The NFT project wants an IPO – Trustnodes
NFTs may make their first public debut with a little-known company, Ultimax Digital Inc., looking to raise $11 million by offering 2.5 million shares at a price range of $4 to $5, giving it a market capitalization of 83 million dollars.
They had no revenue for either 2020 or 2021, but they have two games. One called Geminose – Animal Popstars, which they describe as “a delightful children’s game for Nintendo Switch”, and another called StoneHold, a free-to-play (F2P), multiplayer (two teams of up to five players each), fantasy game in the genre known as a Multiplayer Online Battle Arena (MOBA).
They launched in 2018, raised $2 million, and are now moving into running an NFT marketplace, providing infrastructure for video game developers to incorporate NFTs into video games.
They call it the Ultimax NFT Marketplace, which has yet to launch as far as we can tell, and they see a problem with the current Sotheby’s-type auctions for NFTs.
“We believe the strategy will produce hit or miss results, leaning heavily towards misses and making it difficult to both predict and sustain revenue.
Instead, we are focusing on introducing digital collectibles to a wider audience, in a way similar to the way concert tickets are sold.”
Their strategy to gain some traction with NFTs is two-part, the project says. Their own games and licensed content.
“Our own games – Geminose and StoneHold – will be rich sources of digital content for the Ultimax NFT Marketplace. This will particularly apply to StoneHold.
As the popularity of both games increases, we plan to create digital trading cards for the game characters to be offered on the Ultimax NFT Marketplace.
Just as importantly, using our proprietary content will allow us to develop case studies to share with other video game developers.”
In addition to licensing, “the initial focus is on well-known pop culture content that fits our NFT trading card model for the Ultimax NFT Marketplace.”
They have no full-time employees, but retain “about” seven consultants, software developers and engineers.
Their operating expenses are about $1 million a year, and they have a deficit of $2.7 million, both due to debt and presumably to pay off the seed.
Make all of this pretty much the Hail Mary you get from an investment perspective, and they’re pretty clear about it, saying that “management and our auditors have concluded that our historical recurring operating losses and volatile operating cash flows raise significant doubt about our ability to continue as a going concern.”
The StoneHold game looks the part though, and if they raise what would effectively be $8 million in cash, they could keep running for a while, and who knows, their NFT trading card might work.
However, this is in a very regulated environment, so no token airdrop to create a community around the game.
The Securities and Exchanges Commission (SEC) has been unwilling to change any of its requirements designed for paper systems where digital tokens as such with pseudo-anonymous owners did not exist.
The token model therefore simply cannot work in this regulated environment, limiting this project to only in-game items, but as NFTs.
It could potentially work if the game is very attractive and competitive in some sort of freemium model, with the NFT nature of the in-game items allowing for secondary markets if the SEC isn’t in a grumpy mood.
Nonetheless, if this initial public offering (IPO) goes ahead, it would be the first highly speculative startup to tap into equity-based capital markets to experiment with in-game NFTs.
