SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549


                                  FORM 10-KSB

                                   (Mark One)

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

               For the fiscal year ended _____________________

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

       For the transition period from March 1, 2003 to December 31, 2003

                         Commission file number 0-30420

                    CONVERSION SERVICES INTERNATIONAL, INC.
          ------------------------------------------------------------
             (Exact Name of Registrant as Specified in its Charter)


                 Delaware                            20-1010495
     --------------------------------- ------------------------------------
      (State or other jurisdiction of  (IRS Employer Identification Number)
       incorporation or organization)


             100 Eagle Rock Avenue, East Hanover, New Jersey 07936
      -------------------------------------------------------------------
              (Address of Principal Executive Offices) (Zip Code)

        Registrant's telephone number, including area code: 973-560-9400


Securities registered pursuant to Section 12(b) of the Act:

None

Securities registered pursuant to Section 12(g) of the Act:

<PAGE>

common stock, par value $0.001 per share

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

Yes [X] No [_]
------- ------

Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure  will be contained,  to
the best of the  Registrant's  knowledge,  in  definitive  proxy or  information
statements  incorporated  by  reference  in Part III of this Form  10-KSB or any
amendment to this Form 10-KSB. /x/

State the  issuer's  revenues  for its most recent  fiscal  year:  The  issuer's
revenues for the ten months ended December 31, 2003 were $0.

The  aggregate  market value of the voting stock held by  non-affiliates  of the
Registrant  computed  by  reference  to the price at which the stock was sold on
April 13, 2004 was  approximately  $22,880,000.  Solely for the purposes of this
calculation,  shares held by directors and officers of the Registrant  have been
excluded. Such exclusion should not be deemed a determination or an admission by
the Registrant that such individuals are, in fact, affiliates of the Registrant.

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest  practicable  date: At April 13, 2004, there were
outstanding  673,000,000  shares of the  Registrant's  common stock,  $0.001 par
value.

DOCUMENTS INCORPORATED BY REFERENCE

None.

Transitional Small Business Disclosure Format (check one):

Yes [_] No {X}

                                      S-2
<PAGE>

PART I

ITEM 1. DESCRIPTION OF BUSINESS

Recent Developments

      On August 21,  2003,  LCS Group,  Inc.  (the  "Company")  entered  into an
Agreement  and  Plan of  Reorganization,  as  amended,  with  its  wholly  owned
subsidiary LCS Acquisition Corp. ("LCSAC"),  privately-held  Conversion Services
International,  Inc.  ("CSI") and certain  affiliated  stockholders  of CSI. The
agreement  called for CSI merging with and into LCSAC,  the Company changing its
name to "Conversion Services International, Inc." and the former stockholders of
CSI controlling the board of directors of the Company and approximately 84.3% of
the outstanding shares of common stock of the Company (the "Common Stock").

      At a special  meeting of Company  stockholders  held on January 23,  2004,
Company  stockholders  approved,  among  other  things:  (i) an  increase in the
Company's  authorized  shares of Common Stock from 50,000,000 to  1,000,000,000,
(ii) the  authorization  of up to 20,000,000  shares of "blank check"  preferred
stock,  (iii) the adoption of a stock  incentive plan for the Company,  and (iv)
the  election of Scott  Newman and Glenn  Peipert,  the  principals  of CSI, and
Lawrence K. Reisman, a nominee of Messrs.  Newman and Peipert,  to the Company's
board of directors.

      At the closing of the merger on January 30, 2004, the  stockholders of CSI
received 500,000,000 newly-issued shares of Common Stock (approximately 84.3% of
the then outstanding  shares).  As part of the restructuring,  certain officers,
directors  and  convertible  note holders of the Company and certain other third
parties  received  an  aggregate  of  43,779,824  shares  of  Common  Stock,  or
approximately  9% of the  outstanding  shares.  Included in such 43,779,824 were
18,313,157  shares issued to Dr. Michael Mitchell,  our former President,  Chief
Executive Officer and sole director,  and 1,000,000 shares issued to Alex Bruni,
our former Chief Financial Officer.

      At the closing of the merger,  Dr. Mitchell  resigned as the sole director
of the Company and all officers of the Company,  including  Dr.  Mitchell,  also
resigned.  The new Board of Directors  of the Company  appointed  Mr.  Newman as
Chairman,  President and Chief Executive Officer, Mr. Glenn Peipert as Executive
Vice President and Chief Operating Officer and Mr. Mitchell Peipert, the brother
of Glenn Peipert,  as Vice  President,  Chief Financial  Officer,  Secretary and
Treasurer.  Also, as part of its merger with CSI, LCSAC changed its name to "CSI
Sub Corp. (DE)".

      As part of merger,  the Company also  confirmed that as a condition to the
consummation of the merger  transaction,  100% of the  outstanding  stock of its
wholly owned subsidiary, LCS Golf, Inc., had been sold to a third party.

Business

                                      S-3
<PAGE>

      For the ten months ended December 31, 2003, the Company  operated  without
significant  operations.  During that year, it sought to identify and complete a
merger  or  acquisition  with a  private  entity  whose  business  presented  an
opportunity  for Company  stockholders.  The Company's  management  reviewed and
evaluated  business  ventures for possible mergers or acquisitions  until August
21,  2003,  when it  entered  into the  above-referenced  Agreement  and Plan of
Reorganization with CSI.

Employees

      For the ten months  December  31,  2003,  the  Company  had two  part-time
employees, its two executive officers.

ITEM 2. DESCRIPTION OF PROPERTY

      For the ten months  December  31,  2003,  the Company did not own any real
property, but it did utilize space in the residence of Dr. Mitchell, at 3 Tennis
Court Road, Mahopac, New York 10541, for no rental.

ITEM 3. LEGAL PROCEEDINGS

      For the ten months  December 31, 2003, the Company had the following legal
proceedings:

      In November  2002,  an unrelated  third party filed a complaint in the New
York State Supreme Court in New York County, New York against LCS Golf, Inc. and
the Company's  former chief  executive  officer and chief  financial  officer to
recover  legal  fees  and  disbursements  claimed  to be due in  the  amount  of
$54,772.06 plus interest and attorneys' fees. This action is still pending.

      On November 6, 2003, an unrelated third party filed a complaint in the New
York State Supreme Court in Rockland County, New York against LCS Golf, Inc. and
the Company's  former chief executive  officer and sole director.  The complaint
alleged a breach of  agreement,  a breach of guarantee by the  Company's  former
chief  executive  officer and sole  director and reliance by this party on false
statements,  and sought  aggregate  damages  of  approximately  $1,500,000  plus
interest,  legal fees and expenses.  On November 14, 2003,  the parties  entered
into an  agreement  pursuant to which the Company paid $30,000 and agreed to pay
an  additional  $32,500  when the  closing of the  proposed  merger with CSI was
consummated.  The Company  agreed to issue to this party 250,000 shares of CSI's
common  stock  within five days after the  closing.  The Company is awaiting the
withdraw of the complaint without prejudice.

      On May 1, 2003 a  complaint  naming  LCS Golf,  Inc.,  the  Company's  two
officers  and two other  individuals  was filed by a third  party in Palm  Beach
County,  Florida.  The  Complaint  alleged a breach of  contract  and  contained
allegations of losses of $1,625,000 plus securities and other compensation.  The
Company  settled this  litigation by entering into an agreement on September 25,
2003.  The agreement  called for the issuance of 100,000 shares of the Company's

                                      S-4
<PAGE>

common  stock and a payment of $10,000.  The Company paid this amount on October
22,  2003 and issued the  100,000  shares to a  designee  of the third  party on
November 24, 2003.


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

      See Item 1.


PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Market Information.

      For the ten months  December  31,  2003,  the  Company's  Common Stock was
quoted on the OTC Bulletin Board under the symbol LCSI.OB. Trading in the common
stock in the  over-the-counter  market has been  limited  and  sporadic  and the
quotations  set forth  below are not  necessarily  indicative  of actual  market
conditions.  On February 2, 2004, the Company announced that it formally changed
its corporate name from LCS Group,  Inc. to Conversion  Services  International,
Inc. The Company also announced that,  effective February 3, 2004, shares of the
Common Stock ceased  trading  under the symbol  "LCSI.OB" and were listed on the
OTC Bulletin Board under the symbol  "CSII.OB."  The following  chart sets forth
the high and low bid prices for each  quarter from January 1, 2002 to the latest
practicable date.


                                     High     Low
                                     ----     ---

2002 Quarter
January 1 - March 31                $0.37   $0.03
April 1 - June 30                   $0.51   $0.04
July 1 - September 30               $0.10   $0.04
October 1 - December 31             $0.05   $0.01

2003 Quarter
January 1 - March 31                $0.04   $0.01
April 1 - June 30                   $0.09   $0.08
July 1 - September 30               $0.19   $0.08
October 1 - December 31             $0.18   $0.09

2004
January 1 - March 31                $0.28   $0.12
April 1 - April 13                  $0.18   $0.14

Holders

                                      S-5
<PAGE>

      As of March 23,  2004,  there  were 466  registered  holders of our common
stock, including shares held in street name.

Dividends

      For the ten months  December 31, 2003,  we did not declare a cash dividend
on our common stock, and the Company does not plan to declare any cash dividends
in the foreseeable  future. The payment of dividends is within the discretion of
the Board of  Directors  and will  depend  on the  Company's  earnings,  capital
requirements,  financial  condition  and other  relevant  factors.  There are no
restrictions  that currently limit the Company's ability to pay dividends on its
Common Stock other than those generally imposed by applicable state law.

Recent Sales of Unregistered Securities

      For the ten months December 31, 2003,  there were no sales of unregistered
securities. As part of the Agreement and Plan of Reorganization, as amended, the
former  stockholders  of CSI were  issued  approximately  500,000,000  shares of
Common Stock,  representing  approximately  84.3% of the  outstanding  shares of
common stock of the Company. The Company also issued 43,779,824 shares of Common
Stock to fulfill certain  contractual  obligations  upon the merger described in
Item 1, of which 18,313,157 of those shares were issued to Dr. Michael Mitchell,
our former President,  Chief Executive Officer and sole director,  and 1,000,000
of those shares were issued to Alex Bruni,  our former Chief Financial  Officer.
These  securities  were issued  pursuant to an exemption  from the  registration
under Section 4(2) of the Securities Act of 1933, as amended.

ITEM 6. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

      Except for historical information,  the discussion in this report contains
forward-looking  statements  within the meaning of Section 27A of the Securities
Act of 1933, Section 21E of the Securities  Exchange Act of 1934 and the Private
Litigation  Reform  Act of 1995  that  involve  risks and  uncertainties.  These
forward-looking statements include, among others, those statements including the
words  "expects,"   "anticipates,"   "intends,"  "believes"  and  other  similar
language.  Our actual  results  could  differ  materially  from those  discussed
herein. You should not place undue reliance on these forward-looking statements,
which apply only as of the date of this report.

OVERVIEW

      As of December 31, 2003, we had  previously  terminated all of our revenue
generating  operations  and  released  all  but  two of our  employees,  our two
executive officers.

RESULTS OF OPERATIONS
                                      S-6
<PAGE>

TEN MONTHS ENDED DECEMBER 31, 2003 AND TWELVE MONTHS ENDED FEBRUARY 28, 2003

Revenues

      Our  revenues  for the ten months  ended  December 31, 2003 were zero on a
consolidated  basis as  compared to $31,908 for the prior  twelve  months  ended
February 28, 2003.  This  decrease  resulted  from the  suspension of all of our
revenue generating operations.

Cost of Revenue

      Cost of  revenues  was $0 for the ten months  ended  December  31, 2003 as
compared  to $0 for the prior  twelve  months  ended  February  28,  2003.  This
resulted from the suspension of all of our revenue generating operations.

Selling, General and Administrative

      Selling,  general and  administrative  expenses  were $542,559 for the ten
months ended  December 31, 2003 compared to $601,755 for the year ended February
28, 2003.  This  decrease  resulted  from the  suspension  of all of our revenue
generating operations.

Interest Expense

      Interest  expense  consists  of  interest  on debt  obligations.  Interest
expense was  $84,784 for the ten months  ending  December  31, 2003  compared to
$682,341 for the year ending February 28, 2003.

Income Taxes

      No  provision  for federal or state  income  taxes was recorded as we have
incurred net operating losses since inception through December 31, 2003. The tax
benefit  of the net  operating  losses  has  been  reduced  by a 100%  valuation
allowance.

Liquidity and Capital Resources.

      By March 2003, we had suspended all of our revenue generating  operations.
During the ten months ended  December 31, 2003, we incurred a loss of $[627,343]
and negative cash flow from operations of $[764,543].

      On August 21, 2003,  the Company  entered  into an  Agreement  and Plan of
Reorganization,  as amended,  with its wholly owned  subsidiary LCS  Acquisition
Corp.,  privately-held  Conversion  Services  International,  Inc.  ("CSI")  and
certain affiliated  stockholders of CSI. At the closing of the merger on January
30, 2004, the stockholders of CSI received  500,000,000  newly-issued  shares of
Common Stock (approximately 84.3% of the then outstanding shares).

      As part of merger,  the Company also confirmed that, as a condition to the
consummation of the merger  transaction,  100% of the  outstanding  stock of its
wholly  owned  subsidiary,  LCS  Golf,  Inc.,  had been  sold to a third  party.

                                      S-7
<PAGE>

Commensurate with the sale of LCS Golf, Inc., most loans advanced to LCS Golf,
Inc. previously by independent parties, as of the date of this filing, were
satisfied with shares of our common stock.


ITEM 7. FINANCIAL STATEMENTS.

      Reference  is  made  to  the  Financial  Statements  referred  to  in  the
accompanying Index,  setting forth the consolidated  financial statements of LCS
Group, Inc. and subsidiaries,  which are included at the end of this Form 10-KSB
begining on page F-1.

      Since the stockholders of CSI own a majority of the issued and outstanding
shares of LCS Group,  Inc.  (prior to the name  change  noted  above)  after the
merger,  this  transaction will be accounted for as a reverse merger whereby CSI
is deemed to be the accounting  acquirer of LCS Group,  Inc.. Because LCS Group,
Inc.  did not have any assets or  liabilities  prior to the merger,  there is no
goodwill  or other  intangibles  that will arise from the  merger.  As a result,
historical stockholder's equity of CSI will be retroactively restated to reflect
the recapitalization.

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

     For the ten months  December 31, 2003, we changed our  independent  auditor
and  certifying  accountant  to  Ehrenkrantz  Sterling & Co.  LLC.  Prior to the
transaction  described in Item 1, we had engaged  Eisner LLP as our  independent
auditor and certifying  accountant.  There have been no disagreements wih Eisner
LLP on any matter of accounting  principles or  practices,  financial  statement
disclosure or auditing scope or procedures,  which disagreements if not resolved
to the  satisfaction  of Eisner LLP would  have  caused  them to make  reference
thereto in their report.

ITEM 8A. CONTROLS AND PROCEDURES.

      Our Chief Executive Officer and Chief Financial Officer (collectively, the
"Certifying   Officers")  are  responsible  for   establishing  and  maintaining
disclosure controls and procedures for the Company. Such officers have concluded
(based on their  evaluation of these controls and procedures as of a date within
90 days of the filing of this report) that the Company's disclosure controls and
procedures are effective to ensure that information  required to be disclosed by
the Company in this report is  accumulated  and  communicated  to the  Company's
management,  including its principal executive officers as appropriate, to allow
timely decisions  regarding required  disclosure.  The Certifying  Officers also
have indicated that there were no significant  changes in the Company's internal
controls  or  other  factors  that  could  significantly  affect  such  controls
subsequent to the date of their evaluation, and there were no corrective actions
with regard to significant deficiencies and material weaknesses.

PART III

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

                                      S-8
<PAGE>

 Directors and Executive Officers

      For the ten  months  December  31,  2003,  Dr.  Michael  Mitchell  was our
President,  Chief  Executive  Officer and sole Director,  and Alex Bruni was our
Chief Operating  Officer and Chief Financial  Officer.  On January 30, 2004, Dr.
Mitchell and Mr. Bruni resigned their respective  officers upon  consummation of
our  merger as  described  in Item 1. Set  forth  below  are our  directors  and
executive  officers,  their  respective  names  and  ages,  positions  with  us,
principal  occupations  and business  experiences  during at least the past five
years and the dates of the commencement of each  individual's term as a director
and/or officer as of April 12, 2004.

Name                 Age       Position
----                 ---       --------

Scott Newman         44        President, Chief Executive Officer and Chairman

Glenn Peipert        42        Executive Vice President, Chief Operating Officer
                               and Director

Mitchell Peipert     45        Vice President, Chief Financial Officer,
                               Secretary and Treasurer

Lawrence K. Reisman  45        Director

Robert C. DeLeeuw    47        President, DeLeeuw Associates, LLC

      SCOTT  NEWMAN,  President,  Chief  Executive  Officer and  Chairman  since
January 2004. Mr. Newman founded the former Conversion  Services  International,
Inc. in 1990  (before its merger with and into the  Company)  ("Old CSI") and is
the largest  stockholder of the Company.  He has over twenty years of experience
providing  technology solutions to major companies  internationally.  Mr. Newman
has direct  experience  in strategic  planning,  analysis,  design,  testing and
implementation  of complex  big-data  solutions.  He  possesses  a wide range of
software   and   hardware   architecture/discipline    experience,    including,
client/server, data discovery, distributed systems, data warehousing, mainframe,
scaleable  solutions and e-business.  Mr. Newman has been the architect and lead
designer  of  several  commercial  software  products  used by Chase,  Citibank,
Merrill Lynch and Jaguar Cars. Mr. Newman  advises and reviews data  warehousing
and  business  intelligence  strategy on behalf of the  Company's  Fortune  1000
clients,  including AT&T Capital,  Jaguar Cars, Cytec and Chase. Mr. Newman is a
member of the Young  Presidents  Organization,  a leadership  organization  that
promotes the exchange of ideas,  pursuit of learning and sharing  strategies  to
achieve  personal and professional  growth and success.  Mr. Newman received his
B.S. from Brooklyn College in 1980.

      GLENN  PEIPERT,  Executive Vice  President,  Chief  Operating  Officer and
Director  since January 2004.  Mr.  Peipert held the same positions with Old CSI
since its inception in 1990,  and now holds the same positions with the Company.
Mr. Peipert has over two decades of experience consulting to major organizations
about leveraging  technology to enable strategic  change. He has advised clients
representing a broad  cross-section of rapid growth  industries  worldwide.  Mr.
Peipert has hands on experience with the leading data warehousing products.  His

                                      S-9
<PAGE>

skills include  architecture  design,  development  and project  management.  He
routinely  participates  in  architecture  reviews and  recommendations  for the
Company's  Fortune  500  clients.  Mr.  Peipert  has  managed  major  technology
initiatives  at Chase,  Tiffany,  Morgan  Stanley,  Cytec and the United  States
Tennis   Association.   He  speaks   nationally  on  applying  data  warehousing
technologies to enhance business  effectiveness  and has authored multiple white
papers regarding business intelligence. Mr. Peipert is a member of the Institute
of  Management  Consultants,   as  well  as  TEC  International,   a  leadership
organization  whose  mission is to increase  the  effectiveness  and enhance the
lives of chief  executives and those they influence.  Mr. Peipert is the brother
of Mitchell  Peipert,  the Company's Vice President,  Chief  Financial  Officer,
Secretary and Treasurer.  Mr. Peipert received his B.S. from Brooklyn College in
1982.

      MITCHELL PEIPERT, Vice President,  Chief Financial Officer,  Secretary and
Treasurer since January 2004. Mr. Peipert is a Certified  Public  Accountant who
held the same positions with Old CSI from January 2001 to September  2002.  From
September 2002 to December 2003, Mr. Peipert was Senior Sales  Executive for NIA
Group and  President of E3  Management  Advisors.  From April 1992 until January
2001,  Mr.  Peipert served as Senior Vice President of Operations and Controller
of TSR Wireless  LLC,  where he directed the  accounting,  operations  and human
resources  functions.  He also assisted the chief executive officer in strategic
planning,  capital raising and acquisitions.  Prior to his employment by TSR, he
held  various  managerial  roles for Anchin,  Block & Anchin,  certified  public
accountants,  Merrill Lynch and Grant  Thornton.  Mr.  Peipert is the brother of
Glenn Peipert,  the Company's Executive Vice President,  Chief Operating Officer
and Director.  Mr. Peipert  received his B.S. from Brooklyn  College in 1980 and
received his M.B.A. in Finance from Pace University in 1986.

      LAWRENCE K.  REISMAN,  Director  since  February  2004.  Mr.  Reisman is a
Certified  Public  Accountant  who has been the  principal of his own firm,  The
Accounting  Offices of L.K.  Reisman,  since 1986. Prior to forming his company,
Mr. Reisman was a tax manager at Coopers & Lybrand and Peat Marwick Mitchell. He
routinely  provides  accounting  services to small and  medium-sized  companies,
which services include auditing, review and compilation of financial statements,
corporate, partnership and individual taxation, designing accounting systems and
management  consulting  services.  Mr. Reisman  received his B.S. and M.B.A.  in
Finance from St. John's University in 1981 and 1985, respectively.

      ROBERT C. DELEEUW, Senior Vice President since March 2004 and President of
our wholly  owned  subsidiary,  DeLeeuw  Associates,  LLC. Mr.  DeLeeuw  founded
DeLeeuw Associates,  LLC, formerly known as DeLeeuw  Associates,  Inc., in 1991.
Mr. DeLeeuw has over  twenty-five  years  experience in banking and  consulting.
During  this time,  he has  managed and  supported  some of the  largest  merger
projects in the history of the financial  services  industry and has implemented
numerous  large-scale  business and process change programs for his clients.  He
has been published in American Banker, Mortgage Banking Magazine, The Journal of
Consumer  Lending and Bank  Technology News where he has also served as a member
of the  Editorial  Advisory  Board.  Mr.  DeLeeuw  received his B.S.  from Rider
University in 1979 and received his M.S. in Management from Stevens Institute of
Technology in 1986.

ITEM 10. EXECUTIVE COMPENSATION.

                                      S-10
<PAGE>

      We paid no cash compensation to our executive officers in 2002 and 2003.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

      The following  table sets forth  information  concerning  ownership of the
Common Stock  outstanding  as of April 12, 2004, by: (i) each person known by us
to be a beneficial  owner of more than five  percent  (5%) of our Common  Stock,
(ii)  each  director  and  executive  officer  and  (iii) by all  directors  and
executive officers as a group:

      ------------------------------------------------------------------------
      Name (1) (2)          Shares Beneficially Owned (3)  Percentage of Class
      ------------------------------------------------------------------------
      Scott Newman                 300,050,000                     44.6%
      ------------------------------------------------------------------------
      Glenn Peipert                150,000,000                     22.3%
      ------------------------------------------------------------------------
      Robert C. DeLeeuw             80,000,000                     11.9%
      ------------------------------------------------------------------------
      Lawrence K. Reisman               0                           0%
      ------------------------------------------------------------------------
      Mitchell Peipert                0 (4)                         0%
      ------------------------------------------------------------------------
      All officers and             530,050,000                     78.8%
      directors as a group
      (5 persons)
      ------------------------------------------------------------------------

______________________
(1)   Each stockholder, director and executive officer has sole voting power and
      sole dispositive  power with respect to all shares  beneficially  owned by
      him, unless otherwise indicated.
(2)   The  address  for all  persons  listed  on this  table  is c/o  Conversion
      Services  International,  Inc., 100 Eagle Rock Avenue,  East Hanover,  New
      Jersey 07936.
(3)   Based  upon  shares  of Common  Stock  outstanding  at April  12,  2004 of
      673,000,000  shares.

(4)  Does not include  4,500,000  options to purchase Common Stock issued by our
     Board of  Directors  on March 29, 2004 at an  exercise  price of $0.165 per
     share.  One-third  of the options  granted  vest on the first  anniversary,
     one-third  of the  options  granted  vest  on the  second  anniversary  and
     one-third of the options granted vest on the third anniversary.  The option
     grant expires on March 28, 2014.


ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

      For  the ten  months  December  31,  2003,  the  Company  entered  into an
Agreement and Plan of Reorganization as more fully described in Item 1.

      Other than those described above, we have no material  transactions  which
involved or are planned to involve a direct or indirect  interest of a director,
nominee, executive officer, 5% shareholder or any family of such parties.


ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K.

                                      S-11
<PAGE>

(a) Exhibits

2.1   Agreement  and Plan of  Reorganization,  dated August 21, 2003,  among the
      Company, LCS Acquisition Corp.,  Conversion Services  International,  Inc.
      and certain affiliated  stockholders of Conversion Services International,
      Inc. (filed as Appendix A on Schedule 14A on January 5, 2004).

2.2   First  Amendment to Agreement and Plan of  Reorganization,  dated November
      28, 2003, among the Company,  LCS Acquisition Corp.,  Conversion  Services
      International,  Inc. and certain  affiliated  stockholders  of  Conversion
      Services  International,  Inc.  (filed as  Appendix A on  Schedule  14A on
      January 5, 2004).

2.3   Certificate of Merger,  dated January 30, 2004,  relating to the merger of
      LCS Acquisition Corp. and Conversion Services  International,  Inc. (filed
      as Exhibit 2.3 on Form 8-K on February 17, 2004).

2.4   Acquisition Agreement, dated February 27, 2004, among the Company, DeLeeuw
      Associates,  Inc. and Robert C. DeLeeuw  (filed as Exhibit 2.1 on Form 8-K
      on March 16, 2004).

2.5   Plan and Agreement of Merger and Reorganization,  dated February 27, 2004,
      among the Company,  DeLeeuw  Associates,  Inc. and DeLeeuw  Conversion LLC
      (filed as Exhibit 2.1 on Form 8-K on March 16, 2004).

2.6   Certificate of Merger relating to the merger of DeLeeuw  Associates,  Inc.
      and DeLeeuw  Conversion LLC in Delaware  (filed as Exhibit 2.1 on Form 8-K
      on March 16, 2004).

2.7   Certificate of Merger relating to the merger of DeLeeuw  Associates,  Inc.
      and DeLeeuw Conversion LLC in New Jersey (filed as Exhibit 2.1 on Form 8-K
      on March 16, 2004).

2.8   Certificate  of Amendment  to  Certificate  of Formation  relating to name
      change of DeLeeuw  Conversion  LLC  (filed as  Exhibit  2.1 on Form 8-K on
      March 16, 2004).

3.1   Certificate  of  Incorporation,  as amended  (filed as Exhibit 3.1 on Form
      10-SB on December 9, 1999).

3.2   Certificate of Amendment to the Company's  Certificate  of  Incorporation,
      dated  January 27, 2004,  amending,  among other  things,  the  authorized
      shares of common and preferred  stock (filed as Exhibit 3.1 on Form 8-K on
      February 17, 2004).

3.3   Certificate of Amendment to the Company's  Certificate  of  Incorporation,
      dated  January 30, 2004,  changing the name of the Company from LCS Group,
      Inc. to Conversion Services  International,  Inc. (filed as Exhibit 3.2 on
      Form 8-K on February 17, 2004).

                                      S-12
<PAGE>

3.4   Amended and Restated  Bylaws (filed as Exhibit 3.3 on Form 8-K on February
      17, 2004).

10.1  Employment  Agreement among the Company and Scott Newman,  dated March 26,
      2004 (filed as Exhibit 10.1 on Form 8-K/A on April 1, 2004).

10.2  Employment Agreement among the Company and Glenn Peipert,  dated March 26,
      2004 (filed as Exhibit 10.2 on Form 8-K/A on April 1, 2004).

10.3  Employment  Agreement among the Company and Mitchell Peipert,  dated March
      26, 2004 (filed as Exhibit 10.3 on Form 8-K/A on April 1, 2004).

21*   Subsidiaries of the Company.

31.1  Certification  of the Company's  Chief  Executive  Officer  pursuant to 18
      U.S.C.   Section  1350,  as  adopted   pursuant  to  Section  302  of  the
      Sarbanes-Oxley Act of 2002.

31.2  Certification  of the Company's  Chief  Financial  Officer  pursuant to 18
      U.S.C.   Section  1350,  as  adopted   pursuant  to  Section  302  of  the
      Sarbanes-Oxley Act of 2002.

32.1  Certification  of the Company's  Chief  Executive  Officer  pursuant to 18
      U.S.C.   Section  1350,  as  adopted   pursuant  to  Section  906  of  the
      Sarbanes-Oxley Act of 2002.

32.2  Certification  of the Company's  Chief  Financial  Officer  pursuant to 18
      U.S.C.   Section  1350,  as  adopted   pursuant  to  Section  906  of  the
      Sarbanes-Oxley Act of 2002.

____________________
* filed herewith

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

(1)   Audit Fees

      The  aggregate  fees  billed for  professional  services  rendered  by our
independent auditors for the audit of our annual financial statements and review
of our financial  statements  included in our quarterly reports or services that
are normally  provided by the independent  auditors in connection with statutory
and  regulatory  filings or  engagements  were $89,850 for the fiscal year ended
February 28, 2003 and $46,000 for the ten months ended December 31, 2003.

(2)   Audit-Related Fees

                                      S-13
<PAGE>

      During our last two fiscal years our independent  auditors did not perform
any  assurance  and  related  services  that  were  reasonably  related  to  the
performance  or  review of our  financial  statements  for which we were  billed
except as may have been included in the fees set forth in Paragraph (1) above.

(3)   Tax Fees

      Our independent  auditors did not provide us with any tax compliance,  tax
advice  or  tax  planning  services  during  our  last  two  fiscal  years  and,
accordingly, did not bill us for such services during these years.

(4)   All Other Fees

      During our last two fiscal years our independent  auditors did not provide
us with  any  products  and  did not  provide  us with or bill us any  fees  for
services other than those set forth in Paragraph (1) above.

(5)   This Paragraph is not applicable since we do not have an audit committee.

                                      S-14
<PAGE>

                                   SIGNATURES

      Pursuant  to the  requirements  of Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.

Dated: April 14, 2004

By: /s/ Scott Newman
   -------------------
   Scott Newman
   President, Chief Executive Officer and Chairman since January 30, 2004

      Pursuant to the requirements of the Securities  Exchange Act of 1934, this
report  has  been  signed  below  by the  following  persons  on  behalf  of the
Registrant and in the capacities indicated on April 14, 2004.

Signatures                    Title
----------                    -----

/s/ Scott Newman              President, Chief Executive Officer and Chairman
------------------------
Scott Newman
(Principal Executive Officer
since January 30, 2004)



/s/ Mitchell Peipert          Vice President, Chief Financial Officer, Secretary
------------------------      and Treasurer
Mitchell Peipert
(Principal Financial and
Accounting Officer
since January 30, 2004)

                                      S-15
<PAGE>

                        LCS GROUP, INC. AND SUBSIDIARIES

                               Table of Contents


--------------------------------------------------------------------------------
Independent auditors' report                                      F-1
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
Independent auditors' report                                      F-2
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
Consolidated balance sheet as of December 31, 2003                F-3
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
Consolidated statements of operations for the ten                 F-4
months ended December 31, 2003 and the year ended
February 28, 2003
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
Consolidated  statements  of changes in  stockholders'            F-5
deficit  for the ten months  ended  December  31, 2003
and the years ended February 28, 2003
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
Consolidated  statements  of  cash  flows  for the ten            F-6
months  ended  December  31,  2003 and the year ended
February 28, 2003
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
Notes to financial statements                                     F-7
--------------------------------------------------------------------------------

<PAGE>

INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders
Conversion Services International, Inc.

We have audited the accompanying  consolidated  balance sheet of LCS Group, Inc.
and subsidiaries as of December 31, 2003 and the related consolidated statements
of  operations,  changes  in  stockholders'  deficit  and cash flows for the ten
months  ended   December  31,  2003.   These   financial   statements   are  the
responsibility of the Company's management.  Our responsibility is to express an
opinion  on these  financial  statements  based  on our  audit.  The  financial
statements  of LCS Group,  Inc.  and  subsidiaries  as of February 28, 2003 were
audited by other  auditors  whose  report  dated  June 13,  2003,  expressed  an
unqualified opinion on those statements.

We conducted our audit in accordance with auditing standards  generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audit to obtain  reasonable  assurance  about  whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audit  provides  a
reasonable basis for our opinion.

In our opinion, the financial statements enumerated above present fairly, in all
material  respects,  the consolidated  financial position of LCS Group, Inc. and
subsidiaries  as of December 31,  2003,  and the  consolidated  results of their
operations and their  consolidated  cash flows for the ten months ended December
31, 2003 in conformity  with  accounting  principles  generally  accepted in the
United States of America.


/s/ Ehrenkrantz Sterling & Co., LLC
--------------------------------------
Livingston, New Jersey
March 30, 2004

                                      F-1
<PAGE>

INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders
LCS Group, Inc.

We have audited the accompanying  consolidated statements of operation,  changes
in capital  deficit  and cash flows of LCS Golf,  Inc.,  now known as LCS Group,
Inc., for the year ended February 28, 2003.  These financial  statements are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards  generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audit to obtain  reasonable  assurance  about  whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audit  provides  a
reasonable basis for our opinion.

In our opinion,  the financial  statements of LCS Golf,  Inc.,  now known as LCS
Group,  Inc.,  enumerated above present fairly,  in all material  respects,  the
consolidated  results of their operation and their  consolidated  cash flows for
the year ended  February  28,  2003 in  conformity  with  accounting  principles
generally accepted in the United States of America.

The accompanying  financial statements for the year ended February 28, 2003 have
been prepared  assuming that the Company will  continue as a going  concern.  As
discussed in Note 1, the Company  experienced  recurring losses from operations,
was in  default  of  certain  indebtedness  and had to rely on  loans  from  its
majority  stockholder and others.  These factors raised  substantial doubt about
the  Company's  ability  to  continue  as a going  concern.  Management's  plans
regarding this matter are also described in Note 1. The financial  statements do
not  include  any  adjustments  that  might  result  from  the  outcome  of this
uncertainty.

/s/Eisner LLP
----------------
Eisner LLP


New York, New York
June 18, 2003

                                      F-2
<PAGE>

                        LCS GROUP, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                               DECEMBER 31, 2003

                                     ASSETS
CURRENT ASSETS
    Funds held in escrow                                     $     89,868
                                                             ------------

    TOTAL CURRENT ASSETS                                           89,868
                                                             ------------

    TOTAL ASSETS                                             $     89,868
                                                             ============


                     LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES
    Accounts payable and accrued expenses                    $  1,581,956
    Settled obligations                                           455,507
    Debt not in compliance with terms                             301,445
    Convertible notes payable                                     602,500
    Due to related parties                                      2,948,484
                                                             ------------

    TOTAL CURRENT LIABILITIES                                   5,889,892
                                                             ------------

COMMITMENTS AND CONTINGENCIES                                          --

STOCKHOLDERS' DEFICIT
    Common stock: 50,000,000 shares authorized
    49,220,176 shares issued and outstanding                       49,220
    Additional paid-in capital                                 15,323,681
    Accumulated deficit                                       (21,172,925)
                                                             ------------

    Total Stockholders' Deficit                                (5,800,024)
                                                             ------------

    TOTAL LIABILITIES AND STOCKHOLDERS'  DEFICIT             $     89,868
                                                             ============

See Notes to Consolidated Financial Statements.

                                      F-3
<PAGE>

<TABLE>
<CAPTION>
                                                  Ten Months
                                                    Ended             Year Ended
                                               December 31, 2003   February 28, 2003
                                                ---------------     ---------------


<S>                                             <C>                 <C>
REVENUES                                        $           --      $       31,908

COST OF REVENUES                                            --                  --
                                                ---------------     ---------------

GROSS PROFIT                                                --              31,908

SELLING , GENERAL AND ADMINISTRATIVE                   542,559             601,755
                                                ---------------     ---------------

LOSS FROM OPERATIONS                                  (542,559)           (569,847)

INTEREST EXPENSE                                        84,784             682,341
                                                ---------------     ---------------

NET LOSS                                        $     (627,343)     $   (1,252,188)
                                                ===============     ===============

Net loss per share- basic and diluted           $        (0.01)     $        (0.03)
                                                ===============     ===============

Weighted average number of shares outstanding       49,134,882          35,594,996
                                                ===============     ===============
</TABLE>

See Notes to Consolidated Financial Statements.

                                      F-4
<PAGE>

                        LCS GROUP, INC. AND SUBSIDIARIES
          CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT
      TEN MONTHS ENDED DECEMBER 31, 2003 AND YEAR ENDED FEBRUARY 28, 2003

<TABLE>
<CAPTION>

                                                     Common stock                                                 Total
                                           -----------------------------      Additional      Accumulated     Stockholders'
                                                Shares          Amount     Paid-in Capital      Deficit          Deficit
                                           --------------------------------------------------------------------------------

<S>                                           <C>              <C>          <C>              <C>              <C>
Balance, March 1, 2002                        27,407,225       $ 27,407     $ 14,266,494     $ (19,293,394)   $ (4,999,493)

Issuance of common stock for services         10,000,000         10,000          455,000                --         465,000

Conversion of convertible promissory
  notes                                        5,000,000          5,000          195,000                --         200,000

Share issued for convertible promissory
  notes                                        6,000,000          6,000          389,362                --         395,362

Shares issued upon cashless exercise of
  warrants                                       512,951            513               --                --             513

Shares issued in connection with bridge
  loan                                           200,000            200            5,925                 -           6,125

Net loss                                              --             --               --        (1,252,188)     (1,252,188)
                                           --------------------------------------------------------------------------------

Balance, February 28, 2003                    49,120,176         49,120       15,311,781       (20,545,582)     (5,184,681)

Shares issued in connection with
  litigation settlement                          100,000            100           11,900                            12,000

Net loss                                              --             --               --          (627,343)       (627,343)
                                           --------------------------------------------------------------------------------

Balance, December 31, 2003                    49,220,176       $ 49,220     $ 15,323,681     $ (21,172,925)   $ (5,800,024)
                                           ================================================================================
</TABLE>

See Notes to Consolidated Financial Statements.

                                      F-5
<PAGE>

                        LCS GROUP, INC.AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                        Ten Months
                                                           Ended            Year Ended
                                                      December 31, 2003  February 28, 2003
                                                       ---------------   ----------------
Cash flows from operating activities:
<S>                                                     <C>                <C>
    Net loss                                            $  (627,343)       $(1,252,188)
    Adjustments to reconcile net loss to net cash
      used in operating activities:
       Non-cash impairment charge                                --             34,827
       Depreciation and amortization                             --              6,917
       Issuance of common stock for services                     --             75,000
       Financing charge - noncash                                --            402,000
       Amortization of deferred financing costs                  --             24,700
    Changes in:
       Accounts receivable                                       --                496
       Escrow funds                                         (89,868)                --
       Deferred financing costs                                  --             26,110
       Security deposits                                         --              9,293
       Accounts payable and accrued expenses                (47,332)           556,536
       Other current liabilities                                 --              1,977
                                                        -----------        -----------

           Net cash used in operating activities           (764,543)          (114,332)
                                                        -----------        -----------

Cash flows from investing activities:                            --                 --
                                                        -----------        -----------

Cash flows from financing activities:
    Cash overdraft                                               --              8,178
    Proceeds from (repayments to) settled obligations       (80,134)            75,000
    Proceeds from convertible notes payable                 602,500                 --
    Repayment of debt in default                                 --            (10,000)
    Net proceeds from related parties                       242,177             41,154
                                                        -----------        -----------

           Net cash provided by financing activities        764,543            114,332
                                                        -----------        -----------

NET INCREASE (DECREASE) IN CASH                                  --                 --
CASH, beginning of period                                        --                 --
                                                        -----------        -----------

CASH, end of period                                     $        --        $        --
                                                        ===========        ===========


         SUPPLEMENTARY DISCLOSURES OF CASH PAID DURING THE PERIOD FOR:

Interest                                                $     6,742        $        --
Income taxes                                                     --                 --

        SUPPLEMENTARY DISCLOSURES OF NON-CASH ACTIVITIES FOR THE PERIOD:

Liabilities paid with common stock                      $    12,000          $ 390,000
Debt converted into common stock                                 --            200,000
</TABLE>

See Notes to Consolidated Financial Statements.

                                      F-6
<PAGE>

                        LCS GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION AND BUSINESS

LCS Golf, Inc. (LCS) was formed under the laws of the State of New York on March
8, 1994.  From October 1994 through  November 1999, LCS designed,  assembled and
marketed golf clubs and related  accessories  as well as providing  products and
services  to the golf  playing  public and  marketed  the  database  information
obtained from its websites.  During the fiscal year ended February 28, 2003, LCS
had lost its websites and domain names, and its database had become obsolete.

From November 1999 through the year ended  December 31, 2003,  LCS had suspended
almost all of its revenue generating operations.

On July 16, 2003,  LCS became the  wholly-owned  subsidiary of LCS Group,  Inc.,
hereafter  referred  to as the  "Company."  Pursuant  to this  transaction,  the
Company  acquired all of the assets of LCS at the time, all former  stockholders
of LCS became the  stockholders of the Company,  which is the entity that is now
publicly traded on the OTC Bulletin Board, and the officers and sole director of
LCS became the officers and sole director of the Company.

On  August  21,  2003,  the  Company  entered  into  an  Agreement  and  Plan of
Reorganization,  as amended,  with its wholly owned  subsidiary LCS  Acquisition
Corp. ("LCSAC"),  privately-held Conversion Services International, Inc. ("CSI")
and certain affiliated stockholders of CSI. The agreement called for CSI merging
with and into  LCSAC,  the Company  changing  its name to  "Conversion  Services
International, Inc." and the former stockholders of CSI controlling the board of
directors of the Company and  approximately  84.3% of the outstanding  shares of
common stock of the Company (the "Common Stock").

On January 22, 2004 and as part of merger,  the Company  sold, as a condition to
the consummation of the merger transaction, 100% of the outstanding stock of LCS
to an unrelated third party for a nominal amount.

At a special meeting of Company  stockholders held on January 23, 2004,  Company
stockholders  approved,  among other  things:  (i) an increase in the  Company's
authorized  shares of Common Stock from  50,000,000 to  1,000,000,000,  (ii) the
authorization of up to 20,000,000 shares of "blank check" preferred stock, (iii)
the adoption of a stock incentive plan for the Company, and (iv) the election of
a new Board of Directors.

At the  closing of the merger on  January  30,  2004,  the  stockholders  of CSI
received 500,000,000 newly-issued shares of Common Stock (approximately 84.3% of
the then outstanding  shares).  As part of the restructuring,  certain officers,
directors  and  convertible  note holders of the Company and certain other third
parties  received  an  aggregate  of  43,779,824  shares  of  Common  Stock,  or
approximately  9% of the  outstanding  shares.  Included in the 43,779,824  were
approximately  18,154,824  shares issued to the former sole director,  President
and Chief  Executive  Officer of the Company and 1,000,000  shares issued to the
former Chief Operating Officer and Chief Financial Officer.

Since the  stockholders  of CSI own a majority  of the  issued  and  outstanding
shares of LCS Group,  Inc.  (prior to the name  change  noted  above)  after the
merger,  this  transaction will be accounted for as a reverse merger whereby CSI
is deemed to be the accounting  acquirer of LCS Group,  Inc.  Because LCS Group,
Inc.  did not have any assets or  liabilities  prior to the merger,  there is no
goodwill or other  intangibles  that will arise from the  merger.  (See Note 11.
Subsequent Events) As a result,  historical  stockholder's equity of CSI will be
retroactively restated to reflect the recapitalization.

At the closing of the merger,  the sole director and officers of LCS Group, Inc.

                                      F-7
<PAGE>

resigned. The new Board of Directors of the Company appointed new officers Also,
as part of its merger with CSI, LCSAC changed its name to "CSI Sub Corp. (DE)".

Through  February  28,  2003,  the Company was not able to generate  significant
revenues from its  operations to cover its costs and operating  expenses and had
incurred significant losses. In addition,  the Company had a significant working
capital  deficiency  and a  capital  deficit  and  was  in  default  of  certain
indebtedness.  Although the Company  issued its common  stock for a  significant
portion  of  its   expenses  and  it  had  to  rely  on  loans  from  its  major
stockholder/president  and others,  it was not known  whether the Company  would
have been able to continue this  practice.  It was also not known if the Company
would  have  been  able  to  meet  its  operating  expense  requirements.  These
circumstances  raised  substantial doubt about the Company's ability to continue
as a going concern as of February 28, 2003.

As a  result  of the  merger  with  CSI,  as more  fully  described  below,  the
circumstances  which  gave rise to the  substantial  doubt  about the  Company's
ability to continue as a going concern no longer exists as of December 31, 2003.
In Form  8-K/A  previously  filed by  Company,  we refer you to CSI's  financial
statements  as of and for the year ended  December 31, 2003 wherein CSI received
an unqualified opinion with no emphasis of matter.

Since the  stockholders  of CSI own a majority  of the  issued  and  outstanding
shares of LCS Group,  Inc.  (prior to the name  change  noted  above)  after the
merger,  this  transaction will be accounted for as a reverse merger whereby CSI
is deemed to be the accounting  acquirer of LCS Group,  Inc.  Because LCS Group,
Inc.  did not have any assets or  liabilities  prior to the merger,  there is no
goodwill or other  intangibles  that will arise from the  merger.  (See Note 11.
Subsequent Events - Reverse Merger) As a result, historical stockholder's equity
of CSI will be retroactively restated to reflect the recapitalization.


PRINCIPLES OF CONSOLIDATION

The consolidated  financial  statements  include the accounts of LCS Group, Inc.
and its subsidiaries.  All material  intercompany accounts and transactions have
been eliminated in consolidation.

DEFERRED INCOME TAXES

Deferred  income  taxes are  reported  using the  asset  and  liability  method.
Deferred tax assets are  recognized  for deductible  temporary  differences  and
deferred tax  liabilities  are  recognized  for taxable  temporary  differences.
Temporary differences are the differences between the reported amounts of assets
and  liabilities  and their tax bases.  Deferred  tax  assets  are  reduced by a
valuation  allowance when, in the opinion of management,  it is more likely than
not that some  portion or all of the  deferred  tax assets will not be realized.
Deferred tax assets and  liabilities  are adjusted for the effects of changes in
tax laws and rates on the date of enactment.

LOSS PER SHARE

Loss per  share  has been  computed  by  dividing  the net loss by the  weighted
average  number of shares of common  stock  outstanding,  including  shares with
respect to  liabilities  to be paid with common stock,  during each period.  The
effect of outstanding potential shares of common stock, including stock options,
warrants and convertible  debt is not included in the per share  calculations as
it would be anti-dilutive.

USE OF ESTIMATES

The preparation of financial statements in conformity with accounting principles
generally  accepted in the United States of America requires  management to make
estimates and assumptions that affect the reported amounts of assets,  which are
subject to impairment  considerations,  liabilities and disclosure of contingent
assets and  liabilities  at the date of the  financial  statements  and reported
amounts of revenues and expenses  during the reporting  period.  Actual  results
could differ from those estimates.

2. RECENT PRONOUNCEMENTS

In December  2002,  the FASB issued SFAS No. 148,  "Accounting  for  Stock-based
Compensation - Transition  and Disclosure - an Amendment to SFAS No. 123".  SFAS
No. 148 provides alternative methods of transition for a voluntary change to the
fair value-based method of accounting for stock-based employee compensation.  In
addition,  this statement amends the disclosure requirements of SFAS No. 123 for
public  companies.  This statement is effective for fiscal years beginning after
December 15, 2002. The Company does not have any transactions that would require
disclosure under SFAS No. 148.

In  January  2003  (revised  December  2003)  , the  FASB  issued  FIN  No.  46,
"Consolidation  of Variable  Interest  Entities -- An  Interpretation of ARB No.
51", which  clarifies the  application of Accounting  Research  Bulletin No. 51,
"Consolidated  Financial  Statements,"  to  certain  entities  in  which  equity
investors do not have the characteristics of a controlling financial interest or
do not have  sufficient  equity at risk for the entity to finance its activities
without additional subordinated financial support from other parties. FIN No. 46
provides guidance related to identifying  variable interest entities (previously
known generally as special purpose  entities,  or SPEs) and determining  whether
such entities should be consolidated.  FIN No. 46 must be applied immediately to
variable  interest  entities created or interests in variable  interest entities
obtained after January 31, 2003. For those variable interest entities created or
interests in variable  interest entities obtained on or before January 31, 2003,
the  guidance in FIN No. 46 must be applied in the first  fiscal year or interim
period beginning after June 15, 2003. The Company does not have any transactions
that would require disclosure under FIN No. 46 .

In May 2003,  the FASB issued SFAS No. 150,  "Accounting  for Certain  Financial
Instruments with Characteristics of Both Liabilities and Equity". This statement
establishes standards for how an issuer classifies and measures in its statement

                                      F-8
<PAGE>

of financial position certain financial instruments with characteristics of both
liabilities  and  equity.  It  requires  that an  issuer  classify  a  financial
instrument  that is  within  its  scope  as a  liability  (or an  asset  in some
circumstances) because that financial instrument embodies the characteristics of
an  obligation  of  the  issuer.   This  standard  is  effective  for  financial
instruments  entered  into or modified  after May 31,  2003,  and  otherwise  is
effective at the beginning of the first interim period  beginning after June 15,
2003. The Company has determined that it did not have any financial  instruments
that are impacted by SFAS No. 150.

3. DUE TO RELATED PARTIES

These amounts are due to two officers of the Company. Interest is accrued on one
loan at prime  (4.0% at  December  31,  2003).  The  amounts  consist of accrued
payroll,  expense  reimbursements  and open account  advances  received from the
officers.  In  connection  with the merger with CSI and  pursuant to  settlement
agreements  entered  into by the  Company,  on  January  30,  2004  all of these
obligations  were settled for 19,254,824  shares of CSI common stock and general
releases in full satisfaction of the liabilities were obtained by the Company.

4. CONVERTIBLE NOTES PAYABLE

During the ten months  ended  December  2003,  the  Company  issued  convertible
secured notes payable due on demand totaling $652,500 to various unrelated third
parties and bear no interest of which  $602,500 was  outstanding at December 31,
2003.  In  connection  with the  merger  with  CSI and  pursuant  to  settlement
agreements  entered  into by the  Company,  on January  30,  2004,  all of these
obligations were converted into 21,750,000 common shares of CSI.

5. SETTLED OBLIGATIONS

During the ten months  ended  December  2003,  the Company  entered into several
settlement  obligations  with  unrelated  third  parties for the payment of past
services and note  obligations that were past due. In connection with the merger
with CSI and pursuant to settlement  agreements entered into by the Company,  on
January 30, 2004, all of these  obligations were settled for 2,800,000 shares of
CSI common stock and general  releases in full  satisfaction  of the liabilities
were  obtained  by  the  Company.  The  Company's  former  President  / CEO  had
guaranteed one obligation totaling $232,500.

6. DEBT NOT IN COMPLIANCE WITH TERMS

On August 8, 2000, the LCS borrowed $300,000 and issued a convertible promissory
note that bears interest at 8% per annum with a maturity date which is past due.
On January 31, 2002,  LCS was notified  that it was in default on this note.  In
connection with the default, in June 2002, the LCS entered into an Agreement and
Release with the Noteholder.  In accordance with the release, the Noteholder was
issued an  additional  6,000,000  shares of common  stock in November  2002.  In
addition, the Noteholder exercised warrants that were issued in conjunction with
the notes.

7. COMMON STOCK

In November 2003,  and in connection  with a litigation  settlement,  LCS issued
100,000 shares and paid $10,000 in total  satisfaction of a lawsuit for a breach
of contract.

8. INCOME TAXES

At December 31, 2003, the Company has available for federal income tax purposes,
net operating loss carryforwards of approximately  $15,500,000  expiring through
2023.  For the ten months  ended  December  31,  2003,  the Company  provided an
additional valuation allowance of approximately $331,000 since the likelihood of
realization cannot be determined.  The difference between the statutory tax rate
of 34 percent and the  Company's  effective  tax rate of 0 percent is due to the
100 percent valuation  allowance against net deferred tax assets. As a result of
the merger in January 2004, the use of the net operating loss  carryfoward  will

                                      F-9
<PAGE>

be  significantly  limited  due to the  change  in  control  of the  Company  in
accordance with Section 382 of the Internal Revenue Code.

Deferred tax assets consisted of the following temporary differences:

                                                             December 31,
                                                                 2003
                                                            --------------

Net operating losses                                        $    6,199,672
Accrued expenses                                                   766,442
                                                            --------------
                                                                 6,966,114
Valuation allowance                                             (6,966,114)
                                                            --------------

                                                            $           --
                                                            ==============


9. LEGAL PROCEEDINGS

On November 6, 2003, an unrelated  third party filed a complaint in the New York
State Supreme Court in Rockland  County,  New York against LCS and the Company's
former chief executive officer and sole director. The complaint alleged a breach
of  agreement,  a breach of guarantee by the  Company's  former chief  executive
officer and sole  director and reliance by this party on false  statements,  and
sought aggregate damages of approximately  $1,500,000 plus interest,  legal fees
and  expenses.  On November  14,  2003,  the parties  entered  into an agreement
pursuant  to which the  Company  paid  $30,000  and agreed to pay an  additional
$32,500 when the closing of the proposed  merger with CSI was  consummated.  The
Company  agreed to issue to this  party  250,000  shares of CSI's  common  stock
within five days after the closing.  The Company is awaiting the  withdrawal  of
the complaint without prejudice.

On May 1, 2003 a complaint naming LCS, the Company's two former officers and two
other individuals was filed by a third party in Palm Beach County,  Florida. The
Complaint  alleged a breach of contract and contained  allegations  of losses of
$1,625,000  plus  securities and other  compensation.  The Company  settled this
litigation by entering  into an agreement on September  25, 2003.  The agreement
called for the issuance of 100,000  shares of the  Company's  common stock and a
payment of $10,000.  The Company paid this amount on October 22, 2003 and issued
the 100,000 shares to a designee of the third party on November 24, 2003.

In November  2002,  an  unrelated  third party filed a complaint in the New York
State Supreme Court in New York County,  New York against LCS Golf, Inc. and the
Company's former chief executive  officer and chief financial officer to recover
legal fees and disbursements  claimed to be due in the amount of $54,772.06 plus
interest and attorneys' fees. This action is still pending.

11. SUBSEQUENT EVENTS

REVERSE MERGER

On August 21, 2003,  LCS Group,  Inc.,  LCS  Acquisition  Corp.,  a wholly owned
subsidiary of LCS Group,  Inc., CSI and CSI's  executive  officers and principal
stockholders, executed an Agreement and Plan of Reorganization to merge CSI into
LCS Acquisition  Corp. This transaction was consummated on January 30, 2004, CSI
became  the  operating  entity,  LCS Group  changed  its name to CSl and the CSI
shareholders control approximately 84% of the shares of the combined company. As
part of this transaction,  the Company's  affiliate,  Doorways,  Inc. was merged
into CSI.

In connection with this transaction,  LCS Group, Inc. agreed to a.) increase the
number of common  shares  they  were  authorized  to issue  from  50,000,000  to
1,000,000,000;  b.)  authorized  the right to issue up to  20,000,000  shares of

                                      F-10
<PAGE>

preferred  stock; and c.) adopted the 2003 Stock Incentive Plan (the "2003 Stock
Option Plan").

The 2003 Stock Option Plan  authorizes the issuance of up to 100,000,000  shares
of common stock for the exercise of options.  It also authorizes the issuance of
stock  appreciation  rights.  On March 29, 2004, the Company granted  19,200,000
options to purchase its common stock at an exercise price of $0.165.

Since the  stockholders  of CSI own a majority  of the  issued  and  outstanding
shares of LCS Group,  Inc.  (prior to the name  change  noted  above)  after the
merger,  this  transaction will be accounted for as a reverse merger whereby CSI
is deemed to be the accounting  acquirer of LCS Group,  Inc.. Because LCS Group,
Inc.  did not have any assets or  liabilities  prior to the merger,  there is no
goodwill  or other  intangibles  that will arise from the  merger.  As a result,
historical stockholder's equity of CSI will be retroactively restated to reflect
the recapitalization.

SALE OF LCS GOLF, INC.

On January 22, 2004 and as part of merger,  the Company  sold, as a condition to
the consummation of the merger transaction, 100% of the outstanding stock of LCS
to an  unrelated  third  party for a nominal  amount.  The  following  pro-forma
information  reflects  the  effects of this sale on the  Company's  consolidated
liabilities:

<TABLE>
<CAPTION>
                                         Liabilities as of                              Liabilities after
                                         December 31, 2003   Sale of LCS Golf, Inc.  Sale of LCS Golf, Inc.
                                        --------------------------------------------------------------------
<S>                                           <C>                 <C>                                   <C>
Accounts payable and accrued expenses        $  1,581,956         $     (1,581,956)              $       -
Settled obligations                               455,507                 (455,507)                      -
Debt not in compliance with terms                 301,445                 (301,445)                      -
Convertible notes payable                         602,500                        -                 602,500
Due to related parties                          2,948,484               (2,948,484)                      -
                                        --------------------------------------------------------------------

                                             $  5,889,892         $     (5,287,392)              $ 602,500
                                        ====================================================================
</TABLE>


In  connection  with the merger with CSI and pursuant to  settlement  agreements
entered  into  by the  Company,  on  January  30,  2004,  all  of the  remaining
Convertible Notes Payable  obligations were converted into common shares of CSI.
(See Note 4. Convertible Notes Payable)


                                      F-11