##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 FORM 10-K
  þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended June 30, 2006
 or
 o
    
    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 0-27202
 ADVANCED LIGHTING TECHNOLOGIES, INC.
  Ohio
    
    34-1803229(State or other jurisdiction of incorporation or organization)
    
    (I.R.S. Employer Identification No.)32000 Aurora Road, Solon, Ohio
    
    44139(Address of principal executive offices)
    
    (Zip Code)
 440 / 519-0500
 
    o þ
 þ o
 þ þ o
 þ
  o o þ
 o þ
 þ o




---



##### 



INDEX
 Advanced Lighting Technologies, Inc.
 PageCautionary Statement Regarding Forward Looking Statements
    
    
    2PART IItem 1.
    
    Business
    
    
    2Item 1a.
    
    Risk Factors
    
    
    15Item 2.
    
    Properties
    
    
    19Item 3.
    
    Legal Proceedings
    
    
    20PART IIItem 5.
    
    Market for Registrants Common Equity and Related Shareholder Matters
    
    
    21Item 6.
    
    Selected Financial Data
    
    
    22Item 7.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    25Item 7A.
    
    Quantitative and Qualitative Disclosures about Market Risk
    
    
    37Item 8.
    
    Financial Statements and Supplementary Data
    
    
    38Item 9.
    
    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
    
    
    40Item 9A.
    
    Controls and Procedures
    
    
    40Item 9B.
    
    Other Information
    
    
    40PART IIIItem 10.
    
    Directors and Executive Officers of the Registrant
    
    
    41Item 11.
    
    Executive Compensation
    
    
    44Item 12.
    
    Security Ownership of Certain Beneficial Owners and Management
    
    
    49Item 13.
    
    Certain Relationships and Related Transactions
    
    
    50Item 14.
    
    Principal Accounting Fees and Services
    
    
    50PART IVItem 15.
    
    Exhibits, Financial Statement Schedules, and Reports on Form 8-K
    
    
    52Signatures
    
    
    60EX-10.1.8EX-10.1.19EX-12EX-21EX-31.1EX-31.2EX-32.1EX-32.2
  1




---



##### Table of Contents



CAUTIONARY STATEMENT REGARDING FORWARD LOOKING STATEMENTS
  
 PART I
 
 Item 1. Business
 Background
  The Company
  2




---



##### Table of Contents



Emergence from Bankruptcy
    3




---



##### Table of Contents



Metal Halide
    4




---



##### Table of Contents



Executive Offices
  Lighting Industry and Opportunities in Metal Halide Lighting
  Demand for Specialized Lamps
  Development of New and Advanced Metal Halide Power Supplies
  International Demand for Metal Halide
  5




---



##### Table of Contents



Strategy
    Operating Strategy
  Continue to Use Vertical Integration
  Improve Operating Cash Flow
  6




---



##### Table of Contents



Strengthen OEM and Lighting Agent Relationships
  Seek to Demonstrate Superiority of Metal Halide Lighting Solutions
  Long-Term Growth Strategy
  Introduce New Products
  Increase Sales of Existing Products
  7




---



##### Table of Contents



Increase Participation in International Markets
  Products
  - floodlighting
    
    - sports arena lighting
    
    - general lighting- architectural area lighting
    
    - commercial downlighting
    
    - industrial highbays- general industrial lighting
    
    - airport and railway station lighting
    
    - tunnel lighting- billboard and sign lighting
    
    - gas station canopy lighting
    
    - indirect indoor sports- site lighting
    
    - interior downlighting
    
    and office lighting- soffit lighting
    
    - decorative lighting
    
    - parking garage lighting- hazardous location lighting
    
    - retail store downlighting
    
    - security lighting- accent lighting
    
    and track lighting
    
    - landscape lighting
  Materials
    8




---



##### Table of Contents



Components and Systems
      Production Equipment
  9




---



##### Table of Contents



International Sales
  Product Design and Development
  Materials
  Components and Systems
  10




---



##### Table of Contents



Marketing and Distribution
  Materials
  System Components
    11




---



##### Table of Contents



Manufacturing and Operations
     Raw Materials and Suppliers
  12




---



##### Table of Contents



Competition
 General
  Materials
   System Components
  13




---



##### Table of Contents



Systems
  Intellectual Property
  Environmental Regulation
  14




---



##### Table of Contents



Employees
  
 Item 1a. Risk Factors
  If Metal Halide Lighting Does Not Gain Wider Market Acceptance, Our Business and Financial
Performance May Suffer
  15




---



##### Table of Contents



Our Degree of Indebtedness Could Limit Our Ability to Grow and React to Changes in Market
Conditions
   
    
    our ability to obtain additional financing in the future for
working capital, capital expenditures, acquisitions or other
purposes may be limited, and
 
    
    our flexibility in planning for or reacting to changes in market
conditions may be limited, causing us to be more vulnerable in the
event of a downturn in our business.
 Control of Our Stock by One Principal Shareholder Will Allow It To Control Selection of the Board
of Directors and Determine Shareholder Actions Unilaterally, Which Could Adversely Affect Interests
of Other Holders of Our Securities
  We Must Pay or Refinance Substantial Unsecured Indebtedness Within Five Years
  16




---



##### Table of Contents



Our Growth Objectives Strain Our Resources
  The Extent of Our International Business Operations Could Hurt Our Performance
   If We Are Unable to Protect Our Important Patents and Trade Secrets or If Others Enforce Rights
Against Us, Our Business May Suffer
  17




---



##### Table of Contents



If We Are Unable to Develop and Broaden Product Lines, or If Prices Decrease in Key Product Lines,
Our Business May Suffer
   Because Our Primary Competitors Are More Established and Have More Resources Than We Do, We May
Lack the Resources to Capture Increased Market Share
  18




---



##### Table of Contents



We Sell Products to Our Competitors and Purchase Components from Our Competitors, and These
Relationships Could Change Based on Our Competitors Interests. This Creates a Risk of Potential
Declines in Sales and Reduced Access to Components.
  
 Item 2. Properties
  ApproximateSquare
    
    Owned/Facility Location
    
    Activities
    
    Footage
    
    LeasedNorth AmericaSolon, Ohio
    
    System components manufacturing,
research & devlopment, office
    
    
    55,000
    
    
    LeasedStreetsboro, Ohio
    
    Distribution warehouse, sales office
    
    
    78,000
    
    
    LeasedSanta Rosa, California
    
    Manufacturing, office
    
    
    144,000
    
    
    LeasedUrbana, Illinois
    
    Materials manufacturing, office
    
    
    120,000
    
    
    OwnedMississauga, Ontario, Canada
    
    Distribution warehouse
    
    
    13,000
    
    
    LeasedOtherChennai (Madras) India
    
    System components manufacturing
    
    
    180,000
    
    
    OwnedChennai (Madras) India
    
    System components manufacturing
    
    
    100,000
    
    
    OwnedWantirna South, Victoria, Australia
    
    Distribution warehouse, office
    
    
    33,000
    
    
    OwnedNottingham, England
    
    Distribution warehouse
    
    
    14,000
    
    
    LeasedRickmansworth, England
    
    Sales office
    
    
    5,000
    
    
    Leased
  19




---



##### Table of Contents



Item 3. Legal Proceedings
  20




---



##### Table of Contents



PART II
 
 Item 5. Market for the Registrants Common Equity and Related Shareholder Matters
    21




---



##### Table of Contents



Item 6. Selected Financial Data
   Reorganized Company
    
    
    
    Predecessor CompanyYear
    
    
    Year
    
    
    Six Months
    
    
    
    Six MonthsEnded
    
    
    Ended
    
    
    Ended
    
    
    
    EndedJune 30,
    
    
    June 30,
    
    
    June 30,
    
    
    
    December 31,
    
    
    Year Ended June 30,2006
    
    
    2005
    
    
    2004
    
    
    
    2003
    
    
    2003
    
    
    2002(In thousands)
    
    
    
    (In thousands)Operating Statement Data:Net sales
    
    $
    163,856
    
    
    $
    157,770
    
    
    $
    74,075
    
    
    
    $
    70,510
    
    
    $
    145,087
    
    
    $
    164,786Costs and expenses:Cost of sales
    
    
    96,391
    
    
    
    93,576
    
    
    
    43,230
    
    
    
    
    43,361
    
    
    
    93,167
    
    
    
    109,758Marketing and selling
    
    
    27,440
    
    
    
    25,800
    
    
    
    11,766
    
    
    
    
    11,966
    
    
    
    23,233
    
    
    
    32,223Research and development
    
    
    6,278
    
    
    
    6,069
    
    
    
    2,839
    
    
    
    
    3,095
    
    
    
    6,494
    
    
    
    6,850General and administrative
    
    
    12,416
    
    
    
    13,072
    
    
    
    8,237
    
    
    
    
    5,553
    
    
    
    10,153
    
    
    
    13,416Provision for loan impairment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,700
    
    
    
    7,100Refinancing and non-recurring items
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,387
    
    
    
    Special charges and asset impairment (1)
    
    
    9,858
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,157
    
    
    
    10,561Amortization of intangible assets
    
    
    1,078
    
    
    
    1,028
    
    
    
    474
    
    
    
    
    177
    
    
    
    343
    
    
    
    336Income (loss) from operations
    
    
    10,395
    
    
    
    18,225
    
    
    
    7,529
    
    
    
    
    6,358
    
    
    
    (6,547
    )
    
    
    (15,458
    )Other income (expense):Interest income (expense), net
    
    
    (14,156
    )
    
    
    (13,444
    )
    
    
    (6,621
    )
    
    
    
    (7,271
    )
    
    
    (11,046
    )
    
    
    (11,777
    )Income (loss) from investments (2)
    
    
    599
    
    
    
    3,234
    
    
    
    98
    
    
    
    
    3
    
    
    
    (1,596
    )
    
    
    (2,347
    )Gain on restructuring (3)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,184
    
    
    
    
    
    
    
    Write-off of deferred loan costs (3)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,251
    )
    
    
    
    
    
    
    Reorganization expenses (3)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (11,258
    )
    
    
    (7,435
    )
    
    
    Gain (loss) from sale of fixture subsidiaries (4)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,003
    )
    
    
    227Income (loss) before income taxes,
minority interest, and cumulative
effect of accounting change
    
    
    (3,162
    )
    
    
    8,015
    
    
    
    1,006
    
    
    
    
    (13,235
    )
    
    
    (27,627
    )
    
    
    (29,355
    )Income taxes
    
    
    2,139
    
    
    
    1,497
    
    
    
    489
    
    
    
    
    360
    
    
    
    946
    
    
    
    252Income (loss) before minority interest and
cumulative effect of accounting change
    
    
    (5,301
    )
    
    
    6,518
    
    
    
    517
    
    
    
    
    (13,595
    )
    
    
    (28,573
    )
    
    
    (29,607
    )Minority interest in income
of consolidated subsidiary
    
    
    (751
    )
    
    
    (678
    )
    
    
    (258
    )
    
    
    
    (251
    )
    
    
    (333
    )
    
    
    (219
    )Income (loss) before cumulative
effect of accounting change
    
    
    (6,052
    )
    
    
    5,840
    
    
    
    259
    
    
    
    
    (13,846
    )
    
    
    (28,906
    )
    
    
    (29,826
    )Cumulative effect of accounting change (5)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (71,171
    )Net income (loss)
    
    $
    (6,052
    )
    
    $
    5,840
    
    
    $
    259
    
    
    
    $
    (13,846
    )
    
    $
    (28,906
    )
    
    $
    (100,997
    )
 22




---



##### Table of Contents



Reorganized Company
    
    
    
    Predecessor CompanyJune 30,
    

    
    
    June 30,2006
    
    2005
    
    2004
    
    
    
    2003
    
    2002(in thousands)Balance Sheet Data:Cash and cash equivalents
    
    $
    4,290
    
    
    $
    2,643
    
    
    $
    4,701
    
    
    
    $
    4,167
    
    
    $
    2,874Total assets
    
    
    190,379
    
    
    
    199,837
    
    
    
    194,557
    
    
    
    
    174,276
    
    
    
    193,700Total debt outstanding
    
    
    128,182
    
    
    
    132,010
    
    
    
    131,313
    
    
    
    
    134,661
    
    
    
    139,687Preferred stock
    
    
    29,688
    
    
    
    29,338
    
    
    
    29,338
    
    
    
    
    24,475
    
    
    
    22,290Common shareholders equity (deficit)
    
    
    1,296
    
    
    
    7,281
    
    
    
    1,174
    
    
    
    
    (22,704
    )
    
    
    3,282
 
 (1)
    
    During fiscal 2006, the Company announced a restructuring of its Venture Lighting
operations. This restructuring involves a transfer of production to the Companys facility in
Chennai, India and into a new distribution facility. The Company has recorded special charges
related to the restructuring in fiscal 2006 of $9,858. This amount includes a write-down of
building and equipment, severance pay as a result of the reduction in force, and costs to move
into the new distribution facility. In fiscal 2001 and 2002 the Companys subsidiary
Deposition Sciences, Inc. (DSI) made significant investments in building telecommunication
product manufacturing equipment and related facilities to apply its thin-film coating
technology to telecom products. With the decline in the global telecommunication business and
uncertainty regarding the recovery of the telecom market, the Company recognized a $10,433
charge in fiscal 2003 related to the abandonment of certain long-lived assets and write down
of certain assets held for sale to fair value. The Company also recorded a charge of $1,150
in fiscal 2003 for an impairment related to a non-refundable option to purchase for $11,500
the building currently leased by DSI that was not likely to be exercised before its original
expiration in March 2004. Additionally, as a result of the delisting of the Companys common
shares from the Nasdaq National Market, the Company recorded an asset impairment charge of
$1,163 for the write-off of deferred costs associated with its shelf offerings in fiscal 2003.
The Company also recognized a $411 charge in fiscal 2003 related to the abandonment of lamp
manufacturing equipment. Fiscal 2002 results include special charges related to the
consolidation of the Companys power supply manufacturing operations into its high-efficiency
facility in Chennai (Madras), India, reduction of staffing levels at most locations, and
evaluation of equipment and investments in light of its long-term strategies. The amounts are
classified in the fiscal 2002 statement of operations as: cost of sales  $688 and, special
charges  $10,561.(2)
    
    After completion of the Final Plan of Reorganization, the Company retained an interest in
Fiberstars, Inc., a marketer and distributor of fiber optic lighting products, consisting of
two warrants with an exercise price of $.01 per share that included the right to acquire, upon
meeting certain vesting provisions, an aggregate of 407,000 shares of Fiberstars common stock.Due to the vesting provisions associated with sales volume requirements, the warrants were
accounted for as cost investments and not marked to market as derivative financial instruments
pursuant to the requirements of Statement of Financial Accounting Standards (FAS) No. 133,
Accounting for Derivative Financial Instruments and Hedging Activities. Upon satisfying the
sales volume requirements the warrants are accounted for as derivative financial instruments and
marked to market in accordance with FAS No. 133 requirements. In June 2005, one of the
warrants became fully exercisable, and the Company purchased 175,750 shares. These shares were
marked to fair value at June 30, 2005 based upon the closing share price of $9.91 or a total
value of approximately $1,740. The remaining unvested warrant was accounted for as a derivative
on June 30, 2005 and valued based upon appraisal at $5.87 per share or approximately $1,357.
The total gain recognized with regard to recording the Companys investment at fair value at
June 30, 2005 was $2,450.The final vesting provision for the 231,250 share warrant of maintaining an average closing
stock price for Fiberstars common stock of $12.00 per share for a period of thirty consecutive
days was met on July 27, 2005, and the Company purchased the shares. The warrant was accounted
for as a derivative financial instrument pursuant to the requirements of FAS No. 133, and was
valued based upon the closing market price of
Fiberstars common stock on July 27, 2005, of $13.94 per share, or approximately $3,200. The
total gain recognized with regard to recording the Companys investment at fair value was
$1,864.
 23




---



##### Table of Contents



In November 2005, the Company sold its investment in Fiberstars common stock for $3,154,
resulting in a realized loss of $1,808 in the second quarter of fiscal 2006. Altogether, the
Company recognized gains related to the Companys investment in Fiberstars common stock of
$2,450 in fiscal 2005 and $56 in fiscal 2006.Income from investments in fiscal 2005 also includes a gain on the sale of an investment of
$320. The remainder of the income from investments for fiscal 2006 of
$543, fiscal 2005 of $464
and for the last six months of fiscal 2004 of $98 represents the equity income from the
Companys 40% ownership of Aldrich-APL LLC, a manufacturer and distributor of ultra-pure
inorganics and metals for high-technology applications. In fiscal 2003, the Income (loss) from
investments includes a charge of $703 related to impairment of its investment in a foreign joint
venture involved in the manufacturing of metal halide lamps. In fiscal 2002, the loss from
investments includes a loss from the sale of a preferred stock investment in Venture Lighting
Japan of $2,007. The remainder of the income or loss for the six months ended December 31,
2003, fiscal 2003, fiscal 2002 and fiscal 2001 represents the equity income or loss from the
Companys investment in Fiberstars, Inc. a marketer and distributor of fiber optic lighting
products.(3)
    
    In the six months ended December 31, 2003, the Company recorded several items related to the
Companys reorganization and emergence from bankruptcy. The gain on restructuring of $1,184 includes a
net increase in the receivable from officer of $1,169 related to the settlement related to the
officer loan approved by the bankruptcy court, as well as the impact of the implementation of
the court-approved plan and a settlement with General Electric related to amounts owed to and
receivable from GE. The write-off of deferred loan costs of $2,251 is related to the accounting
for the cancellation of the $100,000 8% Senior Notes in accordance with Emerging Issues Task
Force No. 96-19, Debtors Accounting for a Modification or Exchange of Debt Instruments.
Reorganization expenses of $11,258 represent the cost of consultants, investment bankers, and
attorneys related to the Companys efforts to reorganize under Chapter 11 Bankruptcy.
Reorganization expenses of $7,435 were also incurred in fiscal 2003.(4)
    
    The loss from sale of fixtures subsidiaries of $1,003 in fiscal 2003 relates to a settlement,
approved by the Bankruptcy Court, pursuant to which the Company and Ruud Lighting, Inc. and
its shareholders settled a dispute related to the sale of the fixture subsidiaries. The gain
from sale of fixtures subsidiaries of $227 in fiscal 2002 related to the sale of fixtures
subsidiaries.(5)
    
    In fiscal 2002, the Company recorded $71,171 as a cumulative effect of accounting change
relating to the impairment of goodwill and other indefinite lived intangible assets in
accordance with the Financial Accounting Standards Board Statement of Accounting Standards
(FAS) No. 142, Goodwill and Intangible Assets. FAS No. 142 provides authoritative guidance on
accounting for and financial reporting of goodwill and intangible assets acquired in business
combinations. FAS No. 142 requires that these assets be tested for impairment, and as a
result, the Company recorded $71,171 as a cumulative effect of accounting change as of July 1,
2001.
 24




---



##### Table of Contents



Item 7. Managements Discussion and Analysis of Financial Condition and Results of
Operations.
  The following discussion should be read in connection with the Companys Consolidated Financial
Statements and Notes thereto included in Item 8  Financial Statements and Supplementary Data.
 General
    Results of Operations
 Year Ended June 30, 2006 Compared to Year Ended June 30, 2005
  25




---



##### Table of Contents



Year Ended
    
    
    Year EndedJune 30, 2006
    
    
    June 30, 2005Net sales
    
    $
    163,856
    
    
    
    100.0
    %
    
    $
    157,770
    
    
    
    100.0
    %Costs and expenses:Cost of sales
    
    
    96,391
    
    
    
    58.8
    
    
    
    93,576
    
    
    
    59.3Marketing and selling
    
    
    27,440
    
    
    
    16.7
    
    
    
    25,800
    
    
    
    16.4Research and development
    
    
    6,278
    
    
    
    3.8
    
    
    
    6,069
    
    
    
    3.8General and administrative
    
    
    12,416
    
    
    
    7.6
    
    
    
    13,072
    
    
    
    8.3Amortization of intangible assets
    
    
    1,078
    
    
    
    0.7
    
    
    
    1,028
    
    
    
    0.7Special charges and asset impairment
    
    
    9,858
    
    
    
    6.0
    
    
    
    
    
    
    
    Income from operations
    
    
    10,395
    
    
    
    6.3
    
    
    
    18,225
    
    
    
    11.6Other income (expense):Interest expense
    
    
    (14,488
    )
    
    
    (8.8
    )
    
    
    (13,864
    )
    
    
    (8.8
    )Interest income
    
    
    332
    
    
    
    0.2
    
    
    
    420
    
    
    
    0.3Income from investments
    
    
    599
    
    
    
    0.4
    
    
    
    3,234
    
    
    
    2.0Income (loss) before income taxes
and minority interest
    
    
    (3,162
    )
    
    
    (1.9
    )
    
    
    8,015
    
    
    
    5.1Income taxes
    
    
    2,139
    
    
    
    1.3
    
    
    
    1,497
    
    
    
    1.0Income (loss) before minority interest
    
    
    (5,301
    )
    
    
    (3.2
    )
    
    
    6,518
    
    
    
    4.1Minority interest in income
of consolidated subsidiary
    
    
    (751
    )
    
    
    (0.5
    )
    
    
    (678
    )
    
    
    (0.4
    )Net income (loss)
    
    $
    (6,052
    )
    
    
    (3.7
    )
    
    $
    5,840
    
    
    
    3.7
  Net Sales
  26




---



##### Table of Contents



Cost of Sales.
 Marketing and Selling Expenses.
 Research and Development Expenses
 General and Administrative Expenses.
 Amortization of Intangible Assets.
 Special Charges and Asset Impairment.
 Income from Operations.
 27




---



##### Table of Contents



Interest Expense.
 Income from Investments.
 Accounting for Derivative Instruments and Hedging Activities
    Income Tax Expense.
 28




---



##### Table of Contents



Year Ended June 30, 2005 compared to Year Ended June 30, 2004
    29




---



##### Table of Contents



Reorganized Company
    
    
    Pro Forma ResultsYear Ended
    
    
    Year EndedJune 30, 2005
    
    
    June 30, 2004Net sales
    
    $
    157,770
    
    
    
    100.0
    %
    
    $
    144,585
    
    
    
    100.0
    %Costs and expenses:Cost of sales
    
    
    93,576
    
    
    
    59.3
    
    
    
    86,591
    
    
    
    59.9Marketing and selling
    
    
    25,800
    
    
    
    16.4
    
    
    
    23,732
    
    
    
    16.4Research and development
    
    
    6,069
    
    
    
    3.8
    
    
    
    5,934
    
    
    
    4.1General and administrative
    
    
    13,072
    
    
    
    8.3
    
    
    
    13,790
    
    
    
    9.5Amortization of intangible assets
    
    
    1,028
    
    
    
    0.6
    
    
    
    651
    
    
    
    0.5Income from operations
    
    
    18,225
    
    
    
    11.6
    
    
    
    13,887
    
    
    
    9.6Other
income (expense):Interest
expense
    
    
    (13,864
    )
    
    
    (8.8
    )
    
    
    (14,311
    )
    
    
    (9.9
    )Interest
income
    
    
    420
    
    
    
    .3
    
    
    
    419
    
    
    
    .3Income from
investments
    
    
    3,234
    
    
    
    2.0
    
    
    
    101Gain on
restructuring
    
    
    
    
    
    
    
    
    
    
    1,184
    
    
    
    .8Write-off
deferred loan costs
    
    
    
    
    
    
    
    
    
    
    (2,251
    )
    
    
    (1.5
    )Reorganization
expenses
    
    
    
    
    
    
    
    
    
    
    (11,258
    )
    
    
    (8.5
    )Income (loss)
before income taxes and minority interest
    
    
    (8,015
    )
    
    
    5.1
    
    
    
    (12,229
    )Income taxes
    
    
    1,497
    
    
    
    1.0
    
    
    
    849
    
    
    
    .5Income (loss)
before minority interest
    
    
    6,518
    
    
    
    4.1
    
    
    
    (13,078
    )
    
    
    (9.0
    )Minority
interest in income of consolidated subsidiary
    
    
    (678
    )
    
    
    (.4
    )
    
    
    (509
    )
    
    
    (.4
    )Net income (loss)
    
    
    5,840
    
    
    
    3.7
    
    
    
    (13,587
    )
    
    
    (9.4
    )
 Net Sales
  Cost of Sales.
  30




---



##### Table of Contents



Marketing and Selling Expenses.
 Research and Development Expenses
 General and Administrative Expenses.
 Amortization of Intangible Assets.
 Income from Operations.
 Interest Expense.
 Interest Income.
 31




---



##### Table of Contents



Income from Investments.
 Gain on Restructuring.
 Write-off of Deferred Loan Costs. Debtors Accounting for
a Modification or Exchange of Debt Instruments.
 Reorganization Expenses.
 Income Tax Expense.
 Liquidity and Capital Resources
    32




---



##### Table of Contents



Net Cash Used in Operating Activities.
 Net Cash Provided by Investing Activities.
 Net Cash Used in Financing Activities.
  Schedule of Certain Contractual Obligations
  Payments Due by PeriodLess than
    
    
    Years
    
    
    Years
    
    
    AfterTotal
    
    
    1 Year
    
    
    2 and 3
    
    
    4 and 5
    
    
    5 YearsLong Term Debt
    
    $
    128,182
    
    
    $
    6,513
    
    
    $
    121,566
    
    
    $
    18
    
    
    $
    85Operating Leases
    
    
    24,404
    
    
    
    3,063
    
    
    
    5,469
    
    
    
    4,684
    
    
    
    11,188Interest on Debt
    
    
    36,104
    
    
    
    13,280
    
    
    
    22,692
    
    
    
    122
    
    
    
    10Total Contractual Obligations
    
    $
    188,690
    
    
    $
    22,856
    
    
    $
    149,727
    
    
    $
    4,824
    
    
    $
    11,283
 33




---



##### Table of Contents



Market Risk Disclosures
 Market Risk Disclosures.
 Interest Rate Sensitivity.
 Fair ValueJune 30,
    
    
    
    
    
    June 30,(dollars in millions)
    
    2007
    
    2008
    
    2009
    
    2010
    
    2011
    
    Total
    
    2006LiabilitiesLong-term
Debt, including Current PortionFixed Rate
    
    
    
    
    
    
    
    
    
    $
    114.4
    
    
    
    
    
    
    
    
    
    
    $
    114.4
    
    
    $
    114.4Average Interest Rate
    
    
    11.0
    %
    
    
    11.0
    %
    
    
    11.0
    %
    
    
    
    
    
    
    Variable Rate
    
    $
    6.5
    
    
    $
    2.2
    
    
    $
    4.9
    
    
    $
    0.1
    
    
    $
    0.1
    
    
    $
    13.8
    
    
    $
    13.8Average Interest Rate
    
    
    8.5
    %
    
    
    8.6
    %
    
    
    8.6
    %
    
    
    7.4
    %
    
    
    7.4
    %
  Foreign Currency Exchange Risk
  Critical Accounting Policies
  34




---



##### Table of Contents



Valuation of Accounts and Notes Receivable
   Inventory Valuation Reserves
  Valuation of Long-Lived Assets
 Financial Reporting by Entities in Reorganization Under the Bankruptcy Code
 35




---



##### Table of Contents



Push Down Basis of Accounting Required in Certain Limited Circumstances Goodwill and Other Intangible Assets
  Revenue Recognition
  Deferred Tax Assets and Valuation Allowance
  Impact of Inflation
  36




---



##### Table of Contents



Item 7A. Quantitative and Qualitative Disclosures about Market Risk
  37




---



##### Table of Contents



Item 8. Financial Statements and Supplementary Data
          38




---



##### Table of Contents



REPORT OF MANAGEMENT
      s/ Wayne R. Hellman
    
    /s/ Wayne J. VespoliWayne R. Hellman
    
    Wayne J. VespoliChief Executive Officer
    
    Chief Financial Officer
 39




---



##### Table of Contents



LIST OF FINANCIAL STATEMENTS AND FINANCIAL
STATEMENT SCHEDULES
 
  PageAudited Consolidated Financial Statements:Report of Independent Registered Public Accounting Firm
    
    
    F-2Consolidated Balance Sheets:Reorganized Company as of June 30, 2006 and 2005
    
    
    F-3Consolidated Statements of Operations:Reorganized Company for the Years Ended June 30, 2006 and
June 30, 2005, and for the Six Months Ended June 30, 2004
    
    
    F-5Predecessor Company for the Six Months Ended December 31, 2003
    
    
    F-5Consolidated Statements of Shareholders Equity:Reorganized Company for the Years Ended June 30, 2006 and
June 30, 2005, and for the Six Months Ended June 30, 2004
    
    
    F-6Predecessor Company for the Six Months Ended December 31, 2003
    
    
    F-6Consolidated Statements of Cash Flows:Reorganized Company for the Years Ended June 30, 2006 and
June 30, 2005, and for the Six Months Ended June 30, 2004
    
    
    F-7Predecessor Company for the Six Months Ended December 31, 2003
    
    
    F-7Notes to Consolidated Financial Statements
    
    
    F-8Financial Statement Schedules:
   F-1




---



##### Table of Contents



/s/ Grant Thornton
 
 F-2




---



##### Table of Contents



Advanced Lighting Technologies, Inc.
 
 Consolidated Balance Sheets
 (in thousands, except per share amounts)
 June 30,
    
    
    June 30,2006
    
    
    2005AssetsCurrent assets:Cash and cash equivalents
    
    $
    4,290
    
    
    $
    2,643Trade receivables, less allowances of $742 and $687
    
    
    35,857
    
    
    
    29,069Inventories:Finished goods
    
    
    23,977
    
    
    
    20,849Raw materials and work-in-process
    
    
    11,825
    
    
    
    13,10835,802
    
    
    
    33,957Prepaid expenses
    
    
    2,097
    
    
    
    1,421Total current assets
    
    
    78,046
    
    
    
    67,090Property, plant and equipment:Land and buildings
    
    
    10,341
    
    
    
    20,466Machinery and equipment
    
    
    26,930
    
    
    
    31,260Furniture and fixtures
    
    
    3,017
    
    
    
    2,59240,288
    
    
    
    54,318Less accumulated depreciation
    
    
    7,729
    
    
    
    6,80832,559
    
    
    
    47,510Receivables from related parties
    
    
    1,829
    
    
    
    2,983Investments
    
    
    2,168
    
    
    
    4,946Other assets
    
    
    3,604
    
    
    
    2,980Intangible assets
    
    
    23,623
    
    
    
    24,327Goodwill
    
    
    48,550
    
    
    
    50,001$
    190,379
    
    
    $
    199,837
 See Notes to Consolidated Financial Statements
 F-3




---



##### Table of Contents



Advanced Lighting Technologies, Inc.
Consolidated Balance Sheets  (in thousands, except per share amounts)
 June 30,
    
    
    June 30,2006
    
    
    2005Liabilities and shareholders equityCurrent liabilities:Short-term debt and current portion of long-term debt
    
    $
    6,513
    
    
    $
    11,984Accounts payable
    
    
    6,964
    
    
    
    11,471Payables to related parties
    
    
    862
    
    
    
    310Employee-related liabilities
    
    
    6,705
    
    
    
    7,568Accrued income and other taxes
    
    
    667
    
    
    
    793Other accrued expenses
    
    
    9,315
    
    
    
    8,085Total current liabilities
    
    
    31,026
    
    
    
    40,211Long-term debt
    
    
    121,669
    
    
    
    120,026Deferred tax liabilities
    
    
    341
    
    
    
    826Deferred lease credits
    
    
    3,453
    
    
    
    Total liabilities
    
    
    156,489
    
    
    
    161,063Minority interest
    
    
    2,906
    
    
    
    2,155Preferred stock,
Series A and B
    
    
    29,688
    
    
    
    29,338Common shareholders equityCommon stock, $.001 par value per share, 80,000
shares authorized; 1 share issued and outstanding
    
    
    1
    
    
    
    1Paid-in-capital
    
    
    1,183
    
    
    
    1,130Accumulated other comprehensive income
    
    
    65
    
    
    
    51Retained earnings
    
    
    47
    
    
    
    6,0991,296
    
    
    
    7,281$
    190,379
    
    
    $
    199,837
 See Notes to Consolidated Financial Statements
 F-4




---



##### Table of Contents



Advanced Lighting Technologies, Inc.
 
 Consolidated Statements of Operations
 (in thousands, except per share dollar amounts)
 PredecessorReorganized Company
    
    
    
    CompanyYear
    
    
    Year
    
    
    Six Months
    
    
    
    Six MonthsEnded
    
    
    Ended
    
    
    Ended
    
    
    
    EndedJune 30,
    
    
    June 30,
    
    
    June 30,
    
    
    
    December 31,2006
    
    
    2005
    
    
    2004
    
    
    
    2003Net sales
    
    $
    163,856
    
    
    $
    157,770
    
    
    $
    74,075
    
    
    
    $
    70,510Costs and expenses:Cost of sales
    
    
    96,391
    
    
    
    93,576
    
    
    
    43,230
    
    
    
    
    43,361Marketing and selling
    
    
    27,440
    
    
    
    25,800
    
    
    
    11,766
    
    
    
    
    11,966Research and development
    
    
    6,278
    
    
    
    6,069
    
    
    
    2,839
    
    
    
    
    3,095General and administrative
    
    
    12,416
    
    
    
    13,072
    
    
    
    8,237
    
    
    
    
    5,553Amortization of intangible assets
    
    
    1,078
    
    
    
    1,028
    
    
    
    474
    
    
    
    
    177Special charges and asset impairment
    
    
    9,858
    
    
    
    
    
    
    
    
    
    
    
    
    Income from operations
    
    
    10,395
    
    
    
    18,225
    
    
    
    7,529
    
    
    
    
    6,358Other income (expense):Interest expense
    
    
    (14,488
    )
    
    
    (13,864
    )
    
    
    (6,852
    )
    
    
    
    (7,459
    )Interest income
    
    
    332
    
    
    
    420
    
    
    
    231
    
    
    
    
    188Income from investments
    
    
    599
    
    
    
    3,234
    
    
    
    98
    
    
    
    
    3Gain on restructuring
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,184Write-off of deferred loan costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,251
    )Reorganization expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (11,258
    )Income (loss) before income taxes
and minority interest
    
    
    (3,162
    )
    
    
    8,015
    
    
    
    1,006
    
    
    
    
    (13,235
    )Income taxes
    
    
    2,139
    
    
    
    1,497
    
    
    
    489
    
    
    
    
    360Income (loss) before minority interest
    
    
    (5,301
    )
    
    
    6,518
    
    
    
    517
    
    
    
    
    (13,595
    )Minority interest in income
of consolidated subsidiary
    
    
    (751
    )
    
    
    (678
    )
    
    
    (258
    )
    
    
    
    (251
    )Net income (loss)
    
    $
    (6,052
    )
    
    $
    5,840
    
    
    $
    259
    
    
    
    $
    (13,846
    )
 See Notes to Consolidated Financial Statements, including Emergence from
Bankruptcy describing the Reorganized Company and Predecessor Company.
 F-5




---



##### Table of Contents



Advanced Lighting Technologies, Inc.
 
 Consolidated Statements of Shareholders Equity
 For the Three Years Ended June 30, 2006  (dollars in thousands)
 Loan andAccumulated
    
    
    InterestOther
    
    
    Receivable
    
    
    Retained
    
    
    CommonPreferred
    
    
    Common Stock
    
    
    Paid-In
    
    
    Comprehensive
    
    
    From
    
    
    Earnings
    
    
    ShareholdersStock
    
    
    Shares
    
    
    Par Value
    
    
    Capital
    
    
    Income (Loss)
    
    
    Officer
    
    
    (Deficit)
    
    
    Equity
    
    
    TotalBalance at June 30, 2003
    
    $
    24,475
    
    
    
    23,807
    
    
    $
    24
    
    
    $
    212,724
    
    
    $
    (640
    )
    
    $
    (4,344
    )
    
    $
    (230,468
    )
    
    $
    (22,704
    )
    
    $
    (1,771
    )Net loss -
predecessor company
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (13,846
    )
    
    
    (13,846
    )
    
    
    (13,846
    )Foreign currency
translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,359
    
    
    
    
    
    
    
    
    
    
    
    1,359
    
    
    
    1,359Comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (12,487
    )
    
    
    (12,487
    )Effect of reorganization
and fresh start reporting:Reclassification to
related party receivables
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,344
    
    
    
    
    
    
    
    4,344
    
    
    
    4,344Extinguishment of old stock
    
    
    (24,475
    )
    
    
    (23,807
    )
    
    
    (24
    )
    
    
    (212,724
    )
    
    
    (719
    )
    
    
    
    
    
    
    244,314
    
    
    
    30,847
    
    
    
    6,372Issuance of new stock
    
    
    29,000
    
    
    
    1
    
    
    
    1
    
    
    
    999
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,000
    
    
    
    30,000Balance at
December 31, 2003
    
    
    29,000
    
    
    
    1
    
    
    
    1
    
    
    
    999
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,000
    
    
    
    30,000Net income -
reorganized company
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    259
    
    
    
    259
    
    
    
    259Foreign currency
translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (216
    )
    
    
    
    
    
    
    
    
    
    
    (216
    )
    
    
    (216
    )Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    43
    
    
    
    43Stock purchases by
management / director
    
    
    338
    
    
    
    
    
    
    
    
    
    
    
    131
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    131
    
    
    
    469Balance at June 30, 2004
    
    
    29,338
    
    
    
    1
    
    
    
    1
    
    
    
    1,130
    
    
    
    (216
    )
    
    
    
    
    
    
    259
    
    
    
    1,174
    
    
    
    30,512Net income -
reorganized company
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,840
    
    
    
    5,840
    
    
    
    5,840Foreign currency
translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    267
    
    
    
    
    
    
    
    
    
    
    
    267
    
    
    
    267Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,107
    
    
    
    6,107Balance at June 30, 2005
    
    
    29,338
    
    
    
    1
    
    
    
    1
    
    
    
    1,130
    
    
    
    51
    
    
    
    
    
    
    
    6,099
    
    
    
    7,281
    
    
    
    36,619Net income -
reorganized company
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,052
    )
    
    
    (6,052
    )
    
    
    (6,052
    )Foreign currency
translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14
    
    
    
    
    
    
    
    
    
    
    
    14
    
    
    
    14Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,038
    )
    
    
    (6,038
    )Stock purchases by
management / director
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    53
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    53
    
    
    
    53Preferred stock issuance
    
    $
    350
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    350Balance at June 30, 2006
    
    $
    29,688
    
    
    
    1
    
    
    $
    1
    
    
    $
    1,183
    
    
    $
    65
    
    
    $
    
    
    
    $
    47
    
    
    $
    1,296
    
    
    $
    30,984
 See Notes to Consolidated Financial Statements, including Emergence from
Bankruptcy describing the Reorganized Company and Predecessor Company.
 F-6




---



##### Table of Contents



Advanced Lighting Technologies, Inc.
 
 Consolidated Statements of Cash Flows
 (in thousands)
 PredecessorReorganized Company
    
    
    
    CompanyYear
    
    
    Year
    
    
    Six Months
    
    
    
    Six MonthsEnded
    
    
    Ended
    
    
    Ended
    
    
    
    EndedJune 30,
    
    
    June 30,
    
    
    June 30,
    
    
    
    December 31,2006
    
    
    2005
    
    
    2004
    
    
    
    2003Operating activitiesNet income (loss)
    
    $
    (6,052
    )
    
    $
    5,840
    
    
    $
    259
    
    
    
    $
    (13,846
    )Adjustments to reconcile net income (loss)
to net cash provided by (used in) operating activities:Depreciation
    
    
    5,410
    
    
    
    4,846
    
    
    
    2,136
    
    
    
    
    3,412Amortization
    
    
    1,078
    
    
    
    1,028
    
    
    
    474
    
    
    
    
    177Provision for doubtful accounts
    
    
    228
    
    
    
    181
    
    
    
    180
    
    
    
    
    381Income from investments
    
    
    (599
    )
    
    
    (3,234
    )
    
    
    (98
    )
    
    
    
    (3
    )Gain on restructuring
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,184
    )Write-off of deferred loan costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,251Reorganization expenses in excess of (less than)
cash payments for reorganization expenses
    
    
    
    
    
    
    (1,842
    )
    
    
    (5,049
    )
    
    
    
    2,968Old Senior note interest accrued but not paid
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,000Payment of pre-petition payables
    
    
    
    
    
    
    (371
    )
    
    
    (4,371
    )
    
    
    
    Special charges and asset impairment
    
    
    8,998
    
    
    
    
    
    
    
    
    
    
    
    
    Changes in operating assets and liabilities, excluding
effects of acquisitions and dispositions:Trade receivables
    
    
    (7,016
    )
    
    
    690
    
    
    
    (985
    )
    
    
    
    777Inventories
    
    
    (1,845
    )
    
    
    (8,779
    )
    
    
    (1,680
    )
    
    
    
    380Prepaid and other assets
    
    
    931
    
    
    
    2,359
    
    
    
    908
    
    
    
    
    859Accounts payable and accrued expenses
    
    
    (5,788
    )
    
    
    (115
    )
    
    
    8,030
    
    
    
    
    2,549Other
    
    
    1,575
    
    
    
    1,721
    
    
    
    485
    
    
    
    
    1,452Net cash provided by (used in) operating activities
    
    
    (3,080
    )
    
    
    2,324
    
    
    
    289
    
    
    
    
    4,173Investing activitiesCapital expenditures
    
    
    (5,610
    )
    
    
    (5,979
    )
    
    
    (3,018
    )
    
    
    
    (1,799
    )Proceeds from sale of fixed assets
    
    
    6,543
    
    
    
    
    
    
    
    
    
    
    
    
    Proceeds from sale of investments
    
    
    3,154
    
    
    
    450
    
    
    
    
    
    
    
    
    Purchase of business
    
    
    
    
    
    
    
    
    
    
    (827
    )
    
    
    
    Cash distributions from investments
    
    
    224
    
    
    
    
    
    
    
    
    
    
    
    
    (592
    )Proceeds from sale-leaseback
    
    
    3,841
    
    
    
    
    
    
    
    
    
    
    
    
    Net cash provided by (used in) investing activities
    
    
    8,152
    
    
    
    (5,529
    )
    
    
    (3,845
    )
    
    
    
    (2,391
    )Financing activitiesNet borrowings (payments) under credit facilties
    
    
    (5,471
    )
    
    
    5,402
    
    
    
    
    
    
    
    
    Net payments under debtor-in-possession facility
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (25,126
    )Proceeds from long-term debt
    
    
    3,850
    
    
    
    
    
    
    
    
    
    
    
    
    11,000Payments of long-term debt
    
    
    (2,207
    )
    
    
    (4,255
    )
    
    
    (1,847
    )
    
    
    
    (1,522
    )Investment by Saratoga Lighting Holdings, LLC
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    18,000Issuance of common and preferred stock
    
    
    403
    
    
    
    
    
    
    
    469
    
    
    
    
    Officer loan repayment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,334Net cash provided by (used in) financing activities
    
    
    (3,425
    )
    
    
    1,147
    
    
    
    (1,378
    )
    
    
    
    3,686Increase (decrease) in cash and cash equivalents
    
    
    1,647
    
    
    
    (2,058
    )
    
    
    (4,934
    )
    
    
    
    5,468Cash and cash equivalents, beginning of year
    
    
    2,643
    
    
    
    4,701
    
    
    
    9,635
    
    
    
    
    4,167Cash and cash equivalents, end of year
    
    $
    4,290
    
    
    $
    2,643
    
    
    $
    4,701
    
    
    
    $
    9,635Supplemental cash flow informationInterest paid
    
    $
    14,268
    
    
    $
    13,911
    
    
    $
    3,703
    
    
    
    $
    1,200Income taxes paid
    
    
    622
    
    
    
    975
    
    
    
    356
    
    
    
    
    159
 See Notes to Consolidated Financial Statements, including Emergence from
Bankruptcy describing the Reorganized Company and Predecessor Company.
 F-7




---



##### Table of Contents



Advanced Lighting Technologies, Inc.
 
 Notes to Consolidated Financial Statements
 June 30, 2006
 A. Organization
  B. Emergence from Bankruptcy
   Plan of Reorganization
 F-8




---



##### Table of Contents



Advanced Lighting Technologies, Inc.
Notes to Consolidated Financial Statements
June 30, 2006
 B. Emergence from Bankruptcy (continued)
      Reorganization, Fresh Start and Push Down Adjustments
 F-9




---



##### Table of Contents



Advanced Lighting Technologies, Inc.
Notes to Consolidated Financial Statements
June 30, 2006
 B. Emergence from Bankruptcy (continued)
 Financial Reporting by Entities in
Reorganization Under the Bankruptcy Code Business Combinations
   
    
    Exchange of $100,000 of 8% Senior Notes and accrued interest through December
31, 2003 of $14,400 for $114,400 of 11% Senior Notes;
    
    Issuance to Saratoga of 29,000 shares of the Companys New Series A Preferred
Shares and 1,000 of its New Common Shares in exchange for $18,000 and all of
the equity interests of Saratoga in the Company purchased from GE for
$12,000, including the 761,250 shares of the Companys Old Preferred Stock
and 1,429,590 shares of the Companys Old Common Stock, and push-down of
Saratogas investment;
    
    Cancellation of the existing common stock in exchange for two investments of
the company with a net book value of $7,192 as of the effective date of the
Final Plan; and,
    
    Increase in the receivable from officer of $1,169 resulting from a
court-approved settlement and reclassification of the receivable to related
party receivables from the equity section of the condensed consolidated
balance sheet.
  
    
    Reduction of property, plant and equipment carrying values, including
reduction of the Companys real estate by $11,644 and personal property by
$28,790;
    
    Adjustment of the identifiable intangible assets to $24,675 including
customer contracts and relationships of $10,000, trademarks and tradenames of
$8,635, and technology of $6,040;
    
    Reduction in the value of inventory of $1,997 related to inventory being
disposed of by June 30, 2004; and,
  F-10




---



##### Table of Contents



Advanced Lighting Technologies, Inc.
Notes to Consolidated Financial Statements
June 30, 2006
 B. Emergence from Bankruptcy (continued)
  Push Down Basis of Accounting
Required in Certain Limited Circumstances
 Unaudited Balance Sheet as of December 31, 2003Push-DownPredecessor
    
    
    Reorganization
    
    
    Fresh Start
    
    
    Accounting
    
    
    ReorganizedCompany
    
    
    Adjustments
    
    
    Adjustments
    
    
    Adjustments
    
    
    CompanyCurrent assets
    
    $
    61,524
    
    
    
    3,188
    
    
    
    (524
    )
    
    
    
    
    
    $
    64,188Property, plant and equipment, net
    
    
    86,864
    
    
    
    
    
    
    
    (40,434
    )
    
    
    
    
    
    
    46,430Investments and other assets
    
    
    13,616
    
    
    
    (3,012
    )
    
    
    1
    
    
    
    
    
    
    
    10,605Intangible assets, net
    
    
    2,597
    
    
    
    
    
    
    
    22,078
    
    
    
    
    
    
    
    24,675Goodwill
    
    
    4,573
    
    
    
    
    
    
    
    22,679
    
    
    
    23,309
    
    
    
    50,561Total assets
    
    $
    169,174
    
    
    
    176
    
    
    
    3,800
    
    
    
    23,309
    
    
    $
    196,459Short-term debt and
current portion of long-term debt
    
    $
    5,060
    
    
    
    
    
    
    
    (450
    )
    
    
    
    
    
    $
    4,610Accounts payable and accrued expenses
    
    
    46,078
    
    
    
    (15,515
    )
    
    
    1,395
    
    
    
    
    
    
    
    31,958Long-term debt
    
    
    128,672
    
    
    
    (600
    )
    
    
    
    
    
    
    
    
    
    
    128,072Total liabilities
    
    
    179,810
    
    
    
    (16,115
    )
    
    
    945
    
    
    
    
    
    
    
    164,640Deferred tax liabilities
    
    
    
    
    
    
    
    
    
    
    600
    
    
    
    
    
    
    
    600Minority interest
    
    
    1,219
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,219New preferred stock
    
    
    
    
    
    
    
    
    
    
    5,691
    
    
    
    23,309
    
    
    
    29,000Old preferred stock
    
    
    24,475
    
    
    
    (24,475
    )
    
    
    
    
    
    
    
    
    
    
    New common stock
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    
    
    
    
    1Old common stock
    
    
    24
    
    
    
    (24
    )
    
    
    
    
    
    
    
    
    
    
    Accumulated deficit
    
    
    (245,453
    )
    
    
    1,139
    
    
    
    244,314
    
    
    
    
    
    
    
    Other shareholders equity
    
    
    209,099
    
    
    
    39,651
    
    
    
    (247,751
    )
    
    
    
    
    
    
    999Total liabilities and shareholders equity
    
    $
    169,174
    
    
    
    176
    
    
    
    3,800
    
    
    
    23,309
    
    
    $
    196,459
 Push Down Basis of Accounting Required in
Certain Limited Circumstances Goodwill and Other Intangible Assets
 F-11




---



##### Table of Contents



Advanced Lighting Technologies, Inc.
Notes to Consolidated Financial Statements
June 30, 2006
 C. Significant Accounting Policies
 Principles of Consolidation
  Reporting Periods
  Accounting Estimates
  Translation of Foreign Currency
  Cash Equivalents
  Concentration of Credit Risk
  F-12




---



##### Table of Contents



Advanced Lighting Technologies, Inc.
Notes to Consolidated Financial Statements
June 30, 2006
 C. Significant Accounting Policies (continued)
  Valuation of Loan Receivables
  Inventories
  Property, Plant and Equipment
   Deferred Financing Costs
  F-13




---



##### Table of Contents



Advanced Lighting Technologies, Inc.
Notes to Consolidated Financial Statements
June 30, 2006
 C. Significant Accounting Policies (continued)
 Intangible Assets and Goodwill
  June 30, 2006Estimated
    
    Carrying
    
    
    Accumulated
    
    
    CarryingIntangible Asset Category
    
    Lives
    
    Amount - Gross
    
    
    Amortization
    
    
    Amount - NetPatented Technology and Trade Secrets
    
    8 - 15 Years
    
    $
    7,032
    
    
    $
    (1,190
    )
    
    $
    5,842Customer Contracts and Relationships
    
    10 - 20 Years
    
    
    10,525
    
    
    
    (1,379
    )
    
    
    9,146Tradenames and Trademarks
    
    Indefinite
    
    
    8,635
    
    
    
    
    
    
    
    8,635$
    26,192
    
    
    $
    (2,569
    )
    
    $
    23,623
  Goodwill and Other Intangible Assets
 Revenue Recognition
 Revenue Recognition in
Financial Statements
 Advertising Expense
  Research and Development
  Shipping and Handling Fees and Costs
  F-14




---



##### Table of Contents



Advanced Lighting Technologies, Inc.
Notes to Consolidated Financial Statements
June 30, 2006
 C. Significant Accounting Policies (continued)
 Income from Investments
  Derivative Financial Instruments and Sale of Investment
 Accounting for Derivative Instruments and Hedging Activities
     F-15




---



##### Table of Contents



Advanced Lighting Technologies, Inc.
Notes to Consolidated Financial Statements
June 30, 2006
 C. Significant Accounting Policies (continued)
   Recently Issued Accounting Pronouncements
 Accounting for Uncertainty in Income
Taxes  an Interpretation of FASB statement 109
 D. Financing Arrangements
  June 30,
    
    
    June 30,2006
    
    
    2005Bank Credit Facility  revolving credit loan
    
    $
    4,306
    
    
    $
    5,402Current portion of long-term debt
    
    
    2,207
    
    
    
    6,582$
    6,513
    
    
    $
    11,984
 Balance Sheet
Classification of
 F-16




---



##### Table of Contents



Advanced Lighting Technologies, Inc.
Notes to Consolidated Financial Statements
June 30, 2006
 D. Financing Arrangements (continued)
 Borrowings Outstanding under Revolving Credit Agreements that include Both a Subjective
Acceleration Clause and a Lock-box Arrangement.
   June 30,
    
    
    June 30,2006
    
    
    2005Senior unsecured 11% notes, duqe March 2009
    
    $
    114,400
    
    
    $
    114,400Bank Credit Facility  term loan
    
    
    9,350
    
    
    
    7,700Mortgage notes payable
    
    
    126
    
    
    
    4,342Other
    
    
    
    
    
    
    166123,876
    
    
    
    126,608Less current portion of long-term debt
    
    
    (2,207
    )
    
    
    (6,582
    )$
    121,669
    
    
    $
    120,026
    F-17




---



##### Table of Contents



Advanced Lighting Technologies, Inc.
Notes to Consolidated Financial Statements
June 30, 2006
 E. Shareholders Equity
   Saratoga Lighting Holdings, LLC Investment and Equity Incentive Plans
    F-18




---



##### Table of Contents



Advanced Lighting Technologies, Inc.
Notes to Consolidated Financial Statements
June 30, 2006
 F. Employee Benefits
  DSI Stock Option Plan
   G. Income Taxes
  F-19




---



##### Table of Contents



Advanced Lighting Technologies, Inc.
Notes to Consolidated Financial Statements
June 30, 2006
 PredecessorReorganized Company
    
    
    
    CompanyYear
    
    
    Year
    
    
    Six Months
    
    
    
    Six MonthsEnded
    
    
    Ended
    
    
    Ended
    
    
    
    EndedJune 30,
    
    
    June 30,
    
    
    June 30,
    
    
    
    December 31,2006
    
    
    2005
    
    
    2004
    
    
    
    2003United States
    
    $
    (12,968
    )
    
    $
    (5,862
    )
    
    $
    (4,143
    )
    
    
    $
    (18,778
    )Foreign
    
    
    9,806
    
    
    
    13,877
    
    
    
    5,149
    
    
    
    
    5,543Totals
    
    $
    (3,162
    )
    
    $
    8,015
    
    
    $
    1,006
    
    
    
    $
    (13,235
    )
   PredecessorReorganized Company
    
    
    
    CompanyYear
    
    
    Year
    
    
    Six Months
    
    
    
    Six MonthsEnded
    
    
    Ended
    
    
    Ended
    
    
    
    EndedJune 30,
    
    
    June 30,
    
    
    June 30,
    
    
    
    December 31,2005
    
    
    2005
    
    
    2004
    
    
    
    2003CurrentDomestic
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    
    $
    Foreign
    
    $
    761
    
    
    $
    887
    
    
    $
    399
    
    
    
    $
    350761
    
    
    
    887
    
    
    
    399
    
    
    
    
    350DeferredDomestic
    
    $
    1,038
    
    
    $
    
    
    
    $
    
    
    
    
    $
    Foreign
    
    
    340
    
    
    
    610
    
    
    
    90
    
    
    
    
    101,378
    
    
    
    610
    
    
    
    90
    
    
    
    
    10$
    2,139
    
    
    $
    1,497
    
    
    $
    489
    
    
    
    $
    360
 F-20




---



##### Table of Contents



Advanced Lighting Technologies, Inc.
Notes to Consolidated Financial Statements
June 30, 2006
 G Income Taxes (continued)
  June 30,
    
    
    June 30,2006
    
    
    2005Deferred tax assets:Net operating loss carryforwards
    
    $
    11,443
    
    
    $
    6,104Tax under financial reporting special charges and equity write-down
    
    
    1,804
    
    
    
    776Depreciation
    
    
    3,332
    
    
    
    7,828Other
    
    
    4,877
    
    
    
    3,39021,456
    
    
    
    18,098Deferred tax liabilities:Tax over financial reporting depreciation and amortization
    
    
    6,287
    
    
    
    6,7706,287
    
    
    
    6,770Net deferred tax assets before valuation allowance
    
    
    15,169
    
    
    
    11,328Valuation allowance
    
    
    (15,510
    )
    
    
    (12,154
    )Net deferred tax assets (liabilities)
    
    $
    (341
    )
    
    $
    (826
    )
   F-21




---



##### Table of Contents



Advanced Lighting Technologies, Inc.
Notes to Consolidated Financial Statements
June 30, 2006
 PredecessorReorganized Company
    
    
    
    CompanyYear
    
    
    Year
    
    
    Six Months
    
    
    
    Six MonthsEnded
    
    
    Ended
    
    
    Ended
    
    
    
    EndedJune 30,
    
    
    June 30,
    
    
    June 30,
    
    
    
    December 31,2006
    
    
    2005
    
    
    2004
    
    
    
    2003Statutory tax rate
    
    
    35.0
    %
    
    
    35.0
    %
    
    
    35.0
    %
    
    
    
    (35.0
    )%Foreign tax rate differential
    
    
    87.9
    
    
    
    (49.4
    )
    
    
    (133.5
    )
    
    
    
    (11.9
    )Nondeductible permanent items
    
    
    (49.5
    )
    
    
    3.3
    
    
    
    23.5
    
    
    
    
    17.7Valuation allowance change
    
    
    (153.2
    )
    
    
    22.3
    
    
    
    120.6
    
    
    
    
    31.9Other
    
    
    12.2
    
    
    
    7.5
    
    
    
    3.0
    
    
    
    
    Effective tax rate
    
    
    (67.6
    %)
    
    
    18.7
    %
    
    
    48.6
    %
    
    
    
    2.7
    %
 F-22




---



##### Table of Contents



Advanced Lighting Technologies, Inc.
Notes to Consolidated Financial Statements
June 30, 2006
 G. Income Taxes (continued)
    H. Related Party Transactions
    F-23




---



##### Table of Contents



Advanced Lighting Technologies, Inc.
Notes to Consolidated Financial Statements
June 30, 2006
 H. Related Party Transactions (continued)
 
    F-24




---



##### Table of Contents



Advanced Lighting Technologies, Inc.
Notes to Consolidated Financial Statements
June 30, 2006
  I. Commitments
  J. Quarterly Results of Operations (Unaudited)
  Fiscal 2006, Three Months Ended
    
    12 MonthsJun 30 (a)
    
    Mar 31(b)
    
    Dec 31
    
    Sep 30
    
    Fiscal 06Net sales
    
    $
    44,206
    
    
    $
    42,079
    
    
    $
    40,261
    
    
    $
    37,310
    
    
    $
    163,856Gross profit
    
    
    17,467
    
    
    
    17,651
    
    
    
    17,325
    
    
    
    15,022
    
    
    
    67,465Net income
    
    
    (5,319
    )
    
    
    (2,604
    )
    
    
    411
    
    
    
    1,460
    
    
    
    (6,052
    )
 Fiscal 2005, Three Months Ended
    
    12 MonthsJun 30 (c)
    
    Mar 31
    
    Dec 31
    
    Sep 30
    
    Fiscal 05Net sales
    
    $
    37,798
    
    
    $
    40,272
    
    
    $
    41,122
    
    
    $
    38,578
    
    
    $
    157,770Gross profit
    
    
    15,500
    
    
    
    15,937
    
    
    
    16,783
    
    
    
    15,974
    
    
    
    64,194Net income
    
    
    2,825
    
    
    
    352
    
    
    
    1,606
    
    
    
    1,057
    
    
    
    5,840
 
 (a)
    
    Fourth Quarter 2006  Net income was decreased by Special Charges and Asset
Impairment of $5,765 related to restructuring of the Companys Solon, Ohio facility.(b)
    
    Third Quarter 2006  Net income was decreased by Special Charges and Asset
Impairment of $4,093 related to write-down and abandonment of certain fixed assets.(c)
    
    Fourth Quarter 2005  Net income was increased by a gain of $2,450 related to
the Companys investment in Fiberstars warrants pursuant to FAS No. 133 (See Note
C).
 F-25




---



##### Table of Contents



Advanced Lighting Technologies, Inc.
Notes to Consolidated Financial Statements
June 30, 2006
 K. Segment and Geographic Information
   PredecessorReorganized Company
    
    
    
    CompanyYear
    
    
    Year
    
    
    Six Months
    
    
    
    Six MonthsEnded
    
    
    Ended
    
    
    Ended
    
    
    
    EndedJune 30,
    
    
    June 30,
    
    
    June 30,
    
    
    
    December 31,2006
    
    
    2005
    
    
    2004
    
    
    
    2003United States
    
    $
    98,308
    
    
    $
    93,082
    
    
    $
    43,107
    
    
    
    $
    40,326United Kingdom
    
    
    30,239
    
    
    
    23,573
    
    
    
    11,248
    
    
    
    
    9,899Canada
    
    
    13,962
    
    
    
    19,846
    
    
    
    10,991
    
    
    
    
    11,875Australia
    
    
    14,306
    
    
    
    12,439
    
    
    
    5,974
    
    
    
    
    6,348Other
    
    
    7,041
    
    
    
    8,830
    
    
    
    2,755
    
    
    
    
    2,062$
    163,856
    
    
    $
    157,770
    
    
    $
    74,075
    
    
    
    $
    70,510
  June 30,
    
    
    June 30,2006
    
    
    2005United States
    
    $
    93,667
    
    
    $
    107,643India
    
    
    11,651
    
    
    
    13,552Canada
    
    
    393
    
    
    
    1,296Australia
    
    
    1,534
    
    
    
    1,621United Kingdom
    
    
    1,091
    
    
    
    706$
    108,336
    
    
    $
    124,818
  F-26




---



##### Table of Contents



L. Deferred Lease Credits
  M. Special Charges and Asset Impairment
    Cash/
    
    Charged to
    
    Charges
    
    Liabilities atDescription
    
    Noncash
    
    Operations
    
    Utilized
    
    June 30, 2006Reduce staffing requirements
    
    Cash
    
    $
    2,074
    
    
    $
    578
    
    
    $
    1,496Impairment of long-lived assets
    
    Noncash
    
    
    6,924
    
    
    
    6,631
    
    
    
    293Other
    
    Cash
    
    
    860
    
    
    
    860
    
    
    
    $
    9,858
    
    
    $
    8,069
    
    
    $
    1,789
 F-27




---



##### Table of Contents



Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
  
 Item 9A. Controls and Procedures
  
 Item 9B. Other Information




---



##### Table of Contents



PART III
 
 Item 10. Directors and Officers of the Registrant
  Name
    
    Age
    
    PositionChristian L. Oberbeck
    
    
    46
    
    
    DirectorRichard A. Petrocelli
    
    
    38
    
    
    DirectorRobert Cizik
    
    
    75
    
    
    Non-Executive Chairman and DirectorWayne R. Hellman
    
    
    60
    
    
    Chief Executive Officer and DirectorSabu Krishnan
    
    
    48
    
    
    Chief Operating Officer and DirectorWayne J. Vespoli*
    
    
    45
    
    
    EVP and Chief Financial OfficerLee A. Bartolomei*
    
    
    67
    
    
    Vice PresidentJames L. Schoolenberg*
    
    
    63
    
    
    Vice President
 
 *
    
    Executive officer only Christian L. Oberbeck
 Richard A. Petrocelli
 Robert Cizik
 Wayne R. Hellman
 41




---



##### Table of Contents



Sabu Krishnan
 Wayne J. Vespoli
 Lee A. Bartolomei
 James L. Schoolenberg
  Audit Committee Financial Expert.
 Code of Ethics.
 42




---



##### Table of Contents



SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
  43




---



##### Table of Contents



Item 11. Executive Compensation
 COMPENSATION OF EXECUTIVE OFFICERS
  SUMMARY COMPENSATION TABLE
 Annual Compensation ($)All OtherName and Principal Position
    
    Year
    
    Salary
    
    Bonus (6)
    
    Compensation (7)Wayne R. Hellman (1)
    
    
    2006
    
    
    $
    456,010
    
    
    $
    1,754,468
    
    
    
    7,817Chief Executive Officer and Director
    
    
    2005
    
    
    
    372,116
    
    
    
    2,354,088
    
    
    
    9,1442004
    
    
    
    300,914
    
    
    
    2,327,000
    
    
    
    6,000Sabu Krishnan (2)
    
    
    2006
    
    
    
    275,289
    
    
    
    202,500
    
    
    
    11,265Chief Operating Officer and Director
    
    
    2005
    
    
    
    259,616
    
    
    
    204,656
    
    
    
    2,5962004
    
    
    
    228,654
    
    
    
    187,500
    
    
    
    2,279Wayne J. Vespoli (3)
    
    
    2006
    
    
    
    214,039
    
    
    
    105,000
    
    
    
    7,177Executive Vice President and Chief
    
    
    2005
    
    
    
    199,614
    
    
    
    103,578
    
    
    
    7,762Financial Officer
    
    
    2004
    
    
    
    
    
    
    
    
    
    
    
    Lee A. Bartolomei (4)
    
    
    2006
    
    
    
    200,000
    
    
    
    100,000
    
    
    
    5,281Vice President
    
    
    2005
    
    
    
    194,700
    
    
    
    103,578
    
    
    
    7,2632004
    
    
    
    158,261
    
    
    
    95,000
    
    
    
    6,058James L. Schoolenberg (5)
    
    
    2006
    
    
    
    202,769
    
    
    
    100,000
    
    
    
    8,120Vice President
    
    
    2005
    
    
    
    194,700
    
    
    
    103,578
    
    
    
    6,6412004
    
    
    
    190,000
    
    
    
    95,000
    
    
    
    5,997
 
 (1)
    
    Mr. Hellman is a party to an Employment Agreement with the Company. The Employment
Agreement had an initial term expiring July 2005. In July 2005, the Company and Mr. Hellman
entered into an Amended and Restated Employment Agreement. The agreement, as amended, extends
the term of the Agreement to July 30, 2007, provided for a base salary of $312,000, a
supplemental salary of $138,000 per annum from January 1, 2005 through July 1, 2007, and
provided for two additional bonuses payable on September 30, 2006 and July 30, 2007. The
additional bonuses are payable only if the Company achieves specified adjusted EBITDA goals
for the preceding fiscal year. The after-tax proceeds of the additional bonuses will be
applied to the balance of Mr. Hellmans loan from the Company. Mr. Hellmans Amended and
Restated Employment Agreement was further amended in 2006. The term of the agreement was
extended to June, 2008. The agreement provides for the continuation of the existing
performance bonus plan, with adjusted EBITDA goals for fiscal 2007 yet to be determined, and
also provides that the additional bonus originally payable if the Company met a specified
Adjusted EBITDA goal by June, 2007 would be payable if the goal is achieved by June, 2008.
The Fiscal 2006 additional bonus will result in the payment of Mr. Hellmans loan in
September, 2006. Under the original Employment Agreement, Mr. 44




---



##### Table of Contents



Hellman was entitled to receive
annual base compensation of $300,000. In addition, Mr. Hellman was entitled to receive a
bonus in each year in an amount between 50% and 150% of his base salary,
provided the Company met certain performance criteria. For fiscal 2004, the minimum bonus
threshold was an Adjusted EBITDA of $23,500,000 and achievement of a $27,000,000 Adjusted EBITDA
was required for the superior bonus. Based on the Adjusted EBITDA of $24,600,000, that the
Company calculated pursuant to the Employment Agreement, Mr. Hellmans bonus for Fiscal 2004 was
$300,000. Based on the Adjusted EBITDA of $27,600,000 that the Company calculated pursuant to
the Employment Agreement, Mr. Hellmans bonus for Fiscal 2005 was $327,088. Based on the
Adjusted EBITDA that the Company calculated pursuant to the Employment Agreement, Mr. Hellmans
bonus for Fiscal 2006 will be $312,000. In addition, Mr. Hellman was entitled to additional
bonuses of $2,027,000, the first of which was effective July 2004, and the second of which was
effective July 1, 2005. The after-tax portion of each such bonus (approximately $1,145,000) was
applied directly to reduce Mr. Hellmans loan from the Company. The Amended and Restated
Employment Agreement provides for annual increases in the annual base compensation as determined
by the Compensation Committee during the term of this Agreement. Pursuant to this Agreement,
Mr. Hellman has agreed not to compete with the Company for a period of two years after
termination of employment. Prior to the effective date of the Agreements noted above, Mr.
Hellman was a party to an Employment Agreement with the Company that extended through December
31, 2003. Under this Employment Agreement, Mr. Hellman was entitled to receive annual base
compensation of $195,000. In addition, Mr. Hellman was entitled to receive bonuses in amounts
determined by the Compensation Committee. The former Employment Agreement provided for annual
increases in annual base compensation in amounts determined by the Compensation Committee during
the term of this Employment Agreement. Also includes compensation deferred pursuant to the
Companys 401(k) deferred compensation plan. Under the current and former Employment Agreements,
Mr. Hellman participates in Company sponsored life, health, and disability insurance coverage.(2)
    
    The COOs base salary for calendar year 2006 is $281,000. In July 2005, the Company and the
COO entered into a Severance and Noncompetition Agreement relating to the COOs employment
with the Company. The agreement provides for severance payments payable in the same amounts
and at the same intervals as the COOs current base pay for a period of two years upon the
COOs termination, other than a termination for cause or a termination resulting from the
COOs resignation without good reason. The agreement also provides that, upon termination,
the COO will not engage in any business that competes with the business carried on by the
Company or any of its subsidiaries or affiliates for a period of two years.(3)
    
    The EVPs base salary for calendar 2006 is $218,400. Mr. Vespoli was elected to the office
of Executive Vice President and Treasurer on January 21, 2004 and was elected to the
additional office of Chief Financial Officer in December, 2005. In July 2005, the Company and
the EVP entered into a Severance and Noncompetition Agreement relating to the EVPs employment
with the Company. The agreement provides for severance payments payable in the same amounts
and at the same intervals as the EVPs current base pay for a period of one year upon the
EVPs termination, other than a termination for cause or a termination resulting from the
EVPs resignation without good reason. The agreement also provides that, upon termination,
the EVP will not engage in any business that competes with the business carried on by the
Company or any of its subsidiaries or affiliates for a period of one year.(4)
    
    Mr. Bartolomeis base salary for calendar year 2006 is $200,000.(5)
    
    Mr. Schoolenbergs base salary for calendar year 2006 is $206,000. 45




---



##### Table of Contents



(6)
    
    Bonuses represent amounts paid or to be paid, with respect to a fiscal year, in the following
fiscal year.(7)
    
    Perquisites provided to these executive officers consisted primarily of life, dental and
medical insurance costs, the total of which did not exceed the lesser of $50,000 or 10% of the
persons salary and bonus. Amounts shown are Company contributions to the 401(k) Plan. 46




---



##### Table of Contents



DEPOSITION SCIENCES, INC. OPTION EXERCISES
IN LAST FISCAL YEAR AND 2006 FISCAL YEAR END
DEPOSITION SCIENCES INC. OPTION VALUES
 Number of SecuritiesUnderlying Unexercised
    
    Value of UnexercisedShares
    
    
    
    
    
    Options at Fiscal
    
    In-the-Money OptionsAcquired on
    
    Value
    
    Year-End (#)
    
    at Fiscal Year-End ($)Name
    
    Exercise (#)
    
    Realized ($)
    
    Exercisable/Unexercisable
    
    Exercisable/UnexercisableWayne R. Hellman
    
    
    
    
    
    
    
    
    
    
    750,000/
    
    
    
    
    
    
    
    *Sabu Krishnan
    
    
    
    
    
    
    
    
    
    
    6,000/
    
    
    
    
    
    
    
    *Wayne J. Vespoli
    
    
    
    
    
    
    
    
    
    
      /
    
    
    
    
    
    
    
    *Lee A. Bartolomei
    
    
    
    
    
    
    
    
    
    
    1,000,000/
    
    
    
    
    
    
    
    *James L. Schoolenberg
    
    
    
    
    
    
    
    
    
    
    25,000/
    
    
    
    
    
    
    
    *
 
 *
    
    All of Deposition Sciences Inc.s issued and outstanding stock is held by the Company.
There is no meaningful basis on which to establish a market value per share for purposes of
determining whether or the extent to which the unexercised options held were in-the-money at fiscal
year-end. COMPENSATION OF DIRECTORS
  EMPLOYMENT AGREEMENTS
  47




---



##### Table of Contents



COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
  48




---



##### Table of Contents



Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
 CERTAIN HOLDERS OF VOTING SECURITIES
  Common Shares
    
    Preferred SharesBeneficially Owned (2)
    
    Beneficially Owned (3)Percent of
    
    
    
    
    
    Percent of
    
    Percent ofName and Address (1)
    
    Number
    
    Class
    
    Number
    
    Class
    
    Voting PowerSaratoga Lighting Holdings LLC
    
    
    1,151.94
    
    
    
    97.3
    %
    
    
    29,350.00
    
    
    
    98.9
    %
    
    
    98.9
    %Saratoga Partners IV, L.P.
    
    
    1,151.94
    
    
    
    97.3
    %
    
    
    29,350.00
    
    
    
    98.9
    %
    
    
    98.9
    %Saratoga Coinvestment IV, LLC
    
    
    1,151.94
    
    
    
    97.3
    %
    
    
    29,350.00
    
    
    
    98.9
    %
    
    
    98.9
    %Saratoga Associates IV, LLC
    
    
    1,151.94
    
    
    
    97.3
    %
    
    
    29,350.00
    
    
    
    98.9
    %
    
    
    98.9
    %Christian L. Oberbeck
    
    
    1,151.94
    
    
    
    97.3
    %
    
    
    29,350.00
    
    
    
    98.9
    %
    
    
    98.9
    %Richard A. Petrocelli
    
    
    1,151.94
    
    
    
    97.3
    %
    
    
    29,350.00
    
    
    
    98.9
    %
    
    
    98.9
    %Robert Cizik
    
    
    31.67
    
    
    
    2.7
    %
    
    
    338.33
    
    
    
    1.1
    %
    
    
    1.2
    %Wayne R. Hellman
    
    
    60.69
    
    
    
    5.1
    %
    
    
    
    
    
    
    *
    
    
    
    *Sabu Krishnan
    
    
    45.51
    
    
    
    3.8
    %
    
    
    
    
    
    
    *
    
    
    
    *Wayne J. Vespoli
    
    
    18.21
    
    
    
    1.5
    %
    
    
    
    
    
    
    *
    
    
    
    *Lee A. Bartolomei
    
    
    11.01
    
    
    
    0.9
    %
    
    
    
    
    
    
    *
    
    
    
    *James L. Schoolenberg
    
    
    16.52
    
    
    
    1.4
    %
    
    
    
    
    
    
    *
    
    
    
    *All Directors and Executive Officers
as a Group (9 Persons)
    
    
    1,183.61
    
    
    
    100.0
    %
    
    
    29,688.33
    
    
    
    100.0
    %
    
    
    100.0
    %
 
 *
    
    Less than one percent(1)
    
    The business address of each of Messrs. Hellman, Krishnan, and Vespoli is 32000 Aurora
Road, Solon, Ohio 44139; The business address of Saratoga Lighting Holdings, LLC (Saratoga),
Saratoga Partners IV, L.P., Saratoga Coinvestment IV LLC, Saratoga Associates IV LLC, Saratoga
Management Company LLC, Christian L. Oberbeck, and Richard A. Petrocelli (collectively, the
Saratoga Group) is 535 Madison Avenue, 4th Floor, New York, NY 10022. The business
address for Mr. Cizik is Cizik Interests, 8839 Harness Creek Lane, Houston, TX 77024. The
business address for Mr. Bartolomei is Deposition Sciences, Inc., 3300 Coffey Lane, Santa Rosa, CA
95403. The business address for Mr. Schoolenberg is APL Engineered Materials Inc., 2401 N. Willow
Road, Urbana, IL 61801.(2)
    
    Shares beneficially owned by the Saratoga entities and Messrs. Oberbeck and Petrocelli
include 1,000 shares of Common Stock owned by Saratoga and 151.94 shares of Common Stock which are
owned by Messrs. Hellman, Krishnan, Vespoli, Bartolomei and Schoolenberg, which are held in a
Voting Trust, of which Saratoga is the voting trustee. Each of the shares in the voting trust is
also shown as beneficially owned by the respective individuals.(3)
    
    Shares beneficially owned by the Saratoga entities and Messrs. Oberbeck and Petrocelli include
29,000 shares of Series A Preferred Stock and 350 shares of Series B Preferred Stock owned by
Saratoga. 49




---



##### Table of Contents



Item 13. Certain Relationships and Related Transactions
 CERTAIN TRANSACTIONS WITH DIRECTORS, OFFICERS AND SHAREHOLDERS
     
 Item 14. Principal Accounting Fees and Services
  50




---



##### Table of Contents



Fiscal Year
    
    Fiscal YearCategory
    
    2006
    
    2005Audit Fees
    
    $
    361,000
    
    
    $
    345,000Audit-Related Fees
    
    
    35,000
    
    
    
    20,000Tax Fees
    
    
    136,000
    
    
    
    97,000
 Audit Fees
 Audit-Related Fees
 Tax Fees
 Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent
Auditors
  51




---



##### Table of Contents



PART IV
 
 Item 15. Exhibits, Financial Statement Schedules and Reports on Form 8-K
  Report of Independent Registered Public Accounting FirmConsolidated Balance Sheets:Reorganized Company as of June 30, 2006 and 2005Consolidated Statements of Operations:Reorganized Company for the Years Ended June 30, 2006 andJune 30, 2005, and for the Six Months Ended June 30, 2004Predecessor Company for the Six Months Ended December 31, 2003Consolidated Statements of Shareholders Equity:Reorganized Company for the Years Ended June 30, 2006 andJune 30, 2005, and for the Six Months Ended June 30, 2004Predecessor Company for the Six Months Ended December 31, 2003Consolidated Statements of Cash Flows:Reorganized Company for the Years Ended June 30, 2006 andJune 30, 2005, and for the Six Months Ended June 30, 2004Predecessor Company for the Six Months Ended December 31, 2003Notes to Consolidated Financial Statements
     PreviousFiling IfExhibit
    
    
    
    
    
    IncorporatedNumber
    
    Description
    
    by Reference2.1
    
    Venture Lighting International, Inc., et al. Fourth
Amended Chapter 11 Plan of Reorganization confirmed
December 8, 2003 effective December 10, 2003 (Form 8-K,
Exhibit 2.1)
    
    
    (8
    )3.1
    
    Third Amended and Restated Articles of Incorporation
filed November 12, 2004 (Form 10-Q, Exhibit 3.1)
    
    
    (12
    )3.2
    
    Certificate of Amendment By Directors or Incorporators to
Articles (Form 10-Q, Exhibit 3.1)
    
    
    (15
    )3.3
    
    Amended and Restated Code of Regulations (Form 10-Q,
Exhibit 3.2)
    
    
    (12
    )
 52




---



##### Table of Contents



PreviousFiling IfExhibit
    
    
    
    
    
    IncorporatedNumber
    
    Description
    
    by Reference4.1
    
    Reference is made to Exhibit 2.19.1
    
    Voting Trust Agreement by and between Saratoga Lighting
Holdings LLC and certain shareholders of Advanced
Lighting Technologies, Inc. dated May 13, 2004 (Form
10-K, Exhibit 10.1.19)
    
    
    (11
    )9.2
    
    Voting Trust Agreement by and between Saratoga Lighting
Holdings LLC and certain shareholders of Advanced
Lighting Technologies, Inc. dated July 27, 2005 (Form
8-K, Exhibit 10.9)
    
    
    (13
    )10.1
    
    Management Contracts, Compensatory Plans and Arrangements10.1.1
    
    Loan Agreement dated as of October 8, 1998 between
Advanced Lighting Technologies, Inc. and Wayne R. Hellman
(Form 10-Q/A, Exhibit 10.1)
    
    
    (1
    )10.1.2
    
    Secured Promissory Note of Wayne R. Hellman dated
as of October 8, 1998 in the amount of $9,000,000 to
Advanced Lighting Technologies, Inc. (Form 10-Q/A,
Exhibit 10.2)
    
    
    (1
    )10.1.3
    
    First Amendment to Loan Agreement, Secured
Promissory Note and Security Agreement between Wayne R.
Hellman and Advanced Lighting Technologies, Inc. dated as
of November 22, 2000 (Form 10-Q, Exhibit 10.1)
    
    
    (2
    )10.1.4
    
    Second Amendment to Loan Agreement, Secured
Promissory Note and Security Agreement between Wayne R.
Hellman and Advanced Lighting Technologies, Inc. dated as
of March 15, 2001 (Form 10-Q, Exhibit 10.1)
    
    
    (3
    )10.1.5
    
    Third Amendment to Loan Agreement, Secured
Promissory Note and Security Agreement between Wayne R.
Hellman and Advanced Lighting Technologies, Inc. dated as
of April 25, 2002 (Form 10-K, Exhibit 10.1.7)
    
    
    (4
    )10.1.6
    
    Fourth Amendment to Loan Agreement, Secured
Promissory Note and Security Agreement between Wayne R.
Hellman and Advanced Lighting Technologies, Inc. dated
January 5, 2004 (Form 10-Q, Exhibit 10.2)
    
    
    (10
    )10.1.7
    
    Fifth Amendment to Loan Agreement, Secured
Promissory Note and Security Agreement between Wayne R.
Hellman and Advanced Lighting Technologies, Inc. dated
February 19, 2004 (Form 10-Q, Exhibit 10.3)
    
    
    (10
    )10.1.8
    
    Sixth Amendment to Loan Agreement, Secured
Promissory Note and Security Agreement between Wayne R.
Hellmann ad Advanced Lighting Technologies, Inc. dated
September 8, 2006.
 53




---



##### Table of Contents



PreviousFiling IfExhibit
    
    
    
    
    
    IncorporatedNumber
    
    Description
    
    by Reference10.1.9
    
    Deposition Sciences, Inc. 2001 Equity Incentive
Plan
(Form 10-Q, Exhibit 10.3)
    
    
    (3
    )10.1.10
    
    Management Rights Agreement between Saratoga
Partners IV, L.P. and Advanced Lighting Technologies,
Inc. dated March 22, 2004 (Form 10-Q, Exhibit 10.1)
    
    
    (10
    )10.1.11
    
    Settlement Agreement by and among Advanced
Lighting Technologies, Inc., Wayne R. Hellman and
Saratoga Lighting Holdings LLC dated January 5, 2004
(Form 10-Q, Exhibit 10.5)
    
    
    (10
    )10.1.12
    
    First Amendment to Settlement Agreement by and
among Advanced Lighting Technologies, Inc., Wayne R.
Hellman and Saratoga Lighting Holdings LLC dated February
19, 2004 (Form 10-Q, Exhibit 10.6)
    
    
    (10
    )10.1.13
    
    Settlement Agreement by and among Advanced
Lighting Technologies, Inc., Venture Lighting
International, Inc. Ruud Lighting, Inc., Alan J. Ruud,
Susan Ruud, Theodore O. Sokoly, Christopher A. Ruud and
Cynthia A. Johnson dated as of September 8, 2003 (Form
10-Q, Exhibit 10.4)
    
    
    (7
    )10.1.14
    
    Advanced Lighting Technologies, Inc.s 2003
Equity Incentive Plan adopted and effective December 18,
2003 (Form 10-Q, Exhibit 10.2)
    
    
    (9
    )10.1.15
    
    Employment Agreement between Wayne R. Hellman and
Advanced Lighting Technologies, Inc. dated December 10,
2003 (Form 10-Q, Exhibit 10.3)
    
    
    (9
    )10.1.16
    
    Employment Agreement between James Schoolenberg
and Advanced Lighting Technologies, Inc. dated December
10, 2003 (Form 10-Q, Exhibit 10.4)
    
    
    (9
    )10.1.17
    
    Amendment to Employment Agreement between Wayne
R. Hellman and Advanced Lighting Technologies, Inc. dated
November 12, 2004 (Form 10-Q, Exhibit 10.3)
    
    
    (12
    )10.1.18
    
    Amended and Restated Employment Agreement
between Wayne R. Hellman and Advanced Lighting
Technologies, Inc. dated July 27, 2005 (Form 8-K, Exhibit
10.2)
    
    
    (13
    )10.1.19
    
    Amendment to Amended and Restated Employment
Agreement between Wayne R. Hellman and Advanced Lighting
Technologies, Inc. dated September 20, 2006.
 54




---



##### Table of Contents



PreviousFiling IfExhibit
    
    
    
    
    
    IncorporatedNumber
    
    Description
    
    by Reference10.1.20
    
    Management Services Agreement between Saratoga
Management Company, LLC and Advanced Lighting
Technologies, Inc. dated December 10, 2003 (Form 10-Q,
Exhibit 10.5)
    
    
    (9
    )10.1.21
    
    Common Stock Purchase Agreement between Robert
Cizik and Advanced Lighting Technologies, Inc. dated May
25, 2004 (Form 10-K, Exhibit 10.1.17)
    
    
    (11
    )10.1.22
    
    Common and Preferred Stock Purchase Agreement
between Robert Cizik and Advanced Lighting Technologies,
Inc. dated May 25, 2004 (Form 10-K, Exhibit 10.1.18)
    
    
    (11
    )10.1.23
    
    Reorganization Plan, Lock-Up and Voting Agreement
dated as of October 31, 2003 (Form 10-Q, Exhibit 10.5)
    
    
    (7
    )10.1.24
    
    Advanced Lighting Technologies, Inc.s 2005
Equity Incentive Plan adopted and effective July 27, 2005
(Form 8-K, Exhibit 10.1)
    
    
    (12
    )10.1.25
    
    Severance and Noncompetition Agreement between
Advanced Lighting Technologies, Inc. and Sabu
Krishnan dated July 27, 2005 (Form 8-K, Exhibit 10.3)
    
    
    (3
    )10.1.26
    
    Severance and Noncompetition Agreement between
Advanced Lighting Technologies, Inc. and Wayne Vespoli
dated July 27, 2005 (Form 8-K, Exhibit 10.4)
    
    
    (3
    )10.1.27
    
    Common Stock Purchase Agreement between Wayne R.
Hellman and Advanced Lighting Technologies, Inc. dated
July 27, 2005 (Form 8-K, Exhibit 10.5)
    
    
    (3
    )10.1.28
    
    Common Stock Purchase Agreement between Sabu
Krishnan and Advanced Lighting Technologies, Inc. dated
July 27, 2005 (Form 8-K, Exhibit 10.6)
    
    
    (3
    )10.1.29
    
    Common Stock Purchase Agreement between Wayne J.
Vespoli and Advanced Lighting Technologies, Inc. dated
July 27, 2005 (Form 8-K, Exhibit 10.7)
    
    
    (3
    )10.1.30
    
    Common Stock Purchase Agreement between Wayne J.
Vespoli and Advanced Lighting Technologies, Inc. dated
July 27, 2005 [2003 Plan] (Form 8-K, Exhibit 10.8)
    
    
    (3
    )10.2
    
    Credit Facility Agreements
 55




---



##### Table of Contents



PreviousFiling IfExhibit
    
    
    
    
    
    IncorporatedNumber
    
    Description
    
    by Reference10.2.1
    
    Post-Petition Credit Agreement among Advanced
Lighting Technologies, Inc. and certain of its
subsidiaries and PNC Bank, National Association, as Agent
and Certain Financial Institutions Dated as of February
6, 2003 (Form 10-Q Exhibit 10.1)
    
    
    (5
    )10.2.2
    
    Loan and Security Agreement, dated June 30, 2003,
by and among Advanced Lighting Technologies, Inc. and
certain of its subsidiaries, as Borrowers, and Ableco
Finance LLC, as Lender, and Wells Fargo Foothill, Inc.,
as Agent and Lender (Form 10-K, Exhibit 10.2.29)
    
    
    (6
    )10.2.3
    
    Consent and First Amendment to Loan and Security
Agreement, dated July 25, 2003, by and among Advanced
Lighting Technologies, Inc. and certain of its
subsidiaries, as Borrowers, and Ableco Finance LLC, as
Lender, and Wells Fargo Foothill, Inc., as Agent and
Lender (Form 10-Q, Exhibit 10.1)
    
    
    (7
    )10.2.4
    
    Second Amendment to Loan and Security Agreement,
dated August 21, 2003, by and among Advanced Lighting
Technologies, Inc. and certain of its subsidiaries, as
Borrowers, and Ableco Finance LLC, as Lender, and Wells
Fargo Foothill, Inc., as Agent and Lender (Form 10-Q,
Exhibit 10.2)
    
    
    (7
    )10.2.5
    
    Third Amendment to Loan and Security Agreement,
dated September 30, 2003, by and among Advanced Lighting
Technologies, Inc. and certain of its subsidiaries, as
Borrowers, and Ableco Finance LLC, as Lender, and Wells
Fargo Foothill, Inc., as Agent and Lender (Form 10-Q,
Exhibit 10.3)
    
    
    (7
    )10.2.6
    
    Amended and Restated Loan and Security Agreement
by and among Advanced Lighting Technologies, Inc. and
certain of its subsidiaries, and Wells Fargo Foothill,
Inc. dated December 10, 2003 (Form 10-Q, Exhibit 10.1)
    
    
    (9
    )10.2.7
    
    Amendment and Consent to the Amended and Restated
Loan and Security Agreement by and among Advanced
Lighting Technologies, Inc. and certain of its
subsidiaries, and Wells Fargo Foothill, Inc. dated
December 30, 2003 (Form 10-Q, Exhibit 10.4)
    
    
    (10
    )
 56




---



##### Table of Contents



PreviousFiling IfExhibit
    
    
    
    
    
    IncorporatedNumber
    
    Description
    
    by Reference10.2.8
    
    Consent to Restructure and Amendment to the
Amended and Restated Loan and Security Agreement by and
among Advanced Lighting Technologies, Inc. and certain of
its subsidiaries, and Wells Fargo Foothill, Inc. dated
May 31, 2004 (Form 10-K, Exhibit 10.2.8)
    
    
    (11
    )10.2.9
    
    Amendment to the Amended and Restated Loan and
Security Agreement by and among Advanced Lighting
Technologies, Inc. and certain of its subsidiaries, and
Wells Fargo Foothill, Inc. dated September 15, 2004 (Form
10-Q, Exhibit 10.1)
    
    
    (12
    )10.2.10
    
    Amendment to the Amended and Restated Loan and
Security Agreement by and among Advanced Lighting
Technologies, Inc. and certain of its subsidiaries, and
Wells Fargo Foothill, Inc. dated October 25, 2004 (Form
10-Q, Exhibit 10.2)
    
    
    (12
    )10.2.11
    
    Amendment to the Amended and Restated Loan and
Security Agreement by and among Advanced Lighting
Technologies, Inc. and certain of its subsidiaries, and
Wells Fargo Foothill, Inc. dated September 22, 2005
    
    
    (14
    )10.3
    
    Industrial Building Lease by and between First Industrial
Development Services, Inc. and Deposition Sciences, Inc.
dated February 28, 2006
    
    
    (16
    )12
    
    Statement regarding Computation of Ratios14.1
    
    Code of Ethical Conduct for Chief Executive Officer and
Executive Officers including Senior Financial Officers,
approved by Board of Directors July 27, 2005
    
    
    (13
    )14.2
    
    Code of Conduct (General Section Only) approved by Board
of Directors July 27, 2005
    
    
    (13
    )21
    
    Subsidiaries of the Registrant as of June 30, 200631.1
    
    Rule 13a-14(a)/15d-14(a) Certification31.2
    
    Rule 13a-14(a)/15d-14(a) Certification32.1
    
    Certification Pursuant to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley
Act of 200232.2
    
    Certification Pursuant to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002
 
 (1)
    
    Incorporated by reference to referenced Exhibit in Companys Quarterly Report on Form
10-Q/A for the Quarterly Period ended December 31, 1998 filed March 15, 1999. (SEC
Accession 57




---



##### Table of Contents



No.: 0000950152-99-001926/ SEC File No.: 000-27202/SEC Film No.: 99565325)(2)
    
    Incorporated by reference to referenced Exhibit in Companys Quarterly Report on Form
10-Q for the Quarterly Period ended December 31, 2000 filed February 14, 2001.(3)
    
    Incorporated by reference to referenced Exhibit in Companys Quarterly Report on Form
10-Q for the Quarterly Period ended March 31, 2001 filed May 15, 2001.(4)
    
    Incorporated by reference to referenced Exhibit in Companys Annual Report on Form 10-K
for the Annual Period ended June 30, 2002 filed October 15, 2002(5)
    
    Incorporated by reference to referenced Exhibit in Companys Quarterly Report on Form
10-Q for the Quarterly Period ended March 31, 2003 filed June 4, 2003.(6)
    
    Incorporated by reference to referenced Exhibit in Companys Annual Report on Form 10-K
for the Annual Period ended June 30, 2003 filed October 14, 2003.(7)
    
    Incorporated by reference to referenced Exhibit in Companys Quarterly Report on Form
10-Q for the Quarterly Period ended September 30, 2003 filed November 12, 2003.(8)
    
    Incorporated by reference to referenced Exhibit in Companys Current Report on Form 8-K
dated December 8, 2003 filed December 23, 2003.(9)
    
    Incorporated by reference to referenced Exhibit in Companys Quarterly Report on Form
10-Q for the Quarterly Period ended December 31, 2003 filed March 18, 2004.(10)
    
    Incorporated by reference to referenced Exhibit in Companys Quarterly Report on Form
10-Q for the Quarterly Period ended March 31, 2004 filed May 13, 2004.(11)
    
    Incorporated by reference to referenced Exhibit in Companys Annual Report on Form 10-K
for the Annual Period ended June 30, 2004 filed September 9, 2004.(12)
    
    Incorporated by reference to referenced Exhibit in Companys Quarterly Report on Form
10-Q for the Quarterly Period ended September 30, 2004 filed November 12, 2004.(13)
    
    Incorporated by reference to referenced Exhibit in Companys Current Report on Form 8-K
dated July 27, 2005 filed August 2, 2005.(14)
    
    Incorporated by reference to referenced Exhibit in Companys Annual Report on Form 10-K
for the Annual Period ended June 30, 2005 filed September 28, 2005(15)
    
    Incorporated by reference to referenced Exhibit on Companys Current Report Form 8-K
dated December 29, 2005 filed January 5, 2006(16)
    
    Incorporated by reference to referenced Exhibit in Companys Quarterly Report on Form
10-Q for the Quarterly Period ended March 31, 2006 filed May, 10,2006  58




---



##### Table of Contents



59




---



##### Table of Contents



SIGNATURES
  ADVANCED LIGHTING TECHNOLOGIES, INC.Date: September 27, 2006
    By:
    /s/ Wayne R. HellmanWayne R. HellmanChief Executive Officer  SIGNATURE
    
    TITLE
    
    DATE/s/ Wayne R. Hellman
    
    Chief Executive Officer and Director
    
    September 27, 2006Wayne R. Hellman/s/ Sabu Krishnan
    
    Chief Operating Officer and Director
    
    September 27, 2006Sabu Krishnan/s/ Wayne Vespoli
    
    EVP and Chief Financial Officer
    
    September 27, 2006Wayne Vespoli/s/ Robert Cizik
    
    Non-Executive Chairman and Director
    
    September 27, 2006Robert Cizik/s/ Christian Oberbeck
    
    Director
    
    September 27, 2006Christian Oberbeck/s/ Richard Petrocelli
    
    Director
    
    September 27, 2006Richard Petrocelli
 60




---



##### Table of Contents



SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 EXHIBITS TO
 FORM 10-K
 FOR THE ANNUAL PERIOD ENDED JUNE 30, 2006
 ADVANCED LIGHTING TECHNOLOGIES, INC.




---



##### Table of Contents



EXHIBIT INDEX
 PreviousFiling IfExhibit
    
    
    
    
    
    IncorporatedNumber
    
    Description
    
    by Reference2.1
    
    Venture Lighting International, Inc., et al. Fourth
Amended Chapter 11 Plan of Reorganization confirmed
December 8, 2003 effective December 10, 2003 (Form 8-K,
Exhibit 2.1)
    
    
    (8
    )3.1
    
    Third Amended and Restated Articles of Incorporation
filed November 12, 2004 (Form 10-Q, Exhibit 3.1)
    
    
    (12
    )3.2
    
    Certificate of Amendment By Directors or Incorporators to
Articles (Form 10-Q, Exhibit 3.1)
    
    
    (15
    )3.3
    
    Amended and Restated Code of Regulations (Form 10-Q,
Exhibit 3.2)
    
    
    (12
    )4.1
    
    Reference is made to Exhibit 2.19.1
    
    Voting Trust Agreement by and between Saratoga Lighting
Holdings LLC and certain shareholders of Advanced
Lighting Technologies, Inc. dated May 13, 2004 (Form
10-K, Exhibit 10.1.19)
    
    
    (11
    )9.2
    
    Voting Trust Agreement by and between Saratoga Lighting
Holdings LLC and certain shareholders of Advanced
Lighting Technologies, Inc. dated July 27, 2005 (Form
8-K, Exhibit 10.9)
    
    
    (13
    )10.1
    
    Management Contracts, Compensatory Plans and Arrangements10.1.1
    
    Loan Agreement dated as of October 8, 1998 between
Advanced Lighting Technologies, Inc. and Wayne R. Hellman
(Form 10-Q/A, Exhibit 10.1)
    
    
    (1
    )10.1.2
    
    Secured Promissory Note of Wayne R. Hellman dated
as of October 8, 1998 in the amount of $9,000,000 to
Advanced Lighting Technologies, Inc. (Form 10-Q/A,
Exhibit 10.2)
    
    
    (1
    )10.1.3
    
    First Amendment to Loan Agreement, Secured
Promissory Note and Security Agreement between Wayne R.
Hellman and Advanced Lighting Technologies, Inc. dated as
of November 22, 2000 (Form 10-Q, Exhibit 10.1)
    
    
    (2
    )10.1.4
    
    Second Amendment to Loan Agreement, Secured
Promissory Note and Security Agreement between Wayne R.
Hellman and Advanced Lighting Technologies, Inc. dated as
of March 15, 2001 (Form 10-Q, Exhibit 10.1)
    
    
    (3
    )10.1.5
    
    Third Amendment to Loan Agreement, Secured
Promissory Note and Security Agreement between Wayne R.
Hellman and Advanced Lighting Technologies, Inc. dated as
of April 25, 2002 (Form 10-K, Exhibit 10.1.7)
    
    
    (4
    )




---



##### Table of Contents



EXHIBIT INDEX
 PreviousFiling IfExhibit
    
    
    
    
    
    IncorporatedNumber
    
    Description
    
    by Reference10.1.6
    
    Fourth Amendment to Loan Agreement, Secured
Promissory Note and Security Agreement between Wayne R.
Hellman and Advanced Lighting Technologies, Inc. dated
January 5, 2004 (Form 10-Q, Exhibit 10.2)
    
    
    (10
    )10.1.7
    
    Fifth Amendment to Loan Agreement, Secured
Promissory Note and Security Agreement between Wayne R.
Hellman and Advanced Lighting Technologies, Inc. dated
February 19, 2004 (Form 10-Q, Exhibit 10.3)
    
    
    (10
    )10.1.8
    
    Sixth Amendment to Loan Agreement, Secured
Promissory Note and Security Agreement between Wayne R.
Hellmann ad Advanced Lighting Technologies, Inc. dated
September 8, 2006.10.1.9
    
    Deposition Sciences, Inc. 2001 Equity Incentive
Plan
(Form 10-Q, Exhibit 10.3)
    
    
    (3
    )10.1.10
    
    Management Rights Agreement between Saratoga
Partners IV, L.P. and Advanced Lighting Technologies,
Inc. dated March 22, 2004 (Form 10-Q, Exhibit 10.1)
    
    
    (10
    )10.1.11
    
    Settlement Agreement by and among Advanced
Lighting Technologies, Inc., Wayne R. Hellman and
Saratoga Lighting Holdings LLC dated January 5, 2004
(Form 10-Q, Exhibit 10.5)
    
    
    (10
    )10.1.12
    
    First Amendment to Settlement Agreement by and
among Advanced Lighting Technologies, Inc., Wayne R.
Hellman and Saratoga Lighting Holdings LLC dated February
19, 2004 (Form 10-Q, Exhibit 10.6)
    
    
    (10
    )10.1.13
    
    Settlement Agreement by and among Advanced
Lighting Technologies, Inc., Venture Lighting
International, Inc. Ruud Lighting, Inc., Alan J. Ruud,
Susan Ruud, Theodore O. Sokoly, Christopher A. Ruud and
Cynthia A. Johnson dated as of September 8, 2003 (Form
10-Q, Exhibit 10.4)
    
    
    (7
    )10.1.14
    
    Advanced Lighting Technologies, Inc.s 2003
Equity Incentive Plan adopted and effective December 18,
2003 (Form 10-Q, Exhibit 10.2)
    
    
    (9
    )10.1.15
    
    Employment Agreement between Wayne R. Hellman and
Advanced Lighting Technologies, Inc. dated December 10,
2003 (Form 10-Q, Exhibit 10.3)
    
    
    (9
    )




---



##### Table of Contents



EXHIBIT INDEX
 PreviousFiling IfExhibit
    
    
    
    
    
    IncorporatedNumber
    
    Description
    
    by Reference10.1.16
    
    Employment Agreement between James Schoolenberg
and Advanced Lighting Technologies, Inc. dated December
10, 2003 (Form 10-Q, Exhibit 10.4)
    
    
    (9
    )10.1.17
    
    Amendment to Employment Agreement between Wayne
R. Hellman and Advanced Lighting Technologies, Inc. dated
November 12, 2004 (Form 10-Q, Exhibit 10.3)
    
    
    (12
    )10.1.18
    
    Amended and Restated Employment Agreement
between Wayne R. Hellman and Advanced Lighting
Technologies, Inc. dated July 27, 2005 (Form 8-K, Exhibit
10.2)
    
    
    (13
    )10.1.19
    
    Amendment to Amended and Restated Employment
Agreement between Wayne R. Hellman and Advanced Lighting
Technologies, Inc. dated September 20, 2006.10.1.20
    
    Management Services Agreement between Saratoga
Management Company, LLC and Advanced Lighting
Technologies, Inc. dated December 10, 2003 (Form 10-Q,
Exhibit 10.5)
    
    
    (9
    )10.1.21
    
    Common Stock Purchase Agreement between Robert
Cizik and Advanced Lighting Technologies, Inc. dated May
25, 2004 (Form 10-K, Exhibit 10.1.17)
    
    
    (11
    )10.1.22
    
    Common and Preferred Stock Purchase Agreement
between Robert Cizik and Advanced Lighting Technologies,
Inc. dated May 25, 2004 (Form 10-K, Exhibit 10.1.18)
    
    
    (11
    )10.1.23
    
    Reorganization Plan, Lock-Up and Voting Agreement
dated as of October 31, 2003 (Form 10-Q, Exhibit 10.5)
    
    
    (7
    )10.1.24
    
    Advanced Lighting Technologies, Inc.s 2005
Equity Incentive Plan adopted and effective July 27, 2005
(Form 8-K, Exhibit 10.1)
    
    
    (12
    )10.1.25
    
    Severance and Noncompetition Agreement between
Advanced Lighting Technologies, Inc. and Sabu Krishnan
dated July 27, 2005 (Form 8-K, Exhibit 10.3)
    
    
    (3
    )10.1.26
    
    Severance and Noncompetition Agreement between
Advanced Lighting Technologies, Inc. and Wayne Vespoli
dated July 27, 2005 (Form 8-K, Exhibit 10.4)
    
    
    (3
    )10.1.27
    
    Common Stock Purchase Agreement between Wayne R.
Hellman and Advanced Lighting Technologies, Inc. dated
July 27, 2005 (Form 8-K, Exhibit 10.5)
    
    
    (3
    )




---



##### Table of Contents



EXHIBIT INDEX
 PreviousFiling IfExhibit
    
    
    
    
    
    IncorporatedNumber
    
    Description
    
    by Reference10.1.28
    
    Common Stock Purchase Agreement between Sabu
Krishnan and Advanced Lighting Technologies, Inc. dated
July 27, 2005 (Form 8-K, Exhibit 10.6)
    
    
    (3
    )10.1.29
    
    Common Stock Purchase Agreement between Wayne J.
Vespoli and Advanced Lighting Technologies, Inc. dated
July 27, 2005 (Form 8-K, Exhibit 10.7)
    
    
    (3
    )10.1.30
    
    Common Stock Purchase Agreement between Wayne J.
Vespoli and Advanced Lighting Technologies, Inc. dated
July 27, 2005 [2003 Plan] (Form 8-K, Exhibit 10.8)
    
    
    (3
    )10.2
    
    Credit Facility Agreements10.2.1
    
    Post-Petition Credit Agreement among Advanced
Lighting Technologies, Inc. and certain of its
subsidiaries and PNC Bank, National Association, as Agent
and Certain Financial Institutions Dated as of February
6, 2003 (Form 10-Q Exhibit 10.1)
    
    
    (5
    )10.2.2
    
    Loan and Security Agreement, dated June 30, 2003,
by and among Advanced Lighting Technologies, Inc. and
certain of its subsidiaries, as Borrowers, and Ableco
Finance LLC, as Lender, and Wells Fargo Foothill, Inc.,
as Agent and Lender (Form 10-K, Exhibit 10.2.29)
    
    
    (6
    )10.2.3
    
    Consent and First Amendment to Loan and Security
Agreement, dated July 25, 2003, by and among Advanced
Lighting Technologies, Inc. and certain of its
subsidiaries, as Borrowers, and Ableco Finance LLC, as
Lender, and Wells Fargo Foothill, Inc., as Agent and
Lender (Form 10-Q, Exhibit 10.1)
    
    
    (7
    )10.2.4
    
    Second Amendment to Loan and Security Agreement,
dated August 21, 2003, by and among Advanced Lighting
Technologies, Inc. and certain of its subsidiaries, as
Borrowers, and Ableco Finance LLC, as Lender, and Wells
Fargo Foothill, Inc., as Agent and Lender (Form 10-Q,
Exhibit 10.2)
    
    
    (7
    )10.2.5
    
    Third Amendment to Loan and Security Agreement,
dated September 30, 2003, by and among Advanced Lighting
Technologies, Inc. and certain of its subsidiaries, as
Borrowers, and Ableco Finance LLC, as Lender, and Wells
Fargo Foothill, Inc., as Agent and Lender (Form 10-Q,
Exhibit 10.3)
    
    
    (7
    )




---



##### Table of Contents



EXHIBIT INDEX
 PreviousFiling IfExhibit
    
    
    
    
    
    IncorporatedNumber
    
    Description
    
    by Reference10.2.6
    
    Amended and Restated Loan and Security Agreement
by and among Advanced Lighting Technologies, Inc. and
certain of its subsidiaries, and Wells Fargo Foothill,
Inc. dated December 10, 2003 (Form 10-Q, Exhibit 10.1)
    
    
    (9
    )10.2.7
    
    Amendment and Consent to the Amended and Restated
Loan and Security Agreement by and among Advanced
Lighting Technologies, Inc. and certain of its
subsidiaries, and Wells Fargo Foothill, Inc. dated
December 30, 2003 (Form 10-Q, Exhibit 10.4)
    
    
    (10
    )10.2.8
    
    Consent to Restructure and Amendment to the
Amended and Restated Loan and Security Agreement by and
among Advanced Lighting Technologies, Inc. and certain of
its subsidiaries, and Wells Fargo Foothill, Inc. dated
May 31, 2004 (Form 10-K, Exhibit 10.2.8)
    
    
    (11
    )10.2.12
    
    Amendment to the Amended and Restated Loan and
Security Agreement by and among Advanced Lighting
Technologies, Inc. and certain of its subsidiaries, and
Wells Fargo Foothill, Inc. dated September 15, 2004 (Form
10-Q, Exhibit 10.1)
    
    
    (12
    )10.2.13
    
    Amendment to the Amended and Restated Loan and
Security Agreement by and among Advanced Lighting
Technologies, Inc. and certain of its subsidiaries, and
Wells Fargo Foothill, Inc. dated October 25, 2004 (Form
10-Q, Exhibit 10.2)
    
    
    (12
    )10.2.14
    
    Amendment to the Amended and Restated Loan and
Security Agreement by and among Advanced Lighting
Technologies, Inc. and certain of its subsidiaries, and
Wells Fargo Foothill, Inc. dated September 22, 2005
    
    
    (14
    )10.3
    
    Industrial Building Lease by and between First Industrial
Development Services, Inc. and Deposition Sciences, Inc.
dated February 28, 2006
    
    
    (16
    )12
    
    Statement regarding Computation of Ratios14.1
    
    Code of Ethical Conduct for Chief Executive Officer and
Executive Officers including Senior Financial Officers, approved by Board of Directors July 27, 2005
    
    
    (13
    )14.2
    
    Code of Conduct (General Section Only) approved by Board
of Directors July 27, 2005
    
    
    (13
    )21
    
    Subsidiaries of the Registrant as of June 30, 200631.1
    
    Rule 13a-14(a)/15d-14(a) Certification




---



##### Table of Contents



EXHIBIT INDEX
 PreviousFiling IfExhibit
    
    
    
    
    
    IncorporatedNumber
    
    Description
    
    by Reference31.2
    
    Rule 13a-14(a)/15d-14(a) Certification32.1
    
    Certification Pursuant to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley
Act of 200232.2
    
    Certification Pursuant to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002
 
 (17)
    
    Incorporated by reference to referenced Exhibit in Companys Quarterly Report on Form
10-Q/A for the Quarterly Period ended December 31, 1998 filed March 15, 1999. (SEC
Accession No.: 0000950152-99-001926/ SEC File No.: 000-27202/SEC Film No.: 99565325)(18)
    
    Incorporated by reference to referenced Exhibit in Companys Quarterly Report on Form
10-Q for the Quarterly Period ended December 31, 2000 filed February 14, 2001.(19)
    
    Incorporated by reference to referenced Exhibit in Companys Quarterly Report on Form
10-Q for the Quarterly Period ended March 31, 2001 filed May 15, 2001.(20)
    
    Incorporated by reference to referenced Exhibit in Companys Annual Report on Form 10-K
for the Annual Period ended June 30, 2002 filed October 15, 2002(21)
    
    Incorporated by reference to referenced Exhibit in Companys Quarterly Report on Form
10-Q for the Quarterly Period ended March 31, 2003 filed June 4, 2003.(22)
    
    Incorporated by reference to referenced Exhibit in Companys Annual Report on Form 10-K
for the Annual Period ended June 30, 2003 filed October 14, 2003.(23)
    
    Incorporated by reference to referenced Exhibit in Companys Quarterly Report on Form
10-Q for the Quarterly Period ended September 30, 2003 filed November 12, 2003.(24)
    
    Incorporated by reference to referenced Exhibit in Companys Current Report on Form 8-K
dated December 8, 2003 filed December 23, 2003.(25)
    
    Incorporated by reference to referenced Exhibit in Companys Quarterly Report on Form
10-Q for the Quarterly Period ended December 31, 2003 filed March 18, 2004.(26)
    
    Incorporated by reference to referenced Exhibit in Companys Quarterly Report on Form
10-Q for the Quarterly Period ended March 31, 2004 filed May 13, 2004.(27)
    
    Incorporated by reference to referenced Exhibit in Companys Annual Report on Form 10-K
for the Annual Period ended June 30, 2004 filed September 9, 2004.(28)
    
    Incorporated by reference to referenced Exhibit in Companys Quarterly Report on Form
10-Q for the Quarterly Period ended September 30, 2004 filed November 12, 2004.




---



##### Table of Contents



(29)
    
    Incorporated by reference to referenced Exhibit in Companys Current Report on Form 8-K
dated July 27, 2005 filed August 2, 2005.(30)
    
    Incorporated by reference to referenced Exhibit in Companys Annual Report on Form 10-K
for the Annual Period ended June 30, 2005 filed September 28, 2005(31)
    
    Incorporated by reference to referenced Exhibit on Companys Current Report Form 8-K
dated December 29, 2005 filed January 5, 2006(32)
    
    Incorporated by reference to referenced Exhibit in Companys Quarterly Report on Form
10-Q for the Quarterly Period ended March 31, 2006 filed May, 10,2006