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TMT Investments (TMT)

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Tuesday 17 September, 2019

TMT Investments

Half-year Report

RNS Number : 5180M
TMT Investments PLC
17 September 2019
 

17 September 2019

 

TMT INVESTMENTS PLC

("TMT" or the "Company")

 

Half year report for the six months to 30 June 2019

 

TMT Investments PLC, the venture capital company investing in high-growth, technology companies across a number of core specialist sectors, is pleased to announce its unaudited interim results for the half-year ended 30 June 2019.

 

The interim report will shortly be available on the Company's website, www.tmtinvestments.com.

 

Highlights

·        NAV per share of US$3.66 (uplift of 18.45% from US$3.09 as of 31 December 2018)

·        US$29.5 million in positive revaluations from Backblaze, Taxify, PandaDoc, Workiz and eAgronom

·        Many portfolio companies continue to experience rapid growth, with three new investments made during the period

Post period end

·        Following profitable cash exit from Wrike, Inc. at the end of 2018, the Company declared and paid a special dividend of US$5.8 million (US$0.20 per ordinary share) during July 2019

·        Completed a further four new investments and remain well funded to continue to expand and support the Company's investment portfolio

 

Alexander Selegenev, Executive Director of TMT, commented: "We are delighted with our portfolio company performance in the first half of 2019.  The Company is increasingly recognised as one of very few AIM-quoted vehicles providing UK investors with exposure to earlier stage, primarily US-based, tech companies.  Having exceeded US$100 million in net asset value, TMT continues to actively invest in promising tech companies across our chosen sectors, with the continuing objective of growing shareholder value.  We look forward to updating our shareholders on the Company's progress in the near future."

 

TMT Investments PLC

Alexander Selegenev

Executive Director

www.tmtinvestments.com

 

+44 (0)1534 281 800

(Computershare - Company Secretary)

 

[email protected]

 

Strand Hanson Limited (Nominated Adviser)

Richard Tulloch / James Dance / Eric Allan

 

+44 (0)20 7409 3494

Hybridan LLP (Broker)

Claire Louise Noyce

 

+44 (0)20 3764 2341

Kinlan Communications

David Hothersall

 

+44 (0)20 7638 3435

[email protected]

 

About TMT Investments PLC

 

TMT Investments PLC invests in high-growth technology companies across a number of core specialist sectors and has a significant number of Silicon Valley investments in its portfolio. Founded in 2010, TMT has invested in over 45 companies to date and net assets of US$107 million as at 30 June 2019.  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

 

 

 

EXECUTIVE DIRECTOR'S STATEMENT

 

We are delighted with our portfolio company performance since the beginning of the year, which has continued the trend of positive revaluations and cash realisations.  A number of portfolio companies received further validation for their business models by raising fresh equity capital at higher valuations during the period.  In tandem, most of our other portfolio companies have continued growing their businesses quietly in the background.

 

As a result, TMT's net asset value ("NAV") per share as of 30 June 2019 increased 18.45% to US$3.66 (US$3.09 as of 31 December 2018). 

 

Following the disposal of our investment in Wrike, Inc. ("Wrike") at the end of 2018 for US$24.7 million (net), we have been busy directing these proceeds towards investing in additional exciting companies that meet our investment criteria of having outstanding management teams, high growth potential based on globally scalable business models, viable exit opportunities and are typically already generating revenue.  As noted below we have invested, in aggregate, US$6.5 million in seven new investments in the year to date, which include our first two investments in UK companies MEL Science Ltd, an EdTech company using Virtual Reality (VR) to focus on early science education, and HealthyHealth-UK Ltd, an InsurTech and HealthTech company.

 

We were also pleased to pay a special dividend of US$5.8 million (US$0.20 per ordinary share) to shareholders following the Company's profitable cash exit from Wrike.  The dividend was paid on 31 July 2019 and is the second special dividend paid to shareholders, the first being US$2.9 million (US$0.10 per ordinary share) in November 2016 following our partial cash exit from DepositPhotos.

 

The following developments had an impact on and are reflected in the Company's NAV and/or financial statements as of 30 June 2019 in accordance with applicable accounting standards:

 

Full and partial profitable cash exits, and positive non-cash revaluations:

·        In June 2019, PandaDoc, a document automation SaaS provider (www.pandadoc.com), completed a new equity funding round.  The transaction represented a revaluation uplift of US$0.98 million (or 79.5%) in the fair value of TMT's investment in PandaDoc, compared to the previous reported amount as of 31 December 2018.

·        As announced on 28 June 2019, Bolt, a leading international ride-hailing company (www.bolt.eu) formerly known as Taxify, completed a new funding round.  The transaction represented a revaluation uplift of US$5.04 million (or 29.5%) in the fair value of TMT's investment in Bolt, compared to the previous reported amount as of 31 December 2018.

·        In July 2019, Workiz, a field service management SaaS provider (www.workiz.com), completed a new equity funding round.  The transaction represented a revaluation uplift of US$0.18 million (or 67.6%) in the fair value of TMT's investment in Workiz, compared to the previous reported amount as of 31 December 2018.

·        In August 2019, eAgronom, a farm management SaaS provider (www.eagronom.com), completed a new equity funding round.  The transaction represented a revaluation uplift of US$54,024 (or 23.1%) in the fair value of TMT's investment in eAgronom, compared to the previous reported amount as of 31 December 2018.

·        In August 2019, TMT entered into an agreement with a third-party private investor to dispose of approximately 9% of its interest in Backblaze Inc. ("Backblaze"), a leading data backup and cloud storage company (www.backblaze.com), for a cash consideration of US$2.0 million.  The partial disposal to a third party private investor, implied a substantial increase in the value of TMT's interest in Backblaze to US$23.2 million, being the value of its remaining interest and the consideration received, representing an increase of approximately US$12.7 million (or approximately 120%) on the value of the Company's investment in Backblaze of US$10.5 million as of 31 December 2018.

 

Negative revaluations:

·        In July 2019, the Company entered into a definitive agreement to sell its entire holding in Unicell for a total net cash consideration of US$965,729.  The transaction represented a reduction of US$14,271 in the fair value of TMT's investment in Unicell, compared to the previous reported amount as of 31 December 2018.

 

Key developments for the five largest portfolio holdings in the first half of 2019 (source: TMT's portfolio companies):

 

Bolt (ride-hailing and food delivery platform):

·        Active in over 90 cities over the world (from "over 70" cities as of 31 December 2018)

·        Continuing triple-digit growth in revenue and number of users

·        New equity round raised in the first half of 2019 at an increased valuation

 

Depositphotos (stock photo and video marketplace):

·        Continuing double-digit growth in revenue and number of files in the photobank

·        New graphic design software product Crello continues growing fast in both users and revenue

 

Backblaze (online data backup and cloud storage provider):

·        Continuing double-digit revenue growth, exceeding 575,000 paying customers

·        "B2" cloud storage revenue grew at 128% year-on-year

 

Pipedrive (sales CRM software):

·        Continuing double-digit growth in revenue

·        Over 88,500 paying customers (from "over 85,000" as of 31 December 2018)

 

Scentbird (perfume and other beauty product subscription service):

·        Continuing double-digit growth in revenue and number of customers

·        New skincare and wellness ranges launched

 

New investments

 

In the first half of 2019, the Company made the following investments:

·     US$200,000 in Hugo Technologies Ltd. (www.hugoapp.com), a Central American on-demand delivery service;

·     US$2 million in MEL Science Limited (www.melscience.com), a UK EdTech company using Virtual Reality (VR) to focus on early science education.  The company's main products are subscription kits and VR software for learning chemistry and other disciplines; and

·     £200,000 (US$253,615) in HealthyHealth-UK Ltd, a UK InsurTech and HealthTech company (www.healthyhealth.uk).

 

Operating Expenses

 

In the first half of 2019, the Company's administrative expenses of US$603,554 were in line with the 2018 levels (US$606,143).

 

Bonus Plan

 

Under the Company's Bonus Plan, subject to achieving minimum hurdle rate and high watermark conditions in respect of the Company's NAV, the team receives an annual cash bonus equal to 7.5% of the net increases in the Company's NAV, adjusted for any changes in the Company's equity capital resulting from issuance of new shares, dividends, share buy-backs or similar corporate transactions in each relevant year.  The Company's bonus year runs from 1 July to 30 June.  For the bonus year ended 30 June 2019, the total amount of bonus accrued was US$2,007,693.  The exact allocation of the accrued bonus is expected to be approved and paid to the participants of the Company's Bonus Plan shortly after the publication of this interim report.

 

Financial position

 

As of 30 June 2019, the Company had no financial debt and cash reserves of approximately US$22.4 million.  Following the special dividend paid on 31 July 2019, a number of new investments made since 30 June 2019 and US$2.0 million received in respect of Backblaze in September 2019, as of 16 September 2019, the Company had cash reserves of approximately US$15.3 million.

 

NAV per share

 

The Company's net asset value ("NAV") per share in the first half of 2019 increased 18.45% to US$3.66 (31 December 2018: US$3.09).  The NAV per share does not reflect the dividend payment detailed below.

 

Events after the reporting period

 

As announced on 9 July 2019, following the Company's profitable cash exit from Wrike, Inc., the Company's Board of Directors declared a special dividend to the holders of the Company's ordinary shares for a total amount of US$5,837,166, or US$0.20 per ordinary share.  The dividend was paid on 31 July 2019.

 

As announced in August 2019, the Company has made the following new investments in July and August 2019:

·     US$350,000 in Cheetah X, Inc., the developer of the electric scooter sharing platform Go-X (www.goxapp.com).  Go-X is already operating in San Francisco, San Diego, Houston and Yuma, Arizona;

·     US$1.5 million in Scalarr, Inc., a machine learning-based fraud detection solution focused on the advertising market (www.scalarr.io); and

·     US$1.0 million in Accern Corporation, an AI-based data design company that helps automate research and data analysis processes within organisations (www.accern.com).  Accern's clients include IBM, MetLIfe, Credit Suisse and Moody's, as well as other Fortune 500 companies.

 

In addition, in September 2019, the Company invested US$1,200,000 in Rocket Games Entertainment LLC, the owner of Legionfarm, an online game coaching service that helps gamers master complex games by hiring professional players (www.legionfarm.com).

 

The proceeds from the Unicell disposal were received by the Company in August 2019.

 

The proceeds from the partial Backblaze disposal were received by the Company in September 2019.

 

These events after the reporting period are not reflected in the NAV and/or the interim statements as at 30 June 2019.

 

Outlook

 

TMT has now invested in over 50 companies since its admission to trading on AIM in December 2010 and has a diversified portfolio of over 25 investments, focused primarily on big data/cloud, e-commerce, SaaS (software-as-a-service) and marketplaces.  We continue to see exciting investment and exit opportunities in our chosen sectors, and expect to complete a number of new investments in the second half of 2019.  We look forward to updating our shareholders on the Company's progress in the near future.

 

 

 

FINANCIAL STATEMENTS

 

Statement of Comprehensive Income (unaudited)

 

 

 

For the six months ended 30/06/2019

 

For the six months ended 30/06/2018

 

 

Notes

USD

 

USD

 

 

2

 

 

(Restated)

 

Gains on investments

3

18,919,501

 

11,752,157

 

 

 

18,919,501

 

11,752,157

 

Expenses

 

 

 

 

 

Bonus scheme payment charge

6

(2,007,693)

 

(1,512,251)

 

Administrative expenses

5

(603,554)

 

(606,143)

 

Other operating expenses

 

(13,078)

 

 

 

Operating gain

 

16,295,176

 

9,633,763

 

Net finance income

7

122,959

 

3,063

 

Gain before taxation

 

16,418,135

 

9,636,826

 

Taxation

8

-

 

-

 

Gain attributable to equity shareholders

 

16,418,135

 

9,636,826

 

Total comprehensive income for the year

 

16,418,135

 

9,636,826

 

Gain per share

 

 

 

 

 

Basic and diluted gain per share (cents per share)

9

56.25

 

33.82

 

 

 

 

Statement of Financial Position

 

 

 

At 30 June

2019

USD

 

At 31 December

2018

USD

 

 

Unaudited

 

Audited

 

Notes

 

 

 

Non-current assets

 

 

 

 

Financial assets at FVPL

10

85,698,157

 

64,890,144

Total non-current assets

 

85,698,157

 

64,890,144

 

 

 

 

 

Current assets

 

 

 

 

Trade and other receivables

11

699,472

 

23,804,395

Cash and cash equivalents

12

22,389,897

 

3,270,088

Total current assets

 

23,089,369

 

27,074,483

Total assets

 

108,787,526

 

91,964,627

 

 

 

 

 

Current liabilities

 

 

 

 

Trade and other payables

13

2,107,706

 

1,702,942

Total current liabilities

 

2,107,706

 

1,702,942

 

 

 

 

 

Total liabilities

 

2,107,706

 

1,702,942

 

 

 

 

 

 

 

 

 

 

Net assets

 

106,679,820

 

90,261,685

 

 

 

 

 

Equity

 

 

 

 

Share capital

14

34,790,174

 

34,790,174

Retained profit

 

71,889,646

 

55,471,511

Total equity

 

106,679,820

 

90,261,685

             

 

 

 

Statement of Cash Flows (unaudited)

 

 

 

For the six months ended 30/06/2019

For the six months ended 30/06/2018

 

 

Notes

USD

USD

 

 

 

 

(Restated)

 

Operating activities

 

 

 

 

Operating gain

 

16,295,176

9,633,763

 

Adjustments for non-cash items:

 

 

 

 

Changes in fair value of financial assets at FVPL

3

(18,922,586)

(11,731,576)

 

Bonus scheme payment charge

 

2,007,693

1,512,251

 

Amortised costs of convertible notes receivable

3

-

651

 

 

 

(619,717)

(584,911)

 

Changes in working capital:

 

 

 

 

Decrease/(increase) in trade and other receivables

11

23,104,922

(328,364)

 

Decrease in trade and other payables

13

(1,602,928)

(27,673)

 

Net cash generated from/(used by) operating activities

 

20,882,277

(940,948)

 

Investing activities

 

 

 

 

Interest received

7

96,757

 

Purchase of financial assets at FVPL

10

(2,453,607)

(300,000)

 

Proceeds from sale of financial assets at FVPL

10

568,180

2,063,194

 

Other financial income

7

26,202

-

 

Net cash (used in)/generated from investing activities

 

(1,762,468)

1,766,257

 

Financing activities

 

 

 

 

Proceeds from issue of shares

 

-

3,336,664

 

Net cash from financing activities

 

-

3,336,664

 

Increase/(decrease) in cash and cash equivalents

 

19,119,809

4,161,973

 

Cash and cash equivalents at the beginning of the period

12

3,270,088

985,692

 

Cash and cash equivalents at the end of the period

12

22,389,897

5,147,665

 

 

 

 

Statement of Changes in Equity (unaudited)

 

 

 

Share capital

Retained profit

Total

 

 

USD

USD

USD

Balance at 31 December 2017

 

31,453,510

35,979,019

67,432,529

Gain for the year

 

-

19,492,492

19,492,492

Total comprehensive income for the year

 

 

19,492,492

19,492,492

Transactions with owners in their capacity as owners:

 

 

 

 

Issue of shares

 

3,336,664

-

3,336,664

 

 

 

 

 

Balance at 31 December 2018

 

34,790,174

55,471,511

90,261,685

Gain for the period

 

-

16,418,135

16,418,135

Total comprehensive income for the period

 

-

16,418,135

16,418,135

Balance at 30 June 2019

 

34,790,174

71,889,646

106,679,820

 

 

 

 

 

 

NOTES TO THE FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2019

 

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 (as amended) 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.  The Company's ordinary shares were admitted to trading on the AIM market of the London Stock Exchange on 1 December 2010.

 

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.

 

Financial statements of the Company are prepared by and approved by the Directors in accordance with International Financial Reporting Standards, International Accounting Standards and their interpretations issued or adopted by the International Accounting Standards Board as adopted by the European Union ("IFRSs").  The Company's accounting reference date is 31 December.

 

2.         Summary of significant accounting policies

 

2.1      Basis of presentation

 

The condensed consolidated financial statements for the six months ended 30 June 2019 and 2018 are unaudited and were approved by the Directors on 16 September 2019.  They do not constitute statutory accounts as defined in section 434 of the Companies Act 2006.  The financial statements for the year ended 31 December 2018 were prepared in accordance with International Financial Reporting Standards as adopted by the EU.  The report of the auditor on those financial statements was unqualified and did not draw attention to any matters by way of emphasis of matter.

 

The principal accounting policies applied by the Company in the preparation of these unaudited financial statements are set out below and have been applied consistently.

 

The financial statements have been prepared on a going concern basis, under the historical cost basis as modified by the fair value of financial assets at FVTPL, as explained in the accounting policies below, and in accordance with IFRS.  Historical cost is generally based on the fair value of the consideration given in exchange for assets.

 

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 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 30/06/2019

Average rate, for six months ended 30/06/2019

 

British pounds, £

 

 

 

 

1.2677

1.2937

 

Euro, €

 

 

 

 

1.1373

1.1264

 

 

2.3      New IFRSs and interpretations

 

The IASB has issued the following standards and interpretations which have been endorsed by the European Union to be applied to financial statements with periods commencing on or after the following dates:

 

 

Effective for period beginning on or after

IFRS 9

Financial Instruments

1 January 2018

IFRS 16

Leases

1 January 2019

 

IFRS 16 sets out requirements for recognising and measuring, presentation and disclosure of leases. The standard provides a single lessee accounting model, requiring lessees to recognise assets and liabilities for all leases unless the lease term is 12 months or less or the underlying asset has a low value.

 

As the lease held by the Company is less than 12 months, the Company has not processed any transaction adjustments on adopting IFRS 16. The company recognises the lease payments associated with these leases as expenses on a straight-line basis over the lease term.

 

The comparative information for the period ended 30 June 2018 has been restated to reflect the adoption of IFRS 9 using retrospective approach.

 

 

 

The following table explains the changes in the treatment of movements in fair value for the period ended 30 June 2018 in the Statement of Comprehensive Income.

 

 

Original results for the year ended 30/06/2018

 

Restated results for the year ended 30/06/2018

 

USD

 

USD

Gain attributable to equity shareholders

817,594

 

11,752,157

Other comprehensive income for the period:

 

 

 

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

10,934,563

 

-

Total comprehensive income for the period

11,752,157

 

11,752,157

 

In addition to the above changes the fair value reserve of US$57,782,682 was reclassified to Retained Earnings as at 30 June 2018.

 

3          Gain on investments

 

For six months ended 30/06/2019

 

Restated for six months

 ended 30/06/2018

 

USD

 

USD

Gross interest income from convertible notes receivable

12,516

 

21,232

Amortised costs of convertible notes receivable

-

 

(651)

Net interest income from convertible notes receivable

12,516

 

20,581

Gains on changes in fair value of financial assets at FVPL

18,922,586

 

11,731,576

Success fee attributable to consultants

(15,601)

 

-

Total gain on investments

18,919,501

 

11,752,157

 

4          Segmental analysis

 

Geographic information

The Company has investments in six principal geographical areas - USA, Israel, BVI, Estonia, and the United Kingdom.

 

Non-current financial assets

 

As at 31/12/2018

 

USA

Israel

BVI

Estonia

United Kingdom

Total

 

USD

USD

USD

USD

USD

USD

Equity investments

39,980,857

1,870,183

-

17,094,470

-

58,945,510

Convertible notes & SAFE's

5,710,434

-

-

234,200

-

5,944,634

 Total

45,691,291

1,870,183

-

17,328,670

-

64,890,144

 

As at 30/06/2019

 

USA

Israel

BVI

Estonia

United Kingdom

Total

 

USD

USD

USD

USD

USD

USD

Equity investments

53,260,692

1,852,652

200,000

22,132,548

2,253,607

79,699,499

Convertible notes & SAFE's

5,710,434

-

-

288,224

-

5,998,658

 Total

58,971,126

1,852,652

200,000

22,420,772

2,253,607

85,698,157

 

 

 

5          Administrative expenses

 

Administrative expenses include the following amounts:

 

For six months ended 30/06/2019

 

For six months ended

30/06/2018

 

USD

 

USD

Staff expenses (note 6)

321,842

 

312,601

Professional fees

144,640

 

139,875

Legal fees

26,674

 

22,069

Bank and LSE charges

7,445

 

15,995

Audit and accounting fees

10,396

 

11,218

Rent

47,298

 

47,298

Other expenses

44,002

 

46,713

Currency exchange loss

1,257

 

10,374

 

603,554

 

606,143

 

6          Staff expenses and Bonuses

 

For six months ended 30/06/2019

 

For six months ended 30/06/2018

 

USD

 

USD

Directors' fees

93,002

 

106,361

Wages and salaries

228,840

 

206,240

 

321,842

 

312,601

 

Wages and salaries shown above include fees and salaries relating to the six months ended 30 June. These costs are included in administrative expenses.

 

The average number of staff employed (excluding Directors) by the Company during the six months ended 30 June was 6 (for the year ended 31 December 2018: 5).

 

The Directors' fees for the six months ended 30 June 2019 and 2018 were as follows:

 

For six months ended 30/06/2019

 

For six months ended

30/06/2018

 

USD

 

USD

Alexander Selegenev

50,052

 

62,685

Yuri Mostovoy

24,998

 

25,000

James Joseph Mullins

12,952

 

13,676

Petr Lanin

5,000

 

5,000

 

93,002

 

106,361

 

The Directors' fees shown above are all classified as 'short term employment benefits' under International Accounting Standard 24. The Directors do not receive any pension contributions or other benefits.

 

Key management personnel of the Company are defined as those persons having authority and responsibility for the planning, directing and controlling the activities of the Company, directly or indirectly. Key management of the Company are therefore considered to be the Directors of the Company. There were no transactions with the key management, other than their Directors fees, bonuses and reimbursement of business expenses.

 

Under the Company's Bonus Plan, subject to achieving minimum hurdle rate and high watermark conditions in respect of the Company's NAV, the team receives an annual cash bonus equal to 7.5% of the net increases in the Company's NAV, adjusted for any changes in the Company's equity capital resulting from issuance of new shares, dividends, share buy-backs or similar corporate transactions in each relevant year.  The Company's bonus year runs from 1 July to 30 June.  For the bonus year ended 30 June 2019, the total amount of bonus accrued was US$2,007,693.  The exact allocation of the accrued bonus is expected to be approved and paid to the participants of the Company's Bonus Plan shortly after the publication of this interim report.

 

7          Net finance income

 

For six months ended 30/06/2019

 

For six months ended 30/06/2018

 

USD

 

USD

Interest income

96,757

 

3,063

Other financial income

26,202

 

 

 

122,959

 

3,063

 

8       Income tax expense

 

For six months ended

30/06/2019

 

For six months ended 30/06/2018

 

USD

 

USD

Current taxes

 

 

 

Current year

-

 

-

Deferred taxes

 

 

 

Deferred income taxes

-

 

-

 

-

 

-

 

The Company is incorporated in Jersey. No tax reconciliation note has been presented as the income tax rate for Jersey companies is 0%.

 

9       Gain per share

 

The calculation of basic gain per share is based upon the net gain for the six months ended 30 June 2019 attributable to the ordinary shareholders of US$16,418,135 (for the six months ended 30 June 2018: net gain of US$9,636,826) and the weighted average number of ordinary shares outstanding calculated as follows:

 

Gain per share

For the six months ended 30/06/2019

 

Restated for the six months

ended 30/06/2018

Basic gain per share (cents per share)

56.25

 

33.82

Gain attributable to equity holders of the entity (USD)

16,418,135

 

9,636,826

 

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 year outstanding)

For the six months ended 30/06/2019

 

For the six months ended 30/06/2018

Weighted average number of shares in issue

 

 

 

Ordinary shares

29,185,831

 

28,493,259

 

29,185,831

 

28,493,259

 

 

 

10     Non-current financial assets

 

 

At 30 June 2019

USD

 

At 31 December 2018

USD

Financial assets at FVPL:

 

 

 

Investments in equity shares (i)

 

 

 

- unlisted shares

83,039,903

 

62,285,914

Convertible notes receivable (ii)

 

 

 

- promissory notes

1,458,254

 

1,404,230

- SAFEs

1,200,000

 

1,200,000

 

85,698,157

 

64,890,144

 

Reconciliation of fair value measurements of non-current financial assets:

 

 

 

Financial assets at FVPL

 

Total

 

 

Unlisted
shares

 

Convertible
notes & SAFE's

 

 

 

 

USD

 

USD

 

USD

Balance as at 31 December 2017

 

57,120,436

 

9,452,503

 

66,572,939

Total gains or losses in 2018:

 

 

 

 

 

 

- changes in fair value

 

22,974,039

 

(69,985)

 

22,904,054

Purchases (including consulting & legal fees)

 

74,053

 

934,200

 

1,008,253

Disposal of investment (carrying value)

 

(25,464,451)

 

(130,651)

 

(25,595,102)

Conversion and other movements

 

7,581,837

 

(7,581,837)

 

-

Balance as at 1 January 2018

 

62,285,914

 

2,604,230

 

64,890,144

Total gains or losses in 2019:

 

 

 

 

 

 

- changes in fair value

 

18,868,562

 

54,024

 

18,922,586

Purchases (including consulting & legal fees)

 

2,453,607

 

-

 

2,453,607

Disposal of investment (carrying value)

 

(568,180)

 

-

 

(568,180)

Balance as at 30 June 2019

 

83,039,903

 

2,658,254

 

85,698,157

 

Financial assets at fair value through profit or loss are measured at fair value, and changes therein are recognised in profit or loss.

 

When measuring the fair value of a financial instrument, the Company uses market observable data as far as possible, including relevant transactions during the year or shortly after the year end, which gives an indication of fair value. The "price of recent investment" methodology is used mainly for venture capital investments, and the fair value is derived by reference to the most recent equity financing round. Fair value change is only recognised if that round involved a new external investor.

 

 

 

(i)            Equity investments as at 30 June 2019:

Investee company

Date of initial investment

Value at

1 Jan 2019,

USD

Additions to equity investments during the period, USD

Conversions from loan notes, USD

Gain/loss from changes in fair value of financial assets, USD

Disposals, USD

Value at 30 Jun  2019, USD

Equity stake owned

Unicell

15.09.2011

980,000

-

-

(14,271)

-

965,729

2.36%

DepositPhotos

26.07.2011

10,836,105

-

-

-

-

10,836,105

16.41%

Wanelo

21.11.2011

1,825,596

-

-

-

-

1,825,596

4.69%

Backblaze

24.07.2012

10,533,334

-

-

12,668,178

-

23,201,512

11.78%

E2C

15.02.2014

 136,781

-

-

-

-

 136,781

5.51%

Drippler

01.05.2014

3,260

-

-

-

(3,260)

-

-

Remot3.it

13.06.2014

791,510

-

-

-

-

 791,510

1.68%

Le Tote

21.07.2014

1,997,073

-

-

-

-

 1,997,073

1.32%

Anews

25.08.2014

 1,000,000

-

-

-

-

 1,000,000

9.41%

Klear

01.09.2014

 155,000

-

-

-

-

 155,000

3.04%

Drupe

02.09.2014

 595,142

-

-

-

-

 595,142

7.46%

Bolt

15.09.2014

17,094,470

-

-

5,038,078

-

22,132,548

1.63%

Pipedrive

30.07.2012

10,257,098

-

-

-

-

10,257,098

2.41%

PandaDoc

11.07.2014

1,233,770

-

-

981,348

-

2,215,118

1.76%

The IRApp

16.08.2016

547,972

 

-

16,948

(564,920)

-

-

Full Contact

11.01.2018

244,506

-

-

-

-

244,506

0.21%

ScentBird

13.04.2015

3,340,404

-

-

-

-

3,340,404

4.01%

Workiz

16.05.2016

263,878

-

-

178,281

-

442,159

2.13%

Vinebox

06.05.2016

450,015

-

-

-

-

450,015

2.41%

Hugo

19.01. 2019

-

200,000

-

-

-

200,000

2.00%

MEL Science

25.02.2019

-

1,999,992

-

-

-

1,999,992

4.60%

Healthy Health

06.06.2019

-

253,615

-

-

-

253,615

2.55%

Total

 

62,285,914

2,453,607

-

18,868,562

(568,180)

83,039,903

 

 

(ii)           Convertible loan notes as at 30 June 2019:

Investee company

 

Date of initial investment

Value at 1 Jan 2019,

USD

Additions to convertible note investments during the period, USD

Amortized costs, USD

Conversions from loan notes, USD

Gain/loss from changes in fair value of financial assets, USD

Disposals, USD

Value at 30 Jun 2019, USD

Term, years

Interest rate, %

Sharethis

26.03.2013

570,030

-

-

-

-

570,030

5.0

1.09%

KitApps (Attendify)

10.07.2013

600,000

-

-

-

-

600,000

1.0

2.00%

eAgronom

31.08.2018

234,200

-

-

54,024

-

288,224

-

-

Total

 

1,404,230

-

-

-

54,024

-

1,458,254

 

 

 

 

 

(iii)          SAFEs as at 30 June 2019:

Investee company

 

Date of initial investment

Value at 1 Jan 2019,

USD

Additions to convertible note investments during the period, USD

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

Disposals, USD

Value at 30 Jun 2019, USD

Spinbackup

17.12.2018

300,000

-

-

-

300,000

Sixa

28.07.2016

900,000

-

-

-

900,000

Total

 

1,200,000

-

-

-

1,200,000

 

11     Trade and other receivables

 

At 30 June 2019

 

At 31 December 2018

 

USD

 

USD

Prepayments

314,977

 

311,839

Other receivables

264,361

 

23,401,258

Interest receivable on promissory notes

102,199

 

89,683

Interest receivable on deposits

17,935

 

1,615

 

699,472

 

23,804,395

 

12     Cash and cash equivalents

 

The cash and cash equivalents as at 30 June 2019 include cash on hand and in banks, deposits, net of outstanding bank overdrafts. The effective interest rate at 30 June 2019 was 2.60%.

 

Cash and cash equivalents comprise the following:

 

 

At 30 June 2019

 

At 31 December 2018

 

USD

 

USD

Deposits

8,565,964

 

1,500,000

Bank balances

13,823,933

 

1,770,088

 

22,389,897

 

3,270,088

 

The following table represents an analysis of cash and equivalents by rating agency designation based on Fitch rating or their equivalent:

 

At 30 June 2019

 

At 31 December 2018

 

USD

 

USD

Bank balances

 

 

 

BBB+ rating

13,823,933

 

1,770,088

 

13,823,933

 

1,770,088

Deposits

 

 

 

BBB+ rating

8,565,964

 

1,500,000

 

8,565,964

 

1,500,000

 

22,389,897

 

3,270,088

         

 

 

 

13     Trade and other payables

 

At 30 June 2019

 

At 31 December 2018

 

USD

 

USD

Salaries payable

10,933

 

162,500

Directors' fees payable

28,005

 

9,183

Bonus payable

19,016

 

720,632

Trade payables

30,088

 

789,265

Other current liabilities

59

 

100

Accrued expenses

11,912

 

21,262

Accrued bonus pool

2,007,693

 

-

 

2,107,706

 

1,702,942

 

14     Share capital

 

On 30 June 2019 the Company had an authorised share capital of unlimited shares of no par value and had issued share capital of:

 

At 30 June 2019

 

At 31 December 2018

 

 

USD

 

USD

 

Share capital

34,790,174

 

34,790,174

 

 

 

 

 

 

Issued capital comprises:

Number

 

Number

 

Fully paid ordinary shares

29,185,831

 

29,185,831

 

 

 

 

 

 

 

 

 

 

Number of shares

 

Share capital,

USD

Balance at 31 December 2018

29,185,831

 

27,744,962

Issue of shares

-

 

1,440,869

Balance at 30 June 2019

29,185,831

 

29,185,831

 

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, the Company's senior managers.  German Kaplun also owns 18.33% of the issued share capital of TMT.  Thus, Orgtekhnika is considered a related party.  Together with other related expenses (support personnel, company car, security services, etc.), the total office rent costs to TMT from 1 April 2017 has been US$7,883 per month.

 

The Company's Directors receive fees and bonuses from the Company, details of which can be found in Note 6.

 

 

 

16     Subsequent events

 

As announced on 9 July 2019, following the Company's significantly profitable cash exit from Wrike, Inc., the Company's Board of Directors declared a special dividend to the holders of the Company's ordinary shares for a total amount of US$5,837,166, or US$0.20 per ordinary share.  The dividend was paid on 31 July 2019.

 

As announced on 22 August 2019, the Company has made the following new investments in July and August 2019:

·     US$350,000 in Cheetah X, Inc., the developer of the electric scooter sharing platform Go-X (www.goxapp.com).  Go-X is already operating in San Francisco, San Diego, Houston and Yuma, Arizona;

·     US$1.5 million in Scalarr, Inc., a machine learning-based fraud detection solution focused on the advertising market (www.scalarr.io); and

·     US$1.0 million in Accern Corporation, an AI-based data design company that helps automate research and data analysis processes within organisations (www.accern.com).  Accern's clients include IBM, MetLIfe, Credit Suisse and Moody's, as well as other Fortune 500 companies.

 

In addition, in September 2019 the Company invested US$1,200,000 in Rocket Games Entertainment LLC, the owner of Legionfarm, an online game coaching service that helps gamers master complex games by hiring professional players (www.legionfarm.com).

 

The proceeds from the Unicell disposal were received by the Company in August 2019.

 

The proceeds from the partial Backblaze disposal were received by the Company in September 2019.


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [email protected] or visit www.rns.com.
 
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