15 Jun 2009 07:00
For immediate release
15 June 2009
TOP LEVEL DOMAIN HOLDINGS LIMITED
("TLDH" or the "Company")
Interim Results for the Period ended 30 April 2009
TLDH (AIM: TLDH) today announces its unaudited results for the six month period ended 30 April 2009 (the "Period"). A copy of the interim results for the Period report is available on the Company's website, www.tldh.org.
The following sets out the audited results for the Company for the period ended 30 April 2009.
Chairman's Statement
While we were generally pleased with the performance of our websites TutorialBlog and AppCraver, the portfolio of domain names generated reduced revenue for a number of reasons including, but not limited to, reduced payouts by search result providers, increased traffic attrition, and general deteriorating fundamentals of advertising funded business in the current economic environment. As previously announced, the Company does not currently plan to invest in additional destination domain names at this time, but intends to expand its portfolio vertically into top level domain names ("TLD's") where the Directors believe there are attractive investment opportunities.
Existing TLD's include .com, .net, and .org. The Internet Corporation for Assigned Names and Numbers ("ICANN") recently announced its intention to allow qualified parties to apply to own and operate new TLDs. The Company intends to invest in a portfolio of TLD applicants and infrastructure technologies and following the Period end announced that it had conditionally subscribed for an interest in top level domain registry services provider Minds+Machines Inc. (www.mindsandmachines.com). Minds+Machines Inc. is a consulting and registry services company that provides registry solutions for new TLD applicants.
The Directors are proposing that the Company's current investing policy in relation to asset allocation and risk diversification ("Investing Policy") is modified, subject to approval at the forthcoming annual general meeting ("AGM"), so that the Company can consider a wider range of potential investment opportunities in the internet sector (the "Modified Investing Policy"). In particular the Company intends to acquire a widely distributed mix of businesses involved in the operation and supply of support services to domains and websites and other related internet services businesses including top level domains and top level domain infrastructure and support technologies. As the internet continues to evolve rapidly, this should enable to Company to exploit new investment opportunities which arise through technological or regulatory change.
Revenue for the Period was £129,000 with finance revenue totalling £21,000. Administrative expenses totalled £465,000. Share options expensed totalled £106,000. Retained loss for the period attributable to members of the parent Company totalled £421,000 for a loss of 0.26 pence per Ordinary share.
The Company still has significant cash resources. Cash and cash equivalents at the Period end amounted to approximately £2.0 million.
The Board is excited about the prospects for the Company and believe that the Company is well positioned to take advantage of the new developments within the TLD sector which should create significant opportunities for the future development of the Company.
Frederick Krueger
Chairman and Chief Executive
Further Information:
Top Level Domain Holdings Limited
David Weill Tel: +44 (0) 20 7881 0180
Beaumont Cornish Limited
Roland CornishMichael Cornish Tel +44 (0) 20 7628 3396
gth media relations
Toby Hall /Christian Pickel Tel: +44 (0) 20 7153 8039/8036Or visit the group's website at www.tldh.org
TOP LEVEL DOMAIN HOLDINGS LTD
GROUP INCOME STATEMENT
FOR THE PERIOD ENDED 30 APRIL 2009
| Note | Period ended 30 April 2009 (unaudited) | Period 22 June 2007 to 30 April 2008 (unaudited) | Period 22 June 2007 to 31 October 2008 (audited) | |
| £'000 | £'000 | £'000 | ||
| Revenue | 129 | - | 232 | |
| Administrative expenses | (465) | (215) | (516) | |
| Impairment charge | - | - | (1,019 | |
| Share options expensed | 5 | (106) | (106) | (249) |
| Operating loss | (442) | (321) | (1,552) | |
| Interest receivable | 21 | 75 | 138 | |
| Loss on ordinary activities before taxation | (421) | (246) | (1,414) | |
| Taxation on loss on ordinary activities | - | - | - | |
| Loss for the financial period | (421) | (246) | (1,414) | |
| Attributable to: | ||||
| Equity holders of the company | (421) | (246) | (1,414) | |
| Basic and diluted loss per share expressed in pence | 3 | (0.26) | (0.26) | (1.18) |
TOP LEVEL DOMAIN HOLDINGS LTD
GROUP BALANCE SHEET
AS AT 30 APRIL 2009
| Note | 30 April 2009 (unaudited) | 30 April 2008 (unaudited) | 31 October 2008 (audited) | |
| £'000 | £'000 | £'000 | ||
| Non-current assets | ||||
| Intangible assets | 349 | 1,262 | 349 | |
| Total non-current assets | 349 | 1,262 | 349 | |
| Current assets | ||||
| Trade and other receivables | 655 | 372 | 78 | |
| Cash and cash equivalents | 2,027 | 2,686 | 2,888 | |
| Total current assets | 2,682 | 3,058 | 2,966 | |
| Total Assets | 3,031 | 4,320 | 3,315 | |
| Current Liabilities | ||||
| Trade and other payables | (31) | (30) | (61) | |
| Total Liabilities | (31) | (30) | (61) | |
| Net Assets | 3,000 | 4,290 | 3,254 | |
| Shareholders' equity | ||||
| Share capital | 4 | - | - | - |
| Share premium account | 4,380 | 4,394 | 4,380 | |
| Share based payment reserve | 5 | 391 | 142 | 285 |
| Foreign exchange reserve | 64 | - | 3 | |
| Retained earnings | (1,835) | (246) | (1,414) | |
| Total Equity | 3,000 | 4,290 | 3,254 |
TOP LEVEL DOMAIN HOLDINGS LTD
GROUP CASH FLOW STATEMENT
FOR THE PERIOD ENDED 30 APRIL 2009
| Period ended 30 April 2009 (unaudited) | Period 22 June to 30 April 2008 (unaudited) | Period 22 June 2007 to 31 October 2008 (audited) | |
| £'000 | £'000 | £'000 | |
| Cash outflow from operating activities | |||
| Operating Loss Increase in trade and other receivables (Decrease)/increase in trade and other payables Impairment charge Foreign exchange gain Share options expensed | (442) (577) (30) - - 106 | (321) (372) 30 - - 106 | (1,552) (78) 61 1,019 (18) 249 |
| Net cash outflow from operating activities | (943) | (557) | (319) |
| Cash flows from investing activities | |||
| Interest received | 21 | 75 | 138 |
| Payments to acquire intangible assets | - | (1,247) | (1,353) |
| Net cash in/(out)flow from investing activities | 21 | (1,172) | (1,215) |
| Cash flows from financing activities | |||
| Issue of ordinary share capital | - | 4,548 | 4,548 |
| Share issue costs | - | (133) | (133) |
| Net cash inflow from financing activities | - | 4,415 | 4,415 |
| Net increase in cash and cash equivalents | (922) | 2,686 | 2,881 |
| Cash and cash equivalents at beginning of period | 2,888 | - | - |
| Exchange gain on cash and cash equivalents | 61 | - | 7 |
| Cash and cash equivalents at end of period | 2,027 | 2,686 | 2,888 |
TOP LEVEL DOMAIN HOLDINGS LTD
GROUP STATEMENT OF CHANGES IN EQUITY (Unaudited)
FOR THE PERIOD ENDED 30 APRIL 2009
| Attributable to equity holders of the company | ||||||
| Called up share capital | Share premium reserve | Share based payment reserve | Foreign currency translation reserve | Retained earnings | Total | |
| Group | £ 000's | £ 000's | £ 000's | £ 000's | £ 000's | £ 000's |
| As at 22 June 2007 | - | - | - | - | - | - |
| Loss for the period | - | - | - | - | (1,414) | (1,414) |
| Currency translation differences | - | - | - | 3 | - | 3 |
| Total recognised income and expense | - | - | - | 3 | (1,414) | (1,411) |
| Share capital issued | - | 4,563 | - | - | - | 4,563 |
| Cost of share issue | - | (183) | - | - | - | (183) |
| Share based payments | - | - | 285 | - | - | 285 |
| As at 31 October 2008 | - | 4,380 | 285 | 3 | (1,414) | 3,254 |
| Loss for the period | - | - | - | - | (421) | (421) |
| Currency translation differences | - | - | - | 61 | - | 61 |
| Total recognised income and expense | - | - | - | 61 | (421) | (360) |
| Share capital issued | - | - | - | - | - | - |
| Cost of share issue | - | - | - | - | - | - |
| Share based payments | - | - | 106 | - | - | 106 |
| As at 30 April 2009 | - | 4,380 | 391 | 64 | (1,835) | 3,000 |
TOP LEVEL DOMAIN HOLDINGS LTD
NOTES TO THE INTERIM FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 APRIL 2009
Basis of preparation
The Company was registered as Hecta Media Inc. in British Virgin Islands having been incorporated on 22nd June 2007 under the BVI Business Companies Act 2004 with registered number 1412814. On 16 April 2009, the company changed its registered name to Top Level Domain Holdings Ltd.
The consolidated financial statements has been prepared under the historical cost convention and on a going concern basis and in accordance with International Financial Reporting Standards and IFRIC interpretations adopted for use in the European Union ("IFRS") and those parts of the BVI Business Companies Act applicable to companies reporting under IFRS.
The consolidated financial statements for the period ended 30 April 2009 have not been audited or reviewed in accordance with the International Standard on Review Engagements 2410 issued by the Auditing Practices Board. The figures were prepared using applicable accounting policies and practices consistent with those adopted in the statutory accounts for the period ended 31 October 2008.
The consolidated financial statements contained in this document do not constitute statutory accounts as defined by Section 240 of the Companies Act 1985 (England & Wales). In the opinion of the directors the financial information for this period fairly presents the financial position, result of operations and cash flows for this period.
This Interim Financial Report was approved by the Board of Directors on 12 June 2009.
Statement of compliance
These condensed interim financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union with the exception of International Accounting Standard ('IAS') 34 - Interim Financial Reporting. Accordingly the interim financial statements do not include all of the information or disclosures required in the annual financial statements.
Foreign currencies
The functional currency of each entity is determined after consideration of the primary economic environment of the entity. The group's presentational currency is Sterling (£).
| 2 | Segmental analysis - Group | ||||||||||
| For management purposes the Group only operates in 1 business division, that of internet operations. Revenue is received on the basis of parking revenue and domain sales. Therefore the primary segment is that of Geographical location. | |||||||||||
| The analysis of the operating loss before taxation and the net assets employed by geographical segment of operations is shown below; | |||||||||||
| By geographical area | |||||||||||
| 30 April 2009 | BVI/Parent | BVI/USA | Total | ||||||||
| £ 000's | £ 000's | £ 000's | |||||||||
| Revenue | |||||||||||
| External sales | 8 | 121 | 129 | ||||||||
| Result | |||||||||||
| Operating loss | (171) | (271) | (442) | ||||||||
| Investment revenue | 21 | - | 21 | ||||||||
| Loss before & after tax | (421) | ||||||||||
| Other information | |||||||||||
| Depreciation, amortisation and impairment | - | - | - | ||||||||
| Capital additions | - | - | - | ||||||||
| Assets | |||||||||||
| Segment assets | 45 | 304 | 349 | ||||||||
| Financial assets | 613 | 42 | 655 | ||||||||
| Cash | 2,027 | ||||||||||
| Consolidated total assets | 3,031 | ||||||||||
| Liabilities | |||||||||||
| Segment liabilities | - | - | - | ||||||||
| Financial liabilities | (23) | (8) | (31) | ||||||||
| Consolidated total liabilities | (31) | ||||||||||
| 2 | Segmental analysis - Group (continued) | ||||||||
| 31 October 2008 | BVI/Parent | BVI/USA | Total | ||||||
| £ 000's | £ 000's | £ 000's | |||||||
| Revenue | |||||||||
| External sales | 10 | 222 | 232 | ||||||
| Result | |||||||||
| Operating loss | (648) | (904) | (1,552) | ||||||
| Investment revenue | 137 | 1 | 138 | ||||||
| Loss before & after tax | (1,414) | ||||||||
| Other information | |||||||||
| Depreciation, amortisation and impairment | - | 1,019 | 1,019 | ||||||
| Capital additions | 45 | 1,323 | 1,368 | ||||||
| Assets | |||||||||
| Segment assets | 45 | 304 | 349 | ||||||
| Financial assets | - | 78 | 78 | ||||||
| Cash | 2,888 | ||||||||
| Consolidated total assets | 3,315 | ||||||||
| Liabilities | |||||||||
| Segment liabilities | - | - | - | ||||||
| Financial liabilities | (52) | (9) | (61) | ||||||
| Consolidated total liabilities | (61) | ||||||||
3. Loss per share
The calculation of earnings per share is based on the loss after taxation divided by the weighted average number of shares in issue during the period:
| Period ended 30 April 2009 (unaudited) | Period ended 30 April 2008 (unaudited) | Period ended 31 October 2008 (unaudited) | |
| £'000 | £'000 | £'000 | |
| Net loss after taxation | (421) | (246) | (1,414) |
| Weighted average number of ordinary shares used in calculating basic earnings per share | 162.63m | 95.82m | 120.28m |
| Basic loss per share (expressed in pence) | (0.26) pence | (0.26) pence | (1.18) pence |
As the inclusion of the potential ordinary shares would result in a decrease in the loss per share they are considered to be anti-dilutive and, as such, a diluted loss per share is not included.
4. Share capital
The authorised share capital of the Company and the called up and fully paid amounts at 30 April 2009 were as follows:
£'000
Authorised
Unlimited ordinary shares of no par value each -
| Called up, allotted, issued and fully paid | Number of shares | Nominal value £'000 |
| Incorporation | 1 | - |
| 26 October 2007 for cash at 1p per share | 64,750,000 | - |
| 26 October 2007 for cash at 4p per share | 10,000,000 | |
| 29 October 2007 - original incorporation share cancelled | (1) | - |
| 31 October 2007 for cash at 4p per share | 87,516,456 | - |
| 13 March 2008 for non-cash consideration at 4p per share | 368,242 | - |
| As at 30 April 2009 | 162,634,698 | - |
Total share options in issue
During the period ended 30 April 2009, the company granted no further options over ordinary shares.
As at 30 April 2009 the unexercised options in issue were;
| Exercise Price | Expiry Date | Options in Issue 30 April 2009 |
| 4p | 13 November 2012 | 19,000,000 |
| 4p | 1 January 2013 | 1,750,000 |
| 20,750,000 |
Total warrants in issue
| Exercise Price | Expiry Date | Options in Issue 30 April 2009 |
| 4p | 13 November 2012 | 1,622,665 |
| 1,622,665 |
No options or warrants lapsed or were cancelled and no options or warrants were exercised during the period to 30 April 2009.
5. Share based payments
| Under IFRS 2 'Share Based Payments', the Company determines the fair value of options issued to Directors and Employees as remuneration and recognises the amount as an expense in the income statement with a corresponding increase in equity. | |||||||||||
| Name | Date Granted | Date Vested | Number | Exercise Price (pence) | Expiry Date | Fair Value at Grant Date (pence) | |||||
| Frederick Krueger | 14/11/2007 | See 1 below | 5,000,000 | 4 | 13/11/2012 | 2.23 | |||||
| David Weill | 14/11/2007 | See 1 below | 4,000,000 | 4 | 13/11/2012 | 2.23 | |||||
| Clark Landry | 14/11/2007 | See 1 below | 5,000,000 | 4 | 13/11/2012 | 2.23 | |||||
| Guy Elliott | 14/11/2007 | See 1 below | 3,000,000 | 4 | 13/11/2012 | 2.23 | |||||
| Michael Mendelson | 14/11/2007 | See 1 below | 2,000,000 | 4 | 13/11/2012 | 2.23 | |||||
| Consultant | 01/01/2008 | See 2 below | 1,000,000 | 4 | 01/01/2013 | 2.23 | |||||
| Consultant | 01/01/2008 | See 3 below | 750,000 | 4 | 01/01/2013 | 2.23 | |||||
| Totals | 20,750,000 | ||||||||||
The above share options vest on the 2nd anniversary from the date of grant. The options are exercisable at any time after vesting during the Directors period as an eligible employee until the fifth anniversary of admission.
The above share options vested over the period of the 12 months from the date of grant, on the basis of 166,667 a month for the first 3 months, and 55,555 over the remaining 9 months.
The above share options vested equally over the 6 months from the date of grant. The consultants' contract was terminated on 30 June 2008, and no further options have been granted or vested in accordance with the consultancy agreement.
| The fair value of the options and warrants vesting during the period ended 30 April 2009 amounted to £0.106 million. The assessed fair value at grant date is determined using the Black-Scholes Model that takes into account the exercise price, the term of the option, the share price at grant date, the expected price volatility of the underlying share, the expected dividend yield and the risk-free interest rate for the term of the option. | |||
| The following table lists the inputs to the models used for the period ended 30 April 2009:
| |||
| 14 November 2007 issue - Options | |||
| Dividend Yield (%) | - | ||
| Expected Volatility (%) | 60.0 | ||
| Risk-free interest rate (%) | 4.8 | ||
| Share price at grant date (£) | 0.04 | ||
| The expected volatility reflects the assumption that the historical volatility is indicative of future trends, which may, not necessarily be the actual outcome. | |||
6. Post balance sheet events
On 27 May 2009, the Company announced it was to change its name to Top Level Domain Holdings Ltd. On the same date, the company also announced it had made the following investments;
In dotNYC LLC, the company has taken an interest of 23.5% in the issued share capital for a cash consideration of US$180,000.
In DotEco LLC, the company subscribed for a 10% interest in the issued share capital for a cash consideration of US$200,000.
In Minds+Machines Inc., the company conditionally subscribed for a 35.11% interest for a cash consideration of US$501,000.
7. The financial information set out above does not constitute the Group's statutory accounts for the period ended 31
October 2008, but is derived from those accounts. Statutory accounts for the period have been delivered to
the shareholders, and the auditors made an unqualified report thereon.
8. A copy of this interim statement is available on the Company's website : www.tldh.org