The IPO market has witnessed muted activity this year, and things don’t seem to have improved in the second half. The upcoming public listing of video game technology firm Ultimax Digital, Inc. has elicited much interest among the investment community since it comes at a time when only a few tech companies are pursuing IPO.
As per documents submitted to the Securities and Exchange Commission, Ultimax intends to offer 2.5 million shares in the range of $4 per share to $5 per share. WestPark Capital, Inc. is the sole underwriter in the offering. The company intends to use proceeds from the offering for general working capital purposes, product development, marketing, and acquisitions. The offering is expected to generate around $10 million.
Nasdaq Listing
Pursuant to the offering, Ultimax’s stock will start trading on the Nasdaq Capital Market under the symbol NFTX later this year. Besides creating a public market for the company’s stock, the initial public offering will increase its capitalization and financial flexibility.
Read management/analysts’ comments on quarterly reports
The Company
Ultimax is a video game publisher and developer of software technologies for the video game industry. It was incorporated as Ultimas in March 2018 and was rechristened to Ultimax Digital, Inc. in July 2021. After pivoting its focus to the publishing of video games a few years ago, the company ventured into the development of a non-fungible token marketplace and technology infrastructure to allow the addition of in-game NFT minting.
Unlike video gaming, NFT is an early-stage industry with nascent markets, business strategies, and revenue models. That means the industry has significant growth potential and that bodes well for Ultimax’s NFT platform and ecosystem.
Risks
The main risks facing Ultimax’s business are the highly competitive market for digital gaming technology, high costs associated with research and development activities, the rapidly evolving market in which technologies become obsolete very quickly, pricing pressure, and the absence of marketable products. Over the past couple of years, the business has been negatively impacted by the pandemic, which is likely to continue putting pressure on the company’s sales, given the slowdown in markets where its customers operate.
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In the six months ended June 2022, Ultimax incurred a net loss of $540,860 or $0.03 per share, compared to a loss of $520,718 or $0.03 per share in the comparable period of last year. The company did not generate any revenue for the period since the business is in the early stages of development.