Ganapati plc - Unaudited Interim Results Six Months Ended 31 July 2019
PR Newswire
London, October 31
31 October 2019
Ganapati Plc
("Ganapati" or "the Company")
Unaudited Interim Results for the Six Months Ended 31 July 2019
Ganapati today announces its unaudited interim results for the six months ended 31 July 2019.
Chairman's Statement
Review of the Six Months Period ended 31 July 2019
Following its early development of software for the social media and consumer markets, Ganapati is continuing this business and over the last three years has expanded into the development and creation of products and services for the iGaming sector. Its online games with multiple popular content utilise its knowledge of Japanese history and culture. Ganapati directors are becoming recognised as pioneers of this global industry. In the six months to 31 July 2019 the Company launched nine new online casino games which are being offered to integrated Operators and available to play on iGaming Operators platforms. The Company now has 25 online casino games
Financial Review
The unaudited results for the six-month period ended 31 July 2019 show a loss of (£9,602,186) (six months to 31 July 2018: (£3,555,475). The loss per share was (30p) (six months to 31 July 2018: (11p). This increase is predominantly due to the increases in labour costs and rents.
Total income was £2,330,813 (six months to 31 July 2018: £2,192,619). Net liabilities at the end of the period under review were £74,250,542 (six months to 31 July 2018: £35,455,955). The increase in Net Liabilities is due to the sales of utility tokens which were issued from GanaEight Coin Limited ("G8C") as part of a pre-sale prior to the authorisation and publication of the 'White Paper'. Until the White Paper is approved by the Malta Financial Services Authority ("MFSA") the token sales are being treated as customer advances in the balance sheet.
The Company continues to issue short-term bonds, which are exclusively purchased by Japanese high-net worth investors. These have a three-year maturity date with an option to renew for a further year. As the early bonds issued come up for renewal, many investors are agreeing an extension of their bonds.
Our wholly-owned subsidiary company, GanaEight Coin Limited, through its fellow subsidiary GPJ Venture Capital LLC, is continuing the Token Pre-sale via an Initial Virtual Financial Asset Offering to fund the development of a blockchain platform and its associated token and wallet. As explained below, the sale of tokens is being shown as a liability in the balance sheet until the authorisation of the G8C 'White Paper' by the Malta Financial Services Authority.
Review of Operations
The Company remains committed to the development of the Mobile Application, BUZZPOP and continues to develop the market for this product in Japan. In the iGaming sector Ganapati are issuing between one and two new games per month and currently has 25 games in circulation. After the conclusion of the period under review the Company announced on the 8 August 2019, that its wholly-owned subsidiary company, Ganapati (Malta) Ltd., had signed an agreement for the supply of its games, and software support to integrated operators. The Company continues to expand its revenue sharing agreements and has achieved multiple agreements with various iGaming Operators during both periods under review. The partnership agreements will allow Ganapati to integrate its content and is made available to online gaming and casino services via market leading gaming aggregation platforms and Operators. Your Directors expect to be able to negotiate further such agreements in due course.
GanaEight Coin Limited
In the Chairman's Statement for the accounts to 31 January 2019 it was stated that 'Application for the GanaEight Coin Limited's ("G8C") Virtual Financial Asset ("VFA") to be admitted to trading on the Distributed Ledger Technology Exchange is expected to be made with the Malta Financial Services Authority ("MFSA") in the third quarter of 2019.
The MFSA has experienced a series of delays but has now started to officially accept applications for registration as VFAs. At the date of this Statement, they have not, as yet, issued any decisions on applications submitted. G8C is expecting to submit within fourth quarter. The Directors continue to develop the final White Paper in preparation for submission to the MSFA. In addition, this work is being reviewed and monitored by Grant Thornton Malta, who are Ganapati's VFA agent in Malta. The Directors are committed to progress the development of the blockchain platform to ensure the G8C Information Security and smart contract blue print framework complies with the ongoing obligations for VFA service providers. The tokens will be used as a payment and utility function for online casino participants on Ganapati's own blockchain platform or via various casino sites.
Board Changes
On 7 February 2019, Mr Yutaka Iwakiri was appointed a director of the Company and has assumed the role of Chief Product Officer. On 31 May 2019, Mr Taku Sawada resigned as a Director of the Company in order to pursue his own business interests. After the end of the period under review, and on 25 September 2019, Juliet Adelstein was appointed a director of the Company and as Chief Operating Officer.
Risk Assessment
Your Directors continue to maintain the strict monitoring of possible risks to a loss in value of the shares of the Company. These include:
- Further delays by the MFSA in approving VFA applications
- Changes in legislation affecting the pre-sale of tokens
- The failure to achieve revenue forecasts for the sale of the Company's products.
Outlook
The Company continues to develop the identity of its iGaming products and is commencing the development of the casino platform which will utilise the G8C tokens. In addition, it continues to promote its products at iGaming events around the world to develop its global presence. The Directors believe that the unique visuality of the products and the heritage of the Japanese culture are key competitive advantages in the sector and are looking forward to the continued development and advancement of the products.
Tony Drury
Chairman
31 October 2019
The directors of GanapatiPlcaccept responsibility for this announcement.
COMPANY CONTACT DETAILS:
Ganapati Plc
Tony Drury
Chairman
Telephone: 07973 737284
NEX EXCHANGE CORPORATE ADVISER:
Alexander David Securities Limited
David Scott -Corporate Finance
James Dewhurst - Corporate Broking
Telephone: +44 (0) 20 7448 9820
http://www.ad-securities.com
49 Queen Victoria Street, London EC4N 4SA
Consolidated Income Statement
For the six months ended 31 July 2019
| Unaudited 6 months ended | Unaudited 6 months ended | Audited year ended | |
| 31 Jul 2019 | 31 Jul 2018 | 31 Jan 2019 | |
| £ | £ | £ | |
| Continuing operations | |||
| Revenue | 2,330,813 | 2,192,619 | 3,175,665 |
| Cost of sales | (44,935) | - | - |
| Gross profit | 2,285,878 | 2,192,619 | 3,175,665 |
| Administrative expenses | (11,510,280) | (5,321,902) | (35,979,740) |
| Other income | 729,137 | 520,438 | 1,147,446 |
| Operating loss | (8,495,265) | (2,608,845) | (31,656,629) |
| Interest income | 16 | 3 | 13 |
| Interest costs | - | (51,221) | (133,901) |
| Loss before income tax | (8,495,249) | (2,660,063) | (31,790,517) |
| Income tax | (1,106,937) | (800,442) | (1,717,869) |
| Loss for the financial period | (9,602,186) | (3,460,505) | (33,508,386) |
| Loss for the financial period attributable to: | |||
| -Owners of the parent company | (9,610,357) | (3,460,505) | (33,521,640) |
| -Non-controlling interests | 8,171 | (94,970) | 13,254 |
| (9,602,186) | (3,555,475) | (33,508,386) | |
| Basic loss per share, pence | (30) p | (11) p | (105) p |
Consolidated Statement of Comprehensive Income
For the six months ended 31 July 2019
| Unaudited 6 months ended | Unaudited 6 months ended | Audited year ended | |
| 31 Jul 2019 | 31 Jul 2018 | 31 Jan 2019 | |
| £ | £ | £ | |
| Loss for the period | (9,602,186) | (3,555,475) | (33,508,386) |
| Other comprehensive income | - | - | - |
| Items that may be subsequently reclassified as profit or loss | |||
| Exchange differences on translation of foreign operations | 162,310 | - | - |
| Total comprehensive loss for the period | (9,439,876) | (3,555,475) | (33,508,386) |
| Attributable to: | |||
| -Owners of the parent company | (9,448,047) | (3,460,505) | (33,521,640) |
| -Non-controlling interests | 8,171 | (94,970) | 13,254 |
| (9,439,876) | (3,555,475) | (33,508,386) |
Consolidated statement of changes in equity
For the six months ended 31 July 2019
| Ordinary share capital | Share premium | Capital reserve | Foreign currency reserve | Retained deficit | Total controlling interest | Non-controlling interest | Total Equity | |
| £ | £ | £ | £ | £ | £ | £ | £ | |
| Balance at 31 January 2018 | 319,926 | 396,526 | - | - | (32,726,027) | (32,009,575) | 109,095 | (31,900,480) |
| Loss and total comprehensive income for the period | - | - | - | - | (33,521,640) | (33,521,640) | 13,254 | (33,508,386) |
| Debt-equity swap | 598,200 | - | - | 598,200 | - | 598,200 | ||
| At Balance at 31 January 2019 | 319,926 | 396,526 | 598,200 | - | (66,247,667) | (64,933,015) | 122,349 | (64,810,666) |
| Loss for the period | - | - | - | - | (9,610,357) | (9,610,357) | 8,171 | (9,602,186) |
| Exchange differences on translation of foreign operations | - | - | - | 162,310 | - | 162,310 | - | 162,310 |
| Total comprehensive income for the period | 162,310 | (9,610,357) | (9,448,047) | 8,171 | (9,439,876) | |||
| At Balance at 31 July 2019 | 319,926 | 396,526 | 598,200 | 162,310 | (75,858,024) | (74,381,062) | 130,520 | (74,250,542) |
Consolidated Balance Sheet
As at 31 July 2019
| Unaudited 6 months ended | Unaudited 6 months ended | Audited year ended | ||
| 31 Jul 2019 | 31 Jul 2018 | 31 Jan 2019 | ||
| Notes | £ | £ | £ | |
| Non-current assets | ||||
| System development | 16,806,807 | 19,154,071 | 12,212,259 | |
| Purchased intangible assets | - | 243,590 | 2,487 | |
| Goodwill | 105,843 | - | 105,843 | |
| Tangible assets | 698,865 | - | 336,536 | |
| 17,611,515 | 19,397,661 | 12,657,125 | ||
| Current assets | ||||
| Debtors | 18,837,982 | 2,947,678 | 3,536,504 | |
| Inventory | 701,802 | - | - | |
| Cash and cash equivalents | 3,151,862 | 2,006,593 | 2,164,905 | |
| 22,691,646 | 4,954,271 | 5,701,409 | ||
| Current liabilities | ||||
| Creditors | (38,344,765) | (3,856,673) | (14,566,073) | |
| (38,344,765) | (3,856,673) | (14,566,073) | ||
| Net current assets | (15,653,119) | 1,097,598 | (8,864,664) | |
| Total assets less current liabilities | 1,958,396 | 20,495,259 | 3,792,461 | |
| Non-current liabilities | ||||
| Loans | (76,208,938) | (55,951,214) | (68,603,127) | |
| (76,208,938) | (55,951,214) | (68,603,127) | ||
| Net assets | (74,250,542) | (35,455,955) | (64,810,666) | |
| Equity | ||||
| Ordinary share capital | 3 | 319,926 | 319,926 | 319,926 |
| Share premium | 396,526 | 396,526 | 396,526 | |
| Capital reserve | 598,200 | - | 598,200 | |
| Foreign currency reserve | 162,310 | - | - | |
| Non-controlling interest | 130,520 | 14,125 | 122,349 | |
| Retained deficit | (75,858,024) | (36,186,532) | (66,247,667) | |
| Total equity | (74,250,542) | (35,455,955) | (64,810,666) |
Consolidated Cash Flow Statement
For the six months ended 31 July 2019
| Unaudited 6 months ended | Unaudited 6 months ended | Audited year ended | ||
| 31 Jul 2019 | 31 Jul 2018 | 31 Jan 2019 | ||
| £ | £ | £ | ||
| OPERATING ACTIVITIES | ||||
| Loss for the period | (9,602,186) | (3,460,505) | (33,508,386) | |
| Adjusted for: | ||||
| Depreciation charge | 29,179 | 12,456 | 48,500 | |
| Amortisation & impairment of intangibles | 1,278,580 | - | 3,090,368 | |
| Finance income | (16) | (3) | (13) | |
| Finance cost | - | 51,221 | 133,901 | |
| Tax charge | 1,106,937 | 800,442 | 1,717,869 | |
| Non-controlling interest | - | (94,970) | - | |
| (7,187,506) | (2,691,359) | (28,517,761) | ||
| Working capital adjustments: | ||||
| Decrease/(increase) in trade and other receivables | -16,003,280 | (379,803) | (968,599) | |
| Increase in trade and other payables | 11,324,710 | 1,062,438 | 5,657,185 | |
| (4,678,570) | (2,008,724) | (4,688,586) | ||
| Taxation paid | - | (812,898) | - | |
| Net Interest paid | - | (51,218) | - | |
| Net cash used in operating activities | (11,866,076) | (2,872,840) | (23,829,175) | |
| INVESTING ACTIVITIES | ||||
| Payments to acquire intangible assets | (4,594,548) | (4,614,805) | (767,619) | |
| Payments to acquire tangible assets | (391,508) | - | (137,189) | |
| Net cash used in investing activities | (4,986,056) | (4,614,805) | (904,808) | |
| FINANCING ACTIVITIES | ||||
| Issue of shares | - | - | - | |
| New loans/ bonds | 5,385,108 | 8,183,008 | 19,997,701 | |
| Customer advances | 12,453,981 | - | 5,589,957 | |
| Net cash generated by financing activities | 17,839,089 | 8,183,008 | 25,587,658 | |
| Increase / (decrease) in cash | 986,957 | 695,363 | 853,675 | |
| Cash at the beginning of the year | 2,164,905 | 1,311,230 | 1,311,230 | |
| Cash at the end of the year | 3,151,862 | 2,006,593 | 2,164,905 |
Summary of significant accounting policies
1. Interim accounts
The financial information set out in this interim report does not constitute statutory accounts as defined in section 434 of the Companies Act 2006. The group's statutory financial statements for the year ended 31 January 2019, prepared under FRS 102, have been filed with the Registrar of Companies. The auditor's report on those financial statements was unqualified and did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.
Copies of the interim report are available to view and download from the Company's website: www.ganapatiplc.com.
2. Accounting policies
The interim financial information has been prepared in accordance with the recognition and measurement principles of FRS 102, including Financial Reporting Standard 104, "Interim Financial Reporting", and on the same basis and using the same accounting policies as used in the financial statements for the year ended 31 January 2019.
The interim financial statements have not been audited or reviewed in accordance with the International Standard on Review Engagement 2410 issued by the Auditing Practices Board.
The financial statements have been prepared on a going concern basis under the historical cost convention. The Directors believe that the going concern basis is appropriate for the preparation of the financial statements as the Company is in a position to meet all its liabilities as they fall due.
3. Share capital
| Share capital | Share premium | |
| £ | £ | |
Allotted, called up and fully paid 31,992,649 ordinary shares of 1p each | 319,926 | 396,526 |
| 319,926 | 396,526 |
4. Loss per share
The basic loss per share is calculated by dividing the loss attributable to equity shareholders by the weighted average number of shares in issue.
| Unaudited 6 months ended | Unaudited 6 months ended | Audited year ended | |
| 31 Jul 2019 | 31 Jul 2018 | 31 Jan 2019 | |
| Weighted average number of shares in the period | 31,992,649 | 31,992,649 | 31,992,649 |
| Total loss attributable to equity shareholders of the Company (£) | (9,610,357) | (3,460,505) | (33,521,640) |
Basic loss per share: | (30) p | (11) p | (105) p |
5. Dividends
No interim dividend will be paid.
