Half Yearly Report

RNS Number : 3124S
TMT Investments PLC
23 September 2014
 



23 September 2014

 

TMT INVESTMENTS PLC

("TMT" or the "Company")

 

Half year report for the six months to 30 June 2014

 

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 2014.

 

Key highlights

 

·    NAV per share of US1.30 (unchanged from 31 December 2013)

·    A number of portfolio companies experiencing rapid growth but lack recent corporate finance transactions to record increased valuations

·    Some portfolio companies prove unsuccessful, reflecting the early-stage nature of the Company's investments

·    Positive non-cash revaluation of Gild

·    Impairment of Graphicly

·    Negative non-cash revaluation of UsingMiles

·    US$1.2 million of new investments

·    Three senior managers receiving all of their 2014 salaries in TMT shares rather than in cash, reducing cash expenses and further aligning interests of management with shareholders

·    Well placed to capitalise on investment opportunities created in the software applications, mobile apps, digital media and internet sectors, with approximately US$3.1m in net cash reserves as of the date of this report

 

EXECUTIVE DIRECTOR'S STATEMENT

 

Portfolio Performance

 

The first half of 2014 saw a number of investments evolving to either successfully growing businesses or proving to be unsuccessful.  TMT has now invested in over 35 companies since its floatation in December 2010 and has a diversified portfolio focused around mobile software applications, cloud solutions, advertising technologies, online social networks and data and project management software.  This level of diversification helps absorb any write offs or negative revaluations that occur, and our NAV per share as of 30 June 2014 stayed unchanged at US$1.30.

 

The following developments took place within the Company's portfolio in the first half of 2014:

 

Cash and part-cash exits:

 

·    There were no cash or part-cash exists in the reporting period.

 

Positive non-cash revaluations:

 

·    In May 2014, 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$379,000 (or 223%) in the fair value of TMT's investment in Gild, compared to the amount reported as of 31 December 2013.

 

Impairments and write-offs:

 

·    In May 2014, Graphicly, Inc. ("Graphicly"), an e-book publishing and distribution platform, announced its decision to wind up its operations and that no assets or proceeds would be available for distribution to Graphicly's shareholders.  TMT is pursuing a course of actions to recover its investment in Graphicly but considers it prudent to incur an impairment charge equal to 100% of the fair value of the Company's investment in Graphicly (approx. US$485,825).

 

Negative non-cash revaluations:

 

·    In October 2013, Universal Points Exchange, LLC, a wholly owned subsidiary of Source, Inc. ("Source") and Help Worldwide, Inc. ("HelpWW"), agreed to acquire the assets of UsingMiles Inc. ("UM") for shares ("Transaction").  A UM liquidating trust ("Trust") has been established for the purposes of the Transaction.  As a result of the Transaction, the Trust owns 2.72% of the common stock in Source and 2.455% of the common stock in HelpWW.  The Trust will hold these shares until there is a liquidity event for Source and/or HelpWW or the Board of Trustees determines to distribute the shares, at which time it will distribute the proceeds to the former shareholders of UM.  Once the creditors are paid off, any distributions will next go to the Series A investors pro-rata until they receive their preference of roughly US$5M, of which TMT will receive 5.89%.  After the Series A is paid off, TMT will receive 3.08% of the remaining proceeds.  The Transaction closed on 31 December 2013, and TMT agreed to be included in the Trust on 11 August 2014.  The transaction represents a reduction of approximately US$230,000 (or 89%) in the fair value of TMT's investment in UM, compared to the amount reported as of 31 December 2013.

 

New investments

 

In the first half of 2014, the Company invested US$860,000 in five new companies (technology developer for visually impaired people PROvision/Oriense, smartphone solution provider for senior citizens E2C, mobile tech discovery service Drippler, on-demand business research platform Whale Path, and "Internet of Everything" software developer Weaved), as well as an additional US$350,000 in three existing portfolio companies (Gentoo/Contacts+, rollApp, and KitApps/Attendify).

 

NAV per share

 

The Company's net asset value per share as of 30 June 2014 was US$1.30 (31 December 2013: US$1.30).

 

Operating Expenses

 

In the first half of 2014, the Company's Administrative Expenses of US$652,287 were in line with the first half of 2013 levels (US$649,772).  Total Operating Expenses decreased in the reporting period due to the lower share-based option charge of US$94,848 (first half of 2013: US$327,749).

 

Financial position

 

As of 30 June 2014, the Company had US$3.1 million in cash reserves.  In July 2014, TMT raised US$2.65 million at US$1.85 per sharefrom a number of new and existing investors.  As of the date of this report, the Company has no debt and approximately US$3.1 million in cash reserves.

 

Events after the reporting period and outlook

 

Since 30 June 2014, the Company has invested US$2.2 million in six new companies (productivity software developer Quote Roller, fashion rental platform Le Tote, news reading app Anews, social intelligence platform Twtrland, mobile interface application Drupe, and taxi booking app Taxify), as well as US$600,000 in existing portfolio company Adinch.

 

In August 2014, TMT announced the sale of its entire equity stake in The One-Page Company, Inc.  TMT's total consideration received pursuant to the transaction was US$509,740, representing an internal rate of return ("IRR") of 32%.  TMT originally invested US$250,000 in One-Page on 6 February 2012.

 

Further information on subsequent events is shown in note 16 to the financial information.

 

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 2014.  With a number of our portfolio companies experiencing rapid growth, we expect a number of positive revaluations of our investee companies.  At the same time, given the risky nature of earlier-stage venture capital investments, we expect some negative revaluations in due course as well.

 

We look forward to updating our shareholders on the Company's progress in the near future.

 

Alexander Selegenev

Executive Director

 

For further information contact:

 

TMT Investments Plc

Mr. Alexander Selegenev

www.tmtinvestments.com

 

+44 1534 281 843

alexander.selegenev@tmtinvestments.com

 

ZAI Corporate Finance Ltd.

NOMAD and Broker

Richard Morrison/Irina Lomova

 

+44 20 7060 2220

Kinlan Communications

David Hothersall

 

+44 20 7638 3435

davidh@kinlan.net

 

About TMT Investments

 

TMT Investments PLC invests in high-growth, internet-based companies across a variety of sectors and has a significant number of Silicon Valley investments in its portfolio. Founded in 2010, TMT has raised USD30m and invested in over 35 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 30/06/2014


For the six months ended 30/06/2013


Notes

USD


USD

(Losses)/gains on investments

3

(560,966)


(173,528)

Expenses





Administrative expenses

4

(652,287)


(649,772)

Share-based payment charge

13

(94,848)


(327,749)

Operating loss


(1,308,101)


(1,151,049)

Net finance income

6

6,987


35,999

Loss before taxation


(1,301,114)


(1,115,050)

Taxation


-


-

Loss attributable to equity shareholders


(1,301,114)


(1,115,050)

Other comprehensive income/(loss) for the period:





Change in fair value of available-for-sale financial assets

8

1,254,610


5,164,448

Total comprehensive (losses)/income for the period


(46,504)


4,049,398

Loss per share





Basic and diluted loss per share (cents per share)

7

(5.20)


(4.45)

 

Statements of Financial Position

 



At 30 June

2014, USD


At 31 December

2013, USD






Non-current assets

Notes




Investments in equity shares

8

28,299,290


26,932,335

Convertible loan notes receivable

8

2,692,617


2,193,304

Total non-current assets


30,991,907


29,125,639






Current assets





Trade and other receivables

9

115,664


79,532

Cash and cash equivalents

10

3,122,289


3,242,269

Total current assets


3,237,953


3,321,801

Total assets


34,229,860


32,447,440






Current liabilities





Trade and other payables

11

1,271,750


96,008

Total liabilities


1,271,750


96,008






Net assets


32,958,110


32,351,432






Equity





Share capital

12

27,453,513


26,895,179

Share-based payment reserve

14

688,281


695,970

Fair value reserve

14

9,191,977


7,937,367

Retained losses

14

(4,375,661)


(3,177,084)

Total equity


32,958,110


32,351,432

 

Statements of Cash Flows

 



  For the six

months ended

30/06/2014,


  For the six months ended 30/06/2013,

 


Notes

USD


USD

 






 

Operating activities





 

Operating loss


(1,308,101)


(1,151,049)

 

Adjustments for non-cash items:





 

Profit on disposal of convertible notes

8

-


(157,191)

 

Impairment charge

8

 591,482


415,936

 

Share-based payment charge

13

94,848


327,749

 

Amortized costs of convertible notes receivable

8

6,957


20,044




(614,814)


(544,511)

 

Changes in working capital:





 

Increase in trade and other receivables

9

(36,132)


(130,425)

 

Increase in trade and other payables

11

1,175,742


95,960

 

Net cash from/(used by) operating activities


524,796


(578,976)

 

Investing activities





 

Interest received

6

6,987


35,999

 

Purchase of available-for-sale assets

8

(1,210,097)


(1,521,970)

 

Proceeds from sale of available-for-sale-assets

8

-


606,507

 

Net cash used by investing activities


(1,203,110)


(879,464)

 

Financing activities





 

Cash proceeds from issue of shares

12

558,334


1,158,930

 

Purchase of own shares


-


(699,999)

 

Net cash from financing activities


558,334


458,931

 

Decrease in cash and cash equivalents


(119,980)


(999,509)

 

Cash and cash equivalents at the beginning of the period

10

3,242,269


7,717,554

 

Cash and cash equivalents at the end of the period

10

3,122,289


6,718,045

 

 

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 2013


26,136,248


128,183


2,005,228

(1,336,201)


26,933,458

Total comprehensive loss for the period


-


-


5,932,139

(1,849,303)


4,082,836

Issue of shares


1,458,930


-


-

-


1,458,930

Buy back and cancellation of shares


(699,999)


-


-

-


(699,999)

Share-based payment charge


-


576,207


-

-


576,207

Lapse of share options


-


(8,420)


-

8,420


-

Balance at 1 January 2014


26,895,179


695,970


7,937,367

(3,177,084)


32,351,432

Total comprehensive loss for the period


-


-


1,254,610

(1,301,114)


(46,504)

Issue of shares

14

558,334


-


-

-


558,334

Share-
based payment charge

14

-


94,848


-

-


94,848

Exercise of share options

14

-


(102,537)


-

102,537


-

Balance at 30 June 2014


27,453,513


688,281


9,191,977

(4,375,661)


32,958,110

 

 

NOTES TO THE FINANCIAL INFORMATION FOR THE SIX MONTHS ENDED 30 JUNE 2014

 

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 2014 is unaudited and does not constitute statutory accounts. The comparative figures for the financial year ended 31 December 2013 are not the Company's statutory accounts for that financial year.  Statutory accounts for the year ended 31 December 2013 were approved by the Board of Directors on 28 April 2014. 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 22 September 2014 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 2014 and are the same as those applied by the Company in its financial statements for the year ended 31 December 2013.

 

The Company's financial risk management objectives and policies are consistent with that disclosed in the financial statements for the year ended 31 December 2013.

 

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.

 

Conversation rates, USD

Currency




At 30/06/2014

Average rate, for six months ended 30/06/2014

British pounds, £





1.7034

1.6689

Euro, €





1.3644

1.3711

Israeli shekel





0.2922

0.2878

 

3          (Losses)/gains on investments


For the six months ended 30/06/2014


  For the six months   ended 30/06/2013


USD


USD

Gross interest income from convertible notes receivable

37,473


105,261

Amortized costs of convertible notes receivable

(6,957)


(20,044)

Interest accrued

-


(27,936)

Net interest income from convertible notes receivable

30,516


57,281

Profit on disposal of convertible notes

-


157,191

Loss on disposal of equity investment

(230,727)


-

Impairment of available-for-sale assets

(360,755)


(388,000)

Total net (losses)/gains on investments

(560,966)


(173,528)

 

4          Administrative expenses

 

Administrative expenses include the following amounts:


For the six months ended 30/06/2014


  For the six months   ended 30/06/2013


USD


USD

Staff expenses (note 5)

362,171


360,535

Professional fees

90,335


91,148

Rent

86,304


86,304

Other expenses

72,083


53,840

Legal fees

10,811


32,760

Bank and LSE charges

13,015


10,265

Accounting fees

16,284


7,487

Currency exchange loss

1,284


7,433


652,287


649,772

 

5          Staff expenses


For the six months ended 30/06/2014


   For the six months   ended 30/06/2013


USD


USD

Directors' fees

140,171


132,788

Wages and salaries

222,000


227,747


362,171


360,535

 

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 US$94,848 (for the six months ended 30 June 2013: US$327,749).

 

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 2014 and 2013 were as follows:

 


For the six months ended 30/06/2014


For the six months ended 30/06/2013


USD


USD

Alexander Selegenev

59,413


54,478

Yuri Mostovoy

50,000


50,000

James Mullins

16,739


15,346

Petr Lanin

14,019


12,964


140,171


132,788

 

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 income

 


For the six months ended 30/06/2014


For the six months    ended 30/06/2013


USD


USD

Interest on bank account

115


-

Interest income

6,872


35,999


6,987


35,999

 

7       Loss per share

 

The calculation of basic earnings per share is based upon the net loss for six months ended 30 June 2014 attributable to the ordinary shareholders of US$1,301,114 (for six months ended 30 June 2013: net loss of US$1,115,050) and the weighted average number of ordinary shares outstanding calculated as follows:

 

Loss per share

For the six months ended 30/06/2014


For the six months    ended 30/06/2013

Basic loss per share (cents per share)

(5.20)


(4.45)

Loss attributable to equity holders of the entity, USD

(1,301,114)


(1,115,050)

 

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 30/06/2014


For the six months

ended 30/06/2013

Weighted average number of shares in issue




Ordinary shares

25,004,432


25,040,269


25,004,432


25,040,269

Effect of dilutive potential ordinary shares




Share options

912,444


944,942

Weighted average of shares for the period (fully diluted)

25,916,876


25,985,211

 

The diluted loss per share for both 2014 and 2013 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 2014


At 31 December 2013


USD


USD

Investments in equity shares (i)




- unlisted shares

28,299,290


26,932,335

Convertible notes receivable (ii)




- promissory notes

2,692,617


2,193,304


30,991,907


29,125,639

 

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 2013


15,434,540


3,691,691


19,126,231

Total gains or losses in 2013:







- in profit or loss


-


(390,683)


(390,683)

- in other comprehensive 

  income


5,932,139


-


5,932,139

Purchases (including consulting & legal fees)


3,582,550


1,830,170


5,412,720

Disposal of investment (carrying value)


-


(1,047,609)


(1,047,609)

Conversion of notes to equity and net gain


1,983,106


(1,890,265)


92,841

Balance as at 31 December 2013


26,932,335


2,193,304


29,125,639

Total gains or losses for the six months ended 30/06/2014:







- in profit or loss


-


(6,957)


(6,957)

- in other comprehensive 

  income


1,254,610


-


1,254,610

Purchases (including consulting & legal fees)


703,827


506,270


1,210,097

Disposal of investment (carrying value)


(591,482)


-


(591,482)

Closing balance as at 30 June 2014


28,299,290


2,692,617


30,991,907

 

(i)            Breakdown of equity investments for the six months to 30 June 2014:

Invested company

Date of initial investment

Value at 1 Jan 2014,

USD

Additions to equity investments during the period, USD

Capitalized consulting and legal fees, USD

Gain/loss from changes in fair value of equity investments, USD

Disposals, USD

 

Internal movements, USD

 

Value at  30 Jun 2014, USD

 

Equity stake owned

 

Unicell

15/09/2011

2,982,471

-

-

-

-

-

2,982,471

10.00%

 

Depositphotos

26/07/2011

4,997,285

-

-

-

-

-

4,997,285

27.75%

 

RollApp

19/08/2011

550,000

50,000

-

-

-

-

600,000

10.00%

 

Wanelo

21/11/2011

5,369,400

-

-

-

-

-

5,369,400

4.72%

 

Gild

05/12/2011

170,038

-

-

379,307

-

-

549,345

1.04%

 

1-Page

06/02/2012

305,367

-

-

204,373

-

-

509,740

6.09%

 

ThusFresh

26/03/2012

510,000

-

-

-

-

-

510,000

6.57%

 

Backblaze

24/07/2012

5,034,439

-

-

-

-

-

5,034,439

18.03%

 

UsingMiles

23/08/2012

260,000

-

-

-

(230,727)

(29,273)

-

-

 

UM trust

15/07/2014

-

-

-

-

-

29,273

29,273

5.89%

 

Gentoo

17/09/2012

260,000

-

-

-

-

-

260,000

6.25%

 

Favim

24/10/2012

305,050

-

-

-

-

-

305,050

20.00%

 

Appsindep

12/11/2012

1,863,685

-

-

-

-

-

1,863,685

19.24%

 

Virool

29/08/2012

502,275

 -

 -

 -

-

-

502,275

1.69%

 

Adinch

19/02/2013

1,004,000

-

-

796,000

-

-

1,800,000

20.00%

 

Tracks Media

24/11/2011

341,350

-

-

-

-

-

341,350

6.83%

 

Wrike

12/06/2012

1,991,150

-

-

-

-

-

1,991,150

4.39%

 

Graphicly

03/04/2013

485,825

-

-

(125,070)

(360,755)

-

-

8.47%

 

Drippler

01/05/2014

-

200,000

5,000

-

-

-

205,000

1.86%

 

E2C

15/02/2014

-

124,731

10,000

-

-

-

134,731

6.12%

 

Oriense

27/01/2014

-

59,096

-

-

-

-

59,096

5.45%

 

Weaved

13/06/2014

-

250,000

5,000

-

-

-

255,000

2.69%

 

Total


26,932,335

683,827

20,000

1,254,610

(591,482)

-

28,299,290


 

(ii) Breakdown of convertible loan notes for the six months to 30 June 2014:

Investee company

 

Date of initial investment

Value at 1 Jan 2014,

USD

Additions to convertible note investments during the period, USD

Capitalized consulting and legal fees, USD

Amortized costs, USD

Profit on disposal/ Impairment charge, USD

Disposals, USD

Value at 30 Jun 2014, USD

Terms, years

Interest rate,%

Ninua

08/06/2011

500,000

-

-

-

-

-

500,000

1.5

5.00%

Pipedrive

30/07/2012

777,266

-

-

(1,472)

-

-

775,794

2

2.00%

Sharethis

26/03/2013

571,723

-

-

(198)

-

-

571,525

5

1.09%

Gentoo

21/05/2014

-

100,000

685

(38)

-

-

100,647

2

0.28%

KitApps

10/07/2013

202,616

200,000

585

(2,578)

-

-

400,623

2

2.00%

VitalFields

20/12/2013

141,699

-

-

(2,479)

-

-

139,220

1

15.00%

Whale path

02/06/2014

-

200,000

5,000

(192)

-

-

204,808

2

5.00%

Total


2,193,304

500,000

6,270

(6,957)

-

-

2,692,617

-

-

 

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 2014


At 31 December 2013


USD


USD

Prepayments

9,644


9,767

Interest receivable on promissory notes

105,624


68,151

Interest receivable on deposit

396


1,614


115,664


79,532

 

10     Cash and cash equivalents

 

The cash and cash equivalents as at 30 June 2014 include cash on hand and in banks, deposits, net of outstanding bank overdrafts. The effective interest rate at 30 June 2014 was 0.87%.

 

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 2014


At 31 December 2013


 USD


 USD

Deposits

500,000


1,500,000

Bank balances

2,622,289


1,742,269


3,122,289


3,242,269

 

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 2014


At 31 December 2013


USD


USD

Bank balances




A rating

2,622,289


1,742,269


2,622,289


1,742,269

Deposits




BBB- rating

500,000


1,500,000


500,000


1,500,000

 

11        Trade and other payables

 


At 30 June 2014


At 31 December 2013


USD


USD

Salaries and directors' fees payable

189,091


40,540

Trade payables

27,878


30,682

Other current liabilities (see note 15)

1,050,097


44

Accrued expenses

4,684


24,742


1,271,750


96,008

 

12     Share capital

 

On 30 June 2014 the Company had an authorised share capital of unlimited shares of no par value and had issued share capital of:




As at 30

June 2014


As at 31

December 2013




USD


USD

Share capital



27,453,513


26,895,179

Issued capital comprises:



Number


Number

Fully paid ordinary shares



25,386,062


24,977,728

 


Number of shares


Share
capital





USD


Balance at 31 December 2013

24,977,728


26,895,179


Issue of shares

408,334


558,334


Balance at 30 June 2014

25,386,062


27,453,513


 

13        Share-based payments

 


For the six months ended 30/06/14


For the six months ended 30/06/13


USD


USD

Share option (compensation expenses)

94,848


327,749

Total share-based payment charge

94,848


327,749

 

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.

 

33,334 options that vested to Mr. Selegenev in the year ended 31 December 2013 were exercised. The exercise price was US$1.00 per ordinary share in accordance with the conditions of the option agreement. The share price on the date of exercise was USD1.81.

 

All options granted under the above agreement have now lapsed or been exercised.

 

On 24 October 2012, the Company's 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)


US$1.40


US$1.55


US$1.70

Alexander Morgulchik (Employee)


US$1.40


US$1.55


US$1.70

Alexander Selegenev (Director)


US$1.40


US$1.55


US$1.70

Artyom Inyutin (Employee)


US$1.40


US$1.55


US$1.70

Yuri Mostovoy (Director)


US$1.40


US$1.55


US$1.70

Alexander Pak (Employee)


US$1.40


US$1.55


US$1.70

Levan Kavtaradze (Employee)


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 from the Company's share price performance on AIM.

 


Number of shares


Weighted average exercise price of share options

Outstanding shares at 31 December 2013

5,512,500


1.55

Shares exercised during the six months ended 30 June 2014

375,000


1.40

Exercisable shares at 30 June 2014

1,462,500


1.40

 

On 20 June 2014, the Company's senior managers German Kaplun, Alexander Morgulchik and Artyom Inyutin each exercised options over 375,000 (in total 1,125,000) ordinary shares, at the exercise price of US$1.40 per share. Share price on the date of exercise was US$1.975 per share.

 

14     Reserves


Share based payment reserve

USD

Fair value reserve

USD

Retained losses

USD

Total

USD

Balance as at 1 January 2013

128,183

2,005,228

(1,336,201)

797,210

Loss for the year

-

-

(1,849,303)

(1,849,303)

Gain from changes in fair value

-

5,932,139

-

5,932,139

Share based payment charge

576,207

-

-

576,207

Transfer on exercise of share options

(8,420)

-

8,420

-

Balance as at 31 December 2013

695,970

7,937,367

(3,177,084)

5,456,253

Loss for the year

-

-

(1,301,114)

(1,301,114)

Gain from changes in fair value

-

1,254,610

-

1,254,610

Share based payment charge

94,848

-

-

94,848

Transfer on exercise of share options

(102,537)

-

102,537

-

Balance as at 30 June 2014

688,281

9,191,977

(4,375,661)

5,504,597

 

15     Related party transactions

 

In December 2013, Alexander Morgulchik, German Kaplun and Artyom Inyutin agreed to receive all of their 2014 salaries in TMT shares on 31 December 2014 rather than monthly in cash. The number of shares receivable in each case is fixed at a price of US$1.70 per share.

 

On 20 June 2014, Alexander Morgulchik, German Kaplun and Artyom Inyutin each exercised options over 375,000 (in total 1,125,000) ordinary shares of no par value in the Company, from options granted in 2012, at the exercise price of US$1.40 per share. As of 30 June 2014, only 375,000 of these shares were issued, while the remaining 750,000 shares were issued on 8 July 2014. Proceeds of US$1,050,000 from the exercise of the 750,000 share options for which shares were not yet issued as of 30 June 2014 are included within other current liabilities (note 11).

 

16     Subsequent events

 

On 11 July 2014, TMT completed an investment in Quote Roller, Inc. ("QR").  TMT's investment consists of a US$400,000 unsecured convertible promissory note in QR.  QR is behind two business productivity SaaS products: Quote Roller and PandaDoc.  Both products help improve efficiency and productivity of business development and sales teams across various industries.

 

On 21 July 2014, TMT completed an investment in Le Tote, Inc. ("Le Tote"). TMT's investment consists of a US$250,000 unsecured convertible promissory note in Le Tote. Le Tote is a fashion rental platform giving women access to unlimited garments and accessories each month for a fixed price of US$49 per month.

 

On 22 July 2014, TMT allotted 1,432,431 new ordinary shares of no par value each in the Company to new and existing investors at a price of US$1.85 per share, being a discount of 5.6% to the closing price of TMT shares on 21 July 2014 and rising US$2.65 million.

 

On 11 August 2014, TMT sold its entire equity stake in The One-Page Company, Inc. for the total consideration of US$509,740, representing an internal rate of return of 32%.

 

On 20 August 2014, TMT completed an additional investment in Adinch, Inc.  As part of the US$3 million equity fundraising, TMT acquired additional preferred shares in Adinch for an aggregate consideration of US$600,000.  The fundraising was conducted at a substantially higher equity valuation, which has allowed TMT to increase the fair value of its original investment in Adinch (US$1,000,000 invested in February 2013) by 80%, or approx. US$800,000.

 

On 25 August 2014, TMT completed an investment in Anews, Inc., a rapidly growing global news-reading service with a built-in behavioural advertising network.  TMT has acquired preferred shares in Anews for an aggregate consideration of US$1,000,000.

 

On 1 September 2014, TMT completed a US$150,000 equity investment in Twtrland Ltd., a social intelligence platform.

 

On 2 September 2014, TMT completed a US$225,000 equity investment in Drupe Mobile Ltd., a mobile interface application.

 

On 15 September 2014, TMT completed a €100,000 equity investment in Taxify OÜ, a taxi booking app.

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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