SECURITIES AND EXCHANGE COMMISSION

Self-Regulatory Organizations; Order Granting Application to Strike from Listing and Registration on the American Stock Exchange LLC (Magic Lantern Group, Inc., Common Stock, $.01 par value) File No. 1-09738

July 7, 2005

On June 28, 2005, the American Stock Exchange LLC ("Amex" or "Exchange") filed an application with the Securities and Exchange Commission ("Commission"), pursuant to Section 12(d) of the Securities Exchange Act of 1934 ("Act")¹ and Rule 12d2-2(c) thereunder,² to strike the common stock, $.01 par value ("Security"), of Magic Lantern Group, Inc. ("Company") from listing and registration on Amex.

Amex listing standards provide, among other things, that Amex may consider removing the security of an issuer from listing and registration when: (i) the financial condition and/or operating results of the issuer appear to be unsatisfactory; (ii) the issuer has failed to comply with its listing agreements with the Exchange; or (iii) any other event shall occur or any condition shall exist which makes further dealings on the Exchange unwarranted.

In applying these standards, Amex considers delisting the securities of a company that has: (i) shareholders' equity of less than $2,000,000 if the company has reported losses from continuing operations and/or net losses in two of its past three most recent fiscal years (Section 1003(a)(i) of the Amex Company Guide ("Company Guide")); (ii) shareholders' equity of less than $4,000,000 if the company has reported losses from continuing operations and/or net losses in three of its past four most recent fiscal years (Section 1003(a)(ii) of the Company Guide); and (iii) shareholders' equity of less than $6,000,000 if the company has reported losses from continuing operations and/or net losses in five of its most recent fiscal years (Section 1003(a)(iii) of the Amex Company Guide).

In addition, the Exchange will normally consider suspending dealings in, or removing from the list, a security of a company that: (i) is financially impaired (Section 1003(a)(iv) of the Company Guide); (ii) fails or refuses to pay, when due, any applicable listing fees established by the Exchange (Section 1003(f)(iv) of the Company Guide); (iii) has issued, or authorized its transfer agent or registrar to issue or register, additional securities of a listed class until it has filed an application for the listing of such additional securities and received notification from the Exchange that the securities have been approved for listing (Section 301 of the Company Guide); (iv) fails to file information, documents, and reports with the Commission on a timely basis (Sections 134 and 1101 of the Company Guide); (v) fails to maintain an audit committee comprised solely of at least three independent directors (Section 121(B)(2) of the Company Guide); and (v) fails to meet the requirement that the compensation of the chief executive officer of a listed company be determined either by a Compensation Committee comprised solely of independent directors or by a majority of the independent directors on its Board of Directors (Section 805 of the Company Guide).

Amex stated in its application filed with the Commission that the Security no longer qualifies for continued listing and registration, listing the following reasons:

1. The Company has incurred net losses as follows:

2. The Company has not filed its Form 10-Q with the Commission for the period ended March 31, 2005. Trading in the security has been halted since May 17, 2005.

3. For the year-ended December 31, 2004, the Company had a shareholders' equity of $1,111,000, a working capital deficit of $6,030,000, and an accumulated deficit of $29,232,000.

4. The Company issued shares of its common stock in various transactions without first obtaining the requisite shareholder approval, and/or filing an application for the listing of such shares and/or receiving notification from the Exchange that the shares were approved for listing.

5. The Company is delinquent in making payments on its annual listing fees and fees associated with the listing of additional shares.

6. The Company is not in compliance with the Exchange's corporate governance standards. Currently, there are only two independent members serving on the Company's Audit Committee and only one non-independent member serving on the Company's Compensation Committee.

By letter dated April 29, 2005, in accordance with Section 1009 of the Company Guide, Amex advised the Company of its status in relation to the standards of the Exhange and offered the Company an opportunity to submit a business plan in support of continued listing. The Exchange's letter advised the Company that it would need to regain compliance with the Exchange's continued listing standards within a period of 18 months. By letter dated May 23, 2005, the Exchange advised the Company that it had failed to satisfy an additional continued listing standard. Specifically, the Company was not in compliance with Sections 134 and 1101 of the Company Guide in that the Company failed to file its Form 10-Q with the Commission in a timely manner.

The Company submitted its plan via correspondence dated June 7, 2005. The Exchange determined that the Company's plan did not make a reasonable demonstration of its ability to regain compliance with the Exchange's continued listing standards and did not accept the plan. Therefore, the Exchange determined that the Security did not qualify for continued listing. This determination, along with the Company's right to appeal, was communicated to the Company by letter dated June 10, 2005. The Company did not appeal the Exchange's determination within the requisite time period or thereafter.

The Commission, having considered the facts stated in Amex's application and having due regard for the public interest and protection of investors, orders that the application be, and it hereby is, granted, effective at the opening of business on July 8, 2005.

For the Commission, by the Division of Market Regulation, pursuant to delegated authority.³

Endnotes

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¹ 15 U.S.C. 78l(d).

² 17 CFR 240.12d2-2(d).

³ 17 CFR 200.30-3(a)(1).

http://www.sec.gov/rules/delist/1-09738.htm