NFT Investments PLC - NFT Investments Interim Results
RNS Number : 4519N
NFT Investments PLC
30 September 2021
 

The information contained within this announcement is deemed by the Company to constitute inside information stipulated under the Market Abuse Regulation (EU) No. 596/2014, as retained as part of the law of England and Wales. Upon the publication of this announcement via the Regulatory Information Service, this inside information is now considered to be in the public domain.

 

 

Press Release

 

30 September 2021

 

 

NFT Investments PLC

 

("NFT Investments" or "The Company")

 

Interim results

 

 

NFT Investments PLC, (AQSE: NFT), an investment company specialising in non-fungible tokens ("NFTs"), announces its unaudited financial results for the six months ended 30 June 2021.

 

 

Highlights:

 

·    Successfully completed an IPO on London's AQSE Growth Market (AQSE) on 16th April 2021, raising £35m before expenses

·    Filed an application with OTC Markets Group for the Company's shares to be cross-traded publicly on the OTCQB Venture Market in the US

·    Invested US$1m in AEON International, a leading developer of cutting-edge technology for the luxury fashion industry

·    Became the first company worldwide to pay the salaries and bonuses of its Board and management team entirely in cryptocurrency

 

Post-period highlights:

 

·    Invested US$0.7m into Blimp Technologies Inc., a first-of-its-kind, decentralised real estate collaboration and search platform, bringing the total invested to date to US$1,700,000 

·    Net cash of £29.3m as at 30 June 2021

 

Outlook:

 

·    The dealflow of potential investments remains strong and the Directors and Advisers continue to evaluate a significant number of exciting new opportunities.

·    The Company is well positioned to take advantage of the recent correction in the blockchain and digital assets sectors by investing at attractive valuations.

 

Commenting on the results, Jonathan Bixby, Executive Chairman of NFT Investments, said: "I am very pleased with our successful flotation on the AQSE Growth Market which provided NFT Investment with the capital and credibility to be an early investor in the rapidly growing global market of NFTs.

"We have already made two investments and continue to actively pursue a range of exciting new opportunities that meet our investment criteria and due diligence process. While the NFT and digital assets sector has recently seen a volatile investment environment, the Board's prudent and highly selective strategy has put NFT in a strong position to deploy capital for generating long term and sustainable returns for shareholders. The NFT market is in the very early stages of its growth and the Company looks to the future with great confidence."

 

The Directors of NFT Investments accept responsibility for this announcement.

For further information please contact:

NFT Investments

 

Jonathan Bixby

Executive Chairman

Neil Thapar

Investor Relations

via Tancredi +44 207 887 7633

 

 

+44 7876 455 323

First Sentinel

 

Corporate Adviser

Brian Stockbridge

 

+44 7876 888 011

Tennyson Securities


Corporate Broker

Peter Krens

+44 207 186 9030

Novum Securities


Corporate Broker

Colin Rowbury

Jon Belliss

+44 207 399 9427

Tancredi Intelligent Communication

Media Relations

 

Salamander Davoudi

Helen Humphrey

Edward Daly

nftinvestments@tancredigroup.com

+44 7957 549 906

+44 7449 226 720

+44 7861 430 057

 

 

About NFT Investments:

NFT Investments PLC is an investment company specialising in non-fungible tokens ("NFTs") and is the first ever NFT vehicle to list in a major jurisdiction worldwide. The Company invests in a diversified portfolio of NFTs, cryptocurrency, and/or in companies or funds which have exposure to NFT or blockchain technology. The Company's leadership team have an extensive track record in the cryptocurrency sector and previously founded Argo Blockchain PLC, a global crypto miner. NFT Investments is headquartered in London, UK and its shares are listed on the Aquis Exchange Growth Market under the ticker symbol NFT.

https://www.nftinvest.pro/

 

Introduction

 

I am delighted to report the Company's first set of results since its stock market debut on AQSE on 16th April 2021, noting that the six-month period under review covers only two and a half months activity as a quoted plc.

 

During the period the Company raised a total of £35m before expenses at the time of flotation, which was significantly higher than the Company's original plans.

 

There was no revenue during the period as the Company was in start-up phase. Losses amounted to £2.05m (H1 2020: £0.04m) during the first half, reflecting costs relating to the start-up of operations and two separate fund-raising rounds, including the IPO.

 

The Company held cash and cash equivalents of £29.3m as at 30 June 2021, reflecting proceeds from the two fund raisings, including the IPO.

 

During the period to 30 September the Company made two equity investments, described below:

 

·    An investment of US$1,000,000 was made in AEON International, a leading developer of cutting-edge technology for the luxury fashion industry

 

·    An investment of US$700,000 was made into Blimp Technologies Inc., a first-of-its-kind, decentralised real estate collaboration and search platform

 

The market for NFTs is evolving and expanding. We see opportunities for creating and investing in these early-stage companies and our investments into AEON and Blimp are examples of innovative and disruptive businesses being spawned by these new digital technologies.

 

The cryptocurrency market has recently witnessed a highly volatile period during which Bitcoin has seen a significant decline from peak levels. Despite the volatility, I am pleased to report that NFT Investments has navigated this turbulent period successfully by making money in a challenging environment. The NFT market has a great future ahead and is here to stay. We need to invest wisely in order to generate long-term value for shareholders and I am cautiously excited about the future.

 

I would also like to take this opportunity to thank all our shareholders for their support.

 

Jonathan Bixby, Executive Chairman

 

Investment Strategy

 

The Company's objective is to generate capital growth over the long term through a portfolio of NFTs held in a secure and transparent way. The Board expects to be able to substantially develop its business within 12 months from Admission. NFT Investments will assemble a portfolio of NFT assets across multiple areas of interest and hold custody of these investments. In most cases the proposed investments to be made by the Company will be in NFTs directly and/or investing in companies or funds which have exposure to NFTs or blockchain technology.

 

The Company also benefits from its crypto strategy and having held fiat currency during periods of volatility: the Company reduced its exposure to cryptocurrencies and at the end of the period had zero exposure having made a 5.2% return amounting to US$440,000 on crypto token investments before exiting the market.

 

Market Opportunity

 

The Board considers that there is a sizable potential market for the NFT industry to emerge globally and take market share from the collectibles industry. As well as being scarce, NFT provides a transparent chain of custody between the creator and the holder of the token adding a level of protection to collectible assets.

 

The volume of NFT trade amounts to date to over US$500 million, with US$ 240 million taking place between February and March 2021, and the Board anticipates the continued growth of the NFT market, with NFTs becoming the underlying asset for the whole virtual economy, expanding far beyond just digital art and collectibles. Other areas have already started to grow such as celebrity NFT digital rights, virtual land, video game assets and NFT-backed loans.

 

The market opportunity is to provide a transparent "on ramp" for fiat currency into the NFT market and to provide investors a portfolio of vetted NFT investments across multiple sub-sectors of the market. The investment 13 opportunity reduces the friction of investing in a single NFT and of getting fiat currency into crypto as well as providing custody of the asset.

 

 

Post-period highlights

 

A further investment was made in the second half of the year, taking the portfolio to two, at a total cost of $US1,700,000 to date. The new position was:

 

·    An investment of US$0.7m into Blimp Technologies Inc., a first-of-its-kind, decentralised real estate collaboration and search platform 

 

Outlook

 

Following NFT Investments' record-breaking £35m fundraising on AQSE, the Company has significant capital to deploy into the market.

 

The NFT industry is growing rapidly, and the Company sees significant opportunities to create value for investors as the Company believes that the NFT opportunity is the first example of blockchain monetising at scale and that NFTs are the future of digital ownership and commerce.

 

The Board remains confident in the ability of the Company's directors and advisory board to identify a strong portfolio of investment targets and investee companies. The Company's directors and advisory board have an established track record, experience across the crypto currency sector, digital assets management and decentralised finance, as well as the media industry, which NFT Investments is leveraging to drive value creation.

 

Notwithstanding the volatility in the trading conditions in the cryptocurrency markets since the Company's flotation, excellent progress is being made to execute on the investment strategy and the Directors continue to evaluate a significant number of exciting new investment opportunities.

 

The Board will continue to appraise potential opportunities as they arise and where they are deemed to meet NFT's due diligence and investment criteria, in line with NFT Investments' cautious investment policy. The Company's prudent approach to investments, and low running costs enables it to be highly selective in the opportunities it backs. In addition, it benefits from considerable fire power and a cash-rich balance sheet, which is further enhanced by NFT Investments being one of the largest players in the space, thereby generating a steady deal flow globally.

 

As a result, the Company is well positioned to take advantage of the recent correction in the blockchain and digital assets sectors by investing at attractive valuations when investment conditions stabilise.

 

 

 

 

 

Income Statement

for the Period 1 January 2021 to 30 June 2021

 



Unaudited

Audited



Period

Period



1.1.21

3.3.20



to

to



30.6.21

31.12.20


Notes

£

£





TURNOVER


-

-





Administrative expenses


(2,371,498)

(39,705)



(2,371,498)

(39,705)





Currency exchange gains


321,081

-

OPERATING LOSS

5

(2,050,417)

(39,705)





Interest receivable and similar income


53

1



(2,050,364)

(39,704)





Fair Value adjustment

6

(3,770)

-

LOSS BEFORE TAXATION


(2,054,134)

(39,704)





Tax on loss

7

-

-

LOSS FOR THE FINANCIAL PERIOD


(2,054,134)

(39,704)





OTHER COMPREHENSIVE INCOME


-

-

TOTAL COMPREHENSIVE INCOME FOR




THE PERIOD


(2,054,134)

(39,704)





Earnings per share expressed




In pence per share:

8



Basic


-0.66

-

 

 

Balance Sheet

30 June 2021

 



Unaudited

Audited



30.6.21

31.12.20


Notes

£

£

£

£

FIXED ASSETS






Investments

9


4,478,670


-







CURRENT ASSETS






Debtors

10

1,400,050


110,200


Cash at bank


29,338,540


55,096




30,738,590


165,296


CREDITORS






Amounts falling due within one year

11

(61,397)


(5,000)








NET CURRENT ASSETS



30,677,193


160,296







TOTAL ASSETS LESS CURRENT LIABILITIES


35,155,863


160,296







CAPITAL AND RESERVES






Called up share capital

12


1,003,000


110,000

Share premium

13


33,199,823


90,000

Share based payment reserve

13


3,046,878


-

Retained earnings

13


(2,093,838)


(39,704)

SHAREHOLDERS' FUNDS



35,155,863


160,296

 

 

Statement of Changes in Equity

for the Period 1 January 2021 to 30 June 2021

 





Share



Called up



based



Share

Retained

Share

payment

Total


Capital

Earnings

Premium

Reserve

Equity


£

£

£

£

£

Changes in equity






Issue of share capital

110,000

-

90,000

-

200,000

Total comprehensive income

-

(39,704)

-

-

(39,704)







Balance at 31 December 2020

110,000

(39,704)

90,000

-

160,296













Changes in equity






Issue of share capital (net of expenses)

893,000

-

33,109,823

-

34,002,823

Total comprehensive income

-

(2,054,134)

-

-

(2,054,134)

Share based payments

-

-

-

3,046,878

3,046,878







Balance at 30 June 2021

1,003,000

(2,093,838)

33,199,823

3,046,878

35,155,863







 

 

Cash Flow Statement

for the Period 1 January 2021 to 30 June 2021

 



Unaudited


Audited



Period


Period








1.1.21


3.3.20



to


to



30.6.21


31.12.20


Notes

£


£

Cash flows from operating activities





Cash generated from operations

16

(236,992)


(144,905)






Net cash from operating activities


(236,992)


(144,905)






Cash flows from investing activities





Purchase of fixed asset investments


(4,482,440)


-

Interest received


53


1






Net cash from investing activities


(4,482,387)


1






Cash flows from financing activities





Share issue (net of expenses)


34,002,823


200,000






Net cash from financing activities


34,002,823


200,000






Increase in cash and cash equivalents


29,283,444


55,096

Cash and cash equivalents at beginning of





period

17

55,096


-






Cash and cash equivalents at end of period

17

29,338,540


55,096

 

 

Notes to the Financial Statements

for the Period 1 December 2020 to 31 May 2021

 

1.     STATUTORY INFORMATION

NFT Investments PLC is a public limited company, registered in England and Wales. The company registered number and registered office address can be found on the Company Information page.

With effect from 15 March 2021, the name of the company was changed from Streaks Esports PLC to NFT Investments PLC.

 

2.     ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention as modified by the revaluation of certain assets.

 

Foreign currencies

Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result.

 

Interest income

Interest income is recognised in profit or loss using the effective interest method.

 

Fixed asset investments

Fixed asset investments are held at market or fair value.

 

Debtors

Short term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

 

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

 

In the Statement of Cash Flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Company's cash management.

 

Creditors

Short term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

 

Financial instruments

The Company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares.

 

Share based payment transactions

The fair value of services received determined by reference to the fair value of share warrants and options granted under the share warrants and share award scheme of the Company on the grant date is expensed in the year of grant.

 

At the end of each reporting period, the Company revises its estimates of the number of options that are expected ultimately to vest. The impact of the revision of the estimates during the vesting period, if any, is recognised in profit or loss such that cumulative expenses reflect the revised estimate, with a corresponding adjustment to equity. At the time when the share options are exercised, forfeited after the vesting date or are still not exercised at the expiry date, the amount previously recognised will continue to be held in equity.

 

Going concern

The Directors, having made due and careful enquiry, are of the opinion that the Company has adequate working capital to meet its obligations over the assessed period to the end of December 2022. Having raised £33,424,000 net of expenses on 30 June 2021 at the Company's IPO, the Directors have made an informed judgement, at the time of approving the financial statements, that there is a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. As a result, the Directors have adopted the going concern basis of accounting in the preparation of the annual financial statements. The Directors have considered the impact of Covid-19 on the Company, in the context of their operations. At this stage, the Directors do not envisage a long-term impact to the Company resulting from Covid-19, but will continue to monitor the situation.

 

3.     CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported for assets and liabilities as at the balance sheet date and the amounts reported for revenues and expenses during the year.

 

Valuation of investments - Note 9

The Board has reviewed the carrying value of investments at the period end. They have taken into account the underlying investments and post balance sheet events and concluded that the investments should be carried at market or fair value.

 

Share based payments - Note 15

During the year, share based payments were made based on the fees due to certain individuals for services to be performed by them in the future. In calculating these payments, the directors consulted with professional advisers to establish the market rate for these services. In addition to this, the company has also issued warrants and options to directors which have been valued in accordance with the Black Scholes model. Significant estimation and judgement is required by the directors when using the Black Scholes method.

 

4.     EMPLOYEES AND DIRECTORS


Unaudited

Audited


30.6.21

31.12.20


£

£

Wages and salaries

3,000

-




The average number of employees during the period was NIL (2020 - NIL).

 


Unaudited

Audited


30.6.21

31.12.20


£

£

Directors' remuneration

3,000

-

 

 

5.     OPERATING LOSS

The operating loss is stated after (charging)/crediting:


Unaudited

Audited


30.6.21

31.12.20


£

£

Currency exchange gains

321,081

-

Share based payments

(2,109,559)

-

 

6.     FAIR VALUE ADJUSTMENT


Unaudited

Audited


30.6.21

31.12.20


£

£

Investments

(3,770)

-

 

 

7.     TAXATION

Analysis of the tax charge

No liability to UK corporation tax arose for the period ended 30 June 2021 nor for the period ended 31 December 2020.

 

8.     EARNINGS PER SHARE

Basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period.

Reconciliations are set out below.



Unaudited

30.6.21




Weighted




average




number

Per-share


Earnings

of

amount


£

shares

Pence

Basic EPS




Earnings attributable to ordinary shareholders

(2,054,134)

309,820,442

-0.66





 



Audited

1.1.21




Weighted




average




number

Per-share


Earnings

of

amount


£

shares

Pence

Basic EPS




Earnings attributable to ordinary shareholders

(39,704)

-

-





 

IAS 33 requires presentation of diluted EPS when a company could be called upon to issue shares that would decrease earnings per share, or increase the loss per share. For a loss-making company with outstanding share options, the net loss per share would be decreased by the exercise of options. Therefore, as per IAS33:36, the anti-dilutive potential ordinary shares are disregarded in the calculation of diluted EPS.

 

9.     FIXED ASSET INVESTMENTS




Investments




£

COST OR VALUATION




Additions



4,482,440

Revaluations



(3,770)





At 30 June 2021



4,478,670





NET BOOK VALUE




At 30 June 2021



4,478,670

 

Investments comprise:



 

Original cost

Fair value

30.6.21



£

£

AEON International


721,709

721,709

Big Head Club


108,460

108,460

US Dollar Coin


3,615,577

3,615,577

Ethereum


36,694

32,918

Bit Coin


-

6







4,482,440

4,478,670

 

 

10.   DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

 


Unaudited

Audited


30.6.21

31.12.20


£

£

Other debtors

1,346,578

110,200

VAT

53,472

-





1,400,050

110.200

 

 

11.   CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR


Unaudited

Audited


30.6.21

31.12.20


£

£

Trade creditors

41,447

-

Accruals and deferred income

19,950

5,000





61,397

5,000

 

12.   CALLED UP SHARE CAPITAL

Allotted, issued and partly paid:





Number:

Class:

Nominal value

Unaudited

Audited




30.6.21

31.12.20






1,003,000,000

Ordinary

£0.001

1,003,000

110,000

 

On the 1 April 2021, 193,000,000 Ordinary Shares of £0.001 were issued at £0.01 per share.

On the 16 April 2021, a further 700,000,000 Ordinary Shares of £0.001 were issued at £0.05 per share.

 

13.   RESERVES




Share





based



Retained

Share

payment



earnings

premium

reserve

Totals


£

£

£

£






At 1 January 2021

(39,704)

90,000

-

50,296

Deficit for the period

(2,054,134)

-

-

(2,054,134)

Cash share issue (net of expenses)

-

33,109,823

-

33,109,823

Share based payments

-

-

3,046,878

3,046,878






At 30 June 2021

(2,093,838)

33,199,823

3,046,878

34,152,863

 

14.   RELATED PARTY DISCLOSURES

There have been payments made and expenses accrued in the sum of £98,548 (2020: £22,000) to the companies Briarmount Limited, Dark Peak Services Limited, Marallo Holdings Inc (Canada), Toro Consulting Limited (Canada) and Umgawa Ltd.

These payments relate to Director fees of £19,500 (2020: £22,000) to Mr T Le Druillenec, £17,500 to Mr N Lyth, £19,500 to Mr M S Edwards, £38,000 to Mr J F Bixby and £4,548 to Mr J W Hives.

A salary of £3,000 has also been paid to Mr J W Hives.

 

15.   SHARE-BASED PAYMENT TRANSACTIONS

DISCLOSURE OF SHARE WARRANTS SCHEME

Details of the number of share warrants outstanding:


Unaudited

Audited


30.6.21

31.12.20

Outstanding at the start of the period

-

-

Granted during the period

86,240,000

-

Forfeited during the period

-

-

Exercised during the period

-

-

Outstanding at the end of the period

86,240,000

-

Exercisable at the end of the period

86,240,000

-

 

The share warrants outstanding at the end of the period have a weighted average remaining contractual life of 3.1 years.

The fair value of the share warrant rights granted under the scheme are valued using the Black-Scholes option pricing model with the following weighted-average assumptions:


Unaudited

Audited


30.6.21

31.12.20

Risk free rate

0.77%

N/A

Expected life

0.25 to 1.67

N/A

Volatility

113%

N/A




Using the above calculation method, the weighted average fair value of warrants at 30th June 2021 were assessed as £3,046,878.

 

16.   RECONCILIATION OF LOSS BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS



Unaudited

Audited



1.1.21

3.3.20



to

to



30.6.21

31.12.20



£

£

Loss before taxation


(2,054,134)

(39,704)

Decrease in fair value of investments


3,770

-

Share based payments


3,046,878

-

Finance income


(53)

(1)







996,461

(39,705)

Increase in trade and other debtors


(1,289,850)

(110,200)

Increase in trade and other creditors


56,397

5,000





Cash generated from operations


(236,992)

(144,905)

 

17.   CASH AND CASH EQUIVALENTS

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts:

Period ended 3 June 2021

 

 


Unaudited




30.6.21

1.1.21



£

£





Cash and cash equivalents


29,338,540

55,096









Period ended 31 December 2020

 


Audited




31.12.20

3.3.20



£

£





Cash and cash equivalents


55,096

-

 

18.   ANALYSIS OF CHANGES IN NET FUNDS


At 1.1.21

Cash flow

At 30.6.21


£

£

£

Net cash




Cash at bank

55,096

29,283,444

29,338,540





Total

55,096

29,283,444

29,338,540

 

 

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