Tatton Asset Management Regulatory News (TAM)

7 May 2008 12:34

Titanium Asset Management Corp07 May 2008 Titanium Asset Management Corp. First Quarter Results Chaiman's statement I have pleasure in presenting my first set of financial statements as Chairmanand CEO of Titanium Asset Management Corp. Until the approval by shareholders of the acquisition of National InvestmentServices ('NIS') on March 31st 2008 we were operating under a 'SPAC' structure.From that date we are a fully operational company with three wholly-owned fundmanagement subsidiaries - NIS, Sovereign Advisers and Wood Asset Management. In the coming months the senior Titanium management team will be focussed ondeveloping a fully integrated sales and marketing strategy. At the same time wewill be pursuing other acquisition opportunities. Finally, we will be preparinga registration statement for filing with the Securities and Exchange Commissionprior to seeking a listing on a US exchange. I look forward to providing shareholders with more information on all thesepoints in future reports. Nigel WightmanChairman and CEO For further information: Titanium Asset Management Corp.Nigel Wightman, Chairman and CEO + 44 7789 277849 Seymour Pierce LtdJonathan Wright +44 20 7107 8000 Penrose FinancialGay Collins +44 20 7786 4888Kay Larsentitanium@penrose.co.uk Titanium Asset Management Corp.Interim report and unaudited accounts for the period fromJanuary 1, 2008 to March 31, 2008 BALANCE SHEET as at March 31, 2008 (Unaudited) (amounts in thousands) Note March 31 2008 March 31, 2007ASSETSCurrent AssetsDebtors - trade debtors 2,588 -- prepaids and other receivables 1,139 -Short term investments 15,098Cash at bank and in hand 29,820 25Total Current Assets 48,645 25 Other AssetsGoodwill 37,122 -Intangible assets 27,757 -Property and equipment 125 -Deferred tax asset 436 -Total Other Assets 65,440 -Total Assets 114,085 25LIABILITIES AND SHAREHOLDERS' EQUITYCurrent LiabilitiesAccrued expenses 1,886 -Accounts payable 79 -Amounts repayable to shareholders 12,017 -Other creditors 193 -Total Current Liabilities 14,175 - COMMITMENTSStockholders' Equity -Share capital 4 2 1Additional paid in capital 5 99,462 24Profit and loss account 5 446 -Total Stockholders' Equity 99,910 25Total Liabilities and Stockholders'Equity 114,085 25 The accompanying notes are an integral part of these financial statements. STATEMENT OF OPERATIONS For the period from January 1,2008 to March 31, 2008 (amounts in thousands except per share amounts) 3 months to. 31 Inception (2 Feb 2007) to March, 2008 31 Mar 2007Turnover 2,220 -Amortisationanddepreciation (809) -Otheroperatingexpenses (1,893) -Operating Loss (482) -Interestreceivable 496 -Profit beforetaxes 14 -Income taxexpense 10 -Net Profit 4 - Net Profit Per Share, Basic - -Net Profit Per Share, Fully - -Diluted ======== ======== Weighted Average Shares Outstanding, Basic 22.99 mn 2.88 mnWeighted Average Shares Outstanding, Fully Diluted 22.99 mn 2.88 mn STATEMENT OF CASH FLOWS For the period from January 1, 2008 to March 31, 2008 (amounts in thousands) Jan 1, 2008 Inception to Mar 31, (February 2008 2, 2007) to Mar 31, 2007Net income 4 -Adjustments to reconcile net income to net cashand cash equivalents provided by operating activities:Depreciation and amortisation charges 809 -Changes in operating assets and liabilities:(Increase) in debtors (87) -(increase) in deferred tax asset (59)(Decrease) in current liabilities (904) -Net Cash Used for Operating Activities (237) -Cash flows from investing activitiesCash paid for acquisitions less cash acquired (29,814) -Purchase of property and equipment (6) -Release of restricted cash 55,587Purchase of short term investments (15,098) - --------- ---------Net cash generated from investing activities 10,669 -Cash Flows from Financing ActivitiesProceeds from issuance of share capital - 25 --------- --------- Net Increase in Cash 10,432 25Cash, Beginning of Period 19,388 NilCash, End of Period 29,820 25 NOTES TO FINANCIAL STATEMENTS NOTE 1 - Organization, business and operations Titanium Asset Management Corp. (the "Company") was incorporated in Delaware onFebruary 2, 2007 as a blank check company, the objective of which is to acquireone or more operating companies engaged in the asset management industry. The Company was successfully listed on the London Alternative Investment Marketon 21 June 2007. The listing raised net proceeds of $110.4 million. The Companycompleted its third acquisition on March 31, 2008 and as a result has become anoperating company. The Company intends to seek a registration statement with theSEC within 120 days of the period end with a view to obtaining a listing onNASDAQ. NOTE 2 - Basis of Preparation These report and accounts have been prepared in accordance with accountingprinciples generally accepted in the United States of America. The following accounting policies have been applied consistently in dealing withitems which are material in realation to the financial information of TitaniumAsset Management Corp. set out in this report. NOTE 3 - Summary of Significant Accounting Policies Use of Estimates The preparation of financial statements in conformity withaccounting principles generally accepted in the United States of Americarequires management to make estimates and assumptions that affect the reportedamounts of assets and liabilities and disclosure of contingent assets andliabilities at the date of the financial statements and the reported amounts ofrevenues and expenses during the reporting period. Actual results could differfrom those estimates. The estimates and underlying assumptions are reviewed on an ongoing basis.Revisions to accounting estimates are recognized in the period in which theestimate is revised if the revision affects only that period, or in the periodof the revision and future periods if the revision affects both current andfuture periods. Income per common share Income per common share is computed by dividing netincome by the weighted average number of shares of common stock and restrictedstock outstanding during the period. As the earnings per share are nil noseparate estimate of the impact of dilution has been prepared. Goodwill and intangibles Goodwill is the excess of the amount paid to acquire abusiness over the fair value of the net assets acquired. Pursuant to SFAS No.142, Goodwill and Other Intangible Assets, the carrying amount of goodwill isreviewed for impairment annually or whenever events or changes in circumstancesindicate that the carrying amount might not be recoverable. If the fair value ofthe operations to which the goodwill relates is less than the carrying amount ofthe unamortized goodwill, the carrying amount will be reduced with acorresponding charge to expense. The Company will test goodwill for impairment at least annually (first day ofour fourth quarter), or more often if deemed necessary based on certaincircumstances. The goodwill impairment test will be a two-step process: Step 1 -test for potential impairment by comparing the fair value of each reporting unitwith its carrying amount; if the fair value of the reporting unit is greaterthan its carrying amount (including recorded goodwill), then no impairmentexists and Step 2 is not performed; Step 2 - if the carrying amount of thereporting unit (including recorded goodwill) is greater than its fair value,then the amount of the impairment, if any, is measured and recorded as needed. Intangible assets with definite lives are amortized over their estimated usefullife and reviewed for impairment in accordance with SFAS 144. Intangible assetswith definite lives are amortized using the straight-line method over theirestimated useful lives. Option granted in relation to stock issuance The fair value of the optiongranted to Sunrise Securities Corp. has been credited to additional paid incapital. The cost of the option has been netted off against reserves along withthe other costs of admission. Income taxes The Company accounts for income taxes in accordance with SFASNo. 109, "Accounting for Income Taxes." Deferred tax assets and liabilities arerecognized for the future tax consequences attributable to differences betweenfinancial statement carrying amounts of existing assets and liabilities andtheir respective tax bases and operating loss and other loss carryforwards.Deferred tax assets and liabilities are measured using enacted tax ratesexpected to apply to taxable income in the years in which those temporarydifferences are expected to be recovered or settled. NOTE 4 - Share Capital Authorized Called up and fully paid Number $ Number $Common Stock $0.0001 54,000,000 5,400 22,659,952 2,266Restricted Shares $0.0001 720,000 72 612,716 61Preferred Stock $0.0001 1,000,000 100 0 -------- ------- 5,572 2,327 -------- ------- The holders of Common Stock arising from the issue of units on 21 June 2007 wereentitled to require the Company to repurchase their shares if at the time theCompany seeks approval for a business combination the stockholder votes againstthe proposal. As at the balance sheet date 2,208,452 common shares representing9.75% of the issued share capital were due to be repurchased for a totalconsideration of approximately $12 million. Following the acquisition of NIS onMarch 31, 2008 shareholders no longer have the right to require the Company torepurchase their shares The Restricted Shares carry no rights to dividends except in the case of awinding up of the Company. They convert on a one for one basis to Common Stockif at any time within five years of their issue, and subsequent to a Business Combination, the ten day average share price of theCommon Stock exceeds $6.90. No Preferred Stock had been issued at the balance sheet date and accordingly therights attaching to the Preferred Stock have not been set. There were 20 million warrants in issue at the balance sheet date. Each warrantentitles the holder to subscribe for Common Stock at $4.00 per share subsequentto a Qualifying Business Combination. There were 20 million warrants in issue atthe balance sheet date. The Company issued an option over 2 million Units to the placing agent. Theoption is exercisable at $6.60 following a Qualifying Business Combination. NOTE 5 - Reserves Profit & Loss Additional Paid in Capital Total $000s $000s $000sBrought forward at 1January 2008 442 55,892 56,334Net income for 4 - 4the periodReallocationof temporary equity 55,587 55,587Shares to berepurchased - (12,017) (12,017) 446 99,462 99,908 NOTE 6 - Acquisition The financial statements include assets acquired from National InvestmentServices Inc. on March 31, 2008. At March 31, 2008 Titanium Asset ManagementCorp held 100% of the issued share capital of National Investment Services Inc.The goodwill related to the acquisition will be fully deductible for taxpurposes. Details Consideration Fair value Goodwill Cash $29,848 $34 $-Accrued acquisition costs 1,378 - -Debtors - 3,140 -Property and equipment - 116 -Current liabilities - (425) -Existing customers - 12,000 -Non-compete agreement - 875 -Brands - 351 - _______ _______ _______ $31,226 $16,091 $15,135 NOTE 7 - Intangible assets Goodwill Customers Non-Compete Brands TotalCostAt January 1, 2008 21,987 14,691 1,662 625 38,965Additions (see note 6) 15,135 12,000 875 351 28,361 ______ ______ ______ ______ ______At March 31, 2008 37,122 26,691 2,537 976 67,326 ______ ______ ______ ______ ______AmortizationAt January 1, 2008 - 697 898 43 1,638Charge for period - 697 69 43 809 _____ _____ _____ _____ _____At March 31, 2008 - 1,394 967 86 2,447 _____ _____ _____ _____ _____Net book amount At March 31, 2008 $37,122 $25,297 $1,570 $890 $64,879 Useful life (in months) N/A 60 36 36-48 NOTE 8 - Contingency On March 31st 2008 the Company received notice from its former attorneys thatthey intended to submit an invoice in respect of services provided in 2007. Atthe date of these accounts the Company has not received final confirmation ofthe amount of this invoice or details of the services to which it is related.The Company intends to reject any such invoice as it believes that it has paidin full for services provided in 2007. Accordingly no provision has been made inthese accounts for the invoice. In the event that a liability does arise theincome statement will be unaffected and the Company does not expect itsfinancial position to materially change. This information is provided by RNS The company news service from the London Stock Exchange