~Company continues to grow its assets while disbursing a record $8.2 million in the third quarter 2021~
VANCOUVER, BC, October 18, 2021 – TIMIA Capital Corporation (“TIMIA” or the “Company”) (TSX-V:TCA / OTC: TIMCF) today announced financial results for the third quarter ended August 31, 2021. These results do not include the business of Pivot Financial, which was acquired subsequent to quarter-end.
Third Quarter 2021 Highlights include:
- Total revenue of $1.4 million versus $1.9 million in the same period last year. Total revenue in the current period did not include any income from settlements (2020 – $521,616);
- Interest income from investments of $1.25 million compared to $1.25 million in the same period last year;
- Net income of $307,161 compared to $333,243 in the same period last year;
- Net and comprehensive income was $1.2 million compared to a comprehensive loss of $73,584 for the same period last year due largely to the unrealized foreign currency translation gain on its consolidated US denominated Limited Partnership;
- Loan portfolio increased $9.1 million from $25.5 million to $34.6 million in the last three months largely due to the disbursement of $8.3 million in new and follow-on investments;
- Reported total assets of $46.1 million as at August 31, 2021 compared to $41.9 million as at November 30, 2020. Cash balance, as part of assets, was $8.9 million compared to $12.9 million as at November 30, 2020; and
- Through the Company’s normal course issuer bid, the Company purchased 662,500 shares during the third quarter.
“TIMIA’s origination platform continues to prove its value through the continued deployment of growth capital to successful software companies with a record $8.2 million disbursed in the third quarter,” said Mike Walkinshaw, CEO of TIMIA Capital Corporation. “Our Q3 revenue came in as expected, impacted by investment facility exits experienced in the previous year, and we look to an improvement in future interest revenue with the record amount of new and follow-on investments deployed in the third quarter. Though not included in our third quarter results, our recent acquisition of Pivot Financial is a great opportunity to leverage TIMIA’s origination platform to improve investment performance in other market vertices. We strive to further our growth in both the SaaS and specialty loan market segments through the efficiency of our fintech platform and our marketing systems targeting great organizations requiring growth capital.”
Detailed Financial Review
During the quarter ended August 31, 2021, the Company continued to grow its revenue base by distributing growth capital of $8.3 million in new and follow-on investments and by not posting any loan settlements.
The Company’s revenue is primarily interest income. As the Company makes new investments, the amount of monthly payments derived from the portfolio grows. Interest income in the three months ended August 31, 2021 was $1,246,042 compared to $1,254,651 in the same period last year. Combined income from the settlement of loans and transaction and other fees was $161,637 in the three months ended August 31, 2021 compared to $645,129 in the same period last year. The decrease in income from settlements reflects income from successful exits made during the quarter in 2020 versus no exits in 2021. Total revenue for the three months ended August 31, 2021 was $1.4 million compared to $1.9 million for the three months ended August 31, 2020. While previous exits impacted revenue for the current quarter, the Company believes that the deployment of $8.2 million of investment capital will have a positive impact on future quarters.
TIMIA continues to build the value and size of its portfolio by making new investments and follow-on investments in existing portfolio companies, and actively assisting portfolio companies with their growth plans. At the same time, the Company is investing to support its future growth and the continued development of its fintech platform. Total expenses, including interest expense, for the quarter ended August 31, 2021 were $1.0 million compared with $995,193 for the same period last year. The change reflects a decrease in accounting and legal, interest expense, and share-based payments, offset by increases in administrative, expected credit loss provision, management, and director fees, regulatory, investor relations and communications costs, office, travel, systems, and miscellaneous expenses, year over year.
US dollar denominated investments and subsidiaries are required to be converted to Canadian dollars quarterly at the then prevailing quarter end exchange rates. At the start of the Company’s fiscal year, December 1, 2020, the US dollar was trading at 1.30 Canadian Dollars, by the end of the third quarter the US dollar had fallen to 1.26 Canadian dollars. The change in foreign currency impacts income in several ways including the recognition of unrealised gains and losses on US denominated assets owned directly by TIMIA, and also through the reduction in carried interest income earned by the Company in its capacity as manager of the limited partnerships.
During the quarter ended August 31, 2021, the Company posted net income of $307,161 compared with net income of $333,243 in the same period last year. The small year-over-year decrease is primarily due to the lower total revenue in the current period.
As at August 31, 2021, the Company’s cash balance was $8.9 million and working capital was $13.7 million, compared with $12.9 million and $11.1 million, respectively, as of November 30, 2020.
On September 21, 2021, the Company closed a series of agreements to acquire the business of Pivot Financial (“Pivot”), a Canadian-based private lender focused on creative financing solutions for the small and medium business market. Over the past six years, Pivot has grown to profitability and the Company believes Pivot’s growth will accelerate through its combination with TIMIA. Ken Thomson, CEO of Pivot, was appointed Chief Strategy Officer and has joined the Board of Directors of TIMIA. Dan Flaro, President of Pivot, continues in his role with respect to the Pivot business. The acquisition of Pivot Financial brings TIMIA Capital to over $100 million in assets.
This news release is qualified in its entirety by the Company’s condensed interim financial statements for the three and nine months ended August 31, 2021 and August 31, 2020 and the associated Management’s Discussion & Analysis respecting the same periods, which can be downloaded from the Company’s profile on SEDAR at http://www.sedar.com.
About TIMIA Capital Corporation
TIMIA Capital Corporation has developed a proprietary loan origination platform that services private market, high-yield loan opportunities, thereby earning recurring fees and a share of the profit. While focusing on the fast growing, global, business-to-business Software-as-a-Service (or SaaS) segment, TIMIA’s automated loan origination system is applicable to multiple technology sectors, it creates scalable and profitable growth for TIMIA’s stakeholders. For more information about TIMIA Capital Corporation, please visit www.timiacapital.com
For more information, please contact:
Vice President, Capital Markets & Communications
Mike Walkinshaw, CEO
TIMIA Capital Corporation
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.
Certain information and statements in this news release contain and constitute forward-looking information or forward-looking statements as defined under applicable securities laws (collectively, “forward-looking statements”). Forward-looking statements normally contain words like ‘believe’, ‘expect’, ‘anticipate’, ‘plan’, ‘intend’, ‘continue’, ‘estimate’, ‘may’, ‘will’, ‘should’, ‘ongoing’ and similar expressions, and within this news release include any statements (express or implied) respecting the growth of the Company’s interest income and profitability, the Company’s ability to improve investment performance as a consequence of the acquisition of Pivot, the Company’s ability to further its growth in the SaaS and specialty loan market segments, the impact of the deployment of further investment capital on the Company’s future quarters, the acceleration of Pivot’s growth through the combination with TIMIA, and other statements about growing the Company’s business. Forward-looking statements are not guarantees of future performance, actions, or developments and are based on expectations, assumptions and other factors that management currently believes are relevant, reasonable and appropriate in the circumstances, including, without limitation, the following assumptions: that the Company and its investee companies are able to meet their respective future objectives and priorities, assumptions concerning general economic growth, the Company being able to obtain financing on acceptable terms, the Company’s ability to attract and retain skilled staff, the absence of unforeseen changes in the legislative and regulatory framework for the Company, the COVID-19 pandemic not having a material impact on the Company’s operations, the products and technology offered by the Company’s competitors and the Company’s ability to protect intellectual proprietary rights. Although management believes that the forward-looking statements are reasonable, actual results could be substantially different due to the risks and uncertainties associated with and inherent to Timia’s business. Material risks and uncertainties applicable to the forward-looking statements set out herein include, but are not limited to, worldwide pandemics, such as the recent outbreak of the novel coronavirus COVID-19, may adversely impact multiple aspects of the Company’s business; the Company having insufficient financial resources to achieve its objectives; uncertainty as to the Company’s ability to raise additional funding; availability of further investments that are appropriate for the Company on terms that it finds acceptable or at all; successful completion of exits from investments on terms that constitute a gain when no such exits are currently anticipated; intense competition in all aspects of business; reliance on limited management resources; the Company’s dependence upon certain key personnel and their loss could adversely affect the Company’s ability to achieve its business objectives; general economic risks; new laws and regulations, risk of litigation, the Company may not achieve its publicly announced business objectives according to schedule, or at all; the Company’s success depending upon its ability to protect its intellectual property and its proprietary technology; the price of the Company’s shares may be subject to fluctuation in the future based on market conditions; the Company’s success depends on its ability to effectively manage growth; and significant disruptions of information technology systems or security breaches could adversely affect the Company’s business. Although Timia has attempted to identify factors that may cause actual actions, events or results to differ materially from those disclosed in the forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, predicted, estimated or intended. Also, many of the factors are beyond the control of Timia. Accordingly, readers should not place undue reliance on forward-looking statements. Timia undertakes no obligation to reissue or update any forward-looking statements as a result of new information or events after the date hereof except as may be required by law. All forward-looking statements contained in this news release are qualified by this cautionary statement.