(Vancouver, BC, July 18th, 2016) TIMIA Capital Corporation (“TIMIA” or the “Company”) (TSX-V:TCA) announced continued growth in its financial results for the fiscal quarter ended May 31, 2016.
During the quarter ended May 31, 2016, the Company had revenues of $101,694 compared to $Nil in the same period in 2015. Revenues in the second quarter of 2016 were comprised of royalty and interest income generated under the Company’s new business model. The increased revenues were offset by higher expenses of $215,048 (2015 – $31,592), resulting in a net loss of $113,354 compared to a net loss of $31,592 for the same period last year.
The Company’s financial results are primarily due to the commencement of its Revenue Financing (“RBF”) business.
Revenue Finance
The Company commenced its Revenue Financing business during the year ended November 30, 2015 and has begun to receive its monthly royalty payments from investee companies. At May 31, 2016, the Company had made 4 RBF investments, totaling $2,650,000, with another follow-on investment of an additional $1,000,000 into QuickMobile Inc. (“QuickMobile”), being announced on July 6th, 2016.
The royalty income and related transaction fees from these investments have contributed in a positive way to the Company’s financial performance. The Company had $101,694 in revenue in this quarter compared to $Nil in the same period last year. This increase in revenue was from royalty and interest income generated under the Company’s new RBF business.
The Company’s RBF investments are made into high quality growing software companies and investee companies are all current in their payments as of May 31st, 2016. TIMIA has security provisions contained within its RBF Agreements that are similar to other debt facilities, including rights allowing for declaration of default if routine monthly payments are missed.
Portfolio Performance
Chart 1 below indicates the annualized revenue from our RBF portfolio at each quarter end. This scaling trend is expected to continue with the QuickMobile follow-on investment in July, 2016 further adding to the annualized revenue.
Chart 1 – Annualized Revenue from Core RBF Investments.
Portfolio Performance Continued
The growth of our revenue is driven by both new investments and the growth in revenue of each of our existing investee companies given TIMIA’s monthly royalty is typically a fixed % of the investee company’s revenue.
The average growth of the revenue of our investee companies has exceeded 20% over the past 12 months, taking into account periods both before and after the date of our investments. This revenue growth reflects the success of our due diligence process and our post investment support.
Investment in QuickMobile Inc.
Subsequent to the quarter end, on July 6th, 2016, the Company announced a follow-on investment of $1,000,000 into QuickMobile, bringing its total investment into QuickMobile to $2 Million. The first $1,000,000 investment was made at the time of initial closing on November 2nd, 2015.
Cash Position
As at May 31, 2016, the Company’s cash balance was $1,076,704 and working capital was $1,132,279. Debentures of $870,000 of debentures were issued during the quarter while $750,000 was invested in one new RBF investment, iCompass Technologies Inc.
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Outlook for the 2016 Year
The Company will continue to pursue prudent growth in its RBF portfolio while also carefully monitoring its existing RBF investments. Management will be monitoring each investment in the portfolio in terms of its growth against plan and other key financial metrics.
The Company will also seek to opportunistically monetize its legacy equity investment portfolio.
The Company currently has no exposure to foreign currency denominated investments and should such investments be made, the Company would seek to reduce or eliminate currency risk via structuring or hedging.
“We are very excited about the continued growth of our Revenue Finance investment business in the second quarter of 2016 and we look forward to continuing this growth in the remainder of 2016” said Mike Walkinshaw, CEO of TIMIA. “At the same time, our first priority remains ensuring our portfolio is of the highest credit quality possible in our asset class.”
For full financial statements and the Management Discussion and Analysis please see the Company’s information on www.sedar.com.
About TIMIA Capital Corp.
TIMIA is a Revenue Financing company that provides investment capital to technology companies in exchange for a royalty stream on revenue. This new financing option complements both debt and equity financing while allowing entrepreneurs to retain control of their own business.
Revenue Finance is attractive to companies that are not yet qualified for traditional bank debt but do not want to suffer the dilution and control issues associated with equity issuances. Revenue growth and high gross margins are key attributes required by applicants in order for the successful application of RBF.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.
ON BEHALF OF THE BOARD
Michael Walkinshaw
Chief Executive Officer
TIMIA Capital Corp.
Contact: [email protected]
Phone: 604.398.8839
Disclaimer for Forward-Looking Information
Certain statements in this release are forward-looking statements, which reflect the expectations of management regarding the Company’s issuance of Debentures, payment of interest thereon, acceptance of the offering by the TSX Venture Exchange and the Company’s use of the proceeds of the offering, including investment in RBF instruments. Forward-looking statements consist of statements that are not purely historical, including any statements regarding beliefs, plans, expectations or intentions regarding the future. Such statements are subject to risks and uncertainties that may cause actual results, performance or developments to differ materially from those contained in the statements. No assurance can be given that any of the events anticipated by the forward-looking statements will occur or, if they do occur, what benefits the Company will obtain from them. The Company disclaims any obligation to update the forward-looking statements except as required by law.