RNS Number:7661X
Shariah Capital, Inc
05 June 2007
Shariah Capital Inc. ("Shariah Capital" or "the Company")
Final Results for the period ended 31 December 2006
Chairman's Statement
This is the first set of final results since Shariah Capital's shares were
admitted to the Alternative Investment Market on 13 December 2006.
Shariah Capital is a U.S.-based company that builds Shariah compliant financial
products, provides Shariah compliant consulting and advisory services as well as
Shariah compliant screening software tools. The Company's unique solutions for
short-sales, options and balance sheet leverage enable financial institutions
and investment firms with product platforms to directly market to Islamic
investors. We are pleased to report on the progress made during the period and
to date.
Shariah Capital made considerable progress in the period under review,
culminating with the successful admission of the Company's shares to the
Alternative Investment Market in December 2006. This event marked a significant
strategic milestone, raising Shariah Capital's profile and enabling
international investors to become shareholders in a firm dedicated to
engineering Shariah compliant products.
Since the period end, Shariah Capital has announced, in collaboration with GRT
Capital Partners, a multi-strategy investment adviser, the launch of a unique
Shariah-compliant managed account, with Barclays Capital acting as sole prime
broker for the new account. We believe the account structure and launch with
Barclays Capital represent significant milestones in the Islamic Finance and
alternative investment world.
Furthermore, in May 2007 Shariah Capital announced that it had been granted a
license to operate in the Dubai International Financial Centre (DIFC), which we
view as a further significant strategic development, now enabling Shariah
Capital to operate under regulations in Dubai as well as in the United States
and the United Kingdom.
We continue to be encouraged by the demand for Shariah compliant products and
the opportunities presented for Shariah Capital in the future.
For further information, please contact: Bill Redman bredman@shariahcap.com
Eric Meyer
Chairman and Chief Executive Officer
Shariah Capital, Inc.
125 Elm Street
New Canaan, Connecticut 06340
United States of America
Telephone: +1 (203) 972-0331
Facsimile: +1 (203) 972-0229
emeyer@shariahcap.com
www.shariahcap.com
Emirates Towers - 42nd Floor
Suite 4230
Sheikh Zayed Road
P.O. Box 31303
Dubai, United Arab Emirates
Telephone: +971 4 319 9199
Facsimile: +971 4 319 747
Shariah Capital, Inc.
(formerly Meyer Fund Management, LLC)
Balance Sheet
December 31, 2006
-------------------------------------- ------------
Assets
Cash $1,093,734
Certificates of deposit 3,517,817
Due from related parties (Note 2) 29,097
Prepaid expenses and other current assets 91,589
Property and equipment-net (Note 3) 6,223
-------------------------------------- ------------
Total assets $4,738,460
-------------------------------------- ------------
Liabilities and Stockholders' Equity
Accounts payable $ 9,446
Accrued expenses and other current liabilities 568,171
-------------------------------------- ------------
Total liabilities 577,617
-------------------------------------- ------------
Commitments (Note 4)
Stockholders' equity:
Common stock, $.01 par value, 70,000,000 shares authorized;
58,440,600 shares issued and outstanding 584,406
Additional paid in-capital 4,164,899
Retained deficit (588,462)
-------------------------------------- ------------
Total stockholders' equity 4,160,843
-------------------------------------- ------------
Total liabilities and stockholders' equity $4,738,460
-------------------------------------- ------------
See accompanying significant accounting policies and
notes to financial statements.
Shariah Capital, Inc.
(formerly Meyer Fund Management, LLC)
Statement of Operations
December 31, 2006
-------------------------------------- ------------
Revenues
Consulting $ 222,500
Interest income 30,328
Rental income (Note 4) 19,500
Conference attendee and sponsorship 18,868
-------------------------------------- ------------
Total revenues $ 291,196
-------------------------------------- ------------
Expenses
General and administrative expenses (Notes 3 and 4) $ 885,726
Consultant expenses 31,431
Conference hosting expenses 15,107
Interest expense 3,120
-------------------------------------- ------------
Total expenses $ 935,384
-------------------------------------- ------------
Net loss $ (644,188)
-------------------------------------- ------------
Earnings (loss) per share, basic and diluted $ (.01)
-------------------------------------- ------------
Weighted average shares outstanding, basic and diluted 50,886,497
-------------------------------------- ------------
See accompanying significant accounting policies and
notes to financial statements.
Shariah Capital, Inc.
(formerly Meyer Fund Management, LLC)
Statement of Changes in Stockholders' Equity
Year ended
December 31, 2006
--------------- ---------------- --------- ---------- ---------
Common Stock Additional Retained
Shares Amount paid-in capital Earnings/ (Deficit) Total
--------------- --------- --------- --------- ---------- ---------
Balance at
December 31,
2005 - $ - $ - $ 55,726 $ 55,726
Shares issued
(Note 1) 5,550,000 55,500 5,494,500 - 5,550,000
Shares issued
in lieu of
payment for
services (Note
1) 190,600 1,906 188,694 - 190,600
Conversion of
Meyer Fund
Management LLC
membership
interests to
common stock 50,000,000 500,000 (500,000) - -
Restricted
stock
compensation
expense
(Note 6) - - 72,329 - 72,329
Issuance of
restricted
common stock 2,700,000 27,000 (27,000) - -
AIM offering
expenses - - (1,063,624) - (1,063,624)
Net loss - - - (644,188) (644,188)
--------------- --------- --------- --------- ---------- ---------
Balance at
December 31,
2006 58,440,600 $ 584,406 $ 4,164,899 $ (588,462) $ 4,160,843
--------------- --------- --------- --------- ---------- ---------
See accompanying significant accounting policies and
notes to financial statements.
Shariah Capital, Inc.
(formerly Meyer Fund Management, LLC)
Statement of Cash Flows
(Note 5)
For the year ended December 31, 2006
--------------------------------------- ----------
Cash flows from operating activities:
Net loss $ (644,188)
Adjustments to reconcile net loss to net cash provided by
operating activities:
Common stock issued in lieu of payment for services 190,600
Stock compensation expense 72,329
Depreciation and amortization 1,251
Changes in operating assets and liabilities:
Prepaid expenses and other current assets (82,920)
Deferred revenue (25,000)
Accounts payable (2,831)
Accrued expenses and other current liabilities 520,464
--------------------------------------- ----------
Net cash provided by operating activities 29,705
--------------------------------------- ----------
Cash flows used in investing activities:
Purchase of certificate of deposit (3,517,817)
Purchase of property and equipment (2,259)
--------------------------------------- ----------
Net cash used in investing activities (3,520,076)
--------------------------------------- ----------
Cash flows from financing activities:
Proceeds from sale of common stock, net of AIM expenses 1,936,376
Proceeds from bridge loan 1,200,000
Proceeds from issuance of common stock to investee 1,350,000
Due from related parties (18,000)
--------------------------------------- ----------
Net cash provided by operating activities 4,468,376
--------------------------------------- ----------
Net increase in cash 978,005
--------------------------------------- ----------
Cash, beginning of period 115,729
--------------------------------------- ----------
Cash, end of period $ 1,093,734
--------------------------------------- ----------
See accompanying significant accounting policies and
notes to financial statements.
Shariah Capital, Inc.
(formerly Meyer Fund Management, LLC)
Summary of Significant Accounting Policies
The Company and Nature of Shariah Capital, Inc. ("the Company") was formed on
Operations September 6, 2006 as a Delaware Corporation. The Company
is a multi-dimensional company that creates
Shariah-compliant financial products and services under
its own brand name, under co-branding arrangements with
joint venture partners or on a private label basis. The
Company's targeted clients are financial institutions
and investment management firms that are building
product platforms primarily directed to the Middle East
and Far East and, specifically to, Islamic institutional
and high net worth investors. The firm also is exploring
and expects to pursue a number of business opportunities
with financial and investment firms in Europe, Asia and
the United States.
On September 26, 2006, the Company increased the
authorized shares of common stock that it may issue to
70,000,000 shares.
On November 8, 2006, the Company acquired the assets and
liabilities of Meyer Fund Management, LLC ("Meyer"), the
predecessor Company. The existing members of Meyer were
given 50,000,000 shares of common stock in the Company,
based on their existing percentage holdings in Meyer.
The merger was accounted for as entities under common
control, whereby the Company recognized the assets and
liabilities of Meyer at their carryover basis as of the
date of the merger. Accordingly, the accompanying
financial statements present the operations of both
Meyer Fund Management, LLC and Shariah Capital, Inc.
Post merger, Meyer has since been dissolved.
Revenue Recognition The Company recognizes revenue in the month when the
services are provided.
Property, Equipment and Property and equipment are stated at cost. Depreciation
Depreciation and amortization are provided principally on the
straight-line method over the estimated useful lives.
Fully depreciated assets are written off in the year
following its last depreciation charge. The estimated
useful lives of the computer equipment is 5 years.
Cash and cash equivalents Cash and cash equivalents consist of short term highly
liquid investments purchased with original maturities of
three months or less and are readily convertible into
cash.
Concentration of Credit The Company maintains cash balances with a financial
Risk institution. The balance in this account at this
institution at times maybe in excess of the FDIC insured
limit. The Company has not expensed any losses on such
accounts.
Additionally, the Company maintains a brokerage account
with a financial institution. The balance in this
account at this institution at times may be in excess of
the SIPC insured limit. The Company has not expensed any
losses on such accounts.
Advertising The Company expenses advertising costs as they are
incurred.
Income Taxes On September 6, 2006, Shariah Capital, Inc. was
incorporated in Delaware as a C Corp. under the
provisions of the Internal Revenue Code. The Company is
responsible for minimum taxes to the States of Delaware
and Connecticut. Due to the current year loss, no income
tax provision has been made in the accompanying
financial statements and only the required minimum and
capital taxes have been provided for.
The Company accounts for income taxes in accordance with
Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes." Under this method,
deferred income taxes are recognized for the tax
consequences of "temporary differences" by applying
statutory tax rates expected to be applicable in future
years to differences between the financial statement
carrying amounts and the tax bases of existing assets and
liabilities.
A valuation allowance reduces deferred tax assets when it
is more likely than not that some or all of the deferred
tax assets will not be realized. (See Note 7.)
Use of Estimates The preparation of financial statements in conformity
with generally accepted accounting principles requires
management to make estimates and assumptions that affect
the reported amounts of assets and liabilities at the
date of the financial statements and the reported amounts
of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Earnings (loss) per share Basic earnings (loss) per share is computed by dividing
net income (loss) by the weighted average common shares
outstanding. Diluted earnings (loss) per share is
computed by dividing net income (loss) by the weighted
average common shares outstanding adjusted for
incremental dilution of potentially dilutive securities.
There were no potentially dilutive securities in 2006.
Shariah Capital, Inc.
(formerly Meyer Fund Management, LLC)
Notes to Financial Statements
1. Private On September 1, 2006, the Company entered into a "Master
Placement and Participation Agreement" with numerous individuals and
Recapitalization entities. These participants funded the Company in the
aggregate of $1.2 million. The funding provided working
capital to the Company and to fund costs and expenses
related to having its common stock admitted for trading on
the London Alternative Investment Market (the "AIM") on
terms and conditions as defined in the Agreement. On
December 13, 2006, the Company started publicly trading on
the AIM under the ticker symbol ("SCAP"). In total, the
Company raised $5,740,600, of which $1,200,000 was raised
from the bridge loan per the Master Participation
Agreement, $3,000,000 as part of the private placement,
and the remaining $1,540,600 raised from an investee (AIM
representative). Included in the funds raised are shares
issued in lieu of payment for professional services that
amounted to $190,600. Total costs incurred amounted to
approximately $1,064,000.
2. Related Party As of December 31, 2006, the Company had a receivable from
Transactions the President in the amount of $30,000. The amount was
paid in January 2007. As of December 31, 2006, the Company
had a payable to the President in the amount of $903. The
amount was paid in January 2007.
3. Property and Property and equipment - net, held and used at December
Equipment - net 31, 2006 consists of the following:
2006
--------------------------------------------------------------------------------
Computer equipment $8,449
--------------------------------------------------------------------------------
Less: Accumulated depreciation 2,226
and amortization
--------------------------------------------------------------------------------
$6,223
--------------------------------------------------------------------------------
Depreciation expense amounted to $1,251 for the year ended
December 31, 2006 and is included in general and administrative
expenses.
4. Commitments Operating Leases
The Company is a party to an operating lease agreement relating
to the rental of its corporate office that expires on August
31, 2007, with an annual base rent of approximately $72,000.
The lease also includes a provision to pay additional rent for
their proportionate share of utilities of approximately $1,600
per month over the lease term. Rent expense amounted to
approximately $92,887 for the year ended December 31, 2006 and
is included in general and administrative expenses. The Company
sublets a portion of this corporate office on a month-to-month
basis to two tenants. Rental income amounted to approximately
$19,500 for the year ended December 31, 2006.
The Company is also a party to a month-to-month operating lease
agreement relating to the rental of corporate office space in
Dubai, that commenced in April 2007.
The minimum rental commitments required under these operating
leases after December 31, 2006 are as follows:
Year ended December 31,
--------------------------------------------------------------------------------
2007 $48,000
Employment The Company entered into employment agreements with its
Agreements management employees effective December 7, 2006 whereby
annual salaries aggregate $1,050,000. The agreements provide
for 6 to 12 months notice of termination and provide for the
annual salaries to be paid through the termination date. In
addition, the agreement with the Chairman and Chief
Executive Officer of the Company provides for a $650,000
termination fee.
Non Executive Effective December 6, 2006, the Company entered into a Non
Director Executive Director Service Agreement whereby the individual
Service will serve as the Chairman of the audit, nomination and
Agreement compensation committees of the board of directors for an
annual fee of $32,500. The term of the agreement shall be
for a period of not less than six months unless notice is
given in writing by either party to terminate the agreement.
5. Supplemental Supplemental disclosures of cash flow information are as
Disclosures of follows:
Cash Flow
Information
Year ended
December 31, 2006
--------------------------------------------------------------------------------
Cash paid during the year for interest $ 3,120
Non cash financing transaction:
Contribution of services in exchange for common stock $ 190,600
Conversion of bridge loan into common stock $ 1,200,000
--------------------------------------------------------------------------------
6. Shared Based In December 2004, the Financial Accounting Standards Board
Compensation ("FASB") issued SFAS 123R, "Share-based Payment," a revision
of SFAS 123 which supersedes APB 25 "Accounting for Stock
Issued to Employees". The Company adopted SFAS 123R using the
modified prospective application. Under this method,
compensation cost is recognized for all shared-based payments
granted, modified, or settled after the date of adoption as
well as for any unvested awards that were granted prior to the
date of the adoption.
The Company granted 2,700,000 shares of restricted stock on
December 7, 2006 to several of its employees. These 2006
restricted stock grants vest over a period of three years.
Under the provisions of SFAS 123R, share-based compensation
cost is measured at the grant date, based on the calculated
fair value of the award, and is recognized as an expense over
the employee's requisite service period, which is the vesting
period of the grant. Accordingly, compensation expense of
$72,329 was recorded for the year ended December 31, 2006 in
connection with the restricted stock grants and is included in
general and administrative expenses. Additional compensation
expense costs amounting to $1,073,699, $713,151, and $840,822
will be recognized over the next three years.
7. Income Taxes The Company has net operating loss carry forwards of
approximately $1,100,000 available to reduce any future income
taxes, expiring at various times from 2025 to 2026. The tax
benefit of these losses and other temporary differences amount
to approximately $469,000, has been fully offset by a
valuation allowance due to the uncertainty of its realization.
Please be advised that the pages herewith provided from the financial statements
are just an extract. Full sets are available upon request.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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