Torch investor Update

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Myra Shaw
6 years ago
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1 Torch investor Update JULY 2013

2 Torch investor Update It is now just over a month since our first event and about 6 months since the business started trading. This period has seen important developments I wanted to update you on.

This provides the opportunity for the affluent and connected to conduct business, relax and party.

3 BUILDING THE BRAND Torch has successfully turned its philosophy into a reality At the heart of the Torch s brand philosophy are luxury and exclusivity delivered through the development of world class mobile venues in prime locations, creating a vibe full of buzz and mystique. This provides the opportunity for the affluent and connected to conduct business, relax and party. Through Torch Cannes and Monaco key organisations and personnel in the sports, film and music space were successfully hosted resulting in a resounding endorsement of the Torch brand, delivering influential media coverage further building the Torch brand. The impact of the Torch launch within its target audience augurs well for the future. torch platforms

5 FUNDRAISING AND CAPITAL EXPENDITURE TO DATE Torch has raised in excess of 3m to date, through a mixture of equity and debt. The Board continue to raise further equity capital in line with the original prospectus. These funds have been spent as follows. Expenditure Equipment and long term asset purchases 1.177m Original Research and Development costs 57,000 Fundraising costs 180,000 Corporate operational costs 322,000 Cannes set up costs 361,000 Cannes operational costs 764,000 Monaco set up costs 385,000 Monaco operational costs 174,000 Montenegro set up costs 84,000 Montenegro operational costs 55,000 Total Expenditure 3.560m torch platforms

REVENUE GENERATION The company generates revenues from a number of sources, including sponsorship, facility rental, food and beverage, on site services such as wifi access, table charges, entrance

7 REVENUE GENERATION The company generates revenues from a number of sources, including sponsorship, facility rental, food and beverage, on site services such as wifi access, table charges, entrance fees, partnership deals (such as co funding, capital investment, goods and services in kind). Torch also subsidises certain key patrons and partners (known as comping ) where it believes it to be in the long term interest of the business and the brand and these sums are included in reported revenues. The company has now operated events at Cannes and Monaco and generated total revenues from all the above sources, in excess of 2.5m. This broadly breaks down as: Events Event revenues 0.8m Partnership deals 1.7m torch platforms

In particular, a key partnership deal concluded in Montenegro means that in return for selling a 49% stake in its Montenegrin subsidiary, Torch will now not have to invest capex and opex of some 1.

8 PROFITABILITY Torch forecast a pre tax loss of 2.9m in its first year of operations. The Board are pleased to report that important developments should mean that this loss is reduced and the company has significantly de-risked its operations. In particular, a key partnership deal concluded in Montenegro means that in return for selling a 49% stake in its Montenegrin subsidiary, Torch will now not have to invest capex and opex of some 1.7m originally forecast. Essentially this should significantly de-risk Montenegro, which is expected to be a major generator of revenues and profits. To date the operating position of the company is a loss of 1.451m 1. This is in line with expectations. 1 Assets, R&D and fundraising costs are amortised over a 5 year period. Immediate deductions are taken for corporate and event operational costs and 80% of event set up costs. 20% of event set up costs are amortised over 5 years. These accounting policies have not yet received Auditor sign off and all numbers are unaudited. torch platforms

10 CANNES Torch Cannes delivered a unique beach club experience during the 66th Cannes Film Festival from 15th to 26th May. Situated at the heart of La Croisette opposite the Intercontinental Carlton Cannes, Torch Cannes provided a casual meeting and dining space with film based events during the day and a glamorous party scene in the evening. There was a strong daily programme with key partners including: y A novel daily breakfast club concept for the industry to use given limited space in Cannes during this time y Sales luncheons for major films including Spinning Gold with Justin Timberlake and Jackie Chan holding his Press Junket at the breakfast club y Premiere parties including Borgman, Redemption: The Darkness Descending y Awards: Variety Magazine y International events and parties: Soho Rooms (Moscow s leading night club) y VIP Room (Cannes) hosted the Torch opening party with Kavinksy in conjunction with the Great Gatsby premiere y Torch scored a first with VIP Room (Cannes) when they became the official partner of the Torch Beach club sharing media walls, press, PR and promotional activities driving customers and talent to our door. This positions Torch alongside the established brands already in existence at the film festival y Internationally renowned DJs, Mark Ronson, Roger Sanchez and LMFAO performing to enhance the brand identity The schedule formulated by the Torch team attracted a strong following of A-list celebrities and exciting new opportunities for the business. Although revenues were lower than expected, this was due in part to the extent of comping, as well as a slow start with poor weather. Management now has a clearer understanding of how best to de-risk and monetise the business in Cannes and we are confident that we will be well positioned moving forward in this market. torch platforms

11 CANNES

12 MONACO Torch Monaco provided one of the most prestigious race hospitality venues in Monaco. Moored in a prime position on the T-Jetty Flavio Briatore s 63 metre yacht Force Blue provided a fabulous vantage point for viewing the race as well as after dark entertainment. With exclusive use of the yacht Torch further reinforced its brand experience. There was strong programming of activity booked with key partners including: y The famous Bagatelle brand from New York, and creators of the Champagne Brunch successfully partnered with us providing race day brunch and viewing of the F1 Grand Prix. y A champions league football event on the Saturday night which made Torch the most sought after venue amongst the F1 paddock and German contingent in Monaco. It also attracted English Premier League football players and coaches. y The VIP Room (Monaco) seen as the most powerful venue in Monaco. Hosting top clients by day, whilst promoting the Torch brand during the evening. torch platforms

13 All the berths on the yacht were presold before the event for almost EUR 100,000 in aggregate. The event performed reasonably well financially and we are in good shape to enhance revenues and profits further at this prestigious location in future years. MONACO

MONTENEGRO As mentioned earlier, the Board made a decision to enter into a joint venture deal that has substantially de-risked the Montenegrin operation.

14 MONTENEGRO As mentioned earlier, the Board made a decision to enter into a joint venture deal that has substantially de-risked the Montenegrin operation. This may provide a model to be used to enhance profits and de-risk the business further in future. Torch Montenegro is now owned 49% by Safiro a local company in which I have a controlling interest that is building a 180 room 5 star hotel and 175 luxury residences on the site immediately behind the beach facility. Safiro will provide all capex and start up opex funding in return for its stake, allowing Torch to benefit from the profitability of the event but not assume the start up risk. Due to timing relating to the grant of the beach licence and planning permission, the Board and Safiro have determined to offer a smaller scale operation this year Torch lite with the main build out of the location taking place after this season. This should ensure that the event generates healthy profits this year and gives good lead in time to execute a world class venue and experience for next season. Torch Montenegro will be located on the beautiful beaches of Montenegro, the pearl of the Adriatic in summer and early autumn, the height of the holiday season. Torch will bring the glamour of Ibiza and the French Riviera to the historic port of Budva, heart of Montenegrin leisure and party life. torch platforms

15 Montenegro

FUTURE EVENTS The Torch calendar includes events planned in Singapore, Abu Dhabi, Sao Paolo, Verbier

The Board is currently undertaking a strategic review of these events to determine whether all are core

It is possible the company may focus on fewer events to ensure delivery of profits at an earlier stage

16 FUTURE EVENTS The Torch calendar includes events planned in Singapore, Abu Dhabi, Sao Paolo, Verbier and Sochi over the next 9 months. The Board is currently undertaking a strategic review of these events to determine whether all are core to year 1 operations. It is possible the company may focus on fewer events to ensure delivery of profits at an earlier stage than currently forecast. We are excited and enthused about our ability to build a profitable business and an important brand and look forward to welcoming you at a Torch event in the near future. Yours sincerely Tim Levy Chairman of the Board torch platforms

18 The image of any celebrity, location or individual in this publication does not represent in any way an endorsement of Torch. This information is provided to existing and prospective shareholders in Torch and is based upon financial information which is currently unaudited. The financial information published herein supercedes any other information contained in the Information Memorandum. An investment in Torch is not suitable for promotion to ordinary retail investors. Investors may not get back the amount invested. It is recommended that you seek professional financial advise before investing in Torch. Issued and approved by Future Capital Partners (FS) Limited.

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