Half Yearly Report

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 Mr. Alexander Selegenev www.tmtinvestments.com	[phone] [e-mail]
ZAI Corporate Finance Ltd. NOMAD and Broker Marc Cramsie/Irina Lomova	[phone]
Kinlan Communications David Hothersall	Tel. [phone] [e-mail]

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 months ended 30/06/2013		For the six months 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 2013, USD			At 31 December 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 months ended 30/06/2013,		For the six  months ended 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 payment reserve		Fair value reserve	Retained losses			Total equity
		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 outstanding)	For the six months ended 30/06/2013		For the six months 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 shares		Promissory 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 company	Date of investment	Total cost of investment at 1 Jan 2013,  USD	Additions to net investment during the period, USD	Amount of capitalized consulting and legal services, USD	Changes in value of investment, USD	Total cost of investment at 30 June 2013,  USD	Proportion of equity shares held at period end,%
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 company	Date of purchase	Total cost of investment as at 1 Jan 2013,  USD	Additions to net investment during the period,  USD	Amount of capitalized consulting and legal services, USD	Amount of amortized costs,  USD	Impairment charge, USD	Disposals, USD	Total investment, USD	Term, years	Inte-rest rate,%
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 June 2013		As at 31 December 2012
			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:

Name	Option Shares		Option Price Year 1		Option Price Year 2		Option Price 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 percent)			Option Price Year 1		Option Price Year 2		Option Price 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 USD	Fair value reserve USD	Retained losses USD	Total 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.

 

END

 

 

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