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Coinsilium Group Limited (COIN)
30 September 2020
COINSILIUM GROUP LIMITED
("Coinsilium" or the "Company")
UNAUDITED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE SIX-MONTH PERIOD ENDED 30th JUNE 2020
Coinsilium Group Limited ("Coinsilium" or the "Company"), the Blockchain, DeFi and Crypto Finance venture operator, is pleased to announce its unaudited consolidated interim financial statements for the six months ended 30 June 2020. The period under review was, in the main, one of preparation and transition, paving the way for the Company's transition from an investor in early-stage start-ups to a focused Blockchain, DeFi and Crypto-Finance venture operator, as announced post period on 13 July 2020. Now in its fifth year of operations as a listed company, the Directors remain focused on delivering its vision of creating long term value for shareholders via exposure to a carefully profiled range of high-growth opportunities in the fast evolving blockchain technology sector.
Corporate Highlights:
Commenting, Malcolm Palle, Chairman of Coinsilium said "The Strategic Investment Agreement with IOV Labs and the establishment of the IOV Labs Asia JV represents a transformational event and significant milestone for Coinsilium, laying the foundations for a unique and exciting strategic collaboration between Coinsilium and IOV Labs. The Board believes that this new commercial relationship presents a real opportunity to create meaningful value for shareholders and is particularly significant for the long-term growth of the Company from the perspective of Coinsilium's transition towards its new strategy as a focused Blockchain, DeFi and Crypto-Finance venture operator, as announced post period on 13 July 2020.
"The Board therefore believes that the Company is well positioned to capitalise on new and substantial opportunities in the burgeoning Decentralised Finance (DeFi) and Crypto Finance sector, including the development of products, solutions and services in Crypto Lending, Crypto Staking and Stable Assets, both from within the scope of its joint venture with IOV and also from Coinsilium's operational base in Gibraltar, which is fast becoming a pre-eminent global regulatory jurisdiction for innovative financial technology, and where Coinsilium's core operations are now well established. "Finally, the Board would like to once again thank all shareholders, partners and team members for their continued support and we look forward to providing the market with regular progress updates at this exciting and transformational time for the Company."
Financial Highlights:
For further information, please contact:
Outlook
The Covid19 Pandemic declared on 11 March 2020 has entirely changed the global economic landscape, affecting billions of individuals and millions of companies around the world and triggering a crash in both the financial and crypto markets. Despite the major repercussions we continue to see in the real economy, the crypto markets staged a fast recovery from their March lows and have since continued to demonstrate a significant degree of strength and resilience.
The social distancing measures and travel disruptions around the world have highlighted our reliance on technology and have triggered a wave of digitisation processes amongst SMEs, Corporates and the Governments of the world. This digitisation has increased awareness and interest in cryptocurrencies (currencies whose operation does not rely on a physical artifact) and blockchain technology which minimises trust for small and large exchanges of value or data via the internet.
This renewed interest in cryptocurrencies, both as an inflation hedge as well as a speculative asset, is set against a backdrop of a multi-trillion dollar money printing policy in the US and the innovation we are witnessing in the decentralised finance (DeFi) and Crypto Finance space.
The Company is now seeing some exciting opportunities in the DeFi sector and Management looks forward to unveiling some exciting new projects during the final quarter of 2020 and going forwards into 2021. Given the current pace of development and burgeoning pace of growth in Decentralised Finance and Crypto Finance, the Board believes that Coinsilium is well placed to capitalise on a plethora of new opportunities with the potential to generate meaningful revenue streams and growth for Coinsilium in the near to medium term. We therefore look to the future with renewed confidence and enthusiasm at this exciting time in this fast maturing technology sector.
Post Period Highlights:
Significant Developments for Coinsilium's Investment Portfolio Companies:
Blox
In early 2020, Blox unveiled a new branch of their operations, Blox Staking, which is focused on providing decentralised, non-custodial Ethereum 2.0 staking services. As Ethereum's plans to move from a Proof of Work consensus mechanism to a Proof of Stake mechanism, with an announced minimum of 32 ETH (or about USD7,780 at current prices) to be staked by participants to run their own validator nodes, Blox have identified a need to provide custody-free Eth2 staking as a service and plans to roll out this service as soon as Ethereum 2.0 launches its initial go-live phase (phase 0). The Blox team has announced that Blox Beta will be live September 24th. Registered users will be able to test Blox non-custodial platform running on the Medalla testnet. Full product release will follow the ETH 2.0 release, which could occur in November 2020.
Elevate Health
In the first half of 2020 Elevate Health has been reviewing solutions responding to the new health concerns triggered by Covid-19 such as co-morbidities which tend to increase health risks of infected patients.
Factom
In June 2020, the Company announced that it had been notified by the directors of Factom that Factom has filed for reorganisation under Chapter 11 Subchapter V to address structural issues preventing them from raising further capital. Factom advised that Chapter 11 Subchapter V provisions preserve the position of the existing shareholders and structures the means of paying creditors. The directors of Factom expected Factom to emerge from the Chapter 11 reorganisation in 60 to 90 days.
Helperbit Helperbit is an Italian startup that uses blockchain technology to allow people to donate digital and local currencies to charities and to people in need all over the world, trace their donation and how it is used, offering full transparency of economic flows. Helperbit's collaboration with the Red Cross in Italy to finance medical equipment via cryptocurrency donations during the Covid-19 crisis was praised by various Blockchain and Crypto organisations including the Binance Charity Foundation.
Indorse
In early 2020, Indorse launched a new remote performance management tool called Metamorph, allowing its clients to assess the performance of their tech staff remotely through team communication platforms such as Slack. This software-as-a-service (SaaS) solution takes into account the increased number of remote work situations due to Covid-19 social distancing measures and helps engineering managers improve technical delivery and performance by identifying blind spots in their software engineering team.
Indorse and Coinsilium are co-organising 'Post Covid Hack 2020', a global online hackathon bringing together a number of teams to create new open-source solutions to overcome the health, economic, social and privacy challenges of the post-Covid19 era. Official partners of the hackathon which was launched in August 2020 include Gibraltar Finance, IOV Labs and Singapore-based Tribe Accelerator. The Hackathon has received more than 850 registrations so far.
RSK / IOV Labs
In December 2019, Money on Chain introduced the first Bitcoin-collateralised DeFi solution on the RSK blockchain using the Layer 2 Bitcoin RBTC. In March 2020, during the financial and crypto market crash, the Money on Chain platform proved to be one of the most robust decentralized-financial platforms in the crypto environment.
In January 2020, Coinsilium announced that it had entered into a Strategic Investment Agreement ("SIA") and signed a Memorandum of Understanding with IOV Labs, the Gibraltar registered company and parent to RSK. Under the terms of the SIA, IOV Labs completed an investment of GBP250,001 in Coinsilium by way of a private placement, subscribing for 9,434,000 new ordinary shares at 2.65p per share, giving IOV an interest of 6.94% in Coinsilium's issued share capital, making IOV the largest single shareholder in the Company.
In April 2020, Money on Chain announced the release of the 'RIF on Chain' Decentralised Finance ('DeFi') platform backed by RIF tokens and unveiled the three main assets available on the platform: the RIF Dollar ('RDOC'), a RIF-collateralised stablecoin pegged to the US Dollar and guaranteed by a smart contract; the RIFpro ('RPRO'), a token mirroring the RIF token price fluctuations and redistributes a share of the fees generated by the RIF on Chain platform transactions to its holders, and RIFX a leveraged asset for users who wish to gain leveraged exposure to RIF token price changes.
StartupToken StartupToken has been based in Singapore since 2019. In early 2020, StartupToken started working on a new service, a Bitcoin storage and payment card called Census described as 'Census Smart Card and Wallet', an NFC powered smart bitcoin card, storing coins with military grade protection, without compromising convenience and usability, making the experience of buying and storing bitcoin as simple as possible.
Financial Review
In the period under review revenue for the six months ended 30 June 2020 was £140,230 compared to £108,967 for the six months ended 30 June 2019.
The Group generated a profit for the six months ended 30 June 2020 from continuing operations of £26,531 which was compared to a profit of £237,787 for the six months ended 30 June 2019.
The earnings per share was a profit of 0.019 pence for the six months ended 30 June 2020 which was compared to a profit of 0.179 pence per share for the six months ended 30 June 2019.
The financial assets at fair value through profit or loss increased to £1.876m at 30 June 2020 and this compared to £1.78 m at 31 December 2019.
The total other current assets, which is a combination of cryptocurrencies and tokens, amounted to £331,396 at 30 June 2020, which was an increase from £146,974 on 31 December 2019.
Cash and cash equivalents amounted to £129,212 as at 30 June 2020, compared to £235,079 as at 31 December 2019.
The period under review was, in the main, one of preparation and transition, paving the way for the Company's transition from an investor in early-stage start-ups to a focused Blockchain, DeFi and Crypto-Finance venture operator, as announced post period on 13 July 2020.
In summary, given the prevailing market conditions during much of the period under review, the Board is pleased with the Company's profitability and performance during the past six months compared to the full year ended 2019.
Advisory Clients
Kesholabs / Pesabase
The Company started to act as advisors to Kesholabs, a Kenya-based venture builder and development studio, at the end of 2019. Kesholabs' primary focus is in blockchain-driven innovation and decentralised open finance solutions.
Kesholabs was planning to hold the first DeFi conference in Eastern Africa in Q1 2020, however due to the Covid-19 pandemic the conference has now been postponed.
The Kesholabs team have developed a crypto payment and remittance platform called Pesabase which went on to win the first Celo Camp competition. Celo is an organisation backed by Andreessen Horowitz, a renowned US-based Venture Capital fund.
Post period, in August 2020 Kesholabs announced that Pesabase had secured a registration with the Australian regulator, Austrac, for remittance transfers from Australia to Africa.
In a tweet, Pesabase said that it was excited to have successfully registered with Austrac, the Australian government agency and financial intelligence unit of the country and is looking to start rolling out its services. The successful registration grants Pesabase the right to service any Australian and partner with other players within the space, including banks, to offer its services within and outside Australia.
DIRECTORS' STATEMENT
The period under review started on a most positive note with the announcement on 28 January of the signing of a strategic investment agreement with IOV Labs ("IOV"), accompanied by a private placement of GBP250,000 at 2.65p per share, giving IOV an interest of 6.94% in Coinsilium's issued share capital, making IOV the largest single shareholder in the Company. IOV Labs is parent to major blockchain protocol RSK and those who have followed Coinsilium's progress since its IPO in 2016 will be aware that RSK was one of the first investments Coinsilium made as a publicly listed company. Following the completion of its highly successful private token sale in Gibraltar in 2018, RSK has since grown to become a major global blockchain protocol designed and built to enable smart contracts on the Bitcoin network.
In tandem with this Strategic Investment Agreement, the company announced that IOV and Coinsilium had executed a Memorandum of Understanding ('MOU') to establish a Joint Venture Company in Singapore, to promote and commercialise IOV's products, services and technologies and to promote the adoption in the region of the 'RIF' token which powers the ecosystem of solutions developed by IOV and its partners and developers around the world.
The Company was therefore pleased to announce, post period on 8 July, the execution of a JV agreement with IOV on most equitable terms, with each shareholder holding 50% of the total shares in a new Joint Venture Company ("JVC") in Singapore to be financed by way of a loan from IOV Labs to be repaid from the future revenues of the JVC. The JVC has now been established and Eddy Travia, Coinsilium's CEO, has been appointed to the Board of IOV Labs, Asia Pte. Ltd, representing Coinsilium as its Regional Director.
Southeast Asia is one of the world's fastest growing internet economies. Citing Google & Temasek / Bain, e-Conomy SEA 2019, there were more than 360 million internet users in Southeast Asia as of 2019. The Southeast Asia internet economy has hit $100 billion gross merchandise value and is on track to reach $300 billion by 2025. E-commerce, logistics and financial companies need to adapt to this fast growth of digital services and payments - digital payments reached $600 billion gross transaction value in 2019 and are on track to exceed $1 trillion by 2025. This makes Southeast Asia a particularly fertile market for IOV Labs Asia and for the provision of the RIF Enterprise and RIF Open Finance solutions developed by IOV.
The Strategic Investment Agreement with IOV Labs and the establishment of the IOV Labs Asia JV represents a transformational event and significant milestone for Coinsilium, laying the foundations for a unique and exciting strategic collaboration between Coinsilium and IOV Labs. The Board believes that this new commercial relationship presents a real opportunity to create meaningful value for shareholders, and is particularly significant for the long-term growth of the Company from the perspective of Coinsilium's transition towards its new strategy as a focused Blockchain, DeFi and Crypto-Finance venture operator, as announced post period on 13 July 2020.
The Covid-19 Pandemic declared on 11 March 2020 and the coinciding impact it had on the global financial and crypto markets only temporarily impacted the blockchain and cryptocurrency industry as we quickly saw renewed interest from global funds and from large organisations, including Central Banks, in the programmed scarcity of Bitcoin and the multiple benefits of the trust-minimising and immutable attributes of blockchain technology.
Although some of our plans and the projects of some of our portfolio companies have experienced some implementational delays, overall the impact of the crisis on Coinsilium's core business operations has been minimal. Management is well accustomed to working remotely and the entire Coinsilium team has adapted quickly to the new normal. Conferences have now become virtual and over the course of the period under review, Coinsilium successfully organised a number of successful webinar events; showcasing some of the solutions offered by its partner network, its portfolio companies and their partners.
Coinsilium is currently co-organising the largest hackathon the Company has ever been part of. The PostCovidHack is gathering more than 850 developers from around the world and together with co-organiser Indorse, it has enlisted the active support of the Government of Gibraltar, through Gibraltar Finance, RSK and other high profile partners. Full details of the Post Covid Hack can be found at
Towards the end of the period under review in June, and then more prominently post period in July, the market also started to see substantial inflows of new funds into Decentralised Finance (DeFi), igniting a series of innovations, new token listings and crypto platform launches, the likes of which we have not seen since 2018.
The total value of cryptocurrencies deposited as collateral on DeFi platforms increased from $1.0Bn in February 2020 to almost $12.0Bn as of 23 September 2020 and shows no signs of abating. We anticipate that this market trend will continue to accelerate and grow as it provides crypto entrepreneurs with the opportunity to experiment with complex crypto financial models on a large scale as cryptocurrency traders' thirst for these new models seems hard to quench.
The overall cryptocurrency market has materially strengthened in recent months which has provided the Company with the opportunity to exit and swap out of certain token positions into more liquid positions that, in the Directors' view, either offer greater liquidity, stronger future growth potential, or a combination of both.
Post period, on 20 August 2020, the Company released a market update and reported on the USD value of its fully vested cryptocurrency and token treasury, which, excluding cash at bank, stood at USD575,134. In addition, there was a further USD104,560, as valued in at the time, in vesting RIF tokens. Coinsilium's crypto assets are predominantly denominated in highly liquid cryptocurrencies and tokens including BTC, ETH, ICX and RIF.
In summary, it is most encouraging to see how rapidly the cryptocurrency markets have bounced back from the immediate Covid-19 fallout, and as the world comes to terms with the economic impact of this global pandemic, there is a profound realisation in the industry that the current adverse conditions may present an unprecedented opportunity for blockchain powered solutions and in particular for Decentralised Open Crypto-Finance models to come to the fore and demonstrate their unique attributes and commercial use cases. The Board therefore believes that the Company is well positioned to capitalise on new and substantial opportunities in the burgeoning Decentralised Finance (DeFi) and Crypto Finance sector, including the development of products, solutions and services in Crypto Lending, Crypto Staking and Stable Assets, both from within the scope of its joint venture with IOV and also from Coinsilium's operational base in Gibraltar, which is fast becoming a pre-eminent global regulatory jurisdiction for innovative financial technology, and where Coinsilium's core operations are now well established. Finally, the Board would like to once again thank all shareholders, partners and team members for their continued support, and we look forward to providing the market with regular progress updates at this exciting and transformational time for the Company.
Malcolm Palle Executive Chairman
GROUP STATEMENT OF COMPREHENSIVE INCOME FOR THE PERIOD ENDED 30 JUNE 2020
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
CONSOLIDATED STATEMENT OF CASH FLOWS
NOTES TO THE INTERIM FINANCIAL STATEMENTS
1. Basis of Preparation The consolidated interim financial statements should be read in conjunction with the annual financial statements for the year ended 31 December 2019, which have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union. As permitted, the consolidated interim financial statements have not been prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting'.
2. Financial Information The consolidated interim financial statements do not constitute statutory accounts. They have been prepared on a going concern basis in accordance with the recognition and measurement criteria of International Financial Reporting Standards (IFRS) as adopted by the European Union. Except as described below, the accounting policies applied in preparing the interim consolidated financial statements are consistent with those that have been adopted in the Group's 2019 audited financial statements. Statutory financial statements for the year ended 31 December 2019 were approved by the Board of Directors on 30 July 2020. The report of the auditors on those financial statements was unqualified.
Going concern
The Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. For this reason, the Directors continue to adopt the going concern basis in preparing the Financial Statements.
Risks and uncertainties
The key risks that could affect the Group's short and medium term performance, and the factors that mitigate those risks have not substantially changed from those set out in the Group's 2019 Annual Report and Financial Statements, a copy of which is available on the Company's website: . The Group's key financial risks are liquidity, equity securities price risk and foreign exchange movements.
Accounting policies
The preparation of consolidated interim financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the end of the reporting period. Significant items subject to such estimates are set out in note 4 of the Group's 2019 Annual Report and Financial Statements. The nature and amounts of such estimates have not changed significantly during the interim period. The consolidated interim financial statements have been prepared on the historical cost basis, except for the measurement to fair value of certain financial instruments.
Changes in accounting policies and disclosures
There are no new and amended IFRS standards that are effective for the first time for the financial year commencing 1 January 2020 that would be expected to have a material impact on the Group.
The consolidated interim financial statements for the 6 months ended 30 June 2020 and for the 6 months period ended 30 June 2019 have not been reviewed or audited.
3. Directors Remuneration Directors of the Company received total remuneration of £130,000 for the 6 months ended 30 June 2020 (30 June 2019: £130,000).
4. Earnings Per Share Basic earnings per share is calculated by dividing the profit or loss attributable to equity shareholders by the weighted average number of ordinary shares outstanding during the period.
The Company had no dilutive potential shares during any period.
5. Financial Assets at fair value through profit and loss At 30 June 2020, the Company owns unlisted shares in:
6. Dividends The Directors do not recommend the payment of a dividend.
The interim financial statements were approved by the Board of Directors on 30 September 2020.
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| ISIN: | VGG225641015 |
| Category Code: | MSCM |
| TIDM: | COIN |
| Sequence No.: | 85196 |
| EQS News ID: | 1138038 |
| End of Announcement | EQS News Service |
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