UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: March 31, 2002
------------------------------------
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
EXCHANGE ACT
For the transition period from to
-------------- -------------------
Commission file number 0-4846-3
-------------------------------------------------------------
LumaLite Holdings, Inc.
-------------------------------------------------------------------------------
(Exact name of small business issuer as
specified in its charter)
Nevada 82-0288840
--------------------------------------------------------------------------------
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
2810 Via Orange Way, Ste B, Spring Valley, CA 91978
(Address of principal executive offices)
(619) 660-5410
Issuer's telephone number
Consil Corp., 4766 Holladay Blvd., Holladay, Utah 84117
-------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report.)
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDING DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to
be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution
of securities under a plan confirmed by a court. Yes No
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practical date: Approximately 28,501,692
shares as of May 15, 2002
Transitional Small Business Disclosure Format (check one).
Yes ; No X
---- -----
PART I
Item 1. Financial Statements
INDEPENDENT ACCOUNTANT'S REPORT
To the Board of Directors and Shareholders
LumaLite Holdings, Inc. and Subsidiaries
We have reviewed the accompanying consolidated balance sheets of
LumaLite Holdings, Inc. and subsidiaries as of March 31, 2002 and December 31,
2001 and the related consolidated statements of operations and cash flows for
the three month periods ended March 31, 2002 and 2001. These consolidated
financial statements are the responsibility of the Company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with generally accepted auditing standards, the objective of which is
the expression of an opinion regarding the financial statement taken as a whole.
Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the accompanying consolidated financial statements for them to
be in conformity with generally accepted accounting principles.
Respectfully submitted
/s/ Robison, Hill & Co.
-----------------------------
Certified Public Accountants
Salt Lake City, Utah
May 15, 2002
LUMALITE HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
March 31, December 31,
2002 2001
-------------- --------------
ASSETS
Current Assets:
Cash and Cash Equivalents $ 780 $ 793
Escrow from Private Placement and
Investment in Subsidiary 500,000 -
-------------- --------------
$ 500,780 $ 793
============== ==============
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts Payable and Accrued Expenses $ 41,759 $ 19,312
Accrued Interest Payable 246,163 246,163
Note Payable 725,000 725,000
-------------- --------------
Total Liabilities 1,012,922 990,475
-------------- --------------
Stockholders' Equity
Preferred Stock, Par Value $0.25
Authorized 10,000,000 shares
Issued -0- shares at December 31, 2001 and 2000 - -
Common Stock, No Par Value, Authorized 20,000,000
Shares, 9,455,689 Shares Issued at March 31, 2002
and 9,455,689 at December 31, 2001 2,476,952 2,476,952
Common Stock to be Issued 12,500,000 shares 500,000 -
Accumulated Deficit (3,485,633) (3,463,173)
Less: Common Stock reacquired at cost; 5,982 shares (3,461) (3,461)
-------------- --------------
Total Stockholders' Equity (512,142) (989,682)
-------------- --------------
Total Liabilities and
Stockholders' Equity $ 500,780 $ 793
============== ==============
See accompanying notes and accountants' report.
LUMALITE HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
For the three months ended
March 31,
--------------------------------
2002 2001
-------------- --------------
Continuing operations:
Revenues $ - $ -
Costs and expenses:
General and administrative 22,509 26,194
-------------- --------------
Net Income (Loss) $ (22,509) $ (26,194)
============== ==============
Basic & Diluted loss per share $ - $ -
============== ==============
See accompanying notes and accountants' report.
LUMALITE HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
For the three months ended
March 31,
-------------------------------
2002 2001
--------------- ---------------
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net Income (Loss) $ (22,509)$ (26,194)
Adjustments necessary to reconcile net loss
to net cash used in operating activities:
Increase in accounts and other receivables - 84
Increase (decrease) in accounts payable 22,496 7,000
Increase (decrease) in accrued expenses - 18,105
--------------- ---------------
Net Cash Used in continuing operations (13) (1,005)
--------------- ---------------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Net cash provided by (used) investing activities - -
--------------- ---------------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Net Cash Provided by
Financing Activities - -
--------------- ---------------
Net (Decrease) Increase in
Cash and Cash Equivalents (13) (1,005)
Cash and Cash Equivalents
at Beginning of Period 793 1,419
--------------- ---------------
Cash and Cash Equivalents
at End of Period $ 780 $ 414
=============== ===============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest $ - $ -
Franchise and income taxes $ - $ -
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND
FINANCING ACTIVITIES:
None
See accompanying notes and accountants' report.
LUMALITE HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2002 AND 2001
NOTE 1 - GENERAL
The notes to the consolidated financial statements as of December 31,
2001, as set forth in LumaLite Holdings, Inc.'s 2001 Annual Report on Form
10-KSB, substantially apply to these interim consolidated financial statements
and are not repeated here.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This summary of accounting policies for LumaLite Holdings, Inc. and
subsidiaries is presented to assist in understanding the Company's consolidated
financial statements. The accounting policies conform to generally accepted
accounting principles and have been consistently applied in the preparation of
the financial statements.
Interim Reporting
The unaudited financial statements as of March 31, 2002 and for the
three month periods ended March 31, 2002 and 2001 reflect, in the opinion of
management, all adjustments (which include only normal recurring adjustments)
necessary to fairly state the financial position and results of operations for
the three months. Operating results for interim periods are not necessarily
indicative of the results which can be expected for full years.
Principles of Consolidation
The consolidated financial statements for the three months ended March
31, 2002 and 2001 include the accounts of the parent entity and all of its
subsidiaries.
All significant intercompany balances and transactions have been
eliminated.
Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company considers all
highly liquid debt instruments purchased with a maturity of three months or less
to be cash equivalents to the extent the funds are not being held for investment
purposes.
Income Taxes
The Company has a net operating loss for income taxes. Due to the
regulatory limitations in utilizing the loss, it is uncertain whether the
Company will be able to realize a benefit from these losses. Therefore, a
deferred tax asset has not been recorded. There are no significant tax
differences requiring deferral.
LUMALITE HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2002 AND 2001
(Continued)
Loss per Share
The reconciliations of the numerators and denominators of the basic loss
per share computations are as follows:
Income Shares Per-Share
(Numerator) (Denominator) Amount
--------------- --------------- --------------
For the three months ended March 31, 2002
------------------------------------------------
Basic Loss per Share
Loss to common shareholders $ (22,509) 9,455,689 $ -
=============== =============== ==============
For the three months ended March 31, 2001
------------------------------------------------
Basic Loss per Share
Loss to common shareholders $ (26,194) 9,449,707 $ -
=============== =============== ==============
The effect of outstanding common stock equivalents would be
anti-dilutive for March 31, 2002 and 2001 and are thus not considered.
Reclassifications
Certain reclassifications have been made in the March 31, 2001 financial
statements to conform with the March 31, 2002 presentation.
NOTE 3 - PRIVATE PLACEMENT OF COMMON STOCK
During January, 2002 the Company completed a private placement of
12,500,000 shares of common stock with three accredited investors for an
aggregate purchase price of $500,000. Following the reverse split, as described
in Note 4, the three accredited investors will hold 500,000 post-reverse split
shares of common stock. The sale of the stock was sold under reliance on the
exemption from registration provided under ss. 4(2) of the Securities Act of
1933, as amended. The Proceed from the placement of the 12,500,000 shares of
common stock were placed in escrow and will be used primarily to pay costs and
expenses associated with the merger with LumaLite.
NOTE 4 - SUBSEQUENT EVENTS
On April 11, 2002 a recapitalization was effected by a reverse split of
common stock with one share of common stock exchanged for every twenty-five
outstanding shares of common stock. As a result, the common stock outstanding
was reduced to approximately 877,988 shares.
In April 2002, the Merger with LumaLite was completed. Upon completion
of the merger, all of the issued and outstanding shares of common stock of
LumaLite were cancelled and converted into a right to receive 17,800,000
post-reverse split shares (approximately 62.46% of the outstanding common
stock).
Effective with the merger, the holders of debt in the original amount of
$725,000 converted the principal amount of the debt, plus accrued interest, into
10,118,744 post-reverse split shares of common stock (approximately 35.5% of the
outstanding common stock).
In connection with the merger, Lincoln Properties Ltd L.C., one of the
principal stockholders prior to the private placement, reverse split and the
merger, contributed 296,732 post-reverse split shares of common stock back to
the Company.
For additional information regarding these transactions, see the
Company's annual report for the period ending December 31, 2001 on Form 10-KSB.
Item 2. Management's Discussion and Analysis or Plan of Operation
This quarterly report contains certain forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended, which are
intended to be covered by the safe harbors created thereby. Investors are
cautioned that all forward-looking statements involve risks and uncertainty,
including without limitation, the ability of the Company to continue its
expansion strategy, changes in costs of raw materials, labor, and employee
benefits, as well as general market conditions, competition and pricing.
Although the Company believes that the assumptions underlying the
forward-looking statements contained herein are reasonable, any of the
assumptions could be inaccurate, and therefore, there can be no assurance that
the forward-looking statements included in this quarterly report will prove to
be accurate. In light of the significant uncertainties inherent in the forward-
looking statements included herein, the inclusion of such information should not
be regarded as a presentation by the Company or any other person that the
objectives and plans of the Company will be achieved.
As used herein the term "Company" refers to LumaLite Holdings, Inc., a
Nevada corporation and its predecessors and subsidiaries, unless the context
indicates otherwise.
Business of the Company and its Subsidiaries:
Beginning in late 2001 and continuing through early 2002, we entered
into a series of transactions that we believe will result in our resuming
business operations, although in a significantly different industry than the
traditional industries in which we have operated. Those transactions include the
following transactions:
o In December 2001, we entered into a merger agreement with LumaLite, Inc.
("LumaLite"). LumaLite is a California corporation that develops and
manufactures dental products. The merger was complected immediately
prior to the filing of this report.
o In early January, 2002 we completed a private placement of shares with
three accredited investors for $500,000.
o In March 2002, our stockholders approved, and in April 2002 we effected,
a number of corporate actions that our management believes will enhance
our business operations following the merger with LumaLite. Those
actions included changing our corporate name from "ConSil Corp." to
"LumaLite Holdings, Inc.", effecting a 25 for 1 reverse split of our
outstanding shares of common stock, amending and restating our articles
and bylaws and moving our state of incorporation from Idaho to Nevada.
o In connection with our merger with LumaLite, we converted a significant
amount of our debt into shares of our common stock and one of our
principal shareholders contributed its holdings to our capital.
Our management believes these actions had a beneficial effect on our
financial position. Some of the transactions described below occurred, or are
anticipated to occur, after March 31, 2002, the closing date of the period
covered by this report. We have included descriptions of these matters in this
report to provide a more balanced description of our operations, business and
prospects on a going-forward basis.
LumaLite was incorporated in California in June 1999 to develop,
manufacture and sell advanced medical devices for the dental industry that use
its proprietary technology. LumaLite's current business consists of selling
teeth-whitening systems and whitening gels to dentist through a nation-wide and
international system of distributors. LumaLite's business will constitute our
primary business operations for the foreseeable future. For additional
information regarding LumaLite, its business and operations, see our annual
report for the period ending December 31, 2001 on Form 10-KSB.
Results of Operations
Plan of Operations - We have historically engaged in mining or
mining-related activities. We were initially formed to hold certain mining
properties known as the Silver Summit Mine, but in 1995 we sold that property to
Sunshine Precious Metals, Inc., which filed for Chapter 11 reorganization in
2000 and which has subsequently shut down its operations.
Following the sale of the Silver Summit mine in 1995, we engaged in
mineral exploration and acquisition activities, primarily in Mexico. Those
efforts were unsuccessful and during the fourth quarter of 1997 we essentially
discontinued all active business operations.
The Company may incur significant post-merger or acquisition
registration costs in the event management wishes to register a portion of their
shares for subsequent sale. The Company will also incur significant legal and
accounting costs in connection with the merger including the costs of preparing
Forms 8-K, agreements and related reports and documents.
The Company may not have sufficient funds to undertake any significant
development, marketing and manufacturing of the products acquired. Accordingly,
following the merger, the
Company will, in all likelihood, be required to either seek debt or equity
financing or obtain funding from third parties, in exchange for which the
Company may be required to give up a substantial portion of its shares. There is
no assurance that the Company will be able either to obtain additional financing
or interest third parties in providing funding for the further development,
marketing and manufacturing of the Company's products.
Results of Operations - During the period covered by this report, we
conducted no active business operations, engaged in no mineral research
activities or related development and did not expend any amounts on mineral
research or exploration. During the same period, we had no employees. Certain
administrative services relating to our minimal maintenance operations were
provided by employees of Hecla Mining Company, formerly our majority
stockholder.
Since we did not conduct any active operations during the period covered
by this report, we are not including in this report any information as to
industry segments or any descriptions of or properties, which are minimal and
relate solely to maintaining our administrative functions and corporate
existence.
In January 2002, we entered into an Agreement and Plan of Merger with
LumaLite, ConSil Merger Corp., a Nevada corporation that we formed as a
wholly-owned subsidiary to effect the merger, and certain shareholders of
LumaLite. The merger was completed during April 2002.
Upon completion of the merger, all of the issued and outstanding shares
of common stock of LumaLite were cancelled and converted into a right to
receive, in the aggregate, 17,800,000 post- reverse split shares of our common
stock. In connection with the merger, we assumed all of the then outstanding
options to purchase LumaLite's common stock and we have reserved an aggregate of
98,298 post-reverse split shares of our common stock for issuance under the
options. The 17,800,000 post-reverse split shares of common stock issued to the
LumaLite stockholders in the merger collectively represent approximately 62.46%
of our voting stock.
Capital Resources and Liquidity
Our principal source of funding during the past few years has been
advances from Hecla Mining Company, which was, until mid-2001, our principal
shareholder. In July, Hecla transferred to REA, LLC all outstanding debt owed to
them. As part of the transactions relating to the merger with LumaLite, REA
agreed to convert the outstanding debt into equity.
The Company expects future development and expansion will be financed
through cash flow from operations and other forms of financing such as the sale
of additional equity and debt securities, capital leases and other credit
facilities. There are no assurances that such financing will be available on
terms acceptable or favorable to the Company.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None/Not Applicable.
ITEM 2. CHANGES IN SECURITIES
On April 11, 2002 we effected a reduction in our outstanding capitalization by
effecting a"reverse split" pursuant to which we issued one share of our common
stock in exchange for every twenty-five (25) outstanding shares of our common
stock. As a result of the reverse split, the pre-merger number of issued and
outstanding shares of our common stock was reduced from 21,949,707 shares to
approximately 877,988 shares. The rights and preferences of our common stock
were not modified or amended in connection with the reverse split.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None/Not Applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS
During the first quarter of the fiscal year covered by this report, we submitted
five matters to a vote of our security holders, through the solicitation of
proxies or otherwise. The stockholders voted to ratify amendments to bylaws,
approved a reverse stock split, approved a change in corporate name, adopted new
articles of incorporation and bylaws and approved a change in domicile.
ITEM 5. OTHER INFORMATION
None/Not Applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS
(b) Reports on Form 8-K. No reports on Form 8-K were filed during the
period covered by this Form 10-QSB.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized, this 20th day of May, 2002.
LumaLite Holdings, Inc.
/s/ Michael Jackson
Michael Jackson
Chief Executive Officer
/s/ Hank Schumer
Hank Schumer
Chief Financial Officer