Perth-based technology company Lumacom Ltd has come to an agreement with 4 Times Square Associates for the purchase of the company's New York sign and surrender of the licence on the 4 Times Square location.
Perth-based technology company Lumacom Ltd has come to an agreement with 4 Times Square Associates for the purchase of the company's New York sign and surrender of the licence on the 4 Times Square location.
The transaction involves the payment of cash (A$489,505), cancellation of rental/Licence debt due (A$210,194) and cancellation of the licence and commitments for the balance of the term of the licence (A$3,046,633).
Lumacom cited the signs inability to attract an advertisier since its completion in April 2005 and significant holding costs as reasons behind the sale.
Below is the full announcement:
Landlord Purchases New York Sign
Lumacom is pleased to announce it has come to an agreement with 4 Times Square Associates, LLC (a subsidiary of the Durst Organization Inc), the owner of 4 Times Square for the purchase of the Company's New York sign and surrender of the licence on the location.
The entire transaction surrounding the sale of the sign involves the payment of cash, cancellation of rental/Licence debt due and cancellation of the licence and commitments for the balance of the term of the licence. The transaction involves the following:
$A* $US
Cash component for sale of sign and surrender of the Licence payable over 4 years (gross of NYC taxes): A$489,505 (US$349,703)
Cancellation of licence payments due up to date of agreement: A$210,194 (US$150,163)
Release from lease commitments for the balance of the Licence: A$3,046,633 (US$2,176,515)
* Exchange Rate as at 24 March 2006: $A1 = USD0.7144
In addition, the Company will immediately have its security deposit of $A218,925 ($US156,400) returned to it.
The New York sign has proven the operational robustness of the technology and has been the subject of research and development within the organisation over the last 3 years.
The new Board of Directors found it unacceptable that the sign had been unable to attract an advertiser since its completion in April 2005 whilst continuing to incur significant holding costs. Having reviewed the position, the Board believed the most likely group to attract an
advertiser would be a New York based organisation. The Company concluded that the landlord was best situated to effectively commercialise the asset. Lumacom will continue to work closely with the new owner and will make available parts, stock and expertise over the next 4 years to ensure the optimal operation of the sign.
In addition, the agreement also provides the landlord with an option to purchase up to 3 further signs from the Company (to be installed on the other three sides of the building roof-top) on commercially agreed terms.
Chairman, Mr Tim Ingram said today; "Whereas the sign has considerable potential for a recurring advertising revenue stream, the selling process is taking longer than expected. The Board is cognisant of the long term cost associated with the licence agreement and believes a sale now is a better route in the interest of shareholders".
The deal with the new owner also allows the Company to continue to have rooftop viewings to prospective purchasers of the company's signs and the sign will continue to be show-cased as Lumacom technology. Lumacom still intends to promote its LumaPanel technology on the back of this sale in New York working with various outdoor groups in the USA.
