RNS Number : 9540Y
TMT Investments PLC
15 September 2020
 

15 September 2020

 

TMT INVESTMENTS PLC

("TMT" or the "Company")

 

Half year report for the six months to 30 June 2020

 

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 2020.

 

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

 

Highlights

·        COVID-19's overall effect on portfolio companies is mostly neutral or positive

·        NAV per share of US$3.46 (decrease of 1.7% from US$3.52 as of 31 December 2019)

-   US$1.57 million in positive revaluations (PandaDoc and HealthyHealth)

-   US$2.75 million in impairments (Le Tote)

·        Majority of portfolio companies continue to grow in double digits, with some investees specifically benefiting from the COVID-related market changes (MEL Science, Vinebox, Legionfarm, Hugo, ClassTag, Scentbird, etc.)

·        A number of portfolio companies raised capital at significantly higher conversion caps, creating future revaluation upside potential (Bolt, Legionfarm, and ClassTag)

·        Two new investments made during the period (ClassTag and 3S Money Club)

 

Post period end

·        Completed a further 6 investments in new (Moeco, Volumetric, and Feel Holdings) and existing (Pipedrive, Hugo, and Scentbird) companies and remain well funded to continue to expand and support the Company's investment portfolio

-   Moeco IoT, Inc., an end-to-end solution for valuable data generation and delivery through simple non-intrusive sensors and a secure software platform (www.moeco.io)

-   Volumetric Biotechnologies, Inc., an advanced biomaterial and bio-fabrication company (www.volumetricbio.com)

-   Feel Holdings Limited, a subscription-based innovative multivitamin and food additive producer (www.wearefeel.com)

 

Alexander Selegenev, Executive Director of TMT, commented: "We are pleased to see that the majority of our portfolio companies continue to grow in double digits and that a number of them are directly benefiting from COVID-related market changes. Demand among investors to invest in the tech winners of tomorrow remains very strong and competition to invest in the best companies at attractive valuations is fierce. We have continued to diligently scour and research the market during this turbulent time, in the belief that crises can generate excellent investment opportunities. This has led to two new investments during the period in companies that are growing strongly (parent-school communication service ClassTag (www.classtag.com) and specialist international trade fintech company 3S Money Club (www.3s.money)).

 

Since the period end, we have made a further 6 investments. These include further investment in or adding to our stakes in some of our best performing companies (Hugo, Pipedrive and Scentbird) and new investments in 3 exciting companies, Moeco IoT, Inc., Volumetric Biotechnologies, Inc., and Feel Holdings Limited.

 

We expect a number of positive revaluations across our portfolio in the next months and will update shareholders on relevant developments as appropriate."

 

TMT Investments PLC

Alexander Selegenev

Executive Director

www.tmtinvestments.com

 

+44 (0)1534 281 800

(Computershare - Company Secretary)

 

alexander.selegenev@tmtinvestments.com

 

Strand Hanson Limited (Nominated Adviser)

Richard Tulloch / James Bellman

 

+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

davidh@kinlan.net

 

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 60 companies to date and has net assets of US$101m as of 30 June 2020.  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.

 

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EXECUTIVE DIRECTOR'S STATEMENT

 

The majority of our portfolio companies have been navigating the turmoil caused by COVID-19 successfully, with some investees actually benefiting from the changed market environment.  Some investees have taken advantage of increased investor interest in growing technology companies and raised capital for further expansion via convertible notes or similar instruments at higher conversion caps.  Although such transactions did not trigger immediate revaluations of TMT's investments in such companies, such events provide a strong basis for potential value uplifts in the future.

 

Fast growing companies with ambitious management that are confident in their prospects are understandably reticent to sell too much of their equity to investors at an early stage of their development.  Indeed, as investors, one of our investment requirements is that management retain a significant stake in their companies during the early stages of high growth.  This allows management to remain highly incentivized to increase the value of their equity, thereby aligning themselves with investors' interests.  A convertible note or similar instrument can therefore be a favoured funding route for some companies, especially at an early stage of development.  The fact that some of our portfolio companies were able to raise capital at higher conversion caps is a strong indication of investors' confidence in the potential of those companies.

 

The Company's first half of 2020 was relatively quieter in terms of new investments (ClassTag, Inc. and 3S Money Club Limited) and positive revaluations (PandaDoc and HealthyHealth).  Of over 30 investee companies, the Company's only impairment during the period was in respect of Le Tote, whose department store and fashion rental business was directly affected by COVID-19 and associated lock downs, resulting in the company filing for bankruptcy in August 2020.

 

Despite making only a few new investments during the period, we were busy researching investments into both existing portfolio companies and new companies, and are pleased to report that, since the period end, we have made a total of six investments into existing and new companies.

 

NAV per share

 

The Company's NAV per share in the first half of 2020 decreased by 1.7% to US$3.46 (from US$3.52 as of 31 December 2019), mainly as a result of the impairment of Le Tote (US$2.75m).

 

Operating Expenses

 

In the first half of 2020, the Company's administrative expenses of US$584,031 were below the corresponding 2019 levels (US$603,554), reflecting the Company's reduced business activity during the lock-down period in key markets in Q2 of 2020.

 

Financial position

 

As of 30 June 2020, the Company had no financial debt and cash reserves of approximately US$9.2 million.  As of 14 September 2020, the Company had cash reserves of approximately US$5.5 million.

 

Bonus Plan

 

Under the Company's Bonus Plan, subject to achieving a 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.  As the Company's adjusted NAV per share decreased, no bonus was accrued for the bonus year to 30 June 2020.

 

Update on the continuing effect of COVID-19 and recent market volatility

 

We are pleased to see that the majority of our portfolio companies continue to benefit from the early adoption of a more pragmatic approach of seeking cost-efficient growth as opposed to 'growth at any cost'.  This approach has allowed them to control their burn rates and cash liquidity levels effectively in recent turbulent times.

 

Our top five portfolio companies (Bolt, Backblaze, Depositphotos, Pipedrive and PandaDoc), accounting for approximately 75% of investment portfolio value, are well-established, more mature businesses, with globally diversified revenues, strong cash reserves and tens of thousands of customers.  They are operationally nimble, cost conscious companies that have grown rapidly, without undertaking large funding rounds to support expanded cost bases, compared to some of their peers.

 

Bolt (www.bolt.eu), a leading international ride-hailing and transportation company, is active in over 150 cities globally.  Whilst turnover for the core ride-hailing business had been negatively affected as a result of COVID-19, Bolt's track record as a highly competitive and cost-efficient ride-hailing operator allowed it to not only survive the most difficult COVID-19 lockdown months without laying off a single employee, but also launch new services and raise €100 million in additional capital through a convertible note.  The convertible note featured a conversion cap of €1.7 billion (c.US$1.87 billion), which is significantly higher than Bolt's equity valuation following completion of its last equity funding round in June 2019.  However, as the conversion cap did not establish a new firm equity valuation level, TMT has not increased the fair value of its interest in Bolt.  Since the easing of strict lockdown restrictions in most of Bolt's key markets, its turnover and revenue have been rapidly increasing.

 

Online data backup and cloud storage provider Backblaze (www.backblaze.com) is operationally profitable, with significant cash reserves and over 600,000 customers globally.  Backblaze offers a low-cost cloud storage product that is well positioned for growth in the current cost-saving environment.  As estimated in our 2019 Annual Report, the short-term impact on Backblaze's revenues proved largely neutral, with the longer-term outlook as a result of COVID-19 remaining positive.

 

Stock photo and video marketplace Depositphotos (www.depositphotos.com) entered the recent turbulent period operationally profitable, with sizeable cash reserves and a well-diversified international customer base.  As estimated in our 2019 Annual Report, the short-term impact on Depositphotos' revenues proved neutral.  We have now changed our assessment of the longer-term outlook for Depositphotos as a result of COVID-19 from "potentially negative" to "largely neutral".

 

Sales CRM software Pipedrive (www.pipedrive.com) is operationally profitable, with very significant cash reserves and a well-diversified customer base of over 90,000 companies worldwide.  As estimated in our 2019 Annual Report, the short-term impact on Pipedrive's revenues proved neutral.  TMT believes that the longer-term outlook for Pipedrive as a result of COVID-19 is likely to be positive.

 

Proposal automation and contract management software provider PandaDoc (www.pandadoc.com) has recently become TMT's fifth largest portfolio holding, following completion of a recent new equity round which resulted in a revaluation of TMT's investment to US$3.6 million.  Post COVID-19, its contract automation software solution, which enables sales teams to remotely manage their selling processes "from propose to close", has become even more relevant.  TMT believes that the longer-term outlook for PandaDoc as a result of COVID-19 is likely to be positive.

 

TMT's previous fifth largest holding, perfume and other beauty products subscription service Scentbird (www.scentbird.com) entered the COVID-19 period operationally profitable, with sizeable cash reserves.  Contrary to our expectations in our 2019 Annual Report, the short-term impact on Scentbird's revenues proved positive.  Scentbird continued to grow its annualised revenue at double digits, and its subscriber base reached over 400,000 (from "over 330,000" as of 31 December 2019).  We have now changed our assessment of the longer-term outlook for Scentbird as a result of COVID-19 from "potentially negative" to "positive".

 

The remainder of our portfolio consists of over 30 companies and is diversified across our four core investment sectors: Big Data/Cloud, SaaS (software-as-a-service), Marketplaces and E-commerce.  While a limited number of our portfolio companies most exposed to sectors immediately affected by COVID-19 disruptions faced challenges (with Le Tote being the only sizeable negative example), a notable number of our portfolio companies (such as remote learning company MEL Science, parent-teacher communication platform ClassTag, Central American delivery company Hugo, wine subscription service Vinebox and online game coaching service Legionfarm) have experienced a notable increase in demand for their products.  The further effect of COVID-19's implications on our portfolio companies will depend on how the situation develops in the coming months.

 

TMT's own team has always been internationally based and is therefore used to working remotely.  As a result, there has been no disruption to our operations.

 

Outlook

 

Throughout the recent crisis, and especially following the gradual removal of strict COVID-19-related restrictions in many markets, the venture capital industry has continued to invest in fast-growing, cost-conscious tech companies.  TMT has now invested in over 60 companies since its admission to AIM in December 2010 and has a diversified portfolio of over 30 investments, focused primarily on Big Data/Cloud, SaaS, Marketplaces and E-commerce.  TMT's strategy remains to be very selective in identifying new investment opportunities, while seeking to capitalise on the new and existing investment themes continuously developing in the technology, software and internet space.

 

We expect a number of positive revaluations across our portfolio in the coming months and will update shareholders on relevant developments as appropriate.

 

Alexander Selegenev

Executive Director

14 September 2020

 

 

PORTFOLIO DEVELOPMENTS

 

Against the COVID-19 background, the first half of 2020 was understandably quieter in terms of TMT's new investments and revaluations.  We were nevertheless delighted with the underlying performance of the majority of our portfolio companies.  A number of portfolio companies (PandaDoc and HealthyHealth) received further validation for their business models by raising fresh equity capital at higher valuations during the period.  In tandem, some of our portfolio companies (ride-hailing platform Bolt, parent-school communication platform ClassTag, and online game coaching service Legionfarm) raised additional capital in the form of convertible instruments. While the latter did not trigger immediate revaluations for TMT, they featured significantly higher conversion caps compared to the levels at which TMT invested in those companies, therefore creating potential upside for the Company's NAV.

 

Portfolio Performance

 

The following developments had an impact on and are reflected in the Company's NAV and/or financial statements as of 30 June 2020 in accordance with applicable accounting standards:

 

Full and partial cash exits, and positive revaluations:

 

·    In August 2020, PandaDoc, a proposal automation and contract management software provider (www.pandadoc.com), completed a new equity funding round.  The transaction represented a revaluation uplift of US$1.41 million (or 63.5%) in the fair value of TMT's investment in PandaDoc, compared to the previous reported amount of US$2.22 million as of 31 December 2019.

·    In June 2020, insurtech and healthtech company HealthyHealth (www.healthyhealth.com) completed a new equity funding round.  The transaction represented a revaluation uplift of US$162,122 (or 63.9%) in the fair value of TMT's investment in HealthyHealth, compared to the previous reported amount as of 31 December 2019.

 

Negative revaluations:

 

The following of the Company's portfolio investments were negatively revalued in the first half of 2020:

 

Portfolio Company

Write-down amount (US$)

Reduction as % of fair value reported as of 31 Dec 2019

Reasons for write-down

Le Tote

2,749,812

100%

Company filed for bankruptcy in August 2020

 

Key developments for the five largest portfolio holdings in the first half of 2020 (source: TMT's portfolio companies):

 

Bolt (ride-hailing and delivery service):

·    Active in over 150 cities globally (no material change from 31 December 2019)

·    As announced on 28 May 2020, raised €100 million (US$110 million) in the form of a convertible note

·    Revenue has been recovering rapidly from the lows in April 2020

 

Backblaze (online data backup and cloud storage provider):

·    Double-digit annualised revenue growth continued despite COVID-19's impact

·    "B2" cloud storage revenue continued to grow at a faster rate

 

Depositphotos (stock photo and video marketplace):

·    Small drop in revenues was offset by organic cost savings

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

 

Pipedrive (sales CRM software):

·    Growth in revenue continued, although at a slower rate

·    Over 90,000 paying customers (no material change from 31 December 2019)

 

PandaDoc (proposal automation and contract management software):

·    Double-digit annualised revenue growth continued despite COVID-19's impact

·    Over 20,000 subscribers (from over 17,000 as of 31 December 2019)

 

New investments

 

We naturally slowed down the pace of new investments in the second quarter of 2020, though we have continued to be very active throughout in researching investments into both existing portfolio companies and new companies.  This has resulted in the Company making six investments in new and existing portfolio companies that meet our investment criteria of having fast growing revenue, outstanding management teams, high growth potential based on globally scalable business models, and viable exit opportunities.

 

In the first half of 2020, the Company made the following investments:

 

·    US$400,000 in ClassTag, Inc., a parent-school communication platform currently connecting over 2 million families across 25,000 schools in the USA (www.classtag.com).

·    £500,000 in 3S Money Club Limited, a UK-based online banking service focusing on international trade (www.3s.money).

 

Events after the reporting period

 

In July 2020, the Company invested US$1,000,000 in Moeco IoT, Inc., an end-to-end solution for valuable data generation and delivery through simple non-intrusive sensors and a secure software platform (www.moeco.io).

 

In July 2020, the Company acquired existing shares in portfolio companies Scentbird and Pipedrive from third parties for US$329,903 and US$1,630,075 respectively.

 

In July 2020, the Company invested US$200,000 in Volumetric Biotechnologies, Inc., an advanced biomaterial and bio-fabrication company (www.volumetricbio.com).

 

In August 2020, the Company invested an additional US$1,000,000 in Central American delivery and transportation technology company Hugo (www.hugoapp.com).

 

In August 2020, the Company invested £262,000 in Feel Holdings Limited, a subscription-based innovative multivitamin and food additive producer (www.wearefeel.com).

 

These events after the reporting period are not reflected in the NAV and/or the financial statements as at 30 June 2020.

 

 

 

 

 

FINANCIAL STATEMENTS

 

Statement of Comprehensive Income (unaudited)

 

 

 

For the six months ended 30/06/2020

 

For the six months ended 30/06/2019

 

 

Notes

USD

 

USD

 

 

 

 

 

 

 

(Loss)/Gains on investments

3

(1,264,916)

 

18,919,501

 

 

 

(1,264,916)

 

18,919,501

 

Expenses

 

 

 

 

 

Bonus scheme payment charge

6

-

 

(2,007,693)

 

Administrative expenses

5

(584,031)

 

(603,554)

 

Other operating expenses

 

-

 

(13,078)

 

Operating (loss)/gain

 

(1,848,947)

 

16,295,176

 

Net finance income

7

123,736

 

122,959

 

(Loss)/Gain before taxation

 

(1,725,211)

 

16,418,135

 

Taxation

8

-

 

-

 

(Loss)/Gain attributable to equity shareholders

 

(1,725,211)

 

16,418,135

 

Total comprehensive (loss)/income for the year

 

(1,725,211)

 

16,418,135

 

(Loss)/Gain per share

 

 

 

 

 

Basic and diluted gain (loss) per share (cents per share)

9

(5.91)

 

56.25

 

 

 

 

 

Statement of Financial Position

 

 

 

At 30 June

2020

USD

 

At 31 December

2019

USD

 

 

Unaudited

 

Audited

 

Notes

 

 

 

Non-current assets

 

 

 

 

Financial assets at FVPL

10

91,046,531

 

91,207,190

Total non-current assets

 

91,046,531

 

91,207,190

 

 

 

 

 

Current assets

 

 

 

 

Trade and other receivables

11

1,140,599

 

711,957

Cash and cash equivalents

12

9,188,599

 

11,700,074

Total current assets

 

10,329,198

 

12,412,031

Total assets

 

101,375,729

 

103,619,221

 

 

 

 

 

Current liabilities

 

 

 

 

Trade and other payables

13

286,910

 

805,191

Total current liabilities

 

286,910

 

805,191

 

 

 

 

 

Total liabilities

 

286,910

 

805,191

 

 

 

 

 

Net assets

 

101,088,819

 

102,814,030

 

 

 

 

 

Equity

 

 

 

 

Share capital

14

34,790,174

 

34,790,174

Retained profit

 

66,298,645

 

68,023,856

Total equity

 

101,088,819

 

102,814,030

             

 

 

 

 

Statement of Cash Flows (unaudited)

 

 

 

For the six months ended 30/06/2020

For the six months ended 30/06/2019

 

 

Notes

USD

USD

 

 

 

 

 

 

Operating activities

 

 

 

 

Operating (loss)/gain

 

(1,848,947)

16,295,176

 

Adjustments for non-cash items:

 

 

 

 

Changes in fair value of financial assets at FVPL

3

1,181,529

(18,922,586)

 

Bonus scheme payment charge

 

-

2,007,693

 

 

 

(667,418)

(619,717)

 

Changes in working capital:

 

 

 

 

(Increase)/decrease in trade and other receivables

11

(428,642)

 

(Decrease) in trade and other payables

13

(518,281)

(1,602,928)

 

Net cash (used by)/generated from operating activities

 

(1,614,341)

20,882,277

 

Investing activities

 

 

 

 

Interest received

7

52,868

96,757

 

Purchase of financial assets at FVPL

10

(1,020,870)

(2,453,607)

 

Proceeds from sale of financial assets at FVPL

10

-

568,180

 

Other financial income

7

70,868

26,202

 

Net cash used in investing activities

 

(897,134)

(1,762,468)

 

Financing activities

 

 

 

 

Proceeds from issue of shares

 

-

-

 

Net cash from financing activities

 

-

-

 

(Decrease)/Increase in cash and cash equivalents

 

(2,511,475)

19,119,809

 

Cash and cash equivalents at the beginning of the period

12

11,700,074

3,270,088

 

Cash and cash equivalents at the end of the period

12

9,188,599

22,389,897

 

 

 

 

 

 

Statement of Changes in Equity (unaudited)

 

 

 

Share capital

Retained profit

Total

 

 

USD

USD

USD

Balance at 31 December 2018

 

34,790,174

55,471,511

90,261,685

Gain for the year

 

-

18,389,511

18,389,511

Total comprehensive income for the year

 

-

18,389,511

18,389,511

Transactions with owners in their capacity as owners:

 

 

 

 

Dividends paid

 

 

(5,837,166)

(5,837,166)

 

 

 

 

 

Balance at 31 December 2019

 

34,790,174

68,023,856

102,814,030

Loss for the period

 

-

(1,725,211)

(1,725,211)

Total comprehensive income for the period

 

-

(1,725,211)

(1,725,211)

Balance at 30 June 2020

 

34,790,174

66,298,645

101,088,819

 

 

 

 

 

 

 

 

 

 

 

 

NOTES TO THE FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2020

 

1.         Company information

 

TMT Investments Plc ("TMT" or the "Company") is a company incorporated in Jersey with its registered office at 13 Castle 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

 

Interim financial statements for the six months ended 30 June 2020 are unaudited and were approved by the Directors on 14 September 2020.  The financial statements for the year ended 31 December 2019 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 30/06/2020

Average rate, for six months ended 30/06/2020

 

British pounds, £

 

 

 

 

1.2615

1.2677

 

Euro, €

 

 

 

 

1.1023

1.1373

 

 

2.3      New IFRSs and interpretations

 

The following standards and amendments became effective from 1 January 2020, though did not have any material impact on the Company:

• Amendments to References to Conceptual Framework in IFRS Standards

• Amendments to IFRS 9 and IFRS 7 - Interest rate benchmark reform

• Amendments to IAS 1 and IAS 8 - Definition of Materiality

 

3          (Loss)/Gain on investments

 

For six months ended 30/06/2020

 

For six months

 ended 30/06/2019

 

USD

 

USD

Gross interest income from convertible notes receivable

34,013

 

12,516

Net interest income from convertible notes receivable

34,013

 

12,516

(Losses)/Gains on changes in fair value of financial assets at FVPL

(1,181,529)

 

18,922,586

Success fee attributable to consultants

-

 

(15,601)

Other losses on investment

(117,400)

 

-

Total (loss)/gain on investments

(1,264,916)

 

18,919,501

 

4          Segmental analysis

 

Geographic information

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

 

Non-current financial assets

 

As at 31/12/2019

 

USA

Israel

BVI

Cyprus

Estonia

United Kingdom

Total

 

USD

USD

USD

USD

USD

USD

USD

Equity investments

57,787,606

291,781

779,000

-

22,642,461

2,253,607

83,754,455

Convertible notes & SAFE's

6,802,735

-

-

650,000

-

-

7,452,735

 Total

64,590,341

291,781

779,000

650,000

22,642,461

2,253,607

91,207,190

 

As at 30/06/2020

 

USA

Israel

BVI

Cyprus

Estonia

United Kingdom

Total

 

USD

USD

USD

USD

USD

USD

USD

Equity investments

57,926,660

291,781

779,000

-

22,642,461

3,036,599

84,676,501

Convertible notes & SAFE's

5,720,030

-

-

650,000

-

-

6,370,030

 Total

63,646,690

291,781

779,000

650,000

22,642,461

3,036,599

91,046,531

 

5          Administrative expenses

 

Administrative expenses include the following amounts:

 

For six months ended 30/06/2020

 

For six months ended

30/06/2019

 

USD

 

USD

Staff expenses (note 6)

326,349

 

321,842

Professional fees

115,522

 

144,640

Legal fees

14,102

 

26,674

Bank and LSE charges

8,364

 

7,445

Audit and accounting fees

14,371

 

10,396

Rent

47,298

 

47,298

Other expenses

34,087

 

44,002

Currency exchange loss

23,938

 

1,257

 

584,031

 

603,554

 

6          Staff expenses

 

For six months ended 30/06/2020

 

For six months ended 30/06/2019

 

USD

 

USD

Directors' fees

92,589

 

93,002

Wages and salaries

233,760

 

228,840

 

326,349

 

321,842

 

Wages and salaries shown above include fees and salaries relating to the six months ended 30 June. Bonus Plan costs are not included in administrative expenses and are shown separately.

 

The Directors' fees for the six months ended 30 June 2020 and 2019 were as follows:

 

 

For six months ended 30/06/2020

 

For six months ended

30/06/2019

 

USD

 

USD

Alexander Selegenev

50,000

 

50,052

Yuri Mostovoy

25,000

 

24,998

James Joseph Mullins

12,589

 

12,952

Petr Lanin

5,000

 

5,000

 

92,589

 

93,002

 

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.  The average number of staff employed (excluding Directors) by the Company during the six months ended 30 June was 6 (six months ended 30 June 2019: 6).

 

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 a 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 to 30 June 2019, the total amount of bonus accrued was US$2,007,693.  As the Company's adjusted NAV per share decreased, no bonus was accrued for the bonus year to 30 June 2020.

 

7          Net finance income

 

For six months ended 30/06/2020

 

For six months ended 30/06/2019

 

USD

 

USD

Interest income

52,868

 

96,757

Dividends received

70,868

 

-

Other financial income

-

 

26,202

 

122,736

 

122,959

 

8       Income tax expense

 

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

 

9       (Loss)/Gain per share

 

The calculation of basic (loss)/gain per share is based upon the net (loss)/gain for the six months ended 30 June 2020 attributable to the ordinary shareholders of US$1,725,211 (for the six months ended 30 June 2019: net gain of US$16,418,135) and the weighted average number of ordinary shares outstanding calculated as follows:

 

(Loss)/Gain per share

For the six months ended 30/06/2020

 

Restated for the six months

ended 30/06/2019

Basic (loss)/gain per share (cents per share)

(5.91)

 

56.25

(Loss)/Gain attributable to equity holders of the entity

(1,725,211)

 

16,418,135

 

The weighted average number of ordinary shares outstanding as follows:

 

 

 

 

(in number of shares weighted during the year outstanding)

For the six months ended 30/06/2020

 

For the six months ended 30/06/2019

Weighted average number of shares in issue

 

 

 

Ordinary shares

29,185,831

 

29,185,831

 

29,185,831

 

29,185,831

 

The Company does not have any dilutive instruments in issue.

 

10     Non-current financial assets

 

 

At 30 June 2020

USD

 

At 31 December 2019

USD

Financial assets at FVPL:

 

 

 

Investments in equity shares (i)

 

 

 

- unlisted shares

84,676,501

 

83,754,455

Convertible notes receivable (ii)

 

 

 

- promissory notes

2,170,030

 

3,452,735

- SAFEs

4,200,000

 

4,000,000

 

91,046,531

 

91,207,190

 

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 1 January 2019

 

62,285,914

 

2,604,230

 

64,890,144

Total gains or losses in 2019:

 

 

 

 

 

 

- changes in fair value

 

21,838,934

 

(569,104)

 

21,269,830

Purchases (including consulting & legal fees)

 

2,881,128

 

5,700,000

 

8,581,128

Disposal of investment (carrying value)

 

(3,533,912)

 

-

 

(3,533,912)

Conversion and other movements

 

282,391

 

(282,391)

 

-

Balance as at 1 January 2020

 

83,754,455

 

7,452,735

 

91,207,190

Total gains or losses in 2020:

 

 

 

 

 

 

- changes in fair value

 

(1,181,529)

 

-

 

(1,181,529)

Purchases (including consulting & legal fees)

 

820,870

 

200,000

 

1,020,870

Disposal of investment (carrying value)

 

-

 

-

 

-

Conversion and other movements

 

1,282,705

 

(1,282,705)

 

 

Balance as at 30 June 2020

 

84,676,501

 

6,370,030

 

91,046,531

 

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 relevant transactions during the year or shortly after the year or shortly after the year end, which gives an indication of fair value and considers other valuation methods to provide evidence of 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 or sizeable partial disposal.  Fair value change is only recognised if that round involved a new external investor.  From time to time, the Company may assess the fair value in the absence of a relevant independent equity transaction by relying on other market observable data and valuation techniques.

 

 

(i)            Equity investments as at 30 June 2020:

Investee company

Date of initial investment

Value at

1 Jan 2020,

USD

Additions to equity investments during the period, USD

Conversions from loan notes, USD

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

Disposals, USD

Value at 30 Jun 2020, USD

Equity stake owned

DepositPhotos

26.07.2011

10,836,105

-

-

-

-

10,836,105

16.67%

Wanelo

21.11.2011

1,825,596

-

-

-

-

1,825,596

4.69%

Backblaze

24.07.2012

21,201,509

-

-

-

-

21,201,509

10.85%

E2C

15.02.2014

 136,781

-

-

-

-

 136,781

5.51%

Remote.it

13.06.2014

3,025,285

-

-

-

-

3,025,285

1.64%

Le Tote

21.07.2014

2,749,812

-

-

(2,749,812)

-

-

0.69%

Anews

25.08.2014

 1,000,000

-

-

-

-

 1,000,000

9.41%

Klear

01.09.2014

 155,000

-

-

-

-

 155,000

3.04%

Bolt

15.09.2014

22,132,548

-

-

-

-

22,132,548

1.60%

Pipedrive

30.07.2012

10,257,098

-

-

-

-

10,257,098

2.36%

PandaDoc

11.07.2014

2,215,118

-

-

1,406,161

-

3,621,279

1.55%

Full Contact

11.01.2018

244,506

-

-

-

-

244,506

0.19%

ScentBird

13.04.2015

3,340,404

-

-

-

-

3,340,404

4.01%

Workiz

16.05.2016

442,159

-

-

-

-

442,159

2.13%

Vinebox

06.05.2016

450,015

-

-

-

-

450,015

2.41%

Hugo

19.01.2019

779,000

-

-

-

-

779,000

1.94%

MEL Science

25.02.2019

1,999,992

-

-

-

-

1,999,992

4.45%

Healthy Health

06.06.2019

253,615

-

-

162,122

-

415,737

2.17%

eAgronom

31.08.2018

288,224

-

-

-

-

288,224

2.13%

Rocket Games (Legionfarm)

16.09.2019

200,000

-

-

-

-

200,000

2.00%

Timbeter

05.12.2019

221,688

-

-

-

-

221,688

4.64%

Classtag

03.02.2020

-

200,000

-

-

-

200,000

1.18%

3S Money Club

07.04.2020

-

620,870

-

-

-

620,870

4.40%

Accern

21.08.2019

-

-

1,282,705

-

-

1,282,705

5.19%

Total

 

83,754,455

820,870

1,282,705

(1,181,529)

-

84,676,501

 

 

(ii)           Convertible loan notes as at 30 June 2020:

Investee company

 

Date of initial investment

Value at 1 Jan 2020,

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 convertible notes, USD

Disposals, USD

Value at 30 Jun 2020, USD

Term, years

Interest rate, %

Sharethis

26.03.2013

570,030

-

-

-

-

5.0

1.09%

KitApps

10.07.2013

600,000

-

-

-

-

1.0

2.00%

Accern

21.08.2019

1,282,705

-

-

(1,282,705)

-

-

-

Affise

18.09.2019

1,000,000

-

-

-

-

-

5.00%

Total

 

3,452,735

-

-

(1,282,705)

-

-

2,170,030

 

 

 

 

(iii)          SAFEs as at 30 June 2020:

Investee company

 

Date of initial investment

Value at 1 Jan 2020,

USD

Additions to SAFE investments during the period, USD

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

Disposals, USD

Value at 30 Jun 2020, USD

Spin Technology

17.12.2018

300,000

-

-

-

300,000

Cheetah (Go-X)

29.07.2019

350,000

-

-

-

350,000

Scalarr

15.08.2019

1,500,000

-

-

-

1,500,000

Retarget

24.09.2019

650,000

-

-

-

650,000

Rocket Games (Legionfarm)

24.09.2019

1,200,000

-

-

-

1,200,000

Classtag

03.02.2020

-

200,000

-

-

200,000

Total

 

4,000,000

200,000

-

-

4,200,000

 

11     Trade and other receivables

 

At 30 June 2020

 

At 31 December 2019

 

USD

 

USD

Prepayments

17,442

 

326,648

Other receivables

979,975

 

264,361

Interest receivable on promissory notes

139,562

 

105,548

Interest receivable on deposits

3,620

 

15,400

 

1,140,599

 

711,957

 

12     Cash and cash equivalents

 

The cash and cash equivalents as at 30 June 2020 include cash on hand in banks and bank deposits, net of outstanding bank overdrafts.  The effective interest rate at 30 June 2020 was 0.67%.

 

Cash and cash equivalents comprise the following:

 

 

At 30 June 2020

 

At 31 December 2019

 

USD

 

USD

Deposits

6,500,000

 

6,500,000

Bank balances

2,688,599

 

5,200,074

 

9,188,599

 

11,700,074

 

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

 

At 30 June 2020

 

At 31 December 2019

 

USD

 

USD

Bank balances

 

 

 

BBB+ rating

2,688,599

 

5,200,074

 

2,688,599

 

5,200,074

Deposits

 

 

 

BBB+ rating

6,500,000

 

6,500,000

 

6,500,000

 

6,500,000

 

9,188,599

 

11,700,074

         

 

13     Trade and other payables

 

At 30 June 2020

 

At 31 December 2019

 

USD

 

USD

Salaries payable

42,293

 

-

Directors' fees payable

27,688

 

15,732

Bonus payable

172,354

 

748,626

Trade payables

39,035

 

11,912

Other current liabilities

-

 

9

Accrued expenses

5,540

 

28,912

 

286,910

 

805,191

 

14     Share capital

 

On 30 June 2020 the Company had an authorised share capital of unlimited ordinary shares of no par value and had issued ordinary share capital of:

 

At 30 June 2020

 

At 31 December 2019

 

 

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 2019

29,185,831

 

29,185,831

Balance at 30 June 2020

29,185,831

 

29,185,831

 

There have been no changes to the Company's ordinary share capital between 30 June 2020 and the date of approval of these financial statements.

 

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

 

In July 2020, the Company invested US$1,000,000 in Moeco IoT, Inc., an end-to-end solution for valuable data generation and delivery through simple non-intrusive sensors and a secure software platform (www.moeco.io).

 

In July 2020, the Company acquired existing shares in portfolio companies Scentbird and Pipedrive from third parties for US$329,903 and US$1,630,075 respectively.

 

In July 2020, the Company invested US$200,000 in Volumetric Biotechnologies, Inc., an advanced biomaterial and bio-fabrication company (www.volumetricbio.com).

 

In August 2020, the Company invested an additional US$1,000,000 in Central American delivery and transportation technology company Hugo (www.hugoapp.com).

 

In August 2020, the Company invested £262,000 in Feel Holdings Limited, a subscription-based innovative multivitamin and food additive producer (www.wearefeel.com).

 

These events after the reporting period are not reflected in the NAV and/or the financial statements as at 30 June 2020.

 

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