TIDMSEMP
RNS Number : 5776E
Semper Fortis Esports PLC
31 October 2022
31 October 2022
SEMPER FORTIS ESPORTS PLC
("Semper" or the "Company")
HALF-YEARLY RESULTS FOR THE SIX MONTHSED 31 JULY 2022
Semper Fortis Esports PLC (AQSE: SEMP), the esports company
focused on establishing esports teams, Web3 communities and forming
brand technology partnerships , announces its unaudited half-yearly
results for the six months ended 31 July 2022 and provides an
update on post-period events.
FINANCIAL HIGHLIGHTS
-- Revenues of GBP0.05m (H1 2021: nil) were made up of
sponsorship, revenue share on sales from the official Rocket League
esports shop and prize winnings.
-- Loss before tax of GBP0.46m (H1 2021: GBP0.65m) which
included investment in esports teams and play-to-earn guild,
content creation, professional fees, general operating costs and
impairment of NFT values.
-- Cash at bank as of 31 July 2022 GBP0.63m (H1 2021: GBP1.77m).
OPERATIONAL HIGHLIGHTS
-- Secured first commercial sponsor for an amount of GBP10,000 with The Topps Company, Inc.
-- Launched, and subsequently made an impairment on the new
blockchain based play-to-earn gaming division, SMPR Guild.
-- Established an Employee Benefit Trust ("EBT") for the benefit
of current and future employees.
POST PERIOD EVENTS
-- Significantly reduced overheads in the period to an
annualised amount of GBP265,000, choosing not to renew all existing
contracts with previous esports talent associated with the
company.
-- In October 2022, the company sold SMPR player "Archie" for a transfer fee of $35,000.
Jassem Ossieran, Chief Operating Officer, said : " We have
reduced our overheads in this climate whilst we are searching as a
Board for the right strategy in and around the esports and gaming
sector. We have tried a number of approaches but have never over
invested on any single one, which we feel has been more prudent. We
will report back to our stakeholders when the Board has determined
on the right future direction for the Company."
For more information, please contact:
Semper Fortis Esports plc via Square1 Consulting
https://semperfortisesports.com
Jassem Osseiran, Chief Operating Officer
Max Deeley, Finance Director
Hybridan LLP - AQSE Corporate Adviser and Broker https://hybridan.com
+44 203 764 2341
Claire Noyce, Managing Partner, Corporate Finance
Niall Pearson, Head of Corporate Broking & Sales +44 203 764 2343
Square1 Consulting +44 207 929 5599
David Bick +44 7831 381201
Interim Management Report
Overview
During the prior period, the Company had made significant
investment into its esports teams and content creation and enjoyed
success with its Rocket League team.
However, the monetisation of these teams has proved difficult.
This is a key challenge across the esports industry, despite the
growth of participation in the sector.
Therefore, given the current economic uncertainty, the Company
has taken steps to significantly reduce its overheads.
Esports Team
During the period, the Company generated revenues of GBP0.05m
through its Rocket League team. This came from three sources:
sponsorship; revenue share on sales from the official Rocket League
shop and prize winnings.
However, with team costs being considerably higher than these
earnings and with no visibility on significant increases in
revenues in the near future, the decision was made to end all
contracts with esports talent associated with the Company; with a
view to considering an esports strategy with a lower cost base.
This led to the Company selling one of its Rocket League players
("Archie") for a transfer fee $35,000 in October 2022.
Play-to-Earn
In February 2022, the Company launched a new play-to-earn gaming
division known as SMPR Guild, believing it would bring the Company
material revenues.
Play-to-earn is a relatively new category in video gaming where
blockchain based games reward players with tokens which are free to
convert into cryptocurrency and then into fiat currency.
The Company purchased in-game items (non-fungible tokens known
as NFTs) which are characters required to play a game and then
provided access to these to active game players ("scholars") on a
revenue share basis.
The play-to-earn industry revolves around the Cryptocurrency
market which suffered a significant crash in May 2022 with some
stable coins losing 97% of their value. This dramatically reduced
the value of the in-game items and the earning potential of
scholars.
The Company has therefore prudently raised an impairment of
GBP32,650 against the value of the NFTs it owns reducing the values
to zero.
Establishment of Employee Benefit Trust
During the period, the Company established an Employee Benefit
Trust ("EBT") for the benefit of current and future employees.
In March 2022, the EBT acquired all the Ordinary Shares
(41,000,000 Ordinary Shares) and all the Redeemable Preference
Shares (12,587 Redeemable Preference Shares) held by GIMA Group Inc
for a total consideration of GBP56,747. This concluded all matters
relating to the departure of Mr Soltani (the former CEO) who held
his share interests in the Company through GIMA Group Inc.
Board change
On 20 July 2022 Nolan Bushnell stepped down as non-executive
director. The Board would like to thank Nolan for his invaluable
assistance in starting the Semper Fortis Esports business.
Outlook
The Company has significantly reduced its overheads in order to
conserve its cash position. Moving forward, the Company will
continue to focus on opportunities in and around the esports and
gaming sector.
Max Deeley
Finance Director
28 October 2022
INCOME STATEMENT AND STATEMENT OF COMPRENSIVE INCOME
Unaudited Unaudited Audited
Six months ended Six months ended Year
ended
Note 31 July 2022 31 July 2021 31 January 2022
GBP GBP GBP
Revenue 55,824 - 31,629
Operating and administrative expenses 3 (511,629) (651,287) (1,252,966)
---------------- ----------------- ---------------
Loss before income tax (455,805) (651,287) (1,221,367)
Income tax - - -
Loss for the period and total comprehensive loss (455,805) (651,287) (1,221,367)
================ ================= ===============
Earnings per share attributable to equity owners
Basic and diluted earnings per share 4 (0.001) (0.002) (0.003)
---------------- ----------------- ---------------
STATEMENT OF FINANCIAL POSITION
Unaudited Unaudited Audited
As at As at As at
3 1 July 31 July 31 January 2022
2022 2021
Note GBP GBP GBP
ASSETS
Current assets
Other receivables 97,543 73,214 107,622
Cash and cash equivalents 634,502 1 ,770,442 1,328,418
----------- ------------ ----------------
Total assets 73 2,045 1,843,656 1,436,040
=========== ============ ================
EQUITY AND LIABILITIES
Equity attributable to owners
Share capital 5 76,550 76,550 76,550
Share premium 2,487,410 2,562,410 2,487,410
Share based payments reserve 156,327 1,989 155,077
Investment in own shares (56,747) - -
Retained earnings (2,029,978) (1,007,961) (1,574,173)
6 33,562 1,632,988 1,144,864
Current liabilities
Trade and other payables 98,483 210,668 291,176
Total equity and liabilities 7 32,045 1,843,656 1,436,040
=========== ============ ================
STATEMENT OF CHANGES IN EQUITY
Share based
payments reserve
Share Share Retained Investment in
capital premium earnings own shares Total
GBP GBP GBP GBP GBP GBP
At 1 February
2022 7 6,550 2 ,487,410 1 55,077 ( 1,574,173) - 1,144,864
Total
comprehensive
loss for the
period - - - (455,805) - (455,805)
Share based
payment - - 1,250 - - 1,250
Shares owned by
Employee
Benefit Trust - - - - (56,747) (56,747)
--------- ----------- ---------------- ------------- ---------------- ----------
At 31 July 2022 76,550 2,487,410 156,327 (2,029,978) (56,747) 633,562
========= =========== ================ ============= ================ ============
Share Share Share based payments Retained
capital premium reserve earnings Total
GBP GBP GBP GBP GBP
At 1 February 2021 50,500 - - (356,674) (306,174)
Issue of ordinary shares 26,050 2,562,410 - - 2,588,460
Total comprehensive loss
for the year - - - (651,287) (651,287)
Share based payments - - 1,989 1,989
At 31 July 2021 76,550 2,562,410 1,989 (1,007,961) 1,632,988
========= ========== =========================== ============ ============
Share Share Share based payments Retained
capital premium reserve earnings Total
GBP GBP GBP GBP GBP
At 1 February 2021 50,500 - - (356,674) (306,174)
Issue of ordinary shares 26,050 2,562,410 - - 2,588,460
Total comprehensive loss
for the year - - - (1,221,367) (1,221,367)
Share based payments - (75,000) 158,945 - 83,945
Forfeiture of share
options - - (3,868) 3,868 -
At 31 January 2022 76,550 2,487,410 155,077 (1,574,173) 1,144,864
========= ========== ========================== ============ ==============
STATEMENT OF CASH FLOWS
U naudited U naudited A udited
S ix months Y ear
ended Six months ended ended
31 J uly 31 Ju ly 3 1 January
2022 2021 2022
GBP GBP GBP
Cash flows from operating activities
Loss before income tax (455,805) (651,287) (1,221,367)
Adjustments:
S hare based payments 1,250 1,989 83,945
Movement in working capital
Increase in receivables 10,079 (15,869) (50,277)
Increase/(decrease) in payables (192,693) (226,009) (145,501)
----------- ----------------- -----------
Net cash flow from operating activities (637,169) (891,176) (1,333,200)
----------- ----------------- -----------
C ash flows from investing activities
Purchase of own shares ( 56,747) - -
Net cash flows from investing activities ( 56,747) - -
----------- ----------------- -----------
Cash flows from financing activities
Issue of ordinary shares 6 - 2,5 88,460 2,588,460
Net cash flows from financing activities - 2,5 88,460 2,588,460
----------- ----------------- -----------
Net ( decrease)/ increase in cash and cash equivalents (693,916) 1,6 97,284 1,255,260
Cash and cash equivalents at beginning of period 1,328,418 73,158 73,158
Cash and cash equivalents at end of period 634,502 1 ,770,442 1,328,418
=========== ================= ===========
The accounting policies and notes form an integral part of these
financial statements.
NOTES TO THE FINANCIAL INFORMATION
For the six months ended 31 July 2022
1. Basis of preparation
The interim financial information has been prepared in
accordance with International Financial Reporting Standards,
International Accounting Standards and Interpretations
(collectively IFRSs), as adopted by the UK.
The accounts have been prepared in accordance with accounting
policies that are consistent with the Annual Report and Accounts
for the year ended 31 January 2022.
The unaudited results for the six months ended 31 July 2022 do
not constitute statutory accounts for that period under 435 of the
Companies Act 2006. Statutory accounts for the year ended 31
January 2022 have been delivered to the Registrar of Companies.
The auditors' report on the accounts for 31 January 2022 was
unqualified, did not draw attention to any matters by way of
emphasis, and did not contain a statement under 498(2) or 498(3) of
the Companies Act 2006.
2. Changes in significant accounting policies
The accounting policies applied in these interim financial
statements are the same as those applied in the financial
statements as at and for the year ended 31 January 2022.
3. Operating expenses by nature
U naudited Una udited A udited
Six months S ix months Y ear
ended ended ended
3 1 July 31 July 31 January
2022 2021 202 2
Directors' Remuneration 1 25,563 128,963 2 40,313
Professional fees 157,090 3 56,852 5 75,502
Esports team costs 157,727 1 29,456 2 97,757
S hare based payments 1,250 1 ,989 8 3,945
Sundry expenses 69,999 34,027 5 5,479
5 11,629 651,287 1 ,252,996
----------- ------------- ----------
4. Earnings per share
The basic earnings per share is calculated by dividing the loss
attributable to equity shareholders by the weighted average number
of shares in issue.
The loss attributable to equity holders and weighted average
number of ordinary shares for the purposes of calculating diluted
earnings per ordinary share are identical to those used for basic
earnings per ordinary share. The weighted average number of shares
excludes shares held by an Employee Benefit Trust and has been
adjusted for the issue/purchase of shares during the period.
U naudited Una udited A udited
Six months S ix months year
ended ended ended
31 July 31 July
2022 2021 31 January 2022
GBP GBP GBP
Loss for the period attributable to equity holders (GBP) (455,805) (651,287) (1 ,221,367)
Weighted average number of shares in issue 387,637,922 294,077,148 3 55,287,471
Basic and diluted earnings per share (GBP) (0.001) (0.002) (0.003)
============= ============= ===============
5. Share capital
The issued share capital as at 31 July 2022 was 415,499,800 of
GBP0.0001 each ordinary shares (31 July 2021: 415,499,800; 31
January 2022: 415,499,800) and 35,000 of GBP1.00 each redeemable
deferred shares (31 July 2021: 35,000; 31 January 2022:
35,000).
The ordinary shares have full voting, dividend and capital
distribution (including on winding up) rights.
The redeemable deferred shares hold no voting rights or rights
to receive dividends.
In March 2022 an Employee Benefit Trust established by the
Company acquired all the Ordinary Shares (41,000,000 Ordinary
Shares) and all the Redeemable Preference Shares (12,587 Redeemable
Preference Shares) held by GIMA Group Inc for a total consideration
of GBP56,747. This concluded all matters relating to the departure
of Mr Soltani (the former CEO) who held his share interests in the
Company through GIMA Group Inc. This has been included as part of
Other Reserves within equity.
6. Share based payments
On 26 April 2021, the Company granted options over 12,464,994
ordinary shares at an exercise price of GBP0.031 and a vesting
period of 2 to 4 years. One third of the shares subject to options
vest on each of the 2(nd) , 3(rd) and 4(th) anniversaries of
admission to AQSE.
One of the directors has since left the company, resulting in
8,309,996 options lapsing.
At 31 July 2022, 4,154,998 options were outstanding with an
average exercise price of GBP0.031 per share.
The charge for share based payments in the six months ended 31
July 2022 was GBP1,250 (31 July 2021: GBP1,989; 31 January 2022:
GBP83,945).
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