TIDMTMT
RNS Number : 5313D
TMT Investments PLC
30 April 2013
30 April 2013
TMT INVESTMENTS PLC
("TMT" or the "Company")
Final results for the year ended 31 December 2012
TMT Investments PLC, which invests in high-growth,
internet-based companies across a variety of sectors, is pleased to
announce its final results for the year ended 31 December 2012.
TMT is managed by a highly experienced team with deep TMT
(technology, media and telecoms) and deal finance expertise. The
2012 Annual Results indicate that the capital allocation strategy,
cash reserves and positive growth performance of many of our
investments position the Company well for the coming year.
Key highlights
-- US$10.7 million invested across 12 new and 2 existing
portfolio companies in 2012, with 25 investments to date since
IPO
-- A number of portfolio companies experiencing very rapid growth
-- 68% increase in fair value of stake in DepositPhotos to US$5.06m
-- 2 successful exits and a number of portfolio revaluations to date since IPO
-- Three senior managers to receive all of their 2013 salaries in TMT shares rather than in cash
-- Well placed to capitalise on the opportunities created in the
software applications, digital media and internet sectors, with
approximately US$7m in cash reserves
-- Strong pipeline of investments under review
Alexander Selegenev, Executive Director of TMT, commented:
"2012 has been our second full year as a publicly traded
company. We have invested in twelve new companies and provided
additional financing to two of our existing portfolio companies
operating in the mobile, cloud, social, advertising, and data and
project management segments of the Internet market.
TMT has built a high quality and diversified portfolio of
investments in companies that operate in high-growth,
internet-based sectors. We typically invest in companies at an
early stage of their commercial development, and which we believe
have the potential to outgrow their competitors and become
multinational companies. Many of these companies originate in the
US, and our active presence in the US has meant we have been able
to access and invest in these companies on attractive terms at an
early stage of their development.
TMT will continue with an investment philosophy of targeting
high-quality internet companies with convincing growth strategies,
evidence of strong operational growth and highly competent
management, whilst maintaining an investment focus that is
multi-diversified by business sector, customer base, growth stage
and geography.
TMT places a special emphasis on close monitoring of its
investments as well as supporting its portfolio companies by means
that include facilitating synergies with our other portfolio
companies and developing partner distribution channels. We expect
to continue to announce a number of notable developments in our
existing investee companies in due course."
For further information contact:
TMT Investments Plc +44 1534 281 843
Mr. Alexander Selegenev alexander.selegenev@tmtinvestments.com
www.tmtinvestments.com
ZAI Corporate Finance Ltd.
NOMAD and Broker
Marc Cramsie/Irina Lomova +44 20 7060 2220
Kinlan Communications Tel. +44 20 7638 3435
David Hothersall davidh@kinlan.net
EXECUTIVE DIRECTOR'S STATEMENT
During 2012, the Company has been extremely active in the
fast-growing internet sector, specifically focusing on segments
such as mobile applications, personal and business productivity,
cloud, and mobile advertising services. In 2012, the Company
invested US$8.5 million in 12 new companies, as well as US$2.2
million in 2 existing portfolio companies.
Portfolio Performance
We were delighted to announce our first cash exit in December
2012, when we completed the disposal of our entire equity stake in
Berryman Capital Group Ltd ("Berryman") for a total cash
consideration of US$1.2 million. TMT originally acquired 20% of
Berryman's equity capital for an aggregate consideration of US$1
million on 30 August 2011.
One of the biggest "reporting challenges" faced by the Company
to date is due to the fact that the majority of our investments
have been made in privately held companies, which do not have a
sufficiently long history of earnings. This means that, regardless
of how impressively some of our portfolio companies may have grown
in terms of operating statistics (downloads, audience rankings,
visitors, etc.), changes in fair value of our earlier-stage
portfolio companies cannot be justified under the IFRS rules unless
there has been an independent equity financing round or other
measurable reliable evidence to support a changed valuation.
However, with the growing number of companies in our portfolio,
we have started to see more revaluation events across our
portfolio. As of the end of 2012, Depositphotos became the first of
our portfolio companies suitable for the IFRS-acceptable
revaluation, which resulted in a significant (68%) uplift in the
fair value of our equity stake in Depositphotos (from US$3 million
as of 30 June 2012 to US$5.06 million as of 31 December 2012).
In 2012, three additional revaluations took place in the TMT
portfolio:
-- The One Page Company Inc. ("One-Page") raised new equity
capital, which triggered the conversion of TMT's convertible note
into One-Page's equity, resulting in a 20% increase in the fair
value of TMT's original investment in One-Page (from US$255,000 to
US$305,000 as of 31 December 2012).
-- Gild, Inc. also raised additional equity capital, although at
a discount to the equity valuation at which TMT originally invested
in December 2011. This resulted in a notable (approx. 53%)
reduction in the fair value of TMT's investment in Gild (from
US$335,000 as of 31 December 2011 to US$156,910 as of 31 December
2012).
-- The outstanding principal and unpaid accrued interest of the
Company's convertible promissory note in Virool, Inc. was converted
into Virool's preferred shares thereby increasing the fair value of
our original investment in Virool by 24% in just under 4 months
(from US$405,000 to US$502,275 as of 31 December 2012).
The Company's net asset value per share as of 31 December 2012
was US$1.09.
Key Portfolio Company Developments in 2012 (according to TMT's
portfolio companies)
Depositphotos:
-- Annual revenues up 248%
-- Annual EBITDA up 216%
-- Number of monthly visits (Dec 2012 vs. Dec 2011) up 109%
-- Total number of authors up 86%
-- Total number of photos in the photobank up 123%
Backblaze:
-- Annual revenues up 58%
-- Total number of licensed computers up 59%
-- Ended the year with 47 petabytes of data stored by customers,
up from 24 petabytes at the end of 2011
-- Restored nearly 2.5 billion files for customers
-- Celebrated 5 years in business and won "Best Backup Service 2012" from OnlineBackupReviews
Tracks:
-- Total number of app downloads up 297%
-- Number of monthly active users (Dec 2012 vs. Dec 2011) up 373%
Astrid/Todoroo:
-- Total number of registrations up 815%
-- Number of monthly active users (Dec 2012 vs. Dec 2011) up 49%
-- Total number of app downloads up 72%
-- Named "most popular To-do manager" by Lifehacker readers
Wrike:
-- Annual revenues up 140%
-- Number of monthly active users (Dec 2012 vs. Dec 2011) up 104%
-- Total number of paid accounts up 91%
Pipedrive:
-- Annual revenues up 1,301%
-- Total Paying Customers up 344%
Wanelo, Virool, Favim, Gild, Contacts+(Gentoo):
-- Very impressive growth in the number of users, customers
and/or revenues, but too early for comparable statistics
PeekYou, Ninua, Hotlist, Undrip (ThusFresh), One-Page,
UsingMiles, AppsIndep, rollApp:
-- No significant developments, or product is at a very early stage
Unicell:
-- 2012 revenues and profitability down significantly due to
recent regulatory changes in the industry
Operating Expenses
In 2012, the Company made significant efforts to strengthen its
team and streamline its internal processes. In particular, in June
2012 the Company restructured its management team by appointing
German Kaplun and Alexander Morgulchik, who had previously been
acting as consultants to the Company, as Head of Strategy and Head
of Business Development respectively. In addition, Artyom Inyutin
was appointed as Head of Investments. Since his appointment, Mr.
Inyutin has acquired shares in the Company, at the time
representing 5.28% of the Company's issued equity capital. The
Company has also started to rent an office in Moscow (Russia) since
October 2012. Although these efforts have led to a notable increase
in our Administrative Expenses, we believe the Company has now
reached an optimal size, and we do not expect our 2013 Operating
Expenses to increase significantly from November-December 2012
levels. Importantly, in December 2012, TMT's three senior managers
agreed to receive all of their 2013 salaries in TMT shares on 31
December 2013 rather than monthly in cash. The number of shares
receivable in each case is fixed at a price of US$1.60 per
share.
Financial position
In February 2012, the Company raised US$6.5 million at US$1.40
per share from two of the Company's existing shareholders. That was
an important vote of confidence in our current portfolio and
investment strategy. Subsequent to the year end, in March 2013 the
Company raised an additional US$1.12 million at US$1.50 per share
from a number of new investors. With no outstanding debt and with
approximately US$7 million in cash reserves, the Company continues
to be well placed to capitalise on the investment opportunities
available in the software applications, digital media and internet
sectors.
Outlook
Since 31 December 2012, the Company has invested US$1.9 million
in three new companies (Adinch, Inc., ShareThis Inc., and Graphicly
Inc.), as well as US$100,000 in existing portfolio company Tracks
Media.
In March 2013, we also had our second exit, when our portfolio
company Socialize was acquired by ShareThis Inc., generating an
XIRR return of up to 28% for TMT.
We continue to have a strong pipeline of new investment
opportunities, and intend to complete a number of new and follow-on
investments in 2013. With a number of our portfolio companies
experiencing rapid growth, we also expect to announce a number of
notable developments with our investee companies.
We look forward to updating our shareholders on the Company's
progress in the near future.
Alexander Selegenev
Executive Director
Statement of Comprehensive Income
For the year For the year
ended 31/12/2012 ended 31/12/2011
Notes USD USD
Revenue 3 315,049 8,199
-------------------------------------------- ------ ------------------ ------------------
315,049 8,199
Expenses
Administrative expenses 5 (1,317,451) (569,180)
-------------------------------------------- ------ ------------------ ------------------
Operating loss (1,002,402) (560,981)
Finance income 7 127,251 118,390
-------------------------------------------- ------ ------------------ ------------------
Loss before taxation (875,151) (442,591)
Taxation 8 - -
-------------------------------------------- ------ ------------------ ------------------
Loss attributable to equity shareholders (875,151) (442,591)
Other comprehensive income for the year:
Change in fair value of available-for-sale
financial assets (net) 16 2,005,228 -
-------------------------------------------- ------ ------------------ ------------------
Total comprehensive income/(loss) for
the year 1,130,077 (442,591)
-------------------------------------------- ------ ------------------ ------------------
Loss per share
Basic loss per share (cents per share) 9 (3.62) (2.21)
Diluted loss per share (cents per share) 9 (3.62) (2.21)
-------------------------------------------- ------ ------------------ ------------------
Statement of Financial Position
At 31 December At 31 December
2012,USD 2011,USD
Notes
Non-current assets
Investments in equity shares 10 15,434,540 5,944,459
Convertible notes receivable 10 3,691,691 1,392,252
Total non-current assets 19,126,231 7,336,711
Current assets
------------------------------- ------ ------------------------ ------------------------
Trade and other receivables 11 203,988 49,510
Cash and cash equivalents 12 7,717,554 11,861,305
Total current assets 7,921,542 11,910,815
Total assets 27,047,773 19,247,526
Current liabilities
Trade and other payables 13 114,315 72,329
Total liabilities 114,315 72,329
------------------------------- ------ ------------------------ ------------------------
Net assets 26,933,458 19,175,197
------------------------------- ------ ------------------------ ------------------------
Equity
Share capital 14 26,136,248 19,636,247
Share-based payment reserve 15 128,183 8,420
Investment fair value reserve 16 2,005,228 -
Retained losses 16 (1,336,201) (469,470)
Total equity 26,933,458 19,175,197
------------------------------- ------ ------------------------ ------------------------
Statement of Cash Flows
For the year For the year
ended ended 31/12/2011,
31/12/2012,
USD USD
Notes
Cash used by operating activities
Operating loss (1,002,402) (560,981)
Adjustments for:
Profit on disposal of equity investment 3 (200,000) -
Share-based payment charge 15 128,183 8,420
Amortized costs of convertible notes receivable 3 48,853 4,419
(1,025,366) (548,142)
------------------------------------------------------ ----- ------------ -------------------
Changes in working capital:
Increase in trade and other receivables 11 (154,478) (37,024)
Increase in trade and other payables 13 41,986 32,876
Net cash used by operating activities (1,137,858) (552,290)
------------------------------------------------------ ----- ------------ -------------------
Investing activities
Bank interest received 7 127,251 105,904
Purchase of available-for-sale assets 10 (10,833,145) (7,341,130)
Proceeds from sale of investments 10 1,200,000 -
------------------------------------------------------ ----- ------------ -------------------
Net cash used by investing activities (9,505,894) (7,235,226)
------------------------------------------------------ ----- ------------ -------------------
Financing activities
Proceeds from issue of shares 14 6,500,001 -
------------------------------------------------------ ----- ------------ -------------------
Net cash from financing activities 6,500,001 -
------------------------------------------------------ ----- ------------ -------------------
Net decrease in cash and cash equivalents (4,143,751) (7,787,516)
------------------------------------------------------ ----- ------------ -------------------
Cash and cash equivalents at the beginning
of the year 11,861,305 19,648,821
------------------------------------------------------ ----- ------------ -------------------
Cash and cash equivalents at the end of
the year 12 7,717,554 11,861,305
------------------------------------------------------ ----- ------------ -------------------
Statement of Changes in Equity
For the year ended 31 December 2012 and for year ended 31
December 2011, USD
Share capital Share-based payment Fair value reserve Retained losses Total
reserve
Notes USD USD USD USD USD
Balance at 31
December 2010 19,636,247 - - (26,879) 19,609,368
Total comprehensive
loss for the year - - - (442,591) (442,591)
-------------------- ------ -------------- -------------------- ------------------- ---------------- -----------
Transactions with
owners:
Share based payment
charge 15 - 8,420 - - 8,420
Balance at 31
December 2011 19,636,247 8,420 - (469,470) 19,175,197
-------------------- ------ -------------- -------------------- ------------------- ---------------- -----------
Total
comprehensive
income/(loss) for
the year - - 2,005,228 (875,151) 1,130,077
-------------------- ------ -------------- -------------------- ------------------- ---------------- -----------
Transactions with
owners:
Issue of shares 6,500,001 - - - 6,500,001
Share-based payment
charge 15 - 128,183 - - 128,183
Transfer to
retained losses on
lapse of share
options - (8,420) - 8,420 -
Balance at 31
December 2012 26,136,248 128,183 2,005,228 (1,336,201) 26,933,458
-------------------- ------ -------------- -------------------- ------------------- ---------------- -----------
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER
2012
1. Company information
TMT Investments Plc ("TMT" or the "Company") is a company
incorporated in Jersey with its registered office at Queensway
House, Hilgrove Street, St Helier, JE1 1ES, Channel Islands.
The Company was incorporated and registered on 30 September 2010
in Jersey under the Companies (Jersey) Law 1991 with registration
number 106628 under the name TMT Investments Limited. The Company
obtained consent from the Jersey Financial Services Commission
pursuant to the Control of Borrowing (Jersey) Order 1985 on 30
September 2010. On 1 December 2010 the Company re-registered as a
public company and changed its name to TMT Investments PLC.
The memorandum and articles of association of the Company do not
restrict its activities and therefore it has unlimited legal
capacity. The Company's ability to implement its Investment Policy
and achieve its desired returns will be limited by its ability to
identify and acquire suitable investments. Suitable investment
opportunities may not always be readily available.
The Company will seek to make investments in any region of the
world.
Financial statements of the Company are prepared by and approved
by the Directors in accordance with International Financial
Reporting Standards, International Accounting Standards and their
interpretations issued or adopted by the International Accounting
Standards Board as adopted by the European Union ("IFRSs"). The
Company's accounting reference date is 31 December.
2. Summary of significant accounting policies
2.1 Basis of presentation
The principal accounting policies applied by the Company in the
preparation of these financial statements are set out below and
have been applied consistently.
The financial statements have been prepared on a going concern
basis, under the historical cost basis as modified by the fair
value of available-for-sale financial assets, as explained in the
accounting policies below, and in accordance with IFRS. Historical
cost is generally based on the fair value of the consideration
given in exchange for assets.
2.2 Going concern
The Directors confirm that, after giving due consideration to
the financial position and expected cash flows of the Company; they
have a reasonable expectation that the Company will have adequate
cash resources to continue in operational existence for the
foreseeable future, and for at least one year from the date of
approval of these financial statements and they have therefore
adopted the going concern basis in preparing the financial
statements.
2.3 Segmental reporting
Operating segments are reported in a manner consistent with the
internal reporting provided to the chief operating decision-maker
who is responsible for allocating resources and assessing
performance of the operating segments and which has been identified
as the Board of Directors that make strategic decisions. For the
purposes of IFRS 8 'Operating Segments' the Company currently has
one segment, being 'Investing in the TMT sector'.
Even though the Company only has one segment, there are still
geographical disclosures that need to be made to comply with IFRS 8
'Operating Segments'.
The Company analyses revenue and non-current financial assets
according to the geographical location of the investment (see note
4).
2.4 Foreign currency translation
(a) Functional and presentation currency
Items included in the financial statements of the Company are
measured in United States Dollars ('US dollars', 'USD' or 'US$'),
which is the Company's functional and presentation currency.
(b) Transactions and balances
Foreign currency transactions are translated into US$ using the
exchange rates prevailing at the dates of the transactions.
Exchange differences arising from the translation at the year end
exchange rates of monetary assets and liabilities denominated in
foreign currencies are recognised in the statement of comprehensive
income.
Conversation rates, USD
-----------------------------------------------
Currency Average
At 31.12.2012 rate, 2012
----------------- -------------- ------------
British pounds,
GBP 1.6163 1.5850
----------------- -------------- ------------
2.5 Cash and cash equivalents
Cash and cash equivalents consist of cash at bank and in hand,
deposits held at call with banks, bank overdrafts and other
short-term highly liquid investments with maturities of three
months or less from the date of acquisition.
2.6 Financial assets
Recognition and measurement
Investments are recognized and de-recognized on a date where the
purchase or sale of an investment is under a contract whose terms
require the delivery or settlement of the investment. The Company
manages its investments with a view to profiting from the receipt
of dividends and changes in fair value of equity investments.
"Available-for-sale" financial instruments include unlisted
equity investments and convertible promissory notes. Equity
instruments classified as available-for-sale are those which are
neither classified as held-for-trading nor designated as fair value
through profit or loss. Convertible promissory notes are treated as
similar in nature to the unlisted equity investments and designated
as available-for-sale.
Available-for-sale investments are carried at fair values except
for financial assets that do not have a quoted market price in an
active market and whose fair value cannot be reliably measured
which are measured at cost less any identified impairment losses at
the end of the period in accordance with the IAS 39 para 46 (c)
exemptions. Fair value information has therefore not been disclosed
for those investments.
Where there has been a relevant transaction during the year that
gives an indication of the fair value of the available-for-sale
unlisted shares, the shares are included at that fair value and the
increase or decrease in fair value is recognised in the investment
fair value reserve. The "price of recent investment" methodology is
used mainly for investments in venture capital companies and
includes cost of investment or valuation by reference to a
subsequent financing round. Valuation increases above cost are only
recognised if that round involved a new external investor and the
company is meeting milestones set by investors.
Investments are classified on recognition as "fair value through
profit and loss" when their fair values can be estimated reliably
on a regular basis and when they are managed on a fair value basis.
Fair value changes of investments at fair value through profit and
loss are included within profit/loss in the income statement. At 31
December 2012 all investments are classified as "available-for-sale
and none are classified as "fair value through profit and
loss".
Financial assets that qualify as an associate as 20% or more of
the voting rights are held by the company, are exempt from IAS 28
'Investments in Associates', as TMT Investments plc is a venture
capital organisation. Such investments are therefore treated as
available-for-sale financial assets.
Income
Interest income from convertible notes receivable is recognized
as it accrues by reference to the principal outstanding and the
effective interest rate applicable, which is the rate that exactly
discounts the estimated future cash flows through the expected life
of the financial asset to the asset's carrying value.
Impairment of available-for-sale financial assets
A financial asset is considered to be impaired if objective
evidence indicates that one or more events have had a negative
effect on the estimated future cash flows of that asset. In case of
available for sale assets, a significant or prolonged decline in
the fair value of the financial asset below its cost is considered
an indicator that the financial assets are impaired.
If objective evidence indicates that financial assets that are
carried at cost need to be tested for impairment, calculations are
based on information derived from business plans and other
information available for estimating their fair value. Any
impairment loss is included in profit/loss for the year in the
Statement of Comprehensive Income.
2.7 Net finance income
Net finance income comprises interest income on deposits.
Interest income is recognized as it accrues in the statement of
comprehensive income, using the effective interest method. Finance
costs comprise interest expenses on borrowings and the unwinding of
the discount on provisions.
2.8 Taxation
Deferred tax is provided in full using the liability method, on
temporary differences arising between the tax bases of assets and
liabilities and their carrying amounts in the financial statements.
Deferred tax is not accounted for if it arises from initial
recognition of an asset or liability in a transaction other than a
business combination that, at the time of the transaction, affects
neither accounting nor taxable profit or loss. Deferred tax is
determined using tax rates that are expected to apply when the
related deferred tax asset is realised or when the deferred tax
liability is settled. Deferred tax assets are recognised to the
extent that it is probable that future taxable profits will be
available against which the temporary differences can be
utilised.
2.9 Equity instruments
Ordinary shares are classified as equity. Costs directly
attributable to the issue of new shares are shown in equity as a
deduction from the proceeds.
2.10 Share-based payments
The fair value of options granted to employees is recognized as
an employee expense, with a corresponding increase in equity, over
the period that the employees become unconditionally entitled to
the options. The amount recognized as an expense is adjusted to
reflect the actual number of share options that vest. For equity
settled share-based payment transactions other than transactions
with employees the Company measures the goods or services received
at their fair value, unless that fair value cannot be estimated
reliably. If this is the case the Company measures their fair
values and the corresponding increase in equity, indirectly, by
reference to the fair value of equity instruments granted.
The Company enters into arrangements that are equity-settled
share-based payments with certain employees. These are measured at
fair value at the date of grant, which is then recognized in the
statement of comprehensive income on a straight-line basis over the
vesting period, based on the Company's estimate of shares that will
eventually vest. Fair value is measured by use of an appropriate
model. In valuing equity-settled transactions, no account is taken
of any vesting conditions, other than conditions linked to the
price of the shares of TMT Investments. The charge is adjusted at
each year end date to reflect the actual number of forfeitures,
cancellations and leavers during the period. The movement in
cumulative charges since the previous year end is recognized in the
statement of comprehensive income, with a corresponding entry in
equity.
2.11 New IFRSs and interpretations not applied
The IASB has issued the following standards and interpretations
which have been endorsed by the European Union to be applied to
financial statements with periods commencing on or after the
following dates:
Effective for period beginning on or after
IAS 27 Separate Financial Statements (2011) 1 January 2013
======= ================================================================= ==========================================
IAS 28 Investments in Associates and Joint Ventures (2011) 1 January 2013
======= ================================================================= ==========================================
IFRS 10 Consolidated Financial Statements 1 January 2013
======= ================================================================= ==========================================
IFRS 11 Joint Arrangements 1 January 2013
======= ================================================================= ==========================================
IFRS 13 Fair Value Measurement 1 January 2013
======= ================================================================= ==========================================
IAS 39 Amendments to IAS 39 Employee Benefits 1 January 2013
======= ================================================================= ==========================================
IAS 1 Amendments to IAS 1 Presentation of Items of Other Comprehensive 1 July 2012
Income
======= ================================================================= ==========================================
IFRS 7 Amendments to IFRS 7 Disclosures - Offsetting Financial Assets 1 January 2013
and Financial Liabilities
======= ================================================================= ==========================================
IAS 32 Amendments to IAS 32 Disclosures - Offsetting Financial Assets 1 January 2014
and Financial Liabilities
======= ================================================================= ==========================================
The Directors do not anticipate that the adoption of these
standards and interpretations will have a material impact on the
financial statements in the period of initial application and have
decided not to adopt any of them early.
2.12 Accounting estimates and judgements
Estimates and judgements need to be regularly evaluated and are
based on historical experience and other factors, including
expectations of future events that are believed to be reasonable
under the circumstances. The Company makes estimates and
assumptions concerning the future. The resulting accounting
estimates will, by definition, rarely equal the related actual
results.
The estimates and underlying assumptions are reviewed on an
on-going basis. Revisions to accounting estimates are recognised in
the period in which the estimate is revised if the revision affects
only that period or in the period of the revision and future
periods if the revision affects both current and future
periods.
The estimates significant to the financial statements during the
year and at the year end is the consideration of the fair value of
available-for-sale assets, the impairment of available-for-sale
assets and share-based payment calculations, as set out in the
relevant accounting policies shown above. A number of the
available-for-sale financial assets held by the Company are at an
early stage of their development. The Company cannot yet carry out
regular reliable fair value estimates of some of these investments.
Future events or transactions involving the companies invested in
may result in more accurate valuations of their fair values (either
upwards or downwards) which may affect the Company's overall net
asset value.
3 Revenue
For the year ended 31/12/2012 For the year ended 31/12/2011
USD USD
Gross interest income from convertible notes
receivable 163,902 12,618
Amortized costs of convertible notes receivable (48,853) (4,419)
------------------------------------------------------ ------------------------------ ------------------------------
Net interest income from convertible notes receivable 115,049 8,199
Profit on disposal of equity investment (note 10) 200,000 -
------------------------------------------------------ ------------------------------ ------------------------------
Total revenue 315,049 8,199
------------------------------------------------------ ------------------------------ ------------------------------
4 Segmental analysis
Geographic information
The Company has investments in four principal geographical areas
- USA, Israel, BVI and Cyprus.
Revenue from non-current financial assets amounted to US$115,049
and was derived from net interest for convertible notes receivable
and a profit on disposal of a US equity investment of
US$200,000.
Non-current financial assets
As at 31/12/2012
USA Israel BVI Cyprus Total
USD USD USD USD USD
-------------------- ----------- ---------- -------- ---------- -----------
Equity investments 10,283,334 2,982,471 305,050 1,863,685 15,434,540
Convertible notes 3,691,691 - - - 3,691,691
-------------------- ----------- ---------- -------- ---------- -----------
13,975,025 2,982,471 305,050 1,863,685 19,126,231
-------------------- ----------- ---------- -------- ---------- -----------
As at 31/12/2011
USA Israel BVI Total
USD USD USD USD
------------------ ---------- ------------------ ---------- ----------
Equity 1,961,988 2,982,471 1,000,000 5,944,459
Convertible note 1,392,252 - - 1,392,252
------------------ ---------- ------------------ ---------- ----------
Total 3,354,240 2,982,471 1,000,000 7,336,711
------------------ ---------- ------------------ ---------- ----------
5 Administrative expenses
Administrative expenses include the following amounts:
For the year ended 31/12/2012 For the year ended 31/12/2011
USD USD
------------------------------- ------------------------------ ------------------------------
Staff expenses (note 6) 758,171 329,829
Professional fees 239,265 171,553
Legal fees 46,770 5,400
Bank and LSE charges 25,533 18,689
Audit and accounting fees 47,538 24,220
Rent 43,152 -
Other expenses 158,212 10,220
Currency exchange (gain)/loss (1,190) 9,269
------------------------------- ------------------------------ ------------------------------
1,317,451 569,180
------------------------------- ------------------------------ ------------------------------
6 Staff expenses
For the year ended 31/12/2012 For the year ended 31/12/2011
USD USD
-------------------------------------- ------------------------------ ------------------------------
Directors' fees 284,765 230,209
Wages and salaries 345,223 91,200
Share-based payment charge (note 15) 128,183 8,420
-------------------------------------- ------------------------------ ------------------------------
758,171 329,829
-------------------------------------- ------------------------------ ------------------------------
Wages and salaries shown above include salaries paid in the year
2012, bonuses and share option schemes relating to the year. These
costs are included in administrative expenses.
The average number of staff employed (excluding Directors) by
the Company during the year was 4 (2011: 1).
The Directors' fees for 2012 were as follows:
For the year ended 31/12/2012 For the year ended 31/12/2011
USD USD
--------------------- ------------------------------ ------------------------------
Alexander Selegenev 126,205 115,339
Yuri Mostovoy 100,000 55,558
James Mullins 31,922 32,415
Petr Lanin 26,638 26,897
--------------------- ------------------------------ ------------------------------
284,765 230,209
--------------------- ------------------------------ ------------------------------
The Directors' fees shown above are all classified as 'short
term employment benefits' under International Accounting Standard
24. The Directors do not receive any pension contributions or other
benefits.
Key management personnel of the Company are defined as those
persons having authority and responsibility for the planning,
directing and controlling the activities of the Company, directly
or indirectly. Key management of the Company are therefore
considered to be the Directors of the Company. There were no
transactions with the key management, other than their Directors
fees and share options.
7 Net finance income
For the year ended 31/12/2012 For the year ended 31/12/2011
USD USD
---------------------- ------------------------------ ------------------------------
Bank interest income 127,251 118,390
127,251 118,390
---------------------- ------------------------------ ------------------------------
8 Income tax expense
For the year ended 31/12/2012 For the year ended 31/12/2011
USD USD
---------------------- ------------------------------ ------------------------------
Current taxes
Current year - -
---------------------- ------------------------------ ------------------------------
Deferred taxes
Deferred income taxes - -
---------------------- ------------------------------ ------------------------------
- -
---------------------- ------------------------------ ------------------------------
The Company is incorporated in Jersey. No tax reconciliation
note has been presented as the income tax rate for Jersey companies
is 0%.
9 Loss per share
The calculation of basic loss per share is based upon the net
loss for the year ended 31 December 2012 attributable to the
ordinary shareholders of USD875,151 (2011: net loss of USD 442,591)
and the weighted average number of ordinary shares outstanding
calculated as follows:
Loss per share For the year ended 31/12/2012 For the year ended 31/12/2011
--------------------------------------------------- ------------------------------ ------------------------------
Basic loss per share (cents per share) (3.62) (2.21)
Diluted loss per share (cents per share) (3.62) (2.21)
Loss attributable to equity holders of the entity (875,151) (442,591)
--------------------------------------------------- ------------------------------ ------------------------------
The weighted average number of ordinary shares outstanding
before and after adjustment for the effects of all dilutive
potential ordinary shares calculated as follows:
(in number of shares weighted during the year For the year ended 31/12/2012 For the year ended 31/12/2011
outstanding)
------------------------------------------------------ ------------------------------ ------------------------------
Weighted average number of shares in issue
Ordinary shares 24,186,185 20,000,002
24,186,185 20,000,002
------------------------------------------------------ ------------------------------ ------------------------------
Effect of dilutive potential ordinary shares
Share options 146,735 6,283
------------------------------------------------------ ------------------------------ ------------------------------
Weighted average of shares for the year (fully
diluted) 24,332,920 20,006,285
------------------------------------------------------ ------------------------------ ------------------------------
The diluted loss per share for both 2012 and 2011 is the same as
the basic loss per share because the conversion of the share
options decreases the basic loss per share and is therefore
anti-dilutive.
Transactions involving ordinary shares between the year end date
and the date of approval of financial statements are shown in the
subsequent events note (note 20).
10 Non-current financial assets
At 31 December 2012 At 31 December 2011
Available-for-sale financial assets, USD:
Investments in equity shares (i)
- unlisted shares 15,434,540 5,944,459
Convertible notes receivable (ii)
- promissory notes 3,691,691 1,392,252
------------------------------------------- -------------------- --------------------
19,126,231 7,336,711
------------------------------------------- -------------------- --------------------
Reconciliation of fair value measurements of non-current
financial assets:
Available-for-sale Total
----------------------------------------------- ---------------------------------- ------------
Unlisted Promissory
shares notes
USD USD USD
----------------------------------------------- ----------------- --------------- ------------
Balance as at 1 January 2011 - - -
Purchases in 2011 5,944,459 1,392,252 7,336,711
----------------------------------------------- ----------------- --------------- ------------
Balance as at 31 December 2011 5,944,459 1,392,252 7,336,711
----------------------------------------------- ----------------- --------------- ------------
Total gains or losses in 2012:
- in profit or loss 197,993 (46,846) 151,147
- in other comprehensive income 2,005,228 - 2,005,228
Purchases (including consulting & legal fees) 8,486,860 2,346,285 10,833,145
Disposal of investment (1,200,000) - (1,200,000)
----------------------------------------------- ----------------- --------------- ------------
Balance as at 31 December 2012 15,434,540 3,691,691 19,126,231
----------------------------------------------- ----------------- --------------- ------------
(i) Breakdown of equity investments as at 31 December 2012:
Invested Date of Total cost Additions Amount of Gain/loss Disposals, Total Proportion
company investment of to net capitalized from USD investment of equity
investment investment consulting changes at 31 Dec shares
at 1 Jan during the and legal in fair 2012, USD held
2012, period, services, value of
USD USD USD financial
assets,
USD
--------------- ------------ ----------- ----------- ------------ ---------- ------------ ----------- -----------
Unicell 15/09/2011 2,982,471 - - - - 2,982,471 10.00%
Berryman 30/08/2011 1,000,000 - - 200,000 (1,200,000) - -
Depositphotos 26/07/2011 911,988 2,099,997 7,500 2,043,538 - 5,063,023 30.00%
RollApp 19/08/2011 360,000 - - - - 360,000 9.70%
Wanelo 21/11/2011 355,000 - - - - 355,000 6.53%
Gild 05/12/2011 335,000 - 1,260 (179,350) - 156,910 2.21%
1-Page 06/02/2012 - 245,289 13,062 47,016 - 305,367 6.09%
ThusFresh 26/03/2012 - 485,000 25,000 - - 510,000 7.66%
Backblaze* 24/07/2012 - 2,500,759 10,000 - - 2,510,759 9.86%
UsingMiles 23/08/2012 - 250,000 10,000 - - 260,000 3.00%
Gentoo LABS 17/09/2012 - 250,000 10,000 - - 260,000 6.25%
Favim Holding 24/10/2012 - 300,000 5,050 - - 305,050 20.00%
Appsindep 12/11/2012 - 1,858,685 5,000 - - 1,863,685 19.24%
Virool Inc 29/08/2012 - 401,820 6,431 94,024 - 502,275 1.69%
--------------- ------------ ----------- ----------- ------------ ---------- ------------ ----------- -----------
Total - 5,944,459 8,391,550 93,303 2,205,228 1,200,000 15,434,540 -
--------------- ------------ ----------- ----------- ------------ ---------- ------------ ----------- -----------
*On the first anniversary of the initial investment in
Backblaze, the Company has agreed to acquire such number of newly
issued and existing shares in Backblaze as will bring TMT's fully
diluted equity stake in Backblaze to a minimum of 13.33% and a
maximum of 19.05%, dependent on Backblaze's performance, for an
additional aggregate consideration of US$2,500,759.
(ii) Breakdown of convertible loan notes as at 31 December
2012:
Invested Date of Total cost Additions Amount of Amount of Total Maturity Interest
company investment of to net capitalized amortized investment term, rate, %
investment investment consulting costs, USD at 31 Dec years
at 1 Jan during the and legal 2012, USD
2012, period, services,
USD USD USD
------------ ------------ ----------- ----------- ------------ ----------- ----------- ----------- -----------
Socialize 19/12/2011 504,671 - - (10,027) 494,644 2 6.00%
Tracks
Media 24/11/2011 454,062 - - (9,275) 444,787 2 5.00%
Ninua 08/06/2011 303,119 200,000 5,000 (3,575) 504,544 1.5 5.00%
PeekYou 03/11/2011 130,400 - - (8,022) 122,378 1 5.00%
Todoroo 12/04/2012 - 400,000 - - 400,000 1 8.00%
Hotlist
Media 18/04/2012 - 388,000 17,000 (11,970) 393,030 1 6.00%
Wrike 12/06/2012 - 1,000,000 6,285 (2,922) 1,003,363 1 8.00%
Pipedrive 30/07/2012 - 325,000 5,000 (1,055) 328,945 2 2.00%
------------ ------------ ----------- ----------- ------------ ----------- ----------- ----------- -----------
Total 1,392,252 2,313,000 33,285 (46,846) 3,691,691
-------------------------- ----------- ----------- ------------ ----------- ----------- ----------- -----------
Available-for-sale investments are carried at fair values. Where
financial assets do not have a quoted market price in an active
market and their fair values cannot be reliably measured so are
measured at cost less any identified impairment losses at the end
of reporting period, in accordance with IAS 39 para 46 (c)
exemption. There have been no indications of impairment to
date.
Where there has been a relevant transaction during the year that
gives an indication of the fair value of the unlisted shares, the
shares are included at that fair value and the increase or decrease
in fair value is recognised in the fair value reserve. The "price
of recent investment" methodology is used mainly for investments in
venture capital companies and includes cost of investment or
valuation by reference to a subsequent financing round. Valuation
increases above cost are only recognised if that round involved a
new external investor and the company is meeting milestones set by
investor.
11 Trade and other receivables
At 31 December 2012 At 31 December 2011
USD USD
----------------------------------------- -------------------- --------------------
Prepayments 25,029 24,406
Interest receivable on promissory notes 171,910 12,618
Interest receivable on deposit 7,049 12,486
----------------------------------------- -------------------- --------------------
203,988 49,510
----------------------------------------- -------------------- --------------------
12 Cash and cash equivalents
The cash and cash equivalents as at 31 December 2012 include
cash on hand and in banks, deposits, net of outstanding bank
overdrafts. The effective interest rate at 31 December 2012 was
1.30%.
Cash and cash equivalents at the end of the reporting period as
shown in the statement of cash flows can be reconciled to the
related items in the statement of financial position as
follows:
At 31 December 2012 At 31 December 2011
USD USD
--------------- -------------------- --------------------
Deposits 5,000,000 10,000,000
Bank balances 2,717,554 1,861,305
--------------- -------------------- --------------------
7,717,554 11,861,305
--------------- -------------------- --------------------
The following table represents an analysis of cash and
equivalents by rating agency designation based on Fitch rating or
their equivalent:
At 31 December 2012 At 31 December 2011
USD USD
--------------- -------------------- --------------------
Bank balances
A rating 2,717,554 1,861,305
--------------- -------------------- --------------------
2,717,554 1,861,305
--------------- -------------------- --------------------
Deposits
A rating 5,000,000 10,000,000
--------------- -------------------- --------------------
5,000,000 10,000,000
--------------- -------------------- --------------------
13 Trade and other payables
At 31 December 2012 At 31 December 2011
USD USD
--------------------------- -------------------- --------------------
Directors' fees payable 40,475 37,978
Trade payables 53,625 10,650
Other current liabilities 25 16,383
Accrued expenses 20,190 7,318
--------------------------- -------------------- --------------------
114,315 72,329
--------------------------- -------------------- --------------------
14 Share capital
On 31 December 2012 the Company had an authorised share capital
of unlimited shares of no par value and had issued share capital
of:
At 31 December 2012 At 31 December 2011
USD USD
---------------------------- -------------------- --------------------
Share capital 26,136,248 19,636,247
Issued capital comprises: Number Number
Fully paid ordinary shares 24,642,860 20,000,002
---------------------------- -------------------- --------------------
Number of shares Share
capital
USD
------------------------------------ ----------------- -----------
Balance at 31 December 2010 & 2011 20,000,002 19,636,247
Issue of shares in 2012 4,642,858 6,500,001
Balance at 31 December 2012 24,642,860 26,136,248
------------------------------------ ----------------- -----------
Share capital includes share issue costs of USD 363,753.
On 6 February 2012, the Company allotted 4,642,858 new ordinary
shares of no par value each in the Company at a price of US$1.4 per
share, being a premium of 12% over the closing price of the
Company's shares on 3 February 2012 and raising US$6.5 million.
15 Share-based payments
Share-based payment charge recognized for the years ended 31
December is as follows:
For the year ended 31/12/2012 For the year ended 31/12/2011
USD USD
-------------------------------------- ------------------------------ ------------------------------
Share option (compensation expenses) 128,183 8,420
-------------------------------------- ------------------------------ ------------------------------
Total share-based payment charge 128,183 8,420
-------------------------------------- ------------------------------ ------------------------------
On 27 April 2011, on the recommendation of the independent
directors, the Company granted share options to subscribe for up to
100,000 ordinary shares to Mr. Alexander Selegenev, an executive
director of the Company.
The terms and conditions of the options granted are as
follows:
Options granted to Alexander Selegenev
-------------------------------------------- ---------------------------------------
Date granted 1 January 2011
Number of instruments 100,000
Vesting period 1-3 years
Exercise price US$1.00
Share-based compensation (USD) during 2011 8,420
Share-based compensation (USD) during 2012 8,420
-------------------------------------------- ---------------------------------------
Options granted to Mr. Alexander Selegenev vest as follows:
No. of ordinary shares Exercise Price Exercise Period
----------------------- --------------- -------------------
33,333 US$1 31/12/11-30/01/12*
33,333 US$1 31/12/12-30/01/13*
33,334 US$1 31/12/13-30/01/14*
----------------------- --------------- -------------------
* or a period of 30 days starting from the date on which certain
circumstances preventing exercise during these periods have
ended.
These options are exercisable by Mr. Alexander Selegenev only
while he remains a director and will lapse on the termination of
his appointment.
None of the options that vested to Mr. Selegenev in the year
ended 31 December 2011 were exercised and therefore lapsed.
The weighted average exercise price and contractual life is as
stated in the above tables.
The fair value of services received in return for share options
granted is based on the fair value of share options and warrants
granted, measured using the Black-Scholes formula, using the
following assumptions:
(in USD, except for number of shares and percent) Options granted to
Alexander Selegenev
--------------------------------------------------- ---------------------
Fair value at grant date 1.03
Share price at grant date 1.25
Exercise price 1
Expected volatility, per cent 7.56%
Option life, years 1-3
Expected dividends, per cent 0
Risk free interest rate, per cent 3.14%
--------------------------------------------------- ---------------------
Expected volatility is estimated by considering the Company's
data on AIM.
On 27 August 2012, Board of Directors approved a share option
plan (the "Plan") for directors, officers, employees of or
consultants to the Company and/or any company directly or
indirectly controlled by the Company.
Under the Plan, options for a total of 7,500,000 ordinary shares
in the Company, representing approximately 30% of the current
issued share capital (or 23% of the enlarged share capital assuming
full exercise of the options), can be made available at an exercise
price determined by the Board or its remuneration committee, which
will not be less than the closing middle market price for the
Company's share on AIM on the date of grant as published by or on
behalf of the London Stock Exchange plc. Options will vest on a
daily basis over a period of 3 years whilst the option holder
remains eligible, and vested options can be exercised on each
anniversary of the grant, but if not exercised within 1 year from
the allowable date of exercise, will lapse.
The following options, without performance conditions, have been
granted under the Plan on 25 October 2012:
Option Price Option Price Option Price
Name Option Shares Year 1 Year 2 Year 3
--------------------------- -------------- ------------- ------------- -------------
German Kaplun (note
19) 1,125,000 US$1.40 US$1.55 US$1.70
Alexander Morgulchik
(note 19) 1,125,000 US$1.40 US$1.55 US$1.70
Alexander Selegenev
(Director) 1,125,000 US$1.40 US$1.55 US$1.70
Artyom Inyutin (Employee) 1,125,000 US$1.40 US$1.55 US$1.70
Yuri Mostovoy (Director) 562,500 US$1.40 US$1.55 US$1.70
Alexander Pak (Employee) 300,000 US$1.40 US$1.55 US$1.70
Levan Kavtaradze
(Employee) 150,000 US$1.40 US$1.55 US$1.70
TOTAL 5,512,500
--------------------------- -------------- ------------- ------------- -------------
The fair value of services received in return for share options
granted is based on the fair value of share options and warrants
granted, measured using the Black-Scholes formula, using the
following assumptions:
(in USD, except for
number of shares and Option Price Option Price Option Price
percent) Year 1 Year 2 Year 3
-------------------------- ------------- ------------- -------------
Number of share options
granted 1,837,500 1,837,500 1,837,500
Fair value of share
option at date of grant 0.25 0.15 0.09
Share price at date
of grant 1.65 1.65 1.65
Exercise price 1.40 1.55 1.70
Expected volatility,
per cent 9.39% 9.39% 9.39%
Option life, years 0-1 0-2 0-3
Expected dividends,
percent 0 0 0
Risk free interest rate,
percent 0.41% 0.41% 0.41%
-------------------------- ------------- ------------- -------------
Expected volatility is estimated by considering the data of
company on AIM.
16 Reserves
Share based payment reserve Fair value reserve Retained earnings Total
USD USD USD USD
----------------------------------- ---------------------------- ------------------- ------------------ ----------
Balance as at 1 January 2011 - - (26,879) (26,879)
Loss for the year - - (442,591) (442,591)
Share based payment charge 8,420 - - 8,420
----------------------------------- ---------------------------- ------------------- ------------------ ----------
Balance as at 31 December 2011 8,420 - (469,470) (461,050)
-----------------------------------
Loss for the year - - (875,151) (875,151)
Gain from changes in fair value
transferred to equity - 2,205,228 - 2,205,228
Fair value gain on disposal
transferred from equity - (200,000) - (200,000)
Share based payment charge 128,183 - - 128,183
Transfer to retained earnings on
lapse of share options (8,420) - 8,420 -
----------------------------------- ---------------------------- ------------------- ------------------ ----------
Balance as at 31 December 2012 128,183 2,005,228 (1,336,201) 797,210
----------------------------------- ---------------------------- ------------------- ------------------ ----------
17 Capital management
The capital structure of the Company consists of equity share
capital, reserves, and retained earnings.
The Board's policy is to maintain a strong capital base so as to
maintain investor and market confidence and to enable the
successful future development of the business.
The Company is not subject to externally imposed capital
requirements.
No changes were made to the objectives, policies and process for
managing capital during the year.
18 Financial risk management and financial instruments
The Company has identified the following risks arising from its
activities and has established policies and procedures to manage
these risks. The Company's principal financial assets are cash and
cash equivalents, investments in equity shares, and convertible
notes receivable.
Credit risk
As at 31 December 2012 the largest exposure to credit risk
related to cash and cash equivalents, which was US$7,717,554. The
exposure risk is reduced because the counterparties are banks with
high credit ratings ("A" Liquidity banks) assigned by international
credit rating agencies. The Directors intend to continue to spread
the risk by holding the Company's cash reserves in more than one
financial institution.
(i) Exposure to credit risk
The carrying amount of the following assets represents the
maximum credit exposure. The maximum exposure to credit risk asat
31 December is as follows:
At 31 December 2012 At 31 December 2011
USD USD
------------------------------ -------------------- --------------------
Convertible notes receivable 3,691,691 1,392,252
Trade and other receivables 203,988 49,510
Cash and cash equivalents 7,717,554 11,861,305
------------------------------ -------------------- --------------------
11,613,233 13,303,067
------------------------------ -------------------- --------------------
Market risk
The Company's financial assets areclassified as
available-for-sale and are measured at fair value. The measurement
of the Company's investments in equity shares and convertible notes
is largely dependent on the underlying trading performance of the
investee companies, but the valuation and other items in the
financial statements can also be affected by the interest rate and
fluctuations in the exchange rate.
Interest rate risk
Changes in interest rates impact primarily cash and cash
equivalents by changing either their fair value (fixed rate
deposits) or their future cash flows (variable rate deposits).
Management does not have a formal policy of determining how much of
the Company's exposure should be to fixed or variable rates.
At 31 December 2012 the Company had a cash deposit of
US$5,000,000, earning a variable rate of interest. The Board of
Directors monitors the interest rates available in the market to
ensure that returns are maximized.
Foreign currency risk management
The Company is exposed to foreign currency risks on investments
and salary and director remuneration payments that are denominated
in a currency other than the functional currency of the Company.
The currency giving rise to this risk is primarily GBP. The
exposure to foreign currency risk as at 31 December 2012 was as
follows:
For the year ended 31/12/2012 For the year ended 31/12/2011
USD USD
Current assets
Cash and cash equivalents 141,333 122,743
Trade and other receivables 2,344 2,546
------------------------------------------------------ ------------------------------ ------------------------------
Current liabilities
Trade and other payables (61,296) (22,168)
------------------------------------------------------ ------------------------------ ------------------------------
Net (short) long position 82,381 103,121
------------------------------------------------------ ------------------------------ ------------------------------
Net exposure currency (GBP) 50,969 65,720
------------------------------------------------------ ------------------------------ ------------------------------
Net exposure currency (assuming a 10% movement in
exchange rates against GBP) 74,143 92,809
------------------------------------------------------ ------------------------------ ------------------------------
Impact on exchange movements in the statement of
comprehensive income 8,238 10,312
------------------------------------------------------ ------------------------------ ------------------------------
The foreign exchange rates of the USD at 31 December were as
follows:
31/12/2012 31/12/2011
---------- ----------- -----------
Currency
GBP 1.6163 1.5691
---------- ----------- -----------
This analysis assumes that all other variables, in particular
interest rates, remain constant.
Liquidity risk management
The Company's approach to managing liquidity is to ensure that
it will always have sufficient liquidity to meet its liabilities
when due, under both normal and stressed conditions, without
incurring unacceptable losses or risking damage to the Company.
The Company has low liquidity risk due to maintaining adequate
banking facilities, by continuously monitoring actual cash flows
and by matching the maturity profiles of financial assets and
current liabilities.
As at 31 December 2012, the cash and equivalents of the Company
were US$7,717,554
The following are the maturities of current liabilities as at 31
December 2012:
Carrying amount Within one year 2-5 years More than 5 years
USD USD USD USD
--------------------------- ---------------- ---------------- ---------- -------------------
Directors' fees payable 40,475 40,475 - -
Trade payables 53,625 53,625 - -
Other current liabilities 25 25 - -
Accrued expenses 20,190 20,190 - -
114,315 114,315 - -
--------------------------- ---------------- ---------------- ---------- -------------------
19 Related party transactions
Since May 2012, TMT's Moscow-based staff have been located in an
office that belongs to a company ("Orgtekhnika") controlled by Mr.
Alexander Morgulchik and Mr. German Kaplun, who collectively own
15.8% of the issued share capital of TMT and are thus considered
related parties. There are currently 5 TMT staff involved working
substantially full time on TMT's business. TMT started paying rent
from 1 October 2012. Rent was being paid to Orgtekhnika at the rate
of US$700 per sq meter per year of space utilised. The board
believes this represents a discount from the prevailing market rate
for similar office space in Moscow. Together with other related
expenses (support personnel, company car, security services, etc.),
the total costs to TMT were US$14,536 per month (US$174,429 per
year). These totalled US$43,152 for the period from 1 October to 31
December 2012 and are included under administrative expenses.
Prior to becoming employees of TMT on 14 June 2012, Mr.
Alexander Morgulchik and Mr. German Kaplun acted as consultants to
TMT and were paid US$58,981 in reimbursed expenses during the year
ended 31 December 2012. They have also been granted share options
during the year as set out in note 15. In December 2012, Alexander
Morgulchik, German Kaplun and Artyom Inyutin agreed to receive all
of their 2013 salaries in TMT shares on 31 December 2013 rather
than monthly in cash. The number of shares receivable in each case
is fixed at a price of US$1.60 per share.
20 Subsequent events
On 8 February 2013, portfolio company Gild, Inc. ("Gild")
completed the initial closing of an equity financing round. After
the new equity financing is completed, TMT will hold approximately
1.23% of Gild's fully-diluted equity capital.
On 20 February 2013, TMT Investments completed an investment in
Adinch, Inc. ("Adinch"). TMT has acquired 1,000,000 preferred
shares representing 20.0% of Adinch's fully diluted equity capital,
for an aggregate consideration of US$1,000,000.
On 4 March 2013, TMT Investments was informed by Menostar
Holdings Limited that it had sold 1,300,000 shares, representing
approximately 5.28% in the Company, to Spotlight Global Corp.
On 7 March 2013, TMT Investments allotted 750,398 new ordinary
shares of no par value each in the Company to new investors at a
price of US$1.5 per share, being a discount of 12% over the closing
price of TMT's ordinary shares on 6 March 2013 and raising
US$1,125,000. The Company now has a total of 25,393,258 ordinary
shares in issue.
On 8 March 2013, TMT Investments completed an additional
investment in Tracks Media, Inc. ("Tracks"). TMT's new investment
consists of a US$100,000 unsecured convertible promissory note in
Tracks.
On 26 March 2013, the Company's portfolio company Socialize,
Inc. was acquired by ShareThis, Inc. ("ShareThis"). TMT's total
maximum consideration for the transaction is US$713,991, consisting
of US$40,319 payable to TMT in cash at closing, up to additional
US$103,642 in cash payable to TMT after the expiration of an
eighteen months' holdback period, and US$570,030 in the form of an
unsecured convertible promissory note in ShareThis.
On 3 April 2013, TMT completed an investment in Graphicly, Inc.
TMT's investment consists of a US$350,000 subordinated secured
convertible promissory note in Graphicly.
21 Control
The Company is not controlled by any one party. Details of
significant shareholders are shown in the Directors' Report.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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