Final Results

Timestrip PLC 11 May 2006 TIMESTRIP PLC PRELIMINARY RESULTS FOR THE YEAR ENDED 31 DECEMBER 2005 Timestrip Plc ('Timestrip') develops, manufactures and sells patented Timestrip (R) smart labels which monitor for how long perishable food and other replaceable products have been open or in use. Key points: •Results in line with expectations •Significant progress achieved towards commercialising Timestrip's technology •Deals and alliances have been announced during the period under review with; •Nestle •Bayer •Hamilton Beach/Proctor Silex •Labellord •Bioconservacion •Further discussions and trials underway with major international companies. •Steady progress across core targeted international markets •Directors confident of further progress in the year ahead Paul Freedman, Timestrip's joint CEO commented:- 'Timestrip has made steady progress during the period under review and I am confident of further success in the year ahead as we accelerate our target markets' awareness and the benefits of the Timestrip technology. Recent wins, such as Nestle, will continue to underpin our marketing strategy and I look forward to updating shareholders with further progress shortly'. For further information: Paul Freedman, Joint CEO and founding Director, Timestrip 01462 440 700 Shane Dolan, Biddicks 020 7448 1000 Fergus Marcroft, Evolution Securities 020 7071 4300 CHAIRMAN'S STATEMENT The last year has been one of great transition for your Company as it emerged from a Creditors' Voluntary Arrangement to acquire Timestrip UK Limited and raising £4.5 million through two share placings to fund the commercialisation of its unique smart label technology, the Timestrip(R). The Timestrip(R), which enables the measurement of lapsed time, has been developed for use, initially, for the food, pharmaceutical and other consumable goods industries. We have made significant advances with the technology and also begun to get real traction with potential users, as is evidenced by the deals and alliances that have been formed with, amongst others, Nestle, Bayer, Hamilton Beach/Proctor Silex, and Labellord. We are also in a number of other discussions and trials with major international companies. Financial Results In financial terms, we remain at a very early stage of our development. Turnover for the year ended 31 December 2005 amounted to £103,303 (2004 - £0), resulting in a loss before tax of £1,259,035 (2004 - £33,942). Our financial resources remain in robust health. Cash at the end of the year stood at £2,979,268 while the exercise of placing warrants in April 2006 has increased net cash by a further £867,384. Staff I would like to convey the Board's sincere appreciation for the huge efforts being made by everyone involved in our exciting business - not only our dedicated and professional team in the UK and Israel who are so committed to our goal of becoming a household name across the globe, but also to our advisors who have guided the Company through a time of great transition. Current Trading and Prospects In the current year we have continued to promote the Timestrip(R) technology and are pleased to report that we now have a number of opportunities, which your Board is confident will lead to commercial relationships during the course of 2006 and beyond. As is described in the Operating Review below, Timestrip(R) labels have become an integral part of manufacturers packaging in both the food and non-food consumable industries and your Board is confident that, as consumers and markets become ever more aware of freshness and product age and with the increasing influence of legislation, Timestrip will continue to gain traction within its chosen markets. Stephen Oakes Chairman 11 May 2006 JOINT CHIEF EXECUTIVES' STATEMENT Operating Review The Timestrip(R) label has applications for a number of industrial sectors and we are making good progress in our chosen operating markets: Catering and Food Services The main highlight in this sector is the successful launch of the Labellord(R) -Timestrip(R) in foodservice markets in Benelux and Germany. Since their appointment, NSD/Labellord have marketed Timestrip(R) as a food safety solution relevant to the recently introduced EU Food Hygiene Legislation. The food celebrity, Rob Geus, regularly promotes Timestrip(R) on television and in print, and a concerted advertising campaign, funded by Labellord, is quickly paying dividends. Timestrips are now part of the Bunzl product range in this region and we are delighted that Labellord have recently secured a deal with Metro, a leading wholesaler in Germany with over 100 outlets, who will stock a range of Labellord food safety products that will include five unique product lines of the Timestrip(R). We have already received orders from Labellord in 2006 that exceed total turnover for the Group in 2005 and we expect this trend to continue as the year progresses with increasing numbers of wholesalers selling the product in Europe. Our search continues for similar distribution agreements in Southern Europe but we are experiencing slower than expected progress in North America, where different marketing challenges are being actively addressed. Food We are delighted that Nestle have decided to adopt the Timestrip(R) technology as a standard packaging feature on the Maggi(R) range of sauces in the UK Foodservice business. This is an important confirmation that our technology is a cost-efficient packaging solution that is delivering benefits to brand owners and end-users alike. We look forward to building on this success both within the Nestle organisation and within the industry in general. Retail Packs: Ocado have been re-ordering retail packs of Timestrips(R) product for sale online and have confirmed that they will expand the range to include freezer and room temperature Timestrips(R) later this year. Our success with Ocado, while modest in terms of revenue for the Company, is opening doors to other retail opportunities. We have recently received an order from John Lewis Partnership in the UK and have been approached by a number of leading international brands wishing to explore co-branded retail launches in North America and in Europe. Recent consumer surveys and trends towards fresher and healthier food give us much cause for optimism in this sector. Non-food Consumables Filters: since our announcement in November 2005, Hamilton Beach have not only launched the TrueAir(R) device featuring an integrated Timestrip(R), but also recently announced the launch of another device that is a co-brand venture with Febreze(R), an internationally recognised household brand from Procter & Gamble. (http://www.trueair.com/press_room/febreze.html). Shipments have also commenced to Bioconservacion S.A., who have launched their filter device in the Fagor(R) brand of fridges in Europe. Development projects: work has escalated on our project to integrate our technology into a household product with near-universal usage and we will report on progress with consumer trials in due course. The Company also recently won a significant development contract with a leading international consumer brand to integrate a version of our technology into a new mass-market product planned for launch in 2007. Pharmaceuticals All previously announced projects continue and we are pleased to report that a leading pharmaceutical company has tested and recently approved their Timestrip (R) samples as 'fit for purpose'. This is an important step towards achieving our objective of high profile long-term supply contracts with mass-market international brands. Medical Devices, Cosmetics, Personal Care Our previously announced development project continues on ways to integrate our technology into a range of devices used in hospitals, although progress in this sector is predictably quite slow. We have identified opportunities for the Timestrip(R) technology within the National Health Service and we will report on the progress of discussions in due course. Since the announcement of our ability to produce a one year Timestrip(R) we have received a high level of interest from cosmetic/personal care product companies who are looking at the opportunity presented by Timestrip(R) in relation to recently introduced EU labelling regulations. Paul Freedman Reuben Isbitsky Joint Chief Executive Officer Joint Chief Executive Officer 11 May 2006 11 May 2006 TIMESTRIP PLC PRELIMINARY STATEMENT UNAUDITED RESULTS FOR THE YEAR ENDED 31 DECEMBER 2005 CONSOLIDATED PROFIT AND LOSS ACCOUNT Unaudited Audited 12 months 12 months ended ended 31 December 31 December 2005 2004 GBP GBP '000s '000s Turnover 103 - Cost of sales (66) - ----------- ----------- Gross Profit 37 - - Administration costs (1,346) (34) Amounts written off investments - - Interest payable (5) - Other operating income 55 - ----------- ----------- Loss on Ordinary Activities before Taxation (1,259) (34) Taxation 94 - ----------- ----------- Loss on Ordinary Activities After Taxation (1,165) (34) Dividend - - ----------- ----------- Retained loss (1,165) (34) ----------- ----------- Basic and diluted earnings per ordinary share (0.49)p (0.12)p TIMESTRIP PLC PRELIMINARY STATEMENT UNAUDITED RESULTS FOR THE YEAR ENDED 31 DECEMBER 2005 CONSOLIDATED BALANCE SHEET Unaudited Audited Unaudited Audited Group Company 2005 2004 2005 2004 GBP GBP GBP GBP '000s '000s '000s '000s Fixed assets Investments - - 6,527 - Intangible assets 6,339 - - - Tangible assets 304 - - - -------- ------- -------- --- ------- 6,643 - 6,527 - -------- ------- -------- --- ------- Current assets Stock 66 - - - Debtors 195 3 2,654 3 Cash 2,979 - 1,588 - -------- ------- -------- --- ------- 3,240 3 4,242 3 Creditors: amounts falling due within one year (222) (15) (70) (15) -------- ------- -------- --- ------- Net current assets/(liabilities) 3,018 (12) 4,172 (12) Creditors: amounts falling due over one year (67) - - - -------- ------- -------- --- ------- Net assets/(liabilities) 9,594 (12) 10,699 (12) -------- ------- -------- --- ------- Capital and reserves Called-up share capital 3,603 3,551 3,603 3,551 Share premium account 26,588 15,869 26,588 15,869 Reserves (20,597) (19,432) (19,492) (19,432) -------- ------- -------- --- ------- 9,594 (12) 10,699 (12) -------- ------- -------- --- ------- Shareholders' Funds Equity 6,050 (3,556) 7,155 (3,556) Non-equity 3,544 3,544 3,544 3,544 -------- ------- -------- --- ------- 9,594 (12) 10,699 (12) -------- ------- -------- --- ------- TIMESTRIP PLC PRELIMINARY STATEMENT UNAUDITED RESULTS FOR THE YEAR ENDED 31 DECEMBER 2005 CONSOLIDATED CASH FLOW STATEMENT Unaudited Audited 12 months ended 12 months ended 31 December 31 December 2005 2004 GBP GBP '000s '000s Net cash outflow from operating activities (1,294) (2,222) Returns on investment and servicing of finance Interest received 55 - Interest paid (5) - ------------ ------------ Net cash outflow from returns on investments and servicing of finance (1,244) (2,222) Taxation Tax recovered 80 - Capital expenditure and financial investment Payments to acquire fixed assets & intangible assets (137) - ------------ ------------ Net cash outflow for capital expenditure and financial investment (1,301) - Acquisitions and disposals Net cash acquired from subsidiary undertakings 43 - ------------ ------------ Net cash outflow before financing (1,258) - Financing Issue and purchase of ordinary shares 4,522 2,222 Share issue expenses (273) - Repayment to long term bank loan (12) - ------------ ------------ Net cash inflow from financing 4,237 2,222 ------------ ------------ ------------ ------------ Increase in cash in the period 2,979 - ------------ ------------ TIMESTRIP PLC PRELIMINARY STATEMENT UNAUDITED RESULTS FOR THE YEAR ENDED 31 DECEMBER 2005 NOTES TO CONSOLIDATED CASH FLOW STATEMENT Unaudited Audited 12 months ended 12 months ended 31 December 31 December 2005 2004 GBP GBP '000 '000 Net cash outflow from operating activities Operating loss (1,309) (34) Depreciation and amortisation 317 - Increase in stocks (8) - (Increase)/decrease in debtors (48) 7 Decrease in creditors (246) (2,195) ------------ ------------ (1,294) (2,222) ------------ ------------ Reconciliation of net cash flow to movement in net funds Increase in cash 2,979 - Loans acquired with subsidiary (81) ------------ ------------ Movement in net funds 2,898 - ------------ ------------ Opening funds - - Closing funds 2,898 - ------------ ------------ TIMESTRIP PLC PRELIMINARY STATEMENT UNAUDITED RESULTS FOR THE YEAR ENDED 31 DECEMBER 2005 Notes 1. Basis of consolidation The consolidated profit and loss account and balance sheet include the financial statements of the company and its subsidiary undertakings made up to 31 December 2005. The results of Timestrip UK Limited have been included from the date of acquisition on 25 February 2005. 2. Goodwill, patents and trademarks Goodwill is the difference between the amount paid on the acquisition of Timestrip UK Limited and the aggregate fair value of its separable net assets. Goodwill, patents and trademarks are capitalised and classified as an intangible asset on the balance sheet. The directors have concluded that goodwill arising on the acquisition of Timestrip UK Limited should be amortised over its useful economic life of 20 years. Patents and trademarks are also amortised over their useful economic life which is estimated to be 20 years. 3. Share capital On 25 February 2005, the company acquired the entire issued share capital of Timestrip UK Limited for a consideration of £6.4 million. The purchase price was satisfied by the issue of 160,000,000 new Ordinary Shares of 0.02p each at 4p per share to the vendors on the sale of their Timestrip UK Limited shares. Furthermore on 25 February 2005, 50,581,250 new Ordinary Shares of 0.02p were issued pursuant to a placing to raise a total of £2,023,250 before expenses. On 12 October 2005, 40,000,000 new Ordinary Shares of 0.02p were issued to raise a total of £2,400,000 before expenses. On 19 October 2005, 624,999 new Ordinary Shares of 0.02p were issued to raise a total of £37,500 before expenses. On 23 November 2005, 166,666 new Ordinary Shares of 0.02p were issued to raise a total £10,000 before expenses. On 6 December 2005, 5,000,000 new Ordinary Shares of 0.02p were issued at par. On 6 December 2005, 6,250,000 new Ordinary Shares of 0.02p were issued in favour of £50,000 convertible loan stock. 4. Dividends No dividend is proposed for the period ended 31 December 2005. 5. Taxation No taxation is expected to arise on the results for the period. 6. Loss per Share The loss per share for the year ended 31 December 2005 has been calculated on the basis of the loss after taxation for the period of (£1,165,036) (2004: £ (33,942)) and the weighted average number of shares in issue during the period of 237,871,611 (2004: 28,484,103). 7. Information on Timestrip Timestrip has developed a patented smart label, the Timestrip(R), which enables users of perishable food and other products to monitor for how long an item has been open or in use. The Timestrip(R) is a disposable multi-layer laminated label which contains a timing device consisting of a specialised porous material and a non-toxic liquid. Upon squeezing the label to activate, the liquid starts to move through the porous material by micro-capillary action. A printed calibration on the top layer of the label allows the user to tell at any point in time how long the label has been active. The label is currently manufactured with adhesive backing enabling it to be attached to perishable goods as a reminder to use or replace the product. The label is designed to be easily customised and is capable of being embedded into the product packaging or the product itself. It can be activated automatically either upon first opening the package or upon first use of the product. The solution provided by Timestrip relates to the difficulty in monitoring relative expiry dates, such as 'Use within two weeks of opening'. The Timestrip (R) addresses this problem by reliably monitoring the lapse of time, providing a visual indication that the relative expiry date is approaching, thereby giving the user the opportunity to manage perishable items in a way that was previously problematic. This information is provided by RNS The company news service from the London Stock Exchange LG

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