Victory Square Technologies Inc (CSE:VST, OTCQX:VSQTF) has announced its second quarter financial results, showing its unaudited net asset value (NAV) remaining strong at $89,704,469 at the end of June 2022.
"Despite the choppy markets and gloomy headlines, 2022 has been a year of continued growth and new opportunities for Victory Square" Victory Square CEO Shafin Diamond Tejani said in the results statement.
"Our NAV has remained strong, and we've seen significant growth in our portfolio companies so far this year, including over 500% YOY growth from our wholly-owned subsidiary Hydreight,” he added.
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“We expect this momentum to continue for the rest of the year. The VST team is laser-focused on unlocking value from the existing portfolio, and we've secured strategic non-dilutive capital to build a pipeline of new opportunities," Tejani concluded.
Victory Square has built up a diverse portfolio of more than 25 companies around the world in key sectors of digital health, gaming, Web3, virtual reality/augmented reality, the creator economy and renewables, Tejani said, noting that its high quality deal flow is generated via established relationships with over 80 incubators around the world.
Among its portfolio companies, the company said its wholly-owned subsidiary IV Hydreight entered into a definitive agreement with a deemed transaction value of $22,575,000, of which approximately 78% is attributed to Hydreight and approximately 22% is attributed to Perihelion Capital Ltd (PCL), a capital pool company.
Other notable highlights included:
- GameOn announced a partnership with immersive content pioneer, Tetavi, for a first-of-its-kind NFT music discovery game that allows fans to discover new music, invest in artists/songs, build their own 'record label,' and receive royalties based on streams and charts;
- XR Immersive Tech - Synthesis VR software platform has grown to become the largest VR out-of-home entertainment marketplace for games, educational and training experiences worldwide. Synthesis has over 400 VR arcades globally and a market of over 325 VR games with over 20 million player minutes;
- Hydreight recorded a 518% year-over-year growth in new business partner sign-ups;
- Creator.co saw a 200% growth from the year-ago period;
- Next Decentrum raised $4 million to fund product development and market growth;
- Stardust Solar recorded 100% year-over-year growth;
- FansUnite commenced trading on the Toronto Stock Exchange; and
- Turnium Technology Group began trading on the TSX Venture Exchange on June 22, 2022.
"Victory Square provides investors with a liquid way to invest in early-stage technology and healthcare companies without buying a venture fund that requires accredited investor status or multi-year commitments,” Tejani said. “It also can be purchased by non-accredited investors who are restricted from buying venture funds. It is an excellent way to diversify into early-stage venture" he added.
Strategic loan
Victory Square also announced that it entered into a loan agreement with Ryan Kimel on August 26, 2022, to borrow an aggregate of $2,000,000, which it plans to use for special opportunities and general working capital purposes.
The loan carries the following terms:
- bears interest at 13% per annum payable monthly in advance in cash or marketable securities held by Victory Square calculated and compounded monthly based on a 365 day year basis;
- mature on the two year anniversary of the closing date of the loan; and
- secured against (a) prior to the completion of the qualifying transaction (QT) on the TSX Venture Exchange of PCL with IV Hydreight, certain shares of publicly traded companies currently held by Victory Square; and (b) following the completion of the QT, certain PCL shares to be received by Victory Square in the capital of PCL.
In connection with the loan and subject to the completion of the QT, Victory Square will grant Kimel the right to acquire up to 1,222,222 PCL shares held by the company in connection with the QT at a price of $0.63 per PCL share at any time after four months following the completion of the QT and prior to the maturity date, subject to certain additional conditions.
Victory Square shareholders can join the next Investor Q&A Webinar with CEO Tejani on September 6, 2022, at 4.05pm ET via Zoom by registering here.
Victory Square Technologies builds, acquires and invests in promising start-ups, then provides the senior leadership and resources needed for fast-track growth. Its sweet spot is cutting-edge technology that is shaping the 4th Industrial Revolution.
Contact the author at jon.hopkins@proactiveinvestors.com