1st Quarter Results
May 07 2008 - 8:34AM
UK Regulatory
RNS Number:8847T
Titanium Asset Management Corp
07 May 2008
Titanium Asset Management Corp.
First Quarter Results
Chaiman's statement
I have pleasure in presenting my first set of financial statements as Chairman
and CEO of Titanium Asset Management Corp.
Until the approval by shareholders of the acquisition of National Investment
Services ('NIS') on March 31st 2008 we were operating under a 'SPAC' structure.
From that date we are a fully operational company with three wholly-owned fund
management subsidiaries - NIS, Sovereign Advisers and Wood Asset Management.
In the coming months the senior Titanium management team will be focussed on
developing a fully integrated sales and marketing strategy. At the same time we
will be pursuing other acquisition opportunities. Finally, we will be preparing
a registration statement for filing with the Securities and Exchange Commission
prior to seeking a listing on a US exchange.
I look forward to providing shareholders with more information on all these
points in future reports.
Nigel Wightman
Chairman and CEO
For further information:
Titanium Asset Management Corp.
Nigel Wightman, Chairman and CEO + 44 7789 277849
Seymour Pierce Ltd
Jonathan Wright +44 20 7107 8000
Penrose Financial
Gay Collins +44 20 7786 4888
Kay Larsen
titanium@penrose.co.uk
Titanium Asset Management Corp.
Interim report and unaudited accounts for the period from
January 1, 2008 to March 31, 2008
BALANCE SHEET as at March 31, 2008 (Unaudited)
(amounts in thousands)
Note March 31 2008 March 31, 2007
ASSETS
Current Assets
Debtors - trade debtors 2,588 -
- prepaids and other receivables 1,139 -
Short term investments 15,098
Cash at bank and in hand 29,820 25
Total Current Assets 48,645 25
Other Assets
Goodwill 37,122 -
Intangible assets 27,757 -
Property and equipment 125 -
Deferred tax asset 436 -
Total Other Assets 65,440 -
Total Assets 114,085 25
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accrued expenses 1,886 -
Accounts payable 79 -
Amounts repayable to shareholders 12,017 -
Other creditors 193 -
Total Current Liabilities 14,175 -
COMMITMENTS
Stockholders' Equity -
Share capital 4 2 1
Additional paid in capital 5 99,462 24
Profit and loss account 5 446 -
Total Stockholders' Equity 99,910 25
Total Liabilities and Stockholders'
Equity 114,085 25
The accompanying notes are an integral part of these financial statements.
STATEMENT OF OPERATIONS
For the period from January 1,2008 to March 31, 2008
(amounts in thousands except per share amounts)
3 months to. 31 Inception (2 Feb 2007) to
March, 2008 31 Mar 2007
Turnover 2,220 -
Amortisation
and
depreciation (809) -
Other
operating
expenses (1,893) -
Operating Loss (482) -
Interest
receivable 496 -
Profit before
taxes 14 -
Income tax
expense 10 -
Net Profit 4 -
Net Profit Per Share, Basic - -
Net Profit Per Share, Fully - -
Diluted ======== ========
Weighted Average Shares
Outstanding, Basic 22.99 mn 2.88 mn
Weighted Average Shares
Outstanding, Fully Diluted 22.99 mn 2.88 mn
STATEMENT OF CASH FLOWS
For the period from January 1, 2008 to March 31, 2008
(amounts in thousands)
Jan 1, 2008 Inception
to Mar 31, (February
2008 2, 2007) to
Mar 31,
2007
Net income 4 -
Adjustments to reconcile net income to net cash
and cash equivalents provided by operating activities:
Depreciation and amortisation charges 809 -
Changes in operating assets and liabilities:
(Increase) in debtors (87) -
(increase) in deferred tax asset (59)
(Decrease) in current liabilities (904) -
Net Cash Used for Operating Activities (237) -
Cash flows from investing activities
Cash paid for acquisitions less cash acquired (29,814) -
Purchase of property and equipment (6) -
Release of restricted cash 55,587
Purchase of short term investments (15,098) -
--------- ---------
Net cash generated from investing activities 10,669 -
Cash Flows from Financing Activities
Proceeds from issuance of share capital - 25
--------- ---------
Net Increase in Cash 10,432 25
Cash, Beginning of Period 19,388 Nil
Cash, End of Period 29,820 25
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - Organization, business and operations
Titanium Asset Management Corp. (the "Company") was incorporated in Delaware on
February 2, 2007 as a blank check company, the objective of which is to acquire
one or more operating companies engaged in the asset management industry.
The Company was successfully listed on the London Alternative Investment Market
on 21 June 2007. The listing raised net proceeds of $110.4 million. The Company
completed its third acquisition on March 31, 2008 and as a result has become an
operating company. The Company intends to seek a registration statement with the
SEC within 120 days of the period end with a view to obtaining a listing on
NASDAQ.
NOTE 2 - Basis of Preparation
These report and accounts have been prepared in accordance with accounting
principles generally accepted in the United States of America.
The following accounting policies have been applied consistently in dealing with
items which are material in realation to the financial information of Titanium
Asset Management Corp. set out in this report.
NOTE 3 - Summary of Significant Accounting Policies
Use of Estimates The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent 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.
The estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognized in the period in which the
estimate is revised if the revision affects only that period, or in the period
of the revision and future periods if the revision affects both current and
future periods.
Income per common share Income per common share is computed by dividing net
income by the weighted average number of shares of common stock and restricted
stock outstanding during the period. As the earnings per share are nil no
separate estimate of the impact of dilution has been prepared.
Goodwill and intangibles Goodwill is the excess of the amount paid to acquire a
business over the fair value of the net assets acquired. Pursuant to SFAS No.
142, Goodwill and Other Intangible Assets, the carrying amount of goodwill is
reviewed for impairment annually or whenever events or changes in circumstances
indicate that the carrying amount might not be recoverable. If the fair value of
the operations to which the goodwill relates is less than the carrying amount of
the unamortized goodwill, the carrying amount will be reduced with a
corresponding charge to expense.
The Company will test goodwill for impairment at least annually (first day of
our fourth quarter), or more often if deemed necessary based on certain
circumstances. The goodwill impairment test will be a two-step process: Step 1 -
test for potential impairment by comparing the fair value of each reporting unit
with its carrying amount; if the fair value of the reporting unit is greater
than its carrying amount (including recorded goodwill), then no impairment
exists and Step 2 is not performed; Step 2 - if the carrying amount of the
reporting unit (including recorded goodwill) is greater than its fair value,
then the amount of the impairment, if any, is measured and recorded as needed.
Intangible assets with definite lives are amortized over their estimated useful
life and reviewed for impairment in accordance with SFAS 144. Intangible assets
with definite lives are amortized using the straight-line method over their
estimated useful lives.
Option granted in relation to stock issuance The fair value of the option
granted to Sunrise Securities Corp. has been credited to additional paid in
capital. The cost of the option has been netted off against reserves along with
the other costs of admission.
Income taxes The Company accounts for income taxes in accordance with SFAS
No. 109, "Accounting for Income Taxes." Deferred tax assets and liabilities are
recognized for the future tax consequences attributable to differences between
financial statement carrying amounts of existing assets and liabilities and
their respective tax bases and operating loss and other loss carryforwards.
Deferred tax assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled.
NOTE 4 - Share Capital
Authorized Called up and fully paid
Number $ Number $
Common Stock $0.0001 54,000,000 5,400 22,659,952 2,266
Restricted Shares $0.0001 720,000 72 612,716 61
Preferred Stock $0.0001 1,000,000 100 0
-------- -------
5,572 2,327
-------- -------
The holders of Common Stock arising from the issue of units on 21 June 2007 were
entitled to require the Company to repurchase their shares if at the time the
Company seeks approval for a business combination the stockholder votes against
the proposal. As at the balance sheet date 2,208,452 common shares representing
9.75% of the issued share capital were due to be repurchased for a total
consideration of approximately $12 million. Following the acquisition of NIS on
March 31, 2008 shareholders no longer have the right to require the Company to
repurchase their shares
The Restricted Shares carry no rights to dividends except in the case of a
winding up of the Company. They convert on a one for one basis to Common Stock
if at any time within five years of their issue,
and subsequent to a Business Combination, the ten day average share price of the
Common Stock exceeds $6.90.
No Preferred Stock had been issued at the balance sheet date and accordingly the
rights attaching to the Preferred Stock have not been set.
There were 20 million warrants in issue at the balance sheet date. Each warrant
entitles the holder to subscribe for Common Stock at $4.00 per share subsequent
to a Qualifying Business Combination. There were 20 million warrants in issue at
the balance sheet date.
The Company issued an option over 2 million Units to the placing agent. The
option is exercisable at $6.60 following a Qualifying Business Combination.
NOTE 5 - Reserves
Profit & Loss Additional Paid in Capital Total
$000s $000s $000s
Brought forward at 1
January 2008 442 55,892 56,334
Net income for 4 - 4
the period
Reallocation
of temporary equity 55,587 55,587
Shares to be
repurchased - (12,017) (12,017)
446 99,462 99,908
NOTE 6 - Acquisition
The financial statements include assets acquired from National Investment
Services Inc. on March 31, 2008. At March 31, 2008 Titanium Asset Management
Corp held 100% of the issued share capital of National Investment Services Inc.
The goodwill related to the acquisition will be fully deductible for tax
purposes.
Details Consideration Fair value Goodwill
Cash $29,848 $34 $-
Accrued acquisition costs 1,378 - -
Debtors - 3,140 -
Property and equipment - 116 -
Current liabilities - (425) -
Existing customers - 12,000 -
Non-compete agreement - 875 -
Brands - 351 -
_______ _______ _______
$31,226 $16,091 $15,135
NOTE 7 - Intangible assets
Goodwill Customers Non-Compete Brands Total
Cost
At January 1, 2008 21,987 14,691 1,662 625 38,965
Additions (see note 6) 15,135 12,000 875 351 28,361
______ ______ ______ ______ ______
At March 31, 2008 37,122 26,691 2,537 976 67,326
______ ______ ______ ______ ______
Amortization
At January 1, 2008 - 697 898 43 1,638
Charge for period - 697 69 43 809
_____ _____ _____ _____ _____
At March 31, 2008 - 1,394 967 86 2,447
_____ _____ _____ _____ _____
Net book amount
At March 31, 2008 $37,122 $25,297 $1,570 $890 $64,879
Useful life (in months) N/A 60 36 36-48
NOTE 8 - Contingency
On March 31st 2008 the Company received notice from its former attorneys that
they intended to submit an invoice in respect of services provided in 2007. At
the date of these accounts the Company has not received final confirmation of
the amount of this invoice or details of the services to which it is related.
The Company intends to reject any such invoice as it believes that it has paid
in full for services provided in 2007. Accordingly no provision has been made in
these accounts for the invoice. In the event that a liability does arise the
income statement will be unaffected and the Company does not expect its
financial position to materially change.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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