TIDMSCAP
RNS Number : 7022O
Shariah Capital, Inc
22 September 2011
September 22, 2011
Shariah Capital Inc. ("Shariah Capital" or the "Company")
Interim Results
The Board of Shariah Capital announces the Company's interim
results for the six-month period ending 30 June 2011.
Shariah Capital is a U.S.-based company that creates and
customizes Shariah compliant financial products and platforms and
provides Shariah consulting and advisory services primarily to
financial institutions and investment firms with product
initiatives directed to Islamic investors.
First Half 2011 Review
During the first half of 2011 the Company focused on its core
business relationships with the Al Safi Trust, the Dubai Multi
Commodities Centre Authority (DMCCA) and the Company's joint
venture entity with the DMCCA, Dubai Shariah Asset Management, Ltd
(DSAM). Notable achievements were as follows:
-- With the DMCCA, the Company approved a business plan and
budget for the period to 30 June 2012 for the continuation of its
Middle East North Africa (MENA) retail and institutional sales and
marketing effort. This plan now calls for the specific deployment
of a retail focused sales effort for several of the award winning
DSAM Kauthar Funds. Modifications to documentation, reflecting the
specific needs of retail, are now underway.
-- DMCCA reconfirmed its commitment to the DSAM Kauthar Funds
and agreed to extend its lock up of a minimum of $62,000,000 of
seed capital in the Funds until at least 30 June 2012. Assets under
management in the DSAM Kauthar Funds stood at approximately
$119,000,000 at 30 June 2011.
-- The Company realigned its sales support and sales effort to
DSAM's base in Dubai.
-- DSAM engaged its first United Arab Emirates channel partner
for the sale of its Funds on a retail level.
-- The Company prudently realigned costs and obligations against
the backdrop of a decline in assets, continuing aversion to risk by
investors, and the sustained global economic downturn.
-- The Company continued to be exceedingly careful in the
management of its cash reserves. The Company's cash reserves
(excluding accrued fees payable to the Company) were $4,225,207 at
30 June 2011.
By joint decision of DMCCA and the Company, the determination
was made to close the DSAM Kauthar Natural Resources Fund during
the third quarter of 2011. In connection with that closure, the
DMCCA will redeem approximately $14,200,000 from the DSAM Kauthar
Natural Resources Fund.
Our remaining commodity-focused DSAM Kauthar Funds continued to
garner accolades. For example, Barclay Hedge ranked the DSAM
Kauthar Gold Fund in its Top Ten of Metals & Mining Hedge Funds
for 11 of the past 12 months ending 30 June 2011 and our DSAM
Kauthar Energy Fund in its Top Ten of Energy Hedge Funds for 1 of
the past 12 months as well. Additionally, the DSAM Kauthar Gold
Fund was awarded the Outstanding Performance and Innovation Award
at the MENA Fund Manager Performance Awards in Dubai. Barclay Hedge
awards investment funds an outstanding performance certificate
based on their net returns on a monthly and yearly basis. All three
DSAM Kauthar Funds have received either monthly or yearly
certificates for superior net returns during the first half of
2011.
While the Company was pleased with its continuing and
collaborative relationship with the DMCCA, its new retail approvals
and focus, its strategic new hires, as well as the recognition from
our DSAM Kauthar Funds' success, the ongoing global economic
turbulence continued to negatively impact both the Company and its
business partners in the first half of 2011. Investors in the MENA
region, like investors in the West, remained cautious and executed
redemptions from equity investments.
The Company continued to address the above circumstances by
maintaining strict cost and expense controls. These controls
resulted in reduced expenditures for the Company year-on-year of
$124,272. Further cost reductions are anticipated in the second
half of 2011. Despite challenges on many fronts, the Company is
pleased with its expanding relationship with the DMCCA and as such
the Board supports management's new focus on a retail strategy for
2011 through its commitment of resources to its DSAM joint
venture.
Personnel
In April of 2011, Shaykh Yusuf Talal DeLorenzo (an officer and
director of the Company) departed the Company. Early in the third
quarter of 2011 the Company hired an individual to support the new
retail sales efforts. As a result of the Company's increased UAE
focus the Company anticipates at least one other senior executive
and director will depart in the third quarter of 2011.
Financial Review
During the six months ended 30 June 2011, Shariah Capital
realized a net loss of $158,467 compared to a loss of $62,685 for
the same period in 2010.
The Company generated first half 2011 revenues of $629,361
compared to $706,189 for the first half of 2010, the result of fee
income principally from its Al Safi Trust and DSAM investment
products. Expenses decreased to $734,026 for the first half of
2011, compared to expenses of $858,298 for the corresponding period
in 2010.
Earnings per share for the six-month period ending 30 June 2011
showed a loss of less than $0.01, as compared to a loss of less
than $0.01 for the same period in 2010.
Liquidity and Capital Resources
The Company reduced spending and diligently worked to conserve
cash during the first half of 2011. As at 30 June 2011, the Company
maintained cash, cash equivalents and fee receivables of over
$4,500,000. Management believes that the Company's assets are
adequate to fulfill existing commitments and pursue additional new
business opportunities for the foreseeable future. Unless an
opportunity to acquire or participate in a business presents
itself, management has no current intentions of seeking a capital
raise.
Outlook
Against the backdrop of global economic uncertainty, the Company
does not expect a dramatic change in the cautious mood of Gulf
investors toward alternative investments during the second half of
2011. However, the Company does see signs of investor interest,
especially on a retail level, for the DSAM Kauthar Gold and Energy
Funds. As a result, the Company will actively support the retail
initiative of DSAM Kauthar Energy and Gold Funds. We are
consciously increasing our visibility, sales efforts, and sales
presence in Dubai and the greater MENA region. We are committing
with our partner, the DMCCA, to expand our business through new
retail channel partners and/or solutions rather than rely solely on
the institutional market. As equity investors make allocations, we
want these investors to know that we have stayed the course,
strengthened our DMCCA relationships, bolstered our support, moved
to a retail solution, and provided world class managers with award
winning returns all throughout these challenging times.
As always, we are sincerely grateful to our shareholders for
their continued support.
Eric Meyer
Chairman and CEO
Enquiries:
Eric Meyer
Chairman and Chief Executive Officer
Shariah Capital, Inc.
Telephone: +1 (203) 972-0331
emeyer@shariahcap.com
Investec Investment Banking
Martin Smith
+44 207 597 5177
SHARIAH CAPITAL
BALANCE SHEETS
June 30, 2011 2010
---------------------------------------------- ------------ ------------
ASSETS
Current assets
Cash and cash equivalents $ 4,225,207 $ 4,615,588
Fees receivable 351,467 306,059
Due from related parties 153,313 399
Prepaid expenses and other current assets 155,749 107,950
Investment in DSAM Joint Venture - 172,113
Total current assets 4,885,736 5,202,109
Property and equipment, net 6,327 8,145
------------ ------------
$ 4,892,063 $ 5,210,254
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued expenses $ 212,706 $ 134,027
Due to related party - 3,501
Investment in DSAM Joint Venture 54,547 -
------------ ------------
Total current liabilities 267,253 137,528
------------ ------------
Stockholders' equity
Common stock, $.01 par value, 70,000,000
shares
authorized; 61,744,132 shares issued;
60,970,232 and 61,670,232
shares outstanding at June 30, 2011 and
2010, respectively 617,441 617,441
Additional paid-in capital 12,587,777 12,585,957
Accumulated deficit (8,475,065) (8,025,329)
Treasury stock at cost, 73,900 shares at
June 30, 2011 and 2010 (105,343) (105,343)
------------ ------------
Total stockholders' equity 4,624,810 5,072,726
------------ ------------
$ 4,892,063 $ 5,210,254
See accompanying footnotes to financial statements
SHARIAH CAPITAL
Periods Ended June 30, 2011 2010
------------------------------------------------ ----------- -----------
Revenue
Advisory fee income $ 421,863 $ 661,191
Consulting fee income 207,498 44,998
----------- -----------
Total revenue 629,361 706,189
----------- -----------
Expenses
Payroll and employee benefits 413,945 465,302
AIM expenses 44,670 41,648
Bad debt expense (20,416) -
Computer expenses 8,715 14,050
Depreciation 1,290 1,254
Insurance 30,089 29,965
Marketing 8,000 8,000
Office expense and supplies 3,254 7,916
Professional fees and other 167,901 207,837
Registrar fees 17,022 5,191
Rent 36,900 38,025
Other taxes 13,380 22,270
Stock-based compensation 48 2,172
Telephone 4,303 4,608
Travel and entertainment 4,925 10,060
----------- -----------
Total expenses 734,026 858,298
----------- -----------
Loss from operations (104,665) (152,109)
Other income
Interest and dividend income 18,718 23,831
Income (loss) attributable to unconsolidated
joint venture (72,520) 65,593
----------- -----------
Net loss $ (158,467) $ (62,685)
Loss per share, basic and diluted $ 0.00 $ 0.00
Weighted average shares outstanding, basic
and diluted 60,344,132 60,344,132
STATEMENT OF OPERATIONS
See accompanying footnotes to financial statements
SHARIAH CAPITAL
STATEMENT OF CASH FLOWS
Periods Ended June 30, 2011 2010
-------------------------------------------------- ---------- ----------
Cash flows from operating activities
Net loss $ (158,467) $ (62,685)
Adjustments to reconcile net loss to net
cash
used in operating activities:
Stock-based compensation 48 2,172
(Income) loss attributable to unconsolidated
joint venture 72,520 (65,593)
Depreciation 1,290 1,254
Bad debt expense (20,416)
Changes in operating assets and liabilities:
Fees receivable (128,294) 128,673
Due from related parties 7,327 111,128
Due to related party (8,425) 3,501
Prepaid expenses and other current assets 57,677 (79,910)
Accounts payable and accrued expenses 83,586 30,494
---------- ----------
Net cash used in operating activities (93,154) 69,034
---------- ----------
Cash flows from investing activities
Redemptions of certificates of deposit - 2,725,722
Purchase of property and equipment (805) (2,936)
Investment in DSAM Joint Venture - (108,861)
---------- ----------
Net cash provided by (used in) investing
activities (805) 2,613,925
---------- ----------
Net increase (decrease) in cash and cash
equivalents (93,959) 2,682,959
Cash and cash equivalents, beginning of year 4,319,166 1,932,629
---------- ----------
Cash and cash equivalents, end of year $ 4,225,207 $ 4,615,588
Supplemental disclosures of cash flow
information:
Cash paid for franchise taxes $ 27,880 $ 2,270
See accompanying footnotes to financial statements
NOTES TO FINANCIAL STATEMENTS
1. Nature of operations
Shariah Capital, Inc. (the "Company") was incorporated on
September 6, 2006 as a Delaware Corporation. The Company creates
and customizes Shariah-compliant financial products and platforms
and provides Shariah consulting and advisory services primarily to
financial institutions and investment management firms with product
initiatives directed to Islamic investors in the Middle East and
Far East and, specifically to, Islamic institutional and high net
worth investors. The Company has built proprietary solutions
endorsed by prominent Shariah scholars that enable hedge fund and
other alternative investment managers to manage their portfolios
consistent with their existing strategies and processes while
complying with Shariah. The Company explores business opportunities
with financial and investment management firms in Europe, Asia and
the United States.
2. Summary of significant accounting policies
Basis of Presentation
The financial statements have been prepared in accordance with
accounting principles generally accepted in the United States of
America ("GAAP").
These financial statements were approved by management and
available for issuance on September 21, 2011. Subsequent events
have been evaluated through this date.
Cash and Cash Equivalents and Concentration of Credit Risk
Cash and cash equivalents include cash held in banks and money
market funds with original maturities of three months or less. The
Company maintains cash balances in certain financial institutions
which, at times, may exceed federally insured limits. The Company
has not experienced any losses on these accounts, and believes it
is not subject to any significant credit risk.
Fees Receivable and Allowance for Doubtful Accounts
Fees receivable consist of advisory fees and consulting fees.
Advisory fees are based on the percentage of the net assets of the
fund for which the Company serves as the Shariah advisor.
Consulting fees primarily consist of up-front non-refundable fees
earned upon the commencement of the engagement, pursuant to the
service agreements; a progress fee based upon completion of certain
deliverables; and a final payment based upon the completion of the
consulting and advisory services. Advisory fees and consulting fees
are recognized in the year they are earned. On a periodic basis,
the Company evaluates its fees receivable and determines if an
allowance for doubtful accounts is necessary, based on the history
of collections and current credit conditions. No allowance for
doubtful accounts was deemed necessary at June 30, 2011 and June
30, 2010. The Company reversed a prior entry for a doubtful account
of $20,416, which the Company now believes will be paid in due
course on a timely basis.
Property and Equipment
Property and equipment is stated at cost less accumulated
depreciation. The Company provides for depreciation utilizing the
straight-line method over the estimated useful lives of the related
assets. Computer equipment is depreciated using an estimated useful
life of five years. Expenditures for repairs and maintenance are
charged to expense as incurred.
Long-Lived Assets
The Company accounts for long-lived assets under GAAP which
requires the Company to review for impairment of long-lived assets,
whenever events or changes in circumstances indicate that the
carrying amount of an asset might not be recoverable. When such an
event occurs, management determines whether there has been an
impairment by comparing the anticipated undiscounted future net
cash flows to the related asset's carrying value. If an asset is
considered impaired, the asset is written down to fair value, which
is determined based either on discounted cash flows or appraised
value, depending on the nature of the asset. The Company did not
have any impairment losses on long-lived assets for the periods
ended June 30, 2011 and 2010.
Use of Estimates
The preparation of financial statements in conformity with GAAP
requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosures of
contingent assets and liabilities at the date of the financial
statements and reported amounts of revenue and expenses during the
reporting period. Actual results could differ from those
estimates.
Stock-Based Compensation
GAAP requires an entity to measure the cost of employee services
received in exchange for stock-based awards based on the grant date
fair value of the awards. The grant date fair value of employee
restricted stock-based awards will be estimated based on the market
price of the Company's stock on the date of the grant. All
stock-based awards granted to employees are recognized as
compensation expense over the service period (generally the vesting
period) in the financial statements based on their fair values
established at the time the awards are granted. GAAP requires the
Company to estimate the future forfeitures, which has an impact on
stock-based compensation expense. GAAP also requires the
realization of tax benefits in excess of amounts recognized for
financial reporting purposes to be recognized as a financing
activity rather than an operating activity in the statements of
cash flows.
If an award is modified after the grant date, incremental
compensation expense, if any, will be recognized in an amount equal
to the excess of the fair value of the modified award over the fair
value of the original award immediately before modification.
For non-employee stock-based awards, the Company recognizes an
expense in accordance with GAAP and values the stock-based award on
the fair value of the grant date of the award with subsequent
adjustments based on the fair value of the award as it vests. The
fair value of the restricted stock-based award is estimated based
on the market price of the Company's stock.
Income Taxes
The Company is responsible for minimum taxes to the state of
Connecticut. Due to losses incurred for the years ended December
31, 2010 and 2009, no income tax provision for federal taxes has
been recorded in the accompanying financial statements.
The Company complies with the provisions of GAAP, which requires
an asset and liability approach to financial accounting and
reporting for income taxes. Deferred income tax assets and
liabilities are computed for differences between the financial
statement and tax bases of assets and liabilities that will result
in future taxable or deductible amounts, based on enacted tax laws
and rates applicable to the periods in which the differences are
expected to affect taxable income. Valuation allowances are
established, when necessary, to reduce deferred income tax assets
to the amount expected to be realized.
The determination of the Company's provision for income taxes
requires significant judgment, the use of estimates, and the
interpretation and application of complex tax laws. Significant
judgment is required in assessing the timing and amounts of
deductible and taxable items and the probability of uncertain tax
positions being sustained upon examination by the applicable taxing
authority. The benefits of uncertain tax positions are recorded in
the Company's financial statements only after determining a more
likely than not probability that the uncertain tax positions will
withstand challenge, if any, from tax authorities. When facts and
circumstances change, the Company reassesses these probabilities
and records any changes in the financial statements as appropriate.
Accrued interest and penalties related to income tax matters are
classified as a component of income tax expense.
In accordance with GAAP, the Company is required to determine
whether a tax position is more likely than not to be sustained upon
examination by the applicable taxing authority, including
resolution of any related appeals or litigation processes, based on
the technical merits of the position. The Company is subject to
income tax examinations by major taxing authorities for all tax
years since inception. The tax benefit recognized is measured as
the largest amount of benefit that has a greater than fifty percent
likelihood of being realized upon ultimate settlement.
De-recognition of a tax benefit previously recognized results in
the Company recording a tax liability that reduces stockholders'
equity. The Company recognizes interest accrued and penalties
related to unrecognized tax benefits in income tax payable, if
assessed. No interest expense or penalties have been recorded as of
and for the year ended December 31, 2010. The Company may be
subject to potential examinations by U.S. federal, U.S. state or
foreign jurisdictions in the areas of income taxes. These potential
examinations may include questioning the timing and amounts of
deductions, the nexus of income among various jurisdictions and
compliance with U.S. federal, U.S. state and foreign tax laws. The
Company's management does not expect that the total amount of
unrecognized tax benefits will materially change over the next
twelve months.
Fair Value - Definition and Hierarchy
Fair value is defined as the price that would be received to
sell an asset or paid to transfer a liability (i.e., "the exit
price") in an orderly transaction between market participants at
the measurement date.
In determining fair value, the Company uses various valuation
approaches. A fair value hierarchy for inputs used in measuring
fair value maximizes the use of observable inputs and minimizes the
use of unobservable inputs by requiring that the most observable
inputs be used when available. Observable inputs are those that
market participants would use in pricing the asset or liability
based on market data obtained from sources independent of the
Company. Unobservable inputs reflect the Company's assumptions
about the inputs market participants would use in pricing the asset
or liability developed based on the best information available in
the circumstances. The fair value hierarchy is categorized into
three levels based on the inputs as follows:
Level 1 - Valuations based on unadjusted quoted prices in active
markets for identical assets or liabilities that the Company has
the ability to access. Valuation adjustments and block discounts
are not applied to Level 1
securities. Since valuations are based on quoted prices that are
readily and regularly available in active markets, valuation of
these securities does not entail a significant degree of
judgment.
Level 2 - Valuations based on quoted prices in markets that are
not active or for which all significant inputs are observable,
either directly or indirectly.
Level 3 - Valuations based on inputs that are unobservable and
significant to the overall fair value measurement.
Fair Value - Valuation Techniques
The Company values investments in money market funds, which are
included in cash and cash equivalents, based on the quoted market
price of the net asset value of shares held at year end.
Certificates of deposits are based on a market value pricing
model.
Loss Per Share
Loss per share is based on the weighted average number of common
shares outstanding. The Company complies with GAAP, which requires
dual presentation of basic and diluted earnings per share on the
face of the statement of operations. Basic loss per share excludes
dilution and is computed by dividing income available to common
stockholders by the weighted-average common shares outstanding for
the year.
The unvested weighted average of the restricted stock granted to
employees of 700,000 and 1,400,000 for the six month periods ended
June 30, 2011 and June 30, 2010, respectively, are antidilutive and
have been excluded from the computation of loss per share.
Treasury Stock
No treasury shares were acquired during the six month periods
ended June 30, 2011 and June 30, 2010.
3. Property and equipment
Property and equipment consists of the following at June 30,
2011 and 2010:
2011 2010
Computer equipment $ 13,700 $ 14,184
Less accumulated depreciation 7,373 6,039
$ 6,327 $ 8,145
Depreciation expense amounted to approximately $1,300 and $1,300
for the six month periods ended June 30, 2011 and 2010,
respectively.
4. Fair value measurements
The Company's assets recorded at fair value have been
categorized based upon a fair value hierarchy as described in the
Company's significant accounting policies in Note 2.
The following table presents information about the Company's
assets measured at fair value as of June 30, 2011 and 2010:
2011 2010
Quoted Prices in Quoted Prices in
Active Markets for Active Markets for
Identical Assets Identical Assets
(Level 1) (Level 1)______
Assets (at fair value)
Investment in money market funds $ 2,243,521 $ -_________
Certificates of Deposit $ - _ $ -_________
5. Stock-based compensation
The Company granted 2,700,000 shares of restricted stock on
December 7, 2006 to several employees which vest over three years.
The fair value of the shares on the grant date was $2,700,000. In
December 2007, the Company amended the terms of the granted
restricted stock awards. The amendment increased the December 7,
2006 shares for certain employees by 5% or 47,500 shares, and
extended the vesting period from December 7, 2007 to March 31,
2008, subject to earlier acceleration at the option of the Company.
In December 2008, the Company amended the terms of the granted
restricted stock awards for two of its employees. The amendment
extended the vesting date for 600,000 shares of common stock from
December 7, 2008 to December 7, 2009.
In December 2009, the Company amended the terms of the granted
restricted stock awards for two of its employees. The amendment
extended the vesting date for 1,400,000 shares of common stock from
December 7, 2009 to December 7, 2010. During 2010, the Company
further amended the terms of the granted restricted stock awards
for the same two employees, extending the vesting date for
1,400,000 shares of common stock from December 7, 2010 to August
31, 2011.
In April of 2011, 700,000 shares of unvested common stock were
cancelled, leaving 700,000 shares of common stock remaining as
unvested as at June 30, 2011.
The fair value of each restricted stock award was estimated on
the date of grant or the date of modification, if there was an
additional incremental compensation cost, based on the market price
of the Company's stock at that date.
Stock-based compensation expense amounted to approximately $48
and $2,000 for the six month periods ended June 30, 2011 and 2010,
respectively.
6. Income taxes
The Company has an available net operating loss carry forward of
approximately $6,176,000 to offset future taxable income expiring
at various dates through 2030.
The Company has a deferred tax asset of approximately $2,600,000
and $2,400,000 at December 31, 2011 and 2010, respectively. In
recognition of the uncertainty regarding the ultimate amount of
income tax benefit to be derived, the Company has recorded a
valuation allowance at June 30, 2011 and 2010 for the full amount
of the deferred tax asset.
7. Commitments and contingencies
Operating Leases
In February 2010, the Company entered into an operating lease
for its corporate office in Connecticut, which expired in January
2011, with an optional one year extension. The Company is currently
renting its corporate office on a month to month basis. Rent
expense amounted to approximately $37,000 and $38,000 for the six
month periods ended June 30, 2011 and 2010, respectively.
Employment Agreements
The Company entered into employment agreements with its
management employees. One agreement was terminated in April, 2011.
Another agreement is scheduled to terminate on August 31, 2011. The
employment agreement with the Chairman and Chief Executive Officer
of the Company provides for termination upon 12 months notice and a
$650,000 termination fee.
Annual base salaries of approximately $369,000 and $408,000 were
paid to management employees for the six month periods ended June
30, 2011 and 2010, respectively.
Non-Executive Director Service Agreement
A non-executive director for the Company received compensation
of approximately $7,400 and $7,500 for serving as a member on the
Board of Directors of the Company for the six month periods ended
June 30, 2011 and 2010, respectively.
8. Related party transactions
During 2008, the Company, in collaboration with various
professional organizations, formed the Al Safi Trust, a Cayman
Islands trust with related sub-trusts ("Al Safi"). Al Safi is a
Shariah-compliant alternative investment platform, and the first
known platform to provide an infrastructure for long and short-term
Shariah-compliant investments. The Company is the Shariah advisor
and receives a Shariah advisory fee based on the net asset value of
all Al Safi sub-trusts. In September 2008, three sub-trusts were
formed on Al Safi, each of which was seeded with $50,000,000 by the
Dubai Multi Commodities Centre Authority ("DMCCA"). In November
2008, a fourth sub-trust was seeded by DMCCA in the amount of
$50,000,000, for an aggregate total of $200,000,000 in invested
capital. As of June 30, 2011, assets under management in Al Safi
Trust were approximately $120,000,000. Advisory fee income from Al
Safi amounted to approximately $422,000 and $661,000 for the six
month periods ended June 30, 2011 and 2010, respectively. The
reduction in advisory fee income resulted from a redemption of seed
capital by the DMCCA from Al Safi Trust. Consulting fee income from
Al Safi amounted to approximately $10,000 and $10,000 for the six
month periods ended June 30, 2011 and 2010, respectively.
In connection with forming Al Safi, the Company announced a
joint venture with DMCCA. The joint venture entity, Dubai Shariah
Asset Management Company, Ltd. ("DSAM") is owned 51 percent by
Dubai Commodity Asset Management ("DCAM"), which is wholly owned by
DMCCA, and 49 percent by the Company. The investment is accounted
for under the equity method of accounting for long-term
investments. In conjunction with the joint venture, DMCCA purchased
a 4.99% equity share of the Company and an executive from DMCCA was
elected to the Company's Board of Directors as a non-executive
director.
DSAM develops and manages Shariah-compliant investment products
focused on commodities. DSAM has the right to assess a fee based on
a percentage of the net asset value of the four sub-trusts seeded
by the DMCCA (exclusive of capital invested by the DMCCA).
Consulting fee income from DSAM amounted to approximately
$162,000 and $0 for the six month periods ended June 30, 2011 and
2010, respectively. In addition, the Company is the Shariah adviser
to DMCCA for related Shariah-compliant investments. Consulting fee
income from the DMCCA amounted to approximately $35,000 and $35,000
for the six month periods ended June 30, 2011 and 2010,
respectively.
The Company's income (loss) attributable to DSAM amounted to
approximately ($72,000) and $66,000 for the six month periods ended
June 30, 2011 and 2010, respectively and is included in the
accompanying statements of operations.
The Company had a receivable from DSAM in the amount of
approximately $153,000 and a payable to DSAM in the amount of
approximately $4,000 at June 30, 2011 and 2010, respectively. The
receivable represents the payment of expenses on behalf of DSAM and
is reported as a component of due from related parties (in this
case DSAM) in the accompanying balance sheets. The Company does not
expect this amount to be repaid, but instead expects to reclassify
this amount as equity in the DSAM joint venture.
The Company loaned an employee $50,000 in January 2010, which is
secured by the common stock of the Company held by the employee.
The loan bears interest at a rate of 1.00% per annum plus prime
(3.25% at June 30, 2011) and matures in August 2011 and is reported
as a component of prepaid expenses and other current assets in the
accompanying balance sheets.
9. Major customers
The Company had advisory fee income from one related party that
accounted for 100% of the Company's total advisory fee income for
the six month periods ended June 30, 2011 and 2010.
The Company had consulting fee income from two related parties
that accounted for 100% of the Company's total consulting fee
income for the six month periods ended June 30, 2011 and 2010.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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