Exhibit 99.1
LCM Holdings
(A Development Stage Company)
Financial Statements
Three Months Ended March 31, 2005 and the Period from
Inception (March 31, 2004) to December 31, 2004
================================================================================
LCM HOLDINGS
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
Three Months Ended March 31, 2005 and the Period from
Inception (March 31, 2004) to December 31,2004
================================================================================
LCM HOLDINGS
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
Three Months Ended March 31, 2005 and the Period from
Inception (March 31, 2004) to December 31, 2004
================================================================================
C O N T E N T S
PAGE
Independent Auditor's Report.............................................. 1
Financial Statements:
Balance Sheets................................................... 2
Statements of Operations......................................... 3
Statements of Cash Flows......................................... 4
Notes to Financial Statements.................................... 5-6
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors
LCM Holdings
San Diego, California
We have audited the accompanying balance sheet of LCM Holdings (the Company), a
Delaware corporation in the development stage, as of December 31, 2004 and the
related statements of operations and cash flows for the period from inception
(March 31, 2004) to December 31, 2004. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of LCM Holdings as of December 31,
2004, and the results of its operations and its cash flows for the period from
inception (March 31, 2004) to December 31, 2004 in conformity with accounting
principles generally accepted in the United States of America.
/s/ Vitale, Caturano & Company, Ltd.
VITALE, CATURANO & COMPANY, LTD.
June 28, 2005
Boston, Massachusetts
PAGE 2
LCM HOLDINGS
(A DEVELOPMENT STAGE COMPANY)
Balance Sheets
MARCH 31,
2005 December 31,
(UNAUDITED) 2004
-------------------------
ASSETS
Cash and cash equivalents $ 160 $ 364
-------------------------
$ 160 $ 364
=========================
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable $ 800,132 $ 718,729
Notes payable 30,000 30,000
-------------------------
Total current liabilities 830,132 748,729
-------------------------
Stockholders' deficit:
Common stock, $.001 par 1 1
Accumulated deficit (829,973) (748,366)
-------------------------
Total stockholders' deficit (829,972) (748,365)
-------------------------
$ 160 $ 364
=========================
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE
FINANCIAL STATEMENTS.
PAGE 3
LCM HOLDINGS
(A DEVELOPMENT STAGE COMPANY)
Statements of Operations
THREE MONTHS Period from
ENDED Inception
MARCH 31, (March 31, 2004)
2005 to December 31,
(UNAUDITED) 2004
-------------------------------
Revenues $ -- $ --
-------------------------------
Total revenues -- --
-------------------------------
Research and development 25,765 647,472
General and administrative 55,842 100,894
-------------------------------
Total operating expenses 81,607 748,366
-------------------------------
Net loss (81,607) (748,366)
-------------------------------
Accumulated deficit, beginning of period (748,366) --
-------------------------------
Accumulated deficit, end of period $(829,973) $(748,366)
===============================
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE
FINANCIAL STATEMENTS.
PAGE 4
LCM HOLDINGS
(A DEVELOPMENT STAGE COMPANY)
Statements of Cash Flows
THREE MONTHS Period from
ENDED Inception
MARCH 31, (March 31, 2004)
2005 to December 31,
(UNAUDITED) 2004
-------------------------------
Cash flows from operating activities:
Net loss $ (81,607) $(748,366)
Adjustments to reconcile net loss to
net cash provided by (used in) operating activities:
Change in current assets and liabilities:
Increase in:
Accounts payable 81,403 718,729
Notes payable -- 30,000
-------------------------------
Net cash provided by (used in) operating activities (204) 363
-------------------------------
Cash flows from financing activities:
Proceeds from issuance of common stock -- 1
-------------------------------
Net cash provided by financing activities -- 1
-------------------------------
Net increase (decrease) in cash and cash equivalents (204) 364
Cash and cash equivalents, beginning of period 364 --
-------------------------------
Cash and cash equivalents, end of period $ 160 $ 364
===============================
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE
FINANCIAL STATEMENTS.
PAGE 5
LCM HOLDINGS
(A DEVELOPMENT STAGE COMPANY)
Notes to Financial Statements
Three Months Ended March 31, 2005 (Unaudited) and the Period
From Inception (March 31, 2004) to December 31, 2004 (Audited)
1. NATURE OF ORGANIZATION
LCM Technologies, Inc., (here in referred to as LCM Holdings or the
Company) a Delaware Corporation, was incorporated on March 31, 2004.
The Company is in the development stage and is devoting substantially
all of its efforts toward technology research and development.
On May 4, 2005, the Company and Catcher, Inc. entered into an agreement
in which Catcher, Inc. purchased substantially all of the assets and
liabilities of the Company.
Also, on May 4, 2005, Catcher, Inc. was acquired by U.S. Telesis
Holdings Inc. through a series of stock purchases with the shareholders
of Catcher, Inc. In connection with the acquisition, U.S. Telesis
Holdings, Inc. acquired (i) all of the issued and outstanding shares of
common stock of Catcher in exchange for an aggregate of 34,911,900
shares of authorized, but theretofore unissued shares of common stock,
$.001 par value of U.S. Telesis Holdings, Inc., (ii) all of the issued
and outstanding Series A Preferred Stock of Catcher Inc. in exchange
for 733,778 shares of authorized Series A Preferred Stock, $.001 par
value of U.S. Telesis. In addition, U.S. Telesis assumed Catcher Inc.'s
obligation to issue an aggregate of 32,402,600 shares of common stock
to warrant holders.
Immediately prior to the acquisition of Catcher, Inc. by U.S. Telesis
Holdings, Inc., Catcher, Inc. completed a private placement of units
consisting of common stock and warrants of Catcher to accredited
investors which generated cash proceeds in the amount of $4,500,721.
The Company is subject to risks common to rapid growth technology-based
companies, including a limited operating history, dependence on key
personnel, the need to raise capital, rapid technological change,
competition from substitute products and larger companies, and the need
for the successful development and marketing of commercial products and
services.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
INTERIM FINANCIAL DATA
The accompanying financial statements as of March 31, 2005 are
unaudited. In the opinion of management, these interim statements have
been prepared on the same basis of accounting as the audited financial
statements and include all adjustments, consisting only of normal
recurring adjustments, necessary for the fair presentation of the
results of the interim periods. The financial and other data disclosed
in these notes to the financial statements for these periods are not
necessarily indicative of the results to be expected for any future
periods.
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management
to make estimates and assumptions that affect the reported amounts of
assets and liabilities as of the date of the financial statements and
the reported amounts of revenues and expenses during the reporting
periods. Actual results could differ from those estimates.
PAGE 6
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES...continued
CASH AND CASH EQUIVALENTS
The Company considers all highly liquid investments with original
maturities of 90 days or less to be cash equivalents.
INCOME TAXES
No income tax provision is recorded since the Company has incurred
losses since its inception. Also, due to the uncertainty of future
taxable income, no future tax benefits of incurred losses have been
recognized. Further, since the Company experienced a change in
ownership control on May 4, 2005 (see Note 1), there will be
limitations with respect to the future utilization of income tax loss
carryforwards.
CONCENTRATION OF CREDIT RISK
The Company maintains its cash in bank deposit accounts, which at
times, may exceed federally insured limits. The Company has not
exceeded the federally insured limits as of December 31, 2004. The
Company believes it is not exposed to any significant credit risk on
cash.
3. NOTES PAYABLE
At December 31, 2004, the balance in the two outstanding promissory
notes was $30,000. The notes bear an interest rate of 10% and were due
by December 31, 2004. These notes were paid in 2005.
4. COMMON STOCK
During 2004, the Company issued one share of common stock to the sole
shareholder for a nominal value.
5. RELATED PARTY TRANSACTIONS
CONTRIBUTED SERVICES
During the period ended December 31, 2004, the shareholder contributed
services to the Company. No expense was attributed to these services
during the period ended December 31, 2004 as the Company is still in
the early stage of development.
At December 31, 2004, there was $47,880 due to the shareholder. The
amount is included in accounts payable in the accompanying balance
sheet.