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FORMJET PLC

('FORMJET' OR 'THE COMPANY')

(AIM:FMJ)

TRADING UPDATE

The Board announced, on 22 August 2008, that it had decided not to proceed with a potential acquisition due to adverse due diligence findings. This was a difficult decision given that professional fees of £150,000 had been incurred. Additionally, working towards the acquisition, the Company traded with the target and also acquired £400,000 of software from the target with a view to selling this on at a profit. 

However, due to concerns over the legitimacy of some of the stock acquired, it has been decided to cease marketing of this stock. The Board is exploring opportunities but does not believe that it will be possible to realise any significant value from the sale of this stock. Accordingly, the Board has made a provision of £200,000 against the stock's full carrying value. The Board has discussed this matter with its legal advisers but, as the target went into administration in late 2008, it has been advised that there is little likelihood of a recovery. As a result of the administration, the Company has also had to write off a debtor balance with the target of approximately £140,000. 

Trading in Q3 to 30 September 2008 was otherwise in line with the Board's expectations. However in Q4, which is normally the Company's peak selling period and was expected to result in a profit such that the Group would make a profit for the year overall, sales were below expectation and the Board expects that the Company will make a loss for the year overall. 

The Directors expect that the sales of both the ASI Ability product range, through the growth in popularity of small laptops and netbooks, and the Panda Security products, via the expansion in the UK and the Republic of Ireland, will deliver the Board's expectations in 2009.

As at 16 January 2009, the Company had net borrowings of £75,000, excluding the use of the Company's invoice discounting facility. 

ENQUIRIES:

Formjet plc                                                                                       Tel: 01293 848 860

Lyndon Chapman, Executive Chairman

Tony Lee, Chief Executive

www.formjetplc.com

Dowgate Capital Advisers Ltd                                                        Tel: 020 7492 4777

Liam Murray, Nominated Adviser

www.dowgate.co.uk  

Old Park Lane Capital                                                                     Tel: 020 7493 8188

Michael Parnes, Joint Broker

www.oldplc.com 

Dowgate Capital Stockbrokers Ltd                                                 Tel: 01293 517 744

Neil Badger, Joint Broker

www.dowgate.co.uk  

Notes to Editors:

Formjet plc

Formjet plc is a UK-based company with a highly distinctive business model. It acquires territorial rights to 'alternative' software products, and markets, sells, distributes and supports these products in place of the vendor in worldwide markets. The strategy has at its heart the proposition that the Company can acquire product lines in territories of at least one country without the expense of either product development or the creation of IPR. 

Alternative Products 

• Panda Software (UK) distributes Panda Software antivirus and Internet security products in the UK. With its high margins and recurring annual renewal revenues, Panda is an important contributor to the Group's sales and profitability.  

• Ability Software International (ASI) distributes a powerful suite of office products which, as well as being sold under their own branding, form an integral part of the white label opportunities that Formjet is creating. Ability Software International has also developed the ASI Business Software range. This comprises eight titles, which include fully comprehensive office and graphics suites, Internet security, a business plan development application, small business accounting, appointment book management and staff records management software. In September the Company also added a remote access tool called BeAnywhere to this range. Significant growth in 2008 and further growth targeted in 2009.

• EdAlive edutainment software has opened up a new and growing market for Formjet and now covers a wide range of core subjects including maths, word skills and spelling.

Alternative Routes to Market

• Formjet Innovations is the specialist distribution arm of the Formjet Group focusing on its alternative product range and associated alternative routes to market. The focus here is on creating 'white label' software, targeting retail and brand leaders of importance. 

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