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New listing of DUALITY S.A. on NewConnect

The company DUALITY S.A. was newly listed on NewConnect on 24 September 2020.

DUALITY S.A. is the 376^th company listed on NewConnect and the 11^th new listing on NewConnect in 2020. 

Key information

*at the reference price of PLN 6.32 based on the weighted average price of 47 transactions in shares in the last three months, worth PLN 2.18 million.

The Issuer’s history and core business

The Issuer was founded in December 2012. The founders included: PlayWay S.A., Tomasz Strzałkowski, Piotr Strzałkowski, Michał Szewerniak, Sebastian Woldański, Cezary Oliszewski, Edward Ćwikliński, and Jerzy Ziemiański.

Duality S.A. operates a video gaming business as a producer and publisher of proprietary games and games commissioned by third parties.

As at the date of the Information Document, the Issuer produced and released for publication three proprietary games, including one game in the full version (BarnFinders) and two games in the demo version (Barn Finders: The Pilot and Accident: The Pilot). Its first proprietary PC game, BarnFinders, was released on Steam on 15 June 2020. The game was Steam’s Global Top Seller top three game on the release date. The game production and publication cost was recouped within 72 hours after release. The game sold 70 thousand copies as at 31 August 2020 and was rated on average 82% (very positive) by gamers.

In 2020-2021, the Company is planning to release three proprietary PC games on Steam (Unholy, Accident and Radiance) and one game commissioned by a third party (Tales of Tomorrow: Experiment), which are in production as at the date of the Information Document.

In Q2 2020, 100% of revenue was generated by sales of Barn Finders (PLN 1.6 million).

As at the date of the Information Document, the Issuer’s core team included 11 persons, including 9 persons employed under work contracts and 2 persons affiliated with the company as individuals who carry out economic activities. The team is responsible for the production of Unholy, Barn Finders, and Tales of Tomorrow: Experiment and the pre-production of new games. The Issuer works with third-party teams responsible for the production of Accident and Radiance and for the pre-production of other games.

The Company’s share capital is equal to PLN 400,000 divided into 4,000,000 series A – J shares with a nominal value of PLN 0.1 per share including:

• 1,600,000 series A ordinary bearer shares;
• 560,000 series B ordinary bearer shares;
• 240,000 series C ordinary bearer shares;
• 40,000 series D ordinary bearer shares;
• 60,000 series E ordinary bearer shares;
• 560,000 series F ordinary bearer shares
• 80,000 series G ordinary bearer shares;
• 60,000 series H ordinary bearer shares;
• 300,000 series I ordinary bearer shares;
• 500,000 series J ordinary bearer shares.

Payment for the shares covered by the application:

All of the Issuer’s shares have been paid up with cash. 

Series A, B, C, D, E, F, G, H shares were issued on the basis of the Issuer’s founding deed in December 2017. The issue price of series A shares, taken up by PlayWay SA, was PLN 6.2 per share; the issue price of series B-H shares, taken up by the other founders, was PLN 0.1 per share.

The issue price of series I shares, issued under a resolution of 6 December 2018, was PLN 1.2 per share.

Public offering of series J shares

In April 2019, the Issuer carried out the Company’s equity crowdfunding campaign on www.fundedbyme.com. The objective was to raise funding from investors for the Company’s further growth. In total, 500,000 series J shares were offered in the public offering of series J shares at a price of PLN 3.75 per share. 61 investors took part in the offering.

Series J shares were issued in a private subscription by way of a public offering pursuant to Article 7(8a) of the Public Offering Act in the wording effective at April 2019 (offering up to EUR 1 million). During the offering, the Issuer published on its website a document providing the key information about the issuer of securities and the terms and conditions of the offering, which was not required to be approved by the Polish Financial Supervision Authority.

The Company raised PLN 1,875,000 in the public offering.

The Issuer’s selected financials:

The Issuer’s revenue reported in 2018 and 2019 included mainly changes in inventory while the Issuer generated fractional sales revenue. In H1 2020, the Issuer generated revenues from the sale of its first game. The auditor who audited the Company’s 2019 financial statements issued an unqualified opinion. In the information document, the Issuer warranted that it has sufficient working capital to cover its needs within 12 months after the date of the Information Document.

The Company’s shareholders

• PlayWay SA – 438,043 shares representing 10.95% of the capital and votes;
• Tomasz Strzałkowski – 435,000 shares representing 10.88% of the capital and votes;
• Cezary Oliszewski – 399,600 shares representing 9.99% of the capital and votes;
• Jakub Trzebiński– 212,000 shares representing 5.3% of the capital and votes;
• Other  – 2,515,357 shares representing 62.88% of the capital and votes;

Lock-up agreements

The Issuer’s shareholders: PlayWay S.A., Mr Tomasz Strzałkowski, Mr Cezary Oliszewski, Mr Jakub Trzebiński, Mr Piotr Strzałkowski, Pronet Group sp. z o.o. and 11 natural persons (each holding less than 5.00% of votes in the Company) and 1 legal person (each holding less than 5.00% of votes in the Company) committed themselves to respect share sale restrictions within 12 to 18 months after the first day of trading of the Company’s financial instruments on NewConnect. The lock-up agreements cover in aggregate 2,309,081 shares which represent 57.73% of the Issuer’s share capital.

Transactions in the Issuer’s shares

There were 114 transactions in the Issuer’s shares in the last 12 months at prices ranging from PLN 1 to PLN 9 per share; the prices of transactions concluded in the last 3 months ranged from PLN 4.125 to PLN 9.

Recommended reference price at the first day of trading

The Authorised Adviser and the Market Maker jointly recommended a reference price on the first day of trading at PLN 6.32 equal to the weighted average price of 47 transactions in the Issuer’s shares in the last three months in a total amount of PLN 2.18 million.

Justification of the proposed reference price:

• the scale of the Issuer’s business activity and the current phase of its growth as at the date of the information document are much bigger than the scale of its activity in the period of issue of series J shares, as reflected in particular by the fact the Issuer generated sales revenues in H1 2020;
• the Company produced and released for publication three proprietary games, in particular the PC game Barn Finders on Steam, which was successfully released on Steam in June;
• the Company released two free-of-charge PC games on Steam, Barn Finders: The Pilot and Accident: The Pilot, which were downloaded in 60 thousand copies and 26 thousand copies, respectively, as at 31 July 2020. The Company’s new PC game Accident is scheduled for release of Steam on 15 October 2020.

Financial instruments newly introduced to NewConnect

• 1,600,000 series A ordinary bearer shares;
• 560,000 series B ordinary bearer shares;
• 240,000 series C ordinary bearer shares;
• 40,000 series D ordinary bearer shares;
• 60,000 series E ordinary bearer shares;
• 560,000 series F ordinary bearer shares
• 80,000 series G ordinary bearer shares;
• 60,000 series H ordinary bearer shares;
• 300,000 series I ordinary bearer shares;
• 500,000 series J ordinary bearer shares.

The application covers 100% of all outstanding shares of the Issuer.