##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 
 FORM 10-K
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2009
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For
the transition period from  to
 Commission File Number: 000-53352
 Titanium Asset Management Corp.
  Delaware
(State or other jurisdiction of 
incorporation or organization)
    
    20-8444031
(I.R.S. Employer
Identification Number)777 E. Wisconsin Avenue, Milwaukee, Wisconsin
(Address of principal executive offices)
    
    53202-5310
(Zip Code)
 (414) 765-1980    None   Common Stock, par value $0.0001
 o þ
 o þ
 þ o
 o o
 þ
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company þ(Do not check if a smaller reporting company)
 o þ
   DOCUMENTS INCORPORATED BY REFERENCE
Definitive Proxy Statement for the Companys 2010 Annual Meeting of Stockholders  Part III of this Form 10-K




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##### 



TABLE OF CONTENTS
 PagePART 1ITEM 1.
    
    BUSINESS
    
    
    1ITEM 1A.
    
    RISK FACTORS
    
    
    10ITEM 1B.
    
    UNRESOLVED STAFF COMMENTS
    
    
    18ITEM 2.
    
    PROPERTIES
    
    
    18ITEM 3
    
    LEGAL PROCEEDINGS
    
    
    19ITEM 4.
    
    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
    
    
    19PART IIITEM 5.
    
    MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER
MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
    
    
    21ITEM 6.
    
    SELECTED FINANCIAL DATA
    
    
    22ITEM 7.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATION
    
    
    22ITEM 7A.
    
    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
    
    
    35ITEM 8.
    
    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
    
    
    36ITEM 9.
    
    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
    
    
    61ITEM 9A.
    
    CONTROLS AND PROCEDURES
    
    
    61ITEM 9B.
    
    OTHER INFORMATION
    
    
    61PART IIIITEM 10.
    
    DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
    
    
    62ITEM 11.
    
    EXECUTIVE COMPENSATION
    
    
    62ITEM 12.
    
    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND RELATED STOCKHOLDER MATTERS
    
    
    62ITEM 13.
    
    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND
DIRECTOR INDEPENDENCE
    
    
    63ITEM 14.
    
    PRINCIPAL ACCOUNTING FEES AND SERVICES
    
    
    63PART IVITEM 15.
    
    EXHIBITS, FINANCIAL STATEMENT SCHEDULES
    
    
    64EX-10.27EX-21.1EX-31.1EX-31.2EX-32.1EX-32.2




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This Annual Report on Form 10-K , including, particularly, the Managements Discussion and
Analysis of Financial Condition and Results of Operations, contains forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995, which provides a safe
harbor for statements about future events, products and future financial performance that are
based on the beliefs of, estimates made by and information currently available to the management of
Titanium Asset Management Corp., a Delaware corporation (referred to as we, our or the
Company, and, unless the context indicates otherwise, includes our wholly owned asset management
subsidiaries, Wood Asset Management, Inc (referred to as Wood), Sovereign Holdings, LLC (referred
to as Sovereign), National Investment Services, Inc. (referred to as NIS), and Boyd Watterson Asset
Management, LLC (referred to as Boyd). We refer to Wood, Sovereign, NIS and Boyd collectively as
our subsidiaries or managers. The outcome of the events described in these forward-looking
statements is subject to risks and uncertainties. Actual results and the outcome or timing of
certain events may differ significantly from those projected in these forward-looking statements
due to, among other things, the items described in Item 1A of this Annual Report on Form 10-K and
the following items: market fluctuations that alter our assets under management; termination of
investment advisory agreements; loss of key personnel; loss of third-party distribution services;
impairment of goodwill and other intangible assets; our inability to compete; market pressure on
investment advisory fees; problems experienced in the acquisition or integration of target
businesses; changes in law, regulation or tax rates; ineffective management of risk; inadequacy of
insurance; changes in interest rates, equity prices, liquidity of global markets and international
and regional political conditions; terrorism; changes in monetary and fiscal policy, investor
sentiment and availability and cost of capital; technological changes and events; outcome of legal
proceedings; changes in currency values, inflation and credit ratings; failure of our systems to
properly operate; actions taken by Clal Finance Ltd. (referred to as Clal), as our significant
stockholder; and other factors listed in this Annual Report on Form 10-K and from time to time in
our other filings with the Securities and Exchange Commission (referred to as the Commission). For
this purpose, statements relating to integrating the operational, administrative and sales
activities of our subsidiaries, earning of incentive fees, amount of future assets under
management, acquisitions of additional asset management firms and payment therefor, payment of
deferred consideration for the purchase of our subsidiaries and anticipated levels of future
revenues, expenses or earnings, among other things; any statements using the terms aim,
anticipate, appear, based on, believe, can, continue, could, are emerging,
estimate, expect, expectation, intend, may, ongoing, plan, possible, potential,
predict, project, should and would or similar words or phrases, or the negatives of those
words or phrases; or discussions of strategy, plans, objectives or goals, may identify
forward-looking statements that involve risks, uncertainties and other factors that could cause our
actual results, financial condition and the outcome and timing of certain events to differ
materially from those projected or managements current expectations. By making forward-looking
statements, we have not assumed any obligation to, and you should not expect us to, update or
revise those statements because of new information, future events or otherwise.
 
 PART I
 
 ITEM 1.
    
    BUSINESS
 General




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Company History and Development
     The Wood Acquisition
    2




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The Sovereign Acquisition
    The NIS Acquisition
   The Boyd Acquisition
  3




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Principal Products and Services
 Our Investment Strategies
  December 31,(in millions)
    
    2009
    
    
    2008Fixed income
    
    $
    7,242.3
    
    
    $
    6,674.8Equity
    
    
    869.3
    
    
    
    898.4Real estate
    
    
    39.8
    
    
    
    Total
    
    $
    8,151.4
    
    
    $
    7,573.2
 4




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Sovereign
    
    Enhanced Cash Fixed IncomeLimited Duration Fixed IncomeIntermediate Taxable Fixed IncomeIntermediate Municipal Fixed IncomeCore Fixed IncomeTotal Return Fixed IncomeDiversified Fixed Income StrategyManaged Fixed Income SolutionNIS
    
    Short Duration Fixed IncomeIntermediate Fixed IncomeIntermediate Plus Fixed IncomeIntermediate Aggregate Fixed IncomeAggregate Core Fixed IncomeAggregate Core Plus Fixed IncomeFixed Income Arbitrage FundPreferred Stock FundsImmunized/Liability Matching Fixed IncomeFixed Income Transition ManagementBoyd
    
    Short-Term Fixed IncomeHigh Quality Intermediate Fixed IncomeIntermediate Fixed IncomeHigh Quality Core Fixed IncomeTotal Return Core Fixed IncomeDisciplined Core Fixed IncomeUltra Enhanced Core Fixed Income
     5




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##### Table of Contents



Other Investment Strategies
  Our Clients
  December 31,(in millions)
    
    2009
    
    
    2008Institutional
    
    $
    6,371.8
    
    
    $
    5,830.6Retail
    
    
    1,779.6
    
    
    
    1,742.6Total
    
    $
    8,151.4
    
    
    $
    7,573.2
  December 31,2009
    
    
    2008Percentage of total
    
    
    
    
    
    
    Percentage of totalassets under
    
    
    
    
    
    
    assets underNumber of clients
    
    
    management
    
    
    Number of clients
    
    
    managementInstitutionalPension and welfare plans
    
    
    266
    
    
    
    48
    %
    
    
    228
    
    
    
    40
    %Governmental entities
    
    
    35
    
    
    
    13
    %
    
    
    57
    
    
    
    17
    %Corporations
    
    
    61
    
    
    
    8
    %
    
    
    223
    
    
    
    14
    %Charitable organizations
    
    
    60
    
    
    
    8
    %
    
    
    133
    
    
    
    10
    %Other
    
    
    93
    
    
    
    5
    %
    
    
    1
    
    
    
    Total institutional
    
    
    515
    
    
    
    78
    %
    
    
    642
    
    
    
    81
    %RetailBroker dealer
    
    
    1,212
    
    
    
    12
    %
    
    
    1,805
    
    
    
    7
    %Other
    
    
    765
    
    
    
    10
    %
    
    
    631
    
    
    
    11
    %Total retail
    
    
    1,977
    
    
    
    22
    %
    
    
    2,436
    
    
    
    18
    %Total
    
    
    2,492
    
    
    
    100
    %
    
    
    3,078
    
    
    
    100
    %
  6




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December 31,(in millions)
    
    2009
    
    
    2008Separate accounts
    
    $
    7,291.9
    
    
    $
    7,135.7Private funds
    
    
    859.5
    
    
    
    437.5Total
    
    $
    8,151.4
    
    
    $
    7,573.2
    7




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Distribution and Marketing
 Institutional Distribution
    Broker-Dealer Relationships
   Referral Arrangements
  Competitive Business Conditions
 The U.S. Economy
  namely
 8




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Our Competitive Position in the Industry
  namely
  Governmental Regulation
  Commission Regulation
   9




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State Regulation
  ERISA
  Employees
  
 ITEM 1A. RISK FACTORS
  10




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Risks Relating to Our Business
 Because we have a limited operating history, you may not be able to evaluate our current and future business prospects accurately.
  Our fees are subject to market fluctuations.
  
    
    causing the value of the assets under management to decrease, which would
result in lower investment advisory fees; or
    
    causing negative absolute performance returns for some accounts that have
performance-based fees, resulting in a reduction of revenue from such fees.
    Poor investment performance of our investment strategies could affect our sales or reduce the
amount of assets under management, potentially negatively impacting revenue and profitability.
  We derive substantially all of our revenues from contracts that may be terminated on short notice.
  11




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We depend on the continued services of our key personnel. The loss of key personnel could have a
material adverse effect on us.
  We depend on third-party distribution sources to market our investment strategies and access our
client base.
    We have significant goodwill and intangible assets subject to impairment analysis. The impairment
analysis is based on subjective criteria, and an impairment loss could be recorded.
  12




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Market pressure to lower our subsidiaries investment advisory fees could reduce our profit margin.
  The due diligence process that we undertake in connection with our acquisitions may not reveal all
facts that may be relevant in connection with an acquisition.
  Acquisitions of target businesses involve inherent risks that could threaten our ability to
successfully consummate a transaction.
  
    
    inability to secure enough affirmative votes to gain approval of a proposed
acquisition from the target companys stockholders;
    
    higher than anticipated acquisition costs and expenses; and
    
    the potential diversion of our managements time and attention.
  13




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Future acquisitions may have a dilutive effect on existing holders of Common Stock.
   Our failure to successfully integrate an acquired businesses could have an adverse effect on our
business, financial condition or results of operations.
  
    
    loss of key personnel, either by us, our subsidiaries or by the target
company;
    
    termination of key investment advisory agreements by clients of the target
company;
    
    operating a significantly larger combined organization;
    
    coordinating geographically disparate organizations, systems and
facilities; and
    
    integrating corporate, technological and administrative functions.
 Some of our revenue, net income and cash flow is dependent upon incentive fees, which may make it
difficult for us to achieve steady earnings growth on an annual basis.
  Changes in tax law, the interpretation of existing tax laws and amendments to existing tax rates
could adversely affect our business.
  14




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Changes in laws and regulations could adversely affect our business.
  If our techniques for managing risk are ineffective, we may be exposed to material unanticipated
losses.
   Insurance coverage may not protect us from all of the liabilities that could arise from the risks
inherent in our business.
  Risks Relating to the Asset Management Industry
 The asset management industry has inherent risks and difficult market conditions can adversely
affect the ability of our subsidiaries to successfully execute their investment strategies.
  15




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The asset management industry faces substantial litigation risks which could materially adversely
affect our business, financial condition or results of operations or cause significant harm to our
reputation.
  The asset management business is intensely competitive.
  Employee misconduct could expose us to significant legal liability and reputational harm.
  The asset management business is extensively regulated and the failure to comply with regulatory
requirements may harm our financial condition.
  16




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Operational risks may disrupt our business, result in losses or limit our growth.
  Risks Relating to Our Common Stock
 There is no public U.S. market for our shares and an active market may not develop or be
maintained, which could limit stockholders ability to sell shares of our Common Stock.
  We incur increased costs as a result of being a U.S. public reporting company.
  The transfer of our shares of Common Stock is restricted.
  Clal can exercise control over all matters requiring stockholder approval and could make decisions
about our business that conflict with other stockholders.
  
    
    the majority composition of our board of directors and, through it, any
determination with respect to our business direction and policies, including the
appointment and removal of officers;
 17




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
    
    any determinations with respect to mergers or other business combinations;
    
    determinations with respect to compensation plans;
    
    our acquisition or disposition of assets;
    
    our financing arrangements; and
    
    the payment of dividends on our stock.
  Our charter documents contain provisions that may delay, defer or prevent a change of control.
  
    
    allowing removal of directors for cause only; and not allowing the removal
of directors nominated by Clal, except for removal by Clal (or any affiliate thereof)
so long as Clal or any of its affiliates owns of record at least 35.0% of the then
issued and outstanding shares of Common Stock;
    
    giving the board of directors the ability to authorize the issuance of
 shares of our preferred stock, par value $0.0001, without stockholder approval;
    
    vesting exclusive authority in the board of directors to fill vacancies on
the board of directors, other than the vacancies of the directors nominated by Clal;
    
    limiting stockholders ability to call special meetings; and
    
    giving Clal or any affiliate thereof, special rights so long as Clal or
any of its affiliates owns of record at least 35.0% of the then issued and outstanding
Common Stock.
 We do not expect to pay any dividends for the foreseeable future.
  
 ITEM 1B. UNRESOLVED STAFF COMMENTS
  
 ITEM 2. PROPERTIES
    18




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ITEM 3. LEGAL PROCEEDINGS
    
 ITEM 4. RESERVED
 19




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EXECUTIVE OFFICERS
  Name
    
    Age
    
    PositionRobert Brooks
    
    
    55
    
    
    Chief Executive Officer and Managing Director and
Executive Vice President of NISJonathan Hoenecke
    
    
    50
    
    
    Chief Financial Officer and SecretaryRobert Kelly
    
    
    65
    
    
    Co-Chairman and Director and Chief Executive Officer of NISBrian L. Gevry
    
    
    43
    
    
    Chief Operating Officer and Managing Director and Chief
Executive Officer and Co-Chief Investment Officer of BoydJohn (Jack) Fisher
    
    
    55
    
    
    Managing Director and President and Chief Executive
Officer of Wood and Chief Executive Officer of SovereignTal Raz
    
    
    48
    
    
    Co-Chairman and Director
 Robert Brooks
 Jonathan Hoenecke
 Robert Kelly
 Brian L. Gevry, CFA,
 20




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John (Jack) Fisher
 Tal Raz
 
 PART II
 
 ITEM 5.  MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF
EQUITY SECURITIES
   Price Per Shareof Common Stock ($)Quarterly Period
    
    Low
    
    High1st Quarter, 2008
    
    
    5.63
    
    
    
    5.632nd Quarter, 2008
    
    
    5.63
    
    
    
    5.633rd Quarter, 2008
    
    
    5.25
    
    
    
    5.884th Quarter, 2008
    
    
    5.25
    
    
    
    5.251st Quarter, 2009
    
    
    4.43
    
    
    
    5.752nd Quarter, 2009
    
    
    4.00
    
    
    
    4.503rd Quarter, 2009
    
    
    1.75
    
    
    
    4.004th Quarter, 2009
    
    
    1.50
    
    
    
    3.00
   21




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ITEM 6. SELECTED FINANCIAL DATA
  
 ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  General
       22




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Company History and Development
      Market Developments
  23




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Assets Under Management
    2009December 31,
    
    
    vs.(in millions)
    
    2009
    
    
    2008
    
    
    2008Annual Activity:Beginning balance
    
    $
    7,573.2
    
    
    $
    3,070.8
    
    
    
    147
    %NIS acquisition on March 31, 2008
    
    
    
    
    
    
    2,884.1
    
    
    NMBoyd acquisition on December 31, 2008
    
    
    
    
    
    
    2,856.0
    
    
    NMInflows
    
    
    2,198.8
    
    
    
    1,052.2
    
    
    
    102
    %Outflows
    
    
    (2,205.9
    )
    
    
    (1,877.7
    )
    
    
    15
    %Market value change
    
    
    585.3
    
    
    
    (412.2
    )
    
    NMEnding balance
    
    $
    8,151.4
    
    
    $
    7,573.2
    
    
    
    8
    %Average Assets Under Management (1)
    
    $
    7,839.5
    
    
    $
    4,490.5
    
    
    
    75
    %Average Fee Rate (basis points)
    
    
    24
    
    
    
    29
    
    
    
    (17
    )%Year End Balances:By investment strategy:Fixed income
    
    $
    7,242.3
    
    
    $
    6,674.8
    
    
    
    9
    %Equity
    
    
    869.3
    
    
    
    898.4
    
    
    
    (3
    )%Real estate
    
    
    39.8
    
    
    
    
    
    
    NMTotal
    
    $
    8,151.4
    
    
    $
    7,573.2
    
    
    
    8
    %By client type:Institutional
    
    $
    6,371.8
    
    
    $
    5,830.6
    
    
    
    9
    %Retail
    
    
    1,779.6
    
    
    
    1,742.6
    
    
    
    2
    %Total
    
    $
    8,151.4
    
    
    $
    7,573.2
    
    
    
    8
    %By investment vehicle:Separate accounts
    
    $
    7,291.9
    
    
    $
    7,135.7
    
    
    
    2
    %Private funds
    
    
    859.5
    
    
    
    437.5
    
    
    
    96
    %Total
    
    $
    8,151.4
    
    
    $
    7,573.2
    
    
    
    8
    %
 
 (1)
    
    Average assets under management are calculated based on the quarter end balances and include
amounts acquired in acquisitions in the first quarter following the acquisition.  24




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25




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For the Years EndedDecember 31,(in millions)
    
    2009
    
    
    2008Annual Activity:Beginning balance
    
    $
    806.2
    
    
    $
    938.3Inflows
    
    
    87.7
    
    
    
    77.0Outflows
    
    
    (45.5
    )
    
    
    (18.3
    )Market value change
    
    
    126.5
    
    
    
    (190.8
    )Ending balance
    
    $
    974.9
    
    
    $
    806.2
 Results of Operations
 Consolidated Results of Operations
  2009Year ended December 31,
    
    
    vs.2009
    
    
    2008
    
    
    2008Operating revenues
    
    $
    22,471,000
    
    
    $
    15,241,000
    
    
    
    47
    %Operating expenses:Administrative
    
    
    25,926,000
    
    
    
    16,849,000
    
    
    
    54
    %Amortization of intangible assets
    
    
    4,078,000
    
    
    
    4,190,000
    
    
    
    -3
    %Impairment of intangible assets
    
    
    1,529,000
    
    
    
    6,533,000
    
    
    
    -77
    %Impairment of goodwill
    
    
    8,489,000
    
    
    
    
    
    
    NMTotal operating expenses
    
    
    40,022,000
    
    
    
    27,572,000
    
    
    
    50
    %Operating loss
    
    
    (17,551,000
    )
    
    
    (12,331,000
    )
    
    
    53
    %Other income and expense
    
    
    398,000
    
    
    
    1,004,000
    
    
    
    -58
    %Income (loss) before taxes
    
    
    (17,153,000
    )
    
    
    (11,327,000
    )
    
    
    63
    %Income tax expense (benefit)
    
    
    4,016,000
    
    
    
    (4,287,000
    )
    
    NMNet income (loss)
    
    $
    (21,169,000
    )
    
    $
    (7,040,000
    )
    
    
    220
    %Net income (loss) per sharebasic
    
    $
    (1.03
    )
    
    $
    (0.34
    )
    
    
    224
    %diluted
    
    $
    (1.03
    )
    
    $
    (0.34
    )
    
    
    224
    %
  
    
    Goodwill impairment charges totaling $8,489,000 in 2009.
    
    Intangible asset impairment charges totaling $1,529,000 in 2009 and $6,533,000 in 2008.
    
    Intangible asset amortization totaling $4,078,000 in 2009 and $4,190,000 in 2008
    
    Recognition of a deferred tax valuation allowance of $10,273,000 resulting in a
$4,016,000 deferred tax charge for 2009 as compared to a $4,287,000 deferred tax benefit in
2008.
 26




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Operating Revenues
  2009Year ended December 31,
    
    
    vs.2009
    
    
    2008
    
    
    2008Investment advisory fees
    
    $
    18,944,000
    
    
    $
    12,924,000
    
    
    
    47
    %Incentive fees
    
    
    1,256,000
    
    
    
    518,000
    
    
    
    142
    %Referral fees
    
    
    2,271,000
    
    
    
    1,799,000
    
    
    
    26
    %Total operating revenues
    
    $
    22,471,000
    
    
    $
    15,241,000
    
    
    
    47
    %
 27




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Administrative Expenses
  2009Year ended December 31,
    
    
    vs.2009
    
    
    2008
    
    
    2008Employee compensation:Cash compensation
    
    $
    15,729,000
    
    
    $
    8,971,000
    
    
    
    75
    %Share-based compensation
    
    
    420,000
    
    
    
    
    
    
    NMTotal compensation
    
    
    16,149,000
    
    
    
    8,971,000
    
    
    
    80
    %Third party distribution expense
    
    
    837,000
    
    
    
    496,000
    
    
    
    69
    %Legal, audit, and other professional fees
    
    
    2,443,000
    
    
    
    3,025,000
    
    
    
    -19
    %Occupancy
    
    
    1,314,000
    
    
    
    913,000
    
    
    
    44
    %Other administrative expenses
    
    
    5,183,000
    
    
    
    3,444,000
    
    
    
    50
    %Total administrative expenses
    
    $
    25,926,000
    
    
    $
    15,241,000
    
    
    
    47
    %
  28




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Other Income and Expense
  2009Year ended December 31,
    
    
    vs.2009
    
    
    2008
    
    
    2008Interest income
    
    $
    429,000
    
    
    $
    1,032,000
    
    
    
    -58
    %Realized gains on investments
    
    
    230,000
    
    
    
    
    
    
    NMImpairment loss on investment in
commingled stock fund
    
    
    (381,000
    )
    
    
    
    
    
    NMIncome from equity investee
    
    
    179,000
    
    
    
    
    
    
    NMInterest expense
    
    
    (59,000
    )
    
    
    (28,000
    )
    
    
    110
    %Total other income (expense)
    
    $
    398,000
    
    
    $
    1,004,000
    
    
    
    -60
    %
    29




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##### Table of Contents



Liquidity and Capital Resources
  Year ended December 31,2009
    
    
    2008Net cash used in operating activities
    
    $
    (2,425,000
    )
    
    $
    (633,000
    )Net cash provided by (used in) investing
activities
    
    
    (2,960,000
    )
    
    
    12,015,000Net cash used in financing activities
    
    
    (8,595,000
    )
    
    
    (12,017,000
    )
     Amounts due currently:Sovereign deferred acquisition payment (1)
    
    $
    900,000NIS deferred acquisition payment due March 2010
    
    
    713,000$
    1,613,000
 
 (1)
    
    The amount due for Sovereign reflects the tentative settlement amount as of March 29, 2010 and
represents all remaining obligations due under the Sovereign Agreement.  30




---



##### Table of Contents



Total
    
    
    Cash portion
    
    
    Stock portionAmounts due in 2011:Deferred variable payment due based on
the revenue run rate for Boyd as of
December 31, 2010 exceeding $6,250,000.
The maximum payment of $8,000,000, of
which up to 35% is payable in Common
Stock.
    
    $
    8,000,000
    
    
    $
    5,200,000
    
    
    $
    2,800,000Payment due based on Wood assets under
management at September 30, 2011. The
maximum payment of $2,000,000 is
prorated based on $1.5 billion of assets
under management and up to 50% is
payable in Common Stock.
    
    
    995,000
    
    
    
    498,000
    
    
    
    497,000Total amounts due under acquisition agreements
    
    $
    8,995,000
    
    
    $
    5,698,000
    
    
    $
    3,297,000
  Off-Balance Sheet Arrangements
  Critical Accounting Estimates
   Goodwill.
  31




---



##### Table of Contents



Intangible Assets Other Than Goodwill
   32




---



##### Table of Contents



Valuation Allowances for Deferred Tax Asset
    Fair Value Measurements
   33




---



##### Table of Contents



Contingencies and Litigation
    Recent Accounting Pronouncements
  
    
    The FASB has issued revised standards concerning the accounting for business
combinations that will require the expensing of acquisition costs incurred in future
acquisitions and contingent consideration will be recorded at the acquisition date for
future acquisitions.
    
    The FASB has recently issued guidance for determining the useful life of intangible
assets. The adoption of this guidance did not have an impact on the Companys
consolidated financial statements.
    
    In May 2009, the FASB issued a standard that provides guidance to establish general
standards of accounting for and disclosures of events that occur after the balance
sheet date but before financial statements are issued or are available to be issued.
That standard requires public companies to evaluate subsequent events through the date
that the financial statements are issued. The Company adopted this standard during the
second quarter of 2009.
 34




---



##### Table of Contents




    
    A standard, which was issued by the FASB in June 2009, that requires entities to
provide more information regarding sales of securitized financial assets and similar
transactions. This standard, which is effective for fiscal years beginning after
November 15, 2009, is not expected to have a significant impact on the Companys
consolidated financial statements.
    
    A standard, which was issued by the FASB in June 2009, that modifies how a company
determines when an entity that is insufficiently capitalized or is not controlled
through voting (or similar rights) should be consolidated. The standard clarifies that
the determination of whether a company is required to consolidate an entity is based
on, among other things, an entitys purpose and design and a companys ability to
direct the activities of the entity that most significantly impact the entitys
performance. The standard requires an ongoing reassessment of whether a company is the
primary beneficiary of a variable interest entity and also requires additional
disclosures about a companys involvement in variable interest entities and any
significant changes in risk exposure due to that involvement. This standard, which is
effective for fiscal years beginning after November 15, 2009, is not expected to have a
significant impact on the Companys consolidated financial statements.
    
    A standard, which was issued by the FASB in 2009, that requires additional
disclosures concerning transfers between level 1 and level 2 fair value measurements
and separate information purchases, sales, issuances, and redemptions of items valued
using unobservable inputs.
 
 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  35




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##### Table of Contents



ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
 Report of Independent Registered Public Accounting Firm
 
    
 36




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##### Table of Contents



Titanium Asset Management Corp.
Consolidated Balance Sheets
 December 31, 2009
    
    
    December 31, 2008AssetsCurrent assetsCash and cash equivalents
    
    $
    4,773,000
    
    
    $
    18,753,000Investments
    
    
    12,549,000
    
    
    
    10,683,000Accounts receivable
    
    
    5,030,000
    
    
    
    4,041,000Refundable income taxes
    
    
    
    
    
    
    512,000Other current assets
    
    
    1,162,000
    
    
    
    908,000Total current assets
    
    
    23,514,000
    
    
    
    34,897,000Investment in affiliate
    
    
    2,179,000
    
    
    
    Other investment
    
    
    
    
    
    
    672,000Property and equipment, net
    
    
    427,000
    
    
    
    456,000Goodwill
    
    
    28,147,000
    
    
    
    32,757,000Intangible assets, net
    
    
    24,920,000
    
    
    
    32,206,000Deferred income taxes
    
    
    
    
    
    
    4,202,000Total assets
    
    $
    79,187,000
    
    
    $
    105,190,000Liabilities and Stockholders EquityCurrent liabilitiesAccounts payable
    
    $
    237,000
    
    
    $
    663,000Acquisition payments due
    
    
    1,746,000
    
    
    
    8,145,000Accrued compensation
    
    
    2,472,000
    
    
    
    676,000Other current liabilities
    
    
    1,032,000
    
    
    
    1,113,000Total current liabilities
    
    
    5,487,000
    
    
    
    10,597,000Acquisition payments due
    
    
    960,000
    
    
    
    1,889,000Total liabilities
    
    
    6,447,000
    
    
    
    12,486,000Commitments and contingencies (Note 13)Stockholders equityCommon stock, $0.0001 par value; 54,000,000 shares authorized; 20,689,478
and 20,464,002 shares issued and outstanding at December 31, 2009 and 2008,
respectively
    
    
    2,000
    
    
    
    2,000Restricted common stock, $0.0001 par value; 720,000 shares authorized;
612,716 shares issued and outstanding at December 31, 2009 and 2008
    
    
    
    
    
    
    Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued
    
    
    
    
    
    
    Additional paid-in capital
    
    
    100,332,000
    
    
    
    99,462,000Accumulated deficit
    
    
    (27,766,000
    )
    
    
    (6,597,000
    )Other comprehensive income (loss)
    
    
    172,000
    
    
    
    (163,000
    )Total stockholders equity
    
    
    72,740,000
    
    
    
    92,704,000Total liabilities and stockholders equity
    
    $
    79,187,000
    
    
    $
    105,190,000
 See notes to consolidated financial statements.
 37




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##### Table of Contents



Titanium Asset Management Corp.
Consolidated Statements of Operations
(in thousands except for per share amounts)
 Year ended December 31,2009
    
    
    2008Operating revenues
    
    $
    22,471,000
    
    
    $
    15,241,000Operating expensesAdministrative
    
    
    25,926,000
    
    
    
    16,849,000Amortization of intangible assets
    
    
    4,078,000
    
    
    
    4,190,000Impairment of goodwill
    
    
    8,489,000
    
    
    
    Impairment of intangible assets
    
    
    1,529,000
    
    
    
    6,533,000Total operating expenses
    
    
    40,022,000
    
    
    
    27,572,000Operating loss
    
    
    (17,551,000
    )
    
    
    (12,331,000
    )Other IncomeInterest income
    
    
    429,000
    
    
    
    1,032,000Loss on investments
    
    
    (151,000
    )
    
    
    Income from equity investee
    
    
    179,000
    
    
    
    Interest expense
    
    
    (59,000
    )
    
    
    (28,000
    )Loss before taxes
    
    
    (17,153,000
    )
    
    
    (11,327,000
    )Income tax provision (benefit)
    
    
    4,016,000
    
    
    
    (4,287,000
    )Net loss
    
    $
    (21,169,000
    )
    
    $
    (7,040,000
    )Earnings (loss) per shareBasic
    
    $
    (1.03
    )
    
    $
    (0.34
    )Diluted
    
    $
    (1.03
    )
    
    $
    (0.34
    )Weighted average number of common shares outstanding:Basic
    
    
    20,536,382
    
    
    
    20,406,318Diluted
    
    
    20,536,382
    
    
    
    20,406,318
 See notes to consolidated financial statements.
 38




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##### Table of Contents



Titanium Asset Management Corp.
Consolidated Statements of Changes in Stockholders Equity
For the years ended December 31, 2009 and 2008
 Common Stock
    
    
    
    
    
    
    Restricted SharesAdditional Paid-in
    
    
    Retained Earnings
    
    
    Other Comprehensive
    
    
    Total StockholdersShares
    
    
    Shares held by TIP
    
    
    Amount
    
    
    Shares
    
    
    Amount
    
    
    Capital
    
    
    (Deficit)
    
    
    Income (Loss)
    
    
    EquityBalances at December 31, 2007
    
    
    22,993,731
    
    
    
    
    
    
    $
    2,000
    
    
    
    696,160
    
    
    $
    
    
    
    $
    55,892,000
    
    
    $
    443,000
    
    
    $
    
    
    
    $
    56,337,000Transfer in  repurchase
rights not executed
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    55,587,000
    
    
    
    
    
    
    
    
    
    
    
    55,587,000Common stock redemption
    
    
    (2,542,229
    )
    
    
    
    
    
    
    
    
    
    
    (83,444
    )
    
    
    
    
    
    
    (12,017,000
    )
    
    
    
    
    
    
    
    
    
    
    (12,017,000
    )Unallocated shares acquired
with acquisition of TIP
    
    
    
    
    
    
    (97,011
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Employee share grants
    
    
    12,500
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net loss and comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7,040,000
    )
    
    
    (163,000
    )
    
    
    (7,203,000
    )Balances at December 31, 2008
    
    
    20,464,002
    
    
    
    (97,011
    )
    
    
    2,000
    
    
    
    612,716
    
    
    
    
    
    
    
    99,462,000
    
    
    
    (6,597,000
    )
    
    
    (163,000
    )
    
    
    92,704,000Employee share grants
    
    
    45,500
    
    
    
    55,322
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Equity compensation expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    420,000
    
    
    
    
    
    
    
    
    
    
    
    420,000Forfeitures of employee share
grants
    
    
    
    
    
    
    (82,973
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Common stock issued as payment
for deferred acquisition
obligations
    
    
    179,976
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    450,000
    
    
    
    
    
    
    
    
    
    
    
    450,000Net loss and comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (21,169,000
    )
    
    
    335,000
    
    
    
    (20,834,000
    )Balances at December 31, 2009
    
    
    20,689,478
    
    
    
    (124,662
    )
    
    $
    2,000
    
    
    
    612,716
    
    
    $
    
    
    
    $
    100,332,000
    
    
    $
    (27,766,000
    )
    
    $
    172,000
    
    
    $
    72,740,000
 See notes to consolidated financial statements.
 39




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##### Table of Contents



Titanium Asset Management Corp.
Consolidated Statements of Cash Flows
 Year ended December 31,2009
    
    
    2008Cash flows from operating activitiesNet loss
    
    $
    (21,169,000
    )
    
    $
    (7,040,000
    )Adjustments to reconcile net loss to net cash provided by operating activities:Depreciation and amortization
    
    
    4,219,000
    
    
    
    4,262,000Impairment of intangible assets
    
    
    1,529,000
    
    
    
    6,533,000Impairment of goodwill
    
    
    8,489,000
    
    
    
    Share compensation expense
    
    
    420,000
    
    
    
    Loss on investments
    
    
    151,000
    
    
    
    Income from equity investee
    
    
    (179,000
    )
    
    
    Accretion of acquisition payments
    
    
    55,000
    
    
    
    26,000Deferred income taxes
    
    
    4,016,000
    
    
    
    (3,823,000
    )Changes in assets and liabilities:Increase in accounts receivable
    
    
    (900,000
    )
    
    
    (29,000
    )Increase in other current assets
    
    
    (257,000
    )
    
    
    (607,000
    )Increase (decrease) in accounts payable
    
    
    (432,000
    )
    
    
    511,000Increase (decrease) in other current liabilities
    
    
    1,633,000
    
    
    
    (466,000
    )Net cash used in operating activities
    
    
    (2,425,000
    )
    
    
    (633,000
    )Cash flows from investing activitiesPurchases of property and equipment
    
    
    (130,000
    )
    
    
    (326,000
    )Cash and cash equivalents released from trust
    
    
    
    
    
    
    55,587,000Purchase investments
    
    
    (20,139,000
    )
    
    
    (11,619,000
    )Sales and redemptions of investments
    
    
    19,315,000
    
    
    
    Investment in equity investee
    
    
    (2,000,000
    )
    
    
    Cash paid for acquisition of subsidiaries, net of cash acquired
    
    
    (6,000
    )
    
    
    (31,627,000
    )Net cash provided by (used in) investing activities
    
    
    (2,960,000
    )
    
    
    12,015,000Cash flows from financing activitiesPayment of deferred acquisition obligations
    
    
    (8,595,000
    )
    
    
    Common stock redeemed
    
    
    
    
    
    
    (12,017,000
    )Net cash used in financing activities
    
    
    (8,595,000
    )
    
    
    (12,017,000
    )Net decrease in cash and cash equivalents
    
    
    (13,980,000
    )
    
    
    (635,000
    )Cash and cash equivalents:Beginning
    
    
    18,753,000
    
    
    
    19,388,000Ending
    
    $
    4,773,000
    
    
    $
    18,753,000Supplemental disclosure of cash flow informationIncome taxes refunded (paid)
    
    $
    512,000
    
    
    $
    (606,000
    )Supplemental disclosure of non-cash investing and financing activitiesPaid-in capital attributed to common stock repurchase rights not executed
    
    $
    
    
    
    $
    55,587,000Payments due in connection with acquisitions
    
    $
    1,933,000
    
    
    $
    10,365,000Common stock issued as payment for acquisition obligations
    
    $
    450,000
    
    
    $
    
 See notes to consolidated financial statements.
 40




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##### Table of Contents



Titanium Asset Management Corp.
Notes to Consolidated Financial Statements
 Note 1  Nature of business
  Note 2  Significant accounting policies
 Consolidation
   Basis of presentation
 Segment information
  41




---



##### Table of Contents



Titanium Asset Management Corp.
Notes to Consolidated Financial Statements (continued)
 Operating revenues
  Cash equivalents and concentration of credit risk
 Investments in securities
   Receivables and allowance for doubtful accounts
 42




---



##### Table of Contents



Titanium Asset Management Corp.
Notes to Consolidated Financial Statements (continued)
 Property and equipment
 December 31,2009
    
    
    2008Equipment
    
    $
    316,000
    
    
    $
    245,000Leasehold improvements
    
    
    336,000
    
    
    
    298,000Total property and equipment
    
    
    652,000
    
    
    
    543,000Accumulated depreciation
    
    
    (225,000
    )
    
    
    (87,000
    )Net property and equipment
    
    $
    427,000
    
    
    $
    456,000
 Business combinations
 Goodwill and intangible assets
    Advertising and promotional costs
 Operating leases
 Share-based payments
 43




---



##### Table of Contents



Titanium Asset Management Corp.
Notes to Consolidated Financial Statements (continued)
  Income taxes
  Earnings per share
 Fair value measurements
   44




---



##### Table of Contents



Titanium Asset Management Corp.
Notes to Consolidated Financial Statements (continued)
 Recent accounting pronouncements
  
    
    The Financial Accounting Standards Board (FASB) has issued revised
standards concerning the accounting for business combinations that will require the
expensing of acquisition costs incurred in future acquisitions and contingent
consideration will be recorded at the acquisition date for future acquisitions.
    
    The FASB has recently issued guidance for determining the useful life of
intangible assets. The adoption of this guidance did not have an impact on the
Companys consolidated financial statements.
    
    In May 2009, the FASB issued a standard that provides guidance to establish
general standards of accounting for and disclosures of events that occur after the
balance sheet date but before financial statements are issued or are available to be
issued. That standard requires public companies to evaluate subsequent events through
the date that the financial statements are issued. The Company adopted this standard
during the second quarter of 2009.
  
    
    A standard, which was issued by the FASB in June 2009, that requires
entities to provide more information regarding sales of securitized financial assets
and similar transactions. This standard, which is effective for fiscal years beginning
after November 15, 2009, is not expected to have a significant impact on the Companys
consolidated financial statements.
    
    A standard, which was issued by the FASB in June 2009, that modifies how a
company determines when an entity that is insufficiently capitalized or is not
controlled through voting (or similar rights) should be consolidated. The standard
clarifies that the determination of whether a company is required to consolidate an
entity is based on, among other things, an entitys purpose and design and a companys
ability to direct the activities of the entity that most significantly impact the
entitys performance. The standard requires an ongoing reassessment of whether a
company is the primary beneficiary of a variable interest entity and also requires
additional disclosures about a companys involvement in variable interest entities and
any significant changes in risk exposure due to that involvement. This standard, which
is effective for fiscal years beginning after November 15, 2009, is not expected to
have a significant impact on the Companys consolidated financial statements.
    
    A standard, which was issued by the FASB in 2009, that requires additional
disclosures concerning transfers between level 1 and level 2 fair value measurements
and separate information purchases, sales, issuances, and redemptions of items valued
using unobservable inputs.
 45




---



##### Table of Contents



Titanium Asset Management Corp.
Notes to Consolidated Financial Statements (continued)
 Note 3  Acquisitions
 Acquisition of Wood
    Goodwill
    
    $
    19,865,000Intangible asset  customer relationships
    
    
    12,026,000Intangible asset  non-compete covenant
    
    
    829,000Intangible asset  brand
    
    
    444,000$
    33,164,000
   Acquisition of Sovereign
    Goodwill
    
    $
    2,122,000Intangible asset  customer relationships
    
    
    2,665,000Intangible asset  non-compete covenant
    
    
    833,000Intangible asset  brand
    
    
    181,000$
    5,801,000
 46




---



##### Table of Contents



Titanium Asset Management Corp.
Notes to Consolidated Financial Statements (continued)
  Acquisition of NIS
    Current assets
    
    $
    3,123,000Property and equipment
    
    
    130,000Goodwill
    
    
    7,091,000Intangible asset  customer relationships
    
    
    23,089,000Current liabilities
    
    
    (599,000
    )$
    32,834,000
 Acquisition of Boyd
   47




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##### Table of Contents



Titanium Asset Management Corp.
Notes to Consolidated Financial Statements (continued)
  Current assets
    
    $
    785,000Property and equipment
    
    
    50,000Goodwill
    
    
    5,664,000Intangible asset  customer relationships
    
    
    2,821,000Current liabilities
    
    
    (463,000
    )$
    8,857,000
 Pro forma effect of acquisitions
   Year ended 
December 31, 
2008Total revenue
    
    $
    23,226,000Net loss
    
    $
    (7,124,000
    )Net loss per share:Basic
    
    $
    (0.35
    )Diluted
    
    $
    (0.35
    )Pro forma weighted average number of
common shares outstanding:Basic
    
    
    20,598,318Diluted
    
    
    20,598,318
 48




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##### Table of Contents



Titanium Asset Management Corp.
Notes to Consolidated Financial Statements (continued)
 Note 4  Investments
  Current portfolio of debt securities
 Amortized cost
    
    
    Unrealized gains
    
    
    Unrealized losses
    
    
    Fair valueDecember 31, 2009
    
    $
    12,292,000
    
    
    $
    259,000
    
    
    $
    (2,000
    )
    
    $
    12,549,000December 31, 2008
    
    $
    10,651,000
    
    
    $
    50,000
    
    
    $
    (18,000
    )
    
    $
    10,683,000
  Amortized cost
    
    
    Fair valueWithin one year
    
    $
    6,160,000
    
    
    $
    6,379,000After one year but within five years
    
    $
    6,132,000
    
    
    $
    6,170,000
  2009
    
    
    2008Available for sale securities:Proceeds from sale
    
    $
    18,730,000
    
    
    $
    Gross realized gains on sales
    
    
    329,000
    
    
    
    Gross realized losses on sales
    
    
    (99,000
    )
    
    
    Unrealized gains and losses
    
    
    257,000
    
    
    
    (262,000
    )Net gains (losses)
reclassified out of
accumulated other
comprehensive income to
earnings
    
    
    32,000
    
    
    
    
 Commingled stock fund
  49




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##### Table of Contents



Titanium Asset Management Corp.
Notes to Consolidated Financial Statements (continued)
 Investment in Affiliate
  Initial investment
    
    $
    2,000,000Equity in income of affiliate
    
    
    179,000Investment in affiliate at year end
    
    $
    2,179,000
 50




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Titanium Asset Management Corp.
Notes to Consolidated Financial Statements (continued)
 Note 5  Goodwill and intangible assets
  Goodwill at January 1, 2008
    
    $
    21,987,000NIS acquisition
    
    
    7,091,000Boyd acquisition
    
    
    3,679,000Goodwill at December 31, 2008
    
    
    32,757,000Adjustment to acquired Boyd assets and liabilities
    
    
    267,000Change in estimated values for acquired intangible assets of Boyd
    
    
    1,679,000Additional purchase consideration for Wood and Sovereign
acquisitions
    
    
    1,933,000Impairment of goodwill
    
    
    (8,489,000
    )Goodwill at December 31, 2009
    
    $
    28,147,000
     51




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Titanium Asset Management Corp.
Notes to Consolidated Financial Statements (continued)
  Intangible assets at January 1, 2008
    
    $
    15,340,000NIS acquisition
    
    
    23,089,000Boyd acquisition
    
    
    4,500,000Amortization expense
    
    
    (4,190,000
    )Impairment (a)
    
    
    (6,533,000
    )Intangible assets at December 31, 2008
    
    
    32,206,000Change in estimated values for acquired intangible assets of Boyd (b)
    
    
    (1,679,000
    )Amortization expense
    
    
    (4,078,000
    )Impairment (c)
    
    
    (1,529,000
    )Intangible assets at December 31, 2009
    
    $
    24,920,000
 
 (a)
    
    As a result of the death of Woods founder in 2007, Wood lost several accounts primarily in
the second quarter of 2008. The Company determined that the loss of these accounts impaired
the original value of the Wood customer relationships and recorded an impairment charge of
$1,478,000 in the second quarter of 2008.In the second quarter of 2008, Sovereign lost an institutional account that represented
approximately 19% of the assets under management at the time of the Sovereign acquisition.
As a result, the Company determined that the loss had impaired the original value of the
Sovereign customer relationships and recorded an impairment charge of $314,000 in the second
quarter of 2008.As a result of the significant equity market decreases over the second half of 2008, the
Company reassessed the recoverability of the customer relationship intangible assets
acquired in the Wood, Sovereign and NIS acquisitions at December 31, 2008. The Company
determined that the Wood customer relationship asset had been further impaired and
recognized a $4,540,000 impairment charge. The Company also determined that the Sovereign
customer relationship asset had been further impaired and recognized a $201,000 impairment
charge. The Company determined the carrying amount of the NIS client referral relationship
was still recoverable.(b)
    
    The Company completed its valuation of the intangible assets acquired in the Boyd acquisition
during the quarter ended June 30, 2009. As a result, the estimated amount assigned to the
Boyd customer relationships intangible asset was reduced by $1,679,000 and the goodwill was
increased by the same amount. In connection with the completion of the valuation, the
originally estimated amortizable life of for the Boyd customer relationship asset was reduced
based on the historical attrition rates of the customer base.(c)
    
    During the third and fourth quarters of 2009, Sovereign lost accounts connected with one
retail broker and several other large separate accounts. As a result of these client losses,
the Company reassessed the recoverability of the Sovereign intangible assets and determined
that the remaining carrying amount of these assets had been impaired. The Company recognized
an impairment charge of $1,529,000 to write off the remaining carrying amount for these
assets. 52




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Titanium Asset Management Corp.
Notes to Consolidated Financial Statements (continued)
  December 31, 2009
    
    
    December 31, 2008Accumulated
    
    
    
    
    
    
    
    
    
    
    AccumulatedCost
    
    
    Amortization
    
    
    Net
    
    
    Cost
    
    
    Amortization
    
    
    Net(in thousands)Wood customer relationships
    
    $
    12,026
    
    
    $
    9,909
    
    
    $
    2,117
    
    
    $
    12,026
    
    
    $
    8,850
    
    
    $
    3,176Wood brand
    
    
    444
    
    
    
    249
    
    
    
    195
    
    
    
    444
    
    
    
    139
    
    
    
    305Sovereign customer relationships
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,665
    
    
    
    966
    
    
    
    1,699Sovereign non-compete agreement
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    833
    
    
    
    347
    
    
    
    486Sovereign brand
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    181
    
    
    
    76
    
    
    
    105NIS client referral relationship
    
    
    23,089
    
    
    
    2,695
    
    
    
    20,394
    
    
    
    23,089
    
    
    
    1,154
    
    
    
    21,935Boyd customer relationships
    
    
    2,821
    
    
    
    607
    
    
    
    2,214
    
    
    
    4,500
    
    
    
    
    
    
    
    4,500Totals
    
    $
    38,380
    
    
    $
    13,460
    
    
    $
    24,920
    
    
    $
    43,738
    
    
    $
    11,532
    
    
    $
    32,206
   Year
    
    Amount2010
    
    $
    3,316,0002011
    
    
    3,288,0002012
    
    
    2,040,0002013
    
    
    2,040,0002014
    
    
    1,539,000
 Note 6  Stockholders equity
   53




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Titanium Asset Management Corp.
Notes to Consolidated Financial Statements (continued)
       54




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Titanium Asset Management Corp.
Notes to Consolidated Financial Statements (continued)
 Note 7  Comprehensive Loss
  Year ended December 31,2009
    
    
    2008Net loss
    
    $
    (21,169,000
    )
    
    $
    (7,040,000
    )Unrealized gain (loss), net of tax
    
    
    335,000
    
    
    
    (163,000
    )Comprehensive loss
    
    $
    (20,834,000
    )
    
    $
    (7,203,000
    )
 Note 8  Income taxes
  Year ended December 31,2009
    
    
    2008Current -Federal
    
    $
    
    
    
    $
    (464,000
    )DeferredFederal
    
    
    (5,193,000
    )
    
    
    (3,055,000
    )State
    
    
    (1,064,000
    )
    
    
    (768,000
    )(6,257,000
    )
    
    
    (3,823,000
    )Increase in valuation allowance
    
    
    10,273,000
    
    
    
    4,016,000
    
    
    
    (3,823,000
    )Income tax expense (benefit)
    
    $
    4,016,000
    
    
    $
    (4,287,000
    )
  Year ended December 31,2009
    
    
    2008Income tax benefit at federal statutory rate
    
    $
    (5,832,000
    )
    
    $
    (3,851,000
    )State income taxes, net of federal tax benefit
    
    
    (738,000
    )
    
    
    (507,000
    )Other
    
    
    313,000
    
    
    
    71,000Increase in valuation allowance
    
    
    10,273,000
    
    
    
    Income tax benefit
    
    $
    4,016,000
    
    
    $
    (4,287,000
    )
 55




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##### Table of Contents



Titanium Asset Management Corp.
Notes to Consolidated Financial Statements (continued)
  December 31,2009
    
    
    2008Net operating loss carryforwards
    
    $
    4,097,000
    
    
    $
    1,329,000Goodwill and intangible assets
    
    
    6,122,000
    
    
    
    2,779,000Other
    
    
    54,000
    
    
    
    94,000Total deferred tax assets
    
    
    10,273,000
    
    
    
    4,202,000Valuation allowance
    
    
    (10,273,000
    )
    
    
    Net deferred tax assets
    
    $
    
    
    
    $
    4,202,000
   56




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Titanium Asset Management Corp.
Notes to Consolidated Financial Statements (continued)
 Note 9  Earnings per Share
   Year ended December 31,2009
    
    
    2008Basic EPS:Net loss
    
    $
    (21,169,000
    )
    
    $
    (7,040,000
    )Weighted average shares of common stock outstanding
    
    
    20,344,382
    
    
    
    20,406,318Shares of common stock to be issued in Boyd acquisition
    
    
    192,000
    
    
    
    Basic weighted average shares of common stock outstanding
    
    
    20,536,382
    
    
    
    20,406,318Basic EPS
    
    $
    (1.03
    )
    
    $
    (0.34
    )Diluted EPS:Net loss
    
    $
    (21,169,000
    )
    
    $
    (7,040,000
    )Basic weighted average shares of common stock outstanding
    
    
    20,536,382
    
    
    
    20,406,318Shares of common stock issuable under warrants
    
    
    
    
    
    
    5,556,308Shares of common stock issuable under unit options
    
    
    
    
    
    
    172,422Shares of common stock under compensatory common stock
grants
    
    
    88,352
    
    
    
    Diluted weighted average shares of common stock outstanding
    
    
    20,624,734
    
    
    
    26,135,048Diluted EPS
    
    $
    (1.03
    )
    
    $
    (0.34
    )
  Note 10  Major customer
  57




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Titanium Asset Management Corp.
Notes to Consolidated Financial Statements (continued)
 Note 11  Retirement Plans
  Note 12  Fair Value Disclosures
   Category used for Fair ValuesLevel 1
    
    
    Level 2
    
    
    Level 3Assets at December 31, 2009Cash and cash equivalents
    
    $
    4,773,000
    
    
    $
    
    
    
    $
    Current securities available for
sale  Debt securities
    
    
    
    
    
    
    12,549,000
    
    
    
    Noncurrent
investment  Investment in equity investee
    
    
    
    
    
    
    2,179,000
    
    
    
    $
    4,773,000
    
    
    $
    14,728,000
    
    
    $
    Assets at December 31, 2008Cash and cash equivalents
    
    $
    18,753,000
    
    
    $
    
    
    
    $
    Current securities available for
sale  Debt securities
    
    
    
    
    
    
    10,683,000
    
    
    
    Noncurrent
investment  Commingled stock fund
    
    
    672,000
    
    
    
    
    
    
    
    $
    19,425,000
    
    
    $
    10,683,000
    
    
    $
    
  58




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##### Table of Contents



Titanium Asset Management Corp.
 Notes to Consolidated Financial Statements (continued)
 Note 13  Commitments and Contingencies
  Year endingDecember 31,
    
    Amount2010
    
    $
    902,0002011
    
    
    666,0002012
    
    
    611,0002013
    
    
    528,0002014
    
    
    538,000Thereafter
    
    
    1,862,000
    59




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##### Table of Contents



Titanium Asset Management Corp.
Notes to Consolidated Financial Statements (continued)
 Note 14  Reclassification of Certain Expenses
   Revenues
    
    
    Administrative expensesAs reported
    
    
    As revised
    
    
    As reported
    
    
    As revised2009Quarter ended March 31, 2009
    
    $
    4,896,000
    
    
    $
    5,163,000
    
    
    $
    6,017,000
    
    
    $
    6,284,000Quarter ended June 30, 2009
    
    
    4,944,000
    
    
    
    5,132,000
    
    
    
    6,109,000
    
    
    
    6,297,000Quarter ended September 30, 2009
    
    
    5,047,000
    
    
    
    5,335,000
    
    
    
    5,737,000
    
    
    
    6,025,0002008Quarter ended March 31, 2008
    
    $
    2,220,000
    
    
    $
    2,220,000
    
    
    $
    1,893,000
    
    
    $
    1,893,000Quarter ended June 30, 2008
    
    
    4,486,000
    
    
    
    4,526,000
    
    
    
    4,095,000
    
    
    
    4,135000Quarter ended September 30, 2008
    
    
    3,886,000
    
    
    
    3,969,000
    
    
    
    4,913,000
    
    
    
    4,996,000Quarter ended December 31, 2008
    
    
    4,083,000
    
    
    
    4,526,000
    
    
    
    5,382,000
    
    
    
    5,825,000Year ended December 31, 2008
    
    $
    14,675,000
    
    
    $
    15,241,000
    
    
    $
    16,283,000
    
    
    $
    16,849,000
 60




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##### Table of Contents



ITEM 9.
    
    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
  
 ITEM 9A.
    
    CONTROLS AND PROCEDURES
 Evaluation of Disclosure Controls and Procedures
   Report of Management on Internal Control over Financial Reporting
  Internal Control  Integrated Framework
  
 ITEM 9B.
    
    OTHER INFORMATION
  61




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##### Table of Contents



PART III
 
 ITEM 10.
    
    DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
    
 ITEM 11.
    
    EXECUTIVE COMPENSATION
  
 ITEM 12.
    
    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
  Equity Compensation Plan Information
  Number ofSecuritiesRemaining AvailableNumber of
    
    
    
    
    
    
    for Future IssuanceSecurities to be
    
    
    
    
    
    
    under EquityIssued upon
    
    
    Weighted-average
    
    
    Compensation PlansExercise of
    
    
    Exercise Price of
    
    
    (ExcludingOutstanding
    
    
    Outstanding
    
    
    SecuritiesOptions, Warrants
    
    
    Options, Warrants
    
    
    Reflected in thePlan Category
    
    and Rights
    
    
    and Rights
    
    
    First Column)Equity compensation
plans approved by
security holders
    
    
    
    
    
    
    
    
    
    
    Equity compensation
plans not approved
by security holders
    
    
    4,000,000
    (1)
    
    $
    5.30
    
    
    
    124,662
    (2)Total
    
    
    4,000,000
    
    
    $
    5.30
    
    
    
    124,662
 
 (1)
    
    Consists of currently exercisable unit purchase options (referred to as UPOs) to purchase
2,000,000 units, i.e., 2,000,000 shares of Common Stock at an exercise price of $6.60 and
2,000,000 Warrants, which are exercisable for $4.00 per share of Common Stock granted to
certain officers, directors and employees of Sunrise Securities Corp., or Sunrise, and a
Sunrise charitable foundation as partial compensation for Sunrises services as placement
agent for our private placement, not part of an ongoing plan. Each UPO expires on June 20,
2012. If, however, a UPO is exercised later than June 22, 2011, then no Warrants will be
issued and the exercise price will be reduced to $5.50 per Unit. The Warrants are
non-callable. 62




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##### Table of Contents



(2)
    
    Titanium Incentive Plan, LLC (referred to as TIP), a wholly owned subsidiary of ours, owns
306,358 shares of our Common Stock. TIP was created at the time of our organization to hold
shares of our Common Stock for one-time awards to the employees of our acquired companies. It
was not intended as a vehicle to provide additional on-going equity compensation to our
employees. The shares of Common Stock held by TIP are held in escrow until June 21, 2010.
Pursuant to individual share grant agreements, TIP allocated all of its shares to Wood and
Sovereign employees around the time of our acquisitions in 2007. We amended and restated the
terms of these share grant agreements effective as of July 15, 2008. Each grantee received a
non-voting membership interest in TIP. At June 21, 2010, the grantees non-voting membership
interest in TIP terminates and the grantee is entitled to an in-kind distribution of his or
her allocated shares of our Common Stock. The shares are subject to forfeiture in the event
that the grantees employment with us or any of our subsidiaries is terminated for any reason
(other than death of the grantee), unless otherwise determined by our board of directors (or
an authorized committee thereof). In the event of the grantees death, the beneficiary
identified by the grantee shall have rights to receive the shares to which the grantee was
entitled upon their release from escrow. During 2009, we allocated an additional 55,322
shares to certain employees pursuant to the same share grant terms and 82,973 shares
previously allocated were forfeited due to employee terminations. At December 31, 2009,
124,662 shares of our Common Stock held by TIP were unallocated due to grantee terminations
and available for future grants. 
 ITEM 13.
    
    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
  
 ITEM 14.
    
    PRINCIPAL ACCOUNTING FEES AND SERVICES
  63




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PART IV
 
 ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
  Financial Statements:
 
    
    Report of Independent Registered Public Accounting Firm
    
    Consolidated Balance Sheets as of December 31, 2009 and 2008
    
    Consolidated Statements of Operations for the Years Ended December 31, 2009
and 2008
    
    Consolidated Statements of Changes in Stockholders Equity for the Years
ended December 31, 2009 and 2008
    
    Consolidated Statements of Cash Flows for Years Ended December 31, 2009 and
2008
    
    Notes to Financial Statements
 Financial Statement Schedule:
  Exhibits:
 Exhibit
    
    Description2.1
    
    Sale and Purchase Agreement among Titanium Asset Management Corp., Wood Asset Management,
Inc., and a number of individuals dated September 5, 2007 (1) (incorporated by reference to
Exhibit 2.1 to the Registrants Registration Statement on Form 10 filed with the Securities
and Exchange Commission on July 25, 2008, File No. 000-53352)2.2
    
    Sale and Purchase Agreement among Titanium Asset Management Corp., Sovereign Holdings, LLC and
JARE, Inc. and its owners dated September 5, 2007 (1) (incorporated by reference to Exhibit
2.2 to the Registrants Registration Statement on Form 10 filed with the Securities and
Exchange Commission on July 25, 2008, File No. 000-53352)2.3
    
    Stock Purchase Agreement by and among Titanium Asset Management Corp., National Investment
Services, Inc., NIS Holdings, Inc., and the shareholders of NIS Holdings, Inc. dated February
28, 2008 (1) (incorporated by reference to Exhibit 2.3 to the Registrants Registration
Statement on Form 10 filed with the Securities and Exchange Commission on July 25, 2008, File
No. 000-53352)2.4
    
    Membership Interest Purchase Agreement, dated as of November 7, 2008, by and among Titanium
Asset Management Corp., BWAM Holdings, LLC, Boyd Watterson Asset Management, LLC, the common
members of BWAM Holdings, LLC and, for limited purposes, the preferred members of BWAM
Holdings, LLC. (1) (incorporated by reference to Exhibit 2.1 to the Registrants Form 8-K
filed with the Securities and Exchange Commission on January 5, 2009, File No. 000-53352)
 64




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##### Table of Contents



Exhibit
    
    Description2.5
    
    Amendment No. 1 to Membership Interest Purchase Agreement, dated as of December 30, 2008,
among Titanium Asset Management Corp., Boyd Watterson Asset Management, LLC and Mr. Michael E.
Bee, acting in his capacity as the agent and attorney in fact with the authority to act on
behalf of BWAM Holdings, LLC, the common members of BWAM Holdings, LLC and, for limited
purposes, the preferred members of BWAM Holdings, LLC (incorporated by reference to Exhibit
2.2 to the Registrants Form 8-K filed with the Securities and Exchange Commission on January
5, 2009, File No. 000-53352)3.1
    
    Amended and Restated Certificate of Incorporation of Titanium Asset Management Corp.
(incorporated by reference to Exhibit 3.1 to the Registrants Registration Statement on Form
10 filed with the Securities and Exchange Commission on July 25, 2008, File No. 000-53352)3.2
    
    Amendment to Amended and Restated Certificate of Incorporation of Titanium Asset Management
Corp. (incorporated by reference to Exhibit 3.2 to the Registrants Registration Statement on
Form 10 filed with the Securities and Exchange Commission on July 25, 2008, File No.
000-53352)3.3
    
    Bylaws of Titanium Asset Management Corp. (incorporated by reference to Exhibit 3.3 to the
Registrants Registration Statement on Form 10 filed with the Securities and Exchange
Commission on July 25, 2008, File No. 000-53352)4.1
    
    Form of Common Stock Share Certificate (incorporated by reference to Exhibit 4.1 to the
Registrants Registration Statement on Form 10 filed with the Securities and Exchange
Commission on July 25, 2008, File No. 000-53352)4.2
    
    Form of Warrant (incorporated by reference to Exhibit 4.2 to the Registrants Registration
Statement on Form 10 filed with the Securities and Exchange Commission on July 25, 2008, File
No. 000-53352)4.3
    
    Warrant Deed dated as of June 21, 2007 between Titanium Asset Management Corp. and Capita
Registrars (Jersey) Limited (incorporated by reference to Exhibit 4.3 to the Registrants
Registration Statement on Form 10 filed with the Securities and Exchange Commission on July
25, 2008, File No. 000-53352)4.4
    
    Registration Rights Agreement between Titanium Asset Management Corp. and the parties on the
signature pages thereto dated June 21, 2007 (incorporated by reference to Exhibit 4.4 to the
Registrants Registration Statement on Form 10 filed with the Securities and Exchange
Commission on July 25, 2008, File No. 000-53352)4.5
    
    Investor Rights Agreement between Titanium Asset Management Corp., Sunrise Securities Corp.
and Seymour Pierce Limited dated June 21, 2007 (incorporated by reference to Exhibit 4.5 to
the Registrants Registration Statement on Form 10 filed with the Securities and Exchange
Commission on July 25, 2008, File No. 000-53352)4.6
    
    Form of Unit Purchase Option between Titanium Asset Management Corp. and certain Employees and
Affiliates of Sunrise Securities Corp. (incorporated by reference to Exhibit 4.6 to the
Registrants Registration Statement on Form 10 filed with the Securities and Exchange
Commission on July 25, 2008, File No. 000-53352)
 65




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##### Table of Contents



Exhibit
    
    Description4.7
    
    Share Escrow Agreement dated as of June 21, 2007 by and among Titanium Asset Management Corp.,
Founding Stockholders and Capita Trust Company (Jersey) Limited (1) (incorporated by reference
to Exhibit 4.6 to the Registrants Registration Statement on Form 10 filed with the Securities
and Exchange Commission on July 25, 2008, File No. 000-53352)4.8
    
    Form of Lock In Deed for Individuals (incorporated by reference to Exhibit 4.8 to the
Registrants Registration Statement on Form 10 filed with the Securities and Exchange
Commission on July 25, 2008, File No. 000-53352)4.9
    
    Form of Lock In Deed for Entities (incorporated by reference to Exhibit 4.9 to the
Registrants Registration Statement on Form 10 filed with the Securities and Exchange
Commission on July 25, 2008, File No. 000-53352)4.10
    
    Form of Lock In Deed for Acquisitions (incorporated by reference to Exhibit 4.10 to the
Registrants Registration Statement on Form 10 filed with the Securities and Exchange
Commission on July 25, 2008, File No. 000-53352)10.1 
    
    Letter Agreement between Thomas Hamilton and Titanium Asset Management Corp. dated November
12, 2007, as amended (incorporated by reference to Exhibit 10.1 to the Registrants Amendment
No. 1 to Form 10 filed with the Securities and Exchange Commission on September 15, 2008, File
No. 000-53352)10.2
    
    Amended and Restated Fee Arrangement Agreement between Titanium Asset Management Corp. and
Integra Management Limited dated July 22, 2008 (1) (incorporated by reference to Exhibit 10.2
to the Registrants Registration Statement on Form 10 filed with the Securities and Exchange
Commission on July 25, 2008, File No. 000-53352)10.3 
    
    Employment Agreement between Nigel Wightman and Titanium Asset Management Corp. dated
September 5, 2007 (incorporated by reference to Exhibit 10.3 to the Registrants Registration
Statement on Form 10 filed with the Securities and Exchange Commission on July 25, 2008, File
No. 000-53352)10.4 
    
    Employment Agreement between Jeffrey Hines and Sovereign Holdings LLC (incorporated by
reference to Exhibit 10.4 to the Registrants Registration Statement on Form 10 filed with the
Securities and Exchange Commission on July 25, 2008, File No. 000-53352)10.5 
    
    Employment Agreement between John Fisher and Wood Asset Management, Inc. dated June 9, 2008
(incorporated by reference to Exhibit 10.5 to the Registrants Registration Statement on Form
10 filed with the Securities and Exchange Commission on July 25, 2008, File No. 000-53352)10.6 
    
    Employment Agreement between Robert Kelly and National Investment Services, Inc. (incorporated
by reference to Exhibit 10.6 to the Registrants Registration Statement on Form 10 filed with
the Securities and Exchange Commission on July 25, 2008, File No. 000-53352)10.7 
    
    Employment Agreement between Robert Brooks and National Investment Services, Inc.
(incorporated by reference to Exhibit 10.7 to the Registrants Registration Statement on Form
10 filed with the Securities and Exchange Commission on July 25, 2008, File No. 000-53352)
 66




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##### Table of Contents



Exhibit
    
    Description10.8 
    
    Employment Agreement between Robert J. Siefert and National Investment Services, Inc.
(incorporated by reference to Exhibit 10.8 to the Registrants Registration Statement on Form
10 filed with the Securities and Exchange Commission on July 25, 2008, File No. 000-53352)10.9 
    
    Letter of Appointment to the Board of Directors between Yehoshua Abramovich and Titanium Asset
Management Corp. dated July 17, 2007 (1) (incorporated by reference to Exhibit 10.9 to the
Registrants Registration Statement on Form 10 filed with the Securities and Exchange
Commission on July 25, 2008, File No. 000-53352)10.10 
    
    Letter of Appointment to the Board of Directors between Avigdor Kaplan and Titanium Asset
Management Corp. dated July 17, 2007 (1) (incorporated by reference to Exhibit 10.10 to the
Registrants Registration Statement on Form 10 filed with the Securities and Exchange
Commission on July 25, 2008, File No. 000-53352)10.11
    
    Indemnification Agreement dated July 17, 2007 by and between Titanium Asset Management Corp.
and Yehoshua Abramovich (incorporated by reference to Exhibit 10.11 to the Registrants
Registration Statement on Form 10 filed with the Securities and Exchange Commission on July
25, 2008, File No. 000-53352)10.12
    
    Indemnification Agreement dated July 17, 2007 by and between Titanium Asset Management Corp.
and Avigdor Kaplan (incorporated by reference to Exhibit 10.12 to the Registrants
Registration Statement on Form 10 filed with the Securities and Exchange Commission on July
25, 2008, File No. 000-53352)10.13
    
    Amended and Restated Investment Sub-Advisory Agreement dated February 13, 2006 by and between
Attalus Capital, L.L.C. and National Investment Services Inc. (1) (incorporated by reference
to Exhibit 10.13 to the Registrants Registration Statement on Form 10 filed with the
Securities and Exchange Commission on July 25, 2008, File No. 000-53352)10.14
    
    Referral Letter Agreement dated December 1, 2006 between Attalus Capital, L.L.C. and National
Investment Services Inc. (incorporated by reference to Exhibit 10.14 to the Registrants
Registration Statement on Form 10 filed with the Securities and Exchange Commission on July
25, 2008, File No. 000-53352)10.15 
    
    Titanium Asset Management Corp. Nonqualified Deferred Compensation Plan (incorporated by
reference to Exhibit 10.15 to the Registrants Registration Statement on Form 10 filed with
the Securities and Exchange Commission on July 25, 2008, File No. 000-53352)10.16 
    
    Titanium Incentive Plan LLC Operating Agreement (1) (incorporated by reference to Exhibit
10.16 to the Registrants Registration Statement on Form 10 filed with the Securities and
Exchange Commission on July 25, 2008, File No. 000-53352)10.17 
    
    Amendment to Titanium Incentive Plan LLC Operating Agreement (incorporated by reference to
Exhibit 10.17 to the Registrants Registration Statement on Form 10 filed with the Securities
and Exchange Commission on July 25, 2008, File No. 000-53352)10.18 
    
    Titanium Incentive Plan LLC Form of Grant Agreement (incorporated by reference to Exhibit
10.18 to the Registrants Registration Statement on Form 10 filed with the Securities and
Exchange Commission on July 25, 2008, File No. 000-53352)
 67




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Exhibit
    
    Description10.19
    
    Business Note between National Investment Services, Inc. and Park Bank dated September 22,
2004 (incorporated by reference to Exhibit 10.19 to the Registrants Registration Statement on
Form 10 filed with the Securities and Exchange Commission on July 25, 2008, File No.
000-53352)10.20 
    
    Oral Agreements regarding Director Compensation (incorporated by reference to Exhibit 10.20 to
the Registrants Registration Statement on Form 10 filed with the Securities and Exchange
Commission on July 25, 2008, File No. 000-53352)10.21
    
    Form of Indemnification Agreement (incorporated by reference to Exhibit 10.21 to the
Registrants Amendment No. 1 to Form 10 filed with the Securities and Exchange Commission on
September 15, 2008, File No. 000-53352)10.22
    
    Employment Agreement between Brian L. Gevry and Boyd Watterson Asset Management, LLC dated
November 7, 2008 (incorporated by reference to Exhibit 10.22 to the Registrants Form 10-K
filed with the Securities and Exchange Commission on March 31, 2009, File No. 000-53352)10.23
    
    Indemnification Agreement dated July 1, 2009 by and between Titanium Asset Management Corp.
and Shy Talmon (incorporated by reference to Exhibit 10.1 to the Registrants Quarterly Report
on Form 10-Q for the quarter ended June 30, 2009 filed with the Securities and Exchange
Commission on August 11, 2009, File No. 000-53352)10.24
    
    Referral Arrangement Letter Agreement dated July 1, 2009 between Attalus Capital, L.P. and
National Investment Services, Inc. (incorporated by reference to Exhibit 10.2 to the
Registrants Quarterly Report on Form 10-Q for the quarter ended June 30, 2009 filed with the
Securities and Exchange Commission on August 11, 2009, File No. 000-53352)10.25
    
    Amended Employment Agreement between Robert J. Siefert and National Investment Services, Inc.
(incorporated by reference to Exhibit 10.1 to the Registrants Quarterly Report on Form 10-Q
for the quarter ended September 30, 2009 filed with the Securities and Exchange Commission on
November 11, 2009, File No. 000-53352)10.26
    
    Indemnification Agreement dated November 3, 2009 between Titanium Asset Management Corp. and
Ron Braverman. (incorporated by reference to Exhibit 10.2 to the Registrants Quarterly Report
on Form 10-Q for the quarter ended September 30, 2009 filed with the Securities and Exchange
Commission on November 11, 2009, File No. 000-53352)10.27 
    
    Compromise Agreement between Nigel Wightman and Titanium Asset Management Corp. dated March
18, 2010.21.1
    
    Subsidiaries of Titanium Asset Management Corp.31.1
    
    Chief Executive Officer Certification Pursuant to Rule 13a-14(a) of the Securities Exchange Act31.2
    
    Chief Financial Officer Certification Pursuant to Rule 13a-14(a) of the Securities Exchange Act32.1
    
    Chief Executive Officer Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002
 68




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Exhibit
    
    Description32.2
    
    Chief Financial Officer Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002
 
 (1)
    
    Certain schedules and exhibits have been omitted from these exhibits pursuant to Item
601(b)(2) of Regulation S K. The Company hereby undertakes to furnish supplementally copies
of any of the omitted schedules and exhibits upon request by the Commission.
    
    indicates management contract or compensatory arrangement. 69




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SIGNATURES
   TITANIUM ASSET MANAGEMENT CORP.By:
    /s/ Robert BrooksName:
    Robert BrooksTitle:
    Chief Executive Officer




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Signature
    
    Capacity
    
    DateChief Executive Officer
    
    March 31, 2010/s/ Robert Brooks
Robert Brooks
    
    (Principal Executive Officer)Chief Financial Officer
    
    March 31, 2010/s/ Jonathan Hoenecke
Jonathan Hoenecke
    
    (Principal Financial Officer and
Principal Accounting Officer)/s/ Robert Kelly
Robert Kelly
    
    Co-Chairman
    
    March 31, 2010/s/ Tal Raz
Tal Raz
    
    Co-Chairman
    
    March 31, 2010/s/ Emmanuel Gill
Emmanuel Gill
    
    Vice Chairman
    
    March 31, 2010/s/ Avigdor Kaplan
Avigdor Kaplan
    
    Director
    
    March 31, 2010/s/ Shy Talmon
Shy Talmon
    
    Director
    
    March 31, 2010/s/ Yoram Naveh
Yoram Naveh
    
    Director
    
    March 31, 2010/s/ T. Raymond Suplee
T. Raymond Suplee
    
    Director
    
    March 31, 2010/s/ Thomas Hamilton
Thomas Hamilton
    
    Director
    
    March 31, 2010/s/ Ron Braverman
Ron Braverman
    
    Director
    
    March 31, 2010/s/ John Fisher
John Fisher
    
    Director
    
    March 31, 2010




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EXHIBIT INDEX
 Exhibit
    
    Description2.1
    
    Sale and Purchase Agreement among Titanium Asset Management Corp., Wood Asset Management,
Inc., and a number of individuals dated September 5, 2007 (1) (incorporated by reference to
Exhibit 2.1 to the Registrants Registration Statement on Form 10 filed with the Securities
and Exchange Commission on July 25, 2008, File No. 000-53352)2.2
    
    Sale and Purchase Agreement among Titanium Asset Management Corp., Sovereign Holdings, LLC and
JARE, Inc. and its owners dated September 5, 2007 (1) (incorporated by reference to Exhibit
2.2 to the Registrants Registration Statement on Form 10 filed with the Securities and
Exchange Commission on July 25, 2008, File No. 000-53352)2.3
    
    Stock Purchase Agreement by and among Titanium Asset Management Corp., National Investment
Services, Inc., NIS Holdings, Inc., and the shareholders of NIS Holdings, Inc. dated February
28, 2008 (1) (incorporated by reference to Exhibit 2.3 to the Registrants Registration
Statement on Form 10 filed with the Securities and Exchange Commission on July 25, 2008, File
No. 000-53352)2.4
    
    Membership Interest Purchase Agreement, dated as of November 7, 2008, by and among Titanium
Asset Management Corp., BWAM Holdings, LLC, Boyd Watterson Asset Management, LLC, the common
members of BWAM Holdings, LLC and, for limited purposes, the preferred members of BWAM
Holdings, LLC. (1) (incorporated by reference to Exhibit 2.1 to the Registrants Form 8-K
filed with the Securities and Exchange Commission on January 5, 2009, File No. 000-53352)2.5
    
    Amendment No. 1 to Membership Interest Purchase Agreement, dated as of December 30, 2008,
among Titanium Asset Management Corp., Boyd Watterson Asset Management, LLC and Mr. Michael E.
Bee, acting in his capacity as the agent and attorney in fact with the authority to act on
behalf of BWAM Holdings, LLC, the common members of BWAM Holdings, LLC and, for limited
purposes, the preferred members of BWAM Holdings, LLC (incorporated by reference to Exhibit
2.2 to the Registrants Form 8-K filed with the Securities and Exchange Commission on January
5, 2009, File No. 000-53352)3.1
    
    Amended and Restated Certificate of Incorporation of Titanium Asset Management Corp.
(incorporated by reference to Exhibit 3.1 to the Registrants Registration Statement on Form
10 filed with the Securities and Exchange Commission on July 25, 2008, File No. 000-53352)3.2
    
    Amendment to Amended and Restated Certificate of Incorporation of Titanium Asset Management
Corp. (incorporated by reference to Exhibit 3.2 to the Registrants Registration Statement on
Form 10 filed with the Securities and Exchange Commission on July 25, 2008, File No.
000-53352)3.3
    
    Bylaws of Titanium Asset Management Corp. (incorporated by reference to Exhibit 3.3 to the
Registrants Registration Statement on Form 10 filed with the Securities and Exchange
Commission on July 25, 2008, File No. 000-53352)4.1
    
    Form of Common Stock Share Certificate (incorporated by reference to Exhibit 4.1 to the
Registrants Registration Statement on Form 10 filed with the Securities and Exchange
Commission on July 25, 2008, File No. 000-53352)4.2
    
    Form of Warrant (incorporated by reference to Exhibit 4.2 to the Registrants Registration
Statement on Form 10 filed with the Securities and Exchange Commission on July 25, 2008, File
No. 000-53352)




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Exhibit
    
    Description4.3
    
    Warrant Deed dated as of June 21, 2007 between Titanium Asset Management Corp. and Capita
Registrars (Jersey) Limited (incorporated by reference to Exhibit 4.3 to the Registrants
Registration Statement on Form 10 filed with the Securities and Exchange Commission on July
25, 2008, File No. 000-53352)4.4
    
    Registration Rights Agreement between Titanium Asset Management Corp. and the parties on the
signature pages thereto dated June 21, 2007 (incorporated by reference to Exhibit 4.4 to the
Registrants Registration Statement on Form 10 filed with the Securities and Exchange
Commission on July 25, 2008, File No. 000-53352)4.5
    
    Investor Rights Agreement between Titanium Asset Management Corp., Sunrise Securities Corp.
and Seymour Pierce Limited dated June 21, 2007 (incorporated by reference to Exhibit 4.5 to
the Registrants Registration Statement on Form 10 filed with the Securities and Exchange
Commission on July 25, 2008, File No. 000-53352)4.6
    
    Form of Unit Purchase Option between Titanium Asset Management Corp. and certain Employees and
Affiliates of Sunrise Securities Corp. (incorporated by reference to Exhibit 4.6 to the
Registrants Registration Statement on Form 10 filed with the Securities and Exchange
Commission on July 25, 2008, File No. 000-53352)4.7
    
    Share Escrow Agreement dated as of June 21, 2007 by and among Titanium Asset Management Corp.,
Founding Stockholders and Capita Trust Company (Jersey) Limited (1) (incorporated by reference
to Exhibit 4.6 to the Registrants Registration Statement on Form 10 filed with the Securities
and Exchange Commission on July 25, 2008, File No. 000-53352)4.8
    
    Form of Lock In Deed for Individuals (incorporated by reference to Exhibit 4.8 to the
Registrants Registration Statement on Form 10 filed with the Securities and Exchange
Commission on July 25, 2008, File No. 000-53352)4.9
    
    Form of Lock In Deed for Entities (incorporated by reference to Exhibit 4.9 to the
Registrants Registration Statement on Form 10 filed with the Securities and Exchange
Commission on July 25, 2008, File No. 000-53352)4.10
    
    Form of Lock In Deed for Acquisitions (incorporated by reference to Exhibit 4.10 to the
Registrants Registration Statement on Form 10 filed with the Securities and Exchange
Commission on July 25, 2008, File No. 000-53352)10.1 
    
    Letter Agreement between Thomas Hamilton and Titanium Asset Management Corp. dated November
12, 2007, as amended (incorporated by reference to Exhibit 10.1 to the Registrants Amendment
No. 1 to Form 10 filed with the Securities and Exchange Commission on September 15, 2008, File
No. 000-53352)10.2
    
    Amended and Restated Fee Arrangement Agreement between Titanium Asset Management Corp. and
Integra Management Limited dated July 22, 2008 (1) (incorporated by reference to Exhibit 10.2
to the Registrants Registration Statement on Form 10 filed with the Securities and Exchange
Commission on July 25, 2008, File No. 000-53352)




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Exhibit
    
    Description10.3 
    
    Employment Agreement between Nigel Wightman and Titanium Asset Management Corp. dated
September 5, 2007 (incorporated by reference to Exhibit 10.3 to the Registrants Registration
Statement on Form 10 filed with the Securities and Exchange Commission on July 25, 2008, File
No. 000-53352)10.4 
    
    Employment Agreement between Jeffrey Hines and Sovereign Holdings LLC (incorporated by
reference to Exhibit 10.4 to the Registrants Registration Statement on Form 10 filed with the
Securities and Exchange Commission on July 25, 2008, File No. 000-53352)10.5 
    
    Employment Agreement between John Fisher and Wood Asset Management, Inc. dated June 9, 2008
(incorporated by reference to Exhibit 10.5 to the Registrants Registration Statement on Form
10 filed with the Securities and Exchange Commission on July 25, 2008, File No. 000-53352)10.6 
    
    Employment Agreement between Robert Kelly and National Investment Services, Inc. (incorporated
by reference to Exhibit 10.6 to the Registrants Registration Statement on Form 10 filed with
the Securities and Exchange Commission on July 25, 2008, File No. 000-53352)10.7 
    
    Employment Agreement between Robert Brooks and National Investment Services, Inc.
(incorporated by reference to Exhibit 10.7 to the Registrants Registration Statement on Form
10 filed with the Securities and Exchange Commission on July 25, 2008, File No. 000-53352)10.8 
    
    Employment Agreement between Robert J. Siefert and National Investment Services, Inc.
(incorporated by reference to Exhibit 10.8 to the Registrants Registration Statement on Form
10 filed with the Securities and Exchange Commission on July 25, 2008, File No. 000-53352)10.9 
    
    Letter of Appointment to the Board of Directors between Yehoshua Abramovich and Titanium Asset
Management Corp. dated July 17, 2007 (1) (incorporated by reference to Exhibit 10.9 to the
Registrants Registration Statement on Form 10 filed with the Securities and Exchange
Commission on July 25, 2008, File No. 000-53352)10.10 
    
    Letter of Appointment to the Board of Directors between Avigdor Kaplan and Titanium Asset
Management Corp. dated July 17, 2007 (1) (incorporated by reference to Exhibit 10.10 to the
Registrants Registration Statement on Form 10 filed with the Securities and Exchange
Commission on July 25, 2008, File No. 000-53352)10.11
    
    Indemnification Agreement dated July 17, 2007 by and between Titanium Asset Management Corp.
and Yehoshua Abramovich (incorporated by reference to Exhibit 10.11 to the Registrants
Registration Statement on Form 10 filed with the Securities and Exchange Commission on July
25, 2008, File No. 000-53352)10.12
    
    Indemnification Agreement dated July 17, 2007 by and between Titanium Asset Management Corp.
and Avigdor Kaplan (incorporated by reference to Exhibit 10.12 to the Registrants
Registration Statement on Form 10 filed with the Securities and Exchange Commission on July
25, 2008, File No. 000-53352)10.13
    
    Amended and Restated Investment Sub-Advisory Agreement dated February 13, 2006 by and between
Attalus Capital, L.L.C. and National Investment Services Inc. (1) (incorporated by reference
to Exhibit 10.13 to the Registrants Registration Statement on Form 10 filed with the
Securities and Exchange Commission on July 25, 2008, File No. 000-53352)




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##### Table of Contents



Exhibit
    
    Description10.14
    
    Referral Letter Agreement dated December 1, 2006 between Attalus Capital, L.L.C. and National
Investment Services Inc. (incorporated by reference to Exhibit 10.14 to the Registrants
Registration Statement on Form 10 filed with the Securities and Exchange Commission on July
25, 2008, File No. 000-53352)10.15 
    
    Titanium Asset Management Corp. Nonqualified Deferred Compensation Plan (incorporated by
reference to Exhibit 10.15 to the Registrants Registration Statement on Form 10 filed with
the Securities and Exchange Commission on July 25, 2008, File No. 000-53352)10.16 
    
    Titanium Incentive Plan LLC Operating Agreement (1) (incorporated by reference to Exhibit
10.16 to the Registrants Registration Statement on Form 10 filed with the Securities and
Exchange Commission on July 25, 2008, File No. 000-53352)10.17 
    
    Amendment to Titanium Incentive Plan LLC Operating Agreement (incorporated by reference to
Exhibit 10.17 to the Registrants Registration Statement on Form 10 filed with the Securities
and Exchange Commission on July 25, 2008, File No. 000-53352)10.18 
    
    Titanium Incentive Plan LLC Form of Grant Agreement (incorporated by reference to Exhibit
10.18 to the Registrants Registration Statement on Form 10 filed with the Securities and
Exchange Commission on July 25, 2008, File No. 000-53352)10.19
    
    Business Note between National Investment Services, Inc. and Park Bank dated September 22,
2004 (incorporated by reference to Exhibit 10.19 to the Registrants Registration Statement on
Form 10 filed with the Securities and Exchange Commission on July 25, 2008, File No.
000-53352)10.20 
    
    Oral Agreements regarding Director Compensation (incorporated by reference to Exhibit 10.20 to
the Registrants Registration Statement on Form 10 filed with the Securities and Exchange
Commission on July 25, 2008, File No. 000-53352)10.21
    
    Form of Indemnification Agreement (incorporated by reference to Exhibit 10.21 to the
Registrants Amendment No. 1 to Form 10 filed with the Securities and Exchange Commission on
September 15, 2008, File No. 000-53352)10.22
    
    Employment Agreement between Brian L. Gevry and Boyd Watterson Asset Management, LLC dated
November 7, 2008 (incorporated by reference to Exhibit 10.22 to the Registrants Form 10-K
filed with the Securities and Exchange Commission on March 31, 2009, File No. 000-53352)10.23
    
    Indemnification Agreement dated July 1, 2009 by and between Titanium Asset Management Corp.
and Shy Talmon (incorporated by reference to Exhibit 10.1 to the Registrants Quarterly Report
on Form 10-Q for the quarter ended June 30, 2009 filed with the Securities and Exchange
Commission on August 11, 2009, File No. 000-53352)10.24
    
    Referral Arrangement Letter Agreement dated July 1, 2009 between Attalus Capital, L.P. and
National Investment Services, Inc. (incorporated by reference to Exhibit 10.2 to the
Registrants Quarterly Report on Form 10-Q for the quarter ended June 30, 2009 filed with the
Securities and Exchange Commission on August 11, 2009, File No. 000-53352)




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Exhibit
    
    Description10.25
    
    Amended Employment Agreement between Robert J. Siefert and National Investment Services, Inc.
(incorporated by reference to Exhibit 10.1 to the Registrants Quarterly Report on Form 10-Q
for the quarter ended September 30, 2009 filed with the Securities and Exchange Commission on
November 11, 2009, File No. 000-53352)10.26
    
    Indemnification Agreement dated November 3, 2009 between Titanium Asset Management Corp. and
Ron Braverman. (incorporated by reference to Exhibit 10.2 to the Registrants Quarterly Report
on Form 10-Q for the quarter ended September 30, 2009 filed with the Securities and Exchange
Commission on November 11, 2009, File No. 000-53352)10.27 
    
    Compromise Agreement between Nigel Wightman and Titanium Asset Management Corp. dated March
18, 2010.21.1
    
    Subsidiaries of Titanium Asset Management Corp.31.1
    
    Chief Executive Officer Certification Pursuant to Rule 13a-14(a) of the Securities Exchange Act31.2
    
    Chief Financial Officer Certification Pursuant to Rule 13a-14(a) of the Securities Exchange Act32.1
    
    Chief Executive Officer Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 200232.2
    
    Chief Financial Officer Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002
 
 (1)
    
    Certain schedules and exhibits have been omitted from these exhibits pursuant to Item
601(b)(2) of Regulation S K. The Company hereby undertakes to furnish supplementally copies
of any of the omitted schedules and exhibits upon request by the Commission.
    
    indicates management contract or compensatory arrangement.