At the time of the most recent check, shares of NextPlay Technologies Inc. (NASD: NXTP), which had closed the regular session at $0.20, were up 5.00% to $0.21.
What led to a spike in the NXTP stock price?
A loan and security agreement was recently signed by NextPlay Technologies (NXTP) and Savi Capital Partners, a Delaware limited liability company, for a $200,000,000 revolving line of credit facility with a maturity date of May 31, 2027. NextBank International, Inc. (“NextBank”), the international banking division of NextPlay’s fintech division.
By finalizing the credit facility with Savi Capital, NXTP demonstrated its capacity to acquire other sources of funding and gave itself more financial freedom to expand NextBank’s business lines. NXTP is still committed to building its online banking platform, client base, geographic reach, and loan servicing and processing operations. The facility was used by NXTP to carry out its strategic goals.
According to the conditions of the agreement, NextBank may only draw down and utilize the following maximum loan amounts:
- $30,000,000 from November 15, 2022, to December 14, 2022
- $70,000,000 from December 15, 2022, to January 14, 2023.
- $100,000,000 from January 15, 2023, to February 14, 2023.
- $150,000,000 from February 15, 2023, to March 14, 2023.
- between March 15, 2023, and the Maturity of May 31, 2027, up to the total commitment amount of $200,000,000
How will NXTP use the money?
According to the underwriting standards set out by NextBank, money taken out of the revolving line of the credit facility will be utilized to support loans secured by domestic US commercial real estate properties. These loans will increase the bank’s loan portfolio and create interest spread and fee income, which is anticipated to have a positive effect on the bank’s earnings and cash flow.
How will NXTP go with this?
The deposit portfolio at NextBank is expanding significantly, and the company anticipates further expansion in terms of absolute amounts. In the ‘Know Your Customer’ and ‘Anti-Money Laundering’ Compliance Review procedure for onboarding, the Bank has a backlog of corporate deposits. Over the following three quarters, the bank’s portfolio of earning assets should be significantly impacted by this $200 million line of credit and NextBank’s rise in client deposits. By the conclusion of the company’s fiscal 4Q, NXTP plans to have between US $100 million and $150 million in deposits and the US $200 million in credit available, which taken together should lead to an overall profitable business. The fintech branch of NextPlay is aggressively screening potential strategic partners and investors due to this growth and future.
NXTP is most likely to continue growing:
Additionally, NextPlay intends to launch NextBank’s B to C service in the spring of 2023 and to start international marketing for it. The facility will assist NXTP in finding a means to expand its portfolio in this challenging market and better position the business to become profitable.