News

NextPlay Technologies Reports Fiscal Q3 2022 Record Revenue of $4.2 Million, up 59% Sequentially; Gross Margin Increases to 53.5%

Sunrise, Florida – (NewMediaWire) – January 13, 2022 – 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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