TIDMBLU
RNS Number : 1112E
Blue Star Capital plc
28 June 2023
28 June 2023
Blue Star Capital plc
("Blue Star" or "the Company")
Half-Yearly Results
Half-yearly Results for the six months ended 31 March 2023
Executive Chairman's Statement
I am pleased to report Blue Star's half-yearly results for the
period ended 31 March 2022.
Highlights
-- The Company's two principal investments, representing
approximately 94% o f the portfolio's value, continue to make
steady progress. No new investments were made during the
period.
-- The Company incurred a pre-tax loss for the period of
GBP1,165,942, (H1 2022: loss GBP996,806).
-- The cash position of the Company at 31 March 2023 was
GBP155,563, compared with GBP113,416 as at 31 March 2022. The value
of the portfolio of quoted investments held by the Company at 31
March was approximately GBP147,000.
-- The NAV per share as at 31 March 2023 was 0.2p.
This announcement contains inside information for the purposes
of the UK Market Abuse Regulation.
The Directors of the Company are responsible for the release of
this announcement.
For further information, please contact:
Blue Star Capital plc +44 (0) 777 178 2434
Tony Fabrizi
Cairn Financial Advisers LLP +44 (0) 20 7213 0880
(Nominated Adviser & Broker)
Jo Turner / Liam Murray
About Blue Star
Blue Star is an investing company with a focus on new
technologies. Blue Star's investments include SatoshiPay Limited, a
payments business using blockchain technology; 4 early-stage to
mid-level esports companies, including Dynasty Gaming & Media
Pte. Ltd., whose B2B white label platform is a full-stack gaming
ecosystem; and Sthaler Limited, an identity and payments technology
business which enables a consumer to identify themselves and pay
using just their finger.
Forward looking statement disclaimer
Certain statements made in this announcement are forward-looking
statements. These forward-looking statements are not historical
facts but rather are based on the Company's current expectations,
estimates, and projections about its industry; its beliefs; and
assumptions. Words such as 'anticipates,' 'expects,' 'intends,'
'plans,' 'believes,' 'seeks,' 'estimates,' and similar expressions
are intended to identify forward-looking statements. These
statements are not guarantees of future performance and are subject
to known and unknown risks, uncertainties, and other factors, some
of which are beyond the Company's control, are difficult to
predict, and could cause actual results to differ materially from
those expressed or forecasted in the forward-looking statements.
The Company cautions shareholders and prospective shareholder
holders not to place undue reliance on these forward-looking
statements, which reflect the view of the Company only as of the
date of this announcement. The forward-looking statements made in
this announcement relate only to events as of the date on which the
statements are made. The Company will not undertake any obligation
to release publicly any revisions or updates to these
forward-looking statements to reflect events, circumstances, or
unanticipated events occurring after the date of this announcement
except as required by law or by any appropriate regulatory
authority.
Chairman's Statement
The first half of the year has been one of steady progress for
the Company's two main investments. As previously stated, it is the
Board intention to establish up to date valuations for these two
investments during 2023. A formal sales process has been initiated
by the Board for its stake in SatoshiPay which is expected to
complete by the end of 2023. There is no guarantee this will lead
to an acceptable offer or that the Board will accept an offer.
Below we provide the following portfolio company highlights,
inclusive of updates, for the six-month period ended 31 March 2023
and any subsequent developments.
Dynasty Gaming and Media ("Dynasty")
The Company first invested in Dynasty in October 2019. Over the
intervening period, Dynasty has built a leading esports and gaming
platform . Having successfully built the platform, Dynasty's
business model has, over the last 18 months, evolved from being a
pure SaaS provider to that of an operator where it can fully
benefit from the technology platforms it has developed. Recent
deals have seen it take up ownership rights in the businesses with
which its partnering, as described below.
In October 2022, Dynasty announced that it had signed a
distribution agreement with Indosat Ooredoo Hutchison ("IOH"),
Southeast Asia's second largest telecommunications company, with
almost 100 million subscribers in Indonesia. This agreement sees
Dynasty deliver Web3 Play to Earn ("P2E") games, developed by
Pioneer Media Holdings Inc, to IOH which will actively promote to
their extensive subscriber base. The first P2E title, which has
been localised for the Indonesian gaming market will be launched
imminently . Additional titles are planned to be released during
the second half of 2023.
Dynasty also announced that it has entered into a 50/50 joint
venture in Australia with Lets Play Live ("LPL") in May 2023. The
board understands that LPL is the region's leading esports
tournament organiser and content creator with over 400,000 existing
customers and long-term partnerships with the world's leading games
publishers. The JV launched in Australia in May 2023 and is
understood to be the most significant gaming platform and community
in Australia.
Dynasty is also building close relationships with two of the
Company's other portfolio businesses, Googly Media Holdings
("Googly") and Paidia Gaming ("Paidia"). Googly had a soft beta
launch in May 2023 which proved highly successful. India is a
particularly exciting market, being arguably the fastest growing
gaming market and already the largest mobile gaming market with
500m gamers forecast to grow to 800m gamers within the next 5 years
. Dynasty's partnerships with Googly and Paidia sees it sharing 50%
of all revenue generated . Paidia is a female focused business and
brand based in North America and is performing strongly.
To date, the Company has invested approximately GBP968,000 in
Dynasty. Based on Dynasty's valuation of US$50 million in the last
equity fundraising round, the Company's holding in Dynasty is
valued at approximately US$6.5 million (approximately
GBP5.4million).
Googly and Paidia
The Company owns 0.6% of Googly which on the basis of the most
recent external valuation was worth approximately GBP59,000. The
Company also invested in 2022 and this is currently valued at cost
of approximately GBP59,800.
SatoshiPay
The Company first invested in SatoshiPay in January 2017.
SatoshiPay's mission is to connect the world through instant
payments. To achieve this ambition, SatoshiPay has focused on
building the Pendulum Network Project ("Pendulum") which was
established in June 2021.
Pendulum, a smart-blockchain infrastructure technology company,
aims to decentralize forex and traditional finance, by providing
the missing link between fiat currency and De-Fi ecosystems through
a sophisticated smart contract network.
In the period under review, Pendulum has achieved a number of
key operational milestones. In December 2022 Pendulum completed its
crowdloan as a precursor to it becoming a Polkadot Parachain.
Pendulum's crowd loan was the fastest parachain crowdloan in the
history of the Polkadot ecosystem, demonstrating the strong support
and enthusiasm for Pendulum's integration into the Polkadot
ecosystem.
Pendulum parachain went live on Polkadot mainnet in February
2023 and the corresponding utility token called PEN was listed on
MEXC in March 2023 under the name PULUM (
https://www.mexc.com/de-DE/exchange/PULUM_USDT ).
Finally, earlier this month Pendulum released "Spacewalk", its
blockchain bridge connecting the Stellar and Polkadot networks.
Pendulum described Spacewalk as a trust-minimized bridge that
supports the smooth and seamless transfer of stable assets between
the two ecosystems, allows closer collaboration in the De-Fi sector
and drives synergies between traditional fintech services and the
De-Fi sector.
Pendulum is committed to advancing foreign exchange ("Forex")
trading into the blockchain space to integrate a tranche of the
$6.6 trillion traded daily in Forex markets. It is hoped that the
Spacewalk bridge will serve as critical infrastructure to bring
initial stablecoin liquidity required for Forex trading to Pendulum
and, in turn, to all of Polkadot and Stellar. The nabla.fi team
(formerly known as 0xAmber.com) are about to launch their
novel-design decentralized exchange with oracle-guided pricing and
single-sided liquidity provision for maximum capital efficiency and
attractive FX rates on chain.
As of 31 March 2023, Blue Star has invested approximately
GBP1.9m in SatoshiPay which represents a shareholding of 27.9% of
SatoshiPay's issued share capital, worth GBP4.3m, based on the last
external fund raise in 2019. It is the Board's view that the
valuation of SatoshiPay may have increased significantly since the
last fund raise and it has therefore appointed a specialist firm to
carry out a sales process to ascertain the market value of the
business. There is no guarantee that this will lead to an
acceptable offer and no obligation on the Board or SatoshiPay to
accept any offer but the Board believes this is the only viable way
to independently value its stake in SatoshiPay.
Sthaler
The Company invested in Sthaler in June 2015. Sthaler is an
Identity authentication business FinGo delivers a reliable, fast,
and secure method of identifying an individual at a point of sale
or service to not only personalize and enrich the experience, but
to tackle fraud and financial exclusion. Individuals are anonymous
by default; the ethos of the business is to protect the fundamental
human right to privacy. FinGo uses near infra-red (NIR) light to
illuminate and reveal the hidden pattern of veins within a person's
finger. FinGo encrypts the pattern and then stores it on a server,
cloud or blockchain as an instantly usable anonymous "key" linked
to a digital wallet (an app). The wallet enables a user to add
debit and credit cards or virtually any online account and is
approved to authenticate multiple payment types including payment
cards and real-time payments (bank account-to-account).
During the period under review, Sthaler has built on its
existing partnerships in Australia, Poland, UK and Egypt and
secured further partners and customer opportunities in the
Netherlands, Israel, Ethiopia, Guatemala. Although Sthaler's
technology applies to almost all sectors, the current focus is in
the following sectors: general retail, banking, healthcare and
gambling.
Blue Star invested GBP50,000 in Sthaler and as of 31 March 2023
the Company's holding in Sthaler is valued at approximately
GBP398,000, based on Sthaler's last completed fundraise.
Quoted investments
The Company currently holds 11,951,500 shares in Guild Esports
plc and 62,500 shares in East Side Games Group Inc. These
investments currently have a combined value of approximately
GBP93,762.
Outlook
The Board remains focussed on supporting its current portfolio
businesses with the objective of establishing up to date market
values in the second half of 2023. The Company's two principal
investments continue to achieve significant operational milestones
and the Board remains confident that the portfolio retains
significant potential.
Tony Fabrizi
Executive Chairman
Statement of Comprehensive Income
for the six months ended 31 March 2023
Unaudited Audited
Year ended
Six months ended 31 March 30 September
2023 2022 2022
GBP GBP GBP
Revenue - - -
Loss on disposal of investments (81,491) - (338,836)
Fair value movements in financial instruments designated at fair
value through profit or loss: (730,155) (900,037) (445,223)
(811,646) (900,037) (784,059)
Share based payment (243,248) - -
Administrative expenses (111,626) (100,642) (517,003)
------------- ------------ -------------
Operating loss (1,166,520) (1,000,679) (1,301,062)
Finance income 578 3,873 54
Loss before and after taxation and total comprehensive income for
the period (1,165,942) (996,806) (1,301,008)
------------- ------------ -------------
Loss per ordinary share:
Basic and diluted loss per share (0.02p) (0.02p) (0.03p)
The loss for the period was derived from continuing operations
and is attributable to equity shareholders.
Statement of Financial Position
as at 31 March 2023
Unaudited Audited
Year ended
Six months ended 31 March 30 September
--------------------------- -------------
2023 2022 2022
GBP GBP GBP
Non-current assets
Financial assets at fair value through profit or loss 10,389,061 11,463,552 11,390,278
Convertible loan note - 158,323 -
10,389,061 11,621,875 11,390,278
------------- ------------ -------------
Current assets
Trade and other receivables 16,700 28,243 8,072
Cash and cash equivalents 155,563 113,416 86,575
172,263 141,659 94,647
------------- ------------ -------------
Total assets 10,561,324 11,763,534 11,484,925
------------- ------------ -------------
Current liabilities
Trade and other payables 69,511 44,825 70,418
Total liabilities 69,511 44,825 70,418
------------- ------------ -------------
Net assets 10,491,813 11,718,709 11,414,507
------------- ------------ -------------
Shareholders' equity
Share capital 4,892,774 4,892,774 4,892,774
Share premium account 9,575,072 9,575,072 9,575,072
Other reserves 243,248 - -
Retained earnings (4,219,281) (2,749,137) (3,053,339)
10,491,813 11,718,709 11,414,507
------------- ------------ -------------
Statement of changes in equity
as at 31 March 2023
Share capital Share premium Other reserves Retained earnings Total
-------------- ---------------- ------------------ ------------------ -----------
GBP GBP GBP GBP GBP
Six months ended
31 March 2023
At 1 October 2022 4,892,774 9,575,072 - (3,053,339) 11,414,507
Loss for the period and
total comprehensive
income - - - (1,165,942) (1,165,942)
Share based payment - - 243,248 - 243,248
At 31 March 2023 4,892,774 9,575,072 243,248 (4,219,281) 10,491,813
-------------- ---------------- ------------------ ------------------ -----------
Six months ended
31 March 2022
At 1 October 2021 4,892,774 9,575,072 - (1,752,331) 12,715,515
Loss for the period and
total comprehensive
income - - - (998,806) (998,806)
At 31 March 2022 4,892,774 9,575,072 - (2,749,137) 11,718,709
-------------- ---------------- ------------------ ------------------ -----------
Year ended
30 September 2022
At 1 October 2021 4,892,774 9,575,072 - (1,752,331) 12,715,515
Loss for the year and
total comprehensive
income - - - (1,301,008) (1,301,008)
At 30 September 2022 4,892,774 9,575,072 - (3,053,339) 11,414,507
-------------- ---------------- ------------------ ------------------ -----------
Statement of cash flows
for the six months ended 31 March 2023
Unaudited Audited
Six months ended Year ended
31 March 30 September
2023 2022 2022
GBP GBP GBP
Operating activities
Loss for the period (1,165,942) (996,806) (1,301,008)
Adjustments for:
Finance income (578) (3,873) (54)
Fair value losses 730,155 900,037 445,278
Impairment of convertible loan note - - 150,846
Loss on disposal of investments 81,491 - 338,836
Share based payment 243,248 - -
Working capital adjustments
(Increase)/Decrease in trade and other receivables (8,628) 107,258 127,429
Decrease in trade and other payables (907) (189,317) (163,725)
----------- ---------- -------------
Net cash used in operating activities (121,161) (182,701) (402,398)
----------- ---------- -------------
Investing activities
Proceeds from sale of investments 189,571 - 192,867
Interest received 578 11 -
----------- ---------- -------------
Net cash generated from investing activities 190,149 11 192,867
----------- ---------- -------------
Net cash generated by financing
activities - - -
----------- ---------- -------------
Net increase/(decrease) in
cash and cash equivalents 68,988 (182,690) (209,531)
Cash and cash equivalents at
beginning of the period 86,575 296,106 296,106
----------- ---------- -------------
Cash and cash equivalents at
end of the period 155,563 113,416 86,575
----------- ---------- -------------
Notes to the Interim Financial Statements for the six months
ended 31 March 2023
1. Basis of preparation
The principal accounting policies used for preparing the Interim
Accounts are those the Company expects to apply in its nancial
statements for the year ending 30 September 2023 and are unchanged
from those disclosed in the Company's Report and Financial
Statements for the year ending 30 September 2022.
The nancial information for the six months ended 31 March 2023
and for the six months ended 31 March 2022 have neither been
audited nor reviewed by the Company's auditors.
2. Critical accounting estimates and judgements
The Company makes certain estimates and assumptions regarding
the future. Estimates and judgements are continually evaluated
based on historical experience and other factors, including
expectations of future events that are believed to be reasonable
under the circumstances. In the future, actual experience may di er
from these estimates and assumptions. The estimates and assumptions
that have a signi cant risk of causing a material adjustment to the
carrying amounts of assets and liabilities within the next
financial year are discussed below:
Fair value of financial instruments:
The Company holds investments that have been designated at fair
value through pro t or loss on initial recognition. The Company
determines the fair value of these nancial instruments that are not
quoted, using valuation techniques, contained in the IPEVC
guidelines. These techniques are signi cantly a ected by certain
key assumptions. Other valuation methodologies such as discounted
cash ow analysis assess estimates of future cash ows and it is
important to recognise that in that regard, the derived fair value
estimates cannot always be substantiated by comparison with
independent markets and, in many cases, may not be capable of being
realised immediately.
In certain circumstances, where fair value cannot be readily
established, the Company is required to make judgements over
carrying value impairment, and evaluate the size of any impairment
required.
3. Share based payment
All services received in exchange for the grant of any
share-based remuneration are measured at their fair values. These
are indirectly determined by reference to the fair value of the
share options/warrants awarded. Their value is appraised at the
grant date and excludes the impact of any non-market vesting
conditions (for example, profitability and sales growth
targets).
Share based payments are ultimately recognised as an expense in
the Statement of Comprehensive Income with a corresponding credit
to other reserves in equity, net of deferred tax where applicable.
If vesting periods or other vesting conditions apply, the expense
is allocated over the vesting period, based on the best available
estimate of the number of share options/warrants expected to vest.
Non-market vesting conditions are included in assumptions about the
number of options/warrants that are expected to become exercisable.
Estimates are subsequently revised, if there is any indication that
the number of share options/warrants expected to vest differs from
previous estimates. No adjustment is made to the expense or share
issue cost recognised in prior periods if fewer share options
ultimately are exercised than originally estimated.
Upon exercise of share options, the proceeds received net of any
directly attributable transaction costs up to the nominal value of
the shares issued are allocated to share capital with any excess
being recorded as share premium.
Where share options are cancelled, this is treated as an
acceleration of the vesting period of the options. The amount that
otherwise would have been recognised for services received over the
remainder of the vesting period is recognised immediately within
the Statement of Comprehensive Income.
4. Loss per ordinary share
The calculation of a basic loss per share is based on the loss
for the period attributable to equity holders of the Company and on
the weighted average number of shares in issue during the
period.
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END
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