Final Results

Forbidden Technologies PLC
14 April 2005



Forbidden Technologies plc

Preliminary Results for the year ended 31 December 2004



Forbidden Technologies has developed and is marketing a range of Internet video
distribution and editing products for a wide range of market segments and
platforms.



Highlights

•         Sales of £76,788 (2003: £40,471).

•         Doubling of sales and marketing expenditure to £185,820 resulted in an
          increase in losses to £614,127 (2003: loss £476,843).

•         £1.68 million net current assets (2003: £2.3 million).

•         Four key video markets focused on:

     o        Professional post production

     o        Consumer home editing and publishing

     o        Mobile phone applications

     o        Intruder and fire security

•         Developing relationships with leading broadcasters (including BBC and
          GMTV), production companies (including Mentorn) and facilities houses 
          (including NATS).



Vic Steel, Chairman Forbidden Technologies, commented:



'We are approaching a key milestone in our development of our portfolio of
products as the associated technology aligns with customers needs.  Video
production houses need a remote editing capability which we are providing with
FORscene, our flagship product.  Consumers will soon be able to edit online from
their homes and distribute compressed video to mobile phones.



'We are increasingly confident that the past five years of technological
innovation and development will lead to attractive returns as larger customers
begin to adopt and expand their use of our state-of-the-art solutions.'



                                                                   14 April 2005



Enquiries:


Forbidden Technologies plc                                 020 8879 7245
    Stephen Streater, Chief Executive
    Greg Hirst, Business Development Director

College Hill                                               020 7457 2020
    Corinna Dorward/Adrian Duffield






CHAIRMAN'S STATEMENT



Results

In the year to 31 December 2004, the fifth year of our development, the company
achieved sales of £76,788, compared with £40,471 in the previous year.  We
doubled our expenditure on our sales and marketing activities as our innovative
products become ready for full commercial exploitation.  This resulted in an
increase in the company's loss to £614,127 compared with £476,843 in the
previous year.  Expenditure on sales and marketing increased from £92,856 to
£185,820 in 2004.



Consistent with previous years the company continued its prudent management of
resources, and has maintained a strong balance sheet with £1.68 million of net
current assets and liquid resources of £1.61 million.



Strategy

Following an in depth and detailed review of strategy, the Board has focused the
development and sales and marketing activities upon four key market sectors for
video:



1.       Professional post production

2.       Consumer (i.e. in-home) editing and publishing

3.       Mobile phone applications

4.       Intruder and fire security



Each of the sectors utilises a number of the leading-edge technological
developments that the company has made over the past five years.  These
technologies enable Forbidden to offer superior performing, easy to use products
in very large market sectors.



Marketplace

Since its early days, Forbidden has been creating, developing and refining
technologies in anticipation of the emergence of markets dependent on widespread
availability of such vehicles as higher speed computers, extensive coverage of
the UK by broadband connections and mass take-up of 21/2G and 3G mobile phones.
 In 2005, these are all becoming of sufficient scale to provide meaningful
market opportunities for Forbidden to increase its penetration and exploitation.



Current Programme

a)      Professional post production

The response to our professional version of FORscene has been most encouraging.
 The company is now in the process of demonstration and negotiation with an
exciting list of potential partners ranging from several BBC departments, GMTV,
major production companies such as Mentorn, several post production facilities
houses including NATS and a number of educational establishments.  Potential
partners have widely commented upon the potential cost saving advantage of
FORscene, its simplicity in use and the attraction of ongoing developments and
upgrades, which are automatically available at no effort to the user.



b)      Consumer editing and publishing

The company believes that there is a major opportunity to create a new, young
market using a simple version of FORscene for home use.  This will enable
shooters of home video to edit their own product easily and simply and then
publish it to family, friends, work or school colleagues anywhere in the world
on mobile phones or on web sites.



Forbidden expects to soft-launch this product in the second half of the current
year.



c)       Mobile phones

The application of Forbidden's technologies on mobile phones is attracting
attention in conjunction with the FORlive product and the Viewtooth capability.
 The company is working to develop complete products with a range of potential
partners in the UK and internationally. Potential partners range from a major
pharmaceutical company, a Finnish TV broadcaster, an Italian multi-media
company, a Canadian medical monitoring firm and the multi-media arm of a leading
telecoms provider.



d)      Security

Forbidden believes that the huge security market will develop from an
audio-based market dependent upon bells and sirens to one where video will
dominate and be used widely to monitor homes and business in order to prevent
losses by fire and intruders.



The company has developed a working prototype of such a product and has recently
signed an agreement to licence it, for sales and marketing implementation, to an
Internet based security company.  In addition, Forbidden is in discussion with
other potential partners in traffic and other surveillance areas.  Beta testing
of the security product is planned for the second half of 2005.



Board and staff

As we announced last year, our Finance Director Douglas Blaikie retires this
year.  I would like to thank him for his contribution over the last five years.
 During the year, we added another full time member to our technical team, and
employed a Sales Manager with experience in the video editing market, who joined
us at the beginning of 2005.



Prospects

As outlined above, the company has generated a wide level of serious interest in
the strategic market sectors with the current product line-up.



Accepting that innovative technology products take time to gain large scale
committed customers, each sector has significant sales and profit potential.
The Board is increasingly confident that the past five years of technological
innovation and development will lead to attractive returns to shareholders, as
larger customers begin to adopt and expand their use of Forbidden Technologies'
portfolio of state-of-the-art solutions.

CHIEF EXECUTIVE'S REVIEW



Forbidden's position

Forbidden Technologies stands on the shoulders of computer and technology
giants.  These giants power the advancing installed base of CPUs (Central
Processing Units), memory, discs, displays and internet connectivity of today's
modern PCs and mobile phones.  To lay the foundations of our visionary position
in the new internet based video world, Forbidden Technologies had to understand
and accurately predict multiple trends.



Predictions we made five years ago

Our long term product success relies on the successful outcome of predictions we
made five years ago:



Java would become widely available.  Even Microsoft has been unable to prevent
the extremely high penetration of Java, on Windows PCs, Macs and Linux.  Java
enables anyone with a modern computer to access Forbidden's software without
installing any software.



Broadband would have high penetration.  A dramatic improvement in price and
speed has led to a surge in usage. This is a key development for Forbidden,
whose products use the internet for video distribution.



Internet access would become unmetered.  Customers don't have to pay by the
minute to be on the internet. When combined with broadband, this opens up the
world of data rich internet applications.



The installed base of PCs would be increasingly high powered.  Consumers'
continuing willingness to upgrade their computers at their own expense has
accelerated Forbidden's ability to deliver impressive products to standard
desktops.



Mobile phones would become high performance.  Gone are the small black and white
screens. Modern handsets have colour screens, faster CPUs, 2.5G/3G internet
connectivity, and high memory.  Devices which can run Forbidden's software are
becoming mainstream.



Customers. Customers can take time to adopt new technology, and this is what we
planned for.



Accessibility

The key to Forbidden's product strategy is accessibility:



• simple things are simple to do;

• common things are quick to do;

• minimal training is needed to use the product; and

• the product is reliable.



Open a web page containing Forbidden format content, and our Java technology
springs into action automatically.  Simplicity itself.  By the beginning of
2004, Forbidden's powerful technology was already easily accessible to end
users.



Forbidden spent 2004 creating our master tool to simplify content creation.
FORscene combines our web and mobile publishing expertise with an intuitive,
flexible and powerful editing front end.



Anyone can access our complete editing and web/mobile publishing system from a
PC, Mac or Linux computer through their web browser.  There is no need to
install hardware or software - customers have access their FORscene accounts
from any computer.



Market clarity

Forbidden's new customers are helping us gain valuable insight.  Our FORscene
tools are well placed to tackle the professional video post production market,
particularly in the areas of web/mobile publishing, client review, and off-line
editing (which typically covers the bulk of editing time).  FORscene's
simplicity allows directors and executive producers direct access to the editing
process from their own PCs.  Forbidden is proving a valuable strategic
alternative supplier in a market currently occupied by US players.



Exhibitions

Forbidden again stepped up the level of promotion during the year.  The launch
of FORscene at the International Broadcasting Convention (IBC) caused quite a
stir.  IBC also chose FORmobile to distribute IBC Television News.  This
industry traditionally takes time to adopt new products, and Forbidden has been
actively promoting FORscene to interested parties.




IFRS

Forbidden Technologies plc will have the option to adopt IFRS in the financial
statements for periods starting on or after 1 January 2005.  The Board has begun
considering the differences between UK accounting standards and IFRS.  We have
initially identified accounting for share options and development costs as two
areas which could impact on our financial statements.



Technology development

Last summer, we gave FORmobile users the ability to forward videos (and the
FORmobile application itself) from phone to phone for free using Forbidden's '
Viewtooth' technology.  This push technology complements the pull technology of
downloading video over the internet.



Just as FORscene unifies web and mobile publishing within an editing user
interface, our next video compression technology, under development since
September, will unify web, mobile and live compression under the FORscene
banner.



Internet distribution

Forbidden's visionary policy of making FORscene run in a web page makes it
ideally suited for internet distribution with electronic payment - and the mass
market.  See below for demonstration web pages:  http://www.forbidden.co.uk/
demos/live/ shows live video from Forbidden's offices, http://forscene.net/guest
/ lets you try out the latest version of FORscene for yourself.



Shareholder offer

Forbidden has benefited from shareholder feedback over the last year of FORscene
development. We have increased the value of the shareholder offer this year to
reflect the wider capabilities of FORscene and our increased capacity to serve
it.  This year, Forbidden's registered shareholders are being offered £1000.00
of free credits. Shareholders can now actively participate in our vision.



--------------


Profit and loss account

for the year ended 31 December 2004
                                                              Note               Unaudited
                                                                                     2004             2003
                                                                                        £                £

Turnover                                                                           76,788           40,471
Administrative expenses                                                          (787,563)        (664,071)

Operating loss                                                                   (710,775)        (623,600)
Other interest receivable and similar income                                       68,259           82,589

Loss on ordinary activities before taxation                                      (642,516)        (541,011)
Tax on loss on ordinary activities                                                 28,389           64,168

Loss for the financial year                                                      (614,127)        (476,843)

Basic and diluted loss per ordinary 0.8 pence share             2                  (0.81p)          (0.64p)





A statement of recognised gains and losses has not been included as part of
these financial statements as the Company made no gains or losses in the year
other than as disclosed in the profit and loss account.



A note on historical cost gains and losses has not been included as part of the
financial statements as the results disclosed in the profit and loss account are
prepared on an unmodified historical cost basis.



The results stated above are all derived from continuing operations.






Balance sheet

for the year ended 31 December 2004
                                                        Unaudited
                                                            2004                              2003
                                            £                  £                £                £
Fixed assets
Tangible assets                                           15,812                            13,818

Current assets
Debtors                               142,551                             167,224
Cash                                        -                               8,070
Liquid Resources                    1,606,903                           2,196,848
                                    1,749,454                           2,372,142


Creditors: amounts falling due
within one year
                                      (72,789)                            (84,981)

Net current assets                                     1,676,665                         2,287,161

Net assets                                             1,692,477                         2,300,979

Capital and reserves
Called up share capital                                  605,300                           603,800
Share premium account                                  2,925,375                         2,921,250
Capital contribution reserve                             125,000                           125,000
Profit and loss account                             (1,963,198)                       (1,349,071)

Shareholders' funds - equity                            1,692,477                         2,300,979







Cash flow statement
for the year ended 31 December 2004
                                                                         Unaudited
                                                                             2004              2003
                                                                                £                 £

Reconciliation of operating loss to net cash outflow from
operating activities

Operating loss                                                           (710,775)         (623,600)
Depreciation charges                                                       30,130            31,631
Decrease/(increase) in debtors                                             27,163           (55,306)
(Decrease)/ increase in creditors                                         (12,193)           11,152

Net cash outflow from operating activities                               (665,675)         (636,123)

Cash flow statement

Cash flow from operating activities                                      (665,675)         (636,123)
Returns on investments and servicing of finance                            68,882           152,965
Taxation                                                                   25,277            24,599
Capital expenditure                                                       (32,124)          (31,185)

Cash outflow before management of liquid resources                       (603,640)         (489,744)

Management of liquid resources                                            589,945           476,655
Financing                                                                   5,625            33,750

(Decrease)/increase in cash in the year                                    (8,070)           20,661

Reconciliation of net cash flow to movement in net funds

(Decrease)/increase in cash in the year                                    (8,070)           20,661
Cash inflow from decrease in liquid resources                            (589,945)         (476,655)

Movement in net funds in the year                                        (598,015)         (455,994)
Net funds at the start of the year                                      2,204,918         2,660,912

Net funds at the end of the year                                        1,606,903         2,204,918











Notes



1.         Basis of preparation



The preliminary announcement has been prepared using accounting policies
consistent with those set out in the financial statements for the year ended 31
December 2003.



The financial information in this preliminary announcement does not constitute
the company's statutory accounts for the years ended 31 December 2003 or 2004.
The financial information for the year ended 31 December 2003 is derived from
the statutory accounts for that financial year. Those accounts have been
reported on by the company's auditors and have been delivered to the registrar
of companies. The report of the auditors was unqualified and did not contain a
statement under section 237 (2) or (3) of the Companies Act 1985. The statutory
accounts for the year ended 31 December 2004 will be finalised on the basis of
the financial information presented by the directors in this preliminary
announcement and will be delivered to the registrar of companies following the
company's annual general meeting.



The preliminary announcement for the year ended 31 December 2004 was approved by
the directors on 13th April 2005.



2.         Earnings per share



Diluted earnings per share has not been presented, as including all potential
ordinary shares in the calculation would be anti-dilutive.



3.         Basic earnings per share



The weighted average number of shares in issue during the period is 75,539,726
(2003: 74,678,125).




                      This information is provided by RNS
            The company news service from the London Stock Exchange