28 Sep 2009 07:00
Embargoed Release: 07:00hrs, Monday 28th September 2009
Toumaz Holdings Limited ('Toumaz Holdings' or the 'Group') Unaudited Interim Results for the six month period ended 30 June 2009 Toumaz Holdings (AIM:TMZ), the niche investor specialising in ultra-low powerwireless infrastructure technologies with strong commercial propositions forthe healthcare and electronic sectors, is pleased to present its unauditedinterim results for the six month period ended 30 June 2009 (the 'period').
Highlights:
- The Group made a pre-tax loss of 939,000 (2008: 1,751,000) reflecting the
increased net revenue from Toumaz Technology Limited and its contracts with
various partners and reduced operating costs
- The loss per share was 0.32 pence (2008:0.81 pence)
- Toumaz Technology Limited Successfully Delivers Technology Platform for
collaborative EU-funded DIAdvisor(TM) Clinical Trial
- Major Board changes
- Acquisition of remaining shares in Future Waves (UK) Limited by way of a share
swap
- Consolidation of Toumaz Technology Limited and Future Waves commences
- Two equity fundraisings totalling 3.5 million to fund the working capital
requirements of the Group
- Licensing deal with Imagination Technologies Ltd. to create next generation
multimedia integrated System-on-Chip solution
Post-period Highlights:
- Timely delivery of Sensium(TM) digital plasters and system software for vital sign
monitoring for first clinical trials in London
- Relationship with CareFusion (the Cardinal Health Inc. spin-out) remains strong
with technology and regulatory programme on track
- New Xenif chip based on latest ENSIGMA and META IP cores from Imagination
Technologies Ltd. First samples are expected in Q1, 2010
- Improved, lower cost Fenix 1 chip taped out
- New ultra-low power, Sensium(TM) compatible wireless chip, Telran, introduced by
Toumaz Technology Limited
- Significant cost savings and efficiencies from consolidation of Toumaz
Technology Limited and Future Waves
- CEO Professor Christofer Toumazou FRS wins prestigious World Technology Award
- Placing of 3 million, funds to be used for working capital purposes
Professor Christofer Toumazou FRS, chief executive officer of Toumaz Holdings, commented:
"I am delighted with the progress made by the Group during the period. Forinstance, the Sensium(TM) digital plasters that could transform future vital signmonitoring are about to enter clinical trials. Future Waves is also rapidlydeveloping new chips including an improved, lower cost Fenix 1 and our newXenif chip, now under prototype manufacturing, is expected to play a pivotalrole in the new generation of PURE's internet connected radio products. The Group continues to strengthen following the consolidation of ToumazTechnology and Future Waves, and we remain confident that as a result of themany accomplishments this year, the commercialisation pipeline remains firmlyon track as the Group continues to move towards profitability." For Further Enquiries: Patrick Toumaz Holdings Tel: +44 (0) 207 355 0036 Stephansen Limited Charles Cunningham FinnCap Tel: +44 (0) 207 600 1658 Vikki Krause / Hansard Group Tel: +44 (0) 207 245 1100 Kirsty Corcoran CHAIRMAN'S STATEMENTDuring the first six months of 2009, the Group underwent many changes to itsstructure, designed to strengthen its commercial proposition going forward.Over the period, and as referred to in the 2008 Preliminary Results (announced22 June 2009), Toumaz Holdings announced a number of new Board appointments:Sir Richard Sykes FRS became executive chairman, with Professor ChristoferToumazou FRS as chief executive officer and Patrick Stephansen as chieffinancial officer. The Board was completed by non-executive directors Dr.Hossein Yassaie, Dr. Martin Knight, Dr. Winston Wong, Dr. Ian McWalter andSerge Grisard.In addition, Toumaz Holdings acquired the remaining shares of Future Waves (UK)Limited ('FW') by way of a share swap and commenced its consolidation into theGroup. Technical achievements included the successful delivery of thetechnology platform for the EUR7.1 million EU-funded collaborative DIAdvisor(TM)Clinical Trial. To target some of the most important emerging markets and further develop itsexisting relationship with Imagination Technologies Group PLC ('Imagination'),Toumaz Holdings also signed a further intellectual property ('IP') licensingdeal. Under the agreement Toumaz Holdings has gained access to Imagination'smarket-leading next generation communication and digital radio multimediatechnologies, including META Series2 and ENSIGMA UCC Series3 IP cores, allowingthe Group to fully exploit the synergy between Imagination's communication andmultimedia IP and Toumaz Holding's unique AMX RF (radio frequency) platformtechnology in System-on-Chips ('SoC'), targeting important and fast-developingconsumer connected-device markets.
In the period, Toumaz Holdings raised a total of 3.5 million before expenses, to fund the Group's development and commercial programmes. Since the period-end, the Group has raised a further 3 million.
The Group made a pre-tax loss of 939,000 (2008: 1,751,000) reflecting theincreased net revenue from Toumaz Technology and its contracts with variouspartners and reduced operating costs. The loss per share was 0.32 pence (2008:0.81 pence)
Toumaz Technology - Healthcare
Sensium(TM) Digital Plaster
One of Toumaz Technology's key objectives for 2009 has been to deliver itsdigital plaster system, based on its core Sensium(TM) technology, for clinicaltrials. At end-August 2009, Toumaz Technology completed the development andpilot batch manufacture of the first digital plasters. Together with associatedsystem software the plasters were ready as scheduled for the commencement ofStage 1 clinical trials at the Imperial College Hospitals in London. The trialsare sponsored by CareFusion Corporation ('CareFusion'), the former ClinicalTechnologies and Services division of Cardinal Health Inc. which was spun outand listed on the NYSE on 1 September 2009. The timely delivery of the plastersrepresents a significant achievement by our committed staff. The relationshipwith CareFusion remains strong; Toumaz Technology: in conjunction withCareFusion, is currently working with US regulatory advisors to determine themost effective way to reduce the time to full commercial release of the digitalplaster systems in US hospitals.
DiAdvisor(TM)
The DiAdvisor(TM) European collaborative diabetes project continues to make goodprogress. The successful delivery by Toumaz Technology of the technologyplatform has enabled the first clinical trials (in France, Italy and CzechRepublic) to be completed and the data is now being analysed. Toumaz Technologyis now working on the new mobile data acquisition platforms for the nextclinical trials. The initial results of the first trials indicate thatDiAdvisor(TM) can deliver its objective of developing a method andprediction-based tool that can vastly improve the lives of millions of insulindependent diabetics throughout Europe and the rest of the world.
Telran
Toumaz Technology has introduced a new ultra-low power wireless chip product,"Telran". The chip is a simplified version of the Sensium(TM) chip; in essence itcomprises the radio transceiver, and whilst arguably the world's lowest powergeneral purpose radio transceiver chip, it also offers low cost connectivity toSensium(TM) devices. In this capacity it is expected to play an important role inSensium(TM) enabled consumer devices that connect individuals in the home tohealth and wellness service providers. Prototype samples and evaluation kitsare now being supplied to customers.
Life Pebble System
The Toumaz Life Pebble body worn monitor has now been CE marked and is now approved for sale throughout Europe as a medical device without further approvals from national regulators.
Future Waves - Consumer Applications
The acquisition of FW and the alignment of strategies across the Group haveallowed FW's management to focus on key customer engagements, higher marginopportunities and cost reductions. Accordingly, a product roadmap review hasled to a cost reduction and improvement programme for Fenix 1, which hasbrought immediate benefits by extending the lifetime of this already successfulproduct and improving its production yields and sales margins. Fenix 1 salesremain focused on current customers, in particular PURE (a division ofImagination). A new programme introducing complete modules from FW, based onFenix 1, is underway, building on FW's earlier development work. The modulebusiness offers higher margins, greater customer loyalty and importantly aninternal "socket" for Xenif, FW's next generation System-on-Chip ('SoC'), as itbecomes available as a full production part in Q3 next year.The design for the latest Xenif device has now been released for prototypemanufacturing, and preliminary work has commenced by the (now combined) Toumaz/FW semiconductor development team to take delivery of the new chip in Q1 nextyear. Discussions with PURE, and other potential customers, indicate that Xenifwill play a key role in a new generation of internet connected radios. Othercustomers and applications for this exciting new chip are being identified.By acquiring FW and consolidating the business with Toumaz Technology,significant cost reductions in FW's operating budget have already beenachieved. FW's Hong Kong and Korean offices have been closed, the main officein Taipei has been downsized and further savings have been created by theintegration of various activities across Toumaz Holdings. In addition, furthercost efficiencies are being produced by the implementation of changes tomaterial supply; silicon manufacturing (foundry) costs are expected to reduce.
Consolidation of Toumaz Technology and Future Waves
The consolidation and rationalisation across the Group have provided immediatebenefits. Semiconductor design for both healthcare (Toumaz Technology) andconsumer (FW) products have been combined in an expanded team in the UK.Building on existing expertise and experience, the consolidated team now hassufficient depth and critical mass to rapidly produce new products. As anindication of the maturing of the business and the power of the core AMxtechnology, a number of the new products under development are improvements andvariants on existing devices. Importantly this allows product families thataddress broader customer needs and higher margin products to be produced atsignificantly lower, incremental costs. Telran and the improved Fenix 1 areexamples of this trend.Concurrently, additional applications engineering for the healthcare andconsumer markets is underway in Taiwan. We are utilising the skill andexperience of the Taiwan team and taking advantage of the proximity to localsubcontractor and supplier bases that are generally cheap, fast and of a veryhigh quality. The new FW modules and the Telran evaluation kits (for ToumazTechnology) illustrate our success in adopting this strategy. At the strategic level, the consolidation has led to a new product roadmap thatdemonstrates; the incremental development of current product lines such asSensium(TM), Fenix 1 and Xenif; the development of product families; and theproduction of innovative integrated products offering seamless convergence ofhealthcare and consumer applications through the relationship with Imagination.
World Technology Awards
The Board is delighted to report that on 16 July 2009 Toumaz Holding'sco-founder and chief executive officer Professor Christofer Toumazou FRS wonthe 2009 World Technology Award ('WTA') in the Health and Medicine category.The prestigious WTA are given in recognition of those individuals and companiesdoing innovative work of "the greatest likely long-term significance" in theirrespective fields. It is worth noting that World Technology Network founder andchairman, James P. Clark, said of Professor Toumazou: "Professor Chris Toumazouis a great example of an extraordinary individual working tirelessly ontechnologies and businesses that are actively creating the future, asexemplified by the pioneering digital band-aid healthcare product now enteringthe market through Toumaz Technology". Other winners included 'Face-book' andYouTube.OutlookAs previously stated in our 2008 Report and Accounts, 2009 is a year ofcontinuing development and progress with the further strengthening of ourexisting partner relationships by timely delivery of milestones and bygenerating opportunities to develop new relationships with key players in ourtarget markets. Significant increases in volume and revenue for product fromboth Toumaz Technology and FW are expected in Q4 2010. The Group expects toreach profitability in 2011; Toumaz Technology revenues are projected to comefrom its existing products - Sensium(TM) chips and digital plasters based onSensium(TM) technology; while FW anticipates building sales from its currentproduct Fenix 1 and its new Xenif chip, which will go into production in Q32010. Both businesses have key partners in place to underpin sales growth(CareFusion and PURE). The technology programmes remain on track and we are already realising thebenefits of the consolidation. For the remainder of 2009, our focus willcontinue to be on our core customers, CareFusion and PURE, for the healthcareand consumer markets. Furthermore, we will continue with our planned programmeof investment in product development and generating new commercialopportunities.Sir Richard Sykes FRSChairman25th September 2009 STATEMENT OF COMPREHENSIVE INCOME FOR THE PERIOD ENDED 30 JUNE 2009 Unaudited Unaudited Six Six months months Audited ended ended Year ended 30 June 30 June 31 December Note 2009 2008 2008 GBP'000 GBP'000 GBP'000 Continuing operations Revenue 2,641 713 2,754 Cost of sales (1,063) (106) (736) Gross profit 1,578 607 2,018
Administrative expenses - amortisation of
intellectual property (267) (374) (534) Administrative expenses - other (2,046) (2,268) (4,599) Total administrative expenses (2,313) (2,642) (5,133) Loss from operations (735) (2,035) (3,115)
Result from equity accounted joint
venture - - (162)
Impairment of equity accounted joint
venture (2) - (204) Result from equity accounted associate - -
(576)
Reversal of impairment of equity
accounted associate - 1,249
Loss on disposal of interest in joint
venture (172) - - Finance income 1 22 133 Finance expense (31) - - Loss before taxation (939) (2,013) (2,675) Taxation - 262 440 Loss for the period (939) (1,751) (2,235) Other comprehensive income Currency translation 38 - -
Reversal of losses from associate 172 -
-
Reversal of losses from joint venture 2,801 -
- other comprehensive income 3,011 - - Total comprehensive income for the period 2,072 (1,751) (2,235) Basic and diluted loss per ordinary share 4 (0.32p) (0.81)p (1.01)p The reversal of losses from associate and joint venture relate to the lossespreviously recognised in the income statement relating to the associate andjoint venture which became subsidiaries during the period ended 30 June 2009.This reversal is required under IFRS 3 Business Combinations CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2009 Audited Unaudited Unaudited 31 December Note 30 June 2009 30 June 2008 2008 GBP'000 GBP'000 GBP'000 ASSETS Non-current assets Intangible assets 5 28,042 13,169 12,901
Property, plant and equipment 338 189 171 Interests in joint venture - 276 28
Interests in associates - - 1,407 28,380 13,634 14,507 Current assets Inventories 232 - 120 Tax receivable 440 262 439
Trade and other receivables 6 1,186 815 888
Cash and cash equivalents 645 724 296 Total current assets 2,503 1,801 1,743 Total assets 30,883 15,435 16,250 EQUITY AND LIABILITIES Current liabilities Trade and other payables 7 3,980 1,671 1,628 Total current liabilities 3,980 1,671 1,628 Non-current liabilities - 609 500 Total liabilities 3,980 2,280 2,128 Equity Share capital 8 1,046 544 602 Share premium 37,351 25,933 27,237
Share based payment reserve 902 662 751 Profit and loss account (12,396) (13,984) (14,468) Equity shareholders' funds 26,903 13,155 14,122 Total equity and liabilities 30,883 15,435 16,250 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY SIX MONTHS ENDED 30 JUNE 2009 Share Share Share Premium Based Retained Total capital account payment earnings equity GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Balance at 1 January 2009 602 27,237 751 (14,468) 14,122 Share options issued in share-based payments - - 151 - 151 Issue of share capital 444 10,217 - - 10,661 Costs of share issue - (103) - - (103) Transactions with owners 444 10,114 151 - 10,709 Loss for the period - - - (939) (939)
Other comprehensive income:
Exchange differences on translation of foreign operations - - - 38 38
Reversal of losses from joint
venture 172 172 Reversal of losses from associate - - - 2,801 2,801
Total comprehensive income for
the period - - - 3,011 3,011 Balance at 30 June 2009 1,046 37,351 902 (12,396) 26,903 Share Share Share based Retained premium Total capital account payment earnings equity GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Balance at 1 January 2008 544 25,933 575 (12,233) 14,819 Share options issued in share-based payments - - 87 - 87 Transactions with owners - - 87 - 87 Loss for the period - - - (1,751) (1,751)
Total comprehensive income for
the period - - - (1,751) (1,751) Balance at 30 June 2008 544 25,933 662 (13,984) 13,155 Share Share Share Premium Based Retained Total capital account payment earnings equity GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Balance at 1 January 2008 544 25,933 575 (12,233) 14,819 Share options issued in share-based payments - - 176 - 176 Issue of share capital 58 1,337 - - 1,395 Costs of share issue - (33) - - (33) Transactions with owners 58 1,304 176 - 1,538 Loss for the period - - - (2,235) (2,235)
Total comprehensive income for the period - - - (2,235) (2,235) Balance at 31 December 2008 602 27,237 751 (14,468) 14,122 CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE PERIOD 30 JUNE 2009 Audited Unaudited Unaudited Year Six months Six months ended ended ended 31 December 30 June 30 June 2009 2008 2008 GBP'000 GBP'000 GBP'000
Cash flows from operating activities
Loss before taxation (939) (2,013) (2,675) Amortisation 267 266 534 Depreciation 50 26 63 Share of loss of associates - 108 576
Impairment of equity accounted associate - (1,249) Loss on disposal of joint venture 172 - - Share of loss of joint venture - - 162 Provision against loan from joint venture - - 204
Share based payments 151 87 176 Interest received (1) (22) (133) Interest paid 31 - - Increase in inventories (44) 15 (105)
Decrease/(increase) in trade and other receivables 20 (438) (511) (Decrease)/increase in trade and other payables (1,221) 1,077 925 Foreign exchange reserve movement 39 - - Tax refund - 392 393 Net cash outflow from operating activities (1,475) (502) (1,640) Cash flows from investing activities Purchase of and loans to investments and associates (907) (176) (822) Payments to acquire intangible fixed assets (731) - - Purchase of subsidiary undertaking (49) - - Net cash acquired with subsidiary undertaking 162 - - Sale of investment in other activities 25 - - Purchase of other non-current assets (5) (155) (175)
Interest paid (31) - - Interest received 1 22 36
Net cash used in investing activities (1,535) (309) (961) Cash flows from financing activities Proceeds from issue of share capital 3,462 - 1,395 Share issue costs (103) - (33) Net cash inflow from financing activities 3,359 - 1,362 Net change in cash and cash equivalents 349 (811) (1,239) Cash and cash equivalents at beginning of period 296 1,535 1,535 Cash and cash equivalents at end of
period 645 724 296 NOTES TO THE INTERIM REPORT FOR THE PERIOD ENDED 30 JUNE 2009 1 GENERAL INFORMATIONThe information for the period ended 30 June 2009 does not constitute statutoryaccounts as defined in the Companies Act 2006. The figures for the year ended31 December 2008 have been extracted from the 2008 statutory financialstatements prepared under International Financial Reporting Standards (IFRS).The auditors' report on those accounts was unqualified and did not contain astatement under section 237(2) of the Companies Act 1985, however readersshould note that the report of the independent auditors included an emphasis ofmatter paragraph as follows:
"Emphasis of matter - going concern
In forming our opinion, which is not qualified, we have considered the adequacyof the disclosure made in the principal accounting policies of the financialstatements for the year ended 31 December 2008 concerning the Group's abilityto continue as a going concern. The Group incurred a net loss of 2,235,000during the year ended 31 December 2008. This condition, along with the othermatters explained in the principal accounting policies, in particular therequirement to raise further funding from existing and new shareholders,indicate the existence of a material uncertainty which may cast significantdoubt about the Group's ability to continue as a going concern. The financialstatements do not include the adjustments that would result if the Group wasunable to continue as a going concern."2 ACCOUNTING POLICIESBASIS OF PREPARATIONThe Company was incorporated in the Cayman Islands which do not prescribe theadoption of any particular accounting framework. The Board have resolved thatthe Company will follow IFRS and apply the Companies Act 2006 when preparingits annual financial statements.
The principal accounting policies of the Group remain unchanged from those set out in the Group's 2008 annual report except for the adoption of IAS 1 Presentation of Financial Statements (Revised 2007) and IFRS 8 Operating Segments.
The adoption of IAS 1 (Revised 2007) does not affect the financial position orprofits of the Group, but gives rise to additional disclosures. The measurementand recognition of the Group's assets, liabilities, income and expenses isunchanged, however some items that were recognised directly in equity are nowrecognised in other comprehensive income, for example translation differences.IAS 1 (Revised 2007) affects the presentation of owner changes in equity andintroduces a 'Statement of comprehensive income'.
The adoption of IFRS8 has not changed the segments that are disclosed in the interim financial statements
critical accounting estimates and judgements
The Group makes estimates and assumptions concerning the future. The resultingaccounting estimates will, by definition, seldom equal the related actualresults. The estimates and assumptions that have a significant risk of causinga material adjustment to the carrying amounts of assets and liabilities withinthe next accounting year are detailed below;
Critical accounting estimates and assumptions
The Group makes estimates and assumptions concerning the future. The resultingestimates will, by definition, seldom equal the related actual results. Theestimates and assumptions that have a significant risk of causing a materialadjustment to the carrying amounts of assets and liabilities within the nextaccounting period are discussed below:
Going concern
The interim report has been prepared on the going concern basis. As detailed inthe section above headed 'Going concern' the preparation of the interim reporton the going concern basis is initially dependent [on fund raising which is notcompleted nor committed.] Therefore, there is some uncertainty over theappropriateness of preparing the financial statements on a going concern basis.
Impairment of assets
The Group conducts impairment reviews of assets when events or changes incircumstances indicate that their carrying amounts may not be recoverableannually, or in accordance with the relevant accounting standards. Animpairment loss is recognised when the carrying amount of an asset is lowerthan the greater of its net selling price or the value in use. In determiningthe value in use, management assesses the present value of the estimated futurecash flows expected to arise from the continuing use of the asset and from itsdisposal at the end of its useful life. Estimates and judgments are applied indetermining these future cash flows and the discount rate.
Valuations of share options granted
The fair value of share options granted was calculated using a standardmethodology, called the Binomial option pricing model, which requires the inputof highly subjective assumptions, including the volatility of share price.Because changes in subjective input assumptions can materially affect the fairvalue estimate, in the opinion of Directors of the Company, the existing modelwill not always necessarily provide a reliable single measure of the fair valueof the share options.
CRITICAL JUDGEMENTS IN APPLYING THE GROUP'S ACCOUNTING POLICIES
Management in applying the accounting policies, consider that the most significant judgements they have had to make are whether any impairment provision is required against the intellectual property and goodwill on consolidation and interests in associates.
The accounting for the acquisition of Future Waves (UK) Limited as of the fillacquisition was completed during the period ended 30 June 2009. Management haveaccounted for the acquisition of Future Waves (UK) Limited in one step. At thedate of acquisition, however Toumaz Holdings Limited owned 23.2% of FutureWaves (UK) Limited. This, therefore, constitutes a stepped acquisition and inaccordance with IFRS 3 Business Combinations goodwill should be revised at eachstage of the acquisition. The difference in the value of the goodwillassociated with the acquisition if it had been accounted for as a steppedacquisition is not significant and therefore management have accounted for thisas the Company had been acquired in one stage.
3 SEGMENTAL REPORTING
a) Primary reporting format - business segment
As defined under International Accounting Standard 14 "Segment Reporting" (IAS14), the only material business segment the Group has is that of the commercialexploitation of nano technologies.
b) Secondary reporting format - geographical segment
Under the definitions contained in IAS 14 the only material geographic segment that the Group operates in is the UK.
4 LOSS PER SHARE
The calculation of the basic loss per share is based on the loss attributableto ordinary shareholders divided by the weighted average number of shares inissue during the period. The impact of the share options and share warrant onthe loss per share is anti-dilutive. Basic loss per share Unaudited Unaudited Audited Six months Six months Year ended ended ended 31 December 30 June 30 June 2009 2008 2008 Loss on ordinary activities after tax GBP939,000GBP1,751,000GBP2,235,000 Weighted average number of 0.25p ordinary 289,293,906 217,459,138 220,674,233shares (Loss) per share - basic and diluted (0.32)p (0.81)p (1.01)p 5 INTANGIBLE ASSETS Intellectual Goodwill on property consolidation Total GBP'000 GBP'000GBP'000 Cost
At 1 January 2008, 30 June 2008 and 31
December 2008 4,016 10,582 14,598 Additions 4,227 11,181 15,408 At 30 June 2009 8,243 21,763 30,006 Amortisation At 1 January 2008 1,163 - 1,163 Charge in the period 534 - 534 At 31 December 2008 1,697 - 1,697 Charge in the period 267 - 267 At 30 June 2009 1,964 - 1,964 Net book value at 30 June 2009 6,279 21,763 28,042 Net book value at 31 December 2008 2,319 10,582 12,901 The goodwill on consolidation relates to the acquisition of Toumaz TechnologyLimited on 3 November 2005 and the acquisition of Future Waves (UK) Limited
on20 May 2009. The other intangible asset relates to the option to exploit certainintellectual property rights and intellectual property relating to the coretechnology acquired on the acquisition of Toumaz Technology Limited and thelicense agreement with Imagination Technologies. The consideration for thelicense agreement with Imagination Technologies consists of a number ofpayments scheduled over the duration of the Group's development projects. Thefirst of these payments, amounting to US$2.5 million, was settled through theissue off 28,153,153 new ordinary shares in Toumaz holdings Limited on 14 May2009. The remainder of the payments have been or will be settled in cash. The goodwill arising on the acquisition of Future Waves (UK) Limited isprovisional as a full review and valuation of the fair values of the tangibleand intangible assets acquired has yet to be undertaken. This will beundertaken prior to the finalisation of the financial statements for the yearending 31 December 2009.
6 TRADE AND OTHER RECEIVABLES
Unaudited Unaudited Audited 30 June 2009 30 June 2008 31 December 2008 GBP'000 GBP'000 GBP'000 Trade receivables 764 565 477 Other debtors 180 25 126
Prepayments and accrued income 242 225
285
Trade and other receivables, net 1,186 815
888
Trade and other receivables are usually due within 30 - 60 days and do not bear any effective interest rate.
The fair value of these short term financial assets is not individuallydetermined as the carrying amount is a reasonable approximation of fair value. 7 TRADE AND OTHER PAYABLES Unaudited Unaudited Audited 30 June 2009 30 June 2008 31 December 2008 GBP'000 GBP'000 GBP'000 Trade and other payables 572 372 840 Other creditors 1,988 53 142 Accruals and deferred income 1,420 1,246 646 Trade and other payables 3,980 1,671 1,628 Due after one year Accruals and deferred income - 609 500 The fair value of trade and other payables has not been disclosed as, due totheir short duration, management considers the carrying amounts recognised inthe balance sheet to be a reasonable approximation of their fair value. 8 SHARE CAPITAL Audited Unaudited Unaudited 31 30 June 30 June December 2009 2008 2008 GBP'000 GBP'000 GBP'000 Authorised 4,000,000,000 ordinary shares of 0.25p 10,000 10,000 10,000
Allotted, issued and fully paid 418,401,272 (30 June 2008: 217,459,138, 31 December 2008: 240,717,469) ordinary shares of
0.25p 1,046 544 602 Allotments during the period On 26 January 2009 Toumaz Holdings Limited raised 562,000 by way of a placingof 9,360,538 new ordinary shares of 0.25p each ('Placing Shares') in theCompany at a price of 6p. The placing completed the three-stage fundraisingthat was previously announced on 16 October 2008 and 26 November 2008 where theshares were also placed at 6p. In addition, on 15 May 2009, Toumaz Holdings Limited placed 48,333,333 newOrdinary Shares of 0.25p each at a price of 6p, with certain existing and newshareholders to raise 2,900,000 before expenses. On the same date 28,153,153shares were issued in part settlement of a US $2.6 million licence fee payableto Imagination Technologies. On 20 May 2009, 91,836,779 shares were issued tothe vendors of Future Waves (UK) Limited as acquisition consideration for thatcompany. Warrants On 21 February 2005 a warrant was issued to Strand Partners Limited, theCompany's Nominated Advisor, in connection with their role in the admission ofthe Company to the AIM market. The warrant entitles Strand Partners Limited tosubscribe, at a price of 10p per share, for such number of ordinary shares asare equivalent (on a fully diluted basis) to one per cent. of the issuedordinary share capital of the Company at that time. The issued warrant may beexercised at any time during the period from 8 March 2005 to 8 March 2010. The fair value of the warrants granted was determined using the Black-Scholesvaluation model and 20,000 of share based expense has been included in theshare premium account as a cost of the admission to AIM which gave rise to ashare based payment reserve. No liabilities were recognised due to share basedpayment transactions. 11 ACQUISITIONS AND DISPOSALS
Sentinel Healthcare Limited ("Sentinel")
On 15 January 2009 Toumaz Holdings Limited increased its total interest inSentinel from 50.5% to 81.25% having acquired the additional 31.25%shareholding from Continum Group Limited for 1 in cash. However, following areview of its activities the decision was taken by the Board to dispose of themajority of this interest in Sentinel to reflect the Group's increased focus onits two primary investments Future Waves UK Limited and the wholly-ownedsubsidiary undertaking, Toumaz Technology Limited. Accordingly, on 14 April2009 Toumaz Holdings Limited disposed of 76.75 per cent. of its shareholding ofSentinel for a consideration of 25,000 to Neil Bryant, a director of Sentinel.Toumaz Holdings Limited retained a five per cent, shareholding in Sentinel. Forthe year to 31 December 2008, Sentinel made a loss of 323,000.
Acquisition of Future Waves UK Limited ("Future Waves")
On 20 May 2009, Toumaz Holdings Limited acquired the remaining share capital ofFuture Waves UK Limited ('Future Waves'), in which it already held a 23.2 percent. interest, on the basis of a share swap on a two for one relativevaluation. Under the proposals, Future Waves shareholders received 16.22 newordinary shares in Toumaz Holdings Limited for each ordinary Future Waves shareresulting in the issue of an additional 91,836,779 new ordinary shares in theCompany. Toumaz Holdings Limited intends to consolidate Future Waves withToumaz Technology Limited ("Toumaz Technology") to benefit from technology
andcost synergies. The book values under IFRS and the provisional fair values of the assets andliabilities of the acquired entity as at the date of acquisition were asfollows: Book value Fair Before value to Acquisition Fair value Toumaz under IFRS adjustments Holdings $'000 $'000 $'000 Non- current assets Property, plant and equipment 343 - 343 Current assets Inventory 206 - 206 Trade and other receivables 418 - 418 Cash and cash equivalents 262 - 262 Total assets 1,229 - 1,229 Current liabilities Trade and other payables (2,856) - (2,856) Total liabilities (2,856) - (2,856) Net liabilities (1,627) - (1,627) GBP'000 GBP'000 GBP'000
Sterling equivalent of net liabilities (1,005) - (1,005)
(at US$1.618: 1)
Goodwill arising on acquisition 11,181 - 11,181
Consideration 10,176 - 10,176 GBP'000
Consideration is represented by: Fair value of shares issued (91,836,779 5,510 at 6p, being the market value of the shares at the date of acquisition) Cost associated with the acquisition, 51 settled in cash Cost of acquisition of Future Waves in respect of 23.2% previously held 4,615
10,176
The intangible assets of Future Waves will be independently valued and any remaining difference between the fair value of net liabilities acquired and the fair value of the consideration will be treated as goodwill.
In addition, Future Waves employee share options were transferred and convertedinto Toumaz holdings Limited share options representing a total of 8,507,390options. A fair value adjustment in respect of the cancellation of the oldshare options and new share based payment charge will be made and the goodwillwill be reduced accordingly.
vendor