LMIC Reports Second Quarter and Six-Month Results.

BELTSVILLE, Md. -- LMIC, Inc. (OTCBB:LMII) today reported results for the second quarter ended June 30, 2004.

"During the first half of 2004 we completed our transition to an independent, contract electronics manufacturer, from a provider of services to affiliated companies on a captive

in-house basis," stated Kwok Li, chairman and chief executive officer of LMIC. "As evidence of our progress, we recently announced a contract for $17.0 million with TNCI UK, Ltd. Additionally, we are working on several important early-stage design and prototyping projects, which may evolve into volume production electronics manufacturing contracts."

Mr. Li continued, "Our business pipeline for the second half of 2004 is stronger than ever. We currently have more than $20 million in sales orders expected to be completed and shipped during the next 16 months, and we expect to make continued progress towards profitability in 2005. As we ramp up our outside sales efforts, LMIC is becoming recognized for our integrated design, manufacturing and post-production services, which clearly differentiate us from other small- and mid-sized electronics manufacturers."

Revenue for the three months ended June 30, 2004 was $1.5 million, compared to $899,000 for the three months ended June 30, 2003. Results for the second quarter of 2004 reflect an increase and diversification of the customer base, offset by the company's decision to discontinue services with affiliated companies, which accounted for $450,000 in the second quarter of 2003. Net loss for the second quarter was $2.2 million, or $0.12 per basic share, versus $1.2 million, or $0.15 per basic share, for the same period last year. The increase in net loss resulted largely from an increase in payroll, professional, accounting, and other expenses related to the company's transition from a captive manufacturer to a publicly traded independent contract electronics manufacturer.

Revenue for the six months ended June 30, 2004 was $2.9 million, compared to $2.8 million for the six months ended June 30, 2003. Results for the first half of 2004 reflect an increase and diversification of the customer base, offset by the company's decision to discontinue services with affiliated companies, which accounted for $950,000 in the second quarter of 2003. Net loss for the six months was $4.2 million, or $0.26 per basic share, versus $2.5 million, or $0.34 per basic share, for the same period last year. The increase in net loss resulted largely from an increase in payroll, professional, accounting, and other expenses related to the company's transition from a captive manufacturer to a publicly traded independent contract electronics manufacturer.

About LMIC

LMIC provides integrated design, manufacturing and post-production services to small- and mid-sized electronic original equipment manufacturers (OEMs). The company operates an 85,000 square foot, state-of-the-art manufacturing facility in Beltsville, Md. The company's customers include networking, telecommunications, defense electronics, industrial controls, and medical technology organizations, both private and public.

The company also offers a unique and integrated information management system, which enables advanced product tracking and quality control to LMIC's customers. LMIC is certified as a Minority Business Entity by the Maryland/DC Minority Supplier Development Council, which facilitates government contracting and subcontracting activities.

Forward-Looking Statements:

This document includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements regarding LMIC, Inc. and its subsidiaries' and affiliates' (collectively, the "Company) expected future financial position, results of operations, cash flows, financing plans, business strategy, products and services, competitive positions, growth opportunities, plans and objectives of management for future operations, as well as statements that include words such as "anticipate," "if," "believe," "plan," "estimate," "expect," "intend," "may," "could," "should," "will," and other similar expressions are forward-looking statements. Such forward-looking statements are inherently uncertain, and readers must recognize that actual results may differ materially from the Company's expectations. The Company does not undertake a duty to update such forward-looking statements. Factors that may cause actual results to differ materially from those in the forward-looking statements include the Company's ability to fund its operations, the Company's ability to obtain waivers of existing defaults under its debt documents, actions of the Company's competitors, and changes in general economic conditions. Many of these factors are outside of the Company's control.

(tables follow)

CONSOLIDATED BALANCE SHEETS

                                               June 30,   December 31,
                                                 2004         2003
                                            ------------- ------------
                                             (Unaudited)
ASSETS

Current Assets
   Cash and cash equivalents                $    156,472  $    10,480
   Accounts receivable, less allowance for
    doubtful accounts ($33,452 at June 30,
    2004 and $46,161 at December 31, 2003)       916,243      673,723
   Inventories                                 1,498,738      839,446
   Prepaid and other current assets              408,537      375,000
                                            ------------- ------------
        Total current assets                   2,979,990    1,898,649
                                            ------------- ------------
Property and equipment, net                    4,015,445    4,555,436
                                            ------------- ------------
Other Assets
   Restricted cash in escrow account           4,980,000           --
   Deferred financing costs, net                  70,998           --
                                            ------------- ------------
        Total other assets                     5,050,998           --
                                            ------------- ------------
        Total assets                        $ 12,046,433  $ 6,454,085
                                            ============= ============

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)

Current Liabilities
   Current portion of long-term debt        $  2,822,468  $ 3,296,587
   Accounts payable                            2,292,416    2,479,419
   Accrued expenses and other current
    liabilities                                  846,369    1,045,338
   Convertible promissory notes                2,035,000    3,951,978
   Loan payable - related parties                510,752      560,757
                                            ------------- ------------
        Total current liabilities              8,507,005   11,334,079
                                            ------------- ------------
Other Liabilities
   Long-term debt, less current portion          153,145      440,312
   Convertible promissory notes                  100,000      400,000
   Convertible debentures, net of discount     4,938,878           --
   Deferred occupancy cost                       436,515      382,426
                                            ------------- ------------
        Total other liabilities                5,628,538    1,222,738
                                            ------------- ------------
        Total liabilities                     14,135,543   12,556,817
                                            ------------- ------------
Commitments and contingencies

Stockholders' Equity (Deficiency)
   Common stock, $.001 par value;
    100,000,000 shares authorized;
    17,905,856 shares in 2004 and 12,126,533
    shares in 2003 issued and outstanding         17,906       12,127
   Warrants                                       30,217           --
   Additional paid-in capital                 24,818,277   16,606,912
   Retained earnings (deficit)               (26,955,510) (22,721,771)
                                            ------------- ------------
        Total stockholders' equity
         (deficiency)                         (2,089,110)  (6,102,732)
                                            ------------- ------------
        Total liabilities and stockholders'
         equity (deficiency)                $ 12,046,433  $ 6,454,085
                                            ============= ============



                 CONSOLIDATED STATEMENTS OF OPERATIONS
         Three and Six Months Ended June 30, 2004 (Unaudited)
                         and 2003 (Unaudited)

                    Three Months Ended           Six Months Ended
                         June 30,                    June 30,
                --------------------------  --------------------------
                    2004          2003          2004          2003
                ------------  ------------  ------------  ------------
Net sales      $  1,525,926  $    899,112  $  2,907,223  $  2,815,146

Cost of sales     2,443,797     1,337,751     4,628,350     3,507,726
                ------------  ------------  ------------  ------------
Gross loss         (917,871)     (438,639)   (1,721,127)     (692,580)

Selling,
 general and
 administrative
 expenses         1,171,741       724,224     2,330,333     1,627,626
                ------------  ------------  ------------  ------------
Operating loss   (2,089,612)   (1,162,863)   (4,051,460)   (2,302,026)
                ------------  ------------  ------------  ------------
Other income
 (expenses)
   Interest and
    other debt
    expense,
    net            (148,325)     (143,618)     (300,745)     (269,606)
   Rental and
   other income      65,103        92,642       118,467        88,730
                ------------  ------------  ------------  ------------
    Total other
     income
     (expenses)     (83,222)      (50,976)     (182,278)     (180,876)
                ------------  ------------  ------------  ------------
Loss before
 income taxes    (2,172,835)   (1,213,839)   (4,233,739)   (2,501,082)

Income taxes
 (benefit)               --            --            --            --
                ------------  ------------  ------------  ------------
Net loss         (2,172,835)   (1,213,839)   (4,233,739)   (2,501,082)

Retained
 earnings
 (deficit)
 - beginning    (24,782,675)  (18,305,441)  (22,721,771)  (17,018,198)
                ------------  ------------  ------------  ------------
Retained
 earnings
 (deficit)
 - end         $(26,955,510) $(19,519,280) $(26,955,510) $(19,519,280)
                ============  ============  ============  ============
Net loss per
 common share

   Basic       $      (0.12) $      (0.15) $      (0.26) $      (0.34)
   Diluted     $      (0.11) $      (0.15) $      (0.23) $      (0.33)