Omni-Lite Industries Canada Inc.

Omni-Lite Industries Canada Inc. was founded in September 1992 to develop commercial applications for metal matrix and carbon fibre composite materials originally produced for the aerospace industry. The company offers improved weight to strength ratios along with superior abrasion and corrosion resistance with its method of cold-forging high-quality components using computer-controlled machines that can withstand elevated levels of stress. Omni-Lite uses computer-controlled machines that can produce items that have been impossible to manufacture with traditional techniques. The company currently produces components for five main lines of business including sports, military, automotive, commercial, and aerospace at its manufacturing facilities which are located in Cerritos, California.

Omni-Lite’s early success came from the sports recreation industry where its ultra light-weight ceramic composite track spikes quickly became a standard product used by most of the world’s top track and field athletes. The spikes were not only lighter than steel spikes, but they reduced damage to the track’s surface by compressing the surface rather than puncturing it. The company has since broadened its product offerings to include manufactured goods for the automotive, commercial, aerospace, and military markets. Omni-Lite’s products are utilized by some of the world’s largest corporations, including Daimler- Chrysler, General Motors, Ford, Mazda, Nike, Adidas, Reebok, as well as the U.S. Army, NATO, and the U.S. Special Forces. The company's patented products are now sold in the aftermarket in 140 countries worldwide.

In February 2003, Omni-Lite announced that it had completed the first contract for a Canadian military customer which entailed the manufacturing and delivery of a specialized product. Management stated that this milestone capped 27 months of development and could lead to substantial new production orders in the future. In addition, the company received its 15th cold forging system on February 19, 2003. This equipment, valued at $750,000, will enable the company to develop more complex products required by the military and aerospace industries.

Also during February 2003, the company successfully leased out 5,800 square feet of office space in its Cerritos facility. This lease agreement, which contains an option for a 2-year extension, has a value of approximately $500,000 to be recognized over 5 years.

In March 2003, the company received a new contract for a component manufactured for the U.S. Military and NATO. These clients have overcome some production problems experienced over the past 18 months, but Omni- Lite expects shipments to these customers to begin occurring on a more regular basis. The company also announced the arrival of another cold forging system at its manufacturing facilities. The arrival of this equipment marked the conclusion of Omni-Lite’s expansion plan which commenced in 2002.

In May 2003, the company received two contracts with new customers thereby strengthening a trend which marks the aerospace and automotive divisions as Omni-Lite’s fastest growing areas of business. Shortly thereafter, during August 2003, the company received an order for components to be produced by its military division worth more than US$600,000.

On December 22, 2003, Omni-Lite received new contracts worth approximately US$250,000 for a family of components in its automotive and aerospace divisions. These particular components expand the product range that the company offers in terms of sizes and materials, and will be used in various fastener applications. The shipment of products in respect of these contracts is expected to commence in the first quarter of 2004.

Omni-Lite is currently in the process of repurchasing up to 435,000 shares of its capital stock through a normal course issuer bid. The purchases are to be made during the period of February 1, 2004, to January 31, 2005, and will be conducted by Sprott Securities Inc. The company purchased 450,000 shares for cancellation under a normal course issuer bid during 2003.

During the third quarter ended September 30, 2003, the company achieved sales of US$892,966 as compared to US$673,822 during the same period last year. Omni-Lite’s net earnings for the three month period were US$252,288 or US$0.027 per share, whereas profits for the same period in 2002 were US$25,600 or US$0.003 per share. The company generated almost 50% of its year-to-date net profit in the third quarter alone. Management recently indicated that the company will report record revenues and positive earnings for the fourth quarter of fiscal 2003.