Exhibit 99.2

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of
LED Effects, Inc.

We have audited the accompanying consolidated balance sheets of LED Effects, Inc. and subsidiary (the Company) as of June 13, 2007 and December 31, 2006 and the related consolidated statements of operations, changes in shareholders’ equity and cash flows for the period from January 1 to June 13, 2007 and for the years ended December 31, 2006 and 2005. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the 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 audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of LED Effects, Inc. and subsidiary as of June 13, 2007 and December 31, 2006, and the consolidated results of their operations and cash flows for the period from January 1 to June 13, 2007 and for the years ended December 31, 2006 and 2005, in conformity with United States generally accepted accounting principles.

/s/ Turner, Stone & Company, L.L.P.

Certified Public Accountants
Dallas, Texas
December 6, 2007

LED Effects, Inc. and Subsidiary Consolidated Balance Sheets

	June 13,			December 31,
	2007			2006
Current Assets
Cash and cash equivalents	$	1,245,652		$	1,828,776
Accounts receivable, net of allowance		1,536,780			634,467
Inventory, net of allowance		992,604			1,128,530
Income taxes recoverable		—			92,237
Total current assets		3,775,036			3,684,010
Property and equipment, net		159,585			169,820
Minority investment, at cost		86,528			86,528
Deposits		15,819			13,320
Total assets	$	4,036,968		$	3,953,678
Current Liabilities
Accounts payable	$	231,080		$	329,013
Accrued expenses		—			—
Income taxes payable		67,826
Note payable to bank		—			100,000
Total current liabilities		298,906			429,013
Minority interest in income of subsidiary		87,106			84,523
Deferred tax liability		401,112			395,375
Total Liabilities		787,124			908,911
Shareholders’ Equity
Common stock, no par value 25,000 shares authorized		11,541			11,541
756 issued and outstanding
Retained earnings		3,329,415			3,042,203
Accumulated other comprehensive loss		(91,112	)		(8,977	)
Total shareholders’ equity		3,249,844			3,044,767
Total liabilities and shareholders’ equity	$	4,036,968		$	3,953,678

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

LED Effects, Inc. and Subsidiary
Consolidated Statements of Operations
for the Period January 1, 2007 through June 13, 2007
and the years ended December 31, 2006 and 2005

	Period
	January 1, 2007
	through			Years ended December 31,
	June 13, 2007			2006			2005
Sales	$	3,675,132		$	8,858,068		$	6,301,986
Cost of goods sold		2,606,445			6,061,922			5,087,501
Gross profit		1,068,687			2,796,146			1,214,485
Operating expenses
Selling, general and administrative		226,758			516,538			337,676
Compensation and related expenses		221,013			428,755			357,035
Professional fees		117,780			52,201			23,544
Depreciation		6,691			25,969			25,969
Total operating expense		572,242			1,023,463			744,224
Income from operations		496,445			1,772,683			470,261
Other income (expense)
Interest income		1,520			3,102			12,830
Interest expense		(454	)		(3,386	)		(224	)
Other, net		(35,472	)		(883	)		—
Total other income (expense)		(34,406	)		(1,167	)		12,606
Income before provision for income tax expense and minority interest in income of subsidiary		462,039			1,771,516			482,867
Provision for income tax expense		172,244			666,665			188,674
Income before minority interest in income of subsidiary		289,795			1,104,851			294,193
Minority interest in income of subsidiary		(2,583	)		(84,523	)		—
Net income	$	287,212		$	1,020,328		$	294,193
Items included in comprehensive income Foreign currency loss		82,135			8,977			—
Net comprehensive income	$	205,077		$	1,011,351		$	294,193

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

LED Effects, Inc. and Subsidiary
Consolidated Statement of Changes in Shareholders’ Equity

							Accumulated
							Other
	Outstanding		Common		Retained		Comprehensive
	Shares		Stock		Earnings		Loss			Total
Balance, December 31, 2004		756	$	11,541	$	1,727,682		—		$	1,739,223
Other comprehensive loss		—	$	—	$	—		—			—
Net Income		—	$	—		294,193					294,193
Balance, December 31, 2005		756		11,541		2,021,875		—			2,033,416
Other comprehensive loss		—		—		—		(8,977	)		(8,977	)
Net Income		—		—		1,020,328		—			1,020,328
Balance, December 31, 2006		756		11,541		3,042,203		(8,977	)		3,044,767
Other comprehensive loss		—		—		—		(82,135	)		(82,135	)
Net Income		—		—		287,212		—			287,212
Balance, June 13, 2007		756		11,541		3,329,415		(91,112	)		3,249,844

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

LED Effects, Inc. and Subsidiary
Consolidated Statements of Cash Flows
for the Period January 1, 2007 through June 13, 2007 and the years ended December 31, 2006 and 2005

	2007			2006			2005
Operating Activities
Net income	$	287,212		$	1,020,328		$	294,193
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation		6,691			25,969			25,969
Provision for deferred income tax expense (benefit)		5,737			498,602			(73,583	)
Changes in operating assets and liabilities:
Accounts receivable		(902,313	)		(61,892	)		540,826
Inventory		135,925			(117,051	)		(485,942	)
Income taxes payable (recoverable)		160,062			36,674			(128,911	)
Deposits		(2,499	)		16,464			(7,350	)
Accounts payable and accrued expenses		(97,932	)		190,788			(146,207	)
Income taxes payable (recoverable)
Deposits on contracts		—			(981,100	)		981,100
Net cash provided by (used in) operations		(407,117	)		628,782			1,000,095
Investing Activities
Purchase of property and equipment		—			(52,953	)		(35,927	)
Disposals of property and equipment		3,545			—			—
Net cash provided by (used in) investing activities		3,545			(52,953	)		(35,927	)
Financing Activities
Minority investment, at cost		—			(86,528	)		—
Amount due minority shareholder		2,583			84,523			—
Note payable borrowings		—			100,000			—
Notes payable repayments		(100,000	)		—			(89,557	)
Net cash provided by (used in) financing activities		(97,417	)		97,995			(89,557	)
Effect of exchange rate changes on cash and cash equivalents		(82,135	)		(8,977	)		—
Net increase (decrease) in cash		(583,124	)		664,847			874,611
Cash at beginning of period		1,828,776			1,163,929			289,318
Cash at end of period	$	1,245,652		$	1,828,776		$	1,163,929
Supplemental disclosure of non-cash investing and financing activities
Interest paid	$	454		$	3,386		$	3,386
Taxes paid	$	62,915		$	138,557		$	480,725

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

LED EFFECTS, INC. AND SUBSIDIARY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1: NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Business

LED Effects, Inc. (the “Company”) is a Nevada corporation organized in 1993. The Company’s subsidiary during the periods ending June 13, 2007 and December 31, 2006 was LED Effects KK (Japan) (“LED Japan”). All intercompany accounts and transactions have been eliminated in the accompanying consolidated financial statements.

LED Effects, Inc. designs, engineers, manufactures and markets custom Light Emitting Diodes (“LED”) lighting and digital lighting controls for customers worldwide. Additionally, the Company is a certified value-added reseller for Phillips Solid State Lighting. The Company’s products are used for applications in architectural, special effects, display, stage, casino and theater lighting as well as components for video walls and slot machines. These systems use our own digital RGB control technology or industry standards such as CMX512.

Summary of Significant Accounting Policies

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from these estimates.

Cash and cash equivalents

All highly liquid investments with original maturities of three months or less at date of purchase are carried at cost, which approximates fair value, and are considered to be cash equivalents.

The Company maintains balances in cash accounts which could exceed federally insured limits or in cash accounts that are not eligible for federal deposit insurance. The Company has not experienced any losses from maintaining balances in such cash accounts. Management believes that the Company does not have significant credit risk related to its cash accounts. See Note 7.

Accounts Receivable

Accounts receivable are carried at their estimated net realizable value. The allowance for doubtful accounts reflects our best estimate of probable losses inherent in the accounts receivable balance. We determine the allowance based on known troubled accounts, historical experience, and other currently available evidence. The amounts in the allowance for doubtful accounts was $321,713 and $312,455 at June 13, 2007 and December 31, 2006, respectively.

Inventories

Inventories, which consist of raw materials and components and work-in-process, are stated at standard costs which approximate the First In, First Out (FIFO) method of pricing inventory. See Note 3.

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consist primarily of prepaid insurance which is amortized over the term of the insurance policy.

Property and equipment

Property and equipment are carried at depreciated cost. Depreciation is provided using the straight-line method over the estimated economic lives of the assets, which range from two to five years. Leasehold improvements are amortized over the term of the lease.

Depreciation expense was $6,691, $25,969 and $25,969 for the period ended June 13, 2007 and the years ended December 31, 2006 and 2005, respectively.

Impairment

The Company evaluates the carrying value of its long-lived assets and identifiable intangibles when events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. The review includes an assessment of industry factors, contract retentions, cash flow projections and other factors the Company believes are relevant. No impairments were recorded during the periods presented.

Sales

The majority of the Company’s sales are based on projects that have a term of less than three months. These product sales are recorded when the products are shipped and title passes to customers. Where sales of product are subject to certain customer acceptance terms, revenue from the sale is recognized once these terms have been met.

As of the date of this report, the Company has no reason to believe that an allowance for material product returns is necessary.

Concentration of Credit Risk

A relatively limited number of customers account for a large percentage of the Company’s total sales. For the period ending June 13, 2007 and the years ended December 31, 2006 and 2005, the total number of customers representing 10% of the sales or greater were two, four and two, respectively. The sales to these customers accounted for approximately 38%, 48% and 72%, respectively. The Company closely monitors the credit risk associate with its customers. See Note 8.

Research and Development

The Company expenses all research and development costs as part of its normal on-going daily activities and is not segregated into specific identifiable activities. Research and development includes amounts for design prototypes and modifications made to existing prototypes, as incurred, except for prototypes that have alternative future uses. Costs incurred for building of production tooling and molds are capitalized and usually charged to the customer as part of the project. The Company does not provide for a separate designation for costs incurred in research and development.

Income taxes

The Company utilizes the asset and liability method in accounting for income taxes pursuant to SFAS No. 109 — Accounting for Income Taxes. Under this method, deferred tax assets and liabilities are determined based on temporary differences between the financial reporting and tax bases of assets and liabilities, and are measured using enacted tax rates and laws that are expected to be in effect. The Company currently provides for deferred taxes on depreciation difference and unremitted earnings of its’ foreign subsidiary.

NOTE 2: FAIR VALUE OF FINANCIAL INSTRUMENTS

SFAS No. 107 — Disclosures About Fair Value of Financial Instruments, requires that the Company disclose estimated fair values of financial instruments.

Cash and cash equivalents, accounts receivable, notes and accounts payable, amounts due under the line of credit, accrued expenses and other current liabilities are carried at book value amounts which approximate fair value due to the short-term maturity of these instruments.

NOTE 3: INVENTORY

     At June 13, 2007 and December 31, 2006, respectively, inventory is comprised of the following:

	June 13, 2007			December 31, 2006
Raw Materials	$	839,463		$	926,267
Work in Process		244,471			275,059
Allowance for obsolete items		(91,330	)		(72,796	)
Net Inventory	$	992,604		$	1,128,530

NOTE 4: PROPERTY AND EQUIPMENT

Property and equipment consists of the following:

	June 13, 2007		December 31, 2006
Equipment and furniture	$	136,994	$	168,138
Leasehold improvements		210,147		207,750
Total cost		347,141		375,888
Accumulated depreciation		187,556		206,068
Net book value	$	159,585	$	169,820

NOTE 5: LINE OF CREDIT

On May 19, 2006 the Company entered into a credit facility with Placer Sierra Bank and borrowed $100,000. The Note carried an interest rate of Prime rate plus 0.50%. The initial interest rate and the interest rate at December 31, 2006 was 8.5%. The $100,000 was to be repaid in twelve (12) equal monthly installments plus accrued interest beginning on July 1, 2006.

In 2005, the Company entered into a revolving credit facility with Placer Sierra Bank for $500,000 and an interest rate of Prime rate plus 1.00%.

On May 19, 2006 the credit was increased to $600,000 and the interest rate was reduced to Prime rate plus 0.50%. The initial rate on the revised facility was 8.5%. At December 31, 2006, the rate was 8.5%. The credit facility matures on June 1, 2007. At December 31, 2006 the outstanding balances under this credit facility was $100,000.

As of June 1, 2007, all loans under the credit facility have been paid in full and terminated.

NOTE 6: INCOME TAXES

The Company accounts for corporate income taxes in accordance with SFAS No. 109 - Accounting for Income Taxes. Under SFAS No. 109, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized as set forth below in the period that includes the enactment date.

The significant components of income before income taxes and the consolidated income tax provision (benefit) are as follows:

	Period ended June 13,			Year ended		Year ended
	2007			December 31, 2006		December 31, 2005
Income before taxes and minority interest in income of subsidiary
Domestic	$	429,793		$	461,117	$	544,219
Foreign		32,246			1,310,399		(61,352	)
Total	$	462,039		$	1,771,516	$	482,867
Income tax expense (benefit)
Current Provision
Federal	$	121,176		$	127,055	$	201,401
State		45,331			41,008		60,856
Foreign		—			—		—
Total current income tax expense (benefit)	$	166,507		$	168,063	$	262,257
Deferred income tax expense (benefit)
Federal	$	890		$	40,577	$	(40,479	)
State		(6,117	)		12,490		(12,244	)
Foreign		10,964			445,535		(20,860	)
Total deferred income tax provision (benefit)	$	5,737		$	498,602	$	(73,583	)
Income tax expense (benefit)	$	172,244		$	666,665	$	188,674

The temporary differences that gave rise to deferred tax balance sheet amounts were as follows:

	June 13, 2007			December 31, 2006
Unremitted earnings of foreign subsidiary	$	456,499		$	445,536
Depreciation		(13,432	)		(10,813	)
Other, net		(41,955	)		(39,348	)
Total deferred tax liability	$	468,938		$	395,375

The difference between the effective consolidated tax rate and the statutory rate of tax is mainly due to the effect of the state income tax rate incurred by the company.

NOTE 7: BUSINESS SEGMENT INFORMATION

The Company has determined that it has two reportable segments organized along geographical areas – LED Effects US and LED Effects Japan (Asia). The accounting policies of the segments are the same as those described in the Summary of Significant Accounting Policies (Note 1). The LED Effects US segment consists of operations in the United States while the LED Effects Japan (Asia) segment operates primarily in Japan but also has projects in other Southeast Asia countries.

Summary of Net Sales by Geographic Area

	US		Japan		Total
2007	$	3,595,357	$	79,775	$	3,675,132
2006	$	6,453,361	$	2,404,707	$	8,858,068
2005	$	6,301,986	$	—	$	6,301,986

Assets

	US		Japan		Total
2007	$	2,736,259	$	1,300,709	$	4,036,968
2006	$	2,274,556	$	1,679,122	$	3,953,678

NOTE 8: COMMITMENTS AND CONTINGENCIES

Concentration of Credit Risk

A relatively limited number of customers account for a large percentage of the Company’s total sales. For the period January 1 through June 13, 2007 and for the years ended December 31, 2006 and 2005, the total number of customers representing 10% of the sales or greater were two, four and two, respectively. These customers accounted for the following percentages of total sales individually during the respective periods:

	Period ended June			Year ended December			Year ended December
	13, 2007			31, 2006			31, 2005
Customer A		16	%		—			—
Customer B		22	%		—			—
Customer C		—			14	%		52	%
Customer D		—			12	%		—
Customer E		—			11	%		—
Customer F		—			11	%		20	%
Total for customers in excess of 10% of sales		38	%		48	%		72	%

The Company had two customers accounting for more than 10% of the total accounts receivable at June 13, 2007 and December 31, 2006. At June 13, 2007, the two customers’ accounts receivable accounted for 18% and 10% of the total accounts receivable. At September 31, 2006, the two customers’ accounts receivable balances accounted for 32% and 22% of total accounts receivables.

The top ten customers represented approximately 84%, 66% and 84% of the Company’s total sales for the period January 1 through June 13, 2007 and for the years ended December 31, 2006 and 2005, respectively. The Company closely monitors the credit risk associated with its customers.

Leased space

The Company occupies manufacturing, warehousing and office space in Rancho Cordova, CA that is leased from a third party for approximately $4,400 per month under an agreement that concluded in March 2006. Subsequent to the conclusion of the initial term of the lease, the Company leased the premises on a month-to-month basis. The Company also leases space in Japan on a month-to-month basis at a total rate of approximately $650 per month.

Litigation

From time to time, the Company may become involved in lawsuits or other legal proceedings through the ordinary course of operating its business. The Company does not believe these actions will have a material effect on its consolidated financial statements.

Stock option plan

The Company maintains a stock option plan for key non-management employees. At the option of the shareholders’, certain individuals are granted options that vest upon the completion of certain events that include a change in control of the Company (See Note 9). Outstanding stock options represent less than 2% of the overall outstanding shares of the Company.

Agreements with Contract Manufacturers

The Company currently depends on a small number of contract manufacturers to manufacture its products. If any of these contract manufacturers were to terminate their agreements with the Company or fail to provide the required capacity and quality on a timely basis, the Company may be unable to manufacture and ship products until replacement contract manufacturing services could be obtained.

NOTE 9: SUBSEQUENT EVENTS

On June 14, 2007, the Company entered into an Asset Contribution Agreement with LED Holding, LLC (“LED Holdings”) whereby the Company contributed substantially all of its assets to Holdings and Holdings assumed all of the liabilities related to the Company’s LED business. In return, the Company received 100% of the Class B members’ interest, which represents 49.7% of the total members’ interests. Class B members’ interests are restricted as to voting privileges and other matters.

For stock option vesting purposes, the transaction that occurred as a result of the Asset Contribution Agreement was considered a change in control and any options that were not already vested did so at that time. Should the employees choose to exercise their options, an additional 17 shares of stock would be issued.