Neo Telemedia Limited provided earnings guidance for the three months ended September 30, 2012. Based on preliminary review by the board of directors of Neo Telemedia Limited of the unaudited consolidated management accounts of the group, the board informed the shareholders of the company and potential investors that the group is expected to record a loss for the three months ended September 30, 2012 as compared to the profit recorded in the corresponding period in 2011. Based on the relevant information currently available to the company, the board considers that such loss was mainly because approximately 1,000 traffic lights in aggregate located in Xiamen and Nanchang have been temporarily uninstalled due to road expansion and subway construction carried out by the municipal governments; and the number of advertising agents that the Group has co-operated with has dropped from three to one during the period due to fierce competition and the worsening economic situation in the PRC.

The above factors have adversely affected the group's revenue as well as its operating results for the three months ended September 30, 2012.