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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Shariah (Regs) | LSE:SCAP | London | Ordinary Share | COM SHS USD0.01 (REGS) |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.25 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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RNS Number : 2018B
Shariah Capital, Inc
13 August 2008
Shariah Capital Inc. ("Shariah Capital" or "the Company")
Interim Results
The Board of Shariah Capital is pleased to announce Shariah Capital's interim results for the period ending 30 June 2008.
Shariah Capital is a U.S.-based company that creates and customizes Shariah compliant financial products and platforms and provides
Shariah consulting and advisory services primarily to financial institutions and investment firms with product initiatives directed to
Islamic investors.
Chairman's Statement
In the first half of 2008, Shariah Capital's management team made significant strides towards its goal of market leadership in product
creation and advisory services in the Islamic Finance market.
* The Company secured a strategic joint venture with an agency of the Dubai Government to build a government-sponsored Shariah asset
management company.
* As part of this transaction, the Company successfully negotiated a strategic direct investment in the shares of the Company by the
Government of Dubai.
* The Dubai Government and the World Gold Council announced that the Company will serve as the Shariah advisor to the first Shariah
compliant ETF listed on a Dubai Exchange.
* The Company announced that it was able to secure the participation and collaboration of some of the world's most recognized asset
managers for the first of its Shariah compliant alternative investment products with the Dubai Government.
With the Al Safi platform we've built with Barclays Capital (announced in the previous reporting period), we know of no other Shariah
advisory organization that is able to identify similar accomplishments in the Islamic alternative investment arena.
Management intends to leverage the achievements of the first half of 2008 to secure meaningful assets for the Al Safi platform, its
joint venture asset management company and the ETF product. We remain committed to creating new Islamic products and solutions in order to
expand the Company's reach throughout the alternative investment world.
First Half 2008 Highlights and Achievements
Terms for Shariah Capital's joint venture with the Dubai Government's Dubai Multi Commodities Centre Authority (DMCC) were finalized
during the first half of 2008. The joint venture, Dubai Shariah Asset Management (or "DSAM"), is owned 51% by Dubai Commodity Asset
Management ("DCAM"), a wholly-owned division of DMCC, and 49% by Shariah Capital.
DMCC also completed its purchase of a 4.99% equity stake in Shariah Capital and Dr. David Rutledge, DMCC's Chief Executive, joined our
Board of Directors. Dr. Rutledge was voted formally to the Board at our annual shareholder meeting in May, 2008.
In June, DMCC, Barclays Capital and Shariah Capital issued a joint press release regarding DMCC's intention to fund five world-class
long/short U.S. equity hedge fund managers on the Al Safi Trust platform, the "one-stop" Shariah compliant alternative investment platform
we have built with Barclays. Each manager will pursue an investment strategy focused on a specific commodity sector. These sectors are gold,
oil & gas, natural resources, agriculture and global resources and mining. Through DCAM, DMCC will seed each of these managers with $50
million, a total investment of $250 million.
Al Safi's contractual investment management relationships with these managers, representing some of the most established hedge funds in
the industry, confirm the achievement of one of Shariah Capital's primary objectives: to develop Shariah compliant screens and
methodologies that enable established, high-quality hedge fund managers to manage Shariah compliant portfolios for Islamic investors
consistent with their current strategies. Our efforts during the first half of 2008 achieved this objective.
DSAM will brand and distribute five new funds based on the above commodity strategies. They will act as "feeder funds" that will invest
exclusively in the five commodity fund counterparts on the Al Safi platform. DSAM will manage a fund-of-funds comprised of all five funds
as well. Investors will be able to invest in either the fund-of-funds or the underlying individual subfunds. These Shariah compliant funds
represent the first of a number of asset management initiatives where investment products will be developed and distributed by DSAM.
In April, the World Gold Council (WGC) and DMCC announced their partnership to launch Dubai Gold Shares (DGS), a Shariah compliant gold
ETF product that DMCC intends to list on the Dubai International Financial Exchange (DIFX). Shariah Capital has been appointed as the
Shariah advisor to DGS and hopes to play an active role in this product's development and distribution.
Also in April, Global Finance magazine named Shariah Capital "Best US Islamic Financial Services Firm 2008." We have worked especially
hard to define our leadership position, both in the U.S. and throughout the world. This award is particularly gratifying because so often a
firm is judged by the company it keeps. The recognition by Global Finance distinguishes the Company as "best in class" -- along with some
of the most prominent and successful Islamic financial institutions in our industry.
Finally, in February, our Chief Shariah Officer, Shaykh Yusuf Talal DeLorenzo was appointed to the Shariah Board of the Accounting and
Auditing Organization of Islamic Financial Institutions (AAOIFI). AAOIFI has become the authority for determining Shariah standards for the
Islamic finance industry. Shariah Capital is honored by this appointment and congratulates Shaykh Yusuf for his recognition as one of the
preeminent Shariah scholars in the industry.
The Board is pleased with the Company's execution of its strategy thus far in 2008 and the momentum it has established for securing
revenue in the 2nd half.
Personnel
Since our last interim results, the Company has had no changes in personnel.
Mohammad Jamjoum, our non-Executive Board Member, became a consultant to the company during the early months of 2008 and moved to Dubai
to supervise our office there and follow up our above initiatives with DMCC. With the addition of Dr. Rutledge to our Board as a
non-Executive Director, it is anticipated that Mr. Jamjoum will become a full-time senior manager of Shariah Capital based permanently in
Dubai. With the commencement of revenues from Al Safi, and given the needs of the DSAM joint venture with the DMCC, the company plans to
expand its professional capabilities through the addition of qualified and experienced professionals. We therefore anticipate adding to our
capabilities later in 2008 with new personnel in New Canaan and Dubai.
Bios of our senior management, including Dr. Rutledge, are available on our website (www.shariahcap.com).
Financial Review
During the six months ended 30 June 2008, Shariah Capital realized a net loss of $1,793,410 compared to a loss of $1,431,480 for the
same period in 2007. Cash charges were attributable primarily to management salaries, office rents in Connecticut and Dubai and travel
expenses. Non-cash charges for the six months were $396,120. The majority of these charges relates to restricted stock.
The Company made a strategic decision in 2007 to focus on larger recurring revenue opportunities and strategic relationships rather than
short-term advisory engagements. Consequently, first half 2008 revenues totaled $87,469, principally the result of consulting and advisory
mandates. With the launch of the Al Safi Trust and DSAM investment products, we expect an immediate and positive impact on revenues and
earnings.
Liquidity and Capital Resources
The Company's cash equivalent and securities position is now over $6.7 million, the result of new shares issued to DMCC for
approximately $5.5 million. Management believes that the Company's assets are adequate to fulfill existing commitments and pursue additional
new business opportunities for the foreseeable future.
Outlook
After months of groundwork on the legal documentation for the Al Safi platform, we now are entering the execution phase of this
important product for Shariah Capital. Our near-term emphasis will be on fulfilling our Shariah advisory responsibilities on Al Safi and
streamlining this process to expand the platform beyond its initial five managers.
At the same time, we will commit significant time and resources to DSAM and our product partnership with DMCC, including an active
marketing campaign in the Gulf to attract new assets to the DSAM funds. We are excited by early investor inquiries about these strategies
and the strong institutional interest expressed both in and beyond the Gulf.
Fortunately, our reputation precedes us and we recently have been contacted by financial institutions looking to utilize our skill sets
beyond the hedge fund platform of Al Safi. Although we will consider these and all opportunities selectively, we will remain focused on Al
Safi and DSAM and the strong longer-term revenue stream projected from these products.
Summary
With the Dubai government as a strategic partner, we are confident that the Shariah compliant investment products we develop will find a
ready acceptance in the market and lead to numerous other opportunities for our business. The first half of 2008 has affirmed our conviction
that we remain well-positioned to benefit from the increasing demand for Islamic investment products.
As always, we are sincerely grateful to our shareholders for their continued confidence and support.
Eric Meyer
Chairman and CEO
Enquiries:
Eric Meyer
Chairman and Chief Executive Officer
Shariah Capital, Inc.
Telephone: +1 (203) 972-0331
emeyer@shariahcap.com
Bill Redman
Managing Director and Treasurer
Telephone: +1 (203) 972-0331
bredman@shariahcap.com
Investec Investment Banking
Paul Gray
+44 207 597 5176
Shariah Capital, Inc.
(formerly Meyer Fund Management, LLC)
Balance Sheets
(Unaudited)
June 30, 2008 2007
Assets
Cash $1,510,643 $113,185
Certificates of deposit 1,756,100 2,703,926
Securities purchased, at fair value 3,508,131 785,220
Due from related parties (Note 2) 6,336 1,038
Prepaid expenses and other current assets 96,287 63,874
Total current assets 6,877,497 3,677,243
Property and equipment-net (Note 3) 6,670 7,435
Total assets $6,884,167 $3,674,678
Liabilities and Stockholders' Equity
Accrued expenses and other current liabilities 204,042 33,228
Securities sold, not yet purchased, at fair value - 248,477
Total liabilities 204,042 281,705
Commitments (Note 4)
Stockholders' equity
Common stock, $.01 par value; 70,000,000 shares 617,441 585,406
authorized; 61,744,132 and 58,540,600 shares issued
and outstanding for June 30, 2008 and June 30,
2007, respectively
Additional paid-in capital 11,896,410 4,827,509
Retained deficit (5,833,726) (2,019,942)
Total stockholders' equity 6,680,125 3,392,973
Total liabilities and stockholders' equity $6,884,167 $3,674,678
See accompanying significant accounting policies and notes to financial statements.
Shariah Capital, Inc.
Statements of Operations
(Unaudited)
Six months ended June Six months ended June 30, 2007
30, 2008
Revenues
Interest income $74,483 $88,713
Consulting 9,980 39,980
Investment income
Net realized gain - 34,886
Net change in unrealized - (875)
(depreciation)
Dividend income 6 1,426
Total investment income 6 35,437
Rental income (Note 4) 3,000 16,500
Total revenues $87,469 $180,630
Expenses
General and administrative $1,753,485 $1,604,651
expenses (Notes 3, 4 & 6)
R&D expenses 43,945 -
Consulting expenses 83,449 7,459
Total expenses $1,880,879 $1,612,110
Net loss $(1,793,410) $(1,431,480)
Earnings (loss) per share, $(.03) $(.02)
basic & diluted
Weighted average shares 58,707,679 58,480,932
outstanding, basic & diluted
See accompanying significant accounting policies and notes to financial statements.
Shariah Capital, Inc.
Statements of Cash Flows (Note 5)
(Unaudited)
Six months ended Six months ended
June 30, 2008 June 30, 2007
Cash flows from operating
activities:
Net loss $(1,793,410) $(1,431,480)
Adjustments to reconcile net
loss to net cash used in
operating activities:
Common stock issued in lieu of 125,000
payment for services -
Stock compensation and 396,120 540,479
consulting expense
Net charge in unrealized - 875
depreciation
Depreciation and amortization 1,152 898
Changes in operating assets
and liabilities:
Prepaid expenses and other (3,212) 27,715
current assets
Accounts payable (956) (9,446)
Accrued expenses and other 105,126 (534,943)
current liabilities
Net cash used in operating (1,295,180) (1,280,902)
activities
Cash flows from investing
activities:
Redemptions of certificate of 458,277 813,891
deposit
Cost of securities purchased (3,508,131) (782,374)
Proceeds from securities sold, - 244,756
not yet purchased
Purchases of property and (1,443) (2,110)
equipment
Net cash (used in)/provided by (3,051,297) 274,163
investing activities
Cash flows from financing
activities:
Proceeds from sale of common (1,869)
stock, net of AIM expenses 5,643,377
Due from related parties 58,839 28,059
Net cash provided by financing 5,702,216 26,190
activities
Net increase (decrease) in 1,355,739 (980,549)
cash
Cash, beginning of period 154,904 1,093,734
Cash, end of period $1,510,643 $113,185
See accompanying significant accounting policies and notes to financial statements.
Shariah Capital, Inc.
Summary of Significant Accounting Policies
(Unaudited)
The Company and Nature of Shariah Capital, Inc. ("the Company") was formed on September 6, 2006
Operations as a Delaware Corporation. The Company is a multi-dimensional company
that creates Shariah-compliant financial products and services under
its own brand name, under co-branding arrangements with joint venture
partners or on a private label basis. The Company's targeted clients
are financial institutions and investment management firms that are
building product platforms primarily directed to the Middle East and
Far East and, specifically to, Islamic institutional and high net
worth investors. The firm also is exploring and expects to pursue a
number of business opportunities with financial and investment firms
in Europe, Asia and the United States.
The Company creates and customizes Shariah-compliant financial
products and platforms and provides Shariah consulting and advisory
services primarily to financial institutions and investment firms
with product initiatives directed to Islamic investors. Specifically,
the Company has built propri
On March 18, 2008, the Company announced a proposed joint venture
with the Dubai Multi Commodities Centre Authority (DMCC). The joint
venture entity, Dubai Shariah Asset Management, Ltd. (DSAM), will be
owned 51 per cent by Dubai Commodity Asset Management, a wholly-owned
division of DMCC, and 49 per cent by the Company. The entity intends
to develop and manage a range of Shariah-compliant investment
products focused on commodities. On March 24, 2008, DMCC purchased a
4.99% equity share of the Company. Coincident with this purchase, Dr.
David Rutledge, Chief Executive of DMCC, has joined the Company's
Board as a non-executive director.
Revenue Recognition Professional services arrangements are billed on a time and materials
basis and, accordingly, revenue is recognized as the services are
performed.
Property, Equipment and Property and equipment are stated at cost. Depreciation and
Depreciation amortization are provided principally on the straight-line method
over the estimated useful lives. Fully depreciated assets are written
off in the year following its last depreciation charge. The estimated
useful lives of the computer equipment is 5 years.
Cash and cash equivalents Cash and cash equivalents consist of short term highly liquid
investments purchased with original maturities of three months or
less and are readily convertible into cash.
Investments As part of its cash management program, the Company has invested
$3,500,000 in three taxable, variable rate bonds. Interest payable on
the bonds is reset weekly based on a Dutch auction. Each bond
provides daily liquidity (which settles in five trading days), and
each bond carries an investment grade rating by both Standard & Poors
and Moodys.
Concentration of Credit Risk The Company maintains cash balances with a financial institution. The
balance in this account at this institution at times maybe in excess
of the FDIC insured limit. The Company has not expensed any losses on
such accounts.
Additionally, the Company maintains a brokerage account with a
financial institution. The balance in this account at this
institution at times may be in excess of the SIPC insured limit. The
Company has not expensed any losses on such accounts.
Advertising The Company expenses advertising costs as they are incurred.
Income Taxes On September 6, 2006, Shariah Capital, Inc. was incorporated in
Delaware as a C Corp. under the provisions of the Internal Revenue
Code. The Company is responsible for minimum taxes to the States of
Delaware and Connecticut. Due to the current period loss, no income
tax provision has been made in the accompanying financial statements
and only the required minimum and capital taxes have been provided
for.
The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards No. 109, "Accounting for Income
Taxes." Under this method, deferred income taxes are recognized for
the tax consequences of "temporary differences" by applying statutory
tax rates expected to be applicable in future years to differences
between the financial statement carrying amounts and the tax bases of
existing assets and liabilities.
A valuation allowance reduces deferred tax assets when it is more
than likely than not that some or all of the deferred tax assets will
not be realized. (See Note 7.)
Use of Estimates The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
Earnings (loss) per share Basic and diluted net loss per share allocable to common stockholders
is presented in conformity with SFAS No. 128, "Earnings per Share".
In accordance with SFAS No. 128, basic and diluted net loss per share
has been computed using the weighted-average number of shares of
common stock outstanding during the period, less any shares subject
to restriction.
The number of weighted average shares of common stock outstanding
excluded from the calculation of basic and diluted net loss per share
(because they were subject to restriction) was 1,720,577 and
2,700,000 for the periods ended June 30, 2008 and June 30, 2007,
respectively. Had they been dilutive, such shares would have been
included in the computation of diluted net loss per share.
Shariah Capital, Inc
Notes to Financial Statements
(Unaudited as of June 30, 2008 and June 30, 2007)
1. Costs Related to The Company incurred
Listing on the costs of approximately
London Alternative $1,064,000 in
Investment Market connection with having
its common stock
admitted for trading on
the London Alternative
Investment Market (the
"AIM") in December,
2006. The Company
publicly trades on the
AIM under the ticker
symbol ("SCAP"). For
the six month period
ended June 30, 2007,
the Company incurred
and paid additional
costs related to the
listing of its common
stock on AIM of $1,869.
2. Related Party As of June 30, 2008,
Transactions the Company had a
receivable from an
employee in the amount
of $6,336. The amount
was repaid by the
employee during the 3rd
quarter of 2008. As of
June 30, 2007, the
Company had a
receivable from one of
the Directors in the
amount of $1,038. The
amount was repaid by
the Director during
2007.
3. Property and Property and equipment
Equipment - net - net, held and used at
June 30, 2008 and June
30, 2007 consist of the
following:
2008 2007
Computer equipment $12,002 $10,559
Less: Accumulated depreciation 3,124
and amortization 5,332
$6,670 $7,435
Depreciation expense amounted to $1,152
and $898 for the periods ended June 30,
2008 and June 30, 2007, respectively, and
is included in general and administrative
expenses.
4. Commitments Operating Leases
The Company is a party to an operating
lease agreement relating to the rental of
its corporate office that expires on
August 31, 2008, with an annual base rent
of approximately $72,000. The lease also
includes a provision to pay additional
rent for its proportionate share of
utilities of approximately $1,600 per
month over the lease term. Rent expense
amounted to $80,701 and $69,615 for the
six months ended June 30, 2008 and June
30, 2007, respectively, and is included in
general and administrative expenses. The
Company sublets a portion of this
corporate office on a month-to-month basis
to two tenants. Rental income amounted to
$3,000 and $16,500 for the six months
ended June 30, 2008, and June 30, 2007,
respectively. One sublet agreement was
terminated during 2008 and the other was
terminated during 2007.
The Company is also a party to a
month-to-month operating lease agreement
relating to the rental of corporate office
space in Dubai, which commenced in April
2007.
The minimum rental commitments required
Employment The Company entered into employment
Agreements agreements with its management employees
effective December 7, 2006, whereby annual
salaries aggregate $1,050,000. The
agreements provide for 6 to 12 months
notice of termination and provide for the
annual salaries to be paid through the
termination date. In addition, the
agreement with the Chairman and Chief
Executive Officer of the Company provides
for a $650,000 termination fee.
Non Executive Effective December 6, 2006, the Company
Director Service entered into a Non Executive Director
Agreement Service Agreement whereby an individual
will serve as the Chairman of the audit,
nomination and compensation committees of
the board of directors for an annual fee
of $32,500. The term of the agreement
shall be for a period of not less than six
months unless notice is given in writing
by either party to terminate the
agreement.
5. Supplemental Supplemental disclosures of cash flow
Disclosures of Cash information are as follows:
Flow Information
Six months ended Six months ended June 30, 2007
June 30, 2008
Non cash financing
transaction:
Contribution of services in - 125,000
exchange for common stock
6. Share Based In December 2004, the Financial Accouting Standards Board ("FASB") issued SFAS 123R, "Share-based Payment," a
revision of SFAS 123 which supersedes APB 25 "Accounting for Stock Issued to Employees". The Company adopted SFAS 123R using the
Compensation modified prospective application. Under this method, compensation cost is recognized for all share-based payments
granted, modified, or settled after the date of adoption as well as for any unvested awards that were granted prior to the
date of the adoption.
The Company granted 2,700,000 shares of restricted stock on December 7, 2006 to several of its employees. These
2006 restricted stock grants vest over a period of three years. Under the provisions of SFAS 123R, share-based compensation cost
is measured at the grant date, based on the calculated fair value of the award, and is recognized as an expense
over the employee's requisite service period, which is the vesting period of the grant.
On April 19, 2007, the Company granted 100,000 shares of restricted stock to a memb
7. Income Taxes The Company has net operating loss carry forwards of approximately $2,900,000 available to reduce any future
income taxes, expiring at various times from 2026 to 2027. The tax benefit of these losses and other temporary differences amount to
approximately $1,559,000 as of December 31, 2007, and has been fully offset by a valuation allowance due to the
uncertainty of its realization.
Shariah Capital, Inc.
Schedule of General and Administrative Expenses
(Unaudited as of June 30, 2008 and June 30, 2007)
Six months ended June 30, 2008 Six months ended June 30, 2007
General and administrative
expenses:
AIM Representation 56,500 52,278
Bank service charges 377 415
Board advisory fees - 10,000
Charitable Donation 500 500
Depreciation 1,152 898
Director's Fees 16,250 17,585
Insurance 95,353 63,060
Investment - 200
Information technology 5,696 40,173
Marketing 10,190 3,354
Miscellaneous 356 2,107
Office supplies 2,867 3,393
Payroll 525,000 525,000
Payroll taxes 52,559 32,762
Payroll processing 799 731
Postage and delivery 2,432 2,343
Accounting and Tax Service 40,585 24,975
Fees
Legal 266,013 30,785
Registrar Fees 7,853 7,238
Rent 80,701 69,615
Securities Filings 225 -
State and Labor Taxes 17,350 737
Stock compensation expense 396,120 665,479
Telephone 9,007 5,651
Travel and entertainment 165,213 45,086
Web services 387 286
Total general and $1,753,485 $1,604,651
administrative expenses
This information is provided by RNS
The company news service from the London Stock Exchange
END
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