re judge, page-8

Get's get rid of the emotional and hopeful side for a couple of minutes TheJudge. While this may be hard for you as you just bought some LUM, and for me because I own a few million, here are the cold hard facts about LUM in the past 6 months.

They have purchased Vertigo, which has cost them $500k + costs associated with due diligence + 115mill performance oppies. LUM has contributed approx $400k to help fund Vertigo. Vertigo has consistently been losing money for years and has lost money for the past 6months that they have been part of LUM. LUM has also needed to increase their shares outstanding by around 50mill since the Vertigo acquisition.

So while Vertigo has got huge potential, at the moment, they are a loss making asset. Revenue is irrelevant, earnings are.

The other problem with Vertigo, cf. with the previous LUM model (which failed absymally) is that they need to consistently pick up contracts and the advertising industry is a very competitive market place and the areas Vertigo are dealing with are generally pretty low margin and fairly high initial capital expenditure and a 3month wait to get the money from the purchaser.

I am still optimistic regarding LUM, but it is still a very speculative company and $5mill cap is very realistic IMO. If LUM can pull off a few of these contracts that they have currently got their finger in, an 8-9c share price is fairly realistic ($1mill earnings, 240mill shares, PE 20). 8c is 4x the current share price. People have got to work out if the risk is worth the huge upside possible.