activities review – december 2004

Lumacom is pleased to provide its quarterly update in conjunction with the
December 2004 quarterly cash commitments. During this period the Company
has continued to focus on a series of important strategic milestones set within the
Company.
Construction continues on the sign at 4 Times Square with the Company’s
installer, Spectrum Signs now in the process of completing the steel construction
and preparing to install the LumaPanels on the structure. The LumaPanels are
currently being pre tested prior to installation on the sign infrastructure.
Completion date is expected to be around the end of February 2005 subject to
weather conditions, which can be quite severe this time of year. The schedule
was recently adjusted to cater for Disney’s graphics. These are being applied to
the Ad-skins (the changeable day-time advertising fascias which are affixed to
the face of the LumaPanels) prior to the installation of the LumaPanels to the
building’s sign platform.
In Turkey, construction is progressing well following the Company’s recent
announcement of the binding heads of agreement with Global Medya Parzalarma
SAN TIC LTD (“Global Media”). Our Turkish partners, ITOAS are carrying out the
installation (through their construction group of companies) under Lumacom’s
coordination. They are proving to be extremely reliable and are delivering in line
with our expectations. The installation of the LumaPanels to the sign structure is
expected to be complete in the first 2 weeks of February 2005 and
commissioning and testing is scheduled for completion in early March 2005 in
time for hand over to Global Media. The deal with Global Media is scheduled to
gross some $3m over 3 years to Lumacom and its joint venture partner, ITOAS.
The Company is in discussions with various qualified media and outdoor
advertising companies; those who have existing sites suitable for Lumacom, and
those who are skilled and keen to source sites for Lumacom. Lumacom is
currently in the process of identifying spectacular sites best suited to its
LumaPanel technology with these parties as potential partners. The markets in
which the Company continues to focus are USA, UK, Europe, China and Hong
Kong. This process is an important next step toward the Company’s goal of
developing a network of new signs for the outdoor advertising industry.
Rodd Sala, Managing Director, currently is overseas progressing discussions
and negotiations in all market segments;
“Interest in all strategic regions is developing positively. The association
with Clear Channel-Spectacolor has provided a sound platform from which
the Company has been able to access their world-wide offices. Discussions
in these quarters, in association with the recent good news on our Turkey
JV installation and the positive progress of 4 Times Square is a clear
indicator the Company has turned the corner from a challenging 2004 to a
commercially promising and exciting 2005”
Referring to the attached Commitments Report, the Company continues to focus
on keeping control on its operating cash outlays, Average outlays per month,
(excluding inventory costs for the signs and prepayments for US operations) for
the six months to 31 December 2004 are well below the previous financial year’s
average operating cash outlays of $220,000 per month. Included in the 6 months’
operating cash outlays in the Commitments Report is $350k expended for
Inventory in the main relating to signs for Turkey. In addition, operating cash
outlays include $248k in expenses paid in advance for 4 Times Square. Investing
activities for the 6 months represent the $2.3m investment for the signs for 4
Time Square and Istanbul. The Company completed a capital raising in October
2004 of $1.1m, and in early January 2005 completed a modest placement of
$606,000 to assist in the next phase of the Company’s business development
plan. The January proceeds of $606,000 are not included in the cash balances
reported at 31 December 2004 of $1.2 million.