We (or the “Company”, or the “Issuer”) were incorporated on November 2, 1995 as Carter/Lambert Holdings, Inc. under the laws of the State of Nevada to engage in any lawful corporate purpose. Our shares began trading publicly on the NASD Pink Sheets on October 19, 1999. Our company was initially a shell company. We changed our name to "Electronic Manufacturing Solutions and Services, Inc." on November 14, 2000 and then changed our name to "Searchlight Solutions, Ltd." on June 20, 2003. Although the Issuer was at all times looking to acquire an operating business, and entered into a preliminary agreement to do in so 2000 (which was never completed), until the May 22, 2003 agreement referred to below the Issuer had not specific business plan or purpose.
We are a technology services company, with clients in the legal industry and in other information intensive industries. We provide our customers with information management consulting services. We are also a reseller of software including Searchlight™ and other software used by lawyers to organize their cases.
We have not been involved in any bankruptcy, receivership or similar proceeding.
On May 22, 2003, we entered into a share exchange agreement with Triumph Case Management Ltd. (“Triumph”) of Vancouver, British Columbia. Triumph is a private holding company which owned all of the issued common shares of Searchlight Systems Inc. Searchlight Systems Inc. was incorporated in Nevada and is the United States operating company which in turn owns 100% of the issued common shares of Searchlight Systems Ltd. Searchlight Systems Ltd. is a British Columbia incorporated, Vancouver based technology services company. Searchlight Systems Ltd. employs approximately 60 full time hourly employees and six full time salaried management staff. Searchlight Systems Ltd. is the Canadian operating company in our corporate structure. Searchlight Systems Ltd. provides customers with consulting services and software which enables the transcription of any media containing information into an organized and retrievable digital format.
Triumph agreed to transfer all of the issued and outstanding shares in Searchlight Systems Inc. to the Issuer in exchange for that number of shares that is equal to 75% of the issued and outstanding shares of the Issuer.
We issued 17,968,500 common shares to Triumph Case Management Ltd. for our acquisition of Searchlight Systems Inc. and Searchlight Systems Ltd. This acquisition makes us a majority owned subsidiary of Triumph . Following our acquisition of Searchlight Systems Inc., we commenced the business of being an integrated digital project management company. The operation of the business is carried on through the companies in our corporate structure, Searchlight Systems Inc., Searchlight Systems Ltd. and LMC.
In February, 2003, Searchlight Systems Ltd. purchased 70% of the issued shares in a Washington corporation called Litigation Management Consulting Inc. ("LMC"). LMC provides information co-
ordination and document manipulation services primarily to the legal industry in Washington State. Searchlight Systems Ltd. paid $7,000 for its 70% controlling interest in LMC.
(i)
Our Principal Products, Services and Markets
We are a technology services company, with clients in the legal industry and in other information intensive industries. We provide our customers with information management consulting services. We are also a reseller of software including Searchlight™ and other software used by lawyers to organize their cases. Virtually all of the work we do is for the legal industry.
Our Business Model
Our primary market is within the legal industry. We provide service in legal litigation support, which we have diagrammed in figures 1 and 2. The standard litigation process includes the dispute, the discovery and finally the trial. The trial may be followed by an appeal.
The Company's operations are primarily in Canada, and Washington State. Potential markets for its products include all jurisdictions in North America and Europe. We perform services at our offices in Vancouver, BC, Canada and Seattle, Washington, and also at client sites where necessary or appropriate.
We provide case management support services and software in response to a dispute. We also provide support services and software during the discovery process of deposition and disclosure documents. The deposition is also known as examination for discovery. This pre-trial proceeding is a fact-finding hearing, in which a party is permitted to cross-examine another party to the action under oath, on the issues between them. Disclosure is a term used in criminal proceedings, referring to any and all evidence gathered against an accused.
We also provide support services and software during the pre-trial collaboration period, which includes legal motions, conferences and finally presentation at trial. A legal motion is an application to court seeking an order or generally dealing with a pre-trial issue or an issue within the trial. Evidence is usually given by affidavit and the applications are heard in chambers.
The Company also provides support services and software during an appeal if an appeal follows the trial.
We generate the majority of our revenues through selling services to our clients at an hourly or fixed bid rate. We may also charge per page for paper-based documents. We also license Searchlight™ software to our clients.
Suite of Services
We provide the following suite of services to our clients.
Consulting
In close collaboration with the client (often a legal defence team of lawyers), our personnel create a plan to allocate and handle the technical and the physical organization of resources 1
and information over many disparate locations.
Services include logistical support for the initial months of the project, assisting the team in dealing with issues of what the disclosure contains, advising how to deal with the materials, providing insight into what should be disclosed, and helping craft
1 , “physical organization of resources” means our personnel attend at the offices of our client to retrieve boxes containing documents, computer hard drives, etc. and then bring them to our production facility(s) for analysis.
requests for documents and/or databases.
Data Entry
Manually typing/entering of different types of client, case and business information into Searchlight™ or other software.
Document Annotating
Stamping and numbering of documentation
Document Archiving
Storing documents electronically on compact disk CD ROM or other media including computer hard drives, DVD, or even paper, enabling instant retrieval
Distribution of Disclosure
Facilitating mandatory document production
Document Scanning
Providing a system of document images for the computer file management system of their choice, including competitors' products
Electronic Data Discovery
Electronic data discovery (EDD) is the discovery of evidentiary documents for litigation that are stored in electronic format originally. This includes e-mail, word-processed documents such as memos, letters, spreadsheets, presentations and other electronic formats.
Multi-Media Retrieval
Organizing video, photographs, digital files, hand-written notes and audio evidence
Trial Preparation and Presentation
Creating electronic court rooms which have full audio and visual capabilities so that evidence in any media whether on paper, video, audio, etc., can be viewed by the courtroom’s audience
Document Indexing and Organization
Referencing of critical information
Computer Forensics
Computer forensics is the science and practice of examining and retrieving deleted data. These may include: deleted email, word processing, or spreadsheet files, temporary Internet or cache files that can be used to track Internet activity, numerical data files that reveal monetary transactions, replica files associated with transferring files to a PDA or a CD, log and spool files associated with printing, network access, general use.
Hardware and software Systems
Computers, servers and software can be provided for use on specific cases to avoid overtaxing existing resources
Searchlight™ Software
Searchlight™ is software developed to service the legal litigation support industry. Searchlight™ software includes tools necessary to manage a legal case from inception at the dispute, to completion at trial and or appeal. This includes document organization, indexing of documents, preparation of disclosure (electronic or paper), and acceptance of disclosure from others, data distribution to large teams of lawyers, trial presentation and preparation of electronic appeal books.
Searchlight™ software was developed and is owned by our majority shareholder, Triumph Case Management Ltd. Our subsidiary, Searchlight Systems Inc., is licensed, on a non-exclusive basis, to distribute, use and license Searchlight™ software under a License and Software Distribution Agreement dated February 3, 2003 (the "Licensing Agreement"). Searchlight Systems Inc. pays Triumph the following fees under the Licensing Agreement:
- Per user license fee: $695
- Annual update fee per user: $125
- Triumph programmer hourly rate: $65
- Triumph senior programmer hourly rate: $110
License fees are payable by Searchlight Systems Inc. to Triumph within 15 days of the end of each month in which fees have accrued. Searchlight Systems Inc. also pays Triumph for fees and expenses incurred in connection with customization and installation services for Triumph software which are provided by Triumph. The Licensing Agreement may be terminated by either party to the agreement in the event a material breach has occurred by the other party to the agreement which remains uncured for 60 days after written notice of the material breach.
(ii)
Distribution methods of the products or services.
Our company is primarily a service provider. There are no unique distribution methods for our services. We work on a fee for services and a month to month basis. Services may be performed at the clients’ offices or at one of the Company’s production locations. For software distribution, the software is physically uploaded onto the clients’ servers or desk top computer(s) by one of the Company’s representatives.
(iii)
Status of any publicly announced new product or service.
We currently do not have a publicly announced new product or service.
(iv)
Competitive business conditions and the s issuer's competitive position in the industry and methods of competition.
The main market in which we compete is litigation support of the legal industry. There are competitors within this market which fall into three main areas:
1.
Companies that develop shrink wrapped software (software shipped in a box or downloaded from the internet within executable files).
2.
Companies that provide litigation support services in electronic data discovery of electronic files (EDD) for the discovery step of the litigation process.
3.
Companies that provide litigation support services in electronic discovery of paper documents for the discovery step of the litigation process.
a.
Scanning houses
b.
Coding houses
Software Companies:
Companies included in this area are the providers of shrink-wrapped software (software shipped in a box or downloaded from the internet with executable files). These include:
Summation
Concordance
Sanction
Trial Director (InData)
I Pro
JFS Litigators Notebook (Bowne& Co.)
CaseSoft (DecisionQuest/Bowne& Co.)
Electronic Discovery Services Companies:
Companies included in this area provide products and services in litigation support. These companies focus on providing electronic discovery of files already in electronic format (i.e. Microsoft Word Files, electronic mail, PDF files, etc.) The companies include:
Applied Discovery
Fios Inc.
Kroll
Paper Based Litigation Support Companies:
Companies included in this area provide scanning support and sometimes coding support. These companies will often then further subcontract work out to partner companies. Companies include:
Bowne
IKON
Lex-Solutio
D-M Information Systems
Pacific Legal
Competitive Advantages
In the opinion of management competitors lack the breadth (competitors usually only address one or two aspects) and depth (competitors usually do not deliver information in a usable format to the clients; it may still be in a computer coded format requiring further refinement) of the services and software offered by the Company to address all the requirements of litigation support.
Key Personnel
The Company employs six salaried management staff who possess knowledge, experience, reputation and client contacts. Our company motivates and retains these employees through continuing education programs and competitive compensation. We also employ approximately 60 full time hourly employees.
Physical Location
Through having much of the production staff located in Vancouver, British Columbia, the Company has been able to take advantage of the effects of exchange rates in offering their clients competitive rates as well as maintaining margins through lower cost labor. The location in Vancouver also allows access to a highly skilled labor force. Additionally, through having regional offices with sales staff located in hubs of legal activity in the United States, the Company has been able to take advantage of nationally recognized legal cases as the local provider of litigation support services. Head office is located at 329 Railway Street, Suite 500, Vancouver, B.C. Canada, V6A 1A4 and regional offices are located at 80 S. Washington #300, Seattle 98104 and 616 First Avenue, Suite 700, Seattle, WA USA 98104-225..
(v)
Dependence on one or a few major customers.
Our Company's customer mix includes a disparate group of law firms, government agencies and utility corporations. There is no dependency on a few major customers.
(vi)
Patents, trademarks, licenses, franchises, concessions, royalty agreements or labor contracts, including duration.
Our company does not own nor has it applied for any patents. A trademark has been granted to our controlling shareholder, Triumph Case Management Ltd. ("Triumph"), over the word "Searchlight" as it applies to digital management software. We have been licensed to use Triumph's Searchlight software under the terms of a license and software distribution agreement dated February 3, 2003. The Licensing Agreement is described in detail under the subheading "Searchlight Software". We are not a party to any franchises, concessions, royalty agreement or labor contracts outside of the Triumph Agreement.
(vii)
Need for any government approval of principal products or services.
No government approval is required for our company to provide its principal services and products.
(viii)
Effect of existing or probable governmental regulations on the business.
There are no existing or probable governmental regulations which are likely to have a positive or a negative impact on our business or industry.
(ix)
Estimate of the amount spent during each of the last two fiscal years on research and development activities and if applicable the extent to which the cost of such activities are borne directly by customers.
We have not expended any funds over the last two fiscal years on research and development activities.
(x)
Costs and effects of compliance with environmental laws (federal, state and local).
The business which we operate is not subject to any material or unusual federal, state or local environmental laws.
(xi)
Number of total employees and number of full time employees.
The Company currently employs approximately 60 full time hourly employees and six full time salaried management staff.
