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UNITED STATESSECURITIES
AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-K

(Mark One)

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

For the fiscal year ended

or

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

For the transition period from April 1, 2009 to December
31, 2009

Commission file number 000-30299

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

|Nevada                                                               | 98-0217653                          
|-------------------------------------------------------------------- | ------------------------------------
|(State or other jurisdiction of incorporation or
      organization) | (I.R.S. Employer Identification No.)
|                                                                     |                                     
|18/F., 318 Hennessy Road, W Square,                                  |                                     
|Wanchai, Hong Kong                                                   | 0000000                             
|(Address of principal executive offices)                             | (Zip Code)                          

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

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

|Title of each class | Name of each exchange on which registered
|------------------- | -----------------------------------------
|Nil                 | Nil                                      

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

Common Shares, par value $0.001(Title of class)

Indicate by check mark if the registrant is a well-known
seasoned issuer, as defined in Rule 405 of the Securities Act. Yes
[   ]    No [X]

Indicate by check mark if the registrant is not required to file
reports pursuant to Section 13 or Section 15(d) of the Act. Yes
[   ]    No [X]

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Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes
[X]    No [   ]

Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Web site, if any, every
Interactive Data File required to be submitted and posted pursuant to Rule 405
of Regulation S-T (§232.405 of this chapter) during the preceding 12 months
(or for such shorter period that the registrant was required to submit and
post such files). Yes [_] No [_]

Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein, and will not
be contained, to the best of registrants knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K. [X]

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

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

Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act). Yes [ 
 ]    No [X]

The aggregate market value of the voting and non-voting common
equity held by non-affiliates (affiliates being, for thesepurposes only,
directors, executive officers and holders of more than 10% of the registrants
common stock) of the registrant on September 30, 2009 (the last business day
of the registrants most recently completed second fiscal quarter) was
$12,569,741.70 based on 41,899,139 non-affiliate shares outstanding at $0.30
per share, which is closing price for the common stock as reported by the
quotation service operated by the OTC Bulletin Board on September 30, 2009 (the
last business day of the registrants mostrecently completed second fiscal
quarter).

Indicate the number of shares outstanding of each of the
registrants classes of common stock, as of the latest practicable date:
55,876,410 shares of common stock issued and outstanding as of March
31, 2010.

Documents incorporated by reference: none.

TABLE OF CONTENTS

|                                                                                                                                 | PAGE 
        NUMBER
|-------------------------------------------------------------------------------------------------------------------------------- | --------------------
|PART
      I                                                                                                                     | 3                   
|ITEM
      1. Business                                                                                                           | 3                   
|ITEM
      1A. Risk Factors                                                                                                      | 12                  
|ITEM
      1B. Unresolved Staff Comments                                                                                         | 22                  
|ITEM
      2. Properties                                                                                                         | 22                  
|ITEM
      3. Legal Proceedings                                                                                                  | 23                  
|ITEM
      4. Reserved                                                                                                           | 23                  
|PART
      II                                                                                                                    | 23                  
|ITEM
      5. Market for Registrants Common Equity, Related Stockholder Matters and
      Issuer Purchases of Equity Securities | 23                  
|ITEM
      6. Selected Financial Data                                                                                            | 25                  
|ITEM
      7. Managements Discussion and Analysis of Financial Condition and Results
      of Operations                        | 25                  
|ITEM
      7A. Quantitative and Qualitative Disclosures About Market Risk                                                        | 33                  
|ITEM
      8. Financial Statements and Supplementary Data                                                                        | 33                  

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|                                                                                                                    | PAGE 
        NUMBER
|------------------------------------------------------------------------------------------------------------------- | --------------------
|ITEM
      9. Changes in and Disagreements With Accountants on Accounting and
      Financial Disclosure            | 65                  
|ITEM
      9A(T). Controls and Procedures                                                                           | 65                  
|ITEM
      9B. Other Information                                                                                    | 65                  
|PART
      III                                                                                                      | 66                  
|ITEM
      10. Directors, Executive Officers and Corporate Governance                                               | 66                  
|ITEM
      11. Executive Compensation                                                                               | 73                  
|ITEM
      12. Security Ownership of Certain Beneficial Owners and Management and
      Related Stockholder Matters | 75                  
|ITEM
      13. Certain Relationships and Related Transactions, and Director
      Independence                      | 77                  
|ITEM
      14. Principal Accounting Fees and Services                                                               | 78                  
|PART
      IV                                                                                                       | 79                  
|ITEM
      15. Exhibits, Financial Statement Schedules                                                              | 79                  

Forward Looking Statements

This
transition report on Form 10-K contains forward-looking statements as that term
is defined in Section 27A of the United States Securities Act of 1933 and
Section 21E of the United States Securities Exchange Act of 1934. These
statements relate to future events or our future financial performance. In some
cases, you can identify forward-looking statements by terminology such as may,
should, intends, expects, plans, anticipates, believes, estimates,
predicts, potential, or continue or the negative of these terms or other
comparable terminology. These statements are only predictions and involve known
and unknown risks, uncertainties and other factors, including the risks in the
section entitled Risk Factors, which may cause our or our industrys actual
results, levels of activity or performance to be materially different from any
future results, levels of activity or performance expressed or implied by these
forward-looking statements.

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

Use of Certain Defined Terms

In
this transition report on Form 10-K and unless otherwise specified, all dollar
amounts are expressed in United States dollars, all references to common
shares refer to the common shares in our capital stock and the terms we, us
and our refer to Lightscape Technologies Inc. and our subsidiaries.

PART I

**ITEM
1.**       **BUSINESS.**

Change in Fiscal Year

In December 2009, our board of directors approved a change in
our fiscal year end from March 31 to December 31. The fiscal year end change was
effective December 31, 2009 and resulted in a nine month reporting period from
April 1, 2009 to December 31, 2009. As a result, this Form 10-K is a transition
report and includes financial information for the transition period from April
1, 2009 through December 31, 2009 (the Transition Period). Subsequent to this
report, our reports on Form 10-K will cover the calendar year January 1 to
December 31.

Company Overview

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

We
are a holding company for subsidiaries engaged in two main continuing business
activities: (i) digital out-of-home advertising and (ii) light-emitting diode
(LED) solutions. During the nine months ended December 31, 2009, approximately
20% of our revenue was derived from our digital out-of-home advertising business
and 80% from our LED solutions business.

Digital Out-of-Home Advertising Business

We
design, install and operate digital out-of-home advertising screens. We are
building and expanding our digital out-of-home advertising network (i) through
digital billboard installations which we complete and operate independently, and
(ii) through digital display installations which we complete and operate through
partnerships and/or joint ventures with major property owners and developers in
Asia. We generate revenue by selling advertising space on our digital
out-of-home media network to advertisers. We have established and are continuing
to establish advertising sales channels for our digital out-of-home advertising
network by forming strategic partnerships with advertising agencies and other
media industry partners.

We
signed a joint venture agreement on February 12, 2008 as part of our efforts to
build a digital out-of-home advertising network in the Peoples Republic of
China (the PRC or China). We entered this joint venture agreement with
Beijing Xintong Media & Cultural Development Co. Ltd. (BX). Pursuant to
the terms of the joint venture agreement, (i) the joint venture company was to
be named Beijing Xintong New Vision Media Advertising Co. Ltd. (the Intended JV
), (ii) our company agreed to contribute to the Intended JV cash and an LED
billboard for the joint ventures initial installation within ninety business
days of signing the agreement, and (iii) in exchange for these contributions,
our company would obtain 50.1% ownership of the Intended JV, with the remaining
49.9% to be held by BX. The operations of the Intended JV were anticipated to
include the sourcing, design installation, servicing and maintenance of
large-sized digital billboards at locations in China, and the securing of
advertising contracts for advertising and media content to be displayed on the
screens. The joint venture planned to target niche applications which are
currently underserved by existing competition. Target applications included the
installation of LED billboards located primarily on outdoor façade walls of
shopping centers, hotels, offices and other commercial buildings. The prime
locations for the joint ventures screens were to be major property developments
owned by BXs parent the New World Group. Due primarily to structural
complexities related to the formation of a joint venture company to operate in
the PRC, this joint venture agreement has not closed and our company did not
contribute the cash and an LED billboard to the Intended JV.

Subsequent
to the signing of the joint venture agreement, our company has explored
alternative plans for more rapidly and effectively building a digital
out-of-home advertising network in the PRC in cooperation with the New World
Group. Upon our further discussion with senior management of New World Group,
both parties determined that it would be more effective to partner directly with
New World Group companies, including but not limited to New World China Land
Limited (NWCL), a Hong Kong listed company, and New World Department Stores
China Ltd. (NWDSC), also a Hong Kong listed company and a 72%-owned subsidiary
of the New World Group, to install and operate digital out-of-home advertising
screens at properties owned by NWCL and operated by NWDSC throughout mainland
China. NWDSC is a department store operator in the PRC with a network of 28
stores in 16 major cities in China.

On
October 1, 2009, our company signed an outdoor digital billboard cooperation
agreement with Beijing Chongwen New World Properties Development Co. Ltd., a
New World subsidiary. Under the 10-year agreement, our company agreed to build
two large-scale outdoor LED displays at the Beijing New World Centre mixed-use
complex, with screen areas of 150 square meters and 50 square meters,
respectively. Our company will source, design, install and service the two LED
displays, and secure advertising contracts for advertising and media content to
be displayed on the screens. The first LED display began operating and
generating advertising revenue on February 10, 2010, while the second LED
display is expected to be completed and become operational by June 2010.

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We plan to install additional large-sized LED displays in
second half of 2010, including but not limited to NWDSC department stores in
Wuhan and Changsha, China.

As
of April 15, 2010, we have set up and operate 5 out-of-home LED screens in Hong
Kong and 30 out-of-home LED screens across various major cities in China,
including 2 screens in Beijing, 1 screen in Shenzhen, 1 screen in Jinan and 26
screens in Zhejiang province. 7 new screens are expected to be in operation
before end of 2010. Additionally, we have launched and operate approximately 300
indoor LCD displays within 28 NWDSC department stores across 16 cities in China.
Both the LED and LCD advertising networks became operational and began
generating advertising revenue in February 2010 from various well-known
international brand-name customers.

Our
company believes that our original objectives under the Intended JV are being
achieved through the alternative relationship structure and agreements formed
with the New World Group. As such, the formation of the Intended JV and the
closing of the joint venture agreement dated February 12, 2008 will not be
pursued in the future.

The
primary end-user markets of our digital out-of-home advertising network are
major advertising agencies in China and Hong Kong, and individual advertisers,
such as major corporations and government entities, based in China and Hong
Kong. Demand for digital out-of-home advertising is primarily based on clients
desire to cost-effectively distribute advertisements to as large a target market
of viewers as possible. Our out-of-home advertising network meets these demands
through the large average size of our out-of-home advertising screens and the
location of the screens in high-traffic commercial and residential areas.

Our
company has formed strategic partnerships with Ogilvy & Mather Group, a
major advertising agency in Hong Kong, and LIME, a diversified media
conglomerate, to sell advertising space on our digital out-of-home advertising
network. Both of these partnerships are actively promoting out-of-home
advertising on our network. We are also in the process of negotiating strategic
partnership agreements and contracts with other advertising agencies and
advertisers for the sales of advertising space on the network.

LED Solutions Business

During
2006, we entered the LED solutions business by forming a joint venture company,
Lightscape Technologies (Macau) Limited (Lightscape Macau), and subsequently
acquiring all of the outstanding shares of Lightscape Macau. During 2007, we
also incorporated a wholly-owned subsidiary, Lightscape Technologies (Greater
China) Limited in Hong Kong to engage in the LED solutions business in Hong Kong
and China.

We
  operate in three principal lines of the LED products and services industry:
  (i) LED Systems, (ii) original equipment manufacturing (OEM) and
  Licensing, and (iii) LED Screen Rental Service.

Our
operations in the LED products and services industry focus on the use of
semiconductor devices, known as LEDs, as the primary light source. Compared to
conventional incandescent and fluorescent lamps, LEDs are designed to offer
superior efficiency, reliability and creative design versatility with the
additional benefits of lower energy consumption, prolonged operational life and
the non-use of mercury.

LED Systems

We
provide creative design, installation and digital control of high-specification
LED systems. Our system designs typically consist of various LED hardware
components sourced from third parties, including LED video panels, individual
LED modules and lighting fixtures of various sizes, intensities and color
capabilities, LED flood lights, spotlights, string lights, cove lights, light
tubes and light tiles, submersible LED lights, audio-visual equipment, and
related support hardware, cabling and accessories.

These
LED-based hardware components are integrated by our design team, installed and
then driven by our proprietary digital controller software system, the
Multimedia and Video Show Control System. This product is a user-friendly,
PC-based software system for the authoring, control and playback of intricate,
large-scale video, lighting and audio effects. This product has the ability to
simultaneously control up to four high-resolution LED video walls, an unlimited
number of multiplex channels, DMX universes, 0-10v analog channels, and RS-232

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devices. The softwares graphical user interface and digital
control capabilities simplifies the process of creating and playing elaborate
video, lighting and multimedia effects through LED systems which may contain
thousands of individual addresses.

Our
LED systems are designed for both interior and exterior applications, and our
sales and marketing strategy targets clients demanding high-performance video
and color lighting systems. Demand for our LED systems is primarily based on our
end-user clients desire to add programmable video and/or dynamic lighting
effects to their properties in order to attract and retain customers, and/or to
differentiate and accentuate architectural elements. Demand is also driven by
clients desire for reliable, low-maintenance and energy-efficient video and
lighting design solutions.

The
primary end-user markets for our LED systems include hospitality (casinos,
hotels, nightclubs), entertainment (concert halls, theaters, television
studios), retail (shopping centers, digital signage), high-end residential
(condominiums), architectural (public landmarks, fountains, office buildings),
and special exhibits (conventions, trade show booths). The geographical target
markets for our LED systems include Macau, Hong Kong and China.

Our
LED systems are typically specified within a design plan developed by architects
or lighting designers engaged by the owner of an end-user project. Our sales
personnel work with the architects and lighting designers on the design process
to incorporate our LED systems. Our LED systems are then typically purchased by
general contractors or electrical contractors engaged by the owner of an
end-user project, or by the project owner directly. During installation of the
LED system, we provide on-site supervision to ensure that the LED hardware is
properly installed and operational. We also typically provide client training
services in the use of our digital controller software, and collaborate with
clients in using our software system to create customized video, lighting and
multimedia effects for playback on the installed LED system.

Our
LED systems are sold primarily by our internal sales team through established
relationships with architects, lighting designers and real estate development
owners. A core component of our sales teams approach is a focus on design
creativity, including the professional production of videos for each potential
client with animated renderings of the artistic vision for the clients
installed systems and the types of creative multimedia and lighting effects that
may be achieved.

OEM and Licensing

We
offer OEM and licensing of our proprietary digital controller software product,
the Multimedia and Video Show Control System. Our OEM business primarily targets
LED manufacturers and LED system designers which use our software system to
create and control video, lighting and multimedia effects for their own LED
systems, which are typically sold under their own brand name. We also license
our software system, primarily to owners of end-user projects which have
installed or rented our LED systems. Our OEM and licensing sales are primarily
made by our internal sales team and our geographical target markets include
Macau, Hong Kong and China.

LED Rentals

We
provide rentals of LED-based hardware. The main products we rent include LED
video panels and LED video walls. Complementary products we rent include
individual LED fixtures of various sizes, intensities and color capabilities,
LED flood lights and spotlights. Demand for LED hardware rentals is primarily
based on clients desire to cost-effectively meet their short-term need for
dynamic video and lighting effects in order to deliver advertising, messaging
and/or dramatic lighting effects.

The
primary markets for LED rentals include corporate events (conventions,
conferences, trade shows, special exhibits), advertising companies (indoor and
outdoor digital signage), television and film productions, government (special
events), and live performances (theatre productions, music concerts). Our LED
rental sales are primarily made by our internal sales team and our geographical
target markets currently include Macau and Hong Kong.

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Reclassification of Disposed Subsidiary and Subsidiary
Held for Sale as Discontinued Operations

A
subsidiary which has been disposed of or classified as held for sale during the
nine months ended December 31, 2009 is to be included in discontinued operations
if it meets any of the quantitative thresholds in accordance with ASC 280
Segment Reporting paragraph 18-24, and ASC 205-20 Presentation of Financial
Statements  Discontinued Operations. Our disposal of Golden Cypress Limited
and our pending sale of Beijing Aihua New Enterprise Lighting Appliance Co.
Limited (Beijing Aihua) during the nine months ended December 31, 2009 each
met certain of the quantitative tests and other criteria of ASC 280 and ASC
205-20. As a result, the operating results, assets and liabilities of Golden
Cypress and Beijing Aihua have been reclassified as discontinued operations,
with corresponding reclassification of 2008 comparative figures.

Other Business

Through
our prior 76.8% ownership of Beijing Illumination (Hong Kong) Limited (Beijing
Illumination) and its wholly-owned subsidiary Beijing Aihua, we researched,
developed, manufactured and sold lighting source products. Beijing Aihua
manufactures and sells high-intensity discharge (HID) lighting products
including metal halide lamps and high-pressure sodium lamps.

Compared
to conventional incandescent and fluorescent lamps, HID lamps produce a much
larger quantity of light in a relatively small package. Customer demand for
Beijing Aihuas products is primarily driven by the ability of HID lamps to
generally offer superior efficiency, luminosity, reliability and versatility
with the additional benefit of low energy consumption in comparison with
conventional incandescent or fluorescent lamps.

Beijing
Aihuas HID lamps are used within a wide variety of industrial, governmental,
commercial and residential applications. Metal halide lamps are used primarily
for indoor and outdoor lighting of factories, warehouses, industrial plants,
airports, sports stadiums, supermarkets, shopping centers, underground parkades
and residential buildings. Main applications for high-pressure sodium lamps
include street lighting, subway systems, courtyard lighting and general outdoor
lighting. Xenon lamps are used within the manufacturing of automobile
headlights. Special application HID lamps consist primarily of multi-color lamps
which are used in specialized applications such as aquariums, hydroponics,
outdoor decorative lighting of buildings, bridges and other large architectural
structures, and indoor decorative lighting for theatres and other entertainment
venues. The primary applications for ultra high-pressure mercury lamps are as
key components within light-weight digital crystal projectors and rear
projection televisions.

Beijing
Aihuas internal sales team and sales agents sell its lighting products through
a variety of sales channels including manufacturers, wholesalers, distributors,
contractors, and directly to end-users. The primary geographical markets for
Beijing Aihuas products are China, Hong Kong, Macau, Singapore, India and the
United States.

In
September 2009, our board of directors authorized management to begin the
process to sell all the rights and assets of our lighting source products
business, namely Beijing Aihua. Our companys decision to discontinue operations
in the lighting source products business was intended to more effectively
utilize our financial and human resources by focusing on our digital out-of-home
advertising and LED solutions businesses which we consider to have more
promising potential for revenue and margin growth. As of September 30, 2009, we
classified these assets as assets held for sale and included the results of the
lighting source products business in discontinued operations. On November 20,
2009, Beijing Illumination entered into a Sale and Purchase Agreement with
Zhejiang Zhong Jun Investment Management Co. Limited (Zhejiang Zhong Jun).
Pursuant to the terms and conditions of the Sale and Purchase Agreement, Beijing
Illumination agreed to sell its 100% ownership of the registered share capital
of Beijing Aihua to Zhejiang Zhong Jun in consideration for payments totaling
RMB7,800,000 (approximately US$1,141,352). Of this amount, a cash deposit of
RMB1,500,000 (approximately US$219,491) was paid by Zhejiang Zhong Jun to
Beijing Illumination on November 20, 2009. The remaining RMB6,300,000
(approximately US$921,861) was paid in full by Zhejiang Zhong Jun to Beijing
Illumination in cash in March 2010. The Sale and Purchase Agreement closed on
April 12, 2010.

Competition

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- 8 -

Each
of our operating businesses faces intense competitive pressures within its
respective markets. Such competition may come from domestic and international
operators. While our businesses are managed with the objective of achieving
sustainable growth over the long-term through developing and strengthening
competitive advantages, many factors, including market and technology changes,
may erode competitive advantages or prevent their strengthening. Accordingly,
future operating results will depend to some degree on whether our operating
subsidiaries are successful in protecting or enhancing their competitive
advantages.

Digital Out-of-Home Advertising Business

Our
digital out-of-home advertising business competes with other China-based
out-of-home audiovisual media network providers, including Focus Media Holding
Ltd., Clear Media Limited and TOM Group Limited. These companies have large,
established out-of-home advertising networks and sales channels, and
substantially greater resources to devote to building and maintaining
out-of-home advertising networks and securing advertising contracts than we
do.

Our
competitive advantages include: our relationship with the New World Group, which
enhances our ability to locate digital billboards on high-traffic buildings in
prime locations owned by the New World Group, and enhances our ability to
navigate and comply with applicable government regulations; the relatively large
average size of our digital billboard installations; and our experience in the
sourcing, installation and digital control of large-size LED video walls gained
through the operation of our LED Solutions business.

LED Solutions Business

Our
LED systems, OEM software and LED rental service compete with video and lighting
products utilizing traditional lighting technology provided by many vendors. In
the high-performance video and color lighting markets in which we have primarily
competed to date, competition has largely been fragmented among a number of
small manufacturers of LED systems and designers of LED-based lighting
solutions. However, we are increasingly experiencing competition from larger,
more established companies, including those in the general lighting industry
such as Koninklijke Philips Electronics NV which have established and expanded
business units competing in the LED systems market. These companies have global
marketing capabilities and substantially greater resources to devote to research
and development and other aspects of the development, manufacture, marketing,
design and installation of LED systems and rentals of LED hardware than we do.
Our competitive advantages include: our focus on providing artistic, creative
and customized LED solutions which meet clients demands for both architectural
enhancements and energy-efficiency; our established supply chain to OEM
manufacturers of low-cost, high-quality LED hardware; and our proprietary
digital controller software system capable of creating customized video,
lighting and multimedia effects for playback on installed LED systems.

Other Business

There
are currently about 6 to 8 manufacturers of electric arc tubes of metal halide
lamps and approximately 30 manufacturers of electric arc tubes of high-pressure
sodium lamps in the PRC. We competed in this business as a low-cost
manufacturer.

Raw Materials and Principal Suppliers

The
primary hardware required for the operation of our digital out-of-home
advertising and LED solutions businesses consists of LED billboards and video
panels, LCD video screens, plasma screens, individual LED modules and fixtures
of various sizes, intensities and color capabilities, LED flood lights,
spotlights, string lights, cove lights, light tubes and light tiles, submersible
LED lights, audio-visual equipment, and related support hardware, cabling and
accessories. We purchase our hardware primarily from third party manufacturers
who build these components according to our design and technical specifications.
We select component suppliers based on price and quality. Maintaining a steady
supply of our LED-based hardware is important to our operations and the growth
of our digital out-of-home advertising network and LED solutions business. We
also develop and integrate proprietary software to drive the authoring, control
and playback of content on our digital billboards and our other LED-based
systems.

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- 9 -

Three
OEMs in China were the major suppliers of LED-based hardware for our LED-based
business during the Transition Period. There are many qualified alternative
suppliers for our equipment, and our obligation to our current suppliers is not
exclusive. We have never experienced any material delay or interruption in the
supply of our LED hardware.

The
primary hardware used in the manufacture of our lighting source products
included lighting ballasts, capacitors, arc tubes and glass bulbs. We purchased
component parts from third party wholesale distributors. We selected component
suppliers based on price and quality. Our company was not materially dependent
upon any one supplier for component parts used in the manufacture of our
lighting source products, and raw materials and components were in adequate
supply.

Significant Customers

Approximately
26.5%, 16.3% and 16.0%, respectively, of our total revenue was derived from the
supply and installation of LED displays and systems to three significant
customers during the Transition Period.

Intellectual Property

Patents and Trademarks

Our
material patents granted, patents pending and registered trademarks are as
follows:

|Name                                    | Type                      | ID
      No.                  | Owner                         | Jurisdiction  
|--------------------------------------- | ------------------------- | ----------------------------- | ----------------------------- | --------------
|Multi Media & Video Show Control System | Patent                    | HK1105528                     | Grandplex Development Limited | Hong Kong     
|FX Glass                                | Patent                    | HK1105525                     | Grandplex Development Limited | Hong Kong     
|Interactive LED System                  | Patent                    | HK1105529                     | Grandplex Development Limited | Hong Kong     
|Multi Media & Video Show Control System | Patent Cooperation Treaty | Application Pending           | Grandplex Development Limited | n/a           
|FX Glass                                | Patent Cooperation Treaty | Application Pending           | Grandplex Development Limited | n/a           
|LIGHTSCAPE TECHNOLOGIES                 | Trademark                 | 300850888                     | Tech Team Investment Limited  | Hong Kong     
|LIGHTSCAPE TECHNOLOGIES                 | Trademark                 | 028764-028768                 | Tech Team Investment Limited  | Macau         
|LIGHTSCAPE TECHNOLOGIES                 | Trademark                 | T0708254F T0708255D T0708257J | Tech Team Investment Limited  | Singapore     
|LIGHTSCAPE TECHNOLOGIES                 | Trademark                 | Application Pending           | Tech Team Investment Limited  | USA, EU, China

Domain Names

We
own and operate the duly registered internet domain name www.lightscape-tech.com. The information contained in
our website does not form part of this transition report on Form 10-K. Our
company makes available, on or through our website, our transition and/or annual
reports on Form 10-K, quarterly reports on Form 10-Q,

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current reports on Form 8-K, and amendments to those reports
after they are electronically filed or furnished to the Securities and Exchange
Commission.

Additionally,
any document filed by us, including this transition report on Form 10-K, may be
viewed at the Securities and Exchange Commissions public reference room, 100 F
Street NE, Washington, D.C. 20549. Please call the Securities and Exchange
Commission at 1-800-732-0330 for further information about its public reference
room. These Securities and Exchange Commission filings are also available to the
public at the Securities and Exchange Commissions website at www.sec.gov.

Government Regulation

Our
digital out-of-home advertising business is subject to compliance with certain
government regulations in the PRC. We operate our digital out-of-home
advertising business in the PRC under a regulatory regime consisting of the
State Council, which is the highest authority of the executive branch of the PRC
central government, and ministries and agencies under its authority including
the State Administration for Industry and Commerce, or SAIC.

The
principal regulations governing out-of-home advertising businesses in the PRC
include:

- The Advertising Law (1994);
- The Advertising Administrative Regulations (1987);
- The Implementing Rules for the Advertising Administrative Regulations
  (2004); and
- The Outdoor Advertising Registration Administrative Regulations (1995).

Regulation of Business Licenses for Advertising
Operations

Companies
engaged in advertising activities must obtain from the SAIC or its local
branches a business license which specifically includes operating an advertising
business within its business scope. Companies conducting advertising activities
without such a license may be subject to penalties, including fines,
confiscation of advertising income and orders to cease advertising operations.
The business license of an advertising company is valid for the duration of its
existence, unless the license is suspended or revoked due to a violation of any
relevant law or regulation. Our company, our subsidiaries and/or our joint
venture company have obtained or are in the process of obtaining such business
licenses from the local branches of the SAIC as required by the existing PRC
regulations. We do not expect to encounter any material difficulties in
obtaining or maintaining our required business licenses for the operation of our
digital out-of-home advertising business in the PRC.

Regulation of Out-of-Home Advertising

The
Advertising Law stipulates that the exhibition and display of out-of-home
advertisements must not:

- utilize traffic safety facilities and traffic signs;
- impede the use of public facilities, traffic safety facilities and traffic
  signs;
- obstruct commercial and public activities or create an eyesore in urban
  areas;
- be placed in restrictive areas near government offices, cultural landmarks
  or historical or scenic sites; and
- be placed in areas prohibited by the local governments from having
  out-of-home advertisements.

In
addition, The Outdoor Advertising Registration Administrative Regulations
stipulate that outdoor advertisements in China must be registered with the local
SAIC before dissemination. Advertising distributors are

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required to submit a registration application form and other
supporting documents for registration, including the content of the proposed
outdoor advertisement. After review and examination, if an application complies
with the requirements, the local SAIC will issue an Outdoor Advertising
Registration Certificate for such advertisement. Our company, our subsidiaries
and/or our joint venture company have obtained or are in the process of
obtaining such Outdoor Advertising Registration Certificates for the
advertisements displayed and intended to be displayed on our digital out-of-home
advertising screens. We do not expect to encounter any material difficulties in
obtaining or maintaining our required certificates for the dissemination of
out-of-home advertisements in the PRC.

The
placement and installation of digital billboards is subject to municipal zoning
laws and governmental approvals. Our company, our subsidiaries and/or our joint
venture company have obtained or are in the process of obtaining such municipal
government approvals for each of our digital out-of-home advertising billboards
currently installed or planned to be installed in the PRC. We do not expect to
encounter any material difficulties in obtaining or maintaining our required
government approvals for the installation or operation of our digital
out-of-home advertising billboards in the PRC

Regulation of Advertising Content

PRC
advertising regulations stipulate certain content requirements for
advertisements in the PRC, which include prohibitions on misleading content,
superlative wording, socially destabilizing content or content involving
obscenities, superstition, violence, discrimination or infringement of the
public interest. Advertisements for anaesthetic, psychotropic, toxic or
radioactive drugs are prohibited. It is prohibited to disseminate tobacco
advertisements via broadcast media. It is also prohibited to display tobacco
advertisements in any public area. There are also specific restrictions and
requirements regarding advertisements that relate to matters such as patented
products or processes, pharmaceuticals, medical instruments, agrochemicals,
foodstuff, alcohol and cosmetics. In addition, all advertisements relating to
pharmaceuticals, medical instruments, agrochemicals and veterinary
pharmaceuticals advertised through out-of-home forms of media, together with any
other advertisements which are subject to censorship by administrative
authorities according to relevant laws and administrative regulations, must be
submitted to the relevant administrative authorities for content approval prior
to dissemination. We do not believe that advertisements containing content
subject to restriction or censorship comprise or will comprise a material
portion of the advertisements expected to be shown on our digital out-of-home
advertising billboard network.

Advertising
operators and distributors are required by PRC advertising regulations to ensure
that the content of the advertisements they distribute are in full compliance
with applicable law. In providing advertising services, advertising operators
and distributors must review the prescribed supporting documents provided by
advertisers for advertisements and verify that the content of the advertisements
comply with applicable PRC laws and regulations. In addition, prior to
distributing advertisements for certain commodities which are subject to
government censorship and approval, advertising distributors are obligated to
ensure that such censorship has been performed and approval has been obtained.
Violation of these regulations may result in penalties, including fines,
confiscation of advertising income, orders to cease dissemination of the
advertisements and orders to publish an advertisement correcting the misleading
information. In circumstances involving serious violations, the SAIC or its
local branches may revoke violators licenses or permits for advertising
business operations. Furthermore, advertisers, advertising operators or
advertising distributors may be subject to civil liability if they infringe on
the legal rights and interests of third parties in the course of their
advertising business.

We
employ (or access through our joint venture relationships) qualified inspectors
specifically trained to review advertising content for compliance with relevant
PRC laws and regulations.

Research and Development

Our
company spent $Nil on research and development activities among all of our
subsidiaries during the Transition Period, as compared to $6,792 spent during
the fiscal year ended March 31, 2009.

Within
our LED solutions business, from time to time our software engineers may develop
and improve upon high-end digital software controllers which integrate the
control of video, lighting, electrical and mechanical devices within our LED
systems. Our product engineers may also develop customized, innovative LED
lighting

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- 12 -

products such as LED lighting tubes to enhance lighting
distances and customized LED lighting fixtures for use in our LED lighting
systems.

Compliance with Environmental Laws

To
our knowledge, neither the production nor the sale of our products constitute
activities or generate materials, in a material manner, that requires compliance
with federal, state or local environmental laws in any jurisdictions of our
operation.

Employees

On
a consolidated basis among all of our subsidiaries, our company had a total of
36 employees as of December 31, 2009, 34 of which were full-time employees. Of
these employees, none are covered by collective bargaining agreements.

**ITEM
1A.**     **RISK FACTORS**

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

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

Risks Related to Our Business

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

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

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

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- 13 -

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

We may require additional financing, the availability of
which cannot be assured, and if our company is unable to obtain such financing,
our business may not be able to achieve our corporate goals, and in the worst
case may fail.

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

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

We
depend to a large extent on outside capital over the near-term to fund our
capital needs. Such outside capital may be obtained from additional debt or
equity financing. We are exploring possible bank financing opportunities, mainly
in the form of accounts payable financing. There is no assurance that capital
will be available to meet our continuing development costs or, if the capital is
available, that it will be on terms acceptable to us. Disruptions in financial
markets and challenging economic conditions have affected and may continue to
affect our ability to raise capital. The issuance of additional equity
securities by us would result in a dilution in the equity interests of our
current stockholders. Obtaining commercial loans, assuming those loans would be
available, would increase our liabilities and future cash commitments. Though
the management believes the chance is remote, if we are unable to obtain
financing in the amounts and on terms deemed acceptable to us, we may be unable
to implement our business and growth strategies, respond to changing business or
economic conditions, withstand adverse operating results, consummate desired
acquisitions or compete effectively.

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

We
expend a significant amount of cash in our operations, principally to fund our
procurement of LED-based hardware. We generally fund most of our working capital
requirements out of cash flow generated from operations. Accordingly, if we fail
to generate sufficient revenues from our sales, or if we experience difficulties
collecting our accounts receivable, we may not have sufficient cash flow to fund
our operating costs and our profitability and results of operations could be
adversely affected.

During
the nine months ended December 31, 2009, we improved our operational cash flow
by synchronizing our payment of costs and receipt of revenue by collecting
project deposits before paying related project costs. Key to this was
negotiating with our major suppliers to accept payments in line with the timing
of our receipt of revenue. In turn, we typically bill our customers in
accordance with the percentage-of-completion method, although we offer some of
our long-standing customers more favorable credit terms.

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

Our
operating results have fluctuated from period to period and are likely to
continue to fluctuate as a result of a wide range of factors, including a
historical reliance on non-recurring revenue streams. For example, our provision
of LED systems generally consists of large-scale, one-off supply and build
contracts completed for large property developments. Interim reports may not be
indicative of our performance for the year or our future performance, and
period-to-period comparisons may not be meaningful due to a number of reasons
beyond our

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control. We cannot assure you that our operating results will
meet the expectations of market analysts or our investors. If we fail to meet
their expectations, there may be a decline in our share price.

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

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

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

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

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

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

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

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

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- 15 -

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

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

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

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

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

Currently,
we derive a majority of our revenues from the sale of LED solutions. We expect
to derive a greater proportion of future revenues from our digital out-of-home
advertising business. Each of these industries in which we are active are
characterized by rapid technological change, new products and services, new
sales channels, evolving industry standards and changing client preferences. Our
success will depend, in part, upon our ability to make timely and cost-effective
enhancements and additions to our technology and to introduce new products and
services that meet customer demands. We expect new products and services to be
developed and introduced by other companies that compete with our products and
services. The proliferation of new LED products and services in our markets may
reduce demand for our LED products and services. There can be no assurance that
we will be successful in responding to these or other technological changes, to
evolving industry standards or to new products and services offered by our
current and future competitors. In addition, we may not have access to
sufficient capital for our research and development needs in order to develop
new products and services.

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

Our
success and ability to compete depends in part on our proprietary technology
incorporated in our products and solutions, such as our Multimedia and Video
Show Control System used for the authoring, control and playback of content on
our digital advertising billboards and LED systems. If any of our competitors
copy or otherwise gain access to our proprietary technology or develop similar
technologies independently, we would not be able to compete as effectively. We
consider our patents and trademarks invaluable to our ability to continue to
develop and maintain the goodwill and recognition associated with our brands.
The measures we take to protect the proprietary technology, and other
intellectual property rights, which presently are based upon a combination of

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patent, trademark and trade secret laws, may not be adequate to
prevent their unauthorized use. Further, the laws of foreign countries may
provide inadequate protection of such intellectual property rights. We may need
to bring legal claims to enforce or protect such intellectual property rights.
Any litigation, whether successful or unsuccessful, could result in substantial
costs and a diversion of corporate resources. In addition, notwithstanding any
rights we have secured to our intellectual property, other persons may bring
claims against us claiming that we have infringed on their intellectual property
rights, including claims that our intellectual property rights are not valid.
Any claims against us, with or without merit, could be time-consuming and costly
to defend or litigate, divert our attention and resources, result in the loss of
goodwill associated with our trademarks or require us to make changes to our
technologies.

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

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

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

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

Approximately
58.8% of our revenue was contributed from three customers for the nine months
ended December 31, 2009. If these three or any of our customers ceased doing
business with our company, we would require time to find other customers. If we
lose these customers or are unable to generate recurring revenues from these
customers, there would be a negative impact on our overall performance. We have
not entered into long-term supply contracts with any of these major customers.
Therefore, there can be no assurance that we will maintain or improve the
relationships with these customers, or that we will be able to continue to
supply these customers at current levels or at all. If we cannot maintain
long-term relationships with our major customers, the loss of a significant
portion of our sales to them could have an adverse effect on our business,
financial condition and results of operations.

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

We
are subject to the credit risk of our customers. Businesses that are good credit
risks at the time of sale may become bad credit risks over time. In times of
economic recession, the number of our customers who default on payments owed to
us tends to increase. If we fail to adequately assess and monitor our credit
risks, we could experience longer payment cycles, increased collection costs and
higher bad debt expenses. Additionally, to the degree that the ongoing turmoil
in the credit markets makes it more difficult for some customers to obtain
financing,

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- 17 -

those customers ability to pay could be adversely impacted,
which in turn could have a material adverse impact on our business, operating
results, and financial condition.

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

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

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

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

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

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

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

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

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

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

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

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operate our business and restrict or prohibit transactions
initiated or conducted by our company. Any such changes or new regulations could
affect our ability to develop and sell our products and therefore affect our
ability to generate revenues.

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

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

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

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

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

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

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

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

Our
company does not design or manufacture LEDs or individual LED modules. Our
ability to continue penetrating our existing markets and to expand into new
markets depends on continued advancements in the design and manufacture by
others of LEDs and LED modules. In the digital out-of-home billboard advertising
and high-

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- 19 -

performance LED color lighting markets that we currently serve,
we rely on continued improvements in the brightness, efficiency and initial cost
of color LEDs. The continued development of LED technologies depends on other
companies research and is out of our control. If advancements in LED
technologies occur at a slower pace than we anticipate, or fail to occur at all,
we may be unable to penetrate additional markets, our revenues would be
significantly reduced, and our future prospects for success may be harmed.

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

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

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

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

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

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

Risks Related to Our Industry

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

The
specialty lighting industry, including the provision of digital out-of-home
advertising, LED lighting systems and LED screen rental services, in the PRC is
highly competitive. Our products and services are targeted primarily at property
owners and developers, a market in which we face increasing competition. In
addition, there is

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- 20 -

an increasing trend of consolidation throughout the industry.
We believe that our ability to maintain our market share and grow our operations
within this landscape of changing and increasing competition is largely
dependant upon our ability to distinguish the quality of our products and
services.

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

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

Risks Related to Our Common Stock

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

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

- actual or anticipated variations in our quarterly operating results;
- announcements of new services, products, acquisitions or strategic
  relationships by us or our competitors;
- trends or conditions in the energy management services industry;
- changes in accounting treatments or principles;
- changes in earnings estimates by securities analysts and in analyst
  recommendations;
- changes in market valuations of other energy management services companies;
  and
- general political, economic and market conditions.

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

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

Our
certificate of incorporation authorizes the issuance of 800,000,000 shares of
common stock and 100,000,000 shares of preferred stock. Our board of directors
has the authority to issue additional shares up to the

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- 21 -

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

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

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

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

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

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

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

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

The
Securities and Exchange Commission has adopted regulations which generally
define penny stock to be any equity security that has a market price (as
defined) less than $5.00 per share or an exercise price of less than $5.00 per
share, subject to certain exceptions. Our securities are covered by the penny
stock rules, which impose additional sales practice requirements on
broker-dealers who sell to persons other than established customers and
accredited investors. The term accredited investor refers generally to
institutions with assets in excess of $5,000,000 or individuals with a net worth
in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly
with their spouse. The penny stock rules require a broker-dealer, prior to a
transaction in a penny stock not otherwise exempt from the rules, to deliver a
standardized risk disclosure document in a form prepared by the Securities and
Exchange Commission which provides information about penny stocks and the nature
and level of risks in the penny stock market. The broker-dealer also must
provide the customer with current bid and offer

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- 22 -

quotations for the penny stock, the compensation of the
broker-dealer and its salesperson in the transaction and monthly account
statements showing the market value of each penny stock held in the customers
account. The bid and offer quotations, and the broker-dealer and salesperson
compensation information, must be given to the customer orally or in writing
prior to effecting the transaction and must be given to the customer in writing
before or with the customers confirmation. In addition, the penny stock rules
require that prior to a transaction in a penny stock not otherwise exempt from
these rules, the broker-dealer must make a special written determination that
the penny stock is a suitable investment for the purchaser and receive the
purchasers written agreement to the transaction. These disclosure requirements
may have the effect of reducing the level of trading activity in the secondary
market for the stock that is subject to these penny stock rules. Consequently,
these penny stock rules may affect the ability of broker-dealers to trade our
securities. We believe that the penny stock rules discourage investor interest
in and limit the marketability of, our common stock.

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

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

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

Companies
trading on the OTC Bulletin Board, such as us, must have a class of securities
registered under Section 12 of the Exchange Act, as amended, and must be current
in their reports under Section 13 in order to maintain price quotation
privileges on the OTC Bulletin Board. More specifically, FINRA Rule 6530, which
determines eligibility of issuers quoted on the OTC Bulletin Board, requires an
issuer to be current in its filings with the Securities and Exchange Commission.
Pursuant to Rule 6530(e), as it is currently in effect, if we file our reports
late with the Securities and Exchange Commission three times in a two-year
period or our securities are removed from the OTC Bulletin Board twice in a
two-year period for failure to file reports, then we will be ineligible for
quotation on the OTC Bulletin Board. We have been late in filing a report on one occasion in the past two years: our transition report for the period ending December 31, 2009. If we are late multiple times in filing any
of our annual or quarterly reports during the next two years, we may become
ineligible for quotation on the OTC Bulletin Board. If our common stock becomes
ineligible for quotation on the OTC Bulletin Board, it would negatively affect
the market for our common stock and it may become more difficult for us to
obtain additional equity financing as shares of our common stock would be less
attractive to potential investors.

**ITEM
1B.**     **UNRESOLVED STAFF
COMMENTS.**

Not
applicable.

**ITEM
2.**        **PROPERTIES.**

Our
principal office is located at 18/F., 318 Hennessy Road, W Square, Wanchai, Hong
Kong. The 5,093 square feet office space serves as the base of operations for
our corporate, managerial, accounting, financial, administrative, sales and
marketing functions. Our company has leased the office premises for the period
from August 23, 2008 to August 22, 2011. The monthly fixed rent is $20,293, plus
a monthly service charge of $3,142.

Our
company leases storage space at Store 1, 13/F, Block I, Kingley Industrial
Building, 35 Yip Kan Street, Aberdeen, Hong Kong at a monthly fixed rent of
$386. The rental period is from October 9, 2009 to October 8,

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- 23 -

2011. It serves as a storage place for our LED displays,
related components, parts and tools, as well as archived corporate documents.

Our
company, through Beijing Tech Team Lishida Investment Advisory Co. Ltd. leases
an office at Room 506, Block 2, Chongwen, Beijing, PRC. The 660 square feet
space serves as a supporting office for our OOH advertising business activities
in the PRC. The lease period is from December 9, 2009 to December 8, 2010. The
monthly fixed rent is $483.

Our
company, through Tech Team Development (Zhuhai) Limited, leases an office at
Unit 320, 3/F, 10 Xiangzhou Renminxilu, Zhuhai, PRC. Zhuhai, a Special Economic
Zone, is located in Guangdong Province in southern China. The office serves as a
supporting office for our business development activities, as well as a base for
logistics and administrative functions related to our business activities in
China. The lease period is from June 20, 2009 to June 30, 2011, at a monthly
rent of $183.

**ITEM
3.**        **LEGAL
PROCEEDINGS.**

We know of no material, existing
or pending legal proceedings against our company, nor are we involved as a
plaintiff in any material proceeding or pending litigation. There are no
proceedings in which any of our directors, officers or affiliates, or any
registered or beneficial shareholder of more than five percent of our voting
securities, is an adverse party or has a material interest adverse to us or any
of our subsidiaries.

**ITEM
4.**        **RESERVED**

PART II

|ITEM 5. | MARKET FOR REGISTRANTS COMMON EQUITY, RELATED
      STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
|------- | -------------------------------------------------------------------------------------------------------------------

Shares
of our common stock are listed for quotation on the OTC Bulletin Board under the
trading symbol LTSC and the CUSIP number is 53227B 101. Our shares of common
stock initially began trading on the OTC Bulletin Board on April 17, 2001 under
the trading symbol GBIS. The following table sets forth, for the periods
indicated, the high and low bid prices for each quarter within the last two
fiscal years ended December 31, 2009 as reported by the quotation service
operated by the OTC Bulletin Board. All quotations for the OTC Bulletin Board
reflect inter-dealer prices, without retail mark-up, mark-down or commission and
may not necessarily represent actual transactions.

|Quarter Ended      | High  | Low  
|------------------ | ----- | -----
|December 31, 2009  | $0.20 | $0.11
|September 30, 2009 | 0.27  | 0.15 
|June 30, 2009      | 0.20  | 0.12 
|March 31, 2009     | 0.38  | 0.16 
|December 31, 2008  | 0.71  | 0.20 
|September 30, 2008 | 1.50  | 0.60 
|June 30, 2008      | 2.00  | 1.04 
|March 31, 2008     | 1.30  | 0.49 

On
March 31, 2010, the last reported sale price for shares of our common stock as
reported by the quotation service operated by the OTC Bulletin Board was $0.15.

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- 24 -

As
of March 31, 2010, there were 163 holders of record of shares of our common
stock. As of such date, 55,876,410 shares of our common shares were issued and
outstanding.

Dividend Policy

We
have not declared or paid any cash dividends since inception. Although there are
no restrictions that limit our ability to pay dividends on our common shares, we
intend to retain future earnings, if any, for use in the operation and expansion
of our business and do not intend to pay any cash dividends in the foreseeable
future.

Securities Authorized for Issuance under Equity
Compensation Plans

Our
company did not have an equity compensation plan in place during the fiscal nine
months ended December 31, 2009 or the fiscal year ended March 31, 2009 under
which equity securities of our company were authorized for issuance.

Warrants and Options

As
of March 31, 2010, there were warrants to purchase up to 656,250 shares of
common stock at any time on or prior to March 17, 2013 by cash exercise at an
exercise price of $0.80 per share or by cashless exercise. Pursuant to the terms
of such warrants, the exercise price of such warrants is subject to adjustment
in the event of stock splits, combinations or the like of our common stock.

Transfer Agent and Registrar

The
transfer agent and registrar of our common stock is Pacific Stock Transfer
Company with an address at 4045 South Spencer Street, Suite 403, Las Vegas, NV
89119, telephone number of (702) 361-3033 and facsimile number of (702)
433-1979.

Recent Sales of Unregistered Securities

We
did not issue any equity securities that were not registered under the
Securities Act of 1933 during the fiscal nine months ended December 31, 2009 or
the fiscal year ended March 31, 2009 that were not otherwise disclosed in a
quarterly report on Form 10-Q or in a current report on Form 8-K.

Penny Stock Rules

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

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- 25 -

**ITEM
6.**        **SELECTED
FINANCIAL DATA.**

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

|ITEM 7. | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
      CONDITION AND **RESULTS OF
OPERATIONS.**
|------- | ------------------------------------------------------------------------------------------------

The
following is a discussion and analysis of our companys results of operation and
the factors that could affect our future financial condition and results of
operation. This discussion and analysis should be read in conjunction with our
audited consolidated financial statements and the notes thereto included
elsewhere in this transition report on Form 10-K. Our companys audited
consolidated financial statements are prepared in accordance with United States
generally accepted accounting principles. All references to dollar amounts in
this section are in United States dollars unless expressly stated otherwise.
Please see the Note on Forward-Looking Statements and Risk Factors for a
list of our risk factors.

Company Overview

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

We
are a holding company owning subsidiaries engaged in two main continuing
business activities: (i) digital out-of-home advertising and (ii) light-emitting
diode (LED) solutions. During the nine months ended December 31, 2009,
approximately 20% of our revenue was derived from our digital out-of-home
advertising business and 80% from our LED solutions business.

Digital Out-of-Home Advertising Business

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

LED Solutions Business

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

Other Business

Through
our prior 76.8% ownership of Beijing Illumination, we researched, developed,
manufactured and sold lighting source products. Beijing Illumination, through
its wholly-owned subsidiary Beijing Aihua, manufactures and sells HID lighting
products including metal halide lamps and high-pressure sodium lamps. Pursuant
to a sales and purchase agreement dated November 20, 2009 between Beijing
Illumination and Zhejiang Zhong Jun, Beijing Illumination disposed of its 100%
equity interest in Beijing Aihua. The disposal was completed on April 12, 2010.

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- 26 -

Reclassification of Disposed Subsidiary and Subsidiary
Held for Sale as Discontinued Operations

A
subsidiary which has been disposed of or classified as held for sale during the
Transition Period is to be included in discontinued operations if it meets any
of the quantitative thresholds in accordance with ASC 280 Segment Reporting
paragraph 18-24, and ASC 205-20 Presentation of Financial Statements 
Discontinued Operations. Our disposal of Golden Cypress Limited and our pending
sale of Beijing Aihua during the Transition Period each met certain of the
quantitative tests and other criteria of ASC 280 and ASC 205-20. As a result,
the operating results, assets and liabilities of Golden Cypress and Beijing
Aihua have been reclassified as discontinued operations, with corresponding
reclassification of 2008 comparative figures.

Application of Critical Accounting Policies

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

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

Revenue Recognition

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

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

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

ASC 605 addresses
revenue recognition for long-term construction-type contracts. Since most of our
companys LED solution revenue relates to construction contracts, which by their
nature are long-term, the underlying accounting principle known as matching 
expenses follow revenues  would be violated if the revenue from the contract
were recognized upon contract execution or sale of the services.

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

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- 27 -

ASC 605 requires
that the PC method be used in lieu of the CC method when all of the following
are present: (1) reasonably reliable estimates can be made of the extent of
progress toward completion, contract revenue and contract costs; (2) the
construction contract specifies the parties rights as to the goods or services
consideration to be paid and received, and the resulting terms of payment or
settlement; (3) the contract purchaser has the ability and expectation to
perform all contractual duties; and (4) the contract contractor has the same
ability and expectation to perform all contractual obligations.

ASC 605 states, Contract costs
generally include direct costs, such as material, labor, and subcontracting
costs and indirect costs identifiable with or allocable to the contracts.

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

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

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

Foreign Currency Translation

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

Impairment of Long-Lived Assets Other than Goodwill

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

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- 28 -

Impairment of Goodwill

Our
company performs an annual review for impairment of goodwill, or more frequently
if impairment indicators arise. Goodwill is considered to be impaired if it is
determined that the carrying value of the goodwill exceeds its fair value.

Impairment
test of goodwill is a two-step process. The first step involves comparing the
fair values of the applicable reporting units with the respective aggregate
carrying values, including goodwill. If the carrying amount of a reporting unit
exceeds the reporting units fair value, the second step of the goodwill
impairment test will be performed to determine the amount of the impairment
loss. The second step involves comparing the implied fair value of the related
reporting units goodwill with the carrying value of that goodwill. If the
carrying amount of goodwill exceeds the implied fair value of that goodwill, an
impairment loss is recognized in an amount equal to that excess. It is
determined that our reporting units are one level below our identified operating
segments because discrete financial information is available.

Fair
value is determined under an income approach, applying a discounted cash flow
model. The discounted cash flow model determines fair value based on the present
value of projected cash flows over a specific projection period. All values are
discounted to reflect the risk factor and related uncertainty inherent in an
investment in the reporting unit and achieving the projected cash flows. A
weighted average cost of capital of a market participant is used as the discount
rate. The residual value is determined by applying a constant terminal growth
rate to the estimated net cash flows at the end of the projection period.
Alternatively, the present value of the residual value may be determined by
applying a market multiple at the end of the projection period.

Accounts Receivables and Allowance for Doubtful Accounts

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

Material Trends and Uncertainties

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

We
are building a digital out-of-home advertising network in the PRC, Hong Kong and
other areas of Asia. We are also engaged in the LED solutions business, which
includes the design, supply and building of LED systems, OEM and licensing of
our proprietary intelligent lighting control software, and rental of LED
hardware. Our current business strategy is focused on (i) building and expanding
our digital out-of-home advertising network through installations we complete
and operate independently, through existing partnerships, and by establishing
new partnerships with major property owners and developers in Asia, (ii)
establishing advertising sales channels for our

---

- 29 -

digital out-of-home advertising network by forming strategic
partnerships with advertising agencies and other media industry partners and
(iii) growing sales from our LED solutions business, primarily our LED systems
segment, through design, supply and build contracts with high-end real estate
developments in China, Hong Kong and Macau. The future performance of these
specific business segments may materially affect the future performance of our
company.

In
September 2009, our board of directors authorized management to begin the
process to sell all the rights and assets of our lighting source products
business, namely Beijing Aihua. Our companys decision to discontinue operations
in the lighting source products business was intended to more effectively
utilize our financial and human resources by focusing on our digital out-of-home
advertising and LED solutions businesses which we consider to have more
promising potential for revenue and margin growth. As of September 30, 2009, we
classified these assets as assets held for sale and included the results of the
lighting source products business in discontinued operations. On November 20,
2009, Beijing Illumination entered into a Sale and Purchase Agreement with
Zhejiang Zhong Jun Investment Management Co. Limited (Zhejiang Zhong Jun).
Pursuant to the terms and conditions of the Sale and Purchase Agreement, Beijing
Illumination agreed to sell its 100% ownership of the registered share capital
of Beijing Aihua to Zhejiang Zhong Jun in consideration for payments totaling
RMB7,800,000 (approximately US$1,141,352). Of this amount, a cash deposit of
RMB1,500,000 (approximately US$219,491) was paid by Zhejiang Zhong Jun to
Beijing Illumination on November 20, 2009. The remaining RMB6,300,000
(approximately US$921,861) was paid in full by Zhejiang Zhong Jun to Beijing
Illumination in cash in March 2010. The Sale and Purchase Agreement closed on
April 12, 2010.

Challenging
economic conditions may adversely affect our business. Firstly, we may require
outside capital over the near-term to fund our capital needs. Recent disruptions
in financial markets have reduced the general availability of both equity
capital and debt financing. If we are unable to obtain financing in the amounts
and on terms deemed acceptable to us, we may be unable to implement our business
and growth strategies or withstand adverse operating results. Secondly,
challenging economic conditions have reduced spending by businesses. Our
operating results in one or more segments may be adversely affected by these
slowing economic conditions and spending patterns. If global economic and market
conditions remain uncertain or persist, spread, or deteriorate further, we may
experience material impacts on our business, operating results, and financial
condition. Lastly, in times of economic slowdown, the number of our customers
who default on payments owed to us may increase. We could experience longer
payment cycles, increased collection costs and higher bad debt expenses.

Change in Fiscal Year and Comparative Financial Information

In
December 2009, our board of directors approved a change in our fiscal year end
from March 31 to December 31. The fiscal year end change was effective December
31, 2009 and resulted in a nine month reporting period from April 1, 2009 to
December 31, 2009. As a result, this Form 10-K is a transition report and
includes financial information for the transition period from April 1, 2009
through December 31, 2009 (the Transition Period). Subsequent to this report,
our reports on Form 10-K will cover the calendar year January 1 to December
31.

The
comparative financial information provided for the nine months ended December
31, 2008 is unaudited, since it represented an interim period of the fiscal year
ended March 31, 2009. The unaudited financial information for the nine months
ended December 31, 2008 includes all normal recurring adjustments necessary for
the fair statement of the results for that period.

Summary of Key Results

Total
net revenue from continuing operations for the nine months ended December 31,
2009 was $3,609,888, which represents a 62% increase from the total net revenue
from continuing operations of $2,221,635 for the nine months ended December 31,
2008.

Net
loss from continuing operations for the nine months ended December 31, 2009 was
$2,700,478 compared to a net loss of $1,955,094 for the nine months ended
December 31, 2008.

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- 30 -

Net loss from discontinued operations for the nine months ended December 31, 2009 was $8,699,702 compared to a net loss of $881,268 for the nine months ended December 31, 2008.

Basic and fully diluted loss per share from continuing operations attributable to Lightscape Technologies Inc. common shareholders for the nine months ended December 31, 2009 was $0.05 compared to a basic and fully diluted loss per share from continuing operations of $0.03 for the nine months ended December 31, 2008.

Results of Operations

Comparison of Fiscal Nine Months Ended December 31, 2009
and December 31, 2008

Net Loss

Our net loss from continuing operations attributable to Lightscape Technologies Inc. common shareholders for the nine months ended December 31, 2009 was $2,700,478, or $0.05 per basic and fully diluted share, compared to a net loss of $1,955,094, or $0.03 per basic and fully diluted share, for the nine months ended December 31, 2008. The increase in net loss from continuing operations is primarily attributable to a $502,197 increase in bad debts expense and a $464,456 increase in selling and marketing expenses.

Our net loss from discontinued operations attributable to Lightscape Technologies Inc. common shareholders for the nine months ended December 31, 2009 was $0.15 per basic and fully diluted share, compared to a net loss of $0.02 per basic and fully diluted share, for the nine months ended December 31, 2008. The increase in net loss from discontinued operations is primarily attributable to the discontinuation of our lighting source products business during the nine months ended December 31, 2009. This resulted in a loss from these discontinued operations during the nine months ended December 31, 2009 attributable to our company of $7,713,151, stemming from a shortfall of the disposal consideration received as compared to the net asset value of the subsidiary as of the date of disposal.

Revenues and Cost of Revenues

Total
net revenue from continuing operations for the nine months ended December 31,
2009 was $3,609,888, which represents a 62% increase from the total net revenue
from continuing operations of $2,221,635 for the nine months ended December 31,
2008. The increase in net revenues is attributable to new sales from our digital
out-of-home advertising business and an increase in sales from our LED solutions
business.

Specifically,
revenue related to our digital out-of-home advertising business was $707,776 for
the nine months ended December 31, 2009 as compared to $nil during the nine
months ended December 31, 2008. The gross profit margin on our digital
out-of-home advertising business was 71% for the nine months ended December 31,
2009. Our digital out-of-home advertising business is expected to contribute
increased revenues in the foreseeable future as we ramp up several key digital
billboard installations which were completed during the nine months ended
December 31, 2009 and are expected to begin generating advertising revenue in
the near future. Our company has formed strategic partnerships with Ogilvy &
Mather Group, a major advertising agency in Hong Kong, and LIME, a diversified
media conglomerate, to sell advertising space on our digital out-of-home
network. Both of these partnerships are actively promoting out-of-home
advertising on our network. We are also in the process of negotiating strategic
partnership agreements and contracts with other advertising agencies and
advertisers for the sales of advertising space on the digital advertising
network.

Revenue
related to our LED solutions business increased to $2,818,156 for the nine
months ended December 31, 2009 from $2,195,607 during the nine months ended
December 31, 2008, or an increase of 28%. The increase in revenues was due
primarily to the completion of LED solutions contracts with larger average
contract sums during the nine months ended December 31, 2009 as compared to a
similar number of contracts but with relatively smaller contract sums completed
during the nine months ended December 31, 2008. The gross profit margin on our
LED solutions business was 18% for the nine months ended December 31, 2009
compared to 34% for the nine months ended December 31, 2008. The major reason
for the decrease in gross profit margin was that we offered incentive pricing on
LED solutions contracts to two leading property operators in Hong Kong. These
clients were first time customers of our company, and our management believes
that the discount offered on these LED

---

- 31 -

solutions contracts will serve as an incentive to generate new
out-of-home advertising contracts with the same clients in the future. Our LED
solutions business is expected to contribute increased revenues in the
foreseeable future as several key projects are expected to be completed in the
near future.

Total
cost of revenues for the nine months ended December 31, 2009 was $2,763,695,
which represents an increase of 90% as compared to total cost of revenues of
$1,455,651 for the nine months ended December 31, 2008. The increase in the
total cost of revenues during the nine months ended December 31, 2009 was due
primarily to the corresponding 62% increase in overall sales revenues, as well
as the effect of the incentive pricing offered to two customers on LED solutions
contracts while project costs on those contracts remained at normal levels. Our
overall gross profit margin was 23% for the nine months ended December 31, 2009
as compared to 34% for the nine months ended December 31, 2008.

Operating Expenses

Operating
expenses from continuing operations for the nine months ended December 31, 2009
were $3,538,415, which represents a 30% increase in operating expenses from
$2,727,935 for the nine months ended December 31, 2008. Selling and marketing
expenses, general and administrative expenses, and bad debts constitute the main
components of our operating expenses.

Selling
and marketing expenses for the nine months ended December 31, 2009 increased
approximately 168% to $740,575 from $276,119 for the nine months ended December
31, 2008. The increase corresponds to the 62% increase in total net revenues,
but was also due to one-time advertising campaign expenses of $266,211 and sales
network set up costs of $77,121 related to the launch of our out-of-home
advertising network which began generating its first revenue during the nine
months ended December 31, 2009. Our company anticipates that selling and
marketing expenses will remain steady or decrease slightly in the future as the
one-time expenses are not expected to be recurring. Also, as we further expand
our core digital out-of-home advertising and LED solutions businesses, any
increases in selling and marketing expenses are expected to be limited as a
result of a company-wide cost-cutting initiative implemented throughout 2009 and
into 2010.

General
and administrative expenses decreased by 2% during the nine months ended
December 31, 2009 to $2,060,030 from $2,106,145 for the nine months ended
December 31, 2008. The decrease was mainly due to a $102,479 decrease in
amortization expenses during the nine months ended December 31, 2009 compared to
December 31, 2008. Our company anticipates that general and administrative costs
will remain steady or increase in the foreseeable future as our companys
operations continue to expand, however, such increases are expected to continue
to be limited as a result of a company-wide cost-cutting initiative.

Bad
debts expenses for the nine months ended December 31, 2009 increased to $502,197
from $nil for the nine months ended December 31, 2008. Bad debts resulted mainly
from a $379,861 write off of a trade receivable within our LED solutions
business which management deems irrecoverable and a one-time occurrence.

Income Taxes

We
received income tax credits of $nil during the nine months ended December 31,
2009 compared to $206,977 for the nine months ended December 31, 2008. These tax
credits were related primarily to our operations in Macau and arose as a result
of the finalization of a Complementary Income Tax assessment as issued by the
Macao Finance Service Bureau for the 2007 assessment year, under which $nil tax
is payable as the assessable profits were below the statutory allowance level.

Liquidity and Capital Resources

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

As of December 31, 2009, our company had an overall net working capital surplus of $1,286,027 compared to a surplus of $13,949,011 as of March 31, 2009, representing a decrease in working capital of $12,662,984. As of December 31, 2009, our company had a net working capital surplus from continuing operations of $1,361,336 compared to a surplus of $2,684,133 as of March 31, 2009, representing a decrease in working capital of $1,322,797. The cash and cash equivalents of our company attributable to continuing operations decreased to $209,508 as at December 31, 2009 as compared to $342,729 as of March 31, 2009. Cash attributable to discontinued operations totalled $nil as of December 31, 2009 and $47,470 as of March 31, 2009.

---

- 32 -

Cash Flow Related to Operating Activities

Continuing
operating activities generated cash of $388,272 for the nine months ended
December 31, 2009 as compared to continuing operating activities using cash of
$3,610,280 for the nine months ended December 31, 2008. The increase in cash
generated by continuing operating activities was mainly due to the $996,472
increase in the operating liability Billings in excess of costs and estimated
earnings on uncompleted contracts which represents amounts billed on our LED
solutions contracts in excess of revenues recognized. The increasing total
signifies that we collected an increasing number of deposits before paying
related project costs. During the nine months ended December 31, 2009, we
improved our operational cash flow by synchronizing our payment of costs and
receipt of revenue by collecting more project deposits before paying related
project costs. A $614,004 increase in trade payables also contributed
significantly to the increase in cash generated by continuing operating
activities as we took advantage of extended credit term limits from certain
suppliers. A $399,041 net decrease in prepaid expenses and other current assets
also enhanced our operational cash flow from continuing activities as we
curtailed making deposits and prepaying expenses where possible. Discontinued
operating activities used cash of $251,186 during the nine months ended December
31, 2009 as compared to discontinued operating activities using cash of $959,286
during the nine months ended December 31, 2008.

Cash Flow Related to Investing Activities

Net
cash used in investing activities of continuing operations amounted to $734,072
during the nine months ended December 31, 2009 as compared to investing
activities of continuing operations using cash of $127,633 during the nine
months ended December 31, 2008. The increase in cash used in investing
activities of continuing operations is attributable primarily to our companys
purchase of digital out-of-home advertising displays which increased to $325,216
for the nine months ended December 31, 2009 from $nil for the nine months ended
December 31, 2008. Net cash used in investing activities of discontinued
operations was $45,428 during the nine months ended December 31, 2009 as
compared to investing activities of discontinued operations using cash of
$400,543 during the nine months ended December 31, 2008.

Our company incurred capital expenditures of $952,298 during the nine months ended December 31, 2009 and $148,817 for the nine months ended December 31, 2008. The increase in capital expenditures for the nine months ended December 31, 2009 as compared to December 31, 2008 was mainly attributable to the $325,216 increase in purchases of digital out-of-home advertising equipment. We plan to install additional large-sized LED displays during the second half of 2010, including but not limited to New World Department Store China Ltd. department stores in Wuhan and Changsha, China. We estimate total capital expenditures for these LED screens to be approximately $1,092,545, in the form of cash and/or utilization of our companys LED screen inventory.

Cash Flow Related to Financing Activities

Financing activities of continuing operations generated cash of $205,232 for the nine months ended December 31, 2009 as compared to financing activities of continuing operations generating cash of $779,820 for the nine months ended December 31, 2008. The decrease in net cash flow generated by financing activities of continuing operations was mainly due to the $507,896 repayment of bank loans and the $247,932 repayment of an advance from a director of our company during the nine months ended December 31, 2009 compared to no such repayments during the nine months ended December 31, 2008. Financing activities of discontinued operations generated cash of $256,103 during the nine months ended December 31, 2009 as compared to financing activities of discontinued operations using cash of $23,003 for the nine months ended December 31, 2008.

During
the nine months ended December 31, 2009, our company, through Lightscape
Technologies (Greater China) Limited (LTGC), obtained an instalment loan of
$771,208 (HKD6,000,000) from DBS Bank (Hong Kong) Limited (DBS Bank) under the
Special Loan Guarantee Scheme of The Government of the Hong Kong Special
Administrative Region (HKSAR Government). The loan is repayable over 12 equal
monthly instalments, at an interest rate of 2% per annum over the prime lending
rate, which is currently 5.25%, from May 12,

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- 33 -

2009 to April 12, 2010. The instalment loan is secured by a
Special Loan Guarantee issued by the HKSAR Government for an amount equal to 70%
of the loan, a Guarantee and Indemnity for an unlimited amount duly executed by
a director of our company and a director of LTGC, and a Guarantee and Indemnity
for an unlimited amount duly executed by Tech Team Investment Limited, the
immediate holding company of LTGC. As of December 31, 2009, eight out of twelve
instalments have been repaid to DBS Bank on the respective monthly due dates. As
of the date of this Form 10-K filing, eleven out of twelve instalments have been
repaid to DBS Bank.

Management
believes that additional cash may need to be raised in the next twelve months to
finance our existing operations and expansion of our digital out-of-home
advertising and LED solutions businesses since we have not yet achieved
sustainable positive cash flows. However, management also expects to generate
positive cash flow in the coming twelve months from the completion of projects
which may substantially, if not fully, meet the cash needs of our company during
the next twelve months. Management may consider outside capital over the
near-term, including the next twelve months, if required to fund our capital
needs. Such outside capital may be obtained from additional debt or equity
financing. We are exploring possible bank financing opportunities, mainly in the
form of accounts payable financing. We do not currently have any arrangement for
financing and there is no assurance that capital will be available to meet our
continuing development costs or, if the capital is available, that it will be on
terms acceptable to us.

Off-Balance Sheet Arrangements

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

**ITEM
7A.**     **QUANTITATIVE AND
QUALITATIVE DISCLOSURES ABOUT MARKET RISK.**

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

**ITEM
8.**        **FINANCIAL
STATEMENTS AND SUPPLEMENTARY DATA**.

The
following consolidated financial statements pertaining to our company are filed
as part of this transition report on Form 10-K:

Audited
consolidated financial statements for the fiscal nine months ended December 31,
2009 and the fiscal year ended March 31, 2009:

| | Report of Independent
      Registered Public Accounting Firm, dated April 19, 2010                                                                                        
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                            
| | Consolidated Balance
      Sheets as at December 31, 2009 and March 31, 2009                                                                                               
| |                                                                                                                                                                            
| | Consolidated Statements
      of Operations and Comprehensive Loss for the Nine Months Ended December
      31, 2009 and the Year Ended March 31, 2009                     
| |                                                                                                                                                                            
| | Consolidated Statements
      of Changes in Shareholders Equity and Comprehensive Loss for the Nine
      Months Ended December 31, 2009 and the Year Ended March 31, 2009
| |                                                                                                                                                                            
| | Consolidated Statements
      of Cash Flows for the Nine Months Ended December 31, 2009 and the Year
      Ended March 31, 2009                                            
| |                                                                                                                                                                            
| | Notes to Consolidated
      Financial Statements                                                                                                                           

---











LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIESAUDITED CONSOLIDATED FINANCIAL STATEMENTSFOR THE NINE
MONTHS ENDED DECEMBER 31, 2009 AND THE YEAR ENDED MARCH 31, 2009ANDREPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

---

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



To the Board of Directors and Shareholders of Lightscape
Technologies Inc.



We have audited the accompanying consolidated balance sheets of
Lightscape Technologies Inc. and Subsidiaries (the Company) as of December 31,
2009 and March 31, 2009 and the related consolidated statements of operations
and comprehensive loss, changes in shareholders' equity and comprehensive loss,
and cash flows for the nine months ended December 31, 2009 and the year ended
March 31, 2009. These consolidated financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit to obtain reasonable assurance about
whether the consolidated financial statements are free of material misstatement.
The Company is not required to have, nor were we engaged to perform, an audit of
its internal control over financial reporting. Our audit included consideration
of internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Company's internal control
over financial reporting. Accordingly, we express no such opinion. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the consolidated 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 audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred
to above present fairly, in all material respects, the financial position of
Lightscape Technologies Inc. and Subsidiaries as of December 31, 2009 and March
31, 2009 and the results of their operations and their cash flows for the nine
months ended December 31, 2009 and the year ended March 31, 2009 in conformity
with United States generally accepted accounting principles.

/s/ MSPCCertified
Public Accountants and Advisors, A Professional Corporation.

New York, New York 
April 19, 2010

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- 36 -

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

|                                                                                                                                                            |  | December 31, |  |  | March 31,  | 
|----------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------ |  |  | ---------- | 
|                                                                                                                                                            |  | 2009         |  |  | 2009       | 
|                                                                                                                                                            |  | $            |  |  | $          | 
|ASSETS                                                                                                                                                      |  |              |  |  |            | 
|Current assets:                                                                                                                                             |  |              |  |  |            | 
|Cash and cash
      equivalents                                                                                                                             |  | 209,508      |  |  | 342,729    | 
|Accounts
      receivable, net of allowance for doubtful accounts
      of 
             $876,848 on December 31, 2009
      and $415,383 on March 31, 2009 |  | 905,816      |  |  | 1,213,334  | 
|Costs and
      estimated earnings in excess of billings on uncompleted contracts                                                                           |  | 652,770      |  |  | 673,312    | 
|Prepaid expenses                                                                                                                                            |  | 473,028      |  |  | 344,751    | 
|Rental, utility
      and other deposits                                                                                                                    |  | 125,129      |  |  | 358,466    | 
|Other current assets                                                                                                                                        |  | 54,779       |  |  | 338,399    | 
|Other
      receivables  disposal consideration of subsidiaries                                                                                            |  | 2,036,550    |  |  | -          | 
|Inventories  LED                                                                                                                                           |  | 1,072,150    |  |  | 1,264,975  | 
|Current assets
      of discontinued operations (see Note 12(d))                                                                                            |  | 125,648      |  |  | 12,435,386 | 
|                                                                                                                                                            |  |              |  |  |            | 
|Total current assets                                                                                                                                        |  | 5,655,378    |  |  | 16,971,352 | 
|                                                                                                                                                            |  |              |  |  |            | 
|Intangible assets, net                                                                                                                                      |  | 453,528      |  |  | 82,431     | 
|Goodwill                                                                                                                                                    |  | 776,378      |  |  | 776,378    | 
|Plant and equipment, net                                                                                                                                    |  | 270,478      |  |  | 279,738    | 
|Out-of-home advertising equipment, net                                                                                                                      |  | 2,130,002    |  |  | 1,824,421  | 
|Construction in progress  Out-of-home
      advertising equipment                                                                                          |  | 351,482      |  |  | 266,250    | 
|Deferred cost                                                                                                                                               |  | 86,317       |  |  | 111,132    | 
|Accounts receivable, due after one year and
      net of allowance for doubtful 
      accounts of $nil on December 31, 2009 and $145,871 on March 31, 2009 |  | -            |  |  | 200,889    | 
|Prepaid expenses and other current assets  due after one
      year                                                                                        |  | -            |  |  | 8,610      | 
|Net investment in sales-type leases of
      discontinued operations                                                                                        |  | -            |  |  | 36,359     | 
|                                                                                                                                                            |  |              |  |  |            | 
|                                                                                                                                                            |  | 4,068,185    |  |  | 3,586,208  | 
|                                                                                                                                                            |  |              |  |  |            | 
|TOTAL ASSETS                                                                                                                                                |  | 9,723,563    |  |  | 20,557,560 | 
|                                                                                                                                                            |  |              |  |  |            | 
|LIABILITIES AND SHAREHOLDERS EQUITY                                                                                                                        |  |              |  |  |            | 
|Current liabilities:                                                                                                                                        |  |              |  |  |            | 
|Short-term bank
      borrowings                                                                                                                            |  | 263,313      |  |  | -          | 
|Secured loan                                                                                                                                                |  | 192,802      |  |  | -          | 
|Trade payables                                                                                                                                              |  | 888,394      |  |  | 358,938    | 
|Billings in excess of cost and
      estimated earnings                                                                                                     |  | 996,472      |  |  | -          | 
|Amount due to a
      director                                                                                                                              |  | 497,569      |  |  | 745,501    | 
|Accrued expenses                                                                                                                                            |  | 1,272,747    |  |  | 644,091    | 
|Other current
      liabilities                                                                                                                             |  | 45,297       |  |  | 103,303    | 
|Obligations under capital leases
       current portion                                                                                                    |  | 11,800       |  |  | -          | 
|Current
      liabilities of discontinued operations (see Note 12(d))                                                                                       |  | 200,957      |  |  | 1,170,508  | 
|                                                                                                                                                            |  |              |  |  |            | 
|Total current liabilities                                                                                                                                   |  | 4,369,351    |  |  | 3,022,341  | 

---

- 37 -

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

|                                                                       |  | December 31,     |   |  | March 31,   |  
|---------------------------------------------------------------------- |  | ---------------- | - |  | ----------- | -
|                                                                       |  | 2009             |   |  | 2009        |  
|                                                                       |  | $                |   |  | $           |  
|                                                                       |  |                  |   |  |             |  
|Non-current liabilities:                                               |  |                  |   |  |             |  
|Obligations under capital leases  non-current portion                 |  | 44,249           |   |  | -           |  
|                                                                       |  |                  |   |  |             |  
|Total non-current liabilities                                          |  | 44,249           |   |  | -           |  
|                                                                       |  |                  |   |  |             |  
|Total liabilities                                                      |  | 4,
      413,600 |   |  | 3,022,341   |  
|                                                                       |  |                  |   |  |             |  
|COMMITMENTS (see Note 14)                                              |  |                  |   |  |             |  
|                                                                       |  |                  |   |  |             |  
|Shareholders equity:                                                  |  |                  |   |  |             |  
|Common stock                                                           |  |                  |   |  |             |  
|Authorized:                                                            |  |                  |   |  |             |  
|800,000,000 common shares, par value $0.001 per share                  |  |                  |   |  |             |  
|100,000,000 preferred shares, par value $0.001 per share               |  |                  |   |  |             |  
|Issued and outstanding:                                                |  |                  |   |  |             |  
|55,876,410
      common shares at December 31, 2009 and March 31, 2009 |  | 55,876           |   |  | 55,876      |  
|Additional paid-in capital                                             |  | 34,140,708       |   |  | 34,140,708  |  
|Common stock warrants                                                  |  | 344,673          |   |  | 344,673     |  
|Other reserves                                                         |  | -                |   |  | 28,944      |  
|Accumulated other comprehensive income                                 |  | 281,222          |   |  | 1,077,354   |  
|Accumulated deficit                                                    |  | (29,512,516      | ) |  | (19,219,220 | )
|Total shareholders equity                                             |  | 5,309,963        |   |  | 16,428,335  |  
|Noncontrolling interest                                                |  | -                |   |  | 1,106,884   |  
|Total Equity                                                           |  | 5,309,963        |   |  | 17,535,219  |  
|                                                                       |  |                  |   |  |             |  
|TOTAL LIABILITIES AND SHAREHOLDERS EQUITY                             |  | 9,723,563        |   |  | 20,557,560  |  

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

---

- 38 -

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

|                                                                   |  | Nine Months  |   |  | Nine Months  |   |  | Year       |  
|------------------------------------------------------------------ |  | ------------ | - |  | ------------ | - |  | ---------- | -
|                                                                   |  | Ended        |   |  | Ended        |   |  | Ended      |  
|                                                                   |  | December 31, |   |  | December 31, |   |  | March 31,  |  
|                                                                   |  | 2009         |   |  | 2008         |   |  | 2009       |  
|                                                                   |  |              |   |  | (Unaudited)  |   |  |            |  
|                                                                   |  | $            |   |  | $            |   |  | $          |  
|Revenues:                                                          |  |              |   |  |              |   |  |            |  
|Advertising revenue                                                |  | 707,776      |   |  | -            |   |  | -          |  
|LED solutions revenue                                              |  | 2,818,156    |   |  | 2,195,607    |   |  | 2,932,772  |  
|Other revenue                                                      |  | 83,956       |   |  | 26,028       |   |  | 28,619     |  
|                                                                   |  |              |   |  |              |   |  |            |  
|Total net revenues                                                 |  | 3,609,888    |   |  | 2,221,635    |   |  | 2,961,391  |  
|                                                                   |  |              |   |  |              |   |  |            |  
|Cost of revenues:                                                  |  |              |   |  |              |   |  |            |  
|Cost of sales of Advertising revenue (i)                           |  | 207,576      |   |  | -            |   |  | 13,577     |  
|Cost of sales of LED solutions
      revenue                       |  | 2,312,638    |   |  | 1,455,084    |   |  | 1,638,416  |  
|Costs of Other revenue                                             |  | 243,481      |   |  | 567          |   |  | -          |  
|                                                                   |  |              |   |  |              |   |  |            |  
|Total cost of revenues                                             |  | 2,763,695    |   |  | 1,455,651    |   |  | 1,651,993  |  
|                                                                   |  |              |   |  |              |   |  |            |  
|Gross profit                                                       |  | 846,193      |   |  | 765,984      |   |  | 1,309,398  |  
|                                                                   |  |              |   |  |              |   |  |            |  
|Bad debts                                                          |  | (502,197     | ) |  | -            |   |  | (798,458   | )
|Amortization                                                       |  | (77,301      | ) |  | (179,780     | ) |  | (241,585   | )
|Depreciation                                                       |  | (121,783     | ) |  | (100,277     | ) |  | (126,687   | )
|Loss on disposal of property, plant and
      equipment            |  | (36,529      | ) |  | (65,614      | ) |  | (63,101    | )
|Selling and marketing expenses                                     |  | (740,575     | ) |  | (276,119     | ) |  | (399,353   | )
|General and administrative expenses                                |  | (2,060,030   | ) |  | (2,106,145   | ) |  | (2,977,055 | )
|                                                                   |  |              |   |  |              |   |  |            |  
|Loss from operations                                               |  | (2,692,222   | ) |  | (1,961,951   | ) |  | (3,296,841 | )
|Interest expense, net of interest income                           |  | (65,503      | ) |  | (16,733      | ) |  | (16,624    | )
|Other income                                                       |  | 57,247       |   |  | 23,590       |   |  | 66,269     |  
|                                                                   |  |              |   |  |              |   |  |            |  
|Loss from continuing operations before
      income tax            |  | (2,700,478   | ) |  | (1,955,094   | ) |  | (3,247,196 | )
|Income tax (provision) refund                                      |  | -            |   |  | 206,977      |   |  | 234,920    |  
|                                                                   |  |              |   |  |              |   |  |            |  
|Loss from continuing operations, net of tax                        |  | (2,700,478   | ) |  | (1,748,117   | ) |  | (3,012,276 | )
|                                                                   |  |              |   |  |              |   |  |            |  
|Discontinued operations, net of tax                                |  |              |   |  |              |   |  |            |  
|Net (loss) from discontinued
      operations, net of income taxes |  | (1,040,723   | ) |  | (881,268     | ) |  | (1,885,791 | )
|Gain on disposal of discontinued component                         |  | 54,172       |   |  | -            |   |  | -          |  
|Loss on disposal of a
      subsidiary                             |  | (7,713,151   | ) |  | -            |   |  | -          |  
|                                                                   |  |              |   |  |              |   |  |            |  
|Loss from discontinued operations, net of
      tax                |  | (8,699,702   | ) |  | (881,268     | ) |  | (1,885,791 | )

---

- 39 -

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

|                                                                                                         |  | Nine Months  |   |  | Nine Months  |   |  | Year       |  
|-------------------------------------------------------------------------------------------------------- |  | ------------ | - |  | ------------ | - |  | ---------- | -
|                                                                                                         |  | Ended        |   |  | Ended        |   |  | Ended      |  
|                                                                                                         |  | December 31, |   |  | December 31, |   |  | March 31,  |  
|                                                                                                         |  | 2009         |   |  | 2008         |   |  | 2009       |  
|                                                                                                         |  |              |   |  | (Unaudited)  |   |  |            |  
|                                                                                                         |  | $            |   |  | $            |   |  | $          |  
|                                                                                                         |  |              |   |  |              |   |  |            |  
|Net loss                                                                                                 |  | (11,400,180  | ) |  | (2,629,385   | ) |  | (4,898,067 | )
|Less: net loss attributable to the noncontrolling interest                                               |  | 1,106,884    |   |  | 108,164      |   |  | 314,817    |  
|                                                                                                         |  |              |   |  |              |   |  |            |  
|Net loss attributable to Lightscape Technologies Inc.                                                    |  | (10,293,296  | ) |  | (2,521,221   | ) |  | (4,583,250 | )
|Other comprehensive income:                                                                              |  |              |   |  |              |   |  |            |  
|Foreign currency translation adjustment
      arising during the period                                  |  | 54,841       |   |  | (12,564      | ) |  | (5,088     | )
|Comprehensive loss                                                                                       |  | (10,238,455  | ) |  | (2,533,785   | ) |  | (4,588,338 | )
|                                                                                                         |  |              |   |  |              |   |  |            |  
|Loss per share                                                                                           |  |              |   |  |              |   |  |            |  
|- Basic and diluted                                                                                      |  |              |   |  |              |   |  |            |  
|Loss from continuing operations
      attributable to Lightscape Technologies Inc. common shareholders   |  | (0.05        | ) |  | (0.03        | ) |  | (0.05      | )
|Loss from discontinued operations attributable to
      Lightscape Technologies Inc. common shareholders |  | (0.15        | ) |  | (0.02        | ) |  | (0.03      | )
|Total                                                                                                    |  | (0.20        | ) |  | (0.05        | ) |  | (0.08      | )
|                                                                                                         |  |              |   |  |              |   |  |            |  
|Weighted average number of common shares
      outstanding -Basic and diluted                            |  | 55,876,410   |   |  | 55,876,410   |   |  | 55,876,410 |  

(i) Includes depreciation of plant and equipment and
  amortization of intangible assets of $130,483 and $7,589, respectively, for the
  nine months ended December 31, 2009, $13,320 and $nil, respectively, for the
  year ended March 31, 2009, and $nil and $nil respectively for the nine months
  ended December 31, 2008.

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

---

- 40 -

|LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIES                                     
|----------------------------------------------------------------------------------
|                                                                                  
|CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY
      AND COMPREHENSIVE
|LOSS                                                                              
|Expressed in US
      dollars (except for number of common shares)                

|                                                                                                                       |  |                     |  |  |        |  |  |          |  |  |            |  |  |                           |   |  | Total Accumulated Other Comprehensive
      Income And |   |  |             |   |  |               |  
|---------------------------------------------------------------------------------------------------------------------- |  | ------------------- |  |  | ------ |  |  | -------- |  |  | ---------- |  |  | ------------------------- | - |  | ------------------------------------------------------ | - |  | ----------- | - |  | ------------- | -
|                                                                                                                       |  | Common
      Shares |  |  |        |  |  |          |  |  |            |  |  | Accumulated
      Deficit |   |  |                                                        |   |  |             |  
|                                                                                                                       |  |                     |  |  |        |  |  |          |  |  |            |  |  |                           |   |  |                                                        |   |  |             |   |  |               |  
|                                                                                                                       |  |                     |  |  |        |  |  |          |  |  |            |  |  |                           |   |  | Accumulated                                            |   |  |             |   |  | Total         |  
|                                                                                                                       |  |                     |  |  |        |  |  |          |  |  |            |  |  |                           |   |  | Other                                                  |   |  |             |   |  | Accumulated   |  
|                                                                                                                       |  |                     |  |  |        |  |  |          |  |  |            |  |  |                           |   |  | Comprehensive                                          |   |  |             |   |  | Comprehensive |  
|                                                                                                                       |  |                     |  |  |        |  |  |          |  |  |            |  |  |                           |   |  | Income - Foreign                                       |   |  |             |   |  | (Loss) Income |  
|                                                                                                                       |  |                     |  |  |        |  |  | Common   |  |  | Additional |  |  |                           |   |  | Currency                                               |   |  |             |   |  | And           |  
|                                                                                                                       |  |                     |  |  |        |  |  | Stock    |  |  | Paid-In    |  |  | Other                     |   |  | Translation                                            |   |  | Accumulated |   |  | Accumulated   |  
|                                                                                                                       |  | Number              |  |  | Amount |  |  | Warrants |  |  | Capital    |  |  | Reserves                  |   |  | Adjustment                                             |   |  | Deficit     |   |  | Deficit       |  
|                                                                                                                       |  |                     |  |  |        |  |  |          |  |  |            |  |  |                           |   |  |                                                        |   |  |             |   |  |               |  
|Balance at
      
      March 31, 2008                                                                                 |  | 55,876,410          |  |  | 55,876 |  |  | 344,673  |  |  | 34,140,708 |  |  | 28,944                    |   |  | 1,082,442                                              |   |  | (14,635,970 | ) |  | (13,553,528   | )
|                                                                                                                       |  |                     |  |  |        |  |  |          |  |  |            |  |  |                           |   |  |                                                        |   |  |             |   |  |               |  
|Foreign currency 
      translation 
      adjustment                                                                  |  | -                   |  |  | -      |  |  | -        |  |  | -          |  |  | -                         |   |  | (5,088                                                 | ) |  | -           |   |  | (5,088        | )
|Net loss                                                                                                               |  | -                   |  |  | -      |  |  | -        |  |  | -          |  |  | -                         |   |  | -                                                      |   |  | (4,583,250  | ) |  | (4,583,250    | )
|Noncontrolling 
      interest                                                                                         |  | -                   |  |  | -      |  |  | -        |  |  | -          |  |  | -                         |   |  | -                                                      |   |  | -           |   |  | -             |  
|                                                                                                                       |  |                     |  |  |        |  |  |          |  |  |            |  |  |                           |   |  |                                                        |   |  |             |   |  |               |  
|Balance at 
      March 31, 2009                                                                                       |  | 55,876,410          |  |  | 55,876 |  |  | 344,673  |  |  | 34,140,708 |  |  | 28,944                    |   |  | 1,077,354                                              |   |  | (19,219,220 | ) |  | (18,141,866   | )
|                                                                                                                       |  |                     |  |  |        |  |  |          |  |  |            |  |  |                           |   |  |                                                        |   |  |             |   |  |               |  
|Foreign currency 
      translation 
      adjustment                                                                  |  | -                   |  |  | -      |  |  | -        |  |  | -          |  |  | -                         |   |  | 54,841                                                 |   |  | -           |   |  | 54,841        |  
|Adjustment to 
      foreign currency 
      translation 
      adjustment upon 
      disposal of 
      subsidiaries |  | -                   |  |  | -      |  |  | -        |  |  | -          |  |  | -                         |   |  | (850,973                                               | ) |  | -           |   |  | (850,973      | )
|Adjustment to other 
      reserves upon 
      disposal of 
      subsidiaries                                        |  | -                   |  |  | -      |  |  | -        |  |  | -          |  |  | (28,944                   | ) |  | -                                                      |   |  | -           |   |  | -             |  
|Net loss                                                                                                               |  | -                   |  |  | -      |  |  | -        |  |  | -          |  |  | -                         |   |  | -                                                      |   |  | (10,293,296 | ) |  | (10,293,296   | )
|Noncontrolling 
      interest share of 
      discontinued 
      operations loss                                     |  | -                   |  |  | -      |  |  | -        |  |  | -          |  |  | -                         |   |  | -                                                      |   |  | -           |   |  | -             |  
|                                                                                                                       |  |                     |  |  |        |  |  |          |  |  |            |  |  |                           |   |  |                                                        |   |  |             |   |  |               |  
|Balance at 
      December 31, 2009                                                                                    |  | 55,876,410          |  |  | 55,876 |  |  | 344,673  |  |  | 34,140,708 |  |  | -                         |   |  | 281,222                                                |   |  | (29,512,516 | ) |  | (29,231,294   | )

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

---

- 41 -

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

|                                                                                                                         |  | Nine Months  |   |  | Nine Months  |   |  | Year       |  
|------------------------------------------------------------------------------------------------------------------------ |  | ------------ | - |  | ------------ | - |  | ---------- | -
|                                                                                                                         |  | Ended        |   |  | Ended        |   |  | Ended      |  
|                                                                                                                         |  | December 31, |   |  | December 31, |   |  | March 31,  |  
|                                                                                                                         |  | 2009         |   |  | 2008         |   |  | 2009       |  
|                                                                                                                         |  |              |   |  | (Unaudited)  |   |  |            |  
|                                                                                                                         |  | $            |   |  | $            |   |  | $          |  
|Cash flows from operating activities:                                                                                    |  |              |   |  |              |   |  |            |  
|Net loss                                                                                                                 |  | (10,293,296  | ) |  | (2,521,221   | ) |  | (4,583,250 | )
|Less: Net loss from discontinued operations,
      net of income taxes                                                   |  | (8,699,702   | ) |  | (881,268     | ) |  | (1,885,791 | )
|                                                                                                                         |  |              |   |  |              |   |  |            |  
|Adjustment to reconcile net loss from continuing operations
      to net cash (used in) continuing operating activities: |  |              |   |  |              |   |  |            |  
|Noncontrolling
      interest                                                                                            |  | (1,106,884   | ) |  | (108,164     | ) |  | (314,817   | )
|Amortization of intangible
      assets                                                                                  |  | 84,890       |   |  | 179,780      |   |  | 241,585    |  
|Cost of sales 
      amortization of deferred cost                                                                      |  | 47,920       |   |  | -            |   |  | -          |  
|Depreciation expense                                                                                                     |  | 252,266      |   |  | 100,277      |   |  | 126,687    |  
|Bad debts
      expense                                                                                                  |  | 502,198      |   |  | -            |   |  | 798,458    |  
|Loss on disposal of property,
      plant and equipment                                                                  |  | 36,528       |   |  | 65,614       |   |  | 63,101     |  
|Income tax
      reversal                                                                                                |  | -            |   |  | -            |   |  | (234,921   | )
|Changes in operating assets and liabilities, net of
      acquisitions:                                                  |  |              |   |  |              |   |  |            |  
|Decrease (increase) in
      operating assets:                                                                           |  |              |   |  |              |   |  |            |  
|Accounts receivable, net of
      allowance for doubtful debts                                                           |  | 116,160      |   |  | 721,112      |   |  | 965,857    |  
|Costs and
      estimated earnings in excess of billings on uncompleted contracts                                        |  | 20,543       |   |  | 501,418      |   |  | (34,278    | )
|Prepayment and other current
      assets                                                                                |  | -            |   |  | (2,137,045   | ) |  | -          |  
|Prepaid expenses                                                                                                         |  | (71,527      | ) |  | -            |   |  | 85,798     |  
|Rental and other deposits                                                                                                |  | 231,793      |   |  | -            |   |  | -          |  
|Other current
      assets                                                                                               |  | 238,775      |   |  | -            |   |  | 9,629      |  
|Inventories                                                                                                              |  | -            |   |  | -            |   |  | 2,438      |  
|Inventories -
      LED                                                                                                  |  | -            |   |  | 759,446      |   |  | -          |  
|Net investment in sales-type
      leases of discontinued operations                                                     |  | (4,489       | ) |  | -            |   |  | -          |  
|Increase (decrease) in
      operating liabilities:                                                                      |  |              |   |  | (1,120,553   | ) |  |            |  
|Trade payables                                                                                                           |  | 614,004      |   |  | -            |   |  | (1,530,315 | )
|Billings in
      excess of costs and estimated earnings on uncompleted contracts                                        |  | 996,472      |   |  | -            |   |  | -          |  
|Accrued expenses and other
      current liabilities                                                                     |  | -            |   |  | (562,964     | ) |  | -          |  
|Accrued expenses                                                                                                         |  | (192,567     | ) |  | -            |   |  | 349,262    |  
|Other current liabilities                                                                                                |  | 215,785      |   |  | -            |   |  | (149,460   | )
|Income tax
      payable                                                                                                 |  | -            |   |  | (369,248     | ) |  | (1,308     | )
|                                                                                                                         |  |              |   |  |              |   |  |            |  
|Net cash provided by (used in) continuing
      operating activities                                                     |  | 388,272      |   |  | (3,610,280   | ) |  | (2,319,743 | )
|Net cash provided by (used in) discontinued operating
      activities:                                                  |  |              |   |  |              |   |  |            |  
|Net loss from
      discontinued operations, net of income taxes                                                         |  | (8,699,702   | ) |  | (881,268     | ) |  | (1,885,791 | )
|Adjustments to
      reconcile loss from discontinued operations to net cash used in
      discontinued operations       |  | 8,672,408    |   |  | 767,864      |   |  | 1,575,324  |  
|Net changes in
      operating assets and liabilities                                                                    |  | (223,892     | ) |  | 1,072,690    |   |  | 225,057    |  
|Net cash (used in) discontinued
      operating activities                                                               |  | (251,186     | ) |  | 959,286      |   |  | (85,410    | )
|Net cash provided by (used in) operating
      activities                                                                |  | 137,086      |   |  | (2,650,994   | ) |  | (2,405,153 | )

---

- 42 -

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

|                                                                                     |  | Nine Months |   |  | Nine Months  |   |  | Year       |  
|------------------------------------------------------------------------------------ |  | ----------- | - |  | ------------ | - |  | ---------- | -
|                                                                                     |  | Ended       |   |  | Ended        |   |  | Ended      |  
|                                                                                     |  | December    |   |  | December 31, |   |  | March 31,  |  
|                                                                                     |  | 31,         |   |  | 2008         |   |  | 2009       |  
|                                                                                     |  | 2009        |   |  | (Unaudited)  |   |  |            |  
|                                                                                     |  | $           |   |  | $            |   |  | $          |  
|                                                                                     |  |             |   |  |              |   |  |            |  
|Cash flows from investing activities:                                                |  |             |   |  |              |   |  |            |  
|Purchase of
      plant and equipment                                                |  | (50,244     | ) |  | (139,088     | ) |  | (639,868   | )
|Purchase of out-of-home
      advertising equipment                                  |  | (325,216    | ) |  | -            |   |  | (989,884   | )
|Purchase of
      intangible asset                                                   |  | (455,987    | ) |  | (9,729       | ) |  | (9,730     | )
|Purchase of a subsidiary                                                             |  | -           |   |  | 21,184       |   |  | 21,184     |  
|Disposal of a
      subsidiary                                                       |  | 218,226     |   |  | -            |   |  | -          |  
|Addition to construction in
      progress                                           |  | (97,747     | ) |  | -            |   |  | (178,406   | )
|Addition to
      deferred cost                                                      |  | (23,104     | ) |  | -            |   |  | -          |  
|                                                                                     |  |             |   |  |              |   |  |            |  
|Net cash (used in) investing activities of
      continuing operations               |  | (734,072    | ) |  | (127,633     | ) |  | (1,796,704 | )
|Net cash provided by (used in) investing activities of
      discontinued operations |  | (45,428     | ) |  | (400,543     | ) |  | 8,542      |  
|Net cash (used in) investing activities                                              |  | (779,500    | ) |  | (528,176     | ) |  | (1,788,162 | )
|                                                                                     |  |             |   |  |              |   |  |            |  
|Cash flows from financing activities:                                                |  |             |   |  |              |   |  |            |  
|Inception of bank loan                                                               |  | 771,208     |   |  | -            |   |  | -          |  
|Repayment of
      bank loans                                                        |  | (507,896    | ) |  | -            |   |  | -          |  
|Inception of secured loan                                                            |  | 257,069     |   |  | -            |   |  | -          |  
|Repayment of
      secured loan                                                      |  | (64,267     | ) |  | -            |   |  | -          |  
|Proceeds from short-term
      borrowings                                            |  | -           |   |  | 400,896      |   |  | 400,896    |  
|Repayment of
      short-term borrowings                                             |  | -           |   |  | (400,896     | ) |  | (400,896   | )
|Repayment of capital lease
      obligations                                         |  | (2,950      | ) |  | (1,035       | ) |  | (1,035     | )
|Advance from
      (repayment to) a director                                         |  | (247,932    | ) |  | 771,208      |   |  | 745,503    |  
|Advance from a director of a
      subsidiary                                        |  | -           |   |  | 9,647        |   |  | -          |  
|                                                                                     |  |             |   |  |              |   |  |            |  
|Net cash provided by financing activities of continuing
      operations             |  | 205,232     |   |  | 779,820      |   |  | 744,468    |  
|Net cash provided by financing activities
      of discontinued operations           |  | 256,103     |   |  | (23,003      | ) |  | 14,675     |  
|Net cash provided by financing activities                                            |  | 461,335     |   |  | 756,817      |   |  | 759,143    |  
|                                                                                     |  |             |   |  |              |   |  |            |  
|Effect of foreign exchange rate changes                                              |  | 388         |   |  | 1,539        |   |  | (154,128   | )
|                                                                                     |  |             |   |  |              |   |  |            |  
|Net decrease in cash and cash equivalents                                            |  | (180,691    | ) |  | (2,420,815   | ) |  | (3,588,300 | )
|Cash and cash equivalents at beginning of
      the period                           |  | 390,199     |   |  | 3,978,499    |   |  | 3,978,499  |  
|                                                                                     |  |             |   |  |              |   |  |            |  
|Cash and cash equivalents at end of the
      period (a)                             |  | 209,508     |   |  | 1,557,685    |   |  | 390,199    |  
|                                                                                     |  |             |   |  |              |   |  |            |  
|Supplemental disclosure of cash flows
      information                              |  |             |   |  |              |   |  |            |  
|Interest expense paid                                                                |  | 65,689      |   |  | 22,980       |   |  | 17,104     |  

Noncash investing and financing transactions: for the nine
  months ended December 31, 2009, the Company entered into a capital lease
  totalling $58,997 for a car.

(a) Includes $Nil of cash that is included on the balance sheet
  with Current assets from discontinued operations as of December 31, 2009,
  $47,470 as of March 31, 2009 and $549,948 as of December 31, 2008.

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

---

- 43 -

LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIES

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE
NINE MONTHS ENDED DECEMBER 31, 2009 AND YEAR ENDED MARCH 31, 2009

NOTE 1. ORGANIZATION AND NATURE OF OPERATIONS

Lightscape Technologies Inc. (Lightscape or the Company)
was incorporated under the laws of the State of Nevada. On April 20, 2007, the
Company changed its name from Global Innovative System Inc. to Lightscape
Technologies Inc. The Company is a holding company, and together with its
subsidiaries (the Group) is principally engaged in three business activities:
(i) digital out-of-home (OOH) advertising, (ii) light-emitting diode (LED)
solutions, and (iii) others including lighting source products. However, before
the end of the fiscal nine months ended December 31, 2009, the Company decided
to exit the lighting source products business, details of which are disclosed in
Note 12.

NOTE 2. SUMMARY OF PRINCIPAL ACCOUNTING POLICIES

Principle of Consolidation and Basis of Presentation

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

The accompanying audited consolidated financial statements as
of December 31, 2009 and March 31, 2009 and for the nine months ended December
31, 2009 and year ended March 31, 2009 have been prepared in accordance with
generally accepted accounting principles and with the instructions to Form 10-K
and Regulation S-X applicable to smaller reporting companies.

In December 2009, the board of directors of the Company
approved a change in the Companys fiscal year end from March 31 to December 31.
The fiscal year end change was effective December 31, 2009 and resulted in a
nine month reporting period from April 1, 2009 to December 31, 2009. The consolidated statements of operations and cash flows are presented with comparative information for the nine months ended December 31, 2008. The financial information provided for the nine months ended December 31, 2008 is unaudited, since it represented an interim period of the fiscal year ended March 31, 2009. The unaudited financial information for the nine months ended December 31, 2008 includes all normal recurring adjustments necessary for the fair statement of the results for that period.

Certain of the December 31, 2008 and March 31, 2009 comparative
figures have been reclassified to conform to the current period presentation.
These reclassifications had no impact on previously reported financial position,
results of operations or cash flows. (See Note 12.)

Use of Estimates

The preparation of financial statements requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reported period. Actual results could differ from those estimates.

Accounts Receivables and Allowance for Doubtful Accounts

The Company performs certain credit evaluation procedures and does not require collateral for financial instruments subject to credit risk. The Company believes that credit risk is limited because the Company routinely assesses the financial strength of its customers and, based upon factors surrounding the credit risk of its customers, establishes an allowance for uncollectible accounts receivable. As a consequence, the Company believes that its accounts receivable credit risk exposure beyond such allowances is limited. The Company recognizes an allowance for doubtful accounts to ensure accounts receivable are not overstated due to uncollectibility and are maintained for all customers based on a variety of factors, including the length of time the receivables are past due, significant one-time events and historical experience. An additional reserve for individual accounts is recorded when the Company becomes aware of a customers inability to meet its financial obligation, such as in the case of bankruptcy filings or deterioration in the customers operating results or financial position. If circumstances related to customers change, estimates of the recoverability of receivables would be further adjusted. As of December 31, 2009 and March 31, 2009, the allowance for doubtful accounts was approximately $876,848 and $415,383, respectively.

---

- 44 -

LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIES

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE
NINE MONTHS ENDED DECEMBER 31, 2009 AND YEAR ENDED MARCH 31, 2009

NOTE 2. SUMMARY OF PRINCIPAL ACCOUNTING POLICIES
(continued)

Inventories

Inventories are stated at the lower of cost or market value.
Cost is determined on the first-in, first-out basis. Write-down of potentially
obsolete or slow-moving inventory is recorded based on managements analysis of
inventory levels and the Companys assessment of estimated obsolescence based
upon assumptions about future demand and market conditions. Further write-down
of the value may be required in the future if there is rapid technological and
structural change in the industry. This may reduce the results of operations of
the Company. All of the inventory at December 31, 2009 and March 31, 2009
consists of finished goods.

Goodwill

The Company accounts for acquisitions of business in accordance
with Financial Accounting Standards Board (FASB) Accounting Standards
Codification (ASC) 805 Business Combinations, which results in the
recognition of goodwill when the purchase price exceeds the fair value of net
assets acquired. Goodwill is not subject to amortization but will be subject to
at least an annual evaluation for impairment. Goodwill is stated in the
consolidated balance sheet at cost less accumulated impairment loss.

Intangible Assets

The Company acquired certain intangible assets through the
acquisition of subsidiaries. These intangible assets are comprised of
trademarks, customer lists and relationships, unfulfilled purchase orders,
completed technology for the production of Aihua Ultra-High Pressure Mercury
(AHP) lamps and High Intensity Discharge (HID) lamps, a customer base and a
distributor base. The acquired trademarks were determined to have indefinite
useful lives which are not subject to amortization, unless and until the useful
lives are determined to no longer be indefinite. Virtually all of these intangible assets were disposed of as part of the sale of Beijing Aihua New Enterprise Lighting Appliance Co. Limited (Beijing Aihua). (See Note 12).

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

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

Impairment of Long-Lived Assets Other than Goodwill

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

---

- 45 -

LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIES

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE
NINE MONTHS ENDED DECEMBER 31, 2009 AND YEAR ENDED MARCH 31, 2009

NOTE 2. SUMMARY OF PRINCIPAL ACCOUNTING POLICIES
(continued)

Plant and Equipment and Construction in Progress

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

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

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

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

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

Revenue Recognition

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

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

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

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

---

- 46 -

LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIES

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE
NINE MONTHS ENDED DECEMBER 31, 2009 AND YEAR ENDED MARCH 31, 2009

NOTE 2. SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (continued)

Revenue Recognition (continued)

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

Income Taxes

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

Accounting for Uncertainty in Income Taxes

In June 2006, the FASB issued ASC 740 Income Taxes (ASC
740). ASC 740 is intended to clarify the accounting for uncertainty in income
taxes recognized in a companys financial statements and prescribes the
recognition and measurement of a tax position taken or expected to be taken in a
tax return. ASC 740 also provides guidance on de-recognition, classification,
interest and penalties, accounting in interim periods, disclosure and
transition.

ASC 740 prescribes a two-step process for valuation of a tax
position. Step one is to determine whether it is more-likely-than-not that a tax
position will be sustained upon examination, including the resolution of any
related appeals or litigation based on the technical merits of that position.
Step two is to measure a tax position that meets the more-likely-than-not
threshold to determine the amount of benefit to be recognized in the financial
statements. A tax position is measured at the largest amount of benefit that is
greater than 50% likely of being realized upon ultimate settlement.

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

Foreign Currency Translation

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

---

- 47 -

LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIES

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE
NINE MONTHS ENDED DECEMBER 31, 2009 AND YEAR ENDED MARCH 31, 2009

NOTE 2. SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (continued)

Foreign Currency Translation (continued)

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

Segment Information

The Companys segment reporting is prepared in accordance with
ASC 280 Segment Reporting (ASC 280). The management approach required by ASC
280 requires that the internal reporting structure used by management for making
operating decisions and assessing performance be used as the source for
presenting the Groups reportable segments.

Fair Value of Financial Instruments

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

Comprehensive Income

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

Stock-based Payment

The Company adopted ASC 718 Compensation - Stock Compensation
(ASC 718) using the modified prospective method. Under ASC 718, equity
instruments issued to employees for their services are measured at the
grant-date fair value and recognized in the statement of operations over the
service period.

The Company accounts for stock options and stock issued to
non-employees for goods or services in accordance with the fair value method of
ASC 718, which recognizes the value of such services at the fair value of the
equity instrument or of the goods or services, whichever is more readily
determinable.

Basic and Diluted Earnings (Loss) per Share

The Company reports basic earnings per share in accordance with
ASC 260 Earnings Per Share (ASC 260). Basic earnings per share is computed
using the weighted average number of shares outstanding during the periods
presented. The weighted average number of shares of the Company represents the
common stock outstanding during the period. Diluted earnings per share is based
on the assumption that if there is no anti-dilutive effect on the basic earnings
per share, all dilutive convertible instruments, options, warrants and other
common stock equivalents were converted or exercised. Dilution is computed by
applying the treasury stock method. Under this method, common stock equivalents
are assumed to be exercised at the beginning of the year (or at the time of
issuance, if later), and as if funds obtained thereby were used to purchase
common stock at the average market price during the period.

---

- 48 -

LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIES

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE
NINE MONTHS ENDED DECEMBER 31, 2009 AND YEAR ENDED MARCH 31, 2009

NOTE 2. SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (continued)

Fair Value Disclosure

Effective April 1, 2008, the Company adopted ASC 820 Fair
Value Measurements and Disclosures (ASC 820). ASC 820 clarifies the
definition of fair value, prescribes methods for measuring fair value and
establishes a fair value hierarchy to classify the inputs used in measuring fair
value as follows:

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

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

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

The adoption of ASC 820 did not have a material impact on our
fair value measurements as the Company does not have any balance sheet
components deemed financial assets, and we do not have any nonfinancial assets
or liabilities of our continuing operations that have been marked to fair value,
however our financial statements in the future may be impacted by this standard.

Recent Accounting Pronouncements

In January 2010, the FASB issued an Accounting Standard Update
regarding implementation issues connected with accounting for decreases in the
ownership of a subsidiary. The new guidance clarified the scope of the entities
covered by the guidance in relation to accounting for decreases in the ownership
of a subsidiary. It specifically excludes in-substance real estate or
conveyances of oil and gas mineral rights from the scope. In addition, the new
guidance expands the disclosure requirement for a business combination in stages
and deconsolidation of a business or nonprofit activity. The new guidance became
effective for interim and annual periods ending on or after December 15, 2009
and must be applied retrospectively to the first period of which an entity
adopted the new guidance relating to noncontrolling interests. The management
does not expect adoption of this new guidance will have any impact on the
Companys consolidated financial statements.

In January 2010, the FASB amended the existing fair value
measurements and disclosure standard and provided guidance on increased
disclosure on assets and liabilities as transferred between levels of the fair
value hierarchy. The new guidance was effective for interim and annual reporting
periods beginning after December 15, 2009, except for the requirement to
separately disclose purchases, sales, issuances and settlements in the Level 3
roll forward, which becomes effective for fiscal years beginning after December
15, 2010. The management does not expect adoption of this new guidance will have
any impact on the Companys consolidated financial statements.

In December 2009, the FASB issued guidance which clarifies and
improves financial reporting by entities involved with variable interest
entities. The new guidance is effective for interim and annual reporting
beginning after November 15, 2009. The management does not expect adoption of
this new guidance will have a material impact on the Companys consolidated
financial position and results of operations.

In December 2009, the FASB issued standards on accounting for
transfers of financial assets. The new standards clarify the information an
entity must provide in its financial statements regarding transfer of financial
assets and the effect of the transfer on its financial position, financial
performance, and cash flows. The new standards are effective as of the beginning
of the annual period beginning after November 15, 2009. The management does not
expect

---

- 49 -

LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIES

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTSFOR THE
NINE MONTHS ENDED DECEMBER 31, 2009 AND YEAR ENDED MARCH 31, 2009

NOTE 2. SUMMARY OF PRINCIPAL ACCOUNTING POLICIES
(continued)

Recent Accounting Pronouncements (continued)

adoption of this standard will have a material impact on the
Companys consolidated financial position and results of operations.

In June 2009, the FASB issued the FASB Accounting Standards
Codification (ASC or the Codification) as the source of authoritative GAAP
recognized by the FASB for non-governmental entities. The Codification is
effective for financial statements issued for reporting periods that end after
September 15, 2009. The ASC does not supersede the rules or regulations of the
Securities and Exchange Commission (SEC); therefore, the rules and
interpretive releases of the SEC continue to be additional sources of GAAP for
the Company. The Company adopted the ASC as of July 1, 2009. Adoption is
reflected in these financial statements. The ASC does not change GAAP and did
not have an effect on the Companys financial position, results of operations or
cash flows.

In June 2009, the FASB issued new accounting guidance which
amends the consolidation guidance regarding variable interest entities. The
amendments will affect the overall consolidation analysis under the current
accounting guidance. The new accounting guidance is effective for fiscal years
beginning after November 15, 2009. The management does not expect the adoption
of the new accounting guidance to have a material impact on the Companys
financial condition or results of operations.

In October 2009, the FASB issued new accounting guidance that
amends the revenue recognition for multiple-element arrangements and expands the
disclosure requirements in respect of such arrangements. The new guidance amends
the criteria for separating consideration in multiple-deliverable arrangements,
establishes a selling price hierarchy for determining the selling price of a
deliverable, eliminates the residual method of allocation, and requires the
application of relative selling price method in allocating the arrangement
consideration to all deliverables. The new accounting guidance is effective for
fiscal years beginning after June 15, 2010. The management does not expect the
adoption of the new accounting guidance to have a material impact on the
Companys financial condition or results of operations.

In June 2009, the FASB issued new accounting guidance which
limits the circumstances in which a financial asset should be derecognized when
the transferor has not transferred the entire financial asset by taking into
consideration the transferors continuing involvement. The standard requires
that a transferor recognize and initially measure at fair value all assets
obtained (including a transferors beneficial interest) and liabilities incurred
as a result of a transfer of financial assets accounted for as a sale. The
concept of a qualifying special-purpose entity is removed from ASC 860 along
with the exception from applying ASC 810 Consolidation. The standard is
effective for the first annual reporting period that begins after November 15,
2009, for interim periods within the first annual reporting period, and for
interim and annual reporting periods thereafter. Earlier application is
prohibited. The management does not expect the new guidance included in ASC 860
to have a material impact on the Companys consolidated financial
statements.

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

---

- 50 -

LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIES

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE
NINE MONTHS ENDED DECEMBER 31, 2009 AND YEAR ENDED MARCH 31, 2009

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

Costs and estimated earnings in excess of billings on
uncompleted contracts are summarized as follows:

|                                                         |  | December 31, |  |  | March 31, | 
|-------------------------------------------------------- |  | ------------ |  |  | --------- | 
|                                                         |  | 2009         |  |  | 2009      | 
|                                                         |  | $            |  |  | $         | 
|Cumulative costs incurred on uncompleted
      contracts |  | 2,995,213    |  |  | 761,574   | 
|Cumulative estimated earnings to date                    |  | 617,088      |  |  | 377,420   | 
|                                                         |  | 3,612,301    |  |  | 1,138,994 | 
|Less: Billings to date                                   |  | 2,959,531    |  |  | 465,681   | 
|                                                         |  | 652,770      |  |  | 673,313   | 

NOTE 4. BILLINGS IN EXCESS OF COSTS AND ESTIMATED EARNINGS
ON UNCOMPLETED CONTRACTS

Billings in excess of costs and estimated earnings on
uncompleted contracts are summarized as follows:

|                                                         |  | December 31, |  |  | March 31, | 
|-------------------------------------------------------- |  | ------------ |  |  | --------- | 
|                                                         |  | 2009         |  |  | 2009      | 
|                                                         |  | $            |  |  | $         | 
|Billings to date                                         |  | 1,409,716    |  |  | -         | 
|                                                         |  |              |  |  |           | 
|Cumulative costs incurred on uncompleted
      contracts |  | 298,599      |  |  | -         | 
|Cumulative estimated earnings to date                    |  | 114,645      |  |  | -         | 
|                                                         |  | 413,244      |  |  | -         | 
|                                                         |  | 996,472      |  |  | -         | 

NOTE 5. PREPAID EXPENSES AND OTHER CURRENT ASSETS

Prepaid expenses and other current assets consist of the
following:

|                                              |  | December 31, |  |  | March 31, | 
|--------------------------------------------- |  | ------------ |  |  | --------- | 
|                                              |  | 2009         |  |  | 2009      | 
|Presented in current assets:                  |  | $            |  |  | $         | 
|Prepaid expenses                              |  |              |  |  |           | 
|Prepaid expenses - others                     |  | 439,791      |  |  | 293,460   | 
|Trade deposits                                |  | 33,237       |  |  | 51,291    | 
|                                              |  | 473,028      |  |  | 344,751   | 
|Other current assets                          |  |              |  |  |           | 
|Other receivables                             |  | 10,173       |  |  | 293,794   | 
|Contract surety bond
      refundable deposit |  | 44,605       |  |  | 44,605    | 
|                                              |  | 54,779       |  |  | 338,399   | 

---

- 51 -

LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIES

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE
NINE MONTHS ENDED DECEMBER 31, 2009 AND YEAR ENDED MARCH 31, 2009

NOTE 6. INTANGIBLE ASSETS

Intangible assets consist of the following:

|                                 |  | December 31, |   |  | March 31, |  
|-------------------------------- |  | ------------ | - |  | --------- | -
|                                 |  | 2009         |   |  | 2009      |  
|Presented in non-current assets: |  | $            |   |  | $         |  
|Software and license             |  |              |   |  |           |  
|Cost                             |  |              |   |  |           |  
|Balance - opening                |  | 458,005      |   |  | 641,077   |  
|Addition                         |  | 455,987      |   |  | (9,730    | )
|Written off                      |  | -            |   |  | (173,342  | )
|Balance - closing                |  | 913,992      |   |  | 458,005   |  
|Accumulated amortization         |  | (460,464     | ) |  | (375,574  | )
|Software and license, net        |  | 453,528      |   |  | 82,431    |  

Amortization for the nine months ended December 31, 2009 and the year ended March 31, 2009 was $84,890 and $241,585, respectively.

Estimated amortization for the next 5 years is as follows:

|                              |  | $       | 
|----------------------------- |  | ------- | 
|For the year end December 31, |  |         | 
|2011                          |  | 179,473 | 
|2012                          |  | 151,996 | 
|2013                          |  | 122,059 | 
|2014                          |  | -       | 
|2015                          |  | -       | 
|                              |  | 453,528 | 

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

OOH advertising equipment consists of the following:

|                                                          |  | December 31, |   |  | March 31, |  
|--------------------------------------------------------- |  | ------------ | - |  | --------- | -
|                                                          |  | 2009         |   |  | 2009      |  
|                                                          |  | $            |   |  | $         |  
|OOH advertising LED display                               |  | 2,271,234    |   |  | 1,837,741 |  
|OOH advertising visual, audio and related
      equipment |  | -            |   |  | -         |  
|Total                                                     |  | 2,271,234    |   |  | 1,837,741 |  
|Less: Accumulated depreciation                            |  | (141,232     | ) |  | (13,320   | )
|OOH advertising equipment,
      net                      |  | 2,130,002    |   |  | 1,824,421 |  

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

OOH construction in progress consists of the following:

|                                                               |  | December 31, |  |  | March 31, | 
|-------------------------------------------------------------- |  | ------------ |  |  | --------- | 
|                                                               |  | 2009         |  |  | 2009      | 
|                                                               |  | $            |  |  | $         | 
|Cost incurred related to
      construction of OOH advertising |  |              |  |  |           | 
|LED displays in China                                          |  | 351,482      |  |  | 266,250   | 

---

- 52 -

LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIES

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE
NINE MONTHS ENDED DECEMBER 31, 2009 AND YEAR ENDED MARCH 31, 2009

NOTE 9. OBLIGATIONS UNDER CAPITAL LEASES

|                                                                            |  | December 31, |  |  | March 31, | 
|--------------------------------------------------------------------------- |  | ------------ |  |  | --------- | 
|                                                                            |  | 2009         |  |  | 2009      | 
|                                                                            |  | $            |  |  | $         | 
|                                                                            |  |              |  |  |           | 
|Total minimum lease payments,
      exclusive of related interest of $8,968 |  | 56,049       |  |  | -         | 
|Less: Current portion of obligations under
      capital leases             |  | 11,800       |  |  | -         | 
|Long-term portion of
      obligations under capital leases                 |  | 44,249       |  |  | -         | 

The following is a summary of future minimum lease payments
under capital leases as of December 31, 2009:

|Twelve months ending December 31, |  | $      | 
|--------------------------------- |  | ------ | 
|2010                              |  | 11,800 | 
|2011                              |  | 11,800 | 
|2012                              |  | 11,800 | 
|2013                              |  | 11,800 | 
|2014                              |  | 8,849  | 
|                                  |  | 56,049 | 

The Company entered into capital lease arrangements for leasing
a motor vehicle used in its operations. The lease is for a term of five years.
For the nine months ended December 31, 2009, the capital lease arrangement was
on an interest bearing basis. The lease is on a fixed repayment basis and
requires no contingent rental payments. The interest expense incurred on this
capital lease was $472 and $nil for the nine months ended December 31, 2009 and
for the year ended March 31, 2009, respectively.

NOTE 10. OTHER RESERVES

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

Statutory Surplus Reserve

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

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

NOTE 11. INCOME TAX

The Company accounts for income taxes pursuant to Accounting
Standards Codification 740, Income Taxes (ASC 740). Under this accounting
standard, deferred tax assets and liabilities are determined with reference to
temporary differences between the bases of certain assets and liabilities for
income tax and financial reporting purposes. The deferred tax assets and
liabilities are classified according to the financial statement classification
of the assets and liabilities generating the differences, and a valuation
allowance is to be maintained with respect to deferred tax assets.

---

- 53 -

LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIES

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE
NINE MONTHS ENDED DECEMBER 31, 2009 AND YEAR ENDED MARCH 31, 2009

NOTE 11. INCOME TAX (continued)

The Company establishes a valuation allowance based upon the
potential likelihood of realization of the deferred tax asset and taking into
consideration the Companys financial position and results of operations for the
current period. Future realization of the deferred tax benefit depends on the
existence of sufficient taxable income within the carryforward period under the
Federal tax laws local tax laws of its overseas subsidiaries.

Changes in circumstances, such as the Company generating
taxable income, could cause a change in judgment about the realizability of the
related deferred tax asset. Any change in the valuation allowance will be
included in income in the year of the change in estimate.

ASC 740 Income Taxes defines a criterion that an individual
income tax position must meet for any part of the benefit of that position to be
recognized in an enterprises financial statements and provides guidance on
measurement, derecognition, classification, accounting for interest and
penalties, accounting in interim periods, disclosure and transition.

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

Based on all known facts and circumstances and current tax law,
the Company believes that the total amount of unrecognized tax benefits as of
December 31, 2009 is not material to its results of operations, financial
condition or cash flows. The Company also believes that the total amount of
unrecognized tax benefits as of December 31, 2009, if recognized, would not have
a material effect on its effective tax rate. The Company further believes that
there are no tax positions for which it is reasonably possible, based on current
tax law and policy to which we are subject, that the unrecognized tax benefits
will significantly increase or decrease over the next 12 months producing,
individually or in the aggregate, a material effect on the Companys results of
operations, financial position or cash flows.

Since there is a net operating loss, no income tax is provided
for the nine months ended December 31, 2009, while a tax credit was recorded for
the year ended March 31, 2009 upon issuance of a tax assessment confirming no
income tax for the previous year in Lightscape Technologies (Macau) Limited, our
Macau subsidiary.

Income tax expense for the year ended December 31, 2009
represents the provision for income tax of the subsidiaries operating in Hong
Kong, Macau and Mainland PRC which were calculated at the applicable tax
rate.

A reconciliation of the provision for income taxes from
continuing operations determined at the US statutory corporate income tax rate
to the Companys effective income tax rate is as follows:

---

- 54 -

LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIES

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE
NINE MONTHS ENDED DECEMBER 31, 2009 AND YEAR ENDED MARCH 31, 2009

NOTE 11. INCOME TAX (continued)

|                                                                                         |  | Nine Months  |   |  |            |  
|---------------------------------------------------------------------------------------- |  | ------------ | - |  | ---------- | -
|                                                                                         |  | Ended        |   |  | Year Ended |  
|                                                                                         |  | December 31, |   |  | March 31,  |  
|                                                                                         |  | 2009         |   |  | 2009       |  
|                                                                                         |  | $            |   |  | $          |  
|                                                                                         |  |              |   |  |            |  
|(Loss) before income tax                                                                 |  | (2,700,478   | ) |  | (3,247,196 | )
|US statutory corporate income tax rate                                                   |  | 34%          |   |  | 34%        |  
|Income tax (benefit) computed at United
      States statutory corporate income tax rate |  | (918,163     | ) |  | (1,104,047 | )
|Reconciling items:                                                                       |  |              |   |  |            |  
|Rate differential for Hong
      Kong earnings                                           |  | 423,712      |   |  | 314,573    |  
|Rate differential for Macau earnings                                                     |  | 516,049      |   |  | -          |  
|Rate differential for PRC
      earnings                                                 |  | 335          |   |  | 252        |  
|Rate differential for Singapore earnings                                                 |  | -            |   |  | -          |  
|Tax effect of expenses not
      deductible for tax purposes                             |  | 675,303      |   |  | 715,380    |  
|Tax effect of income not taxable for tax
      purposes                                  |  | (1,012,503   | ) |  | (238,900   | )
|Others                                                                                   |  | (20,920      | ) |  | (198,616   | )
|Expiry of net operating loss                                                             |  | 381,919      |   |  | -          |  
|Change in valuation allowance                                                            |  | (45,732      | ) |  | 276,437    |  
|                                                                                         |  |              |   |  |            |  
|Income tax refund (expense)                                                              |  | -            |   |  | (234,921   | )

Deferred income taxes arose from the following:

|                                                                                   |  | December 31, |   |  | March 31,  |  
|---------------------------------------------------------------------------------- |  | ------------ | - |  | ---------- | -
|                                                                                   |  | 2009         |   |  | 2009       |  
|                                                                                   |  | $            |   |  | $          |  
|Deferred tax assets                                                                |  |              |   |  |            |  
|- tax losses                                                                       |  | 2,373,100    |   |  | 2,313,842  |  
|- valuation allowance                                                              |  | (2,013,544   | ) |  | (2,059,276 | )
|                                                                                   |  |              |   |  |            |  
|Net deferred tax assets                                                            |  | 359,556      |   |  | 254,566    |  
|                                                                                   |  |              |   |  |            |  
|Deferred tax liabilities                                                           |  |              |   |  |            |  
|- Tax depreciation allowance in excess of
      book depreciation and amortization |  | (359,556     | ) |  | (254,566   | )
|                                                                                   |  |              |   |  |            |  
|Net deferred tax                                                                   |  | -            |   |  | -          |  

For the operating loss carry forwards of approximately
  $11,685,527 as of December 31, 2009, $211,696, $206,184, $1,048,945, $737,739
  and $444,494 will expire in 2010, 2011, 2012, 2013 and 2014, respectively, and
  the remainder of $9,036,467 will be carried forward indefinitely.

As at December 31, 2009, the Company had accumulated net
  operating loss carryforwards for Hong Kong income tax purposes of approximately
  $8,625,053 that are available to offset future taxable income. Realization of
  the net operating loss carryforwards is dependent upon future profitable
  operations. Accordingly, management has adjusted the valuation allowance during
  the transition period ended December 31, 2009 to reduce the deferred tax asset
  associated with the net operating loss carryforwards to $Nil at December 31,
  2009.



---

- 55 -

LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIES

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE
NINE MONTHS ENDED DECEMBER 31, 2009 AND YEAR ENDED MARCH 31, 2009

Additionally, as of December 31, 2009, the Company had
accumulated net operating loss carryforwards for Chinese tax purposes of
approximately $924. Realization of the Chinese tax net operating loss
carryforwards is dependent on future profitable operations, as well as a maximum
five-year carryforward period. Accordingly, management has adjusted valuation
allowance to reduce the deferred tax associated with the net operating loss
carryforwards to zero at December 31, 2009. These tax losses yield deferred tax
assets of approximately $231 as of December 31, 2009.

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

|                                                       |  | Nine Months  |   |  |            |  
|------------------------------------------------------ |  | ------------ | - |  | ---------- | -
|                                                       |  | Ended        |   |  | Year Ended |  
|                                                       |  | December 31, |   |  | March 31,  |  
|                                                       |  | 2009         |   |  | 2009       |  
|                                                       |  | $            |   |  | $          |  
|Hong Kong                                              |  | (593,328     | ) |  | (1,123,538 | )
|Macau                                                  |  | (411,416     | ) |  | (580,767   | )
|Singapore                                              |  | -            |   |  | 349        |  
|United States                                          |  | (1,086,244   | ) |  | (1,910,208 | )
|Mainland, the PRC                                      |  | (3,728       | ) |  | (2,804     | )
|Tax exempt countries, including BVI and Cayman Islands |  | (605,762     | ) |  | 369,772    |  
|                                                       |  | (2,700,478   | ) |  | (3,247,196 | )

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

- Tech Team Holdings Limited (TTHL) is a tax-exempted company incorporated
  in the Cayman Islands.
- Under the current BVI law, Tech Team (China) Limiteds, Tech Team
  Investment Limiteds and Powerland Technology Limiteds income are not subject
  to taxation.
- Lightscape Technologies Inc. and Tomi Fuji Energy Pte. Limited also had no
  assessable profits earned or had tax losses brought forward to offset current
  period assessable profit during the periods presented.
- No provision for PRC income tax has been made as Tech Team Development
  (Zhuhai) Limited (TT (Zhuhai)) had no assessable profits earned during the
  nine months and the year ended December 31, 2009 and March 31, 2009
  respectively. Preferential tax treatment has been agreed with the relevant tax
  authorities and TT(Zhuhai) is exempted from PRC income tax in the first two
  profitable years and is subject to half of the standard statutory tax rate of
  15% in the subsequent three years. However, as TT (Zhuhai) derived no taxable
  profits since its commencement of operations, this preferential tax treatment
  has expired and it is required to pay a tax rate of 25% from January 1, 2008
  onward.
- Beijing Illumination is a Hong Kong company which is subject to a tax on
  profits of 16.5% from April 1, 2008 onward.
- Lightscape Macau is a company incorporated in Macau Special Administrative
  Region, which is subject to progressive tax rates to a maximum rate of 12%.
- Other companies are dormant and had no assessable profits earned during the
  periods presented.

---

- 56 -

LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIES

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE
NINE MONTHS ENDED DECEMBER 31, 2009 AND YEAR ENDED MARCH 31, 2009

NOTE 11. INCOME TAX (continued)

Income tax expense (credit) for the nine months and the year
ended December 31, 2009 and March 31, 2009 respectively, represents the
provision for income tax in the following jurisdictions:

|               |  | Nine     |  |  |          |  
|-------------- |  | -------- |  |  | -------- | -
|               |  | Months   |  |  | Year     |  
|               |  | Ended    |  |  | Ended    |  
|               |  | December |  |  | March    |  
|               |  | 31,      |  |  | 31,      |  
|               |  | 2009     |  |  | 2008     |  
|               |  | $        |  |  | $        |  
|Current taxes: |  |          |  |  |          |  
|Hong Kong      |  | -        |  |  | (27,944  | )
|Macau          |  | -        |  |  | (206,977 | )
|               |  | -        |  |  | (234,921 | )

NOTE 12. DISCONTINUED OPERATIONS

The Company accounts for its discontinued operations under the
provisions of ASC 205-20 Presentation of Financial Statements  Discontinued
Operations (ASC 205-20). Accordingly, the results of operations and the
related charges for discontinued operations in respect of Beijing Aihua New
Enterprise Lighting Appliance Co. Ltd. as included previously in other segment,
and discontinued component in respect of Golden Cypress Limited as previously
included in LED solutions segment, have been classified as Net profit from
discontinued operations, net of income taxes on the accompanying Consolidated
Statements of Operations and Comprehensive Loss. Assets and liabilities of the
discontinued operations have been reclassified and reflected on the accompanying
Consolidated Balance Sheets as Current assets of discontinued operations and
Current liabilities of discontinued operations. For comparative purposes, all
prior periods presented have been reclassified to reflect the reclassifications
on a consistent basis.

---

- 57 -

LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIES

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE
NINE MONTHS ENDED DECEMBER 31, 2009 AND YEAR ENDED MARCH 31, 2009

NOTE 12. DISCONTINUED OPERATIONS (continued)

(a) Golden Cypress Limited

In order to more effectively utilize the financial and other
resources, and to focus our business on the digital out-of-home advertising
business, on August 31, 2009, the Company disposed of 100% of the outstanding
capital stock of Golden Cypress Limited (Golden Cypress) to a third party
investor (the Purchaser), at a consideration of $1,120,000. Golden Cypress is
a company incorporated in the British Virgin Islands, which operates an LED
solutions business in Asia, the segment in which we reported its operations
before the sale (See Note 16).

The purchase price is due to be paid in cash by the Purchaser
within 12 months on or before August 31, 2010.

Gain on disposal of Golden Cypress is determined as follows:

|                                                         |  | $         |  
|-------------------------------------------------------- |  | --------- | -
|                                                         |  |           |  
|Cash and cash equivalents                                |  | 1,047     |  
|Accounts receivable                                      |  | 448,952   |  
|Prepaid expenses and other current assets                |  | 824,795   |  
|Plant and equipment, net                                 |  | 64,864    |  
|Out-of-home advertising equipment, net                   |  | 394,415   |  
|Short-term bank borrowings                               |  | (56,993   | )
|Long-term bank borrowings                                |  | (46,818   | )
|Secured loan  current portion                           |  | (138,658  | )
|Secured loan  non-current portion                       |  | (138,658  | )
|Obligations under capital leases  current portion       |  | (3,037    | )
|Obligations under capital leases  current
      portion |  | (5,117    | )
|Trade payables                                           |  | (138,264  | )
|Accrued expenses and other current
      liabilities     |  | (131,676  | )
|Income tax payable                                       |  | (9,024    | )
|Net assets                                               |  | 1,065,828 |  
|Total consideration                                      |  | 1,120,000 |  
|                                                         |  |           |  
|Gain on disposal of a subsidiary                         |  | 54,172    |  

Results of operation of Golden Cypress for the nine months
ended December 31, 2009 have been included as discontinued operations in the
Consolidated Statements of Operations and Comprehensive Loss of the Company.

(b) Lighting Source Products Business

In September 2009, the Companys board of directors authorized
management to begin the process to sell all the rights and assets of the
lighting source products business, namely the operational subsidiary Beijing
Aihua. Beijing
Aihua researches, develops, manufactures and sells high-intensity discharge
lighting products including metal halide lamps and high-pressure sodium lamps.
The Companys decision to discontinue operations in the lighting source products
business was intended to more effectively utilize the Companys financial and
human resources by focusing on the digital out-of-home advertising and LED
solutions businesses which management considers to have more promising potential
for revenue and margin growth. Pursuant to a sales and purchase agreement (the
S&P Agreement) dated November 20, 2009, with an effective date of November
30, 2009, between Beijing Illumination (Hong Kong) Limited (Beijing
Illumination) and Zhejiang Zhong Jun Investment Management Co. Ltd. (Zhejiang
Zhong Jun), the Company, through its subsidiary Beijing Illumination, agreed to
sell to Zhejiang Zhong Jun its 100% equity interest in Beijing Aihua at a
consideration of $1,140,751 (or RMB7,800,000). Of the total consideration of
$1,140,751, $219,375 (or RMB1,500,000) was received in cash on November 20,
2009. The remaining RMB6,300,000 (approximately US$921,861) was paid by Zhejiang Zhong Jun to Beijing Illumination in full by Zhejiang Zhong Jun to Beijing Illumination in cash in March 2010.  The Sale and Purchase Agreement closed on April 12, 2010.

We previously reported Beijing Aihuas operations as part of the Other segment (See Note 16).

---

- 58 -

LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIES

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE
NINE MONTHS ENDED DECEMBER 31, 2009 AND YEAR ENDED MARCH 31, 2009

NOTE 12. DISCONTINUED OPERATIONS (continued)

Loss on disposal of Beijing Aihua is determined as follows:

|                                       |  | $          |  
|-------------------------------------- |  | ---------- | -
|Net tangible assets:                   |  |            |  
|Cash and cash equivalent               |  | 44,674     |  
|Trade receivables                      |  | 321,518    |  
|Prepaid expenses                       |  | 67,542     |  
|Other receivables  current portion    |  | 541,079    |  
|Inventory                              |  | 2,283,079  |  
|Plant and equipment, net               |  | 2,000,550  |  
|Other receivable  non-current portion |  | 512,558    |  
|Trade payables                         |  | (324,406   | )
|Deposits received                      |  | (6,018     | )
|Accrued expenses                       |  | (27,934    | )
|Other payable                          |  | (329,053   | )
|                                       |  | 5,083,589  |  
|Intangible assets:                     |  |            |  
|Other intangible asset                 |  | 675,858    |  
|Net asset value                        |  | 5,759,447  |  
|Consideration                          |  | (1,134,777 | )
|Exchange gain realized on disposal     |  | (839,128   | )
|Disposal expenses                      |  | 227,412    |  
|Loss on disposal of Beijing Aihua      |  | 4,012,954  |  
|Goodwill impairment                    |  | 3,700,197  |  
|                                       |  | 7,713,151  |  

Upon impairment of goodwill, the balance of goodwill as of
December 31, 2009 is as follows:

|                                     |  | $          |  
|------------------------------------ |  | ---------- | -
|                                     |  |            |  
|Goodwill before impairment           |  | 4,476,574  |  
|Impairment relating to Beijing Aihua |  | (3,700,196 | )
|                                     |  | 776,378    |  

---

- 59 -

LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIES

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE
NINE MONTHS ENDED DECEMBER 31, 2009 AND YEAR ENDED MARCH 31, 2009

NOTE 12. DISCONTINUED OPERATIONS (continued)

(c) Results of Discontinued Operations

Revenues and net profit (loss) from discontinued operations of
the Golden Cypress and energy savings business, as included in others, and
lighting source product business of Beijing Aihua are as follows:

|                                               |  | Nine Months  |   |  | Nine Months  |   |  | Year       |  
|---------------------------------------------- |  | ------------ | - |  | ------------ | - |  | ---------- | -
|                                               |  | Ended        |   |  | Ended        |   |  | Ended      |  
|                                               |  | December 31, |   |  | December 31, |   |  | March 31,  |  
|                                               |  | 2009         |   |  | 2008         |   |  | 2009       |  
|                                               |  |              |   |  | (Unaudited)  |   |  |            |  
|                                               |  | $            |   |  | $            |   |  | $          |  
|Operating revenue - Beijing Aihua              |  | 1,162,871    |   |  | 1,508,532    |   |  | 1,545,251  |  
|Operating revenue - others                     |  | 151,012      |   |  | 617,702      |   |  | 1,118,450  |  
|                                               |  | 1,313,883    |   |  | 2,126,234    |   |  | 2,663,701  |  
|                                               |  |              |   |  |              |   |  |            |  
|Pre-tax profit (loss) from discontinued        |  |              |   |  |              |   |  |            |  
|operations:                                    |  |              |   |  |              |   |  |            |  
|Beijing Aihua                                  |  | (1,066,276   | ) |  | (799,315     | ) |  | (1,811,597 | )
|Others                                         |  | 25,553       |   |  | (128,486     | ) |  | (120,632   | )
|                                               |  | (1,040,723   | ) |  | (927,801     | ) |  | (1,932,229 | )
|                                               |  |              |   |  |              |   |  |            |  
|Income tax credit                              |  | -            |   |  | 46,533       |   |  | 46,438     |  
|Net profit (loss) from discontinued operations |  | (1,040,723   | ) |  | (881,268     | ) |  | (1,885,791 | )

(d) Relevant current assets and current liabilities in
respect of discontinued operations are as follows:

|                                                                                                                                                 |  | December 31, |  |  | March 31,  | 
|------------------------------------------------------------------------------------------------------------------------------------------------ |  | ------------ |  |  | ---------- | 
|                                                                                                                                                 |  | 2009         |  |  | 2009       | 
|                                                                                                                                                 |  | $            |  |  | $          | 
|Current assets of discontinued
      operations:                                                                                                 |  |              |  |  |            | 
|Cash and cash equivalents                                                                                                                        |  | -            |  |  | 47,470     | 
|Accounts
      receivable, net of allowance for doubtful accounts of 
             $nil  on December 31, 2009 and
    $872,460 on March 31, 2009 |  | -            |  |  | 1,068,622  | 
|Prepaid expenses
      and other current assets                                                                                                  |  | 9,186        |  |  | 1,182,346  | 
|Inventories  others , including
      valuation allowance of $nil on                                                                            |  |              |  |  |            | 
|December 31,
      2009 and $162,782 on March 31, 2009                                                                                           |  | -            |  |  | 2,276,992  | 
|Net investment in sales-type
    leases of discontinued operations  current portion                                                             |  | 116,107      |  |  | 115,310    | 
|Intangible assets, net                                                                                                                           |  | -            |  |  | 886,851    | 
|Goodwill                                                                                                                                         |  | -            |  |  | 3,700,197  | 
|Plant and equipment, net                                                                                                                         |  | 355          |  |  | 2,256,934  | 
|Out-of-home
      advertising equipment, net                                                                                                     |  | -            |  |  | 389,387    | 
|Prepaid expenses and other
      current assets  due after one year                                                                             |  | -            |  |  | 511,277    | 
|                                                                                                                                                 |  | 125,648      |  |  | 12,435,386 | 

---

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LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIES

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE
NINE MONTHS ENDED DECEMBER 31, 2009 AND YEAR ENDED MARCH 31, 2009

NOTE 12. DISCONTINUED OPERATIONS (continued)

|                                                             |  | December 31, |  |  | March 31, | 
|------------------------------------------------------------ |  | ------------ |  |  | --------- | 
|                                                             |  | 2009         |  |  | 2009      | 
|                                                             |  | $            |  |  | $         | 
|Current liabilities of discontinued
      operations:        |  |              |  |  |           | 
|Short-term bank borrowings                                   |  | -            |  |  | 55,266    | 
|Long-term bank
      borrowings                              |  | -            |  |  | 62,158    | 
|Trade payables                                               |  | 7,824        |  |  | 338,821   | 
|Accrued expenses
      and other current liabilities         |  | 118,178      |  |  | 614,603   | 
|Obligations under capital leases
       current portion     |  | -            |  |  | 2,904     | 
|Obligations
      under capital leases  non-current portion |  | -            |  |  | 5,313     | 
|Income tax payable                                           |  | 74,955       |  |  | 91,443    | 
|                                                             |  | 200,957      |  |  | 1,170,508 | 

NOTE 13. CONCENTRATION OF CREDIT RISK

As of December 31, 2009 and March 31, 2009, the Company has a
credit risk exposure of uninsured cash in banks of $5,018 and $52,133 (including
cash of discontinued operations of $473 and $37,157 respectively), respectively.
The Company does not require collateral or other securities to support financial
instruments that are subject to credit risk.

Subsequent to the measures taken by the Hong Kong Monetary
Authority on October 14, 2008 to use the Exchange Fund to guarantee the
repayment of all customer deposits held in Authorised Financial Institutions in
Hong Kong, following the principles of the existing Deposit Protection Scheme,
assurance is made to depositors that their money is fully protected. Hence, as
of December 31, 2009 cash of $204,490 (including cash of discontinued operations
of $Nil) out of a total of $209,508 (including cash of discontinued operations
of $Nil) of the Companys cash held with banks in Hong Kong is now subject to no
credit risk.

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

For the nine months ended December 31, 2009, three customers accounted for approximately 26.5% and 16.3% (of which these two customers are subsidiaries of the same group of companies) and 16.0%, respectively, of the Company’s total revenues.  As of December 31, 2009, there are three customers whose account receivables to the Company accounted for 50.0%, 28.0% and 13.2%, respectively, of total accounts receivable of which the first customer of 50.0% and the third customer of 13.2% are subsidiaries of the same group of companies.

The Company relies on supplies from numerous vendors. For the
nine months ended December 31, 2009, three vendors accounted for approximately
31.2%, 15.7% and 10.2%,respectively, of total supply purchases.

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

NOTE 14. COMMITMENTS

Leases

The Company has operating lease agreements principally for its
office facilities and factory buildings. Such leases have remaining terms of
approximately 1 to 1.75 years. The following is a summary of future minimum
lease payments under operating leases as of December 31, 2009. Rental expense
was $482,338 and $162,295 for the nine months ended December 31, 2009 and 2008,
respectively, and $252,475 for the year ended March 31, 2009.

---

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LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIES

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE
NINE MONTHS ENDED DECEMBER 31, 2009 AND YEAR ENDED MARCH 31, 2009

NOTE 14. COMMITMENTS (continued)

Twelve months ending December 31,

|           |  | $       | 
|---------- |  | ------- | 
|2010       |  | 256,303 | 
|2011       |  | 161,400 | 
|Thereafter |  | -       | 
|           |  | 417,703 | 

Capital Expenditures

On October 1, 2009, the Company signed an outdoor digital billboard cooperation agreement with Beijing Chongwen  New World Properties Development Co. Ltd., a New World subsidiary.  Under the 10-year agreement, the Company agreed to build two large-scale outdoor LED displays at the Beijing New World Centre mixed-use complex, with screen areas of 150 square meters and 50 square meters, respectively.  The Company will source, design, install and service the two LED displays, and secure advertising contracts for advertising and media content to be displayed on the screens.  The first LED display began operating and generating advertising revenue on February 10, 2010, while the second LED display is expected to be completed and become operational by June 2010.  The Company plans to install additional large-sized LED displays in the second half of 2010, including but not limited to New World Department Store China Ltd. department stores in Wuhan and Changsha, China.  The Company estimates the total capital expenditure involved for these LED screens to be approximately $1,092,545, either in cash or through utilization of LED inventory of the Company.

NOTE 15. RELATED PARTY BALANCES AND TRANSACTIONS

Related Party Transactions

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

Related Party Balances

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

|                          |  | December 31, |  |  | March 31, | 
|------------------------- |  | ------------ |  |  | --------- | 
|                          |  | 2009         |  |  | 2009      | 
|                          |  | $            |  |  | $         | 
|Amount due to a director: |  |              |  |  |           | 
|Mr. Bondy Tan             |  | 497,569      |  |  | 745,503   | 

NOTE 16. SEGMENT INFORMATION

The Company is engaged in continuing operations within two main
business segments: (i) digital out-of-home advertising and (ii) LED solutions.
These represent the Companys reportable segments.

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

|                                          |  | Nine Months  |  |  | Nine Months  |  |  | Year      | 
|----------------------------------------- |  | ------------ |  |  | ------------ |  |  | --------- | 
|                                          |  | Ended        |  |  | Ended        |  |  | Ended     | 
|                                          |  | December 31, |  |  | December 31, |  |  | March 31, | 
|                                          |  | 2009         |  |  | 2008         |  |  | 2009      | 
|                                          |  |              |  |  | (Unaudited)  |  |  |           | 
|                                          |  | $            |  |  | $            |  |  | $         | 
|Segment revenues from external customers: |  |              |  |  |              |  |  |           | 
|Advertising                               |  | 707,776      |  |  | -            |  |  | -         | 
|LED solutions                             |  | 2,818,156    |  |  | 2,195,607    |  |  | 2,932,772 | 
|Other                                     |  | 83,956       |  |  | 26,028       |  |  | 28,619    | 
|                                          |  | 3,609,888    |  |  | 2,221,635    |  |  | 2,961,391 | 

---

- 62 -

LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIES

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE
NINE MONTHS ENDED DECEMBER 31, 2009 AND YEAR ENDED MARCH 31, 2009

NOTE 16. SEGMENT INFORMATION (continued)

|                                                                                      |  | Nine Months  |   |  | Nine Months  |   |  | Year       |  
|------------------------------------------------------------------------------------- |  | ------------ | - |  | ------------ | - |  | ---------- | -
|                                                                                      |  | Ended        |   |  | Ended        |   |  | Ended      |  
|                                                                                      |  | December 31, |   |  | December 31, |   |  | March 31,  |  
|                                                                                      |  | 2009         |   |  | 2008         |   |  | 2009       |  
|                                                                                      |  |              |   |  | (Unaudited)  |   |  |            |  
|                                                                                      |  | $            |   |  | $            |   |  | $          |  
|Operating profit (losses):                                                            |  |              |   |  |              |   |  |            |  
|Advertising                                                                           |  | 191,717      |   |  | -            |   |  | (13,577    | )
|LED solutions                                                                         |  | (2,724,414   | ) |  | (1,936,490   | ) |  | (3,311,883 | )
|Other                                                                                 |  | (159,525     | ) |  | (25,461      | ) |  | 28,619     |  
|Loss from continuing
      operations before income   tax and noncontrolling interest |  | (2,692,222   | ) |  | (1,961,951   | ) |  | (3,296,841 | )

|                                        |  | December 31, |  |  | March 31,  | 
|--------------------------------------- |  | ------------ |  |  | ---------- | 
|                                        |  | 2009         |  |  | 2009       | 
|                                        |  | $            |  |  | $          | 
|Segment assets:                         |  |              |  |  |            | 
|Advertising                             |  | 3,274,945    |  |  | 3,856,166  | 
|LED solutions (i)                       |  | 6,322,970    |  |  | 4,229,653  | 
|                                        |  | 9,597,915    |  |  | 8,085,819  | 
|Assets of discontinued
      operations |  | 125,648      |  |  | 12,471,743 | 
|                                        |  | 9,723,563    |  |  | 20,557,562 | 

(i) including goodwill of $776,378 as of December 31, 2009 and March 31, 2009 included in the LED solutions segment.

|                      |  | For Nine Months Ended December 31, 2009 |  |  | For Nine Months Ended December 31, 2008 (Unaudited) |  |  | For the Year  Ended March 31, 2009 | 
|--------------------- |  | --------------------------------------- |  |  | --------------------------------------------------- |  |  | ---------------------------------- | 
|                      |  | $                                       |  |  | $                                                   |  |  | $                                  | 
|Capital expenditures: |  |                                         |  |  |                                                     |  |  |                                    | 
|Advertising           |  | 902,054                                 |  |  | -                                                   |  |  | 1,168,290                          | 
|LED solutions         |  | 50,244                                  |  |  | 148,817                                             |  |  | 649,597                            | 
|Other                 |  | -                                       |  |  | -                                                   |  |  | -                                  | 
|                      |  | 952,298                                 |  |  | 148,817                                             |  |  | 1,817,887                          | 

Geographical Information:

|                  |  | Nine Months  |  |  | Nine Months  |  |  | Year      | 
|----------------- |  | ------------ |  |  | ------------ |  |  | --------- | 
|                  |  | Ended        |  |  | Ended        |  |  | Ended     | 
|                  |  | December 31, |  |  | December 31, |  |  | March 31, | 
|                  |  | 2009         |  |  | 2008         |  |  | 2009      | 
|                  |  |              |  |  | (Unaudited)  |  |  |           | 
|                  |  | $            |  |  | $            |  |  | $         | 
|Total sales:      |  |              |  |  |              |  |  |           | 
|Mainland, the PRC |  | 522,412      |  |  | 159,812      |  |  | 260,187   | 
|Hong Kong         |  | 3,087,476    |  |  | 1,181,480    |  |  | 2,027,221 | 
|Macau             |  | -            |  |  | 674,956      |  |  | 631,299   | 
|Singapore         |  | -            |  |  | 45,575       |  |  | 42,684    | 
|                  |  | 3,609,888    |  |  | 2,221,635    |  |  | 2,961,391 | 

---

- 63 -

LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIES

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE
NINE MONTHS ENDED DECEMBER 31, 2009 AND YEAR ENDED MARCH 31, 2009

NOTE 16. SEGMENT INFORMATION (continued)

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

|                  |  | December 31, |  |  | March 31, | 
|----------------- |  | ------------ |  |  | --------- | 
|                  |  | 2009         |  |  | 2009      | 
|                  |  | $            |  |  | $         | 
|Hong Kong         |  | 1,760,210    |  |  | 1,168,672 | 
|Mainland, the PRC |  | 2,221,657    |  |  | 2,171,678 | 
|                  |  | 3,981,867    |  |  | 3,340,350 | 

Four customers accounted for 33%, 20.2%, 19.9% and 11.7% of
operating revenue of the LED solutions segment for the nine months ended
December 31, 2009, respectively, and one customer accounted for 38.8% of
operating revenue of the LED solutions segment for the year ended March 31,
2009.

NOTE 17. SECURED LOAN

On July 13, 2009, the Company obtained a secured loan of
$257,069 from a third party financial institution. The loan has a maturity of
four months and was to be repaid on November 12, 2009, which was subsequently
extended to May 12, 2010, at an interest rate of 3% per month. It is secured by
a joint and several guarantee from two directors of subsidiaries of the Company.
Upon agreement of both parties, principal will be repaid in four equal monthly
instalments.

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

|Twelve months ending December 31, |  | $       | 
|--------------------------------- |  | ------- | 
|2010                              |  | 192,802 | 

The liability in respect of the secured loan, as borrowed by
  the Company on May 13, 2009 under a working capital facility of $271,428 from
  a third party financial institution has been assumed by the third party purchaser
  upon disposal of a subsidiary as mentioned in Note 12.

NOTE 18. SHORT-TERM BANK BORROWINGS

Short-term bank borrowings relate to an instalment loan of $771,208 (or HKD6,000,000) from DBS Bank (Hong Kong) Limited (DBS Bank) under the Special Loan Guarantee Scheme of The Government of the Hong Kong Special Administrative Region (HKSAR Government). The loan is repayable over 12 equal monthly instalments, at an interest rate of 2% per annum over the prime lending rate, which is currently 5%, from May 12, 2009 to April 12, 2010. The instalment loan is secured by a Special Loan Guarantee issued by the HKSAR Government for an amount equal to 70% of the loan, a Guarantee and Indemnity for an unlimited amount duly executed by a director of the Company and a director of a subsidiary, and a Guarantee and Indemnity for an unlimited amount duly executed by a subsidiary. As of April 19, 2010, the instalment loan has been fully repaid to DBS Bank on the respective monthly due dates.

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

|Twelve months ending December 31, |  | $       | 
|--------------------------------- |  | ------- | 
|2010                              |  | 263,313 | 

---

- 64 -

LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIES

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE
NINE MONTHS ENDED DECEMBER 31, 2009 AND YEAR ENDED MARCH 31, 2009

NOTE 19.  WARRANTS

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

The warrants have been accounted for as common stock warrants
at fair value in the amount of $344,673, which forms part of shareholders
equity, with the corresponding charge debited directly to additional paid-in
capital, for the year ended March 31, 2008. The valuation of the warrants was
performed by management in accordance with Generally Accepted Valuation
Methodologies, including but not limited to, the discounted cash flow method,
the Black-Scholes-Merton option pricing model, and the Binomial option model, as
required by SFAS No. 123 (revised 2004) Share-Based Payment issued by the
FASB, now codified as ASC 718.

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

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

NOTE 20. RETIREMENT PLAN

The Company operates a Mandatory Provident Fund (MPF) plan
for its Hong Kong employees. The pension expenses charged to the consolidated
statement of operations and comprehensive loss amounted to $29,821 and $44,365
for the nine months ended December 31, 2009 and for the year ended March 31,
2009 respectively.

NOTE 21. POST BALANCE SHEET EVENT

In late March 2010, the Company, through its wholly-owned
subsidiary Lightscape Technologies (Greater China) Limited (LTGC), secured an
Account Payable Financing (AP Financing) loan facility, which also applies to
Letter of Credit and Trust Receipt, with a maximum limit of $642,674 (or
HKD5,000,000) from DBS Bank (Hong Kong) Limited (DBS Bank) under the Special
Loan Guarantee Scheme of the HKSAR Government. The AP Financing loan is operated
on a revolving basis, with the AP Financing loan granted at 100% of invoiced
value against original invoice, for a maximum maturity of 90 days, less
suppliers credit period, if any. Interest charged against the related bill
payable will be at a standard bills rate quoted by DBS from time to time. The AP
Financing loan is secured by a Special Loan Guarantee issued by the HKSAR
Government for an amount equal to 80% of the loan, a Guarantee and Indemnity for
an unlimited amount duly executed by a director of the Company and a director of
LTGC, and a Guarantee and Indemnity for an unlimited amount duly executed by
Tech Team Investment Limited, the immediate holding company of LTGC.

---

- 65 -

|ITEM 9. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
      ACCOUNTING AND FINANCIAL DISCLOSURE.
|------- | -------------------------------------------------------------------------------------------

On
July 25, 2008, we dismissed Yu and Associates CPA Corporation as our principal
independent accountant, and on July 25, 2008, we engaged MSPC Certified Public
Accountants and Advisors, A Professional Corporation as our principal
independent accountant, as reported on our current report on Form 8-K filed on
July 31, 2008. Other than as described below, there has been no change in the
accountants and no disagreements with MSPC Certified Public Accountants and
Advisors, A Professional Corporation on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope procedure.

ITEM 9A(T).   CONTROLS AND PROCEDURES.

Disclosure Controls and Procedures

As
required by Rule 13a-15 under the Securities Exchange Act of 1934, as of the end
of the period covered by this transition report on Form 10-K, being December 31,
2009, we carried out an evaluation of the effectiveness of the design and
operation of our companys disclosure controls and procedures. This evaluation
was carried out under the supervision and with the participation of our
companys management, including our companys Chief Executive Officer. Based
upon that evaluation, our companys Chief Executive Officer concluded that our
companys disclosure controls and procedures were effective as of December 31,
2009. There has been no change in our internal controls over financial reporting
that occurred during our last fiscal quarter ended December 31, 2009 that has
materially affected, or is reasonably likely to materially affect our internal
controls over financial reporting.

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

Managements Annual Report on Internal Control over
Financial Reporting

Management
is responsible for establishing and maintaining adequate control over financial
reporting. In order to evaluate the effectiveness of internal control over
financial reporting as required by Section 404 of the Sarbanes-Oxley Act,
management conducted an evaluation of the effectiveness of our internal control
over financial reporting based on the framework in Internal Control 
Integrated Framework issued by the Committee of Sponsoring Organizations of
the Treadway Commission. Based on this evaluation, management concluded that our
companys internal control over financial reporting was effective as of December
31, 2009.

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

This
transition report on Form 10-K does not include an attestation report of our
companys registered public accounting firm regarding internal control over
financial reporting. Managements report was not subject to attestation by our
companys registered public accounting firm pursuant to temporary rules of the
Securities and Exchange Commission applicable to smaller reporting companies
that permit our company to provide only managements report in this transition
report.

**ITEM
9B.**     **OTHER INFORMATION**

None.

---

- 66 -

PART III

**ITEM 10.**     **DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.**

Directors and Executive Officers

All
directors of our company hold office until the next annual meeting of the
stockholders or until their successors have been elected and qualified. The
officers of our company are appointed by our board of directors and hold office
until their death, resignation or removal from office. Our directors and
executive officers, their ages, positions held, and duration as such, are as
follows:

|Name                      | Position Held with the Company                                | Age | Date First Elected or Appointed                                             
|------------------------- | ------------------------------------------------------------- | --- | ----------------------------------------------------------------------------
|Bondy Tan                 | Director, President, Treasurer,
      Chief Executive Officer | 43  | January 13, 2005                                                            
|Charles Cheung            | Director                                                      | 74  | January 13, 2005                                                            
|Aaron Ratner              | Director, Chief Strategic Officer                             | 35  | February 3, 2010 (Director) December 1,
      2008 (Chief Strategic Officer)
|Edmand Yuk Man Wong(1)    | Director                                                      | 53  | June 5, 2006                                                                
|Kwok Tin Tang(1)          | Director                                                      | 59  | June 5, 2006                                                                
|Alfred Lee Ming Sung(1)   | Director                                                      | 52  | May 15, 2009                                                                
|Francis Man Chung Wong(2) | Former Director                                               | 45  | August 1, 2007                                                              

|(1) | Members of the audit committee, nominating and corporate
      governance committee, and compensation committee.
|--- | ----------------------------------------------------------------------------------------------------------------
|    |                                                                                                                 
|(2) | Francis Man Chung Wong resigned as a director of our
      company on May 15, 2009.                             

Business Experience

The
following is a brief account of the education and business experience of each
director and executive officer during at least the past five years, indicating
each persons principal occupation during the period, and the name and principal
business of the organization by which he or she was employed.

Bondy Tan

Bondy
Tan is a director and the President, Treasurer and Chief Executive Officer of
our company and is the President and Chief Executive Officer of our wholly-owned
subsidiaries Tech Team Holdings Limited and Tech Team Development Limited. From
October 1999 to present, Mr. Tan has led the development and management of our
company and its predecessor operating companies. Mr. Tan is responsible for the
overall management and strategic planning for our company and its subsidiaries.
Mr. Tans experience includes an additional 10 years of marketing management and
business development roles in China and Hong Kong. His former positions include
Marketing and Sales Coordinator for Sony (Hong Kong), where he was responsible
for advertising, promotion and sales activities for Sony in China and Hong Kong.
Mr. Tan also held several roles with Caltex, a wholly-owned subsidiary of
Chevron Corporation, in China and Hong Kong. In these positions, Mr. Tan rebuilt
Caltexs corporate image, developed brand awareness in China, led the formation
of two joint venture projects and managed the operation of 51 service stations
in Hong Kong. Mr. Tan holds a Bachelor of Commerce, with a major in company law,
from Murdoch University in Australia, and a Bachelor of Business, with a major
in marketing, from Edith Cowan University in Australia.

---

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Mr.
Tans experience as the founder, operational leader and key strategic planner of
our company and its predecessor operating companies for the past 11 years led
the board to conclude, as of the time of this transition report, that he should
continue to serve as a director of our company.

Charles Cheung

Dr.
Charles Cheung Wai Bun (J.P.) is acting chairman and a director of our company.
He has over 30 years of senior management experience in various industries
including over 22 years within the banking industry. Dr. Cheung is Chairman of
Joy Harvest International Limited, and he is also Vice-Chairman and Director of
First Metro International Investment Company Limited Hong Kong. He is a Senior
Adviser to the Metropolitan Bank & Trust Company, one of the leading
commercial banking groups in the Philippines. He is an independent Non-Executive
Director and Chairman of Audit Committee of Shanghai Electric Group Limited, one
of the largest PRC state corporations, as well as Pioneer Global Group Limited
and Sunshine Capital Investments Group Limited (formerly named Prime Investments
Holdings Limited), which are all listed on the main board of the Hong Kong Stock
Exchange. Dr. Cheung is also an Independent Non-executive director and Chairman
of the Remuneration Committee of Grand T.G. Gold Holdings Limited, which is
listed on the Hong Kong GEM Board. Dr. Cheung is also a Council Member of the
Hong Kong Institute of Directors. He was formerly an Independent Non-Executive
Director and Chairman of the Audit Committee of Galaxy Entertainment Group
Limited and K. Wah International Holdings Limited, which are both listed on the
main board of the Hong Kong Stock Exchange. Dr. Cheung was formerly Group Chief
Executive and Executive Deputy Chairman of Mission Hills Group which is engaged
in luxury property development, golf resort and hotel management in mainland
China. He was a former director and advisor to the Tung Wah Group of Hospitals,
the largest charitable organization in Hong Kong, and he has served a number of
committees of the Hong Kong Government. Dr. Cheung was also an independent
director and Chairman of the Audit Committee of China Water & Drinks Inc., a
U.S. public company, from August 1, 2007 until October 1, 2008 when the company
was acquired by Heckmann Corp. He holds an Honorary Doctoral degree in Business
Administration from John Dewey University, a Master degree in Business
Administration and a Bachelor of Science degree from New York University. Dr.
Cheung was awarded the Hong Kong Director of the Year Award of Listed Company
Non-Executive Directors in 2002.

Dr. Cheungs extensive
directorship and advisory experience, including for public companies, and his
vast business experience led the board to conclude, as of the time of this
transition report, that he should continue to serve as a director of our
company.

***Aaron Ratner***

Aaron
Ratner has served as Chief Strategic Officer of our company since December 1,
2008 and as a director since February 3, 2010. In the role of Chief Strategic
Officer, he is responsible for managing capital markets, fund raising,
investor/public relations and leading strategic initiatives. From 2007 to 2008,
Mr. Ratner was an investment analyst with Aeneas Capital, an emerging market
investment fund. From 2006 to 2007, Mr. Ratner was an analyst with Steel
Partners, a global activist hedge fund. From 2000 to 2005, Mr. Ratner was an
associate with Simon Murray & Company, a multi-strategy investment firm
based in Hong Kong. Mr. Ratner holds a Master of Science in Management from the
Sloan Masters Program at the Stanford University Graduate School of Business,
and a Bachelor of Arts, with majors in economics and international relations,
from the University of Pennsylvania.

Mr.
Ratners work experience and qualifications related to U.S. and Hong Kong
capital markets, strategic planning and investor relations led the board to
conclude, as of the time of this transition report, that he should continue to
serve as a director of our company.

Edmand Yuk Man Wong

Edmand
Yuk Man Wong is an independent director of our company. From 2005 to present,
Mr. Wong has served as College Secretary with the Community College of City
University of Hong Kong. From 2004 to 2005, he served as Assistant Registrar
(External Relations) with the University of Hong Kong. From 2001 to 2004, Mr.
Wong served as the Director of Global Public Relations & Communications for
ORBIS International, Inc., an international charity in blindness prevention.
Within his career, Mr. Wong has also held various senior positions in the
communications departments of government agencies and with the Hong Kong Jockey
Club. Within these roles over

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the past 25 years, Mr. Wong was responsible for public and
media relations strategy, corporate branding, and public affairs. Mr. Wong holds
a Bachelor of Arts degree in Political Science from the University of British
Columbia.

Mr.
Wongs work experience and skills related to public relations, communications
and branding led the board to conclude, as of the time of this transition
report, that he should continue to serve as a director of our company.

Kwok Tin Tang

Kwok
Tin Tang is an independent director of our company. For the past 22 years, Mr.
Tang has operated as the General Manager of Martin Tang Accountants which
provides accounting, corporate secretary and business consultancy services to
companies in Hong Kong. Mr. Tang is an associate member of The Hong Kong
Institute of Chartered Secretaries and he holds the designation of
Chartered Secretary (ACIS). Mr. Tang holds a Higher Diploma in Accounting from
The Hong Kong Polytechnic University.

Mr.
Tangs work experience and qualifications related to accounting and corporate
administration led the board to conclude, as of the time of this transition
report, that he should continue to serve as a director of our company.

Alfred Lee Ming Sung

Alfred
Lee Ming Sung was appointed as an independent director of our company on May 15,
2009. Mr. Sung is a practicing Certified Public Accountant and since 1998 he has
been the principal of Alfred Sung & Co., an audit and accounting firm based
in Hong Kong. Mr. Sung has over 27 years of experience in auditing, accounting,
taxation, management and financial advisory services. His previous experience
includes 7 years with major international accounting firms. Mr. Sung is
currently a practicing member of the Hong Kong Institute of Certified Public
Accountants and an associate member of the Institute of Chartered Accountants of
Australia. He holds a Bachelor of Economics degree from La Trobe University in
Australia.

Mr.
Sings work experience related to accounting, auditing and financial advisory,
as well as his qualification as an audit committee financial expert, led the
board to conclude, as of the time of this transition report, that he should
continue to serve as a director of our company.

Francis Man Chung Wong

Francis
Man Chung Wong served as an independent director of our company until his
resignation on May 15, 2009. From 2003 to present, Mr. Wong has been a
practicing Certified Public Accountant through Francis Wong C.P.A. Co. Limited.
He has over 19 years of experience in auditing, taxation, management and
financial advisory services. Mr. Wong is currently an independent director and
either chairman or member of the audit / remuneration committee of four
companies listed on the Hong Kong Stock Exchange: China Oriental Group Company
Limited, Digital China Holdings Limited, Wai Kee Holdings Limited and Yardway
Group Limited. Mr. Wongs previous experience includes 6 years with KPMG and 2
years with the Hong Kong Securities Clearing Company Limited. Mr. Wong is a
fellow member of the Association of Chartered Certified Accountants, the Hong
Kong Institute of Certified Public Accountants and the Taxation Institute of
Hong Kong, he is an associate member of the Institute of Chartered Accountants
of England and Wales, and he is a member of the Society of Chinese Accountants
& Auditors. Mr. Wong holds a masters degree in management from Guangzhou
Jinan University.

Family Relationships

There
are no family relationships among our directors or officers.

Involvement in Certain Legal Proceedings

Our
directors, persons nominated to become a director and executive officers have
not been involved in any of the following events during the past ten years:

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|1. | any bankruptcy petition filed by or against any business
      of which such person was a general partner or executive officer either at
      the time of the bankruptcy or within two years prior to that
  time;                                                                                                         
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                             
|2. | any conviction in a criminal proceeding or being subject
      to a pending criminal proceeding (excluding traffic violations and other
      minor offences);                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                             
|3. | being subject to any order, judgment, or decree, not
      subsequently reversed, suspended or vacated, of any court of competent
      jurisdiction, permanently or temporarily enjoining, barring, suspending or
      otherwise limiting his involvement in any type of business, securities or
      banking activities;
|   |                                                                                                                                                                                                                                                                                                                             
|4. | being found by a court of competent jurisdiction (in a
      civil action), the Commission or the Commodity Futures Trading Commission
      to have violated a federal or state securities or commodities law, and the
      judgment has not been reversed, suspended, or vacated;                                        
|   |                                                                                                                                                                                                                                                                                                                             
|5. | being the subject of, or a party to, any United States
      federal or state judicial or administrative order, judgment, decree, or
      finding, not subsequently reversed, suspended or vacated, relating to an
      alleged violation of:                                                                             

(i) any United States federal or state
securities or commodities law or regulation; or

(ii) any law or regulation respecting
financial institutions or insurance companies including, but not limited to, a
temporary or permanent injunction, order of disgorgement or restitution, civil
money penalty or temporary or permanent cease-and-desist order, or removal or
prohibition order; or

(iii) any law or regulation
prohibiting mail or wire fraud or fraud in connection with any business entity;
or

|6. | being the subject of, or a party to, any sanction or
      order, not subsequently reversed, suspended or vacated, of any
      self-regulatory organization (as defined in Section 3(a)(26) of the
      Securities Exchange Act), any registered entity (as defined in Section
      1(a)(29) of the Commodity Exchange Act), or any equivalent exchange,
      association, entity or organization that has disciplinary authority over
      its members or persons associated with a member.
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Section 16(a) Beneficial Ownership Reporting Compliance

Section
16(a) of the Securities Exchange Act of 1934, as amended, requires our executive
officers and directors and persons who own more than 10% of our common stock, to
file reports regarding ownership of, and transactions in, our securities with
the Securities and Exchange Commission and to provide us with copies of those
filings. Based solely on our review of Forms 3, 4 and 5 (and amendments thereto)
furnished to us during or in respect of the fiscal nine months ended December
31, 2009, all directors, executive officers and beneficial owners of more than
10% of the outstanding common stock filed the reports in a timely manner.

Code of Ethics

On
December 31, 2008, our companys board of directors adopted an amended and
restated Code of Ethics that applies to, among other persons, our companys
President and Chief Executive Officer as well as the individuals performing the
functions of our Chief Financial Officer, Secretary and Controller. As adopted,
our Code of Ethics sets forth written standards that are designed to deter
wrongdoing and to promote:

|1. | honest and ethical conduct, including the ethical
      handling of actual or apparent conflicts of interest between personal and
      professional relationships;                                                          
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                              
|2. | full, fair, accurate, timely, and understandable
      disclosure in reports and documents that we file with, or submit to, the
      Securities and Exchange Commission and in other public communications made
      by us;
|   |                                                                                                                                                                                                                              
|3. | compliance with applicable governmental laws, rules and
      regulations;                                                                                                                                                   

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|4. | the prompt internal reporting of violations of the Code
      of Ethics to an appropriate person or persons identified in the Code of
      Ethics; and
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                        
|5. | accountability for adherence to the Code of
  Ethics.                                                                                                  

Our
Code of Ethics requires, among other things, that all of our companys personnel
shall be accorded full access to our President and Chief Executive Officer with
respect to any matter which may arise relating to the Code of Ethics. Further,
all of our companys personnel are to be accorded full access to our companys
board of directors if any such matter involves an alleged breach of the Code of
Ethics by our President and Chief Executive Officer.

In
addition, our Code of Ethics emphasizes that all employees, and particularly
managers and/or supervisors, have a responsibility for maintaining financial
integrity within our company, consistent with generally accepted accounting
principles, and federal, provincial and state securities laws. Any employee who
becomes aware of any incidents involving financial or accounting manipulation or
other irregularities, whether by witnessing the incident or being told of it,
must report it to his or her immediate supervisor or to our companys President
and Chief Executive Officer. If the incident involves an alleged breach of the
Code of Ethics by the President and Chief Executive Officer, the incident must
be reported to any member of our board of directors. Any failure to report such
inappropriate or irregular conduct of others is to be treated as a severe
disciplinary matter. It is against our company policy to retaliate against any
individual who reports in good faith the violation or potential violation of our
companys Code of Ethics by another.

Our
Code of Ethics is filed as Exhibit 14.1 to this transition report on Form 10-K.
We will provide a copy of the Code of Ethics to any person without charge, upon
request. Requests can be sent to: Lightscape Technologies Inc., 18/F., 318
Hennessy Road, W Square, Wanchai, Hong Kong.

Board of Directors

We
currently have six members serving on our board of directors. Our board of
directors has an audit committee, nominating and corporate governance committee,
compensation committee and an executive committee.

Board Leadership Structure and Role in Risk Oversight

Currently,
two individuals serve as principal executive officer and acting chairman of our
board of directors. Under the formal corporate governance guidelines adopted by
our company, our company has no fixed policy with respect to the separation of
the offices of chairman of the board and the chief executive officer. Our board
of directors believes that this issue is part of the succession planning
process, and that it is in the best interests of our company for the board of
directors to make this determination from time to time, including when selecting
a new chief executive officer.

Under
the formal corporate governance guidelines adopted by our company and per our
company bylaws, the chairman of the board acts as the lead director of the
board. The chairman provides value-added contributions to the board including
leading the board to achieve consensus on matters under discussion, acting as a
liaison between the independent directors and our companys management, ensuring
that all resolutions of the board of directors are carried into effect, and
collaborating with the chief executive officer to represent the board and our
company in external communications.

Our
company has determined that its current board leadership structure is
appropriate for our companys current circumstances. As a small company with a
strategy focused on growth while controlling costs, our company believes that a
chairman of the board, separate from the chief executive officer, is needed to
take on an active leadership and management role in order to assist the chief
executive officer to lead our companys overall strategy, growth and operations.
Additionally, as a company which has adopted most of its formal corporate
governance guidelines and board committee charters within the past two years,
our company believes that an active chairman is also required to ensure that the
board and management establish, implement and maintain policies and procedures
to effectively manage the business and to ensure full compliance with our
companys corporate governance policies.

Our
companys entire board of directors is ultimately responsible for the risk
oversight of our company. Under the audit committee charter adopted by our
company, the audit committee of our board of directors assists our

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- 71 -

board regarding risk management issues. Our audit committee
provides this assistance by annually reviewing with management and our internal
auditing department our companys guidelines and policies governing the process
of risk assessment and risk management. After this review, our audit committee
evaluates the effectiveness of our companys process for assessing significant
risks or exposures and the steps management has taken to monitor, control and
minimize such risks to our company. Our audit committee then reports its
evaluation to the entire board, which discusses our companys risk exposures,
considers steps management has taken to monitor and control such exposures, and
adopts new guidelines and policies as required to govern the process by which
risk management is handled. Our boards role in the risk oversight of our
company does not have a material effect on our boards leadership structure.

Audit Committee

We
currently act with a standing audit committee. The audit committee of our board
of directors was established in accordance with Section 3(a)(58)(A) of the
Securities Exchange Act of 1934 on June 6, 2006 and adopted its charter on June
6, 2006. On December 31, 2008, our board of directors adopted an amended and
restated audit committee charter. The audit committee is directed by its charter
to review the scope, cost and results of the independent audit of our books and
records, the results of the annual audit with management and the adequacy of our
accounting, financial and operating controls; to recommend annually to the board
of directors the selection of the independent registered accountants; to
consider proposals made by the independent registered accountants for consulting
work; and to report to the board of directors, when so requested, on any
accounting or financial matters.

Our
audit committee consists of Alfred Lee Ming Sung (appointed chairperson on May
15, 2009 following the resignation of former chairperson Francis Man Chung Wong
on May 15, 2009), Kwok Tin Tang and Edmand Yuk Man Wong, all of whom are or were
non-employee directors of our company. Our board of directors has judged and
affirmatively determined that each current and former member of the audit
committee: (1) meets the definition of independence contained in Rule 5605(a)(2)
of the NASDAQ Listing Rules; (2) meets the criteria for independence set forth
in Rule 10A-3(b)(1) of the Securities Exchange Act of 1934; (3) has not
participated in the preparation of the financial statements of our company or
any current subsidiary of our company at any time during the past three years;
and (4) is able to read and understand fundamental financial statements,
including a companys balance sheet, income statement, and cash flow
statement.

Audit Committee Financial Expert

In
the judgment of our board of directors, Alfred Lee Ming Sung (our current audit
committee chairperson) and Francis Man Chung Wong (our former audit committee
chairperson) each: (1) meets the definition of an audit committee financial
expert, as such term is defined in Item 407(d)(5)(ii) of Regulation S-K and the
rules and regulations promulgated by the Securities and Exchange Commission
thereunder; (2) has past employment experience in finance or accounting,
requisite professional certification in accounting, or any other comparable
experience or background which results in his financial sophistication,
including being or having been a chief executive officer, chief financial
officer or other senior officer with financial oversight responsibilities; and
(3) is able to read and understand fundamental financial statements, including a
companys balance sheet, income statement, and cash flow statement.

Nominating and Corporate Governance Committee

We
currently act with a standing nominating and corporate governance committee of
our board of directors. This committee was established and adopted its charter
on December 31, 2008. The nominating and corporate governance committee is
directed by its charter to identify individuals qualified to become directors of
our company, and to select such director nominees at the next annual meeting of
the shareholders or otherwise; to periodically evaluate the qualifications and
independence of each director on our board and its various committees and
recommend to our board any changes in its or its committees composition; and to
develop and recommend to our board of directors corporate governance principles
applicable to our company, and oversee the application of such corporate
governance principles.

Our
nominating and corporate governance committee considers diversity in identifying
nominees for director. Under the formal corporate governance guidelines and the
nominating and corporate governance committee charter adopted by our company, we
seek to have a board of directors representing diverse experiences in business,
finance, accounting, corporate governance, technology, and in various areas
relevant to our operating businesses.

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- 72 -

Our nominating and corporate governance committee considers the
make-up of the board of directors as a whole in terms of the professional
diversity represented by various occupations, and reviews the overall
qualifications in determining a combination of directors that will best serve
the needs of the board and our company. Based on these reviews, nominees for
director may be chosen, in part, on the desire to enhance the diversity of the
board of directors. Our nominating and corporate governance committee assesses
the effectiveness of the policy to consider diversity in identifying director
nominees by tracking whether any of our companys shareholders or other
stakeholders raise issue with a lack of diversity represented amongst our board
of directors.

Our
nominating and corporate governance committee consists of Edmand Yuk Man Wong
(appointed chairperson on December 31, 2008), Alfred Lee Ming Sung (appointed on
May 15, 2009 following the resignation of former committee member Francis Man
Chung Wong on May 15, 2009) and Kwok Tin Tang, all of whom are or were
non-employee directors of our company. Our board of directors has judged and
affirmatively determined that each current and former member of the nominating
and corporate governance committee meets the definition of independent director:
(1) as that term is defined in Item 407(a) of Regulation S-K and the rules and
regulations promulgated by the Securities and Exchange Commission thereunder;
and (2) as that term is defined in Rule 5605(a)(2) of the NASDAQ Listing
Rules.

As
of the quarter ended December 31, 2009, we did not effect any material changes
to the procedures by which our stockholders may recommend nominees to our board
of directors. If stockholders wish to recommend candidates directly to our
nominating and corporate governance committee, they may do so by sending
communications to the chairperson of the committee at the address on the cover
of this transition report on Form 10-K.

Compensation Committee

We
currently act with a standing compensation committee of our board of directors.
This committee was established and adopted its charter on December 31, 2008. The
compensation committee is directed by its charter to oversee our companys
compensation and benefit plans, policies and practices, including any executive
compensation plans, incentive compensation and equity-based plans; to determine,
or recommend to the board of directors of our company for determination, the
compensation levels of our companys executive officers, specifically the chief
executive officer and the other named executive officers as defined in Rule 3b-7
of the Securities Exchange Act of 1934; to produce an annual report on executive
compensation for inclusion in our companys annual report or proxy statement if
required by applicable securities laws; and to monitor and evaluate matters
relating to the compensation and benefits structure of our company.

Our
  compensation committee consists of Kwok Tin Tang (appointed chairperson on December
  31, 2008), Alfred Lee Ming Sung (appointed on May 15, 2009 following the resignation
  of former committee member Francis Man Chung Wong on May 15, 2009)and
  Edmand Yuk Man Wong, all of whom are or were non-employee directors of our company.
  Our board of directors has judged and affirmatively determined that each current
  and former member of the compensation committee meets the definition of independent
  director: (1) as that term is defined in Item 407(a) of Regulation S-K and the
  rules and regulations promulgated by the Securities and Exchange Commission
  thereunder; and (2) as that term is defined in Rule 5605(a)(2) of the NASDAQ
  Listing Rules.

Executive Committee

We
currently act with a standing executive committee of our board of directors.
This committee was established on April 30, 2005 and adopted its charter on
December 31, 2008. The executive committee is directed by its charter to act on
behalf of the full board of directors between regularly-scheduled board
meetings, usually when timing is critical. The executive committee has and may
exercise the powers of the board of directors to act upon any matters which, in
the opinion of the chairman of the board, should not be postponed until the next
previously scheduled meeting of the board, except powers which may be limited by
corporate law, our companys by-laws or by resolution of the board.

Our
executive committee consists of Charles Cheung (appointed chairperson on
December 31, 2008), Bondy Tan and Aaron Ratner, none of whom has been judged or
affirmatively determined to meet the definition of independent director.

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- 73 -

**ITEM 11.**     **EXECUTIVE COMPENSATION.**

Summary Compensation Table

The
particulars of compensation paid to the following persons:

|(a) | our principal executive officer;                                                                                                                                                                                                              
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                               
|(b) | each of our two most highly compensated executive
      officers other than our principal executive officer who were serving as
      executive officers at the end of the nine months ended December 31, 2009;
      and                     
|    |                                                                                                                                                                                                                                               
|(c) | up to two additional individuals for whom disclosure
      would have been provided under (b) but for the fact that the individual
      was not serving as our executive officer at the end of the nine months
      ended December 31, 2009,

who we will collectively refer to as our named executive
officers, of our company for the nine months ended December 31, 2009 and the
year ended March 31, 2009, are set out in the following summary compensation
table, except that no disclosure is provided for any named executive officer,
other than our principal executive officer, whose total compensation does not
exceed $100,000 for the respective fiscal nine months or year:

|SUMMARY COMPENSATION
        TABLE                      
|--------------------------------------------------------
|Name and Principal
        Position                     
|Bondy Tan 
        President, 
        Treasurer and CEO
|March 31, 2009                                          
|Aaron Ratner 
        Chief Strategic 
        Officer  
|March 31, 2009                                          

Bondy
Tan, as Chief Executive Officer of Tech Team, our wholly-owned operating
subsidiary, was paid a salary of $104,113 and $151,671 for our fiscal nine
months ended December 31, 2009 and fiscal year ended March 31, 2009,
respectively. Aaron Ratner, as Chief Strategic Officer of our company, earned
fees of $72,000 and $102,000 for our fiscal nine months ended December 31, 2009
and fiscal year ended March 31, 2009, respectively. Other than Bondy Tan and
Aaron Ratner, there were no executive officers of our company or of any of our
wholly-owned subsidiaries serving as of December 31, 2009, and no executive
officers who served as such during the fiscal nine months ended December 31,
2009 and fiscal year ended March 31, 2009, whose total salary and bonus exceeded
$100,000 per year.

Our
wholly-owned subsidiaries do not maintain, and did not maintain at any time
during their most recently completed fiscal years, any long-term compensation
plans. As such, there were no long-term compensation plan awards or payouts to
any of the executive officers of our wholly-owned subsidiaries during any of
their two most recently completed fiscal nine months ended December 31, 2009 and
fiscal year ended March 31, 2009.

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- 74 -

Our
company did not have any plan in place during the nine months ended December 31,
2009 or the year ended March 31, 2009 that provides for payments of other
benefits at, following, or in connection with the retirement of any named
executive officer.

Our
company did not have any compensatory plans or arrangements in place during the
nine months ended December 31, 2009 or the year ended March 31, 2009 that
provides for payment(s) to a named executive officer at, following, or in
connection with any termination, including without limitation resignation,
severance, retirement or a constructive termination of a named executive
officer, or a change in control of the registrant or a change in the named
executive officers responsibilities.

Our
compensation program for our executive officers is administered and reviewed by
our compensation committee. Historically, executive compensation consists solely
of a base salary and/or consulting fees. Individual compensation levels are
designed to reflect individual responsibilities, performance and experience, as
well as the performance of our company. The determination of discretionary
bonuses is based on various factors, including implementation of our business
plan, development of corporate opportunities and completion of financing.

Stock Option Grants to our Named Executive Officers

Our
company does not have an effective stock option plan and our company did not
grant any stock options to any named executive officers during the nine months
ended December 31, 2009 or the year ended March 31, 2009.

Aggregate Option Exercises for the Fiscal Nine Months Ended
December 31, 2009 by Executive Officers

There
were no options outstanding, and hence no options exercised, by any named
executive officers during the nine months ended December 31, 2009 or the year
ended March 31, 2009.

Outstanding Equity Awards at Fiscal Period-End

There
were no outstanding equity awards held by any named executive officer as of
December 31, 2009 or March 31, 2009.

Compensation of Directors

Directors
may be paid their expenses for attending each board of directors meeting and may
be paid a fixed sum for attendance at each meeting of the directors or an annual
retainer fee. No payment precludes any director from serving our company in any
other capacity and being compensated for the service. Members of special or
standing committees may be allowed like reimbursement and compensation for
attending committee meetings and/or paid committee and/or chairmanship fees. The
following table summarizes compensation paid to all of our directors during the
nine months ended December 31, 2009:

|DIRECTOR COMPENSATION
|---------------------
|Name                 
|Bondy Tan            
|Charles Cheung       
|Edmand Yuk Man Wong  
|Kwok Tin Tang        

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|DIRECTOR COMPENSATION    
|-------------------------
|Name                     
|Alfred Lee Ming Sung     
|Francis Man Chung Wong(2)

|(1) | Salary compensation as President and Chief Executive
      Officer.                
|--- | -----------------------------------------------------------------------------------
|    |                                                                                    
|(2) | Francis Man Chung Wong resigned as a director of our
      company on May 15, 2009.

|ITEM 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
      MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
|-------- | -----------------------------------------------------------------------------------------------------

The following table sets forth,
as of March 31, 2010 certain information with respect to the beneficial
ownership of our common stock by each stockholder known by us to be the
beneficial owner of more than 5% of our common stock and by each of our current
directors and executive officers. Each person has sole voting and investment
power with respect to the shares of common stock, except as otherwise indicated.
Beneficial ownership consists of a direct interest in the shares of common
stock, except as otherwise indicated.

|Name and Address of Beneficial Owner                                                                                                     | Position Held                                                        | Amount and Nature of Beneficial
      Owner | Percent of Class(1)
|---------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------- | ------------------------------------------- | -------------------
|Eastern Advisors Capital, Ltd. 101 Park Avenue, 48th
      Floor New York, New York 10178                                                | N/A                                                                  | 7,711,345 (2)                               | 13.8%              
|Galaxy China Opportunities Fund Unit 603, Tower 1
      Admiralty Centre, 18 Harcourt Road, Hong Kong                                    | N/A                                                                  | 5,441,236 (3)                               | 9.7%               
|SMC Investment Management Limited P.O. Box 957,
      Offshore Incorporations Centre, Road Town, Tortola, British Virgin
      Islands   | N/A                                                                  | 3,700,000 (4)                               | 6.6%               
|Grossman Family 1 LLC c/o Neal Brickman-Trustee Law
      Office of Neal Brickman 317 Madison Avenue-21st Floor New York, NY
      10017 | N/A                                                                  | 3,535,793 (5)                               | 6.3%               
|Liberty Square Strategic Partners IV (Asia) Offshore,
      L.P. 24 Federal Street, 8th Floor Boston, MA 02110                           | N/A                                                                  | 3,000,000 (6)                               | 5.4%               
|Bondy Tan 18/F., 318 Hennessy Road, W Square
      Wanchai, Hong Kong                                                                    | Director, President and Chief Executive
      Officer of our company | 4,099,633 (7)                               | 7.3%               
|Charles Cheung A2, 6/F Evergreen Villa, 43 Stubbs Road,
      Hong Kong                                                                  | Director of our company                                              | 1,458,293 (8)                               | 2.6%               
|Aaron T. Ratner 18/F., 318 Hennessy Road, W Square
      Wanchai, Hong Kong                                                              | Director, Chief Strategic Officer of our
      company               | 708,000 (9)                                 | 1.3%               

---

- 76 -

|Name and Address of Beneficial Owner                                                                                                | Position Held           | Amount and Nature of Beneficial
      Owner | Percent of Class(1)
|----------------------------------------------------------------------------------------------------------------------------------- | ----------------------- | ------------------------------------------- | -------------------
|Edmand Yuk Man Wong Community College of City
      University, 6/F., Mong Man-wai Building, Kowloon Tong,
      Kowloon, Hong Kong | Director of our company | Nil                                         | Nil                
|Kwok Tin Tang Room 7, 8/F., Blk. A, Hoi Tao Bldg., 11
      Belcher's Street, Sai Wan, Hong Kong                                    | Director of our company | Nil                                         | Nil                
|Alfred Lee Ming Sung 18/F., 318 Hennessy Road, W Square
      Wanchai, Hong Kong                                                    | Director of our company | Nil                                         | Nil                
|Directors and Executive Officers as a Group (six
      persons)                                                                     |                         | 6,265,926                                   | 11.2%              

|(1) | Based on 55,876,410 shares of common stock issued and
      outstanding as of March 31, 2010. Except as otherwise indicated, we
      believe that the beneficial owners of the common stock listed above, based
      on information furnished by such owners, have sole investment and voting
      power with respect to such shares, subject to community property laws
      where applicable. Beneficial ownership is determined in accordance with
      the rules of the Securities and Exchange Commission and generally includes
      voting or investment power with respect to securities. Shares of common
      stock subject to convertible or derivative securities currently
      convertible or exercisable or convertible or exercisable within 60 days
      are deemed outstanding for purposes of computing the percentage ownership
      of the person holding such securities, but are not deemed outstanding for
      purposes of computing the percentage ownership of any other
  person.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|(2) | As disclosed in a Schedule 13G/A filed on February 12,
      2009 and a Form 4 filed on August 4, 2008, Eastern Advisors Capital Group,
      LLC is the investment manager of Eastern Advisors Capital, Ltd., which is
      the direct owner of 7,711,345 shares of common stock. Scott Booth is the
      managing member of Eastern Advisors Capital Group, LLC and a director of
      Eastern Advisors Capital, Ltd. Eastern Advisors Capital Group, LLC, Scott
      Booth and Eastern Advisors Capital, Ltd. share investment control and
      power to vote or to direct the vote over 7,711,345 shares of common stock.
      Eastern Advisors Capital Group, LLC, Scott Booth and Eastern Advisors
      Capital, Ltd. each disclaims beneficial ownership with respect to any
      shares other than those owned directly by such person.                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|(3) | As disclosed in a Schedule 13G/A filed on February 11,
      2009 and a Form 4 filed on December 8, 2008, Galaxy China Opportunities
      Fund was the direct owner and held the sole voting and investment control
      over 5,441,236 shares of common stock. Joe Man Fai Chan is director of
      Galaxy China Opportunities Fund and has voting and investment control over
      the shares of common stock.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|(4) | As disclosed in a Schedule 13G/A filed on February 9,
      2009, SMC Investment Management Limited was the direct owner and held the
      sole voting and investment control over 3,700,000 shares of common stock.
      Hamilton Tang is director of SMC Investment Management Ltd. and has voting
      and investment control over the shares of common stock.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|(5) | As disclosed in a Schedule 13G filed on August 10, 2009,
      Grossman Family (2006) Trust owns 100% of Grossman Family 1 LLC. Neal
      Brickman is the trustee, and Thomas R. Grossman is the investment manager,
      of Grossman Family (2006) Trust. Grossman Family 1 LLC, Grossman Family
      (2006) Trust, Neal Brickman and Thomas R. Grossman share investment
      control and power to vote or to direct the vote over 3,535,793 shares of
      common stock.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|(6) | As disclosed in a Schedule 13G/A filed on February 16,
      2010, Liberty Square Asset Management, LLC is the general partner and
      Liberty Square Asset Management, LP is the investment manager of Liberty
      Square Strategic Partners IV (Asia) Offshore, L.P. Liberty Square Asset
      Management, LLC, Liberty Square Asset Management, LP and Liberty Square
      Strategic Partners IV (Asia) Offshore, L.P. share investment control and
      power to vote or to direct the vote over 3,000,000 shares of common stock.
      Liberty Square Asset Management, LLC, Liberty Square Asset Management, LP
      and Liberty Square Strategic Partners IV (Asia) Offshore, L.P. each
      disclaims beneficial ownership of all shares except to the extent of its
      pecuniary interest therein. Thomas J. Niedermeyer, Jr. is a managing
      member of Liberty Square Asset Management, LLC and has voting and
      investment control over the shares of common stock.                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|(7) | As disclosed in a Schedule 13D/A filed on February 12,
      2008, Bondy Tan directly beneficially owns and holds investment control
      and the power to vote or to direct the vote of 2,888,768 shares of our
      company. Bondy Tan indirectly beneficially owns and holds investment
      control and power to vote or to direct the vote of 387,000 shares of our
      company held by Glory Hill Holdings Limited, a company which he solely
      owns. Bondy Tan indirectly beneficially owns and holds investment control
      and the power to vote or to direct the vote of 252,273 shares of our
      company held by Full Scope Group Limited, a company which he solely owns.
      Bondy Tan indirectly beneficially owns and holds investment control the
      power to vote or to direct the vote of 571,592 shares of our company held
      by Excel Means Limited, a company which he solely
owns.                                                                                         

---

- 77 -

|(8) | As disclosed in a Schedule 13D filed on January 24, 2005,
      Charles Cheung indirectly beneficially owns and holds investment control
      and the power to vote or to direct the vote of 1,458,293 shares of our
      company held by Leisure Assets Limited, a company which he solely
    owns.                
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                        
|(9) | As disclosed in a Form 4 filed on December 10, 2008,
      Aaron T. Ratner indirectly beneficially owns and holds investment control
      and the power to vote or to direct the vote of 708,000 shares of our
      company. The 708,000 shares are held by a nominee shareholder in trust for
      Aaron T. Ratner.

From
time to time, the number of our shares held in the street name accounts of
various securities dealers for the benefit of their clients or in centralized
securities depositories may exceed 5% of the total shares of our common stock
outstanding.

Changes in Control

We
are unaware of any contract, or other arrangement or provision of our Articles
or Bylaws, the operation of which may at a subsequent date result in a change of
control of our company.

Securities Authorized for Issuance under Equity Compensation
Plans

Our company did not have an
equity compensation plan in place during the nine months ended December 31, 2009
or the year ended March 31, 2009 under which equity securities of our company
were authorized for issuance.

**ITEM
13.**     **CERTAIN RELATIONSHIPS
AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.**

Other
than as listed below, we have not been a party to any transaction, proposed
transaction, or series of transactions in which the amount involved exceeds the
lesser of $120,000 or one percent of the average of our companys total assets
as of December 31, 2009 or March 31, 2009 in which, to our knowledge, any of our
directors, officers, five percent beneficial security holder, or any member of
the immediate family of the foregoing persons has had or will have a direct or
indirect material interest:

|                                       |  | December 31, |  |  | March 31, | 
|-------------------------------------- |  | ------------ |  |  | --------- | 
|                                       |  | 2009         |  |  | 2009      | 
|                                       |  | $            |  |  | $         | 
|Amount due to director Bondy
      Tan |  | 745,503      |  |  | 745,503   | 

Bondy
Tan is a director of our company. The amounts stated relate to a series of loan
transactions made by Bondy Tan to our company and represents the largest
aggregate amount of principal outstanding during the fiscal nine months ended
December 31, 2009 and year ended March 31, 2009. As of March 31, 2010, the
principal outstanding was $495,953. During the fiscal nine months ended December
31, 2009, the total amount of principal repaid to Bondy Tan was $247,932. During
the fiscal nine months ended December 31, 2009, the total amount of interest
paid to Bondy Tan was $nil. The rate of interest payable on the loans is
zero.

Director Independence

We
currently act with six directors, consisting of Bondy Tan, Charles Cheung, Aaron
Ratner, Alfred Lee Ming Sung, Kwok Tin Tang and Edmand Yuk Man Wong. Our board
of directors has judged and affirmatively determined that current directors
Alfred Lee Ming Sung, Kwok Tin Tang and Edmand Yuk Man Wong and former director
Francis Man Chung Wong each meets the definition of independent director: (1) as
that term is defined in Item 407(a) of Regulation S-K and the rules and
regulations promulgated by the Securities and Exchange Commission thereunder;
(2) as that term is defined in Rule 5605(a)(2) of the NASDAQ Listing Rules; and
(3) that the current board of directors of our company therefore does not
consist of a majority of independent directors. We currently act with a standing
audit committee, a standing nominating and corporate governance committee and a
standing compensation committee. Each of these committees is composed solely of
independent directors.

Other
than as set out below or disclosed under the heading CERTAIN RELATIONSHIPS AND
RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE, none of our independent
directors entered into any transaction, relationship or arrangement during the
nine months ended December 31, 2009 or the year end

---

- 78 -

March 31, 2009 that were considered by our board of directors
in determining whether the director maintained his or her independence in
accordance with Rule 5605(a)(2) of the NASDAQ Listing Rules.

**ITEM
14.**     **PRINCIPAL ACCOUNTING
FEES AND SERVICES.**

Fees Paid to Independent Accountant

On
July 25, 2008, our company retained MSPC Certified Public Accountants and
Advisors, A Professional Corporation, to provide audit services during the
fiscal year ended March 31, 2009. On May 31, 2007, our company retained Yu and
Associates CPA Corporation to provide audit services during the fiscal years
ended March 31, 2008 and 2007. Our company paid the following fees to our
independent accountants during the fiscal nine months ended December 31, 2009
and the year ended March 31, 2009:

|                                                                | Fiscal nine months ended
      December 31, 2009 | Fiscal year ended
      March 31, 2009
|--------------------------------------------------------------- | ------------------------------------------------ | --------------------------------------
|Audit Fees - MSPC - Yu and Associates
      CPA Corporation     | $170,000          
      Nil                     | $265,000          
      $15,603      
|Audit Related Services                                          | Nil                                              | Nil                                   
|Tax Fees - MSPC - Yu and Associates
      CPA Corporation       | Nil Nil                                          | Nil $8,000                            
|All Other Fees - MSPC - Yu and
      Associates CPA Corporation | Nil Nil                                          | Nil Nil                               
|Total                                                           | $170,000                                         | $288,603                              

Audit Fees

This
category includes the fees for the examination of our consolidated financial
statements and our quarterly reviews of interim financial statements. This
category also includes advice on audit and accounting matters that arose during
or as a result of the audit or the review of our interim financial statements,
and the preparation of an annual management letter on internal control
matters.

The
fees billed by MSPC Certified Public Accountants and Advisors, A Professional
Corporation for professional services rendered for the audit of our financial
statements for the fiscal nine months ended December 31, 2009 were $130,000. For
the fiscal nine months ended December 31, 2009, MSPC Certified Public
Accountants and Advisors, A Professional Corporation billed our company an
aggregate fee of $40,000 for assurance or services relating to our quarterly
financial statements. Our audit fees for the year ended March 31, 2009 were
$280,603.

Audit Related Services

We
did not incur any audit related services billed by MSPC Certified Public
Accountants and Advisors, A Professional Corporation during the fiscal nine
months ended December 31, 2009. Our audit related services for the year ended
March 31, 2009, including the aggregate fees billed for assurance and related
services relating to the performance of the audit of our financial statements
which are not reported under the caption Audit Fees above, were $nil.

---

- 79 -

Tax Fees

We
incurred tax fees billed by MSPC Certified Public Accountants and Advisors, A
Professional Corporation of $Nil during the fiscal nine months ended December
31, 2009. The aggregate fees billed during the year ended March 31, 2009, for
products and services provided by our former auditors for tax compliance, tax
advice and tax planning, were $8,000.

All Other Fees

We
did not incur any additional fees billed by MSPC Certified Public Accountants
and Advisors, A Professional Corporation or Yu and Associates CPA Corporation
other than the fees listed above during the fiscal nine months ended December
31, 2009 or the year ended March 31, 2009.

The
Securities and Exchange Commission requires that, before MSPC Certified Public
Accountants and Advisors, A Professional Corporation is engaged by us or our
subsidiaries to render any auditing or permitted non-audit related services, the
engagement be:

- approved by our audit committee; or

- entered into pursuant to pre-approval
policies and procedures established by the audit committee, provided the
policies and procedures are detailed as to the particular service, the audit
committee is informed of each service, and such policies and procedures do not
include delegation of the audit committees responsibilities to management.

Our
audit committee pre-approved all services provided by our independent
accountant. Our audit committee does not have records of what percentage of the
above fees were pre-approved. All of the services and fees described under the
categories of Audit Related Fees, Tax Fees and All Other Fees were
reviewed and approved by our audit committee before or after the respective
services were rendered.

Our
audit committee has considered the nature and amount of the fees of $130,000
billed by MSPC Certified Public Accountants and Advisors, P.C. and believes that
the provision of the services for activities unrelated to the audit is
compatible with maintaining the independence of MSPC Certified Public
Accountants and Advisors, A Professional Corporation.

PART IV

**ITEM
15.**     **EXHIBITS, FINANCIAL
STATEMENT SCHEDULES.**

|(a) |     | Documents filed as part of this transition
  report:                                                                                                                       
|--- | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |     |                                                                                                                                                                            
|    | (1) | Report of Independent Registered Public Accounting Firm,
      dated April 19, 2010                                                                                        
|    |     |                                                                                                                                                                            
|    |     | Consolidated Balance Sheets as at December 31, 2009 and
      March 31, 2009                                                                                               
|    |     |                                                                                                                                                                            
|    |     | Consolidated Statements of Operations and Comprehensive
      Loss for the Nine Months Ended December 31, 2009 and the Year Ended March
      31, 2009                     
|    |     |                                                                                                                                                                            
|    |     | Consolidated Statements of Changes in Shareholders
      Equity and Comprehensive Loss for the Nine Months Ended December 31, 2009
      and the Year Ended March 31, 2009
|    |     |                                                                                                                                                                            
|    |     | Consolidated Statements of Cash Flows for the Nine Months
      Ended December 31, 2009 and the Year Ended March 31, 2009                                                  
|    |     |                                                                                                                                                                            
|    |     | Notes to Consolidated Financial
  Statements                                                                                                                               

---

- 80 -

| | (2) | Financial Statement Schedules:
None.
| | --- | ------------------------------------

(b) Exhibits:

|Exhibit Number | Description                                                                                                                                                                                                                                                                                                                                                                 
|-------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|               |                                                                                                                                                                                                                                                                                                                                                                             
|(2)            | Plan of Purchase, Sale, Reorganization, Arrangement,
      Liquidation or Succession                                                                                                                                                                                                                                                                                        
|               |                                                                                                                                                                                                                                                                                                                                                                             
|2.1            | Share Exchange Agreement dated January 7, 2005, among
      Global Innovative Systems Inc., Tech Team Holdings Limited, Bondy Tan and
      the Selling Shareholders (incorporated by reference from our Current
      Report on Form 8-K filed on January 18, 2005)                                                                                                        
|               |                                                                                                                                                                                                                                                                                                                                                                             
|(3)            | (i) Articles of Incorporation; and (ii) Bylaws                                                                                                                                                                                                                                                                                                                              
|               |                                                                                                                                                                                                                                                                                                                                                                             
|3.1            | Charter (incorporated by reference from our Registration
      Statement on Form 10-SB filed on April 11, 2000)                                                                                                                                                                                                                                                             
|               |                                                                                                                                                                                                                                                                                                                                                                             
|3.2            | Articles of Incorporation (incorporated by reference from
      our Registration Statement on Form 10-SB filed on April 11, 2000)                                                                                                                                                                                                                                           
|               |                                                                                                                                                                                                                                                                                                                                                                             
|3.3            | Certificate of Reverse Stock Split filed with the Nevada
      Secretary of State on November 12, 2003 (incorporated by reference from
      our Current Report on Form 8-K filed on December 17, 2003)                                                                                                                                                                     
|               |                                                                                                                                                                                                                                                                                                                                                                             
|3.4            | Certificate of Amendment to Articles of Incorporation
      filed with the Secretary of State of Nevada on March 3, 2004 (incorporated
      by reference from our Quarterly Report on Form 10- QSB filed on May 15,
      2004)                                                                                                                                            
|               |                                                                                                                                                                                                                                                                                                                                                                             
|3.5            | Certificate of Change filed with the Secretary of State
      of Nevada on December 23, 2004 (incorporated by reference from our Current
      Report on Form 8-K filed on January 6, 2005)                                                                                                                                                                                 
|               |                                                                                                                                                                                                                                                                                                                                                                             
|3.6            | Articles of Merger filed with the Secretary of State of
      Nevada on April 17, 2007 effective April 20, 2007 (incorporated by
      reference from our Current Report on Form 8-K filed on April 23, 2007)                                                                                                                                                               
|               |                                                                                                                                                                                                                                                                                                                                                                             
|3.7            | Bylaws (incorporated by reference from our Current Report
      on Form 8-K filed on October 14, 2008)                                                                                                                                                                                                                                                                      
|               |                                                                                                                                                                                                                                                                                                                                                                             
|(10)           | Material Contracts                                                                                                                                                                                                                                                                                                                                                          
|               |                                                                                                                                                                                                                                                                                                                                                                             
|10.1           | Management Contract between Tech Team Holdings Limited /
      Tech Team Development Limited and Bondy Tan (incorporated by reference
      from our Current Report on Form 8-K filed on January 18, 2005)                                                                                                                                                                  
|               |                                                                                                                                                                                                                                                                                                                                                                             
|10.2           | Joint Venture Agreement between Lightscape Technologies
      (Greater China) Limited, Beijing Xintong Media & Cultural Development
      Co. Ltd., Beijing New Vision Media Advertising Co. Ltd. and Miss Yao Po
      Chun dated February 12, 2008 (Translated from Chinese)(incorporated by reference from our Annual Report on Form 10-KSB filed
      on July 14, 2008)
|               |                                                                                                                                                                                                                                                                                                                                                                             
|10.3           | Form of Registration Rights Agreement among Lightscape
      Technologies Inc. and the investors named therein dated March 9, 2008
      (incorporated by reference from our Current Report on Form 8-K filed on
      March 10, 2008)                                                                                                                                      

---

- 81 -

|Exhibit Number | Description                                                                                                                                                                                                                                                                                                          
|-------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|               |                                                                                                                                                                                                                                                                                                                      
|10.4           | Agreement between
        Lightscape Technologies Inc. and Aaron Tibor Ratner dated April 18, 2008
        (incorporated by reference from our Current Report on Form 8-K filed on
        December 5, 2008)                                                                                                         
|               |                                                                                                                                                                                                                                                                                                                      
|10.5           | Sale and Purchase
        Agreement between Beijing Illumination (Hong Kong) Limited and Zhejiang
        Zhong Jun Investment Management Co. Limited, dated November 20, 2009 (Translated
        from Chinese)(incorporated by reference from our Quarterly
        Report on Form 10-Q filed on November 23, 2009)
|               |                                                                                                                                                                                                                                                                                                                      
|(14)           | Code of Ethics                                                                                                                                                                                                                                                                                                       
|               |                                                                                                                                                                                                                                                                                                                      
|14.1           | Code of Ethics
        (incorporated by reference from our Current Report on Form 8-K filed on
        January 6, 2009)                                                                                                                                                                                              
|               |                                                                                                                                                                                                                                                                                                                      
|(21)           | Subsidiaries                                                                                                                                                                                                                                                                                                         
|               |                                                                                                                                                                                                                                                                                                                      
|21.1*          | List
        of subsidiaries                                                                                                                                                                                                                                                                                         
|               |                                                                                                                                                                                                                                                                                                                      
|(31)           | Rule 13a-14(a)/15d-14(a)
        Certifications                                                                                                                                                                                                                                                                      
|               |                                                                                                                                                                                                                                                                                                                      
|31.1*          | Certification
        of Principal Executive Officer and Principal Financial Officer filed pursuant
        to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                        
|               |                                                                                                                                                                                                                                                                                                                      
|(32)           | Section 1350
        Certifications                                                                                                                                                                                                                                                                                  
|               |                                                                                                                                                                                                                                                                                                                      
|32.1*          | Certification
        of Principal Executive Officer and Principal Financial Officer pursuant
        to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
        Act of 2002.                                                                                                       

*Filed herewith

---

- 82 -

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.

LIGHTSCAPE TECHNOLOGIES INC.

By: /s/ Bondy Tan Bondy Tan President,
Treasurer, Chief Executive Officer and Director (Principal Executive
Officer, Principal Financial Officer and Principal Accounting
Officer)

Date: April 19, 2010

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 and on the dates indicated.

|Signature                    | Title                           | Date          
|---------------------------- | ------------------------------- | --------------
|                             |                                 |               
|                             |                                 |               
|By: /s/ Bondy Tan            |                                 |               
|Bondy Tan                    | President, Treasurer, Chief     | April 19, 2010
|                             | Executive Officer and Director  |               
|                             | (Principal Executive Officer,   |               
|                             | Principal Financial Officer and |               
|                             | Principal Accounting Officer)   |               
|                             |                                 |               
|                             |                                 |               
|                             |                                 |               
|By: /s/ Aaron Ratner         |                                 |               
|Aaron Ratner                 | Director                        | April 19, 2010
|                             |                                 |               
|                             |                                 |               
|                             |                                 |               
|By: /s/ Charles Cheung       |                                 |               
|Charles Cheung               | Director                        | April 19, 2010
|                             |                                 |               
|                             |                                 |               
|                             |                                 |               
|By: /s/ Edmand Yuk Man Wong  |                                 |               
|Edmand Yuk Man Wong          | Director                        | April 19, 2010
|                             |                                 |               
|                             |                                 |               
|                             |                                 |               
|By: /s/ Kwok Tin Tang        |                                 |               
|Kwok Tin Tang                | Director                        | April 19, 2010
|                             |                                 |               
|                             |                                 |               
|                             |                                 |               
|By: /s/ Alfred Lee Ming Sung |                                 |               
|Alfred Lee Ming Sung         | Director                        | April 19, 2010

---