Letter from LizardTech CEO, Carlos Domingo

Dear Customers and Partners,

The first quarter of 2005 brought with it the accomplishment of three key milestones for LizardTech that offer exciting opportunities for our customers and partners. First, Japanese company Celartem Technology Inc., the parent company of LizardTech, merged its three U. S. holdings, LizardTech, Extensis and Celartem U. S., in an effort to leverage each company's strengths across business models. I'm excited to be stepping up as the President and CEO of the newly formed company. The creation of a larger cohesive entity will result in a more competitive organization whose individual components are better positioned to expand their efforts in their respective markets, while creating a more efficient operation toward profitability for shareholders. The new entity will operate under the Celartem Inc. name and will retain both brands, LizardTech and Extensis. Celartem Inc. will leverage Extensis' deep distribution channels and customer base and LizardTech's technology and understanding of the government and document imaging markets to better serve our existing and future customers and partners. LizardTech is about “making your imaging work” and Extensis provides solutions for “empowering your digital assets” so starting with the corporate tag line, both companies are going to be working to provide solutions to help customers get the most out of their digital content. For the readers not familiar with Extensis, please check out their Website www.extensis.com to learn more about their world-class, client/server solutions for digital asset and font management.

Another key milestone this quarter is the integration of native wavelet MrSID technology with the Oracle® Spatial 10g GeoRaster architecture. This integration delivers improved efficiency and reduced costs for enterprise customers who need a solution for storing and distributing large raster data sets in a database. And because we've led the charge in implementing JPEG 2000 encoding in a way that will best bring the benefits of that standard to professional users, this venture also represents LizardTech's first step toward providing JPEG 2000 support for Oracle Spatial 10g in the future.

Finally, through a strategic partnership with Avision, now Celartem's distributor for all Document Express with DjVu products in the greater China region, including Mainland China, Taiwan, Hong Kong and Korea, LizardTech has established a robust presence in the Asia Pacific region. In Asia Pacific, there is a high demand for document imaging solutions that enable organizations to cost effectively archive and share scanned color documents. Avision will not only be our distributor but will also integrate DjVu open file format in their capture application AVScan that ships with every Avision scanner. With Avision now on board as a partner I am confident we will be able to jointly deliver a world-class document imaging solution to a wide range of customers in Asia Pacific.

As we progress through 2005, we are leveraging our combined corporate strengths in the U. S. while establishing strategic partnerships necessary to better serve markets at home and abroad. We are dedicated to delivering geospatial and document imaging solutions that consistently meet and exceed customer expectations. Through furthering advanced technology such as JPEG 2000 and tight integration with technology partners such as Kofax, Kodak and Oracle, the LizardTech team now under our new corporate umbrella at Celartem Inc. will continue to build software that customers can rely upon to improve their businesses and operations.

Regards,

Carlos Domingo