Update on trading

Brainspark PLC
25 October 2004


FOR IMMEDIATE RELEASE                                            25 October 2004

                 BRAINSPARK PLC ('Brainspark' or the 'Company')

                   UPDATE ON TRADING, INVESTMENTS AND FUNDING

Trading

On 30 September 2004, Brainspark (www.brainspark.com), a company focusing on
investments in best-of-breed Information and Communication Technology (I&CT)
Companies primarily in Europe and in Israel, announced its results for the six
months ended 30 June 2004.

These results show a loss of £561,000 compared to a loss of £1,582,000 for the
comparable period in 2003. Of this loss, £199,000 represents operating costs and
£362,000 is attributable to the amortisation of goodwill and share of loss of
associates (£471,000 represented operating costs, £931,000 for goodwill
amortisation and share of loss of associates and £180,000 was written off
investments for the comparable 2003 period).
The Company is currently operating cautiously, cutting costs and protecting its
current portfolio companies and assisting them to create value.

The cost-cutting measures begun in 2002 - having further reduced the cash
'burn-rate' to an average of £30,000, per month net of recovery of rent and
charges made to portfolio companies for the six month period.

The Company's current strategy is to raise further capital from existing key
shareholders and sell some of the non-strategic portfolio companies - with the
objective of using the proceeds for general working capital purposes and to
support the strategic portfolio companies.

Investee Companies

1. Sale of non-strategic portfolio companies

Brainspark sold its holdings in the following investments as follows:

a) On 24 June 2004, a holding representing 38.3% of the share capital of Smile
On, a company providing e-learning services to UK dental professionals, for a
consideration of £220,000.

b) On 6 October 2004, a holding representing 33.% of the share capital of The
Usability Company, a company providing usability testing and consultancy
services, for a consideration of £360,000. In addition, the disposal gives the
Company the opportunity to have 15,680 options (equal to a 7.8% of the company
on a fully diluted base) with an exercise price of £1.36.36 and terminating
February 15, 2006.

Originally, the investment made in these companies was £1.2 million and the two
holdings had a total consolidated net book value at 30 June 2004 of £22,000.
The profit against the book value is £558,000.

2. Capital increases

a) From April to date, Brainspark made further investments of US$200,000 in
Geosim Systems Limited (www.GeosimCities.com), a company 51.75% owned by
Brainspark, Of these investments, US$50,000 is relating to the agreement signed
in June last year for a total available investment of US$600,000. Of this
amount, Geosim used only US$225,000 and US$150,000 relating to the new agreement
of available investment of US$600,000 signed on 1 July 2004. This agreement was
established to renew the financial support to Geosim in order to finance its
sales activity in USA and in Europe. This new investment will result in the
increase of the holding to 52.76%. GeoSim is an Israeli company, whose main
business purpose is the creation of 3D models of cities and other areas of
special interest. GeoSim has now a backlog order of more than US$1 million
(£550,000) arising mainly from three projects - the city of Lucca, an historical
town in Tuscany (Italy), an extension to complete the original project of
Philadelphia (USA) and the Pennsylvania University campus (USA). There are other
potential orders in its pipeline - one of them to be closed soon.

b) In September 2004 Brainspark agreed to a capital increase in Metapack (
www.metapack.co.uk), a software and services company, which specialises in the
retail supply chain, retaining its percentage holding unchanged (5.89%). This
investment is made by using the income from the license of the rented space in
the Company's building for two and a half months.

3. Agreement

On 7 September 2004, a memorandum of understanding was drawn up between ACS, a
company of which Brainspark owns 16.2 per cent and with twenty years' experience
in the sector of satellite imaging and, more recently, medical imaging analysis
and AISoftw@re, a company whose shares are listed on the Milan Stock Exchange
and a leader in the Italian market in medical image management, to prepare a
joint international industrial development plan. For some time both parties have
been looking into the idea of a joint international business project in the
sector of innovative IT technologies for real-time examination of images for the
market of health diagnosis equipment and equipment for laser surgery operations.
Subject to a positive outcome of the industrial plan, which will be prepared,
the intended direction of AISoftw@re's Board is to propose a corporate
aggregation to the Board of ACS.

Funding

On 8 October 2004, Brainspark repaid £50,000 of the convertible loan notes
allotted.

Further information

Alberto Agosta 020 7843 9838
Roland Cornish 020 7628 3396



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