Mobile Streams signs major NFT contract with Necaxa FC

10th November 2022

Mobile Streams plc, the AIM quoted mobile content and data intelligence company, is proud to announce it has signed a 5-year contract to be the exclusive provider of NFT trading cards, collectable and other agreed NFT products for Necaxa Football club ("Necaxa").

Founded in 1923 Necaxa are one of Mexico's most popular teams, playing in the top division, Liga MX. They play in the Estadio Victoria in Aguascalientes, Mexico. The NFTs that will be produced are not only designed to deliver significant potential revenue but also to increase fan engagement and participation with the club.

Streams Data, a wholly owned subsidiary of the Company, and Necaxa Football club have entered into a Licence Agreement whereby MOS has been granted a 5-year, global right to use the Necaxa commercial and intellectual property for the purpose of the production, promotion and commercialisation of agreed NFT products (the "Agreement").

Under the terms of the Agreement, the parties have agreed a target revenue figure over the 5 years of the contract of which MOS's potential share is approximately USD 8.8 million. This net figure, which is a target agreed between MOS and Necaxa and not a forecast or guidance as to what will actually be achieved, being the estimated revenue MOS will receive after any revenue-share payments have been made. Revenue from the NFTs will come from both the sale price of the NFT itself and a royalty generated from them each time they are traded in perpetuity, these royalties are typically 5-10% of the sale price.

This announcement further expands and solidifies the MOS "HeroesNFTclub" brand in the Mexican market. The Company is actively engaged in further NFT deals and announcements on these will be made when appropriate.

Non-Fungible Tokens ("NFTs") are digital data stored in a blockchain, a form of distributed ledger. The ownership of an NFT is recorded in the blockchain, and can be transferred by the owner, allowing NFTs to be sold and traded. In effect the Company's products are digital merchandise. An example would be a sports trading card - NFTs produced under this contract are one-of-a-kind trading cards. If you traded it for a different card, you'd have something completely different.

The global NFT market is expected to reach $122 billion in size by 2028, with more than $17 billion in sales in 2021 and $35 Billion expected to be generated this year. The fastest growing sector within this space is the sports NFT market and the Company believes this contract win with a major sports brand demonstrates that the business is now very well positioned within this sector.

MOS will produce a large range of trading card, collectable and other agreed NFTs for Necaxa. NFTs will be sold via a primary marketplace that MOS is creating for the club which can be accessed via the team digital touch points, such as the Necaxa website and social media accounts. Additionally, the NFTs will be sold via MOS's telco contracts globally, its LiveScores sites and Apps and the MOSMetaverse website. They will be marketed not only by the Necaxa site, but also online across the world to fans globally.

Details of the Agreement

Under the terms of the Agreement, the parties have agreed a target revenue figure over the 5 years of the contract, of which MOS's share is approximately USD 8.8 million. This net figure is the estimated revenue MOS will receive after any rev-share payments have been made. The Agreement also requires MOS to make an initial cash payment to Necaxa, which is well covered by the Group's existing cash and cash equivalents, and if certain revenue targets in a year are met then a minimum revenue guarantee would exist for the next year. However, in the context of the revenue that MOS would receive for this to be activated, the Board considers these would be modest and achievable from within the next year's revenue that MOS expects to receive from the contract. The Board further believes that, noting the expected recurring nature of NFT revenues, it estimates that its maximum net exposure, under all but the most extreme worst case commercial assumptions, including the upfront cash fee, would be approximately USD100,000 over the first 3 years of the Agreement. The Agreement contains a 3-year break clause and standard terms for termination.

Furthermore, under the Agreement MOS will issue Necaxa with US$150,000 of Ordinary Shares at the 3 month VWAP prior to the share issue; such issue to proceed once the Directors have adequate shareholder authorities to issue additional shares at a Meeting of Shareholders to be convened in due course.

Mark Epstein, CEO Mobile Streams plc, said:

"We are delighted to have signed this contract. Necaxa are a hugely popular team with a great fan base. It's privilege to be working with such a great club. In additional I would like to thank their management team who have a great vision for the club."

Santiago Tinajero, General Director Necaxa, said:

"We are very pleased to be partnering with Mobile Streams for our NFT's. We look forward to delivering a new generation of digital merchandise to our fans that drive engagement and participation with the team, along with additional revenue for the club. We look forward to a long and successful partnership."