NFT Investments PLC Annual results and restoration of trading (7195H)

TIDMNFT

RNS Number : 7195H

NFT Investments PLC

08 April 2022

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

08 April 2022

NFT Investments PLC

("NFT Investments" or "The Company"")

Annual results and restoration of trading

NFT Investments PLC (AQSE: NFT), an incubator specialising in the market for non-fungible tokens ("NFTs"), announces its audited results for the 12 months ended 31 December 2021.

Highlights

 
 --   Raised GBP35m before expenses through a flotation on the 
       Aquis Stock Exchange Growth Market ("AQSE"), a record for 
       AQSE, on 16 April 2021. 
 --   Made seven investments and one exit in early-stage growth 
       technology and media businesses engaged in NFTs and digital 
       assets totalling approximately GBP5.8m. 
 --   A GBP1.73m gain on investment in Kodoku Studios Ltd. ("Kudoku 
       Studios"), an NFT-focused gaming company, following its 
       takeover. 
 --   Established significant positions in the following cryptocurrencies: 
       BNB, Bitcoin, Ether, XBD, FLOW and DOT. 
 --   Filed an application for listing on Canada's NEO Exchange 
       on 8 December 2021. 
 --   Net asset value amounted to GBP34.38m, equivalent to 3.43p 
       per share, as at 31 December 2021 comprising cash and cash 
       equivalents of GBP21.9m and net book value of investments 
       including cryptocurrencies of GBP12.5m. 
 

Update on proposed transaction and restoration of trading

On 24 January 2022, the Company signed a non-binding letter of intent for the proposed acquisition of Pluto Digital PLC ("Pluto Digital") for a consideration of GBP96m to be satisfied in NFT shares, subject to shareholder approval. NFT Investments' shares were suspended from trading pending conclusion of the discussions.

After careful consideration, the Company announces today that it will not proceed with the proposed acquisition of Pluto Digital at this time. The Company will continue to evaluate other opportunities in the NFT sector that it believes will be accretive to shareholder value. NFT Investments' shares will return to trading at 08:00am (BST) today.

Outlook

 
 --   The NFT sector continues to enjoy strong growth as digital 
       assets gain increasing popularity with collectors and investors 
       as a new asset class. 
 --   The Company is well positioned to take advantage of the 
       recent market 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:

"Since listing in April last year, NFT Investments has made considerable progress in implementing its investment strategy. Despite volatile market conditions we secured a stake in seven companies that have high growth potential and are equipped to make an impact on the blockchain sector. At the same, we also took the opportunity to realise significant gains from one investment.

"The NFT sector continues to show strong growth and we have a cash-rich balance sheet to take advantage of new investment opportunities to generate long term value for shareholders and deliver a sustained increase in net asset value, which currently amounts to 3.43p per share."

The Directors of NFT Investments accept responsibility for this announcement.

For further information please contact:

 
 NFT Investments 
 Jonathan Bixby                        via Tancredi [phone] 
  Executive Chairman 
  Neil Thapar 
  Investor Relations                    [phone] 
                                      ------------------------------ 
 First Sentinel 
                                      ------------------------------ 
 Corporate Adviser 
  Brian Stockbridge                    [phone] 
                                      ------------------------------ 
 Tennyson Securities 
                                      ------------------------------ 
 Corporate Broker 
  Peter Krens                          [phone] 
                                      ------------------------------ 
 Novum Securities 
                                      ------------------------------ 
 Corporate Broker 
  Colin Rowbury 
  Jon Belliss                          [phone] 
                                      ------------------------------ 
 Tancredi Intelligent Communication 
  Media Relations 
                                      ------------------------------ 
 Gabriela Amaya Garcia 
  Edward Daly                          [phone] 
  Charlie Hobbs                         [phone] 
  [e-mail]      [phone] 
                                      ------------------------------ 
 

About NFT Investments:

NFT Investments PLC is an incubator specialising in the market for 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 Stock Exchange Growth Market under the ticker symbol NFT. https://www.nftinvest.pro/

Chairman's statement

Introduction

I am delighted to report NFT Investments' first full year results as a publicly listed company since its stock market debut on AQSE on 16 April 2021, noting that the period under review covers approximately nine months activity as a quoted plc.

A total of GBP35m before expenses was raised at the IPO, significantly higher than the Company's original plans, and a record for a new issue on AQSE.

The flotation came at a time of burgeoning global interest in the NFT sector and provided the Company with a strong capital base to invest in and nurture a range of innovative NFT ventures with the purpose of delivering long term capital gains for our investors. These businesses are applying potentially disruptive technologies spawned by the blockchain and digital revolution.

The Company made a commitment to move quickly to invest its funds within the first 12 months of its flotation. We have done as promised. Despite volatile market conditions, the Board and its advisory panel evaluated a wide range of opportunities in accordance with the Company's investment criteria and due diligence process while maintaining a highly selective and prudent policy.

This culminated with seven investments for an outlay of approximately GBP5.8m plus the establishment of a portfolio of cryptocurrencies valued at GBP6.9m at the end of the year. While investing with the aim of generating significant gains over the long term, our investment in Kodoku Studios has already produced 349% gain as a result of its takeover by Pioneer Media Holdings Inc. ("Pioneer Media") in November last year for GBP2.225m in cash and shares.

There was no revenue during the period as the Company was in start-up phase. A loss before tax of GBP2.8m (H1 2020: GBP0.04m) was incurred in the year, reflecting costs related to the valuation of warrants issued, the start-up of the business, two separate fund-raising rounds including the IPO, as well as operational expenses.

The Company also ended the year with a strong and liquid balance sheet with cash and cash equivalents of GBP21.9m as at 31 December 2021. Our robust financial position means that we are well placed to consider new opportunities at attractive valuations.

After careful consideration we have decided to terminate our discussions for the acquisition of Pluto Digital. However, the Company will continue to explore other exciting opportunities to create sustained long-term value for shareholders.

I would like to take this opportunity to thank all our shareholders for their support last year and look forward to updating them on our discussions in due course.

Jonathan Bixby, Executive Chairman

Market opportunity

The NFT market has dramatically increased in both value and popularity in the past year. In January 2021, sales of NFTs on the largest NFT trading platform OpenSea totalled just US$8m. In August 2021 alone, sales reached more than US$3 billion. In January 2022, OpenSea reported that over US$5 billion had been spent on NFTs that month.

Overall, users spent more than US$44 billion on NFT marketplaces and collections in 2021, according to data from Chainalysis, a blockchain data platform. These figures were not just from a few large trades inflating the market, but most transactions were under US$10,000. (Source: Chainanalysis, 2021, Report Preview: The 2021 NFT Market Explained [Updated 1/13/22]).

While the majority of NFT sales were at modest prices, some have sold at values that are comparable with traditional art. For example, in November 2021, Human One by Beeple sold for almost US$30 million. The highest price for an NFT sale ever was reached in December 2021, when Pak's The Merge was bought by a collection of 30,000 investors for a combined value of US$91.8 million.

Operational review

During the period the Company made seven investments, described below:

 
 --   US$1m was invested in AEON International Ltd., a leading 
       developer of cutting-edge technology for the luxury fashion 
       industry. 
 --   US$0.7m was invested into Blimp Technologies Inc., a first-of-its-kind, 
       decentralised real estate collaboration and search platform, 
       incorporated in Canada. 
 --   CAN$0.1m was invested in Big Whale Labs, a start-up venture 
       which is using Web3.0 technologies to create a decentralised 
       social network platform. 
 --   US$1.4m was invested into Sturdy Exchange, a marketplace 
       to display, collect and trade NFTs created by artists and 
       performers, via Hex Capital Ltd., a venture capital firm 
       that invests in early-stage crypto assets and blockchain 
       companies. 
 --   US$0.25m was invested into Afterparty Inc., a platform for 
       creators to engage with their fans and generate revenues 
       by selling "token-gated" virtual events and sell digital 
       merchandise. 
 --   US$1m was invested in NFT Studios Ltd., a film production 
       company run by Niels Juul, a well-known Hollywood producer, 
       funding movies exclusively through NFTs. 
 --   GBP0.5m invested in Kodoku Studios, an innovative NFT-gaming 
       company for a 25% stake which was subsequently sold in exchange 
       for approximately GBP0.125m cash and a 3% stake in Pioneer 
       Media Holdings Inc., an AQSE-listed company. Based on Pioneer 
       Media's closing share price of 107p dated 31 December 2021, 
       the stake is worth GBP2.14m and has generated a GBP1.73m 
       gain on the Company's investment in Kodoku Studios. 
 

Outlook

The NFT industry is growing rapidly, and the Company sees significant opportunities to create value for investors as the Board 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.

Despite the volatility in trading conditions in the cryptocurrency markets, 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.

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

Statement of Profit or Loss and Other Comprehensive Income

For the year ended 31 December 2021

 
                                                                                Year ended 31.12.21        Period 
                                                                                                           3.3.20 
                                                                                                      to 31.12.20 
                                                                                                GBP           GBP 
Revenue 
Profit on sale of investment                                                              1,602,444             - 
Loss on disposal of crypto assets                                                         (205,580)             - 
Administrative expenses                                                                 (1,220,850)      (39,705) 
Share based payments                                                                    (2,147,242)             - 
                                                                                ------------------- 
Operating loss                                                                          (1,101,378)      (39,705) 
 
Gain on revaluation of investments                                                          208,208             - 
Loss on revaluation of crypto assets                                                    (1,067,146)             - 
Finance income                                                                                  115             1 
 
Loss before tax                                                                         (2,830,051)      (39,704) 
Tax                                                                                               -             - 
(Loss)/profit after taxation                                                            (2,830,051)      (39,704) 
 
Other comprehensive income                                                                        -             - 
 
Total comprehensive income for the year                                                 (2,830,051)      (39,704) 
                                                                                -------------------  ------------ 
 
 
 
Earnings per share attributable to the equity owners of the company (pence): 
Basic loss per share                                                                         (0.38)        (0.04) 
Diluted (loss)/earnings per share                                                            (0.38)        (0.04) 
 
 

The notes contained in the Company's Annual Report form part of these financial statements.

Statement of Financial Position

For the year ended 31 December 2021

 
                                      31.12.21   31.12.20 
                                           GBP        GBP 
Assets 
Non-Current assets 
Intangible assets                    6,917,916          - 
Investments                          5,559,308          - 
                                    12,477,224          - 
                                  ------------  --------- 
Current assets 
Trade and other receivables            125,765    110,200 
Cash and cash equivalents           21,903,724     55,096 
                                    22,029,489    165,296 
                                  ------------  --------- 
 
  Total assets                      34,506,713    165,296 
                                  ============  ========= 
 
  Equity and liabilities 
  Current liabilities 
Trade and other payables               124,427      5,000 
Net current liabilities                124,427      5,000 
                                  ------------  --------- 
 
 
Equity 
Share capital                        1,003,000    110,000 
Share premium                       33,323,133     90,000 
Share based payment reserve          2,925,908          - 
Retained losses                    (2,869,755)   (39,704) 
Total equity                        34,382,286    160,296 
                                  ------------  --------- 
 
Total equity and liabilities        34,506,713    165,296 
                                  ============  ========= 
 

The notes contained in the Company's Annual Report form part of these financial statements.

The financial statements were approved by the Board of Directors on 22 March 2022 and were signed on its behalf by:

Nicholas Lyth

Director

The financial information set out in this announcement does not constitute statutory accounts. This financial information has been extracted from the audited full accounts of the Company for the year ended 31 December 2021. The Company does not declare a dividend for the period.

The full Annual Report of the Company will be available on the Company's website: www.nftinvest.pro . The Company's Annual General Meeting will be convened in due course.

The Directors of the Company accept responsibility for the contents of this announcement.

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April 08, 2022 02:01 ET (06:01 GMT)