TIDMTMT
RNS Number : 8717M
TMT Investments PLC
30 August 2013
30 August 2013
TMT INVESTMENTS PLC
("TMT" or the "Company")
Half year report for the six months to 30 June 2013
TMT Investments PLC, which invests in high-growth,
internet-based companies across a variety of sectors, is pleased to
announce its unaudited interim results for the half year ended 30
June 2013.
Key highlights
-- A number of portfolio companies experiencing rapid growth
-- 2 successful cash/part-cash realisations (Socialize and
Todoroo/Astrid), with maximum potential internal rates of return
("IRR") of up to 28% and 57% respectively
-- A number of non-cash revaluations of portfolio companies,
including US$5 million (or 1,413%) increase in fair value of
investment in Wanelo
-- First impairment
-- 17% increase in the Company's NAV per share (from US$1.09 as
of 31 December 2012 to US$1.28 as of 30 June 2013)
-- US$1.12 million raised from new investors at US$1.50 per share
-- US$2 million of new investments
-- Buy-back of the Company's shares enhancing NAV per share
-- Three senior managers receiving all of their 2013 salaries in TMT shares rather than in cash
-- Well placed to capitalise on investment opportunities created
in the software applications, mobile apps, digital media and
internet sectors, with approximately US$3.8m in net cash
reserves
EXECUTIVE DIRECTOR'S STATEMENT
In the first half of 2013, the Company had a number of exciting
developments, overall contributing to a significant increase in its
net asset value.
Portfolio Performance
In the first half of 2013, the following revaluations took place
in the TMT portfolio:
Cash and part-cash exits:
-- In March 2013, the Company's portfolio company Socialize,
Inc., which generates greater user engagement and more downloads by
making mobile apps more social, was acquired by ShareThis, Inc.
("ShareThis"), a leading social media and sharing platform. 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. The
maximum potential consideration represents a premium of
approximately US$214,000 (or 43%) to the value of TMT's original
investment in Socialize made in December 2011.
-- In May 2013, the Company's portfolio company Todoroo, Inc.
("Astrid"), a leading online "to-do" manager, was acquired by
Yahoo! Inc. TMT's total maximum potential consideration for the
transaction is US$673,665, subject to deductions in the event of
breaches of certain representations and warranties by Astrid. The
maximum potential consideration represents a premium of
approximately US$273,000 (or 68%) to the value of TMT's original
investment in Astrid made in April 2012.
Non-cash revaluations and impairments:
-- In February 2013, the Company's portfolio company Gild, Inc.
("Gild"), which identifies and ranks outstanding IT programmers
through harnessing big data and its own proprietary algorithm,
completed a new equity financing round. The transaction represents
an uplift of approximately US$13,000 (or 15%) in the fair value of
TMT's investment in Gild, compared to the latest reported amount as
of 31 December 2012.
-- In June 2013, the Company's portfolio company rollApp, Inc.
("rollApp"), which delivers third-party software to any
web-browser-equipped device, completed the initial closing of a new
US$1,000,000 equity financing round. As part of the initial
closing, TMT acquired newly issued preferred shares in rollApp for
an aggregate consideration of US$50,000. The transaction represents
an uplift of approximately US$140,000 (or 39%) in the fair value of
TMT's investment in rollApp, compared to the latest reported amount
as of 31 December 2012.
-- In the first half of 2013, the Company's portfolio company
Wanelo, Inc. ("Wanelo"), the online social shopping community,
completed an equity financing round led by a number of prominent
investors. The transaction represents an uplift of approximately
US$5,000,000 (or 1,413%) in the fair value of TMT's investment in
Wanelo, compared to the latest reported amount as of 31 December
2012.
-- In the first half of 2013, the Company's portfolio company
Hotlist, Inc. ("Hotlist"), a mobile app for discovering events,
experienced significant difficulties. The Hotlist online service
and mobile applications have been suspended, and Hotlist is
currently in a dormant state. Under the circumstances, the Board of
TMT considered it prudent to incur an impairment charge equal to
100% of the fair value of and accrued interest on TMT's convertible
promissory note investment in Hotlist compared to the latest
reported amount as of 31 December 2012 (approx. US$415,000). TMT is
considering ways of recovering some of its investment in Hotlist,
but the amount is not expected to be significant.
New investments
In the first half of 2013, the Company invested US$1.9 million
in three new companies (Adinch Inc., a mobile advertising platform,
ShareThis Inc., and Graphicly Inc., an online publishing and
distribution platform), as well as an additional US$150,000 in two
existing portfolio companies (Tracks Media, a mobile photo-sharing
social network, and rollApp).
Buy-back of the Company's shares
On 4 June 2013, TMT agreed to purchase 636,363 ordinary shares
in the Company from one of the Company's shareholders at a price of
US$1.10 per share, at a cost of US$700,000. As the shares were
acquired at a discount to the Company's net asset value per share,
the purchase has contributed positively to the Company's NAV per
share. The acquired shares were subsequently cancelled, and the
Company does not hold any shares in treasury.
NAV per share
The Company's net asset value per share as of 30 June 2013
increased to US$1.28 (31 December 2012: US$1.09).
Operating Expenses
In the first half of 2013, the Company's Administrative Expenses
were generally in line with November-December 2012 levels. The only
reason for the significant increase in Operating Expenses in the
reporting period was due to the significantly higher Share Option
costs. These are a non-cash item resulting from the Company's share
option program adopted in October 2012.
Financial position
In March 2013 the Company raised US$1.12 million at US$1.50 per
share from a number of new investors. The Company's portfolio
realisations have also contributed to the Company's cash reserves.
Accordingly, despite the Company's recent share buy-back and
continuing new investments, the Company has approximately US$3.8
million in cash reserves.
Other developments: Changes to the UK Take-over Code
At present, TMT is not subject to the UK Take-over Code ("Code")
and the Company's shareholders do not currently benefit from the
protections it provides. However, at the time of TMT's admission to
AIM, certain provisions were incorporated into the Articles which,
to an extent, mirror certain provisions of the Code. As of 30
September 2013, all UK, Channel Island and Isle of Man incorporated
public companies which have securities admitted to trading on AIM
will be subject to the Code, irrespective of their place of central
management and control. As a result, TMT will be subject to the
Code from 30 September 2013 and will need to amend its Articles to
remove those provisions which would then conflict with the
provisions of the Code. The Company will therefore convene a
General Meeting to be held prior to 30 September 2013 to make the
necessary changes.
Outlook
Since 30 June 2013, the Company has invested US$200,000 in
KitApps Inc., as well as US$2.5 million in existing portfolio
company Backblaze, Inc., an online data backup provider.
We continue to have a strong pipeline of new investment
opportunities, and intend to complete a number of new and follow-on
investments by the end of 2013. With a number of our portfolio
companies experiencing rapid growth, we also expect a number of
revaluations of our investee companies.
We look forward to updating our shareholders on the Company's
progress in the near future.
Alexander Selegenev
Executive Director
30 August 2013
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
About TMT Investments
TMT Investments PLC invests in high-growth, internet-based
companies across a variety of sectors and has a significant number
of Silicon Valley investments in its portfolio. Founded in 2010,
TMT has raised USD28m and invested in 26 companies to date. The
company's objective is to generate an attractive rate of return for
shareholders, predominantly through capital appreciation. The
company is traded on the AIM market of the London Stock Exchange.
www.tmtinvestments.com
Statements of Comprehensive Income
For the six For the
months ended six months
30/06/2013 ended 30/06/2012
Notes USD USD
Gains/(losses) on investments 3 (173,528) 33,938
-------------------------------------------- ------ -------------- ------------------
Expenses
Share-based payment charge 13 (327,749) (4,210)
Administrative expenses 4 (649,772) (479,915)
-------------------------------------------- ------ -------------- ------------------
Operating loss (1,151,049) (450,187)
Net finance revenue 6 35,999 76,636
-------------------------------------------- ------ -------------- ------------------
Loss before taxation (1,115,050) (373,551)
Taxation - -
-------------------------------------------- ------ -------------- ------------------
Loss attributable to equity shareholders (1,115,050) (373,551)
Other comprehensive income/(loss) for
the period:
Change in fair value of available-for-sale
financial assets 5,164,448 (129,544)
-------------------------------------------- ------ -------------- ------------------
Total comprehensive income/(loss) for
the period 4,049,398 (503,095)
-------------------------------------------- ------ -------------- ------------------
Loss per share
Basic loss per share (cents per share) 7 (4.45) (1.57)
Diluted loss per share (cents per share) 7 (4.45) (1.57)
-------------------------------------------- ------ -------------- ------------------
Statements of Financial Position
At 30 June At 31 December
2013, USD 2012, USD
Non-current assets Notes
Investments in equity shares 8 21,658,623 15,434,540
Convertible notes receivable 8 3,296,666 3,691,691
------------------------------ ------ -------------------- ------------------------
Total non-current assets 24,955,289 19,126,231
Current assets
Trade and other receivables 9 306,477 203,988
Cash and cash equivalents 10 6,718,045 7,717,554
Total current assets 7,024,522 7,921,542
Total assets 31,979,811 27,047,773
Current liabilities
Trade and other payables 11 210,275 114,315
Total liabilities 210,275 114,315
------------------------------ ------ -------------------- ------------------------
Net assets 31,769,536 26,933,458
------------------------------ ------ -------------------- ------------------------
Equity
Share capital 12 26,595,179 26,136,248
Share-based payment reserve 14 447,512 128,183
Fair value reserve 14 7,169,676 2,005,228
Retained losses 14 (2,442,831) (1,336,201)
Total equity 31,769,536 26,933,458
------------------------------ ------ -------------------- ------------------------
Statements of Cash Flows
For the six For the six
months ended months ended
30/06/2013, 30/06/2012,
Notes USD USD
------------------------------------------------ ----- ------------- -------------
Operating activities
Operating loss (1,151,049) (450,187)
------------------------------------------------ ----- ------------- -------------
Adjustments for:
Profit on disposal of convertible
notes 8 (157,191) -
Investment impairment and interest
charges 415,936 -
Share-based payment charge 13 327,749 4,210
Amortized costs of convertible notes
receivable 8 20,044 20,335
------------------------------------------------ ----- ------------- -------------
(544,511) (425,642)
------------------------------------------------ ----- ------------- -------------
Changes in working capital:
Increase in trade and other receivables 9 (130,425) (40,341)
Increase/(decrease) in trade and
other payables 11 95,960 (10,701)
------------------------------------------------ ----- ------------- -------------
Net cash used by operating activities (578,976) (476,684)
------------------------------------------------ ----- ------------- -------------
Investing activities
Interest received 35,999 77,038
Purchase of available-for-sale assets 9 (1,521,970) (4,685,757)
Proceeds from sale of available-for-sale-assets 9 606,507 -
------------------------------------------------ ----- ------------- -------------
Net cash used by investing activities (879,464) (4,608,719)
------------------------------------------------ ----- ------------- -------------
Financing activities
Proceeds from issue of shares 12 1,158,930 6,500,001
Purchase of own shares (699,999) -
------------------------------------------------ ----- ------------- -------------
Net cash from financing activities 458,931 6,500,001
------------------------------------------------ ----- ------------- -------------
(Decrease)/increase in cash and cash
equivalents (999,509) 1,414,598
------------------------------------------------ ----- ------------- -------------
Cash and cash equivalents at the beginning
of the period 10 7,717,554 11,861,305
------------------------------------------------ ----- ------------- -------------
Cash and cash equivalents at the end
of the period 10 6,718,045 13,275,903
------------------------------------------------ ----- ------------- -------------
Statements of Changes in Equity
Share capital Share-based Fair value Retained Total equity
payment reserve losses
reserve
USD USD USD USD USD
Notes
------------------- ------ -------------- -------------- -------------- --------------- -------------
Balance at 1
January 2012 19,636,247 8,420 - (469,470) 19,175,197
------------------- ------ -------------- -------------- -------------- ---------------- -------------
Total
comprehensive
loss for the
period - - 2,005,228 (875,151) 1,130,077
------------------- ------ -------------- -------------- -------------- ---------------- -------------
Issue of shares 6,500,001 - - - 6,500,001
Share-based
payment charge - 128,183 - - 128,183
Lapse of share
options - (8,420) - 8,420 -
Balance at 1
January 2013 26,136,248 128,183 2,005,228 (1,336,201) 26,933,458
------------------- ------ -------------- -------------- -------------- ---------------- -------------
Total
comprehensive
loss for the
period - - 5,164,448 (1,115,050) 4,049,398
------------------- ------ -------------- -------------- -------------- ---------------- -------------
Issue of shares 14 1,158,930 - - - 1,158,930
Buy back and
cancellation of
shares 14 (699,999) - - - (699,999)
Share-based
payment charge 13 - 327,749 - - 327,749
Exercise of share
options 14 - (8,420) - 8,420 -
Balance at 30 June
2013 26,595,179 447,512 7,169,676 (2,442,831) 31,769,536
------------------- ------ -------------- -------------- -------------- ---------------- -------------
NOTES TO THE FINANCIAL INFORMATION FOR THE SIX MONTHS ENDED 30
JUNE 2013
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.
TMT is traded on the AIM market of the London Stock
Exchange.
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.
The financial information relating to the six months ended 30
June 2013 is unaudited and does not constitute statutory accounts.
The comparative figures for the financial year ended 31 December
2012 are not the Company's statutory accounts for that financial
year. Statutory accounts for the year ended 31 December 2012 were
approved by the Board of Directors on 29 April 2013. The report of
the auditors on those accounts was unqualified, did not include a
reference to any matters to which the auditors drew attention by
way of emphasis without qualifying their report and did not contain
any qualification.
These unaudited interim financial results were approved by the
Board of Directors on 30 August 2013 and are available on the
Company's website
http://www.tmtinvestments.com/investor-relations/financial-reports/.
2. Summary of significant accounting policies
2.1 Basis of presentation
The accounting policies applied by the Company in these
unaudited interim results are based on International Financial
Reporting Standards as adopted by the European Union, including IAS
34 'Interim Financial Reporting', and in accordance with the
accounting policies which the Company expects to adopt in its next
annual accounts for the year ending 31 December 2013 and are the
same as those applied by the Company in its financial statements
for the year ended 31 December 2012.
The Company's financial risk management objectives and policies
are consistent with that disclosed in the financial statements for
the year ended 31 December 2012.
For the purposes of IFRS 8 'Operating Segments' the Company
currently has one segment, being 'Investing in the TMT sector'. No
further operating segment financial information is therefore
disclosed.
2.2 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 half year
end exchange rates of monetary assets and liabilities denominated
in foreign currencies are recognised in the statement of
comprehensive income.
3 Gains/(losses) on investments
For the six months ended 30/06/2013 For the six months ended 30/06/2012
USD USD
------------------------------------------ ------------------------------------ ------------------------------------
Gross interest income from convertible
notes receivable 105,261 54,273
------------------------------------------ ------------------------------------ ------------------------------------
Amortized costs of convertible notes
receivable (20,044) (20,335)
------------------------------------------ ------------------------------------ ------------------------------------
Interest accrued (27,936) -
------------------------------------------ ------------------------------------ ------------------------------------
Net interest income from convertible
notes receivable 57,281 33,938
------------------------------------------ ------------------------------------ ------------------------------------
Profit on disposal of convertible notes 157,191 -
------------------------------------------ ------------------------------------ ------------------------------------
Impairment of available-for-sale assets (388,000) -
------------------------------------------ ------------------------------------ ------------------------------------
Total net (losses)/gains on investments (173,528) 33,938
------------------------------------------ ------------------------------------ ------------------------------------
4 Administrative expenses
Administrative expenses include the following amounts:
For the six months ended 30/06/2013 For the six months ended 30/06/2012
USD USD
------------------------- ------------------------------------ ------------------------------------
Staff expenses (note 5) 360,535 239,723
Professional fees 91,148 157,768
Rent 86,304 -
Other expenses 53,840 64,631
Legal fees 32,760 5,245
Bank and LSE charges 10,265 8,454
Accounting fees 7,487 3,000
Currency exchange loss 7,433 1,094
------------------------- ------------------------------------ ------------------------------------
649,772 479,915
------------------------- ------------------------------------ ------------------------------------
5 Staff expenses
For the six months ended 30/06/2013 For the six months ended 30/06/2012
USD USD
-------------------- ------------------------------------ ------------------------------------
Directors' fees 132,788 148,780
Wages and salaries 227,747 90,943
360,535 239,723
-------------------- ------------------------------------ ------------------------------------
Wages and salaries shown above include salaries and bonuses
relating to the six months ended 30 June. These costs are included
in administrative expenses. In addition to the above, there are
employment expenses for share-based payments of $327,749 (six
months ended 30 June 2012: $4,210).
On 6 December 2010, Alexander Selegenev, James Mullins, Petr
Lanin and on 6 June 2011, Yuri Mostovoy, entered into letters of
appointment with the Company whereby they agreed to provide
services to the Company in return for fixed fees. The Directors'
fees for six months ended 30 June 2013 and 2012 were as
follows:
For the six months ended 30/06/2013 For the six months
ended 30/06/2012
USD USD
--------------------- ------------------------------------ -------------------
Alexander Selegenev 54,478 69,569
Yuri Mostovoy 50,000 50,000
James Mullins 15,346 15,968
Petr Lanin 12,964 13,243
--------------------- ------------------------------------ -------------------
132,788 148,780
--------------------- ------------------------------------ -------------------
The Directors do not receive any pension contributions or other
benefits other than the share options that have been granted to the
directors that are disclosed in note 13.
6 Net finance costs
For the six months ended 30/06/2013 For the six months ended 30/06/2012
USD USD
----------------- ------------------------------------ ------------------------------------
Interest income 35,999 76,636
35,999 76,636
----------------- ------------------------------------ ------------------------------------
7 Loss per share
The calculation of basic earnings per share is based upon the
net loss for six months ended 30 June 2013 attributable to the
ordinary shareholders of US$1,115,050 (for six months ended 30 June
2012: net loss of US$ 373,551) and the weighted average number of
ordinary shares outstanding calculated as follows:
Loss per share For the six months ended 30/06/2013 For the six months ended 30/06/2012
------------------------------------------ ------------------------------------ ------------------------------------
Basic loss per share (cents per share) (4.45) (1.57)
Diluted loss per share (cents per share) (4.45) (1.57)
Net loss for the period, USD (1,115,050) (373,551)
------------------------------------------ ------------------------------------ ------------------------------------
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 period For the six months ended 30/06/2013 For the six months
outstanding) ended 30/06/2012
----------------------------------------------------------- ------------------------------------ -------------------
Weighted average number of shares in issue
Ordinary shares 25,040,269 23,852,044
23,852,044
----------------------------------------------------------- ------------------------------------ -------------------
Effect of dilutive potential ordinary shares
Share options 944,942 24,099
----------------------------------------------------------- ------------------------------------ -------------------
Weighted average of shares for the period (fully diluted) 25,985,211 23,876,143
----------------------------------------------------------- ------------------------------------ -------------------
The diluted loss per share for both 2013 and 2012 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.
8 Non-current financial assets
At 30 June 2013 At 31 December 2012
USD USD
----------------------------------- ---------------- --------------------
Investments in equity shares (i)
- unlisted shares 21,658,623 15,434,540
Convertible notes receivable (ii)
- promissory notes 3,296,666 3,691,691
----------------------------------- ---------------- --------------------
24,955,289 19,126,231
----------------------------------- ---------------- --------------------
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 2012 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
------------------------------------------------------------ ------------ ------------ ------------
Total gains or losses for the six months ended 30/06/2013:
- in profit or loss - (408,044) (408,044)
- in other comprehensive income 5,164,448 - 5,164,448
Purchases (including consulting & legal fees) 1,059,635 1,032,365 2,092,000
Disposal of investment - (1,019,346) (1,019,346)
Closing balance as at 30 June 2013 21,658,623 3,296,666 24,955,289
------------------------------------------------------------ ------------ ------------ ------------
(i) Breakdown of equity investments as at 30 June 2013:
Investee Date of Total cost Additions Amount of Changes in Total cost Proportion
company investment of to net capitalized value of of of equity
investment investment consulting investment, investment shares held
at 1 Jan during the and legal USD at 30 June at period
2013, period, services, 2013, end,%
USD USD USD USD
--------------- -------------- ------------- ------------ ------------ ------------- ------------- ------------
Unicell 15/09/2011 2,982,471 - - - 2,982,471 10.00
DepositPhotos 26/07/2011 5,063,023 - - - 5,063,023 30.00
RollApp 19/08/2011 360,000 50,000 3,080 136,920 550,000 10.00
Wanelo 21/11/2011 355,000 - - 5,014,400 5,369,400 4.71
Gild 05/12/2011 156,910 - - 13,128 170,038 1.31
1-Page 06/02/2012 305,367 - - - 305,367 6.09
ThusFresh 26/03/2012 510,000 - - - 510,000 7.71
Backblaze 24/07/2012 2,510,759 - 2,555 - 2,513,314 9.86
UsingMiles 23/08/2012 260,000 - - - 260,000 3.00
Gentoo LABS 17/09/2012 260,000 - - - 260,000 6.25
Favim Holding
Ltd 24/10/2012 305,050 - - - 305,050 20.00
Appsinder
Limited 12/11/2012 1,863,685 - - - 1,863,685 19.24
Virool Inc 29/08/2012 502,275 - - - 502,275 1.69
Adinch Inc 19/02/2013 - 1,000,000 4,000 - 1,004,000 20.00
Total 15,434,540 1,050,000 9,635 5,164,448 21,658,623 -
------------------------------- ------------- ------------ ------------ ------------- ------------- ------------
(ii) Breakdown of convertible loan notes as at 30 June 2013:
Investee Date of Total cost Additions Amount of Amount of Impairment Disposals, Total Term, Inte-rest
company purchase of to net capitalized amortized charge, USD investment, years rate,%
investment investment consulting costs, USD USD
as at 1 during the and legal USD
Jan 2013, period, services,
USD USD USD
------------ ---------- ----------- ----------- ------------ ---------- ----------- ------------ ------------ ------ ----------
Socialize 19/12/11 494,644 - - (2,329) - (492,315) - 2 6.00%
Tracks
Media 24/11/11 444,787 100,000 720 (4,895) - - 540,612 2 5.00%
Ninua 08/06/11 504,544 - - (3,004) - - 501,540 1.5 5.00%
PeekYou* 03/11/11 122,378 - - 1,293 - (123,671) - 1 5.00%
Todoroo/
Astrid 12/04/12 400,000 - 3,360 - - (403,360) - 1 8.00%
Hotlist 18/04/12 393,030 - - (5,030) (388,000) - - 1 6.00%
Wrike 12/06/12 1,003,363 - 1,255 (3,116) - - 1,001,502 1 8.00%
Pipedrive 30/07/12 328,945 - - (1,240) - - 327,705 2 2.00%
Sharethis,
Inc 26/03/13 - 570,030 2,000 (105) - - 571,925 5 1.09%
Graphicly,
Inc 03/04/13 - 350,000 5,000 (1,618) - - 353,382 0.7 6.00%
Total 3,691,691 1,020,030 12,335 (20,044) (388,000) (1,019,346) 3,296,666 -
------------------------ ----------- ----------- ------------ ---------- ----------- ------------ ------------ ------ ----------
* In May 2013, the Company agreed with its portfolio company
PeekYou LLC ("PeekYou") that the entire principal of the Company's
convertible note in PeekYou, together with all applicable interest,
will be repaid to TMT in monthly tranches by 1 December 2013.
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 they are
measured at cost less any identified impairment losses at the end
of reporting period, in accordance with IAS 39 para 46 (c)
exemption.
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.
9 Trade and other receivables
At 30 June 2013 At 31 December 2012
USD USD
----------------------------------------- ---------------- --------------------
Prepayments 29,408 25,029
Interest receivable on promissory notes 169,528 171,910
Interest receivable on deposit 5,834 7,049
Short-term notes receivables 101,707 -
----------------------------------------- ---------------- --------------------
306,477 203,988
----------------------------------------- ---------------- --------------------
10 Cash and cash equivalents
The cash and cash equivalents as at 30 June 2013 include cash on
hand and in banks, deposits, net of outstanding bank overdrafts.
The effective interest rate at 30 June 2013 was 1.40%.
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 30 June 2013 At 31 December 2012
USD USD
--------------- ---------------- --------------------
Deposits 5,000,000 5,000,000
Bank balances 1,718,045 2,717,554
--------------- ---------------- --------------------
6,718,045 7,717,554
--------------- ---------------- --------------------
The following table represents an analysis of cash and
equivalents by rating agency designation based on Fitch rating or
their equivalent as at 30 June
At 30 June 2013 At 31 December 2012
USD USD
--------------- ---------------- --------------------
Bank balances
A rating 1,718,045 2,717,554
--------------- ---------------- --------------------
1,718,045 2,717,554
--------------- ---------------- --------------------
Deposits
A rating 5,000,000 5,000,000
--------------- ---------------- --------------------
5,000,000 5,000,000
--------------- ---------------- --------------------
11 Trade and other payables
At 30 June 2013 At 31 December 2012
USD USD
-------------------------------------- ---------------- --------------------
Salaries and directors' fees payable 173,213 40,475
Trade payables 35,802 53,625
Other current liabilities 1,260 25
Accrued expenses - 20,190
-------------------------------------- ---------------- --------------------
210,275 114,315
-------------------------------------- ---------------- --------------------
12 Share capital
On 30 June 2013 the Company had an authorised share capital of
unlimited shares of no par value and had issued share capital
of:
As at 30 As at 31 December 2012
June 2013
USD USD
---------------------------- ----------- -----------------------
Share capital 26,595,179 26,136,248
Issued capital comprises: Number Number
Fully paid ordinary shares 24,790,228 24,642,860
---------------------------- ----------- -----------------------
Number of shares Share
capital
USD
--------------------------------- ----------------- -----------
Balance at 31 December 2012 24,642,860 26,136,248
Issue of shares 783,731 1,158,930
Share buy-back and cancellation (636,363) (699,999)
Balance at 30 June 2013 24,790,228 26,595,179
--------------------------------- ----------------- -----------
13 Share-based payments
For the six months ended 30/06/13 For the six months ended 30/06/12
USD USD
-------------------------------------- ---------------------------------- ----------------------------------
Share option (compensation expenses) 327,749 4,210
-------------------------------------- ---------------------------------- ----------------------------------
Total share-based payment charge 327,749 4,210
-------------------------------------- ---------------------------------- ----------------------------------
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
Option life, years 1-3
Exercise price US$1.00
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.
33,333 options that vested to Mr. Selegenev in the year ended 31
December 2012 were exercised. The exercise price is US$1.00 per
ordinary share in accordance with conditions of option agreement.
The share price on the date of exercise was USD1.7925.
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 per cent) Options granted to
Alexander Selegenev
---------------------------------------------------- ---------------------
Share price at grant date $1.03
Exercise price $1.00
Expected volatility, per cent 7.56%
Option life, years 1-3
Risk free interest rate, per cent 3.14%
---------------------------------------------------- ---------------------
Expected volatility is estimated by considering the Company's
data on AIM.
On 24 October 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 then issued
share capital (or 23% of the enlarged share capital at the time,
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 (Employee) 1,125,000 US$1.40 US$1.55 US$1.70
Alexander Morgulchik
(Employee) 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.
14 Reserves
Share based payment reserve Fair value reserve Retained losses Total
USD USD USD USD
----------------------------------- ---------------------------- ------------------- ---------------- ------------
Balance as at 1 January 2012 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
-----------------------------------
Loss for the year - - (1,115,050) (1,115,050)
Gain from changes in fair value
transferred to equity - 5,164,448 - 5,164,448
Share based payment charge 327,749 - - 327,749
Transfer on exercise of share
options (8,420) - 8,420 -
----------------------------------- ---------------------------- ------------------- ---------------- ------------
Balance as at 30 June 2013 447,512 7,169,676 (2,442,831) 5,174,357
----------------------------------- ---------------------------- ------------------- ---------------- ------------
15 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
16.13% 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 paid to Orgtekhnika started at the rate
of US$700 per sq meter per year of space utilised and is currently
at the same level. The board believes this represents a discount
from the prevailing market rate for similar office space in Moscow
and that the terms of the rental agreement are fair and reasonable
insofar as TMT shareholders are concerned. Together with other
related expenses (support personnel, company car, security
services, legal services, etc.), the total costs to TMT were
US$19,704 per month (US$236,448 per year). These totalled
US$112,904 for the six months ended 2013 and are included under
administrative expenses.
16 Subsequent events
On 2 July 2013, the outstanding principal and unpaid accrued
interest of the Company's convertible promissory note in Wrike,
Inc. ("Wrike"), an online project management software provider,
amounting to US$1,080,000 was converted into Wrike's common shares.
As a result, TMT currently owns 6.32% of Wrike's fully diluted
equity capital.
On 10 July 2013, TMT completed an investment in KitApps, Inc
("Attendify"). TMT's investment consists of a US$200,000 unsecured
convertible promissory note in Attendify, which enables event
planners to create fully customized mobile apps for conferences,
tradeshows, exhibitions and other types of events.
On 26 July 2013, TMT completed an additional US$2.5 million
equity investment in Backblaze, Inc. As a result, TMT currently
owns 18.03% of Backblaze's fully diluted equity capital.
On 20 August 2013, as part of a mutually agreed recapitalization
program, in which all promissory note holders have agreed to
convert their notes into equity, the outstanding principal of the
Company's convertible promissory notes in Tracks Media, Inc.
("Tracks"), amounting to US$536,500 was converted into Tracks's
common shares. Post-conversion, TMT will own 8.545% of Tracks's
fully diluted equity capital. As part of the recapitalisation, all
the outstanding accrued interest on the convertible notes has been
waived.
On 28 August 2013, the Company's portfolio company Graphicly,
Inc. ("Graphicly") has completed the initial closing of a new
equity financing round. According to the terms of the Company's
convertible promissory note in Graphicly (the "Note"), the
outstanding principal and unpaid accrued interest of the Note
amounting to US$358,458 was converted into Graphicly's preference
shares. After the new equity financing round is completed, TMT will
hold approximately 8.47% of Graphicly's fully-diluted equity
capital. The transaction represents an uplift of approximately
US$130,000 (or 36%) in the fair value of TMT's original investment
in Graphicly.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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