via NewMediaWire –
NextPlay Technologies, Inc. (NASDAQ:
NXTP), a digital native ecosystem for finance, digital
advertisers, and video gamers, reported results for the first
quarter of fiscal 2023 ended May 31, 2022.
On June 28, 2022, NextPlay announced it entered into definitive
agreements to sell its travel business, NextTrip Group, LLC
(NextTrip), and its 51% ownership of Reinhart Digital TV (the owner
of Zappware) to TGS Esports Inc., an esports tournament solutions
provider. Closing of the transaction remains subject to various
conditions, including (without limitation) regulatory approvals and
approval of certain related matters by TGS' shareholders, and is
expected to occur in the second half of this calendar year. The
sale, if and when consummated, is expected to unlock shareholder
value, improve cash flow and allow the company to focus resources
on core businesses.
As a result, as of May 31, 2022, the NextTrip and Reinhart
Digital TV businesses are no longer consolidated with, or presented
as divisions of, NextPlay Technologies, and instead have been
reclassified as assets held for sale by the company. Beginning with
the company’s first quarter of fiscal 2023, the company will report
the financial results of its two continuing business segments:
NextFinTech, comprised of Longroot and NextBank; and
NextMedia, comprised of HotPlay, representing the company’s
in-game advertising (IGA) technology.
Fiscal Q1 2023 Financial Highlights
● Revenue totaled $467,000 vs. none in the corresponding
year-ago quarter.
● Consolidated gross profit totaled $364,000 or 77.9% of total
revenue.
● Assets totaled $106.5 million at May 31, 2022.
Fiscal Q1 2023 Operational Highlights
● Acquired the assets, including
patents and video game development technology, of Fighter Base
Publishing and its Make It Games™ brand. The acquisition
strengthened NextPlay’s IP portfolio and digital business ecosystem
offerings to digital advertisers, consumers and video gamers. The
proprietary Make It Games AI animation tools enable game or film
characters to be more lifelike in appearance and behavior, saving
producers time and money over traditional animation.
● Acquired certain assets of goGame,
including its new-gen game publishing platform that features
tournament, chat and payment systems that support 37 casual games
ranging from arcade to strategy. NextPlay is currently working to
complete the integration of its HotPlay IGA technology into the 37
games, which is expected to be completed by year end. In connection
with the acquisition, goGame also granted the company a perpetual
license for goPay its payment gateway, a payment aggregator that
offers game developers multiple ways to more easily collect and
process user payments through carrier billing, over the counter,
e-voucher, bank transfer and e-wallet transfers.
● Acquired the assets of Token IQ,
Inc., an early innovator in digital asset management and smart
compliant token technology. Token IQ’s foundational IP employs a
distributed ledger, like Ethereum or Stellar, to reconcile legal
and regulatory requirements around digital assets, including Know
Your Customer (KYC) challenges, anti-money laundering (AML) and
shareholder rights enforcement. NextPlay plans to initially deploy
the Token IQ technology through its NextBank International and
Longroot Thailand subsidiaries. The technology is also available to
license partners.
● Signed preliminary agreement with Decentralised
Investment Group (DIG), a leading global blockchain technology
company, to develop and operate an exclusive fiat payment platform
for DIG’s customers. Upon execution of a definitive agreement,
NextBank International would provide DIG customers with access to
its Fintech platform, which would enable these customers to
purchase and monetize DIG assets. This would initially involve
using in-game assets from Realms of Ethernity (RoE), the world’s
first MMORPG (massively multiplayer online role-playing games) NFT
game. NextPlay and DIG are currently in the process of negotiating
definitive agreements to formalize the relationship, which they
hope to finalize in the near term, subject to completion of due
diligence and satisfaction of market, regulatory and other
customary closing conditions.
● Entered memorandum of understanding
with TruCash Group of Companies Inc. to support the launch of
NextBank Payments, which, once implemented, is expected to include
mobile wallets and mobile payments, as well as credit, debit and
prepaid cards. The relationship with TruCash also presents the
opportunity to offer NextBank's international banking services to
TruCash's millions of account holders worldwide. NextBank and
TruCash are in the process of negotiating definitive agreements to
formalize the relationship, which they hope to finalize in the near
term.
Management Commentary
“In fiscal Q1, our topline growth and high gross margin versus
the same year-ago quarter was primarily due to Fintech acquisitions
we completed last year,” commented NextPlay’s co-CEO and principal
executive officer, Nithinan ‘Jess’ Boonyawattanapisut.
“The results were lower sequentially mostly due the
reclassification of Reinhart Digital TV and NextTrip as assets held
for sale in anticipation of their proposed sale to TGS Esports.
“We believe the strategic sale of these assets to a buyer who is
positioned to more quickly leverage them for growth and market
share will accelerate the unlocking of shareholder value,
particularly through the potential distribution of TGS shares to
our investors through a special dividend.
“Further, the valuable acquisitions we have made in the video
game and Fintech areas, and especially the advancements we have
made since their acquisition, calls for us to intensify our focus
and capital resources on what we see as a unique opportunity for
high-margin revenue growth in their fast-growing
markets.
“These advancements include the long-anticipated release of
HotPlay 2.0 during calendar 2022, which will offer new powerful
advertising and real-world rewards delivery technology to our
partners and business customers. HotPlay 2.0 is intended to
strengthen its integration capabilities and deep-linking support
for games via a generational update of its Unity SDK for iOS,
Android, Android TV, and HTML5.
“HotPlay 2.0 also features new online management portals for
advertisers and publishers, and new apps for consumers and players,
including a HotPlay Reward Redemption native mobile app for iOS and
Android. HotPlay 2.0 is being rolled out initially to select
partners in preparation for the global launch through our connected
ecosystem.
“The integration of HotPlay with our newly acquired Make It
Games AI animation platform, once completed, will introduce unique,
highly disruptive capabilities for the development and monetization
of video games, as well as virtual reality, metaverse and other
immersive experiences. We expect that, for these applications, it
will greatly lower the production cost and time for the game
developers in our digital ecosystem, including our own development
teams.
“To showcase our HotPlay IGA technology and generate near-term
revenue, our in-house game development studio is preparing to
launch 15 casual games, including Evergreen Forest, Rolly Loops,
Skyline Stack, Hook’n Hop, and Booster Maths. These games will have
cross-platform capability, and we plan to release them initially
through the Apple iOS and Android app stores before the end of the
year.
“We continued to advance our relationship with Triplecom Media
PVT Ltd., whose iTAP platform is a fast-growing over-the-top (OTT)
entertainment platform based in India. Upon execution of a
definitive agreement formalizing the relationship, we plan to
integrate iTAP’s entertainment and esports content into HotPlay’s
in-game advertising platform, thereby creating a unique opportunity
for us to enter India’s fast-growing entertainment segment of
hyper-casual games.
“Our recent acquisition of the goGame hyper-casual game
portfolio combined with our HotPlay in-game advertising solution
offers synergistic value to entertainment platforms like iTAP. We
believe that it can provide tremendous new revenue opportunities,
especially given iTAP’s rapidly growing user base in one of the
most populous countries in the world, second only to China at
approximately 1.4 billion people. We are planning for a commercial
launch with iTAP by the end of the year, subject to execution of
definitive agreements relating thereto.
“Our NextFinTech division, which comprises insurance,
reinsurance, online banking, and crypto portal operations, has also
been making strong progress. It is bringing forth a
diversified set of Fintech solutions to the market that we
anticipate will offer asset banking, asset management, mobile
payment, and a range of retail banking services for customers
around the world. As a result, it has been our most active division
in terms of new business development and revenue generation.
“A new online banking platform with a more robust core banking
system is scheduled to launch this summer. We expect the new
platform to drive significant acceleration in the number of new
customers, amount of deposits, and related revenue generation, with
this resulting in NextBank turning cash flow positive this
year.
“Due to the extensive investments we’ve made in our core
business over the past year, we believe we are well-positioned for
growth across our digital ecosystem of gaming, Adtech and Fintech.
We now offer highly differentiated digital solutions across several
global high-growth markets. We see our growth in fiscal 2023 being
driven by new HotPlay and NextBank deployments and product
adoption, with the goal of achieving positive cash flow and
profitability.”
Fiscal Q1 2023 Financial Summary
Revenue for the first quarter of fiscal 2023 totaled $467,000,
compared to no revenue in the same year-ago quarter. The increase
was driven by loan portfolio organic growth and increase in
financial services of NextBank. NextMedia, the company’s digital
interactive media division, had no revenue.
Operating expenses totaled $4.9 million, compared to $0.5
million in the same year-ago period. The increase was primarily due
to legal, consulting, and professional fees related to certain
pre-operating activities and employee expenses in the period.
Net loss attributable to the company was $5.7 million or $(0.05)
per basic and diluted share, as compared to a net loss of $0.4
million or $(0.01) per basic and diluted share in the same year-ago
period. The year-ago results only represent HotPlay’s
financials.
Cash and cash equivalents as of May 31, 2022 totaled $2.4
million, compared to $4.3 million on February 28, 2022. The
decrease in cash on hand was mainly from the cash out flow to
operating activities and certain cash classified as asset held for
sale.
The company’s Quarterly Report on Form 10-Q for the quarter
ended May 31, 2022, as well as 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 and banking services to consumers and corporations
within a growing worldwide digital ecosystem. NextPlay’s products
and services utilize innovative AdTech, Artificial Intelligence and
Fintech technologies to leverage the strengths and market channels
of its digital ecosystem. 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, TGS’ ability
to obtain shareholder approval of the NextTrip and
Reinhart/Zappware sale and related matters; the need for regulatory
approval of the sale and related items; the parties’ ability to
satisfy the closing conditions for such sale; our ability to
convert and distribute TGS common shares to our shareholders in the
future in a tax-efficient and cost-effective manner; our ability to
negotiate and enter into definitive agreements with those parties
that we have entered into preliminary non-binding agreements with;
our ability to effectively and efficiently integrate our recently
acquired assets into our business; 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; current regulation governing digital currency
activity is often unclear and is evolving; the future development
and growth of digital currencies are subject to a variety of
factors that are difficult to predict and evaluate, many of which
are out of our control; the value of digital currency is volatile;
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; 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; if we do not adequately protect our intellectual property,
our ability to compete could be impaired; our business is
susceptible to risks associated with international operations;
unfavorable changes in, or interpretations of, government
regulations or taxation of the evolving 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; 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 fourth
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.
The terms, structure and timing of the
proposed sale of NextTrip and the NextPlay’s 51% ownership of
Reinhart Digital TV to TGS Esports are outlined in the definitive
agreements entered into on June 28, 2022, and remain subject to a
number of items including (without limitation) TGS shareholder
approval of certain related matters, as well as regulatory
approvals and other customary closing conditions. Further details
regarding the sale can be found in NextPlay’s current report on
Form 8-K filed with the Securities and Exchange Commission on June
29, 2022, available at sec.gov and in the Investors section of the
company’s website.
SOURCE: NextPlay Technologies, Inc.
Company Contacts:Richard MarshallDirector of Corporate
DevelopmentNextPlay Technologies, Inc.Tel (954)
888-9779Email: richard.marshall@nextplaytechnologies.com
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