UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): April 16, 2002
Commission File No. 0-4846-3
LUMALITE HOLDINGS, INC.
(Exact name of Registrant as specified in its charter)
Nevada 82-0288840
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2810 Via Orange Way, Suite B
Spring Valley, California 91978
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 619 660-5410
CONSIL CORP.
6975 South Union Park Center, Suite 600
Salt Lake City, Utah, 84097
(Former name and address)
Item 1. Changes in Control of Registrant
Change in Control Transaction
On April 16, 2002, our parent corporation, Lumalite Holdings, Inc. (the
"Company") closed the merger (the "Merger") of its wholly-owned subsidiary,
Consil Merger Corp., a Nevada corporation, into LumaLite, Inc., a California
corporation ("LumaLite"). Under the terms of the Merger, all of the issued and
outstanding shares of common stock of LumaLite were cancelled and converted
into, and became a right to receive, in the aggregate, 17,800,000 shares of our
common stock. In connection with the Merger, we assumed all of the then
outstanding options (whether vested or unvested) to purchase LumaLite's common
stock and we reserved an aggregate of 98,298 post-reverse split shares of our
common stock for issuance under those options. The 17,800,000 shares of common
stock issued to the LumaLite stockholders in the Merger collectively represent
approximately 62.46% of our voting stock. As a result, if the LumaLite
stockholders act in concert, they will have significant control over our
business and operations, including the right to elect our Board of Directors.
For more information regarding the Merger and the other transactions we effected
in connection with the consummation of the Merger, see our annual report on Form
10-KSB for the period ended December 31, 2001.
The Company (which was formerly known as "ConSil Corp.") was originally
formed to hold mineral property in Shoshone County, Idaho. In 1995, our
stockholders approved the sale of those assets. Following the sale, we engaged
in other mineral exploration and acquisition activities, primarily in Mexico.
Those activities were unsuccessful and, beginning in the fourth quarter of 1997
and continuing through late 2001, we engaged in no active business operations,
had no employees and maintained only minimal accounting, management and officer
functions. With the consummation of the Merger, LumaLite's business will
constitute our primary business operations for the foreseeable future.
LumaLite was incorporated in California in June 1999 to develop,
manufacture and sell advanced medical devices for the dental industry.
LumaLite's current business operations are described in more detail at Item 2,
below.
References in this report, unless the context requires otherwise, to
"us," "our" and "we" are references to the Company and its wholly-owned
subsidiary, LumaLite. This report contains references to trademarks. All such
trademarks are the properties of their registered or common-law owners.
New Management
In connection with the Merger, James Anderson, our sole director and
officer, appointed four new members of our Board of Directors (all of whom were,
pursuant to the terms of the Merger, designees of LumaLite) and new officers,
and then resigned from our Board of Directors and as an officer. Our new
directors and officers, and their respective ages and biographical information
for each of them are presented below. There are no family relationships between
or among any of our directors:
Name Age Position
Dr. Dale Rorabaugh 58 Chairman of the Board and Chief Executive
Officer
Michael Jackson 55 Director and President
Hank Schumer 74 Director, Secretary-Treasurer and Chief
Financial Officer
Joseph Forehand 46 Director, Vice President of Operations
Dr. Dale Rorabaugh. Dr. Rorabaugh is the Chairman of our Board of
Directors and is our Chief Executive Officer. He also serves as C.E.O. and as a
director of LumaLite. Dr. Rorabaugh was one of the founders of LumaLite. He was
most recently President of the AuRora Group, a company specializing in research
and development of new products for the medical profession. Between 1994 and
2000, he was President of Eclipse Ventures, which developed a corneal
topographer used in Lasik surgery for measuring curvature of the cornea. Before
joining Eclipse, he was the founder and President of Dicon Corp., a company that
first introduced micro-processors to the ophthalmic industry in the form of an
automated visual field device. Dr. Rorabaugh holds a degree in Physics from the
University of Virginia and a Doctor of Optometry degree from the University of
California at Berkeley.
Michael Jackson. Michael Jackson is a member of our Board of Directors
and is our President. He also serves as President and as a director of LumaLite.
Before joining LumaLite, Mr. Jackson was most recently Vice President of
Marketing and Sales with HGM Medical Laser, a medical sales business. Before
that, Mr. Jackson was the Vice President of Sales for the Western Region for
Kreativ, Inc., a dental sales organization.
Hank Schumer. Hank Schumer is our Secretary-Treasurer, Chief Financial
Officer, and a member of our Board of Directors. Mr. Schumer also acts as
LumaLite's Vice President, Secretary, Chief Financial Officer and as a member of
its Board of Directors. Mr. Schumer was the President of Cafe Cartes, of San
Diego, California, a consulting services company. Mr. Schumer holds a Bachelor
of Electrical Engineering degree from C.C.N.Y. and a Masters in Business
Administration from Drexel Institute of Technology.
Joseph Forehand. Joseph Forehand is a member of our Board of Directors
and is our Vice President of Operations. Mr. Forehand also serves as Vice
President of LumaLite. Before joining LumaLite, he was Vice President of
Operations at Kreativ, Inc., a dental equipment manufacturing concern.
Structure of Our Board of Directors
At each annual meeting of our shareholders, our directors are elected
and hold office for a term expiring at the annual meeting of our shareholders
held the next succeeding year, or until their earlier resignation or removal.
Our Certificate of Incorporation provides that our directors may be removed only
for cause, and only by the affirmative vote of the holders of two-thirds of the
common shares entitled to vote at a meeting of our shareholders.
Executive Compensation
During 1999, 2000 and 2001, we did not pay any compensation to our
executive officers or directors. Following the Merger, we anticipate that we
will not pay salaries to our officers or directors, but that we will compensate
the persons who act as officers of LumaLite for the services they provide to
LumaLite. See the section entitled "Employment Agreements" below for more
information regarding LumaLite's agreements to pay compensation to its officers.
The following table summarizes the compensation LumaLite paid to its Chief
Executive Officer and each of its three most highly compensated executive
officers (other than the chief executive officer) who were serving as executive
officers at the end of the last completed fiscal year and whose salary and bonus
exceeded $100,000 (our "named executive officers"), for the periods indicated:
SUMMARY COMPENSATION TABLE
Annual Compensation
-------------------------------
Name And Fiscal Securities Underlying
Principal Position Year Salary ($) Bonus ($) Options/SARS (#)
------------------ ---- ---------- --------- ---------------
Dr. Dale Rorabaugh, 2001 $ 10,000 $79,028(4)
Chairman and CEO 2000
1999
Michael Jackson, 2001 86,088 (1) 148,631 2,577,614 (7)
President 2000 87,749 (1)
1999 12,000 (1)
Joseph Forehand, 2001 96,241 (2) 109,171(5)
Vice President 2000 106,250 (2)
1999 50,000 (2)
Hank Schumer, 2001 38,500 (3) 79,065 (6)
Chief Financial Officer 2000 28,500 (3)
1999 35,000 (3)
(1) Amounts shown reflect agreed upon compensation, a portion of which was
deferred at the election and agreement of the named executive officer. None
of the amounts shown for 1999 was paid, and $12,000 was deferred; none of
the amounts shown for 2000 was paid, and $87,749 was deferred and paid in
2001; and none of the amounts shown for 2001was deferred.
(2) Amounts shown reflect agreed upon compensation, a portion of which was
deferred at the election and agreement of the named executive officer. None
of the amounts shown for 1999 was paid, and $50,000 was deferred; none of
the amounts shown for 2000 was paid, and $106,250 was deferred and both the
1999 and 2000 deferred amounts were paid in 2001; none of the amounts shown
for 2001was deferred.
(3) Amounts shown were paid to the named executive officer's wholly-owned
consulting firm. See "Certain Relationships and Related Transactions."
Amounts shown reflect agreed upon compensation, a portion of which was
deferred at the election and agreement of the named executive officer. None
of the amounts shown for 1999 was paid, and $35,000 was deferred; none of
the amounts shown for 2000 was paid and $28,500 was deferred and paid in
2001; and none of the amounts shown for 2001 was deferred.
(4) The named executive officer received $46,453 of the amount shown. The
balance of the amount shown ($32,575) was deferred at the election and
agreement of the officer.
(5) The named executive officer received $60,187 of the amount shown. The
balance of the amount shown ($48,984) was deferred at the election and
agreement of the officer.
(6) The named executive officer received $46,453 of the amount shown. The
balance of the amount shown ($29,612) was deferred at the election and
agreement of the officer.
(7) Represents 300,000 shares of LumaLite, which, as a result of the Merger,
represent the number of shares of Company common stock shown. The named
executive officer exercised the options shown in the same year of their
grant for an exercise price of $75,000, which was the fair market value of
the stock at both the grant and exercise date.
Stock Option Grants
Since 1997, we have maintained two stock option plans. One plan
provides for stock-based grants to selected officers, directors and other key
employees. The other plan provides for grants of incentive stock options to
participating employees. The terms of the options granted under either plan
cannot be longer than five years from the date of their grant. No options are
currently outstanding under either plan.
LumaLite also maintains an option plan for its employees, officers and
consultants, which it adopted in 1999. As of December 31, 2001, LumaLite had
granted options for 98,298 shares (on a post-Merger basis) of its common stock,
but those options were assumed by the Company in the Merger and now represent
options to acquire 98,298 shares of the Company's common stock at an average
exercise price of $.11 per share. None of the options is in favor of any of our
named executive officers. The outstanding options were granted as incentive
stock options, have terms of four years and vest in 12.5% installments every 6
months after the date of their grant.
Director Compensation
Our directors do not receive cash compensation for serving on our board
(or any committee of our board), or for any other services they provide us in
their capacity as directors. They are, however, reimbursed for expenses they
incur in connection with attending board or committee meetings.
Indemnification of Officers and Directors
Our Certificate of Incorporation limits the personal liability of our
directors and officers for monetary damages to the maximum extent permitted by
Nevada law. Under Nevada law, those limitations include monetary damages for any
action taken or failed to be taken as an officer or director except for an act
or omission that involves intentional misconduct for a known violation of the
law, or the payment of improper distributions. Nevada law also permits a
corporation to indemnify any current or former director, officer, employee or
agent if the person acted in good faith and in a manner in which he reasonably
believed to be in or not opposed to the best interests of the corporation. In
the case of a criminal proceeding, the indemnified person must also have had no
reasonable cause to believe that his conduct was unlawful.
Our bylaws also provide that, to the full extent permitted by our
Certificate of Incorporation and the Nevada Business Corporations Act, we will
indemnify, and advance expenses to, our officers, directors and employees in
connection with any action, suit or proceeding, civil or criminal, to which
those persons are made party by reason of their being a director, officer or
employee. At present, we are not involved in any litigation or proceeding
involving any of our directors, officers, employees or agents where
indemnification by us would be required or permitted.
Employment Agreements
Prior to the Merger, LumaLite entered into written employment
agreements with Messers. Rorabaugh, Jackson, Schumer and Forehand (all of whom
sit on our board and hold officer positions with the Company in addition to the
officer and director positions they hold with LumaLite). The employment
agreements are all dated effective January 1, 2002 and have initial terms of
five years. The agreements are automatically renewable for one-year extension
terms, subject to notice by the other party of his or its intent to terminate
the agreement. The agreements provide for stated base salary amounts ($120,000
per year in the case of Messrs. Jackson and Forehand, $130,000 per year in the
case of Mr. Rorabaugh, and $80,000 in the case of Mr. Schumer), payable in
monthly installments. Compensation for any extension terms will be as mutually
agreed to by the parties at the beginning of the extension period. Each contract
can be terminated upon the agreement of the parties, upon the death of the
employee or upon LumaLite's dissolution, bankruptcy or receivership.
The contracts do not provide for any "change of control" payments,
severance payments or other provisions that provide for or require payments to
the employee in the event of any fundamental change in LumaLite's business,
operations or ownership. The agreements also do not contain any non-competition,
non-solicitation or assignment of inventions provisions, although they do
require the employee and LumaLite, during the term of the agreement, to use
their best efforts to avoid areas which may involve conflicts of interest
between LumaLite and the employee with respect to activities engaged in by the
employee.
Certain Relationships and Related Transactions
One of LumaLite's named executive officers provided his services to
LumaLite through a consulting arrangement. Under that arrangement, that
officer's wholly-owned consulting company provides those services to LumaLite
and the amounts otherwise payable to the officer for the services is paid to the
consulting company. During 1999 and 2000, LumaLite paid the consulting company
$35,000 and $28,500, respectively, under this arrangement, a portion of which
was deferred. See "Executive Compensation" above.
LumaLite has, from time to time, advanced amounts to certain of its
named executive officers. In 2000 and 2001, LumaLite loaned its president
$51,000 and $20,000, respectively, without interest. Those amounts were repaid
in 2001. In 2000, LumaLite loaned $65,000 and in 2001 LumaLite loaned $24,000,
without interest, to its vice president of operations. That loan was repaid in
2001.
Stock Ownership of Management and Certain Stockholders
The following table sets forth, as of May 15, 2002, the number and
percentage of the outstanding shares of common stock which, according to the
information supplied to the Company, were beneficially owned by:
o each person who is a director of the Company;
o each executive officer;
o all directors and executive officers of the Company as a group; and
o each person who, to the knowledge of the Company, is the beneficial
owner of more than 5% of its outstanding common stock.
All percentages are based on a total of 28,501,692 outstanding shares of our
common stock. None of the named persons hold any options or warrants to purchase
common stock. Except as otherwise indicated, the persons named in the table have
sole voting and dispositive power with respect to all shares beneficially owned,
subject to community property laws if and where applicable:
Total Percent of Class
Shares Beneficial Beneficially
Name of Beneficial Owner Owned Ownership(1) Owned
Eugene Breznock
(5% Shareholder) 3,252,560 3,252,560 11.4
Dr. Dale Rorabaugh
(Chairman and CEO) 4,571,853 4,571,853 16.0
Michael Jackson
(Director and President) 2,577,614 2,577,614 9.0
Joseph Forehand
(Director, VP Operations)
2,577,614 2,577,614 9.0
Hank Schumer
(Director & C.F.O.) 1,777,590 1,777,590 6.2
All directors and officers as a group (4
persons) 11,504.671 11,504,671 40.3
------------------------
(1) Beneficial ownership is determined in accordance with the rules of the
Securities & Exchange Commission. In computing the number of shares
beneficially owned by a person and the percentage ownership of that person,
shares of common stock subject to options held by that person that are
currently exercisable or become exercisable within 60 days following May
15, 2002 are deemed outstanding. These shares, however, are not deemed
outstanding for the purpose of computing the percentage ownership of any
other person. Unless otherwise indicated in the other footnotes to this
table, the persons and entities named in the table have sole voting and
sole investment power with respect to the shares set forth opposite such
shareholder's name.
Item 2. Acquisition or Disposition of Assets
The Acquisition
On April 16, 2002, the Company and LumaLite closed the Merger, which
resulted in the Company's acquisition of LumaLite and its business operations.
The Company and LumaLite subsequently filed a number of state filings with the
Secretaries of State of Nevada and California, the last of which was filed and
accepted on May 15, 2002. We will conduct our principal business operations
through LumaLite for the foreseeable future.
Description of Business of LumaLite
Overview
LumaLite develops and markets tooth-whitening products and services
through wholesale distributors, primarily to dental practitioners. LumaLite's
current principal product is its LumaArch(TM) bleaching product and associated
Xenon-halogen illumination system, which provides customers with tooth-whitening
results that we believe are superior to those provided by LumaLite's
competitors, based on, among other factors, its lower cost and the shortened
period of time that the customer is required to spend in the dental chair during
the whitening process. LumaLite intends to launch a number of complementary
products to its current product and service offerings in the near future and, in
late 2002, intends to introduce company-owned and operated tooth-whitening
centers in major retail locations as a store-in-store concept.
LumaLite's Operations
LumaLite was founded in 1999 for the purpose of developing advanced
device technologies for the medical and dental industries. LumaLite has focused
its research and development activities on cosmetic and tooth-whitening
solutions, and in late 2000, it commercially introduced its principal product,
"LumaArch," a comprehensive tooth-whitening and bleaching system that we believe
is more effective, cost efficient and easier to use than competitive
tooth-whitening systems.
The LumaArch system uses a multiple-use proprietary Xenon-halogen light
carrying technology and a proprietary liquid light guide to produce uniform
tooth-whitening results without any heat. The system is used in conjunction with
single-use LumaWhite tooth-whitening material, a specially formulated to the
energy wavelength produced by the LumaArch. The LumaArch system provides up to
eight shades of whitening improvement in a procedure that takes approximately 30
to 40 minutes of chair time, and at a cost to the patient of approximately $295.
As of April 2002, LumaLite had an installed base of approximately 1,700 LumaArch
systems nationwide (at an average manufacturers suggested retail price to the
dental professionals of $6,000), and we expect to have an installed worldwide
base of 3,100 systems by the end of 2002.
LumaLite currently markets its LumaArch system through a series of
wholesale distributor relationships with leading dental supply companies,
including Henry Schien and Patterson Dental. These dental supply companies
provide LumaLite with the equivalent of a 1,500 person sales representative
force and ready access to the more than 120,000 domestic dentists in the United
States. For more information regarding LumaLite's wholesale distributor
relationships, see "Strategic Relationships and Contracts" below.
LumaLite intends to extend its current product and service offerings
through two initiatives. First, beginning in the fall of 2002, LumaLite intends
to open company-owned and operated LumaLite retail tooth-whitening centers that
will offer consumers accessible, pleasant and affordable access to quality
tooth-whitening services in an upscale, "salon" type atmosphere. The
tooth-whitening centers will be designed to avoid the stigma associated with
in-office dental visits and make tooth-whitening less painful and easier. We
intend to place the retail centers in high traffic locations such as shopping
malls, "store-within-a-store" boutiques in major upscale department stores and
fitness centers, resorts, spas and vacation destinations. We expect to have
between five and ten centers in operation by the end of 2002, and open
forty-five centers in 2003. By the end of 2004, we anticipate having a total of
125 centers in operation. We believe the retail centers will build LumaLite's
brand recognition and marketing exposure, as well as offer numerous
opportunities for the growth of LumaLite's customer base.
The second initiative will focus on the introduction of a number of
ancillary tooth-whitening and oral hygiene products, such as at-home
tooth-whitening kits, toothpastes and mouthwash. These products will be designed
to supplement and reinforce the customer's initial LumaArch tooth-whitening
procedure, since there is a natural degradation in post-procedure tooth
whiteness from natural wear and the customer's use of staining agents such as
coffee, nicotine and red wine. We anticipate initiating market introduction of
these products in late 2002, beginning with the "LumaWhite DIY" (do it
yourself), a home bleaching and whitening kit, "LumaWhite" toothpaste, and
"LumaWhite" branded mouthwash and chewing gum. We believe that LumaLite's sale
of these consumer products will leverage its established reputation within the
cosmetic dentistry industry and provide an additional, high margin, recurring
revenue stream.
Industry Overview
Tooth-whitening has been practiced in rudimentary form since the late
1800s. With the discovery of carbamide peroxide, an active bleaching agent, and
its accidental application to aesthetic dentistry in the 1960s, the modern
tooth-whitening industry began to develop. Initially, tooth-whitening procedures
were generally cost prohibitive and time consuming. During the 1990s, the
industry experienced significant growth and, by 2001, was a $1.3 billion
domestic industry. The industry is expected to have domestic sales exceeding $5
billion within the next seven years. Industry experts believe that the industry
has grown due to a number of factors, including a fundamental shift in the focus
of the dental profession (i.e., as baby boomers age there is less of a need for
traditional dental services such as treating cavities and tooth decay), a more
image conscious American public that desires white, good-looking teeth and the
growing perception that the industry represents a potentially lucrative niche
industry. According to the American Dental Association, approximately 84% of
U.S. dentists now offer cosmetic dental procedures as part of their practices
and 50% of those dentists report a steady increase in the amount of cosmetic
procedures they have performed over the last three years.
Despite the substantial changes in the industry over the past decade,
current tooth-whitening products still suffer from the same general problems
that have plagued the industry historically -- they are generally expensive,
inconvenient and not very effective. The most commonly used methods for
whitening stained or discolored teeth have traditionally been at-home solutions,
such as whitening toothpaste or dentist-prescribed bleaching trays that offer
only marginal shade improvements (1 to 3 shades of improvement for toothpastes
and 2 to 4 shares of improvement for trays) at a moderate cost, but with a
significant investment in time. The most effective whitening solutions have
typically relied on dental professionals using light or laser activated
bleaching systems. These systems have historically been fairly expensive and,
because the procedures are done at dental offices, cause some potential
customers to avoid the procedures because of a fear of dental offices and the
assumption that the in-office bleaching process will be painful, difficult and
generally uncomfortable.
In 1999, one of our principal competitors, BriteSmile, introduced a
relatively cost effective and easy to use in-office bleaching procedure that
offered significant whitening results at a moderate (although still relatively
high-end) cost. Using that system, a customer could obtain an average of eight
shades of whiteness improvement during a 90 minute procedure and at an average
cost of $600. In late 2002, LumaLite will introduce its retail operation using
the LumaArch, which offers comparable results at approximately half the cost of
a BriteSmile procedure and which requires customers to spend only 30-40 minutes
in the dentist chair.
Strategy
We intend, through LumaLite, to become a leading provider of vertically
integrated tooth-whitening products and services through the following business
strategies:
o We intend to develop a number of product line extensions,
including retail tooth-whitening centers in major retail mall,
spa and vacation locations. The centers will expand our
distribution chain beyond wholesale and traditional dental
offices and into more consumer friendly locations. We believe the
retail locations will provide LumaLite with an enhanced ability
to cross-sell its other branded tooth-whitening products.
o We intend to develop and market ancillary tooth-whitening
products (such as toothpaste, mouthwash and gum) that will
enhance and maintain the tooth-whitening effects of the LumaArch
tooth-whitening process. We also intend to maintain a strong
research and development abilities to facilitate the development
of future ancillary products and services.
o We plan to expand and retain a strong and seasoned management
team with proven experience in developing and marketing medical
and dental technologies, as well as assisting us in becoming a
major factor in the consumer tooth-whitening arena. Our
management team has worked together for several years, in a
number of businesses, on medical and other technology based
products.
o We intend to develop additional revenue streams through
international expansion. Currently, we reach the approximately
120,000 domestic dentists through our wholesale distributor
relationships and accelerate the marketing of our products and
services internationally to the additional approximately 300,000
non-domestic dentists through additional strategic relationships
and/or distributor relationships. We have executed international
distribution contracts with distributors in Australia, Singapore,
Indonesia, Taiwan, the European Union (United Kingdom, Spain,
Italy, Germany and France), Middle East, Korea, Brazil and
Mexico. We have received both Canadian and European regulatory
approval (in the form of a "CE" designation) for the LumaArch,
which will allow us to actively market the LumaArch in those
territories.
o We intend to engage in selective acquisitions of assets and
companies where we believe those acquisitions will enhance,
supplement or speed up our business plan.
Products and Technology
We believe the LumaArch bleaching system is technologically superior to
the tooth-whitening systems employed by our competitors. The LumaArch system was
developed by LumaLite's co-founder, Dr. Dale Rorabaugh, and is currently the
core of LumaLite's product and service offerings. The LumaArch system uses a
proprietary Xenon-halogen multiple illumination source that produces a high
lumen energy output in a specified bandwidth within the visible spectrum. The
Xenon-halogen light is filtered through a patented "liquid light" guide that
provides a highly focused, uniform wavelength with virtually no heat as a
byproduct. We believe the liquid light guide is more effective in the whitening
process than more commonly used, but less efficient, fiber optic guides, and
that our liquid light guides are the most advanced guides currently on the
market, providing operating efficiencies in the range of 85%. By comparison,
most commonly used fiber optic light guides provide efficiencies of
approximately 45%, and the only competitive liquid light product on the market
is 20% less efficient than the LumaArch liquid light guides. The LumaArch liquid
light guides produce virtually no heat, providing a safer and more comfortable
process for the patients.
LumaLite's liquid light guides have been specifically designed to
interact with LumaLite's LumaWhite tooth-whitening material, which is the medium
that actually whitens the tooth enamel. The material is developed in a
proprietary formulation that increases the rate of oxidation on the internal and
external chromagens that cause tooth staining. The LumaArch system is also
unique in that it is designed only for tooth-whitening and can simultaneously
whiten both tooth arches at the same time. In comparison, other tooth-whitening
systems typically use products that have multiple applications, including
composite curing.
LumaLite has received one patent on its LumaArch system and has filed
three additional patents in the United States. LumaLite intends to continue
filing patents, with the advice of its counsel. LumaLite also uses a number of
trademarks for its products and services. Currently, it uses "LumaLite," for the
company name, and has also trademarked "LumaLite Guide," "LumaArch," "LumaWhite
Plus" and "LumaBlock." We intend to file additional trademark applications as
appropriate.
Strategic Relationships and Contracts
We have entered into a number of agreements relating to the
distribution of our services and products both domestically and internationally.
Domestic Distribution Relationships. LumaLite distributes its products
domestically through relationships with a number of nationwide dental
distributors, including Henry Schein, Inc., Patterson Dental Supply, Inc.,
Burkhart Dental and Kings Two Dental Supply. LumaLite sells its products to
those parties through standard purchase order arrangements, pursuant to which,
upon the sale of a LumaLite product, the distributor presents a purchase order
to LumaLite and LumaLite then invoices the distributor for payment. LumaLite's
relationships with its domestic distributors are non-exclusive and subject to
termination by either party at any time.
International Distributorships. LumaLite's international
distributorship arrangements are evidenced by a series of written agreements
using a standardized form that LumaLite has developed. The agreements specify
the territory and the products covered by the distributorship agreements. As of
the date of this report, LumaLite had entered into agreements for the
territories of Australia, Singapore, Indonesia, Taiwan, the European Union,
Korea, Brazil and Mexico.
The distribution arrangements grant the distributors the exclusive
right to distribute the products specified in the described territory and
require the distributor to maintain adequate facilities and sales personnel to
sell LumaLite's products. The distribution agreements generally provide for
minimum sales quotas by each distributor. If a distributor fails to meet the
sales quota during a particular year and fails to remedy any shortfall within 90
days after notice from LumaLite, LumaLite has the right to terminate the
distribution agreement. If the distributor sells more than the minimum quota for
any particular year, the distributor receives a credit for the excess sales
toward the minimum quota required for the subsequent year.
LumaLite is required to provide each distributor with a current price
list which is valid for the first 12 months after the date of the agreement and
which then may be changed on at least 60 days notice to the distributor. The
distributor is required to pay for any products purchased under the distribution
agreement by an irrevocable letter of credit (or other method agreed to by
LumaLite),
The distribution agreements are generally for an initial term of three
years and then provide the distributor with a right to renew the contract for up
to two additional three-year periods. The agreement can be terminated by either
party if the distributor fails to make timely payment for the products it
purchases or if a party declares bankruptcy or institutes insolvency
proceedings. In addition, either party may terminate the agreement for the other
party's failure to perform any non-monetary obligation set forth in the
agreement after 90 days notice specifying the party's failure to perform.
LumaLite may terminate the agreement if the distributor ceases to make
LumaLite's products available to customers for more than 30 consecutive days or
the distributor states in writing that intends to cease marketing LumaLite's
products.
Sales and Marketing
Currently, LumaLite distributes its LumaArch system using a wholesale
distribution network that sells to professional dental customers through
established relationships. LumaLite's wholesale distributors are primarily major
dental distributors.
LumaLite's distributor relationships effectively provide it with access
to the equivalent of 1,500 sales representatives who sell to the over 120,000
domestic dentists. LumaLite believes that this distribution system provides it
with rapid national market penetration without the heavy up-front costs that a
national sales platform would normally require. LumaLite compliments its
national distributor relationships with a small commission-only sales force of
approximately 20 independent sales representatives who train and update dental
end users on the LumaArch product and its use.
LumaLite believes that wholesale distribution provides a number of
distinct benefits to it over the more traditional direct marketing approaches
and independent distribution chains used by its competitors. Typically,
traditional marketing and distribution chains are costly, complex and slow to
gain momentum. For example, LumaLite believes its principal competitors employ
marketing approaches that require them to spend a significant portion of their
revenues (at least in the early stages of corporate growth) on marketing and
advertising. We believe, however, that by using distributor networks and
relationships, LumaLite's overall marketing and advertising costs will stabilize
in the range of between 10% and 12% of revenues.
We believe that by the end of 2002 LumaLite's distribution network will
lead to an installed base of approximately 3,100 LumaArch systems on a worldwide
basis, and that those installed systems will allow LumaLite to derive long-term
recurring revenues from the sale of its high-margin, single-use LumaLite
tooth-whitening material as customers and dental practitioners use the LumaArch
systems. LumaLite also intends to take advantage of these existing sales
channels to cross-market its proposed line of complementary tooth-whitening
products to its expanding customer base.
Competition.
LumaLite's tooth-whitening systems will compete with all
tooth-whitening products and services, including those offered through dental
offices, retail stores and take-home products. LumaLite's competition in the
in-office arena include BriteSmile, Inc., which offers its products through a
number of storefront centers, Air Technologies, which uses Patterson Dental as a
distribution channel, and Discus Dental, Inc., which markets its product through
a direct sales force.
Companies that offer dentist-prescribed home bleaching products include
Opalescence, which is offered by Ultra Dent, Inc., Night White, which is offered
by Discus Dental, Inc., Platinum, which is offered by Colgate, Crest Strips and
NuProGold, which are offered by Dentsply International, Inc., and Rembrandt,
which is offered by DenMat, Inc.
The company believes LumaLite's products and services compete favorably
with the products and services offered by in-office and store front products and
service providers, since the LumaArch system provides comparable or superior
tooth-whitening services (on average, eight shades of whitening difference) for
a price point that is significantly lower than the cost of its competitors'
products and services. For example, laser-based bleaching systems typically
retail for between $10,000 and $50,000, and cost patients between $750 and
$2,000, while less effective power bleaching systems cost dentist between $1,000
and $5,000, with a cost to the patient of $500 to $1,250. LumaLite's primary
competitor in the marketplace, which offers a comparable whitening system that
produces results similar to those produced by LumaArch, with a minimum chair
time, is available to dental practitioners only through a 10 year exclusive
contract and at a cost per procedure to the dental practitioners of $250,
resulting in a customer cost of $600. With respect to in-home professional or
over-the-counter products, we believe LumaLite's products' and services'
competitive advantages include significantly reduced processing time, and better
results.
Governmental Regulation
The business operations we conduct through LumaLite are and will be
subject to certain federal, state and local statutes, regulations and
ordinances, including those governing health and safety. The LumaArch system is
categorized as a Class 1 exempt medical device as defined by the Food and Drug
Administration, and is used specifically to perform cosmetic dental procedures.
Therefore, the LumaArch is not subject to the customary rules and regulations
of, and oversight by, the FDA.
In most states, our tooth-whitening procedures are deemed to be part of
the practice of dentistry. Generally, states impose licensing and other
requirements on the practice of dentistry. In addition, some states prohibit
general business corporations from engaging in the practice of dentistry. In
some states, our corporate structure (including, as appropriate, the structure
relating to our proposed retail tooth-whitening centers) may be required to be
reviewed by, and require the express approval of, a state agency governing the
practice of dentistry, such as a board of dental examiners. In those states, we
may need specific approval for the operation of our proposed retail
tooth-whitening centers. Based on our review of applicable statutes and
regulations and our corporate structure (including, with respect to our proposed
retain tooth-whitening centers), we believe that our operations are and will be
in compliance in all material respects with applicable federal, state and local
regulations.
Employees
As of December 31, 2001, the Company had no employees. As of that same
date, LumaLite had a total of 13 employees. Of these employees, 2 were involved
in sales and marketing, 2 were involved in product development, 7 were involved
in quality assurance, manufacturing and product support, and 2 were involved in
administrative and corporate functions.
Properties
Prior to the completion of the Merger, our properties consisted
primarily of minimal office equipment, the right to use office space at our
principal executive location at 4766 Holladay Boulevard in Holladay, Utah, and
the rights under our royalty agreement with Sunshine Precious Metals, Inc.,
which, as noted above, filed for reorganization under Chapter 11 of the
bankruptcy code in 2000 and has shut down operations in its Sunshine mine.
As a result of the Merger, we now conduct our principal business
operations through LumaLite's properties and equipment. LumaLite's principal
business operations are conducted from a leased 4,500 sq. ft. combination
administrative, research, manufacturing and warehouse space located in Spring
Valley, California. The lease for the property expires in November 2004. We
believe the lease is on commercially reasonable terms and that it is adequate
for LumaLite's current needs. We also believe there is additional lease space
available on commercially reasonable terms in the same general area if we decide
that LumaLite requires additional space for its operations.
LumaLite maintains manufacturing equipment, as well as supplies and
inventory, at its principal business location. Its manufacturing equipment
consists primarily of assembly and final-testing machines and equipment.
LumaLite has the ability to source its manufacturing equipment and components
from a number of vendors. LumaLite believes all of its manufacturing equipment
is in good condition, normal wear and tear excepted. LumaLite's manufacturing
facilities comply with Good Manufacturing Procedures (GMP).
In connection with our business activities, we have not historically
engaged, and do not intend in the future to engage, in any significant
investment activities, including investments in real estate, investments in real
estate mortgages or in securities or interests of persons primarily engaged in
real estate activities.
Legal Proceedings
We are not subject to any material actual or pending legal proceedings.
Risk Factors
Prospective investors in our common stock should carefully consider the
following risks before deciding to buy our common stock. Our business, financial
condition or operating results may suffer if any of the events described in the
following risk factors actually occur. There may be additional risks that we are
not currently able to identify. These may also adversely affect our business,
financial condition or operating results. If any of the events we have
identified, or those that we cannot now identify, occurs, the trading price of
our common stock could decline, and investors in our securities may lose all or
part of the money they paid to buy our common stock.
Our business is difficult to evaluate because it has a limited operating
history.
At the parent company level, we have historically operated at a loss.
Between 1997 and 2001, we maintained only minimal administrative and management
functions. As of December 31, 2001, we had an accumulated deficit of $3,469,284.
As a result of the Merger we will conduct our operations primarily through
LumaLite (which began operating in 1999) and also consolidate our operations
with LumaLite's for financial accounting purposes. Its limited operating history
makes predicting future results difficult. LumaLite generated revenues of
$4,020,359 for 2001 and pre-tax income of $688,013 for the same period, compared
with revenues of $585,380 and a pre-tax loss of $237,462 for 2000. As of
December 31, 2001, LumaLite had an accumulated deficit of $136,333.
Our historical financial information is of limited value in projecting
our future results on a going-forward basis for a number of reasons, including
(i) because LumaLite has only had a limited operating history, (ii) because we
have had only minimal operations since 1997, and (iii) because we will
consolidate the results of the Company's and LumaLite's operations for
accounting purposes as a result of the Merger. Therefore, it is difficult to
evaluate our business and prospects.
Further, our quarterly revenues and the results of our operations may
vary significantly in the future (from quarter to quarter or otherwise) based on
a number of factors, including the following:
o our ability to attract new customers and maintain customer
satisfaction;
o the timing of the sale of our products and services and the
implementation of our products and services (including opening
our retail-based tooth-whitening centers);
o our ability to establish and maintain strategic relationships;
o increased expenses, including expenses related to sales and
marketing, research and development, administration or
international expansion;
o our ability to enhance, improve or introduce our products and
services, either internally or through the integration of
third-party improvements, and to introduce those new or enhanced
products or services into the market;
o the announcement or introduction of new or enhanced products and
services by our competitors;
o continued growth of the dental market and tooth-whitening
commerce; and
o governmental regulation surrounding the development, sale or use
of our products or services.
Accordingly, we believe that quarter-to-quarter comparisons of our operating
results are not necessarily meaningful and are not necessarily indicative of
future performance.
Our success will depend on consumer acceptance of our light-activated
tooth-whitening and maintenance products.
We currently derive, and anticipate deriving in the future, a
substantial portion of our revenues from LumaLite's light-activated
tooth-whitening methods, procedures and other dental products. Those products,
methods and procedures are based on a relatively new tooth-whitening concept for
consumers. Our success will depend in large part on our ability to successfully
encourage consumers, dentists and dental office employees to switch from
traditional bleach and tray whitening methods to our light-activated
tooth-whitening products.
We compete in an industry that is characterized by rapidly changing technology.
The dental device and supply industry is characterized by rapid
technological change. As technological changes occur in the marketplace, we may
have to modify our products to become or remain competitive, or to ensure that
our products do not become obsolete. If we fail to anticipate or respond in a
cost-effective and timely manner to governmental requirements, market trends or
consumer demands, or if there are any significant delays in our product
development or introduction of new products into the marketplace, our revenues
and profit margins may decline, which could adversely affect our cash flows,
liquidity and operating results.
We are subject to significant competition
The market for tooth-whitening products and services is highly
competitive, and that competition may intensify in the future. A number of
well-established companies and smaller entrepreneurial companies are focusing
significant resources on developing and marketing products and services that
compete with our products and services. In addition, many of our current and
potential competitors have greater financial, technical, operational and
marketing resources. We may not be able to compete successfully against these
competitors in developing our products or services. Competitive pressures may
also force prices for tooth-whitening products and services down, and those
price reductions could affect our potential future revenues.
We are susceptible to product liability suits and, if a lawsuit is brought
against us, defending the action could require us to pay large legal expenses
and/or judgments.
We have not had any product liability claims asserted against us, but
because of the nature of the dental device industry, there can be no assurance
that we will not be subject to those types of claims in the future. Our products
come in contact with vulnerable areas of the human body, such as the mouth,
tongue, tooth and gums, and therefore, the sale and support of dental products
makes us susceptible to the risk of product liability claims. A successful
product liability claim, or the negative publicity brought by such claims, could
have a material adverse effect on our revenues and business.
We maintain product liability insurance with coverage limits of
$1,000,000 per occurrence and $2,000,000 per year. While be believe that
coverage is adequate, we do not guarantee that the amount of the insurance that
we carry will be adequate to satisfy any claims that are made against us in the
future, or that we will be able to obtain insurance in the future at
satisfactory rates or in adequate amounts.
We may experience shortages of the supplies we need because we do not have
long-term agreements with our suppliers.
Our success depends to a large degree on our ability to provide our
affiliated dentists with our state of the art light-activated whitening
products, and a sufficient supply of tooth-whitening materials and maintenance
products. Since we first commercially introduced our products, we have relied on
manufacturing and supply agreements with a number of suppliers and
manufacturers. We have no long-term purchase contracts or other contractual
assurances of continued supply, pricing or access to those products or
manufacturing services. While we believe we have good relationships with our
suppliers and manufacturers, if we are unable to obtain supplies from one or
more of our key vendors on a timely basis, or if there is a significant change
in our ability to obtain necessary equipment or supplies, our results of
operations could be seriously harmed.
We do not intend to pay dividends.
We do not anticipate paying any cash dividends on our common stock to
our shareholders for the foreseeable future. We intend to retain future
earnings, if any, for use in our operations and expanding our business.
Our common stock price may be volatile, we trade on only a limited public market
basis, and we are subject to certain restrictions that may affect your ability
to sell our stock.
Our common stock trades on the over-the-counter market maintained by
the NASD. The over-the-counter market is distinct from, and generally handles a
smaller volume of trades, than other exchanges over which securities of
companies are traded, including the New York Stock Exchange, the "system
maintained by the NASDAQ national market and small cap market systems and local
trading exchanges." The owners of our common stock may, therefore, find it more
difficult to dispose, or obtain accurate quotations for the market price of our
common stock. In addition, stocks traded over-the-counter are generally subject
to a rule that imposes restrictive sales practice requirements on broker-dealers
selling those securities to persons other than established customers and
accredited investors. For transactions covered by this rule, the broker-dealer
must, among other requirements, make a special suitability determination
regarding the purchasers and must receive the purchaser's written consent to the
transactions prior to any purchase. Consequently, the rule may restrict the
ability of broker-dealers to sell or limit the interest of broker-dealers in
selling our common stock and may adversely affect the ability of holders of our
common stock to sell shares.
The market prices for securities of emerging companies, including the
Company, have historically been highly volatile. Significant volatility in the
market price of the shares of our common stock may arise due to factors such as
our developing business, historic losses and relatively low price per share. In
addition, future announcements concerning us or our competitors may have a
significant impact on the market price of our common stock. Those announcements
might include announcements regarding financial results, the results of testing,
technological innovations, new commercial products, changes to governmental
regulations, governmental decisions on commercialization of products,
developments concerning proprietary rights, litigation or public concern as to
the safety of our products. As long as there is only a limited public market for
our common stock, the sale of a significant number of shares of our common stock
at any particular time could be difficult to achieve at the market prices
prevailing immediately before those shares are offered, and the offering of a
significant number of shares of common stock at any one time could cause a
severe decline in the price of our common stock.
We currently rely on wholesale distributors to market our products, but there
can be no assurance that those distributors will meet their contractual
obligations or be successful in their efforts.
We market the LumaArch primarily through a series of distribution
agreements with wholesale distributors that have direct sales contacts with
domestic dentists. We recently entered into similar arrangements in several
foreign countries for sales of our products to dentists outside the United
States. If our distributors fail to promote our products, or if they fail or
refuse to comply with the terms of their agreements with us, our ability to
market our products and services, at least in the short term, could be
materially and adversely affected, which could adversely affect our revenues,
operations and business plan. There can be no assurance that our distributors
will comply with the terms of their contractual obligations with us, or that
they will be successful in marketing our products.
We cannot guarantee that our patent applications will be granted, or that, even
if they are granted, our competitors will not infringe on them.
We have filed a number of patent applications related to our
tooth-whitening products which are currently pending, including patent
applications relating to our LumaArch, Liquid Light Guides and Do It Yourself
Trays. Although we intend to continue to apply for patents, we cannot assure you
that we will continue to apply for, or that we will actually be issued, patents,
and that, if any such patents are issued, that third parties will not infringe
on those new patents or our existing patents. If we are unable or fail to
protect our intellectual property rights through the patent process, that could
weaken our competitive position, reduce our revenue and increase our costs.
In addition to patents, we rely on a combination of trade secrets,
copyrights and trademark laws, nondisclosure agreements and other contractual
provisions and technical measures to protect our intellectual property rights.
These measures may not be adequate to safeguard the technology underlying our
products and services. If they do not protect our rights, third parties could
use our technology, and our ability to compete in the market could be reduced.
In addition, our employees, consultants and other persons who participate in the
development of our products and services could breach their agreements with us
regarding our intellectual property, and we may not have adequate remedies for
those breaches. We may also not be able to effectively protect our intellectual
property rights in some foreign countries. For a variety of reasons, we may not
decide to file for additional patent, copyright or trademark protections outside
of the United States or in foreign jurisdictions. We also realize that our trade
secrets may become known through other means that we do not currently foresee.
Even though we intend to protect our intellectual property, our competitors may
independently develop similar or alternative technologies or products that are
equal or superior to our technology and products without infringing on any of
our intellectual property rights, or design around our proprietary technologies.
Our products or services could infringe on the intellectual property rights of
others, which could require us to engage in costly litigation and, if we are not
successful in that litigation, could also require us to pay substantial damages
and/or prohibit us from selling our products or services.
Third parties may assert infringement or other intellectual property
claims against us if we use, even inadvertently, their intellectual property
rights. If it is ultimately determined that our products or services infringed
on a third party's proprietary rights, we may have to pay substantial damages,
including treble damages, for those past infringements. Further, we may be
prohibited from selling our products before we obtain a license from those
parties, which, if available at all, could require us to pay substantial
royalties. Even if the infringement claims are without merit, defending
infringement lawsuits takes significant time, is expensive and can divert
management's attention from other pressing business concerns.
We may be subject to government regulations regarding the corporate practice of
dentistry.
We intend to expand our current distribution system by opening a series
of wholly-owned and operated retail tooth-whitening centers in "in-store" retail
locations. In certain states, we may operate those centers through licensed
dentists or other dental practitioners. Our corporate structure, operation of
centers and contractual relationships with our licensed dentists at those
centers may be subject to government regulation and may be reviewed by
applicable state agencies governing the practice of dentistry (such as
state-regulated boards of dental examiners). We believe that our operation of
centers will be in compliance in all material respects with applicable federal,
state and local laws and regulations regarding the practice of dentistry (all of
which are subject to change), and that any state agency which chose to review
our operational structure would conclude likewise. However, we cannot assure you
that we will obtain a favorable review in all such instances. If we are unable
to do so, we may be subject to penalties or be prevented from operating in
certain jurisdictions. Further, if we are unable to comply with the applicable
laws and regulations in any state, we may be limited in those states to offering
our products and services through other means than wholly-owned centers.
We may be subject to government regulation regarding our tooth-whitening
services and products.
The light used in our tooth-whitening systems is categorized as a Class
I exempt Medical Device, as defined by the Food and Drug Administration, or FDA.
As long as the light is used specifically to perform cosmetic dental procedures
(i.e., tooth-whitening), it is not subject to premarket notification
requirements, although we are subject to FDA requirements regarding the handling
of complaints and other general FDA record keeping standards. We cannot assure
you that some or all of the existing government regulations regarding the use,
storage, administration or manufacture of our products or services (either
existing or under development) will not change significantly or adversely in the
future, or that we will not become subject to compliance with additional or
stricter governmental regulations which could, in the future, affect our
potential revenue or operations.
The ownership of our outstanding common stock is concentrated in a limited
number of shareholders.
Our current directors and executive officers, or their affiliates, own
and control approximately 40% of our common stock and, therefore, if they act in
concert, those persons would have significant influence on decisions affecting
our business, including the identity and makeup of our board of directors, and
any other matters requiring approval of our shareholders.
We may not be successful in building a strong brand identity and customer
loyalty.
We believe that establishing and maintaining brand identity and brand
loyalty is crucial to attracting customers, dentists and other strategic
partners. To attract and retain those groups, and respond to competitive
pressures, we intend to continue substantial investments in creating and
maintaining brand loyalty for our products and services. We believe advertising
rates, and the cost of advertising campaigns in particular, could increase
substantially in the future. If our branding efforts are not successful, our
results of operations could be adversely affected.
Promotion and enhancement of our brands will depend on our success in
consistently providing high quality tooth-whitening services and products and
customer satisfaction with those products and services.
If our customers do not perceive our services and products to be of
high quality, or if we introduce new services or products that are not favorably
received by our potential customers, the value of our brands could be harmed.
Any such decrease in the value or perceived value of our brands could harm our
reputation, reduce our net revenue, cause us to lose customers and affect the
price of our common stock.
We may need additional capital to fund our operations and finance our growth,
but we may not be able to obtain it on acceptable terms or at all.
If we expand our operations more rapidly than we currently anticipate,
if our working capital needs exceed our current expectations or if we make any
acquisitions, we will need to raise additional capital from either equity or
debt sources. If we cannot obtain financing on terms acceptable to us or at all,
we may be forced to curtail our planned business expansion and we may be unable
to fund our ongoing operations.
Our business strategy may not effectively address our market and we may never
realize a return on the resources we invest to execute our strategy.
LumaLite has made substantial investments to pursue its business
strategy. These investments include investments in:
o infrastructure and equipment;
o research and development;
o expanding its work force;
o experienced management;
o product and service offerings; and
o developing marketing and sales resources and brand awareness.
These investments may not be successful, and other companies may employ more
cost effective strategies than LumaLite has used to compete in LumaLite's
markets. LumaLite may never realize a return on the resources in which it has
invested or in which it may invest in the future.
Our competitors may seize the market opportunities we have identified because we
may not effectively execute our business strategy.
If we fail to execute on our business strategy in a timely or effective
manner, our competitors may be able to seize the marketing opportunities we have
identified. Our business strategy is complex and requires us to successfully and
simultaneously complete many tasks. To be successful, we will need to:
o invest in state-of-the-art equipment, research and development;
o attract and retain customers;
o improve or enhance our products;
o attract and retain highly skilled employees and consultants;
o introduce complementary products and services, including our
retail tooth-whitening centers and ancillary tooth-whitening
products;
o attract and retain experienced management, sales and marketing
personnel;
o evolve our business to gain advantages in an increasingly
competitive environment.
Although most of our management team has worked together for several years,
there can be no assurance that we will be able to successfully execute all
elements of our business strategy.
We plan to expand very rapidly, and managing our growth may be difficult.
LumaLite has rapidly expanded its operations since it was founded in
1999. We expect its business to continue to grow geographically and in terms of
the number of products and services it offers and the manner in which it offers
those products and services. We cannot be sure that we will successfully manage
that growth. To successfully manage our growth. We must:
o invest in research and development personnel to make sure our
products and services remain up-to-date;
o hire and retain key executive management personnel;
o improve our management, financial and information systems and
controls; and
o expand, train and manage our employee base effectively.
There will be additional demands on our customer service support and sales,
marketing and administrative resources as we increase our service offerings and
expand our target markets. The strains imposed by these demands are magnified by
the relatively early stage of our operations. If we cannot manage our growth
effectively, our business, financial condition or results of operations could be
adversely affected.
Our growth could be limited if we are unable to attract and retain qualified
personnel.
We believe that our short- and long-term success depends larmaterialy
on our ability to attract and retain highly skilled technical, managerial and
marketing personnel. We may not be able to hire the necessary personnel to
implement our business strategy, or we may need to pay higher compensation for
employees than we currently expect. We cannot be sure we will succeed in
attracting and retaining the personnel we need to continue to grow.
We depend, particularly in the case of LumaLite, on a limited number of
key personnel who would be difficult to replace. Our success also depends in
significant part on the continued services of our key technical, sales and
senior management personnel. Losing one or more of our key employees could have
a material adverse effect on our business, results of operations and financial
condition. LumaLite has employment agreements with each of its key officers.
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
This Form 8-K includes forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. These statements relate
to, among other things, analyses and other information that are based on
forecasts of future events and results, and estimates of amounts not yet
determinable. These statements also relate to future prospects, developments and
business strategies. These forward-looking statements are identified by their
use of terms and phrases such as "anticipate," "believe," "could," "estimate,"
"expect," "intend," "may," "plan," "predict," "project," "will" or the negative
of those or other variations, or comparable expressions, including references to
assumptions.
The forward-looking statements in this Form 8-K, including statements
concerning projections of future results, operating profits and earnings, if
any, are based on current expectations and are subject to risks and
uncertainties that could cause actual results to differ materially from those
expressed or implied by those statements. The risks and uncertainties include
but are not limited to our continued ability to:
o develop and market our current products and services and expand
the scope of our products and services through the introduction
of complementary products and services and retail tooth-whitening
centers;
o attract and retain customers;
o attract and retain highly skilled employees;
o effectively manage growth; and
o evolve our business to gain advantages in an increasingly
competitive environment.
Our risks are more specifically described in the section entitled "Risk
Factors," above. If one or more of these risks or uncertainties materializes, or
if the assumptions prove incorrect, our actual results may vary materially from
our expected, estimated or projected results. Given these uncertainties, you
should not place undue reliance on any forward-looking statements contained in
this Form 8-K.
We undertake no obligation to update forward-looking statements or risk
factors other than as required by applicable law, whether as a result of new
information, future events or otherwise.
Item 7. Financial Statements and Exhibits.
(a) Financial Statements and Proforma Information
The Company will file, as an amendment to this report and within
the time period set forth in Item 7, the financial statements and/or
proforma financial information specified in regulation S-X, as
promulgated under the Securities Exchange Act of 1934, as amended,
together (as appropriate) with signed accountant's reports as provided
in Regulation S-X.
(b) Exhibits. N/A
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
LUMALITE HOLDINGS, INC.
Date: May 17, 2002 By: /s/ Michael Jackson
--------------------------
Michael Jackson, President