FST.L Regulatory News (FST)

2 April 2012

Toumaz Limited

Full year results

Toumaz Limited (AIM: TMZ, 'Toumaz' or 'the Group'), a pioneer in and provider of ultra-low power, high-performance wireless communications technologies and solutions, announces its audited full year results for the year ended 31 December 2011.

Highlights

·; Commercialisation of Sensium disposable digital plaster ('Sensium Plaster') well underway

- US hospital launch on track for this month

·; Telran, the world's lowest power wireless transceiver chip launched and approved for European and US distribution

- Supply agreements already in place with key customers

·; Xenif, the multimedia and wireless connectivity chip gaining market traction

·; Reorganisation of the Group into two businesses:

- Toumaz Healthcare, covering health technology solutions

- Toumaz Microsystems covering the design and development of semiconductor chips and solutions for low power and high data-rate wireless connectivity

·; Imagination Technologies Group plc ('Imagination') invested £5m of cash, technology and engineering resources in Toumaz Microsystems as a strategic partner

·; Post year end fundraising raised £11.1m (net) to invest further in Toumaz Microsystems and developing a new multi-standard connectivity chip incorporating the new IEEE standard for Body Area Networks and next generation wireless connectivity offerings

Professor Chris Toumazou, Chief Executive of Toumaz, commented,

"2011 was a transformational year for Toumaz, with increased commercial momentum in the health and consumer sectors and closer strategic relationships with our partners. We have formalised key partnerships and secured additional investment from international strategic partners, which will support research and development and the commercialisation of our products.

"Our Sensium™ disposable digital plaster solution achieved the key milestone of approval for use in US hospitals and initial launch is now due this month at a Los Angeles hospital."

Enquiries:

About Toumaz - (www.toumaz.com)

Toumaz is pioneering low cost, ultra-low power wireless technologies for a wide range of markets including medical monitoring and internet-connected consumer devices.

The Group has two businesses; Toumaz Healthcare covering health technology solutions, and Toumaz Microsystems covering the design and development of semiconductor chips and solutions for low power and high-performance wireless communication.

Toumaz Healthcare provides wireless healthcare monitoring solutions for the hospital and home health markets. Toumaz's licensable smart sensor interface and transceiver platform, Sensium, is a leader in real-time wireless monitoring of the body's vital signs. Sensium has the potential to transform medical monitoring and reduce the cost of healthcare by wirelessly connecting individuals to healthcare providers - simply, affordably and unobtrusively. For healthcare professionals, this creates new opportunities for pro-active monitoring and improved quality of care. For patients, it delivers new opportunities for lifestyle-compatible personalised healthcare.

Toumaz Microsystems designs, develops and sells low-power and high performance semiconductor chips and solutions for the growing embedded wireless connectivity market, addressing opportunities in a wide range of internet connected devices. These include home and enterprise automation, healthcare, smart power, security/monitoring systems, intelligent toys and other connectivity-centric cloud-enabled systems.

Its key product, Telran, the world's lowest power radio system-on-chip forms the basis for Toumaz UK's Sensium platform.

Toumaz is an AIM listed company (AIM: TMZ) with development centres in Abingdon, UK and Taipei City, Taiwan.

Overview

2011 was a year of important achievements and developments for the Group. FDA approval of the Sensium™ disposable digital plaster solution was granted and initial commercial launch in US hospitals is imminent. Strategic relationships with both California Capital Equity (CCE) and Imagination were also formalised during the year.

At the end of 2011, Imagination invested £5m of cash, technology and engineering resources in Toumaz Microsystems. After the year end, Imagination exchanged its interest in Toumaz Microsystems for a significant interest in Toumaz as a whole. The Group's relationship with Imagination in this area deepened as it continued to contribute technological input and resources.

Toumaz was also reorganised into two distinct operating businesses: Toumaz Healthcare, focusing on health technology solutions, and Toumaz Microsystems covering the design and development of wireless semiconductor chips addressing low power as well as high performance connectivity solutions.

Toumaz Microsystems' strategy is to deliver both low-power and high-performance connectivity solutions addressing both ultra low-power, battery-operated connected devices and also high data-rate devices needed for wireless audio and video delivery.

The Group's capacity to execute its strategy in expanding its products and exploiting the demand for low power wireless connectivity was significantly enhanced in February 2012, when £11.1m (net) was raised to accelerate the development of the connectivity chips and to take advantage of the newly ratified IEEE industry standard for Body Area Networks

Operational review

Toumaz Healthcare

The Sensium™ disposable digital plaster solution was granted 510(k) approval by the US FDA in July 2011 for use in US hospitals. The Sensium™ is an ultra-low power technology platform that provides unobtrusive, continuous, wireless monitoring of vital signs for up to six days. It provides a wireless link from the patient to the hospital's electronic information system, allowing constant monitoring of heart rate, respiration and temperature. The disposable product will be mainly used in hospitals.

During the year, Toumaz established a joint venture with CCE, a company owned by Dr Patrick Soon-Shiong, to commercialize the disposable Sensium™ plaster worldwide. The joint venture, Toumaz US, is owned 20% by Toumaz and 80% by CCE. Toumaz will sell Sensium™ chips and boards to the joint venture and receive royalties on the sale of all products containing Toumaz IP.

Initial commercial launch in a hospital in Los Angeles is imminent . The Sensium™ will be deployed initially to a small number of rooms with a gradual deployment to all general ward beds thereafter.

The Group continues to work to expand the Sensium™ product range to applications outside of hospitals, including non-disposable devices for wireless monitoring in the home and on the move. This includes a non-exclusive license agreement with a newly established company to use Sensium™ technology for sports and fitness applications in the UK.

Quanta Computer has developed a prototype product based on Sensium technology targeting diabetes type II sufferers. Prototypes are currently being tested.

Toumaz Microsystems

Toumaz Microsystems designs, develops and sells semiconductor chips and solutions for the growing embedded wireless connectivity market including home automation, healthcare, smart power, security/monitoring systems and cloud embedded systems. It aims to deliver solutions for both ultra-low power, battery operated connected devices and high data rate devices for audio and video delivery enabling strong market and application footprint, as internet connectivity becomes ubiquitous.

The Xenif wireless multimedia chip, developed in collaboration with Imagination Technologies, has been selling at increased volumes to the Group's tier one customer during the year for audio streaming applications.

The world's lowest power wireless radiochip, Telran, was launched during 2012 and following its approval for distribution in Europe and the US, a number of development kits were sold to prospective customers and it is now gaining traction with a number of potential volume customers.

Following the fundraising in February 2012 and the investment and technological support from Imagination Technologies, a key focus for Toumaz Microsystems is the development of a new multi-standard connectivity chip incorporating the new IEEE standard 802.15.6 for Body Area Networks.

Toumaz has been an active participant and driver of the IEEE committee specifying and developing this important new standard and plans to develop the first chip based on the new standard. By combining other existing low power radio standards on the same chip, it will also have the potential to be used for a range of consumer wireless applications.

These new chips are expected to be incorporated in the next generation Sensium solution for wireless healthcare monitoring, both in and out of the hospital, making it fully compatible with this new industry standard, as well as being the first FDA approved standard wireless monitor for hospitals.

Financial review

Group revenues for the year to 31 December 2011 were £2.3m (2010: £2.7m), mostly development income and license fees for Toumaz Healthcare. The Group has started to generate revenues from product sales. Development income will continue at reduced level after completion of the Sensium™ development work in February 2012.

Personnel costs were £3.9m (2010: £3.8m). Since the year end the Taiwanese operation has been significantly reduced and the engineering functions moved to the UK. This will save approximately £500,000 of costs per annum. R&D costs decreased to £3.2m (2010: £3.5m) mainly due to completion of the Xenif and Telran chips. Amortisation of intangible assets was flat at £1.4m (2010: £1.5m). Funds have been mainly used to complete the software elements of the Sensium plaster and the integration into the hospital networks.

The Group reported a loss after tax of £6.7m (2010: loss £5.9m). Tax losses carried forward are approximately £24.4m. The loss per share was 1.06p (2010: loss 0.99p).

Cash inflow included £2.3m of revenues and £0.7m in R&D tax credits, while cash outflow from operations amounted to £8.1m. The cash balance at the end of the year was to £2.2m, following an investment by Imagination Technologies with a cash element of £1.5m paid in 2011. A further £0.5m was paid in March 2012.

On 13 February 2012, the Group raised a net amount of £ 11.1m from a private placement of equity. At 31 March 2012, the Group's cash balance was £11.4m.

In 2012, the Group intends to domicile Toumaz in the United Kingdom for tax purposes.

Board changes

Two of the Board's non-executive directors, Ian McWalter and Serge Grisard, have stepped down from the Board today initiating an adjustment of the Board's composition to reflect its strategic and operational needs.

Current trading and outlook

The Group has started the process of strengthening its executive management team in order to drive the commercialisation of the business and its IP as well as exploiting the numerous market opportunities. The Group plans to make further changes over the next few months.

Toumaz's aim is to deliver both ultra-low power and high-performance solutions for connected devices. The trend towards wireless cloud-connected devices across many markets creates a large number of opportunities for low power wireless solutions. Toumaz is now in a position to be able to provide customers with such products.

The launch of the Sensium™ technology in US hospitals represents an important milestone for the Group. The first hospital will serve as a reference site for further expansion which the Group expects will gain momentum during the second half of the year and into 2013. The Group also looks forward to exploiting the Sensium™ technology to other markets outside of hospitals.

Toumaz intends to build on the transformation of 2011, and early 2012, with substantial investment and expertise now within the business. With the ever-growing demand for complete wireless platforms for machine to machine connectivity and enabling home and consumer solutions, the Group believes that there is a strong market for its products.

The approval of the IEEE Body Area Networks standard in February 2012, alongside the resources provided by the Group's recent £11.1m (net) fundraising, provides Toumaz with the window of opportunity and the investment needed to be able to set the industry standard for ultra-low power wireless chips.

Consolidated statement of comprehensive income for the year ended 31 December 2011

Consolidated statement of changes in equity for the year ended 31 December 2011

Consolidated statement of financial position for the year ended 31 December 2011

Consolidated Cash Flow Statement for the year ended 31 December 2011

Notes to the financial statements for the year ended 31 December 2011

1. Basis of Preperation

The Group was incorporated in the Cayman Islands which do not prescribe the adoption of any particular accounting framework. The Board has therefore adopted and complied with International Financial Reporting Standards (IFRS) as adopted by the European Union. The Group's shares are listed on the AIM market of the London Stock Exchange.

2. Going Concern

The directors have prepared profit and cashflow forecasts through to 31 December 2013 which incorporate the Group and its subsidiary undertakings as at 31 December 2011.

The key assumptions in preparing the forecasts are as follows:

·; In the Toumaz Healthcare Division the development costs and related income, from the strategic partnership between Toumaz Healthcare Limited (formerly Toumaz UK Limited) and Toumaz US LLE, is forecast to complete in Q1 2012 as the first generation digital plaster is completed. In Q2 2012 a limited release of the digital plaster will be made in the United States with an initial low level of related product sales forecast. From the end Q4 2012 it is expected that both product sales and royalty revenue, from the commercialisation of the digital plaster, will start to flow. Initially at low levels, as market penetration and acceptance is reached, then at an increasing pace during 2013.

·; Further products, based on the Sensium™ chip and related technology, are forecast. A licence and development agreement has already been signed for sport and fitness related products. Commercial launch is expected during the second half of the year. Other applications based on a rechargeable Sensium plaster are being reviewed.

·; In Toumaz Microsystems development of the Xenif and Telran chips has been completed and market launch started with increasing revenues forecast for 2012 and beyond. Initial development work on a wireless ultra-low power chip based the new IEEE standard (802.15.6) for Body Area Network has started and expected to be completed end of the year. Launch will be end 2012 or early 2013 and significant revenue streams are expected from this product.

·; During 2012 further development costs, associated with both the existing portfolio of wireless chips and new ones will be required. The new ultra-low power wireless chip based on the 802.15.6 standard will be incorporated in next generation Sensium plasters.

On 13 February 2012 the Group announced the raising of £11.1m (net) from existing and new shareholders to fund its development programme and provide working capital. The current forecasts assume that no further funds are required during the period under review. These forecasts demonstrate that the Group is able to continue in business for a period of at least twelve months from the date of approval of the financial statements. Accordingly the financial statements have been prepared on a going concern basis.

3. Taxation

The tax credit for the year is as follows:

The tax assessed for the period differs from the standard rate of corporation tax in the UK as follows:

The Group has tax losses in the UK of approximately £24.4 million (2010: £19.0 million) available for offset against future operating profits. Of these approximately £7.1million relates to the pre-acquisition losses and their use may be restricted. The Group has not recognised any deferred tax asset in respect of these losses.

4. Loss per share

The calculation of the basic loss per share of (1.06)p (2010: (0.99)p) is based on the loss after tax of £6.6m (2010: £5.9m) divided by the weighted average number of ordinary shares in issue during the year of 624,072,722 (2010: 592,898,479).

Because of losses incurred the impact of the share options and share warrant is anti dilutive.

5. Goodwill

6. Other Intangible Assets

During the year a new subsidiary, Toumaz Microsystems Limited, was established with investment and support from Imagination Technologies Group plc. The 25% investment from Imagination Technologies Group plc consisted of the following:

·; Certain licences for technology with a value of £1,252k (see note 6);

·; Prepaid royalty and maintenance services with a value of £1,748k; and

·; £2m of cash, of which £1.5m was received during the year and £0.5m due in early 2012.

This investment has been treated as an asset purchase by the Group and results in the creation of a non-controlling interest of £5m. Subsequent to the year end this ownership structure has been simplified. The Group's 75% contribution to the investment in the new subsidiary was in the form of assets transferred from Toumaz Healthcare Limited to Toumaz Microsystems Limited at a value of £15m.

Intellectual property

Intellectual property at 1 January 2011 relates to the valuation of beneficial licence agreements, trade names and customer relationships in Toumaz Healthcare and Toumaz Mocrosystems at the date of their original acquisition. The remaining life of the Toumaz Healthcare asset is approximately three years and for Toumaz Microsystems between five and nine years.

Licence & development fees

At 1 January 2011 licence & development fees related to an agreement, dated 14 May 2009, with Imagination Technologies Group plc to license a next generation communication and digital radio multimedia IP platform. The consideration for the license deal consisted of a number of payments scheduled over the duration of the Group's development projects.  The remaining life of this asset is five years.

On 30 December 2011, consequent on the signing of the Shareholder's Agreement between Toumaz Healthcare Ltd and Imagination Technologies Group plc relating to the joint investment in the newly formed company Toumaz Microsystems Limited, Imagination Technologies Group plc granted an additional licence for the exploitation of key Imagination technology. The technology licensed is essential to the future development of the new generation of and new generation of wireless chips. The licence has been granted in perpetuity and will not be amortised. It will however be subject to an annual impairment review

The Directors have tested both Intellectual property and licence & development fees for impairment in conjunction with their testing for Goodwill in accordance with the Group's accounting policy. It is their view that no impairment of either category of Intangible asset is required.

7. Non-current assets

The prepaid royalties and maintenance agreements reflect the non-current portion of the amounts prepaid greater than one year consequent on the signing of the Shareholders Agreement between Toumaz UK Ltd and Imagination Technologies Group plc relating to the joint investment in the newly formed company Toumaz Microsystems Limited,

8. Trade and other receivables

All trade receivables are within credit terms of between 30 to 60 days and do not bear any effective interest.

The fair value of these short term financial assets is not individually determined as the carrying amount is a reasonable approximation of fair value.

9. Trade and other payables

All of the above are due within one year. The fair value of trade and other payables has not been disclosed as, due to their short duration, management considers the carrying amounts recognised to be a reasonable approximation of their fair value.

10. Share capital

All shares are equally eligible to receive dividends and the repayment of capital and represent equal votes at meetings of shareholders.

Allotments during the year

On 16 February 2011 14,563,142 ordinary shares of 0.25p were issued to California Capital Equity LLC at a price of 8.83p. The difference between the total consideration received of £1,285,925 and the total nominal value of shares issued £36,408 has been transferred to the share premium account. The costs associated with this issue were £123,541.

On 4 March 2011 21,250,000 ordinary shares of 0.25p were issued to Quanta Computer Inc. and other institutional investors at a price of 8.83p. The difference between the total consideration received of £1,876,375 and the total nominal value of shares issued £53,125 has been transferred to the share premium account. The costs associated with this issue were £149,158.

Options and warrants

At 31 December 2011, options over 24,197,935 (2010: 24,197,935) ordinary shares were in issue to directors serving at that date as disclosed in the Report on Remuneration. In addition, at that date the Group has in issue 14,963,652 (2010: 18,327,301) further options.

11. Publication

The financial information in this announcement does not constitute statutory accounts. The auditors have given an unqualified report on the statutory accounts for the year ended 31 December 2011. The information contained in the announcement has been extracted from audited information.

The annual report for the year ended 31 December 2011 will be sent to shareholders shortly.