via NewMediaWire --
NextPlay Technologies, Inc. (NASDAQ:
NXTP), a digital business ecosystem for digital
advertisers, consumers, video gamers and travelers, reported
results for the third quarter of fiscal 2022 ended November 30,
2021.
Fiscal Q3 Financial Highlights
●
Achieved record quarterly revenue of $4.2 million, +59% from the
previous quarter. This compares very favorably to $0 revenue in the
same period last year.
● Gross
profit totaled $2.2 million, with consolidated gross margin
improving to 53.5% from 51.9% in the previous quarter.
● Assets
totaled $121.0 million.
● Cash,
cash equivalents and restricted cash totaled $21.4 million, up from
$8.9 million at the end of the previous quarter as the result of an
equity offering completed during the quarter.
Fiscal Q3 Operational
Highlights
●
Received conditional approvals for insurance and reinsurance
licenses. The licensing enables NextPlay’s NextShield LTD business
unit to establish digital primary insurance and reinsurance
operations and to offer blockchain-delivered products like
parametric comprehensive travel insurance and bank deposit
insurance.
●
Launched NextPlay X Soma Labs, an innovation and design platform
bringing together non-fungible tokens (NFTs), social games, and
Metaverse virtual worlds for major brands, creators, and
agencies.
●
Announced the MedTrek Fund, a blockchain securitized closed-end
fund focused on building medical facilities designed to lower the
likelihood of infection for four medical asset classes including
primary care, tertiary care, long term care and resort convalescent
facilities.
● Appointed Jorge E.
Miro Hernandez as president and COO of NextBank International and
Carla P. Mendez as chief administrative officer.
Management Commentary
“The increase in our third quarter revenues and
significant gross margin expansion demonstrate that we’ve arrived
at a major inflection point in our growth and development strategy
as we gradually and successfully integrate several components of
recent synergistic acquisitions to transform our business,”
commented NextPlay co-CEO, Nithinan ‘Jessie’ Boonyawattanapisut.
“This was the first full quarter that showed 100% contribution from
these acquisitions, and we believe that it represents the
foundation for further growth and expansion. We are now focused on
actualizing operational and sales efficiencies by deepening
operations integration, and by cross-selling new products across
divisions.”
“During the quarter, our digital interactive media
division, NextMedia, delivered Blockbuster 2048, its first
in-house casual game, out of the 16 games currently in the pipeline
that are scheduled to be released during fiscal Q4 2022 and Q1
2023, to iOS and Android app stores. In conjunction, we have now
released HotPlay 2.0, our next-generation in-game advertising
platform to our internal teams. It will deliver advertisements and
real-world rewards into video games without disrupting gameplay,
offering new revenue streams to publishers and advertisers alike.
With the continued development of the HotPlay platform and
integration of the MakeItGames AI animation platform we
anticipate the platform will introduce disruptive and game-changing
capabilities to game, virtual reality, metaverse and other
immersive experiences as we begin to release HotPlay 2.0 to
select partners during the first half of this calendar year and
beyond. We also worked on the deeper integration of HotPlay
into other parts of our ecosystem to enable digital advertisers and
brands to use HotPlay to reach a vast global consumer base.
“Our Fintech division comprises our insurance,
reinsurance, online banking and crypto portal operations. Led
by successful insurance and banking industry executives, the
Fintech division is bringing a diversified set of fintech solutions
to market that will offer asset banking, asset management, mobile
payment, and a range of retail banking services to customers around
the world. NextBank welcomes blockchain industry participants and
is focused on providing enabling capabilities to clients in the
DeFi, NFT and exchange verticals. We expect NextBank to
provide significant contributions to earnings and to cash flow
beginning in fiscal Q1 2023. Our Longroot crypto portal is in
active negotiations with a number of prospective clients (issuers)
who target issuances by fiscal Q2 and Q3 2023. We also plan to
issue our own digital insurance tokens, which allow customers to
purchase any of our insurance products, as well as a series of
stable coins to facilitate remittance services that NextBank will
provide. We see considerable synergies between NextBank’s
services and our Longroot crypto portal services to meet the
financial and operational needs of blockchain centric companies,
providing a range of services to blockchain industry
participants.”
In fiscal Q3, our fintech division received
conditional approval of its general insurance and reinsurance
licenses application from the Labuan Financial Services
Authority (Labuan FSA). The licensing advances our mission of
pushing the boundaries of insurance and reinsurance innovation with
a product portfolio that will be unique to the industry, and it
keeps us on track to launch our first two blockchained insurance
products in fiscal Q2 and Q3 2023.”
“Our travel division is in the process of
integrating NextPlay’s NextTrip ConNextions booking
engine with a number of online travel agencies (OTAs). Several are
already in the certification process, which is the final step
before OTAs gain access to our travel inventory via their
platforms. Our global inventory of vacation rental properties
provides many new lodging options to OTAs around the world.
We anticipate these integrations to help increase our booking
volumes as the resurgence in the travel and tourism sector
continues following the pandemic related lockdowns.”
“The major equity offering we completed in the
quarter fortified our balance sheet and supported our many growth
initiatives. We have launched an expense reduction program to
eliminate redundant systems and processes due to the acquisitions.
Certain one-time expenses related to post-merger activities
incurred during this quarter are not anticipated to recur in the
future. For these reasons, we anticipate a significant reduction in
SG&A expenses and progression to positive cash flow by the end
of the second half of fiscal 2023.
“We have scheduled a special shareholder meeting
on January 28, 2022, and we encourage all shareholders to submit
their votes. We are seeking shareholder approval to complete our
previously announced acquisition of certain game-industry
intellectual property from Fighter Base Publishing Inc. and certain
distributed ledger intellectual property from Token IQ Inc.
Both entities are majority-owned by NextPlay’s Chief
Technology Officer, Mark Vange, who is a visionary leader in both
industries.
“We expect the addition of Token
IQ’s technology to become the core to our products and
services, from our Longroot asset-based cryptocurrencies, our
digital insurance tokens and HotPlay in-game tokens, to future
NextBank fintech services and NextTrip medical tourism offerings.
Token IQ also brings valuable technology and software development
talent to support the technology integration between our platforms
and our partners, as well as further our IP development. We
believe Fighter Base Publishing’s AI driven animation technology
will bring unique capabilities to our HotPlay platform and
significant cost reduction to our game studio operations.
As we complete our final quarter of fiscal 2022
ending in February, we expect to be exceptionally well-positioned
for growth across all three divisions: interactive digital media,
fintech and travel. We see near-term revenue growth and margin
expansion being further fueled by new HotPlay deployments and
Longroot cryptocurrency offerings, and we believe that these
developments will steadily advance us toward strong cash flow and
profitability.”
Fiscal Q3 2022 Financial
Summary
Revenue for the third quarter of fiscal 2022
totaled $4.2 million, an increase of 59% from $2.6 million in the
previous quarter and compares very favorably to no revenue in the
same year-ago quarter. The increase was primarily the result of the
company’s acquisition of Reinhart TV/Zappware completed on June 23,
2021, and NextBank (formerly International Financial Enterprise
Bank) completed on July 21, 2021.
NextMedia, the company’s digital interactive media
division, contributed revenue of $3.7 million driven by organic
growth of digital media globally. The company’s NextFinTech
division contributed revenue of $0.4 million, and the NextTrip
travel division contributed revenue of $0.1 million.
Consolidated gross profit totaled $2.2 million or
53.5% of revenue, as compared to none in the same period a
year-ago. The margin improvement was due to high margin products in
digital media and financial services from recent acquisitions.
Operating expenses totaled $11.1 million, compared
to $0.46 million in the same year-ago period. The increase was
primarily due to the consolidation of expenses from business
combinations of HotPlay, Reinhart TV/Zappware, and NextBank, as
well as one-time post-merger related expenses.
Net loss attributable to the Company was $9.06
million or $(0.1) per basic and diluted share, as compared to a net
loss of $0.5 million or $(5.09) per basic and diluted share in the
same year-ago period which only represented HotPlay’s financials
per accounting standard.
Cash and cash equivalents as of November 30, 2021,
totaled $20.5 million, compared to $8.9 million as of August 31,
2021. The increase was due to an equity offering completed during
the quarter.
The Company’s quarterly report for the quarter
ended November 30, 2021, and other reports the company files with
the SEC, including reports on Forms 10-Q, 10-K and 8-K, can be
accessed at sec.gov and on NextPlay’s website in
the IR section.
About NextPlay Technologies
NextPlay Technologies, Inc. (Nasdaq: NXTP) is a
technology solutions company offering games, in-game advertising,
crypto-banking, connected TV and travel booking services to
consumers and corporations within a growing worldwide digital
ecosystem. NextPlay’s engaging products and services utilize
innovative AdTech, Artificial Intelligence and Fintech solutions to
leverage the strengths and channels of its existing and acquired
technologies. For more information about NextPlay Technologies,
visit www.nextplaytechnologies.com and follow us
on Twitter @NextPlayTech and LinkedIn.
Forward-Looking Statements
This press release includes “forward-looking
statements” within the meaning of, and within the safe harbor
provided by the Safe Harbor Provisions of the Private Securities
Litigation Reform Act of 1995, Section 27A of the Securities Act of
1933, as amended, and Section 21E of the Securities Exchange Act of
1934, as amended. Forward-looking statements give our current
expectations, opinions, belief or forecasts of future events and
performance. A statement identified by the use of forward-looking
words including “will,” “may,” “expects,” “projects,”
“anticipates,” “plans,” “believes,” “estimate,” “should,” and
certain of the other foregoing statements may be deemed
forward-looking statements. Although the Company believes that the
expectations reflected in such forward-looking statements are
reasonable, these statements involve risks and uncertainties that
may cause actual future activities and results to be materially
different from those suggested or described in this news release.
Factors that may cause such a difference include risks and
uncertainties including, and not limited to, our need for
additional capital which may not be available on commercially
acceptable terms, if at all, which raises questions about our
ability to continue as a going concern; the fact that the COVID-19
pandemic has had, and is expected to continue to have, a
significant material adverse impact on the travel industry and our
business, operating results and liquidity; amounts owed to us by
third parties which may not be paid timely, if at all; certain
amounts we owe under outstanding indebtedness which are secured by
substantially all of our assets and penalties we may incur in
connection therewith; the fact that we have significant
indebtedness, which could adversely affect our business and
financial condition; our revenues and results of operations being
subject to the ability of our distributors and partners to
integrate our alternative lodging rental (ALR) properties with
their websites, and the timing of such integrations; uncertainty
and illiquidity in credit and capital markets which may impair our
ability to obtain credit and financing on acceptable terms and may
adversely affect the financial strength of our business partners;
the officers and directors of the Company have the ability to
exercise significant influence over the Company; stockholders may
be diluted significantly through our efforts to obtain financing,
satisfy obligations and complete acquisitions through the issuance
of additional shares of our common or preferred stock; if we are
unable to adapt to changes in technology, our business could be
harmed; our travel business depends substantially on property
owners and managers renewing their listings; if we do not
adequately protect our intellectual property, our ability to
compete could be impaired; our long-term success depends, in part,
on our ability to expand our property owner, manager and traveler
bases outside of the United States and, as a result, our business
is susceptible to risks associated with international operations;
unfavorable changes in, or interpretations of, government
regulations or taxation of the evolving ALR, Internet and
e-commerce industries which could harm our operating results; risks
associated with the operations of, the business of, and the
regulation of, Longroot and NextBank International (formerly IFEB);
the market in which we participate being highly competitive, and
because of that we may be unable to compete successfully with our
current or future competitors; our potential inability to adapt to
changes in technology, which could harm our business; the
volatility of our stock price; the fact that we may be subject to
liability for the activities of our property owners and managers,
which could harm our reputation and increase our operating costs;
and that we have incurred significant losses to date and require
additional capital which may not be available on commercially
acceptable terms, if at all. More information about the risks and
uncertainties faced by NextPlay are detailed from time to time in
NextPlay’s periodic reports filed with the SEC, including its most
recent Annual Report on Form 10-K and Quarterly Reports on Form
10-Q, under the headings “Risk Factors”. These reports are
available at www.sec.gov. Other unknown or unpredictable
factors also could have material adverse effects on the Company’s
future results and/or could cause our actual results and financial
condition to differ materially from those indicated in the
forward-looking statements. Investors are cautioned that any
forward-looking statements are not guarantees of future performance
and actual results or developments may differ materially from those
projected. The forward-looking statements in this press release are
made only as of the date hereof. The Company takes no obligation to
update or correct its own forward-looking statements, except as
required by law, or those prepared by third parties that are not
paid for by the Company. If we update one or more forward-looking
statements, no inference should be drawn that we will make
additional updates with respect to those or other forward-looking
statements.
SOURCE: NextPlay Technologies, Inc.
Company Contacts:
Richard Marshall
Director of Corporate Development
NextPlay Technologies, Inc.
Tel (954) 888-9779
Email: richard.marshall@nextplaytechnologies.com
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