advertising agencies and other media
industry partners.

We signed a joint venture
agreement on February 12, 2008 as part of our efforts to build an LED
out-of-home advertising network in the Peoples Republic of China (the PRC or
China). We entered this joint venture agreement with Beijing Xintong Media
& Cultural Development Co. Ltd. (BX). Pursuant to the terms of the joint
venture agreement, (i) the joint venture company will be named Beijing Xintong
New Vision Media Advertising Co. Ltd. (BXNV), (ii) our company agreed to
contribute to BXNV cash and an LED billboard for the joint ventures initial
installation within ninety business days of signing the agreement, and (iii) in
exchange for these contributions, our company will obtain 50.1% ownership of
BXNV, with the remaining 49.9% to be held by BX. The joint venture formation
process is ongoing. Certain details of the joint venture arrangement are being
finalized, including the process of completing the transfer of the 50.1% share
ownership in BXNV from BX to our company (or one of our subsidiaries), and other
minor strategic and operational details. Management does not believe that there
are any material risks to our ultimate receipt of 50.1% ownership of BXNV as
originally contemplated by the terms of the joint venture agreement signed on
February 12, 2008. Post-formation, we intend to account for our 50.1% interest
in the joint venture as a subsidiary in our consolidated financial statements.
As such, we will consolidate all profit and loss, assets and liability items and
eliminate the future minority shareholding portion held by BX, in this case
49.9%, as a minority interest. We expect the joint venture agreement to close
before the end of December 2009.

In addition to the pending joint
venture agreement, our company has expanded its out-of-home advertising network
relationship with the New World Group by working directly with New World
Department Store China (NWDSC) properties throughout mainland China. The first
phase of the network build-out with NWDSC is expected to include the
installation of an LED billboard at each of nine sites across four cities in
China and is expected to be completed by September 2009.

LED Solutions Business

We operate in three principal
lines of the LED products and services industry: (i) LED Systems, (ii) original
equipment manufacturing (OEM) and Licensing, and (iii) LED Screen Rental
Service. We provide design, installation and digital control of LED video and
lighting systems; OEM and licensing of our proprietary digital controller
software system; and rentals of LED screens and related hardware.

Other Business

Through our 76.8% ownership of
Beijing Illumination, we research, develop, manufacture and sell lighting source
products. Beijing Illumination, through its wholly-owned subsidiary Beijing
Aihua, manufactures and sells HID lighting products including metal halide lamps
and high-pressure sodium lamps.

Application of Critical Accounting Policies

Our discussion and analysis of
our financial condition and results of operations are based on our consolidated
financial statements, which have been prepared in accordance with U.S. GAAP. The
preparation of these financial statements requires us to make estimates and
judgments that affect the reported amounts of assets, liabilities, revenues and
expenses. We evaluate, on an on-going basis, our estimates for reasonableness as
changes occur in our business environment. We base our estimates on experience
and various other assumptions that we believe to be reasonable under the
circumstances, the results of which form the basis for making judgments about
the carrying values of assets and liabilities that are not readily apparent from
other sources. Actual results may differ from these estimates under different
assumptions or conditions.

Critical accounting policies are
defined as those that are reflective of significant judgments, estimates and
uncertainties, and potentially result in materially different results under
different assumptions and conditions. We believe the following are our critical
accounting policies:

Revenue Recognition

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- 35 -

Our company recognizes revenue
when it has persuasive evidence of an arrangement, the product has been
delivered and installed or the services have been provided to the customer, the
sales price is fixed or determinable, and collectability is reasonably assured.
In addition to the aforementioned general policy, the following are specific
revenue recognition policies for each major category of revenue.

Advertising LED out-of-home
advertising revenue from advertising services, net of agency rebates and
commissions, is recognized ratably over the period in which the advertisement is
displayed. Prepayments for the advertising services are deferred and recognized
as revenue when the advertising services are rendered.

LED solutions Our company
sells its products directly to end users and through distributors. Revenue is
recognized when the product is delivered to the customer and all other revenue
recognition criteria are met. Revenues for LED solutions activities provided on
a supply and build basis and for consultancy services for which the revenue
generation process lasts for several months are recognized on the
percentage-of-completion (PC) method.

American Institute
of Certified Public Accountants (AICPA) Accounting Research Bulletin (ARB)
No. 45, Long-Term Construction-Type Contracts, (1955) and AICPA Statement of
Position (SOP) 81-1, Accounting for Performance of Construction-Type and
Certain Production-Type Contracts, (1981) address revenue recognition for
long-term construction-type contracts. Since most of our companys LED solution
revenue relates to construction contracts, which by their nature are long-term,
the underlying accounting principle known as matching  expenses follow revenues
 would be violated if the revenue from the contract were recognized upon
contract execution or sale of the services.

There are two
acceptable methods of revenue recognition under the preceding pronouncements for
construction contractors.These are not alternative methods, however,
from which contractors are free to choose regardless of the circumstances. One is the PC method and the other is the completed contract
(CC) method. Under the PC method, the construction contractor recognizes
revenue over the life of the construction contract based on the degree of
completion. For example, 50% completion means recognition of one-half of
revenues, costs, and income. Under the CC method, all revenues, costs, and
income are recognized only at completion of the construction project, ordinarily
at the end of the construction contract.The PC method is preferred and
should be used whenever the conditions for its use are satisfied.

SOP 81-1 requires
that the PC method be used in lieu of the CC method when all of the following
are present: (1) reasonably reliable estimates can be made of revenue and costs;
(2) the construction contract specifies the parties rights as to the goods,
consideration to be paid and received, and the resulting terms of payment or
settlement; (3) the contract purchaser has the ability and expectation to
perform all contractual duties; and (4) the contract contractor has the same
ability and expectation to perform.

SOP 81-1 states, Contract costs
generally include direct costs, such as materials, direct labor, and
subcontracts and indirect costs identifiable with or allocable to the
contracts.

Our company always seeks to use the
fairest approximation of the PC method. LED solutions projects for which our
clients can provide their quantity surveyors certificate (QC certificate)
allow us to use the certificate as a basis that is applied consistently for
estimation and accrual of revenue and related costs. In the absence of a QC
certificate, our company will calculate a projects PC based on the ratio of
incurred costs to estimated final costs.

Contract costs include all direct
material, labor, subcontract and other costs and those indirect costs related to
contract performance, such as indirect salaries and wages, equipment repairs and
depreciation, insurance and payroll taxes. Administrative and general expenses
are charged to expense as incurred. Provisions for estimated losses on
uncompleted contracts are made in the period in which such losses are
determined. Changes in job performance, job conditions and estimated
profitability, including those changes arising from contract penalty provisions
and final contract settlements may result in revisions to costs and income and
are recognized in the period in which the revisions are determined. An amount
attributable to contract claims is

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- 36 -

included in revenues when realization
is probable and the amount can be reliably estimated. We generally provide a
one-year warranty for workmanship under our contracts. Warranty claims
historically have been inconsequential.

The asset, Costs and estimated
earnings in excess of billings on uncompleted contracts represents revenues
recognized in excess of amounts billed on these contracts. The liability
Billings in excess of costs and estimated earnings on uncompleted contracts
represents billings in excess of revenues recognized on these contracts.

Other This includes sales of
lighting source products, rental income, commission and service income and
sales-type lease income. Regarding sales of lighting source products,our
company sells its products directly to end users and through distributors.
Revenue is recognized when the product is delivered to the customer and all
other revenue recognition criteria are met. Revenue from rentals and operating
leases without any acceptance provisions is recognized on a straight-line basis
over the term of the rental or lease. Revenue regarding commission and service
income is recognized when services are rendered. Revenue from sales-type leases
is recognized over the term of the lease, using the effective interest method.

Foreign Currency Translation

The functional currency of our
company is Hong Kong dollars (HKD). Transactions in other currencies are
recorded in HKD at the rates of exchange prevailing when the transactions occur.
Monetary assets and liabilities denominated in other currencies are measured in
HKD at rates of exchange in effect at the balance sheet dates. Exchange gains
and losses are recorded in the consolidated statements of operations as a
component of current period earnings. For financial reporting purposes, the
financial statements of our company which are prepared using the functional
currency have been translated into United States dollars. Assets and liabilities
are translated at the exchange rates at the balance sheet dates and revenue and
expenses are translated at the average exchange rate for the period and
stockholders equity is translated at historical exchange rates. Any translation
adjustments resulting from the translation are included in foreign exchange
adjustment in other comprehensive income, a component of stockholders equity.

Impairment of Long-Lived Assets

Our company reviews long-lived
assets for potential impairment based on a review of projected undiscounted cash
flows associated with these assets. Long-lived assets are included in impairment
evaluations when events and circumstances exist that indicate the carrying
amount of these assets may not be recoverable. Measurement of impairment losses
for long-lived assets that our company expects to hold and use is based on the
estimated fair value of the assets. Therefore, future changes in our companys
strategy and other changes in our operations could impact the projected future
operating results that are inherent in estimates of fair value, resulting in
impairments in the future. Additionally, other changes in the estimates and
assumptions, including the discount rate and expected long-term growth rate,
which drive the valuation techniques employed to estimate the fair value of
long-lived assets could change and, therefore, impact the assessments of
impairment in the future.

Accounts Receivables and Allowance for Doubtful Accounts

Our company performs certain
credit evaluation procedures and does not require collateral for financial
instruments subject to credit risk. We believe that credit risk is limited
because our company routinely assesses the financial strength of our customers
and, based upon factors surrounding the credit risk of our customers, we
establish an allowance for estimated uncollectible accounts receivable. As a
consequence, we believe that our accounts receivable credit risk exposure beyond
such allowances is limited. We recognize an allowance for doubtful accounts to
ensure accounts receivable are not overstated due to uncollectibility and are
maintained for all customers based on a variety of factors, including the length
of time the receivables are past due, significant one-time events and historical
experience. An additional reserve for individual accounts is recorded when our
company becomes aware of a customers inability to meet its financial
obligation, such as in the case of bankruptcy filings or

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- 37 -

deterioration in the customers operating results or financial
position. If circumstances related to customers change, estimates of the
recoverability of receivables would be further adjusted.

Material Trends and Uncertainties

Periodic changes occur in our
companys industry and business that make it reasonably likely that aspects of
our future operating results will be materially different from our historical
operating results. Sometimes these matters have not occurred, but their
existence is sufficient to raise doubt regarding the likelihood that historical
operating results are an accurate gauge of future performance. We attempt to
identify and describe these trends, events, and uncertainties to assist
investors in assessing the likely future performance of our company. Investors
should understand that these matters typically are new, sometimes unforeseen,
and often are fluid in nature. Moreover, the matters described below are not the
only issues that may result in variances between past and future performance nor
are they necessarily the only material trends, events, and uncertainties that
will affect our company. As a result, investors are encouraged to use this and
other information to judge for themselves the likelihood that past performance
will be indicative of future performance.

We are building an LED
out-of-home advertising network in the PRC, Hong Kong and other areas of Asia.
Following the acquisition of Lightscape Technologies (Macau) Limited
(Lightscape Macau) in 2006, our company entered the LED solutions business,
which includes the design, supply and building of LED systems, OEM and licensing
of our proprietary intelligent lighting control software, and rental of LED
hardware. Our current business strategy is focused on (i) building and expanding
our LED out-of-home advertising network through installations we complete and
operate independently, through existing partnerships and by establishing new
partnerships with major property owners and developers in Asia, (ii)
establishing advertising sales channels for our LED out-of-home advertising
network by forming strategic partnerships with advertising agencies and other
media industry partners and (iii) growing sales from our LED solutions business,
primarily our LED systems segment, through design, supply and build contracts
with high-end real estate developments in China, Hong Kong, Singapore and other
areas of Asia. The future performance of these specific business segments may
materially affect the future performance of our company. Our company continues
to develop, manufacture and sell lighting source products. However, we are
reviewing our plans and strategic options related to this business unit.

Recent disruptions in financial
markets and challenging economic conditions may adversely affect our business.
Firstly, we depend to a large extent on outside capital over the near-term to
fund our capital needs. Disruptions in financial markets have reduced the
general availability of both equity capital and debt financing. If we are unable
to obtain financing in the amounts and on terms deemed acceptable to us, we may
be unable to implement our business and growth strategies or withstand adverse
operating results. Secondly, the disruptions in the financial markets and
challenging economic conditions have reduced spending by businesses. Our
operating results in one or more segments may be adversely affected by these
slowing economic conditions and spending patterns. If global economic and market
conditions remain uncertain or persist, spread, or deteriorate further, we may
experience material impacts on our business, operating results, and financial
condition. Lastly, in times of economic slowdown, the number of our customers
who default on payments owed to us may increase. We could experience longer
payment cycles, increased collection costs and higher bad debt expenses.
Additionally, to the degree that the ongoing turmoil in the credit markets makes
it more difficult for some customers to obtain financing, those customers
ability to pay could be adversely impacted, which in turn could have a material
adverse impact on our business, operating results, and financial condition.

Summary of Key Results

Total net revenue for the three
months ended June 30, 2009 was $1,490,652, which represents a 4% decrease from
the total net revenue of $1,558,707 for the three months ended June 30,
2008.

Net loss for the three months
ended June 30, 2009 was $754,435 compared to a net loss of $993,861 for the
three months ended June 30, 2008.

Basic and fully diluted loss per
share for the three months ended June 30, 2009 was $0.01 compared to a basic and
fully diluted loss per share of $0.02 for the three months ended June 30, 2008.

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- 38 -

Results of Operations  Three Months Ended June 30,
2009

Our net loss for the three months
ended June 30, 2009 was $754,435 compared to a net loss of $993,861 for the
three months ended June 30, 2008, or a reduction in net loss of $239,426.

Revenues and Cost of Revenues

Total net revenue for the three
months ended June 30, 2009 was $1,490,652, representing a 4% decrease from the
total net revenue of $1,558,707 for the three months ended June 30, 2008. The
decrease in net revenues is primarily attributable to the decrease in revenue
from our non-core businesses, primarily our HID lighting products business.

Specifically, revenue related to
our LED out-of-home advertising business was $188,625 for the three months ended
June 30, 2009 as compared to $nil during the three months ended June 30, 2008.
The gross profit margin on our LED out-of-home advertising business was 79.2%
for the three months ended June 30, 2009. Our LED out-of-home advertising
business is expected to contribute increased revenues in the foreseeable future
as we ramp up several key LED billboard installations which were completed
during the three months ended June 30, 2009 and are expected to begin generating
advertising revenue in the near future. Our company has formed strategic
partnerships with Ogilvy & Mather Group, a major advertising agency in Hong
Kong, and LIME, a diversified media conglomerate, to sell advertising space on
our LED billboards. We are also in the process of negotiating strategic
partnership agreements and contracts with other advertising agencies and
advertisers for the sales of advertising space on the LED billboard network.

Revenue related to our LED
solutions business increased to $855,433 for the three months ended June 30,
2009 from $652,949 during the three months ended June 30, 2008, or an increase
of 31%. The increase in revenues was due primarily to the completion of more LED
solutions contracts during the three months ended June 30, 2009 as compared to a
smaller number of contracts completed during the three months ended June 30,
2008. The gross profit margin on our LED solutions business was 25.1% for the
three months ended June 30, 2009. Our LED solutions business is expected to
contribute increased revenues in the foreseeable future as several key projects
are expected to be completed in the near future.

Sales from our other business,
which includes our HID lighting products business, were $446,594 for the three
months ended June 30, 2009 compared to $905,758 for the three months ended June
30, 2008, representing a decrease of 51%. The decrease in revenues from our
other businesses was due primarily to a decrease in revenue from sales of HID
lighting products by our subsidiary Beijing Illumination. The decrease in sales
by Beijing Illumination was due primarily to the scaling back of overall
operations, including reducing production lines, production shifts and
personnel, in order to focus on our companys core LED out-of-home advertising
and LED solutions businesses. The gross profit margin on our other business was
16.3% for the three months ended June 30, 2009. We are currently reviewing our
plans and strategic options related to our HID lighting products business.

Total cost of revenues for the
three months ended June 30, 2009 was $1,053,790, which represents a decrease of
6% as compared to total cost of revenues of $1,126,968 for the three months
ended June 30, 2008. The decrease in the total cost of revenues during the three
months ended June 30, 2009 was due in part to the 4% decrease in sales revenues,
but also decreased due to improved cost control related to our LED solutions
business, namely supplies of LED modules and video screens, and a higher
proportion of revenue from the LED out-of-home advertising business, which
generally provides for a higher profit margin than our LED solutions or other
business. The lower costs of supplies are a result of general technological
improvements and economies of scale in the manufacture of LED hardware by our
OEM suppliers, and our ability to secure supply contracts on more favorable
terms. As a result, our overall gross profit margin improved to 29.3% for the
three months ended June 30, 2009 as compared to 27.7% for the three months ended
June 30, 2008.

Operating Expenses

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- 39 -

Operating expenses for the three
months ended June 30, 2009 were $1,271,751, which represents an 11% decrease in
operating expenses from $1,434,557 for the three months ended June 30, 2008.
Selling and marketing expenses, general and administrative expenses and
amortization of intangible assets constitute the main components of our
operating expenses.

Selling and marketing expenses
for the three months ended June 30, 2009 increased approximately 45% to $238,393
from $163,975 for the three months ended June 30, 2008. The increase was mainly
due to increased costs incurred in order to build up our project pipeline of LED
solutions contracts, and to establish our sales network for our LED out-of-home
advertising business. Our company anticipates that selling and marketing
expenses will remain steady or increase in the future to support our companys
further expansion in our core LED out-of-home advertising and LED solutions
businesses, however, such increases are expected to be limited as a result of a
company-wide cost-cutting initiative implemented in January 2009.

General and administrative
expenses decreased by 11% during the three months ended June 30, 2009 to
$835,427 from $936,794 for the three months ended June 30, 2008. The decrease
was mainly due to the cost savings achieved as a result of the company-wide
cost-cutting initiative implemented in January 2009. Our company anticipates
that general and administrative costs will remain steady or increase in the
foreseeable future as our companys operations continue to expand, however, such
increases are expected to continue to be limited as a result of a company-wide
cost-cutting initiative.

Our company acquired certain
intangible assets through the acquisitions of TFEMS and Beijing Illumination.
These intangible assets are comprised of completed technology for the production
of AHP lamps, trademarks, a customer base and a distributors list. Amortization
of intangible assets incurred for the three months ended June 30, 2009 was
$120,844 as compared to $205,653 for the three months ended June 30, 2008. The
decrease was due to the carrying value of intangible assets as of March 31, 2009
being lower than as of March 31, 2008 as a result of full amortization of
certain of the assets during the year ended March 31, 2009.

Liquidity and Capital Resources

Our principal cash requirements
are for operating expenses, including staff costs and funding costs of
inventory.

As of June 30, 2009, our company
had a net working capital surplus of $5,996,489 compared to a surplus of
$6,287,977 as of March 31, 2009, representing a decrease in working capital of
$291,488. The cash and cash equivalents of our company attributable to
continuing operations decreased to $149,549 as at June 30, 2009 as compared to
$381,643 as of March 31, 2009. Cash attributable to discontinued operations
totaled $nil as of June 30, 2009 and $8,555 as of March 31, 2009.

Cash Flow Related to Operating Activities

Operating activities used cash of
$900,051 for the three months ended June 30, 2009 as compared to operating
activities providing cash of $72,707 for the three months ended June 30, 2008.
The increase in cash used in operating activities was mainly due to an increase
in accounts receivable. Our accounts receivable balance increased as we made no
significant collections of accounts receivable while adding to our accounts
receivable balance near the completion stage of LED solutions projects during
the three months ended June 30, 2009, compared to the collection of accounts
receivable of approximately $570,000 during the three months ended June 30,
2008.

Cash Flow Related to Investing Activities

Net cash used in investing
activities amounted to $153,821 during the three months ended June 30, 2009 as
compared to investing activities using cash of $2,814 during the three months
ended June 30, 2008. The increase in cash used in investing activities is
attributable primarily to our companys purchase of LED out-of-home advertising
displays and purchases of plant and equipment to support our growing LED
solutions business in Singapore.

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Our company incurred capital
expenditures of $148,814 during the three months ended June 30, 2009 and $2,814
for the three months ended June 30, 2008. The increase in capital expenditures
for the three months ended June 30, 2009 as compared to June 30, 2008 was mainly
attributable to increased purchases of LED out-of-home advertising equipment. As
of June 30, 2009, our company did not have any material commitments for capital
expenditures and management does not anticipate that our company will spend
additional material amounts on capital expenditures in the near future.

Cash Flow Related to Financing Activities

Financing activities generated
cash of $811,133 for the three months ended June 30, 2009 as compared to
financing activities generating cash of $487,978 for the three months ended June
30, 2008. The increase in net cash flow generated by financing activities was
mainly due to our company obtaining bank loans to fund operations.

During the three months ended
June 30, 2009, our company, through Lightscape Technologies (Greater China)
Limited (LTGC), obtained an installment loan of $771,208 (HKD6,000,000) from
DBS Bank (Hong Kong) Limited (DBS Bank) under the Special Loan Guarantee
Scheme of The Government of the Hong Kong Special Administrative Region (HKSAR
Government). The loan is repayable over 12 equal monthly installments, at an
interest rate of 2% per annum over the prime lending rate, which is currently
5.25%, from May 12, 2009 to April 12, 2010. The installment loan is secured by a
Special Loan Guarantee issued by the HKSAR Government for an amount equal to 70%
of the loan, a Guarantee and Indemnity for an unlimited amount duly executed by
a director of our company and a director of LTGC, and a Guarantee and Indemnity
for an unlimited amount duly executed by Tech Team Investment Limited, the
immediate holding company of LTGC. As of June 30, 2009, two out of twelve
installments have been repaid to DBS Bank on the respective monthly due dates.

On May 13, 2009, our company
obtained a secured loan under a working capital facility of $271,428 from a
third party financial institution. The loan is repayable over 24 equal monthly
installments, at an interest rate of 9.17% effective per annum from the date of
drawdown. It is secured by a joint and several guarantee from two directors of
subsidiaries of our company and a bankers guarantee of $67,857 for a period of
27 months from the date of drawdown.

Management believes that
additional cash may need to be raised in the next twelve months to finance our
existing operations and expansion of our LED out-of-home advertising and LED
solutions businesses since we have not yet achieved sustainable positive cash
flows. As such, we may need to depend on outside capital over the near-term,
including the next twelve months, to fund our capital needs. Such outside
capital may be obtained from additional debt or equity financing. We do not
currently have any arrangement for financing and there is no assurance that
capital will be available to meet our continuing development costs or, if the
capital is available, that it will be on terms acceptable to us.

Off-Balance Sheet Arrangements

Our company has no outstanding
derivative financial instruments, off-balance sheet guarantees, interest rate
swap transactions or foreign currency contracts. Our company does not engage in
trading activities involving non-exchange traded contracts.

Item 3. Quantitative and Qualitative Disclosures About
Market Risk.

As a smaller reporting company, we are
not required to provide this information.

Item 4T. Controls and Procedures.

As required by Rule 13a-15 under
the Securities Exchange Act of 1934, as of the end of the period covered by this
quarterly report, being June 30, 2009, we have carried out an evaluation of the
effectiveness of the design and operation of our companys disclosure controls
and procedures. This evaluation was carried out under the supervision and with
the participation of our management, including our Chief Executive Officer.
Based upon that evaluation, our Chief Executive Officer concluded that our
disclosure controls and procedures are effective as at the

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end of the period covered by this report. There have been no
significant changes in our internal controls over financial reporting that
occurred during our most recent fiscal quarter ended June 30, 2009 that have
materially affected, or are reasonably likely to materially affect our internal
controls over financial reporting.

Disclosure controls and
procedures and other procedures that are designed to ensure that information
required to be disclosed in our reports filed or submitted under the Securities
Exchange Act of 1934 is recorded, processed, summarized and reported, within the
time period specified in the Securities and Exchange Commissions rules and
forms. Disclosure controls and procedures include, without limitation, controls
and procedures designed to ensure that information required to be disclosed in
our reports filed under the Securities Exchange Act of 1934 is accumulated and
communicated to management, including our Chief Executive Officer to allow
timely decisions regarding required disclosure.

Our management, including our
Chief Executive Officer and Chief Accounting Officer, does not expect that our
disclosure controls and procedures or our internal controls will prevent all
errors and all fraud. A control system, no matter how well conceived and
operated, can provide only reasonable, not absolute, assurance that the
objectives of the control system are met. Further, the design of a control
system must reflect the fact that there are resource constraints, and the
benefits of controls must be considered relative to their costs. Because of the
inherent limitations in all control systems, no evaluation of the controls can
provide absolute assurance that all control issues and instances of fraud, if
any, within our company have been detected.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

We know of no material, active,
or pending legal proceeding against our company, nor are we involved as a
plaintiff in any material proceeding or pending litigation where such claim or
action involves damages for more than 10% of our current assets as of June 30,
2009. There are no proceedings in which any of our companys directors,
officers, or affiliates, or any registered or beneficial shareholders, is an
adverse party or has a material interest adverse to our companys interest.

Item 1A. Risk Factors.

Much of the information included
in this quarterly report includes or is based upon estimates, projections or
other forward-looking statements. Such forward-looking statements include
projections or estimates made by us and our management in connection with our
business operations. While these forward-looking statements, and any assumptions
upon which they are based, are made in good faith and reflect our current
judgment regarding the direction of our business, actual results will almost
always vary, sometimes materially, from any estimates, predictions, projections,
assumptions or other future performance suggested herein.

Such estimates, projections or
other forward-looking statements involve various risks and uncertainties as
outlined below. We caution the reader that important factors in some cases have
affected and, in the future, could materially affect actual results and cause
actual results to differ materially from the results expressed in any such
estimates, projections or other forward-looking statements. Prospective
investors should consider carefully the risk factors set out below.

Risks Related to Our Business

Our limited operating history makes it difficult to evaluate
our future prospects and results of operations.

We have a limited operating
history. Accordingly, you should consider our future prospects in light of the
risks and uncertainties experienced by early stage companies in evolving markets
such as the growing market for LED out-of-home advertising and LED systems in
the PRC. Some of these risks and uncertainties relate to our ability to:

- attract new customers and increase spending per customer;

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- increase awareness of our brand and continue to develop customer loyalty;
- respond to competitive market conditions;
- respond to changes in our regulatory environment;
- manage risks associated with intellectual property rights;
- maintain effective control of our costs and expenses;
- raise sufficient capital to sustain and expand our business; and
- attract, retain and motivate qualified personnel.

If we are unsuccessful in
addressing any of these risks and uncertainties, our business may be materially
and adversely affected.

We may require additional financing, the availability of
which cannot be assured, and if our company is unable to obtain such financing,
our business may fail.

Our business plan calls for
expenses, working capital and capital expenditures necessary to continue the
build-up of our LED out-of-home advertising network and to complete supply and
build contracts for LED systems. However, there is no assurance that actual cash
requirements will not exceed our estimates. We may need to raise additional
funds to:

- support our planned rapid growth;
- develop new or enhanced services and technologies;
- increase our marketing efforts;
- acquire complementary businesses or technologies; and/or
- respond to competitive pressures or unanticipated requirements.

We depend to a large extent on
outside capital over the near-term to fund our capital needs. Such outside
capital may be obtained from additional debt or equity financing. We do not
currently have any arrangement for financing and there is no assurance that
capital will be available to meet our continuing development costs or, if the
capital is available, that it will be on terms acceptable to us. Disruptions in
financial markets and challenging economic conditions have affected and may
continue to affect our ability to raise capital. The issuance of additional
equity securities by us would result in a dilution in the equity interests of
our current stockholders. Obtaining commercial loans, assuming those loans would
be available, would increase our liabilities and future cash commitments. If we
are unable to obtain financing in the amounts and on terms deemed acceptable to
us, we may be unable to implement our business and growth strategies, respond to
changing business or economic conditions, withstand adverse operating results,
consummate desired acquisitions or compete effectively.

Our operations are cash intensive and our business could be
adversely affected if we fail to maintain sufficient levels of working capital.

We expend a significant amount of
cash in our operations, principally to fund our procurement of LED-based
hardware. Our suppliers typically require payment in full within 30-60 days
after delivery, although some of our suppliers provide us with credit. In turn,
we typically require our customers to make payment in full on delivery, although
we offer some of our long-standing customers credit terms. We generally fund
most of our working capital requirements out of cash flow generated from
operations. Accordingly, if we fail to generate sufficient revenues

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from our sales, or if we experience difficulties collecting our
accounts receivable, we may not have sufficient cash flow to fund our operating
costs and our profitability and results of operations could be adversely
affected.

Our operating results may fluctuate from period to period
and if we fail to meet market expectations for a particular period, our share
price may decline.

Our operating results have
fluctuated from period to period and are likely to continue to fluctuate as a
result of a wide range of factors, including a historical reliance on
non-recurring revenue streams. For example, our provision of LED systems
generally consists of large-scale, one-off supply and build contracts completed
for large property developments. Interim reports may not be indicative of our
performance for the year or our future performance, and period-to-period
comparisons may not be meaningful due to a number of reasons beyond our control.
We cannot assure you that our operating results will meet the expectations of
market analysts or our investors. If we fail to meet their expectations, there
may be a decline in our share price.

If there are any interruptions to or a decline in the
quality of our LED hardware supply channels, our sales could be materially and
adversely affected.

LED video screens, modules and
lighting hardware are the principal component parts used in our sales. We
procure all of our LED hardware from a number of third-party manufacturers. Our
third-party suppliers may not continue to be able to provide an adequate supply
of LED hardware to satisfy our present and future sales needs. The supply of LED
video screens, modules and lighting hardware is dependent on the output of OEM
LED manufacturers. Our current suppliers may not be able to provide LED video
screens, modules and lighting hardware of sufficient quality to meet our quality
control requirements. Any interruptions to or decline in the amount or quality
of our LED hardware supply could materially disrupt our sales and adversely
affect our business. We are vulnerable to increases in the price of raw
materials (particularly of LED modules and video screens) and other operating
costs. If the costs of raw materials or other costs of sales and distribution of
our products and services increase, and we are unable to entirely offset these
increases by raising prices of our products and services, our profit margins and
financial condition could be adversely affected.

We operate in a highly-competitive industry and our failure
to compete effectively may adversely affect our ability to generate
revenue.

Management is aware of similar
products and services which compete directly with our LED out-of-home
advertising and LED systems, and some of the companies developing and offering
these similar products and services have greater financial, technical and
marketing resources, larger LED out-of-home advertising and LED system
distribution networks, and greater brand name recognition than we do. These
companies may develop products and services superior to those of our company.
Such competition will potentially affect our chances of achieving profitability
in the future.

This may place us at a
disadvantage in responding to our competitors pricing strategies, technological
advances, marketing campaigns, alliances and other initiatives. Some of our
competitors conduct more extensive promotional activities and offer lower prices
to customers than we do, which could allow them to gain greater market share or
prevent us from increasing our market share. In the future, we may need to
decrease our prices if our competitors continue to lower their prices. Our
competitors may be able to respond more quickly to new or changing
opportunities, technologies and customer requirements. Further, to the extent
our competitors are able to attract and retain customers based on product and/or
price advantages, our business and ability to grow could be adversely affected
in a material manner. To be successful, we must establish and strengthen our
brand awareness, effectively differentiate our product and service lines from
those of our competitors and build our strategic partnerships. To achieve this
we may have to substantially increase marketing activities and expenses in order
to compete effectively.

Our failure to maintain existing relationships or to obtain
new relationships with companies that allow us to access desirable locations
where we plan to operate our LED out-of-home advertising billboards could harm
our growth potential and our ability to increase our revenues.

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Our ability to generate future
revenues from LED out-of-home advertising sales depends largely upon our ability
to secure desirable locations for the installation and operation of our
large-scale out-of-home LED billboards. This, in turn, requires that we develop
and maintain joint venture, strategic and/or other business relationships with
property owners and developers which own the targeted locations suitable to
place our LED billboards. If we are unable to maintain our existing
relationships or to form new relationships with property owners and developers,
our ability to install and operate LED out-of-home billboards would be
negatively impacted. In turn, advertisers may not find advertising on our LED
out-of-home billboards attractive and may not wish to purchase advertising time
slots on our network, which would have a material negative impact on our ability
to grow future revenues.

If we are unable to attract advertisers to advertise on the
LED out-of-home advertising network we are building, we will be unable to
generate advertising fees, which could negatively affect our ability to grow
revenues.

The fees we can charge
advertisers for time slots on our LED billboard network depends on the size and
quality of our LED billboard network and the demand by advertisers for
advertising time on our network. Advertisers will choose to advertise on our LED
network in part based on the size of our network and the desirability of the
locations where we operate our LED out-of-home billboards. If we fail to
maintain or to increase the number of locations and LED billboards in our
network, advertisers may be unwilling to purchase time on our network which
could negatively affect our ability to grow our revenues in the future.

We may be subject to government actions based on the content
displayed on and the locations of the LED billboards in the LED out-of-home
advertising network we are building in China.

In China, The Outdoor Advertising
Registration Administrative Regulations stipulate that out-of-home
advertisements in China must be registered with the local State Administration
for Industry and Commerce (SAIC), before dissemination. Advertising
distributors are required to submit a registration application form and other
supporting documents for registration, including the content of the proposed
out-of-home advertisement. Our company, our subsidiaries and/or our joint
venture company have obtained or are in the process of obtaining such Outdoor
Advertising Registration Certificates for the advertisements displayed and
intended to be displayed on our LED out-of-home advertising billboards. However,
we may be subject to government action if advertisements shown on our
out-of-home LED network are in violation of relevant PRC advertising laws and
regulations or that the advertisements broadcast on our network have not
received required approval from the relevant local supervisory bodies.

In addition, the placement and
installation of LED billboards in China is subject to municipal zoning laws and
governmental approvals. Our company, our subsidiaries and/or our joint venture
company have obtained or are in the process of obtaining such municipal
government approvals for each of our LED out-of-home advertising billboards
currently installed or planned to be installed in the PRC. If our existing or
future LED billboards are installed in violation of municipal zoning laws or
without the required government approvals and are required to be removed, it
would diminish the attractiveness of our LED out-of-home advertising network for
advertisers and adversely affect our ability to sell advertising space on our
network which would in turn adversely affect our ability to grow future
revenues.

Rapid technological changes in our industry could render our
products non-competitive or obsolete and consequently affect our ability to
generate revenues.

Currently, we derive a majority
of our revenues from the sale of LED systems and lighting source products. We
expect to derive a greater proportion of future revenues from our LED
out-of-home advertising business. Each of these industries in which we are
active are characterized by rapid technological change, new products and
services, new sales channels, evolving industry standards and changing client
preferences. Our success will depend, in part, upon our ability to make timely
and cost-effective enhancements and additions to our technology and to introduce
new products and services that meet customer demands. We expect new products and
services to be developed and introduced by other companies that compete with our
products and services. The proliferation of new LED products and services in our
markets may reduce demand for our LED products and services. In addition, the
rapid technological advancements in HID lighting products may render our current
lighting source products obsolete. There can be no assurance that we will be
successful in responding to these or other technological changes, to evolving
industry standards or to new products and services offered by our current and
future

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competitors. In addition, we may not have access to sufficient
capital for our research and development needs in order to develop new products
and services.

We could lose our competitive advantages if we are not able
to protect our proprietary technology and intellectual property rights against
infringement, and any related litigation could be time-consuming and
costly.

Our success and ability to
compete depends in part on our proprietary technology incorporated in our
products and solutions, such as our Multimedia and Video Show Control System
used for the authoring, control and playback of content on our LED advertising
billboards and LED systems. If any of our competitors copy or otherwise gain
access to our proprietary technology or develop similar technologies
independently, we would not be able to compete as effectively. We consider our
patents and trademarks invaluable to our ability to continue to develop and
maintain the goodwill and recognition associated with our brands. The measures
we take to protect the proprietary technology, and other intellectual property
rights, which presently are based upon a combination of patent, trademark and
trade secret laws, may not be adequate to prevent their unauthorized use.
Further, the laws of foreign countries may provide inadequate protection of such
intellectual property rights. We may need to bring legal claims to enforce or
protect such intellectual property rights. Any litigation, whether successful or
unsuccessful, could result in substantial costs and a diversion of corporate
resources. In addition, notwithstanding any rights we have secured to our
intellectual property, other persons may bring claims against us claiming that
we have infringed on their intellectual property rights, including claims that
our intellectual property rights are not valid. Any claims against us, with or
without merit, could be time-consuming and costly to defend or litigate, divert
our attention and resources, result in the loss of goodwill associated with our
trademarks or require us to make changes to our technologies.

We may not be able to hire and retain qualified personnel to
support our growth and if we are unable to retain or hire such personnel in the
future, our ability to improve our products and implement our business
objectives could be adversely effected.

To continue our growth, we will
need to recruit additional senior management personnel, including persons with
financial and sales experience. In addition, we must hire, train and retain a
number of other skilled personnel, including persons with experience in LED
system design, creative lighting design, development of intelligent LED control
software, electrical engineering and operations. Intense competition for these
personnel could cause our compensation costs to increase significantly, which
could have a material adverse effect on our results of operations. Our future
success and ability to grow our business will depend in part on the continued
service of these individuals and our ability to identify, hire and retain
additional qualified personnel. If we are unable to attract and retain qualified
employees, we may be unable to meet our business and financial goals.

We are highly dependent on our
senior management to manage our business and operations. In particular, we rely
substantially on our chief executive officer, Mr. Bondy Tan, to manage our
operations. In addition, we also rely on design, engineering, sales and
marketing personnel with technical and industry knowledge to market, sell and
install our products and services. We do not maintain key man life insurance on
any of our senior management or key personnel. The loss of any one of them, in
particular Mr. Tan, would have a material adverse effect on our business and
operations. Competition for senior management personnel is intense and the pool
of suitable candidates is limited. We may be unable to locate a suitable
replacement for any senior management personnel that we lose. In addition, if
any member of our senior management joins a competitor or forms a competing
company, they may compete with us for customers, business partners and other key
professionals and staff members of our company.

Our company is subject to sales channel risk due to a
concentration of sales to a limited number of customers and any significant
interruption from these customers may have a material adverse effect on our
company.

Approximately 21.3% of our
revenue was contributed from one customer for the three months ended June 30,
2009. If this or any of our customers ceased doing business with our company, we
would require time to find other customers. If we lose these customers or are
unable to generate recurring revenues from these customers, there would be a
negative impact on our overall performance. We have not entered into long-term
supply contracts with any of these major customers. Therefore, there can be no
assurance that we will maintain or improve the relationships with these
customers, or that we will be able to continue to supply these customers at
current levels or

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at all. If we cannot maintain long-term relationships with our
major customers, the loss of a significant portion of our sales to them could
have an adverse effect on our business, financial condition and results of
operations.

Our company is subject to the credit risk of our customers,
which could have a material adverse effect on our financial condition, results
of operations and liquidity.

We are subject to the credit risk of our customers. Businesses
that are good credit risks at the time of sale may become bad credit risks over
time. In times of economic recession, the number of our customers who default on
payments owed to us tends to increase. If we fail to adequately assess and
monitor our credit risks, we could experience longer payment cycles, increased
collection costs and higher bad debt expenses. Additionally, to the degree that
the ongoing turmoil in the credit markets makes it more difficult for some
customers to obtain financing, those customers ability to pay could be
adversely impacted, which in turn could have a material adverse impact on our
business, operating results, and financial condition.

Our growth could be impaired if we do not successfully
handle certain risks associated with international business.

There are risks inherent in doing business in international
markets, including:

- fluctuations in currency exchange rates;
- difficulties in staffing and managing foreign operations;
- changes in regulatory requirements, tariffs and other trade barriers;
- potential adverse tax consequences; and
- inadequate protection for intellectual property rights.

One or more of these factors may
make it difficult for us to fully implement our international business
strategies and may have a material adverse effect on our current or future
international operations.

The current economic environment has adversely affected
business spending patterns, which may have an adverse effect on our
business.

The disruptions in the financial
markets and challenging economic conditions have adversely affected the world
economy, and in particular, reduced spending by businesses. Our operating
results in one or more segments may be affected by these uncertain or changing
economic conditions and spending patterns. If our customers delay or cancel
spending on LED out-of-home advertising, LED solutions and/or other lighting
source products, that decision could result in reductions in sales of our
products and services, longer sales cycles and increased price competition.
There can be no assurances that government responses to the disruptions in the
financial and economic markets will restore spending to previous levels. If
global economic and market conditions remain uncertain or persist, spread, or
deteriorate further, we may experience material impacts on our business,
operating results, and financial condition.

We derive a substantial portion of our revenues from sales
in the PRC and any downturn in the Chinese economy could have a material adverse
effect on our business and financial condition.

A substantial portion of our
revenues are generated from sales in the PRC. We anticipate that revenues from
sales of our products and services in the PRC will continue to represent a
substantial proportion of our total revenues in the near future. Any significant
decline in the condition of the PRC economy could, among other things, adversely
affect consumer buying power and discourage the purchase of our products and
services, which in turn would have a material adverse effect on our revenues and
profitability.

Any changes in the political and economic policies of, or
any new regulations implemented by, the Chinese government could affect, or even
restrict, the operation of our business and our ability to generate
revenues.

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Our business is currently focused
on the sale of LED out-of-home advertising and LED products and services in
China. Accordingly, our business, results of operations and financial condition
are affected to a significant degree by any economic, political and legal
developments in China.

Since the late 1970s, the Chinese
government has been reforming its economic system. Although we believe that
economic reform and the macroeconomic measures adopted by the Chinese government
has had and will continue to have a positive effect on the economic development
in China, there can be no assurance that the economic reform strategy will not
from time to time be modified or revised. Some modifications or revisions, if
any, could have a material adverse effect on the overall economic growth of
China and the development of specialty lighting products and services in China.
Any such changes would have a material adverse effect on our business.
Furthermore, there is no guarantee that the Chinese government will not impose
other economic or regulatory controls that would have a material adverse effect
on our business. Any changes in the political, economic and social conditions in
China, adjustments in policies by the Chinese government or changes in laws and
regulations on the sale of LED out-of-home advertising or LED products and
services could affect the manner in which we operate our business and restrict
or prohibit transactions initiated or conducted by our company. Any such changes
or new regulations could affect our ability to develop and sell our products and
therefore affect our ability to generate revenues.

Our company is subject to foreign exchange rate risk,
particularly fluctuations in the exchange rate between Chinese Renminbi and
United States dollars and between Singapore dollars and United States dollars.

Our company may enter sales
transactions denominated in Chinese Renminbi and Singapore dollars. While
Singapore dollars are free from to exchange control, with free conversion of
currency, the PRC State Administration for Foreign Exchange, under the authority
of the Peoples Bank of China, controls the conversion of Renminbi into foreign
currencies. The principal regulation governing foreign currency exchange in
China is the Foreign Currency Administration Rules (1996), as amended. Under the
Rules, once various procedural requirements are met, Renminbi is convertible for
current account transactions, including trade and services, but not for capital
account transactions, including direct investment, loan or investment in
securities outside China, unless the prior approval of the State Administration
of Foreign Exchange of the PRC is obtained. Although the Chinese government
regulations now allow greater convertibility of Renminbi for current account
transactions, significant restrictions still remain.

The value of the Renminbi is
subject to changes in Chinas central government policies and to international
economic and political developments affecting supply and demand in the China
Foreign Exchange Trading System market. The Renminbi is moved to a managed
floating exchange rate based on market supply and demand with reference to a
basket of foreign currencies. The recent global financial crisis may lead to
drastic and unanticipated fluctuations in the exchange rates of Renminbi and
Singapore dollars, which may affect our company through either foreign exchange
gains or losses to be accounted for in the statement of operations, and which
may materially affect our operating results and financial position.

New or changing government policies or regulations related
to the LED out-of-home advertising or LED products and services industries in
our markets may have an adverse effect on our operations and may require our
company to modify our business plan.

Our management oversees trends in
our market industries by accessing available market information, including
updated governmental policies and regulations related to such industries from
time to time, particularly the LED out-of-home advertising industry in China.
Both short and long-term changes in governmental policies or regulations
affecting the LED out-of-home advertising or LED products and services
industries may trigger our company to take appropriate measures to re-position
our company to achieve our business plan or alter the business plan as a whole.
We cannot assure that our company will be able to adapt to changing policies and
regulations efficiently in order to maintain the currently anticipated level of
business, results of operations or financial condition.

If LED-based hardware does not achieve greater market
acceptance, prospects for our growth and profitability may be limited.

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Our companys future success
depends on increased market acceptance of LED-based hardware. Potential
customers for LED-based hardware may be reluctant to adopt LED video and
lighting hardware as an alternative to traditional light source technology
because of its higher initial cost and relatively low light output in comparison
with the most powerful traditional lighting sources, or because of perceived
risks relating to LED technologys novelty, complexity, reliability and quality,
usefulness and cost-effectiveness when compared to other lighting sources
available in the market. These factors could adversely affect demand for our
companys LED out-of-home advertising billboards and/or our LED systems. If
acceptance of LED-based hardware does not continue to grow, opportunities to
increase our revenues and operate profitably may be limited.

If advances in LED technology do not continue, we may be
unable to increase our penetration of our existing markets or expand into new
markets.

Our company does not design or
manufacture LEDs or individual LED modules. Our ability to continue penetrating
our existing markets and to expand into new markets depends on continued
advancements in the design and manufacture by others of LEDs and LED modules. In
the LED out-of-home billboard advertising and high-performance LED color
lighting markets that we currently serve, we rely on continued improvements in
the brightness, efficiency and initial cost of color LEDs. The continued
development of LED technologies depends on other companies research and is out
of our control. If advancements in LED technologies occur at a slower pace than
we anticipate, or fail to occur at all, we may be unable to penetrate additional
markets, our revenues would be significantly reduced, and our future prospects
for success may be harmed.

If we fail to develop and maintain an effective system of
internal controls, we may not be able to accurately report our financial results
or prevent fraud; as a result, current and potential shareholders could lose
confidence in our financial reports, which could harm our business and the
trading price of our common stock.

Effective internal controls are
necessary for us to provide reliable financial reports and effectively prevent
fraud. Section 404 of the Sarbanes-Oxley Act of 2002 requires us to evaluate and
report on our internal controls over financial reporting. The process of
strengthening our internal controls and complying with Section 404 is expensive
and time consuming, and requires significant management attention. We cannot be
certain that the measures we undertake will ensure that we will maintain
adequate controls over our financial processes and reporting in the future.
Furthermore, if we are able to rapidly grow our business, the internal controls
that we will need will become more complex, and significantly more resources
will be required to ensure our internal controls remain effective. Failure to
implement required controls, or difficulties encountered in their
implementation, could harm our operating results or cause us to fail to meet our
reporting obligations. If we or our auditors discover a material weakness in our
internal controls, the disclosure of that fact, even if the weakness is quickly
remedied, could diminish investors confidence in our financial statements and
harm our stock price. In addition, non-compliance with Section 404 could subject
us to sanctions by the Securities and Exchange Commission, lawsuits, delisting
by SROs and/or an assignment of higher risks by investors, which would further
reduce our stock price.

Most of our assets, all of our directors and most of our
officers are outside the United States, with the result that it may be difficult
for investors to enforce within the United States any judgments obtained against
us or any of our directors or officers.

Although we are organized under
the laws of the State of Nevada, our principal executive office is located in
Hong Kong. Outside the United States, it may be difficult for investors to
enforce judgments against us obtained in the United States in any such actions,
including actions predicated upon civil liability provisions of federal
securities laws. In addition, all of our directors and most of our officers
reside outside the United States, and many of the assets of these persons and
our assets are located outside of the United States. As a result, it may not be
possible for investors to affect service of process within the United States
upon such persons or to enforce against us or such persons judgments predicated
upon the liability provisions of the United States securities laws. There is
substantial doubt as to the enforceability against us or any of our directors
and officers located outside the United States in original actions or in actions
of enforcement of judgments of United States courts or liabilities predicated on
the civil liability provisions of United States federal securities laws.

The occurrence of a widespread health epidemic may adversely
affect our financial condition and results of operations.

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Our businesses may be adversely
affected by widespread regional, national or global health epidemics, such as
pandemic flu, including the recent swine flu spreading from Mexico to the rest
of the world. Such threats or epidemics may adversely impact our businesses by
disrupting provision of services to our customers, and by causing customers to
avoid public gathering places. If such health epidemics occur, we may experience
material impacts on our business, operating results, and financial
condition.

Risks Related to Our Industry

The LED out-of-home advertising and LED products and
services industries in the PRC may face increasing competition from both
domestic and foreign companies, as well as increasing industry consolidation,
which may affect our market share and profit margin.

The specialty lighting industry,
including the provision of LED out-of-home advertising billboards, LED lighting
systems, LED screen rental services, and advanced lighting products, in the PRC
is highly competitive. Our products and services are targeted primarily at
property owners and developers, a market in which we face increasing
competition. In addition, there is an increasing trend of consolidation
throughout the industry. We believe that our ability to maintain our market
share and grow our operations within this landscape of changing and increasing
competition is largely dependant upon our ability to distinguish the quality of
our products and services.

In addition, prior to the entry
of the PRC into the World Trade Organization (WTO), high barriers to entry
existed for many potential competitors in our business through the use of
tariffs and restrictive import licensing and distribution practices. The
admission of the PRC to the WTO has lowered some of the tariffs and other
barriers to entry so we can expect that competition will increase.

We cannot assure you that our
current or potential competitors will not develop products or services of a
comparable or superior quality to ours, or adapt more quickly than we do to
evolving consumer preferences or market trends. In addition, our competitors may
merge or form alliances to achieve a scale of operations or sales network which
would make it difficult for us to compete. Increased competition may also lead
to price wars or negative brand advertising, which may adversely affect our
market share and profit margin. We cannot assure you that we will be able to
compete effectively with our current or potential competitors.

Risks Related to Our Common Stock

A decline in the price of our common stock could affect our
ability to raise further working capital and adversely impact our
operations.

A prolonged decline in the price
of our common stock could result in a reduction in the liquidity of our common
stock and a reduction in our ability to raise capital. Because our operations
have been primarily financed through the sale of equity securities, a decline in
the price of our common stock could be especially detrimental to our liquidity
and our continued operations. Any reduction in our ability to raise equity
capital in the future would force us to reallocate funds from other planned uses
and would have a negative effect on our business plans and operations, including
our ability to develop new products and continue our current operations. If the
stock price declines, there can be no assurance that we will be able to raise
additional capital or generate funds from operations sufficient to meet our
obligations. We believe the following factors could cause the market price of
our common stock to continue to fluctuate widely and could cause our common
stock to trade at a price below the price at which you purchase your shares:

- actual or anticipated variations in our quarterly operating results;
- announcements of new services, products, acquisitions or strategic
  relationships by us or our competitors;
- trends or conditions in the energy management services industry;

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- 50 -

- changes in accounting treatments or principles;
- changes in earnings estimates by securities analysts and in analyst
  recommendations;
- changes in market valuations of other energy management services companies;
  and
- general political, economic and market conditions.

The market price for our common
stock may also be affected by our ability to meet or exceed expectations of
analysts or investors. Any failure to meet these expectations, even if minor,
could have a material adverse affect the market price of our common stock.

If we issue additional shares in the future, it will result
in the dilution of our existing stockholders.

Our certificate of incorporation
authorizes the issuance of 800,000,000 shares of common stock and 100,000,000
shares of preferred stock. Our board of directors has the authority to issue
additional shares up to the authorized capital stated in the certificate of
incorporation. Our board of directors may choose to issue some or all of such
shares to acquire one or more businesses or to provide additional financing in
the future. The issuance of any such shares will result in a reduction of the
book value or market price of the outstanding shares of our common stock. If we
issue any such additional shares, such issuance also will cause a reduction in
the proportionate ownership and voting power of all other stockholders. Further,
any such issuance may result in a change of control of our corporation.

If a market for our common stock does not develop,
stockholders may be unable to sell their shares.

There is currently a limited
market for our common stock, which trades through the OTC Bulletin Board.
Trading of stock through the OTC Bulletin Board is frequently thin and highly
volatile. There is no assurance that a sufficient market will develop in the
stock, in which case it could be difficult for stockholders to sell their stock.

The market price for our common stock may be volatile and
subject to wide fluctuations, which may adversely affect the price at which you
can sell our shares.

The market price for our common
stock may be volatile and subject to wide fluctuations in response to factors
including the following:

- actual or anticipated fluctuations in our quarterly operations results;
- changes in financial estimates by securities research analysts;
- conditions in foreign or domestic specialty lighting markets;
- changes in the economic performance or market valuations of other specialty
  lighting companies;
- announcements by us or our competitors of new products, acquisitions,
  strategic partnerships, joint ventures or capital commitments;
- addition or departure of key personnel;
- fluctuations of exchange rates between the Renminbi and the U.S. dollar;
- intellectual property litigation; and
- general economic or political conditions in the PRC.

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- 51 -

In addition, the securities
market has from time to time experienced significant price and volume
fluctuations that are not related to the operating performance of particular
companies. These market fluctuations may also materially and adversely affect
the market price of our stock.

Trading of our stock may be restricted by the Securities and
Exchange Commissions penny stock regulations which may limit a stockholders
ability to buy and sell our stock.

The Securities and Exchange
Commission has adopted regulations which generally define penny stock to be
any equity security that has a market price (as defined) less than $5.00 per
share or an exercise price of less than $5.00 per share, subject to certain
exceptions. Our securities are covered by the penny stock rules, which impose
additional sales practice requirements on broker-dealers who sell to persons
other than established customers and accredited investors. The term
accredited investor refers generally to institutions with assets in excess of
$5,000,000 or individuals with a net worth in excess of $1,000,000 or annual
income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock
rules require a broker-dealer, prior to a transaction in a penny stock not
otherwise exempt from the rules, to deliver a standardized risk disclosure
document in a form prepared by the Securities and Exchange Commission which
provides information about penny stocks and the nature and level of risks in the
penny stock market. The broker-dealer also must provide the customer with
current bid and offer quotations for the penny stock, the compensation of the
broker-dealer and its salesperson in the transaction and monthly account
statements showing the market value of each penny stock held in the customers
account. The bid and offer quotations, and the broker-dealer and salesperson
compensation information, must be given to the customer orally or in writing
prior to effecting the transaction and must be given to the customer in writing
before or with the customers confirmation. In addition, the penny stock rules
require that prior to a transaction in a penny stock not otherwise exempt from
these rules, the broker-dealer must make a special written determination that
the penny stock is a suitable investment for the purchaser and receive the
purchasers written agreement to the transaction. These disclosure requirements
may have the effect of reducing the level of trading activity in the secondary
market for the stock that is subject to these penny stock rules. Consequently,
these penny stock rules may affect the ability of broker-dealers to trade our
securities. We believe that the penny stock rules discourage investor interest
in and limit the marketability of, our common stock.

The Financial Industry Regulatory Authority, or FINRA, has
adopted sales practice requirements, which may limit a stockholders ability to
buy and sell our shares.

In addition to the penny stock
rules described above, FINRA has adopted rules requiring that in recommending an
investment to a customer, a broker-dealer must have reasonable grounds for
believing that the investment is suitable for that customer. Prior to
recommending speculative low-priced securities to their non-institutional
customers, broker-dealers must make reasonable efforts to obtain information
about the customers financial status, tax status, investment objectives and
other information. Under interpretations of these rules, FINRA believes that
there is a high probability that speculative low-priced securities will not be
suitable for at least some customers. FINRA requirements make it more difficult
for broker-dealers to recommend that their customers buy our common stock, which
may limit our shareholders ability to buy and sell our stock and which may have
an adverse effect on the market for our shares.

If we are late multiple times in filing any of our annual or
quarterly reports during the next two years, our common stock may become
ineligible for quotation on the OTC Bulletin Board, which would negatively
affect the market for our shares and our ability to obtain additional
financing.

Companies trading on the OTC
Bulletin Board, such as us, must have a class of securities registered under
Section 12 of the Exchange Act, as amended, and must be current in their reports
under Section 13 in order to maintain price quotation privileges on the OTC
Bulletin Board. More specifically, FINRA Rule 6530, which determines eligibility
of issuers quoted on the OTC Bulletin Board, requires an issuer to be current in
its filings with the Securities and Exchange Commission. Pursuant to Rule
6530(e), as it is currently in effect, if we file our reports late with the
Securities and Exchange Commission three times in a two-year period or our
securities are removed from the OTC Bulletin Board twice in a two-year period
for failure to file reports, then we will be ineligible for quotation on the OTC
Bulletin Board. If we are late multiple times in filing any of our annual or
quarterly reports during the next two years, we may become ineligible for
quotation on the OTC Bulletin Board. If our common stock becomes ineligible for
quotation on the OTC Bulletin Board, it would negatively affect the market for
our common

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- 52 -

stock and it may become more difficult for us to obtain
additional equity financing as shares of our common stock would be less
attractive to potential investors.

Item 2. Unregistered Sales of Equity Securities and Use of
Proceeds.

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Submission of Matters to a Vote of Security
Holders.

None.

Item 5. Other Information.

None.

Item 6. Exhibits

Exhibits required by Item 601 of Regulation
S-K

|Exhibit Number | Description                                                                                                                                                                                                                                                         
|-------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|               |                                                                                                                                                                                                                                                                     
|(2)            | Plan of Purchase, Sale,
      Reorganization, Arrangement, Liquidation or Succession                                                                                                                                                                                
|               |                                                                                                                                                                                                                                                                     
|2.1            | Share Exchange Agreement dated January 7, 2005, among
      Global Innovative Systems Inc., Tech Team Holdings Limited, Bondy Tan and
      the Selling Shareholders (incorporated by reference from our Current
      Report on Form 8-K filed on January 18, 2005)
|               |                                                                                                                                                                                                                                                                     
|(3)            | (i) Articles of Incorporation; and (ii) Bylaws                                                                                                                                                                                                                      
|               |                                                                                                                                                                                                                                                                     
|3.1            | Charter (incorporated by reference from our Registration
      Statement on Form 10-SB filed on April 11, 2000)                                                                                                                                                     
|               |                                                                                                                                                                                                                                                                     
|3.2            | Articles of Incorporation (incorporated by reference from
      our Registration Statement on Form 10-SB filed on April 11, 2000)                                                                                                                                   
|               |                                                                                                                                                                                                                                                                     
|3.3            | Certificate of Reverse Stock Split filed with the Nevada
      Secretary of State on November 12, 2003 (incorporated by reference from
      our Current Report on Form 8-K filed on December 17, 2003)                                                             
|               |                                                                                                                                                                                                                                                                     
|3.4            | Certificate of Amendment to Articles of Incorporation
      filed with the Secretary of State of Nevada on March 3, 2004 (incorporated
      by reference from our Quarterly Report on Form 10- QSB filed on May 15,
      2004)                                    
|               |                                                                                                                                                                                                                                                                     
|3.5            | Certificate of Change filed with the Secretary of State
      of Nevada on December 23, 2004 (incorporated by reference from our Current
      Report on Form 8-K filed on January 6, 2005)                                                                         
|               |                                                                                                                                                                                                                                                                     
|3.6            | Articles of Merger filed with the Secretary of State of
      Nevada on April 17, 2007 effective April 20, 2007 (incorporated by
      reference from our Current Report on Form 8-K filed on April 23, 2007)                                                       

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- 53 -

|Exhibit Number | Description                                                                                                                                                                                                                                                                                                                                                                                 
|-------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|               |                                                                                                                                                                                                                                                                                                                                                                                             
|3.7            | Bylaws (incorporated by reference
      from our Current Report on Form 8-K filed on October 14, 2008)                                                                                                                                                                                                                                                                                      
|               |                                                                                                                                                                                                                                                                                                                                                                                             
|(10)           | Material Contracts                                                                                                                                                                                                                                                                                                                                                                          
|               |                                                                                                                                                                                                                                                                                                                                                                                             
|10.1           | Management
        Contract between Tech Team Holdings Limited / Tech Team Development Limited
        and Bondy Tan (incorporated by reference from our Current Report on Form
        8-K filed on January 18, 2005)                                                                                                                                                                      
|               |                                                                                                                                                                                                                                                                                                                                                                                             
|10.2           | Form of Subscription
        Agreement dated August 21, 2007 (incorporated by reference from our Current
        Report on Form 8-K filed on August 22, 2007)                                                                                                                                                                                                                               
|               |                                                                                                                                                                                                                                                                                                                                                                                             
|10.3           | Subscription
        Agreement between Lightscape Technologies Inc. and SMC Investment Management
        Limited dated December 11, 2007 (incorporated by reference from our Current
        Report on Form 8-K filed on December 14, 2007)                                                                                                                                                
|               |                                                                                                                                                                                                                                                                                                                                                                                             
|10.4           | Joint Venture
        Agreement between Lightscape Technologies (Greater China) Limited, Beijing
        Xintong Media & Cultural Development Co. Ltd., Beijing New Vision
        Media Advertising Co. Ltd. and Miss Yao Po Chun dated February 12, 2008
        (Translated from Chinese)(incorporated by reference from our Annual
        Report on Form 10-KSB filed on July 14, 2008)
|               |                                                                                                                                                                                                                                                                                                                                                                                             
|10.5           | Form of Securities
        Purchase Agreement, among Lightscape Technologies Inc. and the investors
        named therein dated March 9, 2008 (incorporated by reference from our
        Current Report on Form 8-K filed on March 10, 2008)                                                                                                                                               
|               |                                                                                                                                                                                                                                                                                                                                                                                             
|10.6           | Form of Registration
        Rights Agreement among Lightscape Technologies Inc. and the investors
        named therein dated March 9, 2008 (incorporated by reference from our
        Current Report on Form 8-K filed on March 10, 2008)                                                                                                                                                
|               |                                                                                                                                                                                                                                                                                                                                                                                             
|10.7           | Escrow Agreement
        among Lightscape Technologies Inc., Roth Capital Partners, LLC and Tri-
        State Title & Escrow, LLC, as escrow agent, dated March 9, 2008 (incorporated
        by reference from our Current Report on Form 8-K filed on March 10, 2008)                                                                                                                    
|               |                                                                                                                                                                                                                                                                                                                                                                                             
|10.8           | Form of Placement
        Agent Warrant (incorporated by reference from our Current Report on Form
        8-K filed on March 10, 2008)                                                                                                                                                                                                                                                     
|               |                                                                                                                                                                                                                                                                                                                                                                                             
|10.9           | Agreement
        between Lightscape Technologies Inc. and Aaron Tibor Ratner dated April
        18, 2008 (incorporated by reference from our Current Report on Form 8-K
        filed on December 5, 2008)                                                                                                                                                                                
|               |                                                                                                                                                                                                                                                                                                                                                                                             
|(14)           | Code of Ethics                                                                                                                                                                                                                                                                                                                                                                              
|               |                                                                                                                                                                                                                                                                                                                                                                                             
|14.1           | Code of Ethics
        (incorporated by reference from our Current Report on Form 8-K filed on
        January 6, 2009)                                                                                                                                                                                                                                                                     
|               |                                                                                                                                                                                                                                                                                                                                                                                             
|(31)           | Rule 13a-14(a)/15d-14(a) Certifications                                                                                                                                                                                                                                                                                                                                                     
|               |                                                                                                                                                                                                                                                                                                                                                                                             
|31.1*          | Certification
      of Principal Executive Officer and Principal Financial Officer filed pursuant
      to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                   
|               |                                                                                                                                                                                                                                                                                                                                                                                             
|(32)           | Section 1350 Certifications                                                                                                                                                                                                                                                                                                                                                                 

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- 54 -

|Exhibit Number | Description                                                                                                                                                                                                   
|-------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|               |                                                                                                                                                                                                               
|32.1*          | Certification
        of Principal Executive Officer and Principal Financial Officer pursuant
        to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
        Act of 2002.

*Filed herewith

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.

LIGHTSCAPE TECHNOLOGIES INC.

By: /s/ Bondy TanBondy TanPresident,
Secretary and Treasurer and Chief Executive Officer and Director
(Principal Executive Officer, Principal Financial Officer and
Principal Accounting Officer)

Date: August 19, 2009

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