The Share Price of FFG Tumbled By 7.143% Post The Update On Investment in Epsilon Capital

Financial

On 24 January 2019, Fatfish Blockchain Limited (ASX: FFG), an Australian tech venture investment firm from the diversified financial announced that its Investee, Epsilon Capital received US$1 million investment and it opted out not to continue with the second tranche of investment.

Earlier on 3 May 2018 and 10 July 2018, the company announced its development and investment in Epsilon Capital. As a result, today on 24 January 2019, the company invested US$1 million.

Fatfish Disruptive Ventures Ltd (FDV), which is a subsidiary company of FFG completed its first investment tranche for occupying 5% shares of Epsilon Capital against US$250,000. Earlier also, FDV provided support and services Epsilon Capital against which it received 10% its shares. At present FDV has 15% shares of Epsilon Capital. Epsilon Capital is a fund-of-funds management firm which focuses on providing exposure to the rise of digital assets via a diversified portfolio of digital asset managers. 

The company further announced the Epsilon received another U$1,000,003.47 from the strategic investor.  Explosive Growth Limited (“Explosive Growth”) will receive 33% of the enlarged capital of the Epsilon Capital. Being a strategic shareholder, Explosive Growth Limited will be supporting Epsilon in international marketing and expansion towards its fund-of-funds business. To facilitate this, Explosive Growth holds power to appoint one representative to the board of directors of Epsilon Capital.

Regarding the strategic investment by Explosive Growth, FDV has opted itself out of the second tranche investment of US$250,000 for the 5% equity in Epsilon. After the entry of Explosive Growth and its investment in Epsilon Capital, the existing shareholding of FDV will now be only 10% of the enlarged capital of Epsilon Capital.

The investment from the Explosive Growth will be used as working capital for Epsilon and also to carry its business model. However, Fatfish hopes that in 12- 18 months its shareholding will increase in Epsilon Capital.

The official listing date of FFG on ASX is 23 November 1995 where the company has given a consistently negative performance. FFG’S last one-year performance is -81.58%.

As per the half-year results of FY2018 for the period ended 30 June 2018, the company generated $1,664,095 from the ordinary activities. During the period, the company made a net loss of $24,692,741. The position of balance sheet says that the company is capable of meeting long-term obligations as it holds a net asset base of $23,436,906. A low debt-equity ratio of 0.27 indicates that the company used its resources during the period instead of approaching for external financial support in the form of debt. Based on the position of the current asset and the current liabilities, it can be said that the company might struggle in meeting the working capital and in clearing short-term debt. By the end of the period, Fatfish Blockchain Limited has net cash of $775,462.

With the market open on 24 January 2019, the opening price of the share was A$0.014. It went as high as A$0.015. The lowest price recorded for the day was A$0.013. The closing price of the share was A$0.013 and opening price as at 25 January 2019 is A$0.015 with the stock holding a market capitalization of A$ 7.34 million and a PE ratio of ~0.9x.


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