VANCOUVER, BRITISH COLUMBIA–(Marketwired – Oct. 21, 2016) – TIMIA Capital Corp. (“TIMIA” or the “Company”) (TSX VENTURE:TCA) is pleased to announce strong and stable growth in both its portfolio size and its top line revenue.
During the quarter ended August 31, 2016, the Company had revenues of $195,909, almost double the $101,694 in the previous quarter of 2016 and almost triple the $75,674 in revenues in the same period last year when the Company had a different business model. The increased revenues were offset by higher expenses of $287,154 (2nd quarter, 2016 – $215,048), resulting in a net loss of $91,245 (2nd quarter, 2016 – $113,354). The increased expenses were a result of investments in building the TIMIA brand in the deal ecosystem, as well as building the Company’s internal infrastructure to support scalability.
The Company’s improved financial results are due to the increase in both the size of the Revenue Finance portfolio and the revenue growth of the underlying portfolio. Chart 1 below shows the simple and weighted average recurring revenue growth of the 4 portfolio companies, standardized to 100 since March, 2015. The Company’s portfolio is growing at > 20% per annum top line growth.
To view Chart 1, please visit the following link: http://media3.marketwire.com/docs/1073448a.jpg
Revenue Finance
The Company commenced its Revenue Financing (“RBF”) business during the year ended November 30, 2015 and has begun to receive its monthly royalty payments from investee companies. At August 31, 2016, the Company had made 4 RBF investments, including follow-on investments, totaling $3,900,000, with another follow-on investment of an additional $250,000 into iCompass Technologies Inc. (“iCompass”), being announced on September 19th, 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 $195,909 in revenue in this quarter compared to $75,674 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 August 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 2 below indicates the annualized revenue from our RBF portfolio at each quarter end. This scaling trend is expected to continue with the iCompass follow-on investment in September, 2016 further adding to the annualized revenue.
To view Chart 2, please visit the following link: http://media3.marketwire.com/docs/1073448b.jpg
Our portfolio is comprised of debt facilities with variable repayment terms tied to a royalty on revenue. All of our investees are up to date with their payments as of August 31, 2016.
Investment in iCompass.
Subsequent to the quarter end, on September 19th, 2016, the Company announced a follow-on investment of $250,000 into iCompass, bringing its total investment into iCompass to $1 Million. The first $750,000 investment was made at the time of initial closing.
Cash Position
As at August 31, 2016, the Company’s cash balance was $253,069 and working capital was $192,355. $250,000 of debentures were issued during the quarter while $1,250,000 was invested in two follow-on RBF investments, QuickMobile Inc. and Predictable Revenue Inc.
Outlook for the Final Quarter of 2016
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 and non-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 third 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 Capital Corporation, is a specialty finance company that provides revenue financing to technology companies in exchange for a royalty stream on revenue. The alternative financing option compliments both debt and equity financing, while allowing entrepreneurs to retain control of their business. TIMIA’s target market is the fast-growing growing business-to-business software-as-a-service (SaaS) segment. TIMIA is run by a seasoned investment team with a track record of originating and managing debt and equity investments, as well as monitoring, compliance and workouts.
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.
Disclaimer for Forward-Looking Information
Certain statements in this release are forward-looking statements. 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.
