FORM 10-QSB

U. S. SECURITIES AND EXCHANGE
COMMISSION

WASHINGTON, DC 20549

Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

For Quarter Ended: December 31, 2002

Commission File Number: 001-04026

LIFESTYLE INNOVATIONS, INC.
(Exact name of small business issuer as specified in its charter)

Nevada 82-6008727
(State of Incorporation) (IRS Employer ID No)

3801 William D. Tate Avenue, Suite 100, Grapevine, TX 76051
-----------------------------------------------------------
(Address of principal executive office)

817-421-0010
(Issuer's telephone number)

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

The number of shares outstanding of registrant's common stock, par value $.001
per share, as of December 31, 2002 was 20,352,930 shares.

Transitional Small Business Disclosure Format (Check one): Yes No X .
----- ----

Lifestyle Innovations, Inc. and Subsidiaries
(A Majority Owned Subsidiary of eResource Capital Group, Inc.)

INDEX

Page

No.
Part I. Financial Information (unaudited)

Item 1.Condensed Consolidated Balance Sheet - December 31, 2002 3

Condensed Consolidated Statements of Operations - 4
Three Months Ended December 31, 2002 and 2001

Condensed Consolidated Statements of Operations - 5
Six Months Ended December 31, 2002 and 2001

Condensed Consolidated Statement of Stockholders' Equity - 6
Six Months Ended December 31, 2002

Condensed Consolidated Statements of Cash Flows - 7
Six Months Ended December 31, 2002 and 2001

Notes to Condensed Consolidated Financial Statements - 8-18
Six Months Ended December 31, 2002 and 2001

Item 2.Management's Discussion and Analysis of Financial Condition and 19-21
Results of Operations

Item 3. Controls and Procedures 21

Part II. Other Information 22-25

Lifestyle Innovations, Inc. and Subsidiaries
(A Majority Owned Subsidiary of eResource Capital Group, Inc.)
Condensed Consolidated Balance Sheet
December 31, 2002
(Unaudited)

Assets

Current assets
Cash and cash equivalents .................................... $ 24,373
Accounts receivable, net of allowance for bad debts of $13,978 870,053
Investments .................................................. 25,587
Inventories .................................................. 121,014
Prepaid expenses and other assets ............................ 40,740
------------
Total current assets ....................................... 1,081,767
Property and equipment, net .................................... 332,746
Other assets ................................................... 15,528
Goodwill, net .................................................. 8,920,226
------------
Total assets ................................................. $ 10,350,267
============

Liabilities and Stockholders' Equity

Current liabilities
Notes payable ................................................. $ 1,627,701
Accounts payable and accrued expenses ......................... 1,595,320
Unearned income ............................................... 60,510
Due to related parties ........................................ 36,245
Due to RCG and it subsidiaries ................................ 1,407,927
------------
Total current liabilities ...................................... 4,727,703
Long-term debt, less current portion ........................... 163,000

Stockholders' equity
Preferred stock, $.10 par value. Authorized 1,000,000 shares; --
no shares issued and outstanding
Common stock, $.001 par value. Authorized 250,000,000 shares; 20,353
issued and outstanding 20,352,930 shares
Additional paid in capital ................................... 12,316,303
Stock subscription receivable ................................ (4,000)
Retained deficit ............................................. (6,873,092)
------------
Total stockholders' equity ..................................... 5,459,564
------------
Total liabilities and stockholders' equity ................... $ 10,350,267
============

See accompanying notes to consolidated financial statements.

Lifestyle Innovations, Inc. and Subsidiaries
(A Majority Owned Subsidiary of eResource Capital Group, Inc.)
Condensed Consolidated Statements of Operations
Three months ended December 31, 2002 and 2001

(Unaudited)

2002 2001

Sales and revenues .......................... $ 561,345 $ 1,002,349
Cost of sales ............................... 339,588 512,167
------------ ------------
Gross profit .............................. 221,757 490,182

Other expense (income):
Selling, general and administrative expense 628,267 436,176
Loss (gain) on disposal of fixed assets ... 1,322 --
Management fee - parent ................... 30,000 50,000
Interest expense .......................... 47,877 47,408
------------ ------------
707,466 533,584
------------ ------------
Loss before income taxes .................... (485,709) (43,402)
Income taxes ................................ -- --
------------ ------------
Net loss .................................... $ (485,709) $ (43,402)
============ ============

Net loss per share, basic and diluted ....... $ (0.02) $ (0.00)
============ ============

Weighted Average Shares Outstanding ......... 20,306,191 16,000,000
============ ============

See accompanying notes to consolidated financial statements.

Lifestyle Innovations, Inc. and Subsidiaries
(A Majority Owned Subsidiary of eResource Capital Group, Inc.)
Condensed Consolidated Statements of Operations
Six months ended December 31, 2002 and 2001

(Unaudited)

2002 2001

Sales and revenues .......................... $ 1,101,135 $ 1,746,340
Cost of sales ............................... 696,059 1,104,553
------------ ------------
Gross profit .............................. 405,076 641,787

Other expense (income):
Selling, general and administrative expense 1,297,526 1,071,145
Loss (gain) on disposal of fixed assets ... 1,322 (171,600)
Management fee - parent ................... 60,000 97,000
Debt forgiveness .......................... -- (24,351)
Interest income ........................... (506) --
Interest expense .......................... 95,396 68,445
------------ ------------
1,453,738 1,040,639
------------ ------------
Loss before income taxes .................... (1,048,662) (398,852)
Income taxes ................................ -- --
------------ ------------
Net loss .................................... $ (1,048,662) $ (398,852)
============ ============

Net loss per share, basic and diluted ....... $ (0.06) $ (0.02)
============ ============

Weighted Average Shares Outstanding ......... 18,727,648 16,000,000
============ ============

See accompanying notes to consolidated financial statements.

Lifestyle Innovations, Inc. and Subsidiaries
(A Majority Owned Subsidiary of eResource Capital Group, Inc.)
Condensed Consolidated Statement of Stockholders' Equity
Six Months Ended December 31, 2002
(Unaudited)

Additional Stock
Common Stock Paid-in Subscription Retained
Shares Par Value Capital Receivable (Deficit) Total
------ --------- ------- ---------- ---------- -----

Balance, June 30, 2002 ... 16,000,000 $ 16,000 $11,602,587 $ -- $(5,824,430) $ 5,794,157
Acquire Lifestyle
Innovations, Inc ........ 4,074,530 4,075 103,574 (4,000) -- 103,649
Notes payable converted
to common stock ......... 100,000 100 217,400 -- -- 217,500
Common stock sold for
cash .................... 178,400 178 392,742 -- -- 392,920
Net loss ................. -- -- -- -- (1,048,662) (1,048,662)
----------- ----------- ----------- ----------- ----------- ----------
Balance, December 31, 2002 20,352,930 $ 20,353 $12,316,303 $ (4,000) $(6,873,092) $ 5,459,564
============ =========== =========== =========== =========== ==========

See accompanying notes to consolidated financial statements.

Lifestyle Innovations, Inc. and Subsidiaries
(A Majority Owned Subsidiary of eResource Capital Group, Inc.)
Condensed Consolidated Statements of Cash Flows
Six months ended December 31, 2002 and 2001

(Unaudited)

2002 2001

Cash flows from operating activities
Net loss .......................................... $(1,048,662) $ (398,852)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation .................................... 65,138 36,816
Gain on sale of assets .......................... -- (171,600)
Allowance for bad debts ......................... 4,000 --
Decrease (increase) in assets:
Accounts receivable ........................... (350,373) (165,684)
Inventories ................................... (399) (102,748)
Prepaid expenses and other assets ............. 17,691 (173,242)
Increase (decrease) in liabilities:
Accounts payable and accrued expenses ......... 535,080 170,866
Deposits and unearned income .................. (22,038) (253,235)

----------- -----------
Net cash used in operating activities ............. (799,563) (1,057,679)
----------- -----------

Cash flows from investing activities
Acquisition of property and equipment ............ (52,357) (107,066)
Acquisition of Lifestyle Tech -Atlanta ........... -- (289,991)

----------- -----------
Net cash used in financing activities ............. (52,357) (397,057)
----------- -----------

Cash flows from financing activities
Common stock issued for cash ...................... 412,420 --
Cash received in excess of cash paid in acquisition 273,518 --
Loan proceeds ..................................... 75,000 1,517,276
Repayment of notes payable ........................ (18,000) --
Loans from related party .......................... 121,078 11,875

----------- -----------
Net cash provided by financing activities ......... 864,016 1,529,151
----------- -----------
Net increase in cash and cash equivalents ......... 12,096 74,415
Cash and cash equivalents, beginning of period .... 12,277 1,426
----------- -----------
Cash and cash equivalents, end of period .......... $ 24,373 $ 75,841
=========== ===========

See accompanying notes to consolidated financial statements.

Lifestyle Innovations, Inc. and Subsidiaries
(A Majority Owned Subsidiary of eResource Capital Group, Inc.)
Notes to Condensed Consolidated Financial Statements
Six months ended December 31, 2002 and 2001
(Unaudited)

A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(1) Principles of Consolidation and Basis of Presentation - The
consolidated financial statements include the accounts of
Lifestyle Innovations, Inc. ("LFSI") and its wholly owned
subsidiaries LST, Inc. d/b/a Lifestyle Technologies ("LST") and
Brittany Enterprises, Inc. ("Brittany") (collectively the
"Company"). All material intercompany accounts and transactions
have been eliminated. Effective July 15, 2002 Princeton Mining
Company changed its name to Lifestyle Innovations, Inc.

At December 31, 2002 the Company has a significant working capital
deficit, due primarily to $1,407,927 due to RCG and its
subsidiaries, $1,595,320 in accounts payable and accrued expenses,
notes payable in the amount of $1,381,782 which are due in August
2003 and $209,919 in notes payable due on demand. The Company does
not currently have sufficient cash flows to meet its obligations
currently due within the next 12 months. The Company is currently
exploring additional sources of liquidity, including debt and
equity financing alternatives and potential sales of its Common
Stock in private placement transactions. Additionally, the Company
plans on negotiating with its debt holders to extend some or all
of the debt due in August 2003. If the Company is (i) unable to
grow its business or improve its operating cash flows as expected,
(ii) unsuccessful in extending a substantial portion of the debt
repayments scheduled for August 2003, or (iii) unable to raise
additional funds through private placement sales of our Common
Stock, then the Company will need to secure alternative debt or
equity financing to provide it with additional working capital.
There can be no assurance that additional financing will be
available when needed or, if available, that it will be on terms
favorable to the Company and its stockholders. If the Company is
not successful in generating sufficient cash flow from operations,
or in raising additional capital when required in sufficient
amounts and on terms acceptable to the Company, these failures
would have a material adverse effect on the Company's business,
results of operations and financial condition. If additional funds
are raised through the issuance of equity securities, the
percentage ownership of the Company's shareholders would be
diluted.

(2) Organization - LFSI was organized in September 1950, under the
laws of the State of Idaho.

On September 5, 2002, LFSI acquired LST, a Delaware corporation,
and its wholly owned subsidiaries, Lifestyle Technologies
Franchising Corp., Lifestyle Security, Inc. and Lifestyle

Technologies Atlanta, all organized in July 2001. LFSI issued
16,000,000 shares of its common stock to eResource Capital Group,
Inc. ("RCG"), to acquire 100% interest in LST. At December 31,
2002 LFSI was a 78% subsidiary of RCG. LFSI had only nominal
operations prior to the merger, leasing two condominium units,
accordingly for accounting purposes the transaction has been
treated as the issuance of stock by LST for the net monetary
assets of LFSI, accompanied by a recapitalization of LST. The
accounting treatment is identical to accounting for a reverse
acquisition, except that no goodwill or other intangible asset is
recorded. The historical financial statements prior to September
5, 2002 are those of LST.

On April 24, 2001, LFSI acquired Brittany, a Nevada corporation
organized on October 29, 1998. For accounting purposes, the
acquisition has been treated as the acquisition of Brittany by
LFSI with Brittany as the purchaser (reverse acquisition).
Brittany did not have operations until March 30, 2001, when it
acquired two condominium units that it is leasing.

Princeton Mining Company, an Idaho corporation, merged into its
wholly owned subsidiary, Princeton Mining Company, a Nevada
corporation on May 6, 2002. Princeton Mining Company, a Nevada
corporation, was the survivor.

(3) Nature of Business - LST is a full service home technology
integration company providing builders, homeowners, and
commercial customers with complete installation and equipment for
structured wiring, security, personal computer networking, audio,
video, home theater, central vacuum and accent lighting. LST has
also secured relationships with product manufacturers,
distributors and service providers (cable, Internet service,
broadband and security). The Company launched a national
franchising program in the fourth quarter of fiscal 2001 and, in
fiscal 2002, sold 14 franchises. LST also owns and operates
locations in the Charlotte, NC and Atlanta, GA markets.

Brittany is the owner of two condominium units that are located in
Dallas, Texas which are currently under lease.

(4) General - The financial statements included in this report have
been prepared by the Company pursuant to the rules and regulations
of the Securities and Exchange Commission for interim reporting
and include all adjustments (consisting only of normal recurring
adjustments) that are, in the opinion of management, necessary for
a fair presentation. These financial statements have not been
audited.

Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations for interim reporting. The
Company believes that the disclosures contained herein are
adequate to make the information presented not misleading.
However, these financial statements should be read in conjunction
with the financial statements and notes thereto included in LST's
Annual Report for the period ended June 30, 2002, which is
included in the Company's Form 8-K/A filed on November 18, 2002.

B. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Cash and Cash Equivalents

The Company classifies as cash equivalents any investments which can be
readily converted to cash and have an original maturity of less than
three months. At times cash and cash equivalent balances at a limited
number of banks and financial institutions may exceed insurable
amounts. The Company believes it mitigates its risks by depositing cash
or investing in cash equivalents in major financial institutions.

Fair Value of Financial Instruments

The following methods and assumptions were used by the Company in
estimating its fair value disclosures for financial instruments:

o Cash and cash equivalents: The carrying amount reported in the
balance sheet for cash approximates its fair value
o Accounts receivable and accounts payable: Due to their short term
nature, the carrying amounts reported in the balance sheet for
accounts receivable and accounts payable approximate their fair
value. The Company provides for any losses through its allowance for
doubtful accounts.
o Notes Payable: The carrying amount of the Company's notes payable
approximate their fair value.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to
concentrations of credit risk consist principally of cash, accounts
receivable, investments, and notes payable. The Company places its cash
with high credit quality financial institutions. The Company performs
periodic credit evaluations of its customers' financial condition and
generally does not require collateral. Although due dates of
receivables vary based on contract terms, credit losses have been
within management's estimates in determining the level of allowance for
doubtful accounts. Overall financial strategies are reviewed
periodically.

Inventories

Inventories, which consist of purchased components, are recorded at the
lower of cost or market with cost being determined on a first-in,
first-out (FIFO) method.

Prepaid Expenses

Prepaid expenses include insurance and deferred costs. The deferred
costs relate to a consulting agreement that required RCG to issue
shares and warrants to the consultant. The original deferred cost of
$57,000 is being amortized over the life of the service agreement.

Property and Equipment

Property and equipment are recorded at cost, net of accumulated
depreciation. Depreciation is calculated by using the straight-line
method over the estimated useful lives of the assets, which is five to
seven years for all categories except for computer software, with is
depreciated over 3 years. Repairs and maintenance are charged to
expense as incurred. Expenditures for betterments and renewals are
capitalized. The cost of property and equipment and the related
accumulated depreciation are removed from the accounts upon retirement
or disposal with any resulting gain or loss being recorded as other
income or expenses.

Goodwill and Intangible Assets

The Company records goodwill and intangible assets arising from
business combinations in accordance with FAS No. 141 "Business
Combinations" ("FAS 141") which requires that the purchase method of
accounting be used for all business combinations initiated after June
30, 2001. FAS 141 also specifies the criteria applicable to intangible
assets acquired in a purchase method business combination to be
recognized and reported apart from goodwill.

The Company accounts for goodwill and intangible assets in accordance
with FAS 142. The Company adopted FAS 142 effective July 1, 2001. In
completing the adoption of FAS 142, LST allocated its previously
existing goodwill as of July 1, 2001 to its reporting units, as defined
in FAS 142, and performed an initial test for impairment as of that
date.

In accordance with FAS 142, the Company no longer amortizes goodwill.
FAS 142 requires that goodwill and intangible assets with indefinite
useful lives no longer be amortized, but instead be tested at least
annually for impairment. FAS 142 also requires that intangible assets
with definite useful lives be amortized over their respective estimated
useful lives to their estimated residual values, and be reviewed for
impairment.

Stock Options and Warrants

The Company accounts for stock option grants to employees in accordance
with APB Opinion No. 25, "Accounting For Stock Issued To Employees" and
options and warrants issued to non-employees under FAS No. 123,
"Accounting For Stock Based Compensation". For the options and warrants
issued to non-employees, the fair value of each award has been
calculated using the Black-Scholes Model in accordance with FAS No.
123.

Revenue Recognition

The Company's home technology services work is completed in three
phases - pre-wiring, trim-out and hardware installation. The Company
invoices its customers and records revenue as work is completed on each
project. For alarm monitoring service contracts sold by the Company,
revenue is recognized only when the contracts are sold to third party
finance companies or as billed if the Company holds and services the
contract. The Company sells substantially all of its alarm monitoring
contracts immediately subsequent to the date the contracts are signed
by the customer.

Sales of franchise licenses are recognized as revenue when the
Company's obligations under the franchise agreement are "substantially
complete." The Company generally defines "substantially complete" as
the completion of training by the franchisee's General Manager and the
approval by the Company of the franchise location plan.

Royalties are based on a percentage of the sales recorded by
franchisees and are recorded as earned. Procurement fees charged to
franchisees are recorded in the month that the related product is
shipped to the franchisee.

Advertising Costs

Advertising costs are generally charged to operations in the period
incurred and totaled $20,103 and $24,082 for the six months ended
December 31, 2002 and 2001, respectively and $11,238 and $13,894 for
the three months ended December 31, 2002 and 2001, respectively.

Marketing Fund

The Company's franchise agreement requires franchisees to pay 1.25% of
their sales into a general marketing fund to be used to promote the
Lifestyle name and home technology concept on a national basis. The
Company records these receipts into the marketing fund liability,
classified in Accounts Payable and Accrued Expenses, which the Company
administers. The marketing fund is managed by a committee consisting of
management of the Company and representatives from certain franchises.

Income Taxes

Income taxes are accounted for in accordance with FAS 109, "Accounting
for Income Taxes". This Statement prescribes the use of the
asset/liability method. Deferred taxes represent the expected future
tax consequences when the reported amounts of assets and liabilities
are recovered or paid. They arise from differences between the

financial reporting and tax basis of assets and liabilities and are
adjusted for changes in tax laws and tax rates when those changes are
enacted. The provision for income taxes represents the total of income
taxes paid or payable for the current year, plus the change in deferred
taxes during the year. Management of the Company elected to provide a
reserve against the potential future income tax benefits from its
current net operating loss, due to the uncertainty of its realization.

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, the disclosure of contingent assets and
liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.

B. ACQUISITIONS AND DISPOSITIONS

In September 2001, the Company sold its branch locations in Greenville/Columbia,
SC, Raleigh, NC and Hilton Head, SC to entities that are now operating these
locations as franchises. These branches, which had a net equity deficit of
$36,700, were sold for net proceeds of $134,900 resulting in a net gain of $
171,600.

On July 10, 2001, the Company acquired certain net assets and the business of a
home technology company in Atlanta, GA, now operated as Lifestyle Technologies
Atlanta, Inc. ("LSTA") for $1,255,000 which was paid in cash ($275,000), RCG
Common Stock (139,365 shares) and a four - year term note ($250,000). Including
direct acquisition costs, the total purchase price aggregated $1,259,857 and the
transaction was accounted for using the purchase method of accounting. The
excess value of the purchase price over the fair value of the net assets on the
acquisition date aggregated $1,207,669 which was allocated to goodwill.

C. INVESTMENTS

The Company's investments are comprised of a certificate of deposit, including
accrued interest, which is pledged as collateral on a trade credit agreement
with a vendor.

D. PROPERTY AND EQUIPMENT

A summary of property and equipment as of December 31, 2002 is as follows:

Real estate ................... $ 46,394
Leasehold improvements ........ 35,031
Showrooms ..................... 133,153
Vehicles ...................... 12,074
Computers and office equipment 178,398
Furniture and fixtures ........ 54,993
Computer software ............. 40,197
---------
500,240
Less: Accumulated depreciation (167,494)
---------
Property and equipment, net ... $ 332,746
=========

E. NOTES PAYABLE

Notes payable at December 31, 2002 consist of the following:

Note payable - due on demand bearing interest at the prime rate plus 1% and
secured by assets pledged by an affiliate of the
Company .................................................................. $ 100,000
Note payable - due in August 2003 with interest at 10%;
collateralized by certain home technology assets (2) ..................... 300,000
Note payable - due in August 2003 with interest imputed at 8%;
unsecured ................................................................ 50,000
Note payable - due on demand; with interest at 8% ......................... 75,000
Note payable - due on demand; with interest at 10%;
collateralized by real estate ........................................... 34,919
Note payable - due in August 2003 with interest at 12%; unsecured ......... 381,782
Note payable - due in August 2003 with interest at 12% and collateral-
ized by certain home technology accounts receivable and inventory (1) .... 650,000
Note payable - due in monthly installments of $3,000 and a balloon
payment in July 2005; with interest at 8%; collateralized
by home technology accounts receivable ................................... 199,000
----------
1,790,701
Less current maturities, including demand notes ........................... 1,627,701
----------
Long-term portion ......................................................... $ 163,000
==========

(1) At the option of the note holder, this note can be converted into RCG's
Common Stock at a ratio of one share of Common Stock for each $4.55 of
outstanding principal and interest.
(2) The principal and accrued interest on these notes payable are convertible
to shares of RCG Common Stock at the greater of $1.12 per share or a 20%
discount to the average closing price of the Common Stock for the ten days
immediately preceding the conversion date.

F. INCOME TAXES

Deferred income taxes at December 31, 2002 consist primarily of net operating
loss carryforwards, which amount to approximately $5,612,000 and expire between
2020 and 2023. A valuation allowance has been recorded for the full amount of
the deferred tax assets. Further, due to substantial limitations placed on the
utilization of net operating losses following a change in control, utilization
of such NOL's could be limited.

G. STOCK OPTIONS AND WARRANTS

As discussed above, on September 5, 2002 RCG completed a transaction with LFSI
to sell 100% of the common stock of LST in exchange for 16 million shares of
LFSI stock. Pursuant to the terms of the Merger Agreement, each outstanding
option or warrant issued to LST employees in connection with RCG's acquisition
of LST will either be converted with the appropriate adjustment into an option
or warrant to purchase LFSI common stock or will be terminated pursuant to their
terms. If options or warrants are terminated pursuant to the terms of
outstanding warrants or stock options agreements, or RCG's stock option plan,
LFSI will grant warrants or options to holders of these securities. Newly
granted options or warrants will be proportionate to the terminated amount and
will have an exercise price equal to the market price of LFSI stock.

During the period ended December 31, 2002, the Company recorded $14,250 in
non-cash expense related to common stock and stock purchase warrants that were
granted to a consultant engaged to assist the Company in developing and
implementing its national franchising program. The fair value of these warrants,
$57,000, as determined in accordance with FAS 123 has been recorded on the
Company's financial statements and is being amortized to expense over the
service period of the related agreement. At December 31, 2002 the unamortized
balance in prepaid expenses was $16,625.

H. TRANSACTIONS WITH RELATED PARTIES

At December 31, 2002, notes and advances due to affiliates consisted of the
following:

DUE TO RELATED PARTIES
Due to RCG and its subsidiaries .......... $1,407,927
==========

Note payable to Michael Pruitt, CEO of RCG 10,658
Advance payable to Mr. Pruitt ............ 25,587
----------
$ 36,245
==========

The amount due to RCG and its subsidiaries represents net advances to and from
RCG and its subsidiaries. RCG also provides various services to the Company,
including accounting and finance assistance, capital and debt raising, human

resources and other general and administrative services. For the six months
ended December 31, 2002 and 2001, RCG charged the Company $60,000 and $97,000,
respectively. For the three months ended December 31, 2002 and 2001, RCG charges
the Company $30,000 and $50,000, respectively.

The note payable to Mr. Pruitt, CEO of RCG, indicated in the above table bears
interest at 12% per annum and is due on demand. The advance payable to Mr.
Pruitt bears interest at a variable rate, which approximates the rate of
interest earned on the Company's certificate of deposit investment, and is due
on demand.

Mr. Pruitt has pledged certain of his personal assets to secure a $100,000 bank
credit facility for LST's home technology business. At September 30, 2002, the
balance outstanding on this bank facility was $100,000.

Mr. Pruitt is also a minority investor in a company that has purchased franchise
licenses and business operations of LST's home technology business in three
markets in South Carolina and in another company that has purchased franchise
licenses in three locations in Maryland. The franchise locations in South
Carolina owed the Company and its subsidiaries $139,000 at December 31, 2002 and
the franchise locations in Maryland owed the Company and its subsidiaries
$12,000 at December 31, 2002.

Paul B. Johnson, Chief Executive Officer and a director of the Company, is an
investor in a company, which in November 2001 became a franchisee of the
Company's home technology business in the Dallas, Texas market. The Dallas
franchise location owed the Company and its subsidiaries $98,000 at December 31,
2002.

During fiscal 2002, Glenn Barrett resigned as President of Lifestyle and began
LVA Technologies LLC ("LVA"), a low voltage wiring business that operates as a
Lifestyle franchisee headquartered in Charlotte, NC to service the commercial
market. The Company waived LVA's initial franchise fee for the commercial
franchise. LVA also owns the Greenville and Columbia, SC franchises. LVA's low
voltage wiring business pays royalties on products purchased from the Company at
the same rate as the Company's other franchisees, however, it does not pay
royalties on revenue generated from products purchased elsewhere as required of
the Company's other franchisees, including the Greenville and Columbia, SC
franchises. LVA and its subsidiaries owed the Company and its subsidiaries
$265,000 at December 31, 2002.

At December 31, 2002, total debt outstanding to G. David Gordon and a company in
which he is the president and a shareholder, was $431,782 which is reflected in
notes payable on the Condensed Consolidated Balance Sheet. The loans, which
arose during fiscal 2002, bear interest at 8% to12%. Mr. Gordon and this company
also loaned RCG an additional $1,144,000 during fiscal 2002 at interest rates of
8% to 12%. Mr. Gordon also acts as special legal counsel to RCG and the Company
from time to time.

Mr. Gordon has an ownership interest in eight of the Company's franchises,
including two locations that were purchased during fiscal 2002 from the Company
and for which the Company recorded a gain of $119,000. Mr. Gordon has an

ownership interest in the three markets in South Carolina along with Mr. Pruitt,
as discussed above; the Dallas market along with Mr. Johnson; and four
additional markets in Houston, Texas, Raleigh, North Carolina, Wilmington, North
Carolina and Greensboro, North Carolina. These four markets owed the Company and
its subsidiaries $112,000 at December 31, 2002.

I. BUSINESS SEGMENT INFORMATION

Information related to business segments is as follows:

Company Owned
Locations Franchising Corporate Total

SIX MONTHS ENDED DECEMBER 31, 2002

Revenue
External customers ............. $ 866,840 $ 256,922 $ 3,346 $1,127,108
Intersegment ................... $ -- $ 45,003 $ -- $ 45,003

Net loss from operations ......... $ 688,561 $ 193,955 $132,170 $1,014,686

SIX MONTHS ENDED DECEMBER 31, 2001

Revenue from external customers .. $1,403,917 $ 342,423 $ -- $1,746,340

Net loss from operations ......... $ 205,608 $ 193,244 $ -- $ 398,852

Corporate includes the real estate investment and the costs associated with the
requirements of a public company.

J. CONTINGENCIES

As a part of the issue of 16,000,000 shares of its Common Stock to RCG, LFSI was
obligated to file a registration statement within 90 days of the September 5,
2002 closing date of the transaction. If LFSI did not meet this deadline, it was
obligated to issue an option to RCG for 1,000,000 shares of LFSI common stock at
20% of the last bid price for the LFSI common stock on the triggering date. As a
result of the potential acquisition of FutureSmart Systems, Inc. ("FutureSmart")
by LFSI (See Note K), RCG and LFSI have agreed to extend the deadline for filing
the registration statement until May 31, 2003 or a later date consistent with
any registration rights associated with the potential acquisition of
FutureSmart.

K. LETTER OF INTENT

On November 27, 2002 LFSI executed a non-binding Letter of Intent ("LOI") to
acquire FutureSmart Systems, Inc., a privately held Delaware corporation. The
LOI was amended on January 15, 2003, primarily to extend the Closing Date to
February 15, 2003. FutureSmart is a manufacturer of structured wiring and home
networking systems. FutureSmart develops and distributes home technology
products designed to meet the current and future needs of homeowners for
computer networking, audio/video distribution and home automation. Their
products include: distribution panels, computer networking components, security
systems, telephone distribution systems, and wiring for home technologies. One
condition to the closing requires LFSI to obtain working capital for
FutureSmart. LFSI is currently attempting to obtain such financing, however,
there can be no assurance sufficient financing will be arranged or the
acquisition will be consummated.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

From time to time, the Company may publish forward-looking statements relative
to such matters as anticipated financial performance, business prospects,
technological developments and similar matters. The Private Securities
Litigation Reform Act of 1995 provides a safe harbor for forward-looking
statements. All statements other than statements of historical fact included in
this section or elsewhere in this report are, or may be deemed to be,
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Important
factors that could cause actual results to differ materially from those
discussed in such forward-looking statements include, but are not limited to,
the following: changes in the economy or in specific customer industry sectors;
changes in customer procurement policies and practices; changes in product
manufacturer sales policies and practices; the availability of product and
labor; changes in operating expenses; the effect of price increases or
decreases; the variability and timing of business opportunities including
acquisitions, alliances, customer agreements and supplier authorizations; the
Company's ability to realize the anticipated benefits of acquisitions and other
business strategies; the incurrence of debt and contingent liabilities in
connection with acquisitions; changes in accounting policies and practices; the
effect of organizational changes within the Company; the emergence of new
competitors, including firms with greater financial resources than the Company;
adverse state and federal regulation and legislation; and the occurrence of
extraordinary events, including natural events and acts of God, fires, floods
and accidents.

On September 5, 2002, LFSI acquired LST, a Delaware corporation, and its wholly
owned subsidiaries, Lifestyle Technologies Franchising Corp., Lifestyle
Security, Inc. and Lifestyle Technologies Atlanta. LFSI issued 16,000,000 shares
of its common stock to eResource Capital Group, Inc. ("RCG"), to acquire 100%
interest in LST. At December 31, 2002 LFSI was a 78% subsidiary of RCG. LFSI had
only nominal operations prior to the merger, leasing two condominium units,
accordingly for accounting purposes the transaction has been treated as the
issuance of stock by LST for the net monetary assets of LFSI, accompanied by a
recapitalization of LST. The accounting treatment is identical to accounting for
a reverse acquisition, except that no goodwill or other intangible asset is
recorded. The historical financial statements prior to September 5, 2002 are
those of LST.

On April 24, 2001, LFSI had a change in control and acquired a new subsidiary,
Brittany Enterprises, Inc. LFSI issued 18,000,000 shares (subsequently
reverse-split to 2,571,429 shares) of its $.10 par value common stock to acquire
Brittany. Brittany owns two condominium units in Dallas, Texas, which are
currently under lease.

LIQUIDITY AND CAPITAL RESOURCES
At December 31, 2002 LFSI had a working capital deficit of $3,645,936 as
compared to a working capital deficit of $1,885,664 at June 30, 2002, an
increase of $1,760,272. The largest component of the increase resulted from a
transfer of $1,381,782 in notes payable, which are due in August 2003, to
current from non-current. In addition, accounts payable and accrued expenses
have increased $535,080 and the net payable to RCG and subsidiaries of
$1,476,453 at June 30, 2002 had been reduced to $1,407,927 at December 31, 2002.

During the six months ended December 31, 2002, the Company sold 398,400 shares
of its common stock and increased capital, net of transaction costs by $871,420.
Of this amount, $261,000 was sold prior to the merger on September 5, 2002 and
$610,420, including converting $198,000 in notes payable, was sold after the
merger.

At December 31, 2002 the Company has a significant working capital deficit, due
primarily to $1,407,927 due to RCG and its subsidiaries, $1,595,320 in accounts
payable and accrued expenses, notes payable in the amount of $1,381,782 which
are due in August 2003 and $209,919 in notes payable due on demand. The Company
does not currently have sufficient cash flows to meet its obligations currently
due within the next 12 months. The Company is currently exploring additional
sources of liquidity, including debt and equity financing alternatives and
potential sales of its Common Stock in private placement transactions.
Additionally, the Company plans on negotiating with its debt holders to extend
some or all of the debt due in August 2003. If the Company is (i) unable to grow
its business or improve its operating cash flows as expected, (ii) unsuccessful
in extending a substantial portion of the debt repayments scheduled for August
2003, or (iii) unable to raise additional funds through private placement sales
of our Common Stock, then the Company will need to secure alternative debt or
equity financing to provide it with additional working capital. There can be no
assurance that additional financing will be available when needed or, if
available, that it will be on terms favorable to the Company and its
stockholders. If the Company is not successful in generating sufficient cash
flow from operations, or in raising additional capital when required in
sufficient amounts and on terms acceptable to the Company, these failures would
have a material adverse effect on the Company's business, results of operations
and financial condition. If additional funds are raised through the issuance of
equity securities, the percentage ownership of the Company's shareholders would
be diluted.

SALES AND REVENUES
During the six months ended December 31, 2002, sales declined $645,205 (36.9%)
from the year earlier amount. During the year earlier period, $1,403,917 of the
sales were from LST's company owned locations in Charlotte, NC, Greenville, NC,
Hilton Head, SC and Raleigh, NC. During the current year period, sales include
$840,867 from LST's company owned locations. The decline in company owned
locations revenue is principally the result of the sale in September 2001 of the
locations in Greenville, NC, Hilton Head, SC and Raleigh, NC. The franchising
revenue is solely from franchise fees, royalties and procurement fees charged to
franchises, which did not commence until the second quarter of last fiscal year.
Franchise revenues amounted to $256,922 in the current year period as compared
to $342,423 in the year earlier period. Of these amounts, $40,000 and $280,000
represent sales of franchises and $216,922 and $62,423 represent revenues from
royalties and procurement fees, respectively. The revenues from the sale of
franchises has declined substantially from the initial sales, however, the
majority of the decline has been offset by increased recurring revenues from
royalties and procurement fees.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSE
Selling, general and administrative ("SG&A") expenses have increased $226,381
and $192,091 during the six and three month periods ended December 31, 2002 as
compared to the year earlier periods. The majority of the increase was a result
of the costs associated with becoming a separate reporting entity with the
Securities and Exchange Commission.

During the six month period ended December 31, 2002 the Company incurred new
costs of $140,342 for corporate overhead, which includes $51,500 in payroll
costs, $60,558 in professional fees and $23,581 in travel costs. During the
current year period, SG&A for the franchising group was $455,293 as compared to
$503,118 during the prior year period. SG&A for company owned stores was
$748,892 as compared to $568,027 during the prior year period. The Company is
continuing to attempt to reduce its overhead costs while still emphasizing
growing the franchise portion of the business.

GAIN ON DISPOSAL OF FIXED ASSETS
In September 2001, the Company sold its branch locations in Greenville/Columbia,
SC, Raleigh, NC and Hilton Head, SC to entities that are now operating these
locations as franchises. These branches, which had a net equity deficit of
$36,700, were sold for net proceeds of $134,900 resulting in a net gain of
$171,600.

DEBT FORGIVENESS
In August 2001, affiliates of LST forgave indebtedness in the amount of $24,351.

INTEREST EXPENSE
Interest expense increased from $68,445 in the prior year period to $95,396
during the six months ended December 31, 2002. The increase is due to the higher
average level of debt outstanding during the current year period as compared to
the prior year period. The majority of the Company's current debt was obtained
in August 2001 and accordingly would have been outstanding only approximately
75% of the prior year period.

ITEM 3. CONTROLS AND PROCEDURES

The Company has established and currently maintains controls and other
procedures designed to ensure that material information required to be disclosed
in its reports filed under the Securities Exchange Act of 1934 is recorded,
processed, summarized and reported, within the time periods specified by the
Securities and Exchange Commission. In conjunction with the close of each fiscal
quarter, the Company conducts an update and a review and evaluation of the
effectiveness of the Company's disclosure controls and procedures. In the
opinion of the Company's principal executive officer, based upon an evaluation
completed within 90 days prior to the filing of this report, the Company's
disclosure controls and procedures are sufficiently effective to ensure that any
material information relating to the Company is recorded, processed, summarized
and reported to its principal officers to allow timely decisions regarding
required disclosures.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

None.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

During the three months ended December 31, 2002, the Company sold
68,000 shares of its $.001 par value Common Stock for net proceeds of
$152,800, to sophisticated investors. The proceeds were used for
working capital. The small business issuer claimed exemption from
registration based upon Section 4(2) of the Securities and Exchange Act
of 1933 (the "Act").

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not applicable.

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

None.

ITEM 5. OTHER INFORMATION

The Company currently does not employ a Chief Financial Officer.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits - 99.1 Certificate Pursuant to 18 U.S.C. Section 1350
(b) Reports on Form 8-K
i) On November 4, 2002, the Company filed its Form 8-K dated
October 31, 2002 to report the change in its principal
accountant from Stephen P. Higgins, CPA to Crisp Hughes Evans
LLP, the current auditor of LST.
ii) On November 18, 2002, the Company filed its Form 8-K/A
dated September 5, 2002 to report the audited financial
statements of LST, Inc. and subsidiaries. Financial statements
included the audit of LST, Inc. as of June 30, 2002 and for
the two years then ended. Pro forma statements were not
included.

SIGNATURE

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 thereunto duly authorized.

LIFESTYLE INNOVATIONS, INC.

Date: February 14, 2003 By: /s/ Paul Johnson
---------------------------
Paul Johnson, Chief Executive Officer
and Principal Accounting Officer

CERTIFICATION

I, Paul Johnson, certify that:

1. I have reviewed this quarterly report on Form 10-QSB of Lifestyle
Innovations, Inc.;
2. Based on my knowledge, this quarterly report does not contain any
untrue statement of material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as, and for the periods presented in this
quarterly report;
4. I am responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for
the registrant and have:
a) designed such disclosure controls and procedures to ensure
that material information relating to the registrant is made known
to me by others within the Company, particularly during the period
in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date
of this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report my conclusions about the
effectiveness of the disclosure controls and procedures based on my
evaluation as of the Evaluation Date;
5. I have disclosed, based on my most recent evaluation, to the
registrant's auditors and the audit committee of registrant's board of
directors (or persons performing the equivalent functions):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and reportfinancial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls;
6. I have indicated in this quarterly report whether or not there were
significant changes in internal controls or in other factors that could
significantly affect internal controls subsequent to the date of my
most recent evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.

February 14, 2003 /s/ Paul Johnson
--------------------------
Paul Johnson
Chief Executive Officer

Exhibit 99.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350
(SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002)

Pursuant to and solely for purposes of, 18 U.S.C. Section 1350 (Section
906 of the Sarbanes-Oxley Act of 2002), the undersigned hereby
certifies in the capacity and on the date indicated below that:

1. The Quarterly Report of Lifestyle Innovations, Inc.
(the "Registrant") on Form 10-QSB for the period
ended December 31, 2002 as filed with the Securities
and Exchange Commission on the date hereof (the
"Report") fully complies with the requirements of
Section 13(a) or 15(d) of the Securities Exchange Act
of 1934; and

2. The information contained in the Report fairly
presents, in all material respects, the financial
condition and results of operations of the
Registrant.

Date: February 14, 2003 By: /s/Paul Johnson
--------------------------
Paul Johnson
Chief Executive Officer