Market
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    Page 1 of 19
 Regulatory Announcement
 Go to market news section
 Company
    
    Titanium Asset ManTIDM
    
    TAMHeadline
    
    3rd Quarter ResultsReleased
    
    07:00 10-Nov-08Number
    
    7808H07
 
 Titanium Asset Management Corp.




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Market
News
    
    Page 2 of 19




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Market
News
    
    Page 3 of 19
 Titanium Asset Management Corp.
Consolidated Balance Sheets
(in thousands except for shares)
 September 30,
    
    
    December 31,2008
    
    
    2007(unaudited)AssetsCurrent assetsCash and cash equivalents
    
    $
    30,574
    
    
    $
    19,388Cash and cash equivalents held in trust fund
    
    
    
    
    
    
    55,587Accounts receivable
    
    
    2,810
    
    
    
    388Prepaid expenses and other assets
    
    
    531
    
    
    
    115Total current assets
    
    
    33,915
    
    
    
    75,478Property and equipmentOffice furniture, fixtures and equipment
    
    
    238
    
    
    
    19Less accumulated depreciation
    
    
    51
    
    
    
    16Property and equipment, net
    
    
    187
    
    
    
    3Goodwill
    
    
    29,420
    
    
    
    21,987Intangibles, net
    
    
    33,541
    
    
    
    15,340Deferred income taxes
    
    
    1,908
    
    
    
    377Investments
    
    
    893Total assets
    
    $
    99,863
    
    
    $
    113,185Liabilities and Stockholders EquityCurrent liabilitiesAccounts payable
    
    $
    281
    
    
    $
    149Accrued expenses:Income taxes
    
    
    95
    
    
    
    657Other
    
    
    584
    
    
    
    206Guaranteed payment for acquisition
    
    
    1,000
    
    
    
    
 Deferred revenues
    
    
    205
    
    
    
    Other current liabilities
    
    
    
    
    
    
    249Total current liabilities
    
    
    2,165
    
    
    
    1,261Guaranteed payment for acquisition
    
    
    915
    
    
    
    Total liabilities
    
    
    3,080
    
    
    
    1,261Commitments and contingenciesCommon stock, subject to possible conversion
20,000,000 shares 
at conversion value
    
    
    
    
    
    
    55,587Stockholders equityCommon stock, $0.0001 par value;
authorized 54,000,000 shares; 20,451,502 and 22,993,731 shares
issued and outstanding at September 30,
2008 and December 31, 2007, respectively
    
    
    2
    
    
    
    2Restricted
shares, $0.0001 par value; authorized 720,000 
shares; 612,716 and 696,160 shares
issued and outstanding at September 30,
2008 and December 31, 2007, respectively
    
    
    
    
    
    
    Preferred
stock, $0.0001 par value, authorized 1,000,000 
shares; none issued
    
    
    
    
    
    
    Other comprehensive income (loss)
    
    
    (33
    )
    
    
    Additional paid-in capital
    
    
    99,461
    
    
    
    55,892Retained earnings (deficit)
    
    
    (2,647
    )
    
    
    443Total stockholders equity
    
    
    96,783
    
    
    
    56,337Total liabilities and
stockholders equity
    
    $
    99,863
    
    
    $
    113,185




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Market
News
    
    Page 4 of 19
 Titanium Asset Management Corp.
 Consolidated Statements of Income 
(in thousands except for shares)
 Periodfrom February 2,Nine Months
    
    
    2007 (inception)Ended September
    
    
    through September30, 2008
    
    
    30, 2007)(unaudited)
    
    
    (unaudited)Fee income
    
    $
    10,592
    
    
    $
    Operating expenses:Administrative
    
    
    10,965
    
    
    
    370Amortization of intangibles
    
    
    3,096
    
    
    
    Write off of intangibles
    
    
    1,792
    
    
    
    Total operating expenses
    
    
    15,853
    
    
    
    370Operating loss
    
    
    (5,261
    )
    
    
    (370
    )Other income
    
    
    
    
    
    
    Interest income
    
    
    774
    
    
    
    1,432Investment income (loss)
    
    
    (38
    )
    
    
    Miscellaneous income
    
    
    65
    
    
    
    Interest expense
    
    
    (14
    )
    
    
    Income (loss) before taxes
    
    
    (4,474
    )
    
    
    1,062Taxes (expense) benefit on income
    
    
    1,384
    
    
    
    (403
    )Net income (loss)
    
    $
    (3,090
    )
    
    $
    659Net (loss) income per shareBasic
    
    $
    (0.15
    )
    
    $
    0.06Diluted
    
    $
    (0.15
    )
    
    $
    0.05




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Market
News
    
    Page 5 of 19
 Periodfrom February 2,Nine Months Ended
    
    
    2007 (inception) throughSeptember 30, 2008
    
    
    September 30, 2007(unaudited)
    
    
    (unaudited)Cash flows from operating activitiesNet (loss) income
    
    $
    (3,090
    )
    
    $
    659Adjustments to reconcile net income to
net cash provided by operating activities:Depreciation and amortization
    
    
    3,131
    
    
    
    Deferred income taxes
    
    
    (1,531
    )
    
    
    Recognize impairment of intangible asset
    
    
    1,792
    
    
    
    Changes in assets and liabilities:Decrease (increase) in:Accounts receivable
    
    
    (396
    )
    
    
    Prepaid expenses and other assets
    
    
    412
    
    
    
    (32,373
    )Increase (decrease) in:
    
    
    
    
    
    
    Accounts payable
    
    
    134
    
    
    
    Accrued expenses and other
current liabilities
    
    
    (580
    )
    
    
    5,419Net cash provided by (used in) operating 
activities
    
    
    (128
    )
    
    
    (26,295
    )Cash flows from investing activitiesPurchases of property and equipment
    
    
    (103
    )
    
    
    Cash and cash equivalents held in 
(released from) trust
    
    
    55,587
    
    
    
    (55,011
    )Long-term investments
    
    
    (893
    )
    
    
    Net unrealized loss on long-term investments
    
    
    (34
    )
    
    
    Cash paid for acquisition of subsidiaries, 
net of cash acquired
    
    
    (31,226
    )
    
    
    Net cash provided by (used in) 
investing activities
    
    
    23,331
    
    
    
    (55,011
    )Cash flows from financing activitiesIssuance of common stock units
    
    
    
    
    
    
    120,025Costs associated with share issue
    
    
    
    
    
    
    (9,652
    )Common stock redeemed
    
    
    (12,017
    )
    
    
    (3,892
    )Net (used in) cash provided by financing
activities
    
    
    (12,017
    )
    
    
    106,481Net (decrease) increase in cash and cash 
equivalents
    
    
    11,186
    
    
    
    25,175Cash and cash equivalents:Beginning
    
    
    19,388
    
    
    
    Ending
    
    $
    30,574
    
    
    $
    25,175Supplemental disclosure of non-cash
financing activitiesFair value of placement agent warrant
    
    $
   
    
    
    $
    2,091Income taxes paid
    
    $
    630
    
    
    $
    Paid-in capital attributed to common stock repurchase
rights not executed
    
    $
    55,587
    
    
    $
   Guaranteed
payment issued in connection with acquisition
    
    $
    1,915
    
    
    $
   
 See notes to consolidated financial statements.




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Market
News
    
    Page 6 of 19
 Note 1  General




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Market
News
    
    Page 7 of 19
   Note 2  Adoption of New Accounting Standards
 Fair Value Measurements
 The Fair Value Option for Financial Assets and
Financial Liabilities, Including an Amendment of FASB Statement No. 115
 Business Combinations Noncontrolling Interests in Consolidated Financial Statements
 Disclosures about Derivative Instruments and Hedging
Activities




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Market
News
    
    Page 8 of 19
  The Hierarchy of Generally Accepted Accounting
Principles
 Effective Date of FASB Statement
No. 157
 Note 3  Acquisitions
 Acquisition of Wood




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Market
News
    
    Page 9 of 19
  Goodwill
    
    $
    19,865Intangible asset  customer relationships
    
    
    12,026Intangible asset  non-compete covenant
    
    
    829Intangible asset  brand
    
    
    444$
    33,164
 Acquisition of Sovereign
    Goodwill
    
    $
    2,122Intangible asset  customer relationships
    
    
    2,665Intangible asset  non-compete covenant
    
    
    833Intangible asset  brand
    
    
    181$
    5,801
 Acquisition of NIS (unaudited)




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Market
News
    
    Page 10 of 19
    Current assets
    
    $
    3,123Property and equipment
    
    
    115Goodwill
    
    
    7,432Intangible asset  customer relationships
    
    
    23,088Current liabilities
    
    
    (629
    )$
    33,129
 Note 4  Goodwill and intangibles
  Wood acquisition
    
    $
    19,865Sovereign acquisition
    
    
    2,122NIS acquisition
    
    
    7,432Goodwill at September 30, 2008
    
    $
    29,419




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Market
News
    
    Page 11 of 19
  AverageUseful LifeAccumulated
    
    
    
    
    
    
    inCost
    
    
    Amortization
    
    
    Net
    
    
    MonthsWood
customer relationships
    
    $
    12,026
    
    
    $
    3,796
    
    
    $
    8,230
    
    
    
    60Wood brand
    
    
    444
    
    
    
    110
    
    
    
    334
    
    
    
    48Sovereign customer
relationships
    
    
    2,665
    
    
    
    683
    
    
    
    1,982
    
    
    
    84Sovereign non-compete
agreement
    
    
    833
    
    
    
    278
    
    
    
    555
    
    
    
    36Sovereign brand
    
    
    181
    
    
    
    60
    
    
    
    121
    
    
    
    36NIS client
referral
relationship
    
    
    23,088
    
    
    
    770
    
    
    
    22,318
    
    
    
    180Intangible assets
    
    $
    39,237
    
    
    $
    5,697
    
    
    $
    33,540
  Note 5  Income taxes




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Market
News
    
    Page 12 of 19
 NineMonthsEndedSeptember30, 2008(unaudited)CurrentFederal
    
    $
    State
    
    
    DeferredFederal
    
    
    1,384State
    
    
    1,384Taxes on income
    
    $
    1,384
  NineMonthsEndedSeptember30, 2008(unaudited)Income taxes at federal statutory rate
    
    $
    1,531State income taxes, net of federal tax benefit
    
    
    (95
    )Other
    
    
    (52
    )$
    1,384
  September 30, 2008(unaudited)Goodwill and intangibles
    
    $
    1,912Property and equipment
    
    
    (4
    )Total deferred tax asset
    
    $
    1,908




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Market
News
    
    Page 13 of 19
  Note 6  Line of credit
  Note 7  Retirement plan
  Note 8 Contingencies
  .




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##### 



Market
News
    
    Page 14 of 19
  Note 9 Earnings per Share
   Period fromNine months
    
    
    February 2,ended
    
    
    2007 (inception)September 30, 2008
    
    
    to September 30, 2007Basic EPS:Net income (loss)
    
    $
    (3,090
    )
    
    $
    659Weighted average shares outstanding
    
    
    21,205,373
    
    
    
    10,549,370Basic EPS
    
    $
    (0.15
    )
    
    $
    0.06Diluted EPS:Net income
    
    $
    (3,090
    )
    
    $
    659Weighted average number of common
shares outstanding
    
    
    21,205,373
    
    
    
    10,549,370Dilutive warrants
    
    
    3,901,682
    
    
    
    3,177,723Restricted stock
    
    
    695,963
    
    
    
    696,160Dilutive weighted average shares
    
    
    25,803,018
    
    
    
    14,423,253Diluted EPS
    
    $
    (0.15
    )
    
    $
    0.05




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Market
News
    
    Page 15 of 19
 Note 10 Restatement of Financial Statements




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##### 



Market
News
    
    Page 16 of 19
 Balance sheet:
 June 30, 2008
    

    
    
    
    
    
    June 30, 2008(unaudited)
    
    
    
    
    
    
    (unaudited)As reported
    
    
    Adjustments
    
    
    RestatedCurrent assetsCash and cash equivalents
    
    $
    16,922
    
    
    $
    15,216
    
    
    $
    32,138Short -term investment
    
    
    15,216
    
    
    
    (15,216
    )
    
    
    Accounts receivable
    
    
    2,426
    
    
    
    
    
    
    
    2,426Prepaid expenses and other assets
    
    
    1,302
    
    
    
    
    
    
    
    1,302Total current assets
    
    
    35,866
    
    
    
    
    
    
    
    35,866Property and equipment - net
    
    
    190
    
    
    
    
    
    
    
    190
 Goodwill
    
    
    39,281
    
    
    
    (9,862
    )
    
    
    29,419Intangibles, net
    
    
    26,246
    
    
    
    8,388
    
    
    
    34,634Deferred income taxes
    
    
    610
    
    
    
    518
    
    
    
    1,128Total assets
    
    
    102,193
    
    
    
    (956
    )
    
    $
    101,237Liabilities and Stockholders EquityCurrent liabilitiesAccounts payable and accrued expenses
    
    $
    660
    
    
    $
    
    
    
    $
    660Guaranteed payment for acquisition
    
    
    1,000
    
    
    
    
    
    
    
    1,000Deferred revenues
    
    
    218
    
    
    
    
    
    
    
    218Other current liabilities
    
    
    34
    
    
    
    3
    
    
    
    37Total current liabilities
    
    
    1,912
    
    
    
    
    
    
    
    1,915Guaranteed payment for acquisition
    
    
    903
    
    
    
    
    
    
    
    903Total liabilities
    
    
    2,815
    
    
    
    3
    
    
    
    2,818Commitments and contingencies
    
    
    
    
    
    
    
    
    
    
    Stockholders equityCommon stock
    
    
    2
    
    
    
    
    
    
    
    2Restricted shares
    
    
    
    
    
    
    
    
    
    
    Preferred stock
    
    
    
    
    
    
    
    
    
    
    Additional paid-in capital
    
    
    99,462
    
    
    
    
    
    
    
    99,462Retained earnings (deficit)
    
    
    (86
    )
    
    
    (959
    )
    
    
    (1,045
    )Total stockholders equity
    
    
    99,378
    
    
    
    
    
    
    
    98,409Total
liabilities
and
stockholders
equity
    
    $
    102,193
    
    
    $
    (956
    )
    
    $
    101,237




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Market
News
    
    Page 17 of 19
 Statement of Income:
 Six months
    
    
    
    
    
    
    Six monthsended June 30,
    
    
    
    
    
    
    ended June 30,2008
    
    
    
    
    
    
    2008(unaudited)
    
    
    
    
    
    
    (unaudited)As reported
    
    
    Adjustments
    
    
    RestatedFee income
    
    $
    6,706
    
    
    
    
    
    
    $
    6,706Operating expenses:Administrative
    
    
    5,987
    
    
    
    1
    
    
    
    5,988Amortization
of intangibles
    
    
    2,319
    
    
    
    (317
    )
    
    
    2,002Write off of intangibles
    
    
    
    
    
    
    1,792
    
    
    
    1,792Total operating
expenses
    
    
    8,306
    
    
    
    1,476
    
    
    
    9,782Operating loss
    
    
    (1,600
    )
    
    
    (1,476
    )
    
    
    (3,076
    )Other incomeInterest
    
    
    868
    
    
    
    
    
    
    
    868Loss before taxes
    
    
    (732
    )
    
    
    (1,476
    )
    
    
    (2,208
    )Income tax benefit
    
    
    203
    
    
    
    517
    
    
    
    720Net loss
    
    $
    (529
    )
    
    $
    (959
    )
    
    $
    (1,488
    )Net loss per sharebasic
    
    $
    (0.02
    )
    
    $
    (0.05
    )
    
    $
    (0.07
    )diluted
    
    $
    (0.02
    )
    
    $
    (0.05
    )
    
    $
    (0.07
    )




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Market
News
    
    Page 18 of 19
 Statement of Cash flows:
 Six months ended June 30,
    
    
    
    
    
    
    Six months ended June 30,2008
    
    
    
    
    
    
    2008(unaudited)
    
    
    
    
    
    
    (unaudited)As reported
    
    
    Adjustments
    
    
    RestatedCash flows from operating activitiesNet income
    
    $
    (529
    )
    
    $
    (959
    )
    
    $
    (1,488
    )Adjustments to reconcile net income to
net cash provided by operating
activities:Depreciation and amortization
    
    
    2,322
    
    
    
    (320
    )
    
    
    2,002Deferred income taxes
    
    
    (233
    )
    
    
    (518
    )
    
    
    (751
    )Write off of intangible asset
    
    
    
    
    
    
    1,792
    
    
    
    1,792Changes in operating assets and
liabilities
    
    
    (1,080
    )
    
    
    3
    
    
    
    (1,077
    )Net cash provided by (used
in) operating 
activities
    
    
    480
    
    
    
    (2
    )
    
    
    478Cash flows from investing activitiesPurchases of property and
equipment
    
    
    (73
    )
    
    
    1
    
    
    
    (72
    )Cash and cash equivalents held in 
(released from) trust
    
    
    55,587
    
    
    
    
    
    
    
    55,587Short term investments
    
    
    (15,216
    )
    
    
    15,216
    
    
    
    Cash paid for acquisition of
subsidiaries, 
net of cash acquired
    
    
    (31,226
    )
    
    
    
    
    
    
    (31,226
    )Net cash provided by
investing activities
    
    
    9,072
    
    
    
    15,217
    
    
    
    24,289Cash flows from financing activitiesCommon stock redeemed
    
    
    (12,017
    )
    
    
    
    
    
    
    (12,017
    )Net cash (used in) provided
by financing
activities
    
    
    (12,017
    )
    
    
    
    
    
    
    (12,017
    )Net increase (decrease) in cash and
cash equivalents
    
    
    (2,465
    )
    
    
    15,215
    
    
    
    12,750Cash and cash equivalents:Beginning
    
    
    19,388
    
    
    
    
    
    
    
    19,388Ending
    
    $
    16,923
    
    
    
    15,215
    
    
    $
    32,138Supplemental disclosure of non-cash
financing activitiesIncome taxes paid
    
    $
    598
    
    
    
    
    
    
    $
    598Paid-in capital attributed to common
stock repurchase rights not executed
    
    $
    55,587
    
    
    
    
    
    
    $
    55,587Guaranteed payment issued in
connection with acquisition
    
    
    1,903
    
    
    
    
    
    
    $
    1,903




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##### 



Market
News
    
    Page 19 of 19
 
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