27 September 2019
COINSILIUM GROUP LIMITED
("Coinsilium" or the "Company")
UNAUDITED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE SIX MONTH PERIOD ENDED 30 JUNE 2019
Coinsilium Group Limited ("Coinsilium" or the "Company"), the blockchain venture builder and investor that finances and manages the development of early-stage blockchain technology companies, is pleased to announce its unaudited consolidated interim financial statements for the six months ended 30 June 2019.
Now in its fourth year of operations as a listed company, the Directors remains focused on delivering its vision of providing retail investors with exposure to a diverse range of high-quality, carefully profiled opportunities in the fast evolving blockchain technology sector.
Corporate Highlights:
- Wholly owned Gibraltar registered subsidiary, Coinsilium (Gibraltar) Limited, incorporated;
- Advisory services provided in relation to OASISBloc's presale and Initial Exchange Offering ("IEO"); and
- The Times Group, India's largest Media group, agrees investment of up to US$6.5m in Coinsilium Investment portfolio company, Indorse, including an initial investment of US$2m as a convertible note, with a valuation of US$15 million with an option of a further US$4.5m. Investment is being used for Indorse's expansion into India and to build demand for its services through The Times Group's 360-degree media assets in India, which rank among the most popular titles in the country. Based on The Times Group investment at a valuation of USD $15m, the implied value of Coinsilium's 10% shareholding in Indorse is USD $1.5m, representing a 350% uplift in the two years since Coinsilium's initial investment at the pre-seed and seed stage.
Commenting, Malcolm Palle, Chairman of Coinsilium, said: "The period under review was a time of significant transition for Coinsilium, particularly with the relocation of the Company's core operations to Gibraltar, which occurred during the first three months of the year. Despite less than favourable market conditions for the first half of this period, it was pleasing to see that by the close, a sector-wide recovery was well underway, with the industry also regaining much of its previous momentum.
"We are witnessing the blockchain industry's move toward maturity and as such, Coinsilium is proud to be advising, and investing in what we believe are solutions which will unleash the benefits of blockchain technology to society at large. In particular, we believe our work with IOV Labs provides an exciting market opportunity as the RSK blockchain and the RSK Infrastructure network (RIF) will become the backbone of numerous highly useful decentralised applications (dApps) across various sectors.
"Across the Company's investing, venture building and advisory services divisions, we look forward to the future with confidence. Finally, the Board would like to once again thank all shareholders, partners and team members for their continued support."
Financial Highlights:
- Revenue for the period of £108,967 (H1 2018: £1,333,515) - the decrease attributable to the fees generated from Token Advisory Services;
- Profit for the period from continuing operations £237,787 (H1 2018: profit of £554,605);
- Profit per share of £0.002 (H1 2018: profit per share of £0.005);
- Financial assets at fair value at profit or loss of £1.69m at 30 June 2019 (31 December 2018: £1.4m);
- Total other current assets £164,945 at 30 June 2019 (31 December 2018: £251,810); and
- As at 30 June 2019, cash and cash equivalents amounted to £475,340 (31 December 2018: £592,171).
- No dividends were paid or recommended to be paid during the period.
The directors of the Company accept responsibility for the contents of this announcement.
For further information, please contact:
Coinsilium Group Limited
Malcolm Palle, Executive Chairman
Eddy Travia, CEO
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+44 (0) 7785 381 089
www.coinsilium.com
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Peterhouse Capital Limited
Guy Miller / Mark Anwyl
(NEX Exchange Corporate Adviser)
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+44 (0) 207 469 0930
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SI Capital Limited
Nick Emerson
(Broker)
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+44 (0) 1483 413 500
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Yellow Jersey PR
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+44 (0) 20 3004 9512
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Chris Flame / Dominic Barretto
(PR & IR)
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Outlook
We are now seeing a rapid maturation within the industry itself which bodes well for many of our current and proposed new ventures. And as we now look to expand the scope of our global advisory services and venture activities from our Gibraltar base, we are most optimistic that we can now start to develop a sustainable and scalable advisory service offering with the potential to generate reliable recurring revenues, to complement our ongoing token sale advisory services and investment activities.
It is also most encouraging to see the growing pace of mainstream awareness for cryptocurrencies and a greater sense of mainstream acceptance, driven in no small part by the media coverage of the likes of Facebook and their partners with the proposed launch of Libra in 2020.
The Directors are optimistic that this trend of awareness and acceptance is set to continue, and with the relocation of our core activities to Gibraltar now complete, the Company has a solid base from which to build on this momentum and ensure that the business is well positioned to capitalise on the growth opportunities that lie ahead.
Post Period Highlights:
- 1 July 2019 - Annual General Meeting of the Company held at 9.30 a.m. all resolutions were duly passed;
- 11 July 2019 - New Strategic Advisory Agreement (the "Agreement"). Coinsilium (Gibraltar) Limited together with StartupToken Limited have signed an Agreement with IOV Labs Limited to support and promote the RSK Smart Contract Network and RSK Infrastructure Framework blockchain solutions in Singapore and the Southeast Asia enterprise markets;
- 29 July 2019 - Appointment as an Advisor to Jur AG ("Jur"). Jur is a Zug-registered company developing a blockchain-based decentralised legal ecosystem, automating the process of contract creation, execution, enforcement and dispute resolution; and
- 2 September 2019 - Investment portfolio company Indorse Pte. Ltd provided the Company with an Operational Update. Highlights included, Strong growth and robust pipeline of new small and large enterprise clients from India and Singapore. Successful delivery of strategic advertising campaigns, mainly through the Economic Times print and online media channels, leveraging the relationship with The Times Group. Distinct product lines and optimised, scalable revenue model established. Material near term revenues targeted with two Fortune 500 companies amongst initial clients. Featured as a sponsor for the prestigious Economic Times Startup Awards 2019.
Significant Developments for Coinsilium's Investment Portfolio Companies:
Blox
Blox enables users, traders and enterprises to manage and track their cryptocurrency portfolio with pro tools and advanced management features like auto-sync for exchanges and wallets, and daily snapshots of the portfolio balance and activity.
Throughout the first half of 2019, the Blox team has continued to on-board business clients paying a monthly subscription to access Blox professional cryptocurrency portfolio management tools. Blox allows companies access to share the workspace with team members, auditors, CFO, and CPA to include all parties involved in accounts, audits or taxes preparations.
Bundle Network
In January 2019, Bundle Network reported they had strengthened their collaboration with Istanbul-based startup accelerator RDC Smartup. RDC Smartup had been established by software development company RDC Partner. RDC Smartup's co-founder Onder Uysal joined Bundle Network management team in charge of strategy and business development.
In February 2019, Bundle pursued the development of the Beta version of its platform and integrated some of the main cryptocurrency exchanges.
In April 2019, the Bundle Network Head of Strategy and Business Development joined the Draper University programme. Draper University is a Silicon Valley-based school for entrepreneurs founded by Tim Draper.
Elevate Health
During the first half of 2019, Elevate Health has pursued the development of their proprietary mobile application with programmes to track and assess the changes in lifestyle behaviour of users in preparation for the roll out of a comprehensive pilot program in Southeast Asia and Australia.
Programmes developed by Elevate Health include:
Unplug: a proprietary smartphone device management tool to integrate with the Elevate Health App, developed for corporations with the aim of reducing daily screen time use by their employees (Facebook, WhatsApp etc) for non work-related purposes and to prevent loss of productivity and attention associated with these habits. Corporations will reward employees for time spent offline via Unplug.
Soberlink: Elevate Health is working with Soberlink, an FDA-cleared Cellular Device which allows the remote detection of alcohol use and incorporates biometric facial recognition for monitoring an individual's sobriety. Potential use cases include, for example, insurance companies and recovery treatment centres. The hardware device interfaces with the Elevate Health mobile phone application. Rewards will be paid to users via the Elevate Health platform following negative results indication if no alcohol was detected by the device.
Quit: Designed to support users to quit smoking. A small and discreet smart device plugs into Quit and is fingerprint protected. The user wears the 'Smokerlyser' and receives random requests to test the CO level showing a difference in the smoking frequency. The results of the tests are sent and processed automatically by the Elevate Health platform and rewards are paid to the users following negative results indicating a decrease in the smoking frequency.
Coinsilium interest in Elevate Health: 5.0 % of the total equity
Factom
Post period, in August 2019, Factom announced that the Factom Protocol was being leveraged by a new project, the PegNet, that adds payments and store of value utilities to the Factom Protocol. The PegNet is an independent, open source protocol that delivers 30 protocol backed tokens pegged to real world assets such as the U.S. dollar, Euros and other key fiat currencies as well as hard assets, such as gold, and a number of cryptocurrencies. According to Factom, the PegNet should increase liquidity and demand for Factom's tokens. PegNet CPU mining went live in August 2019.
Post period, in September 2019, the U.S. Department of Energy ("DOE") granted circa USD200,000 to Factom to protect the national power grid. According to the DOE, the project seeks to protect the security of millions of devices.
Coinsilium interest in Factom: 1.06 % of the total equity
Indorse
Indorse uses a global network of experts to assess and confirm the abilities, expertise, and achievements of candidates to help companies worldwide find the best tech talent - with an initial focus on the coding sector.
In June 2019, Brand Capital, the strategic investment arm of India's largest media house, The Times Group, agreed to invest up to US$ 6.5m in the Singapore-based skills verification platform Indorse. The investment was to be used for Indorse's expansion into India and to build the demand for its services through The Times Group's 360-degree media assets in India, which rank among the most popular titles in the country. The investment has been structured as a USD $2m convertible note, with a valuation of USD $15 million, with the option of a further tranche of USD $4.5m.
Indorse have already worked with both small and large tech companies in finding suitable talent. Most recently, it conducted a tech recruitment event to assess coding and data science candidates for South-East Asia's biggest ride-hailing firm, Grab, through which they processed 2,500 applications.
Post period, in August 2019, Indorse sponsored the Economic Times Startup Awards 2019 which rewarded noticeable start-ups in India on the back of these start-ups outstanding performance. Malcolm Palle, Executive Chairman, and Eddy Travia, CEO, were representing Coinsilium at the event in Bangalore.
Coinsilium interest in Indorse: 10.0 % of the total equity
RSK / IOV Labs
In February 2019, IOV Labs announced that the RSK blockchain had become the most secure smart contract platform in the world, and the second most secure blockchain behind the Bitcoin blockchain. As reported by the Crypto51 website, which aggregates data from Mine the Coin, CoinMarketCap, and NiceHash, the cost at the time to execute a 51% attack on Bitcoin cost US$ 244,853. By surpassing 45% of the hashing power of the Bitcoin network, an attack on the RSK Smart Contract Network would cost approximately US$ 112,000 per hour. This made RSK one of the most secure and reliable platforms for developers to build their dApps and proved that merge-mining can succeed in securing Bitcoin sidechains.
In April 2019, IOV Labs announced that developers can now launch an RSK Smart Mainnet node on Microsoft's Azure BaaS offering, becoming one of the few public blockchains supported by Microsoft's Blockchain as a Service (BaaS) marketplace. The integration provides a simplified process for setting up an environment that facilitates the development of decentralized applications (dApps) and services supported by the Bitcoin blockchain.
In May 2019, IOV Labs announced it has officially launched the RIF Lumino Network as part of the RSK Infrastructure Framework (RIF OS). RIF OS is a suite of open and decentralized infrastructure protocols that enable faster, easier, and scalable development of distributed blockchain applications built atop the RSK Network.
The RIF Lumino Network, an integral part of the RIF Payments Protocol, provides scalability without compromising long term sustainability. The RIF Lumino Network is similar to the Lightning Network but provides scalability not only for Bitcoin but for every token running on the RSK Network.
The RIF Lumino Network is the second major implementation of RIF OS protocols to be launched on RIF OS since its debut in November 2018.
In May 2019, IOV Labs and Monday Capital announced the launch of the first Blockchain Innovation and Development Studio for Bitcoin, RSK and RIF OS in San Francisco and a global Ecosystem Fund. The Studio will create new developer tools that will streamline the integration of decentralized infrastructure. It will be a space of experimentation that facilitates the creation of next-generation blockchain solutions in partnership with startups and corporations in order to identify real-world problems that blockchain-based products and services can solve.
The Ecosystem Fund, managed by Monday Capital, a strong supporter of the RIF Ecosystem, will focus on supporting projects around the world that would benefit from RSK/RIF OS technology integration through targeted investments of between $100,000 and $1 million. The Ecosystem Fund will work closely with the Studio to ensure holistic support of the projects.
In June 2019, IOV Labs announced a partnership with Swarm, a distributed storage platform and content distribution service, to implement and address the incentivization behaviour of the Swarm network as a whole, including the Ethereum and RSK implementations. As part of the collaboration, they are also jointly developing the first implementation of the concept under RIF Storage services - which will pave the way for a wide array of innovation related to the blockchain storage industry.
RIF Storage is a unified interface and set of libraries to facilitate encrypted and decentralized storage and streaming of information. RIF Storage is meant to allow users to store and share all sensitive data in a secure manner. The accounting and payment system will utilize the RSK sidechain, notably including the recently launched Lumino transaction scaling solution. The RIF Storage beta launch integrated with Swarm on RSK is expected to be launched by the end of Q3 2019.
In June 2019, IOV Labs announced the launch of RIF Name Service Multi-Crypto which allows users to manage all domains from one master dashboard, streamlining ease of use and fostering blockchain technology mass adoption.
A first for the industry, the improved RIF Name Service (RNS) is the only service that supports and manages domains originating from any blockchain. Previously, RNS could only support addresses built on the RSK Network, however, with the new upgrade, domain owners can integrate their domains into the RNS architecture and manage them from one master dashboard, streamlining decentralised domain ownership.
RNS simplifies the blockchain Domain Name System (DNS), by turning traditional blockchain domains that appear as a series of randomised letters and numbers into human-readable form, such as a name or an easily remembered word, greatly reducing complexities and errors while opening up blockchain domain accessibility.
Coinsilium interest in IOV Labs: Coinsilium shareholding of 65,000 series Seed 1 RSK shares was converted to RIF tokens by way of a 'share for token' swap as announced on 19 November 2018. Coinsilium will receive approximately 1,951,846 RIF tokens over the stated vesting period.
Financial Review
In the period under review revenue for the six months ended 30 June 2019 was £108,967 compared to £1,333,515 for the six months ended 30 June 2018. The decrease is attributable to the fees generated from Token Advisory Services.
The Group generated a profit for the six months ended 30 June 2019 from continuing operations of £237,787 which was compared to a profit of £554,605 for the six months ended 30 June 2018.
The earnings per share was a profit of £0.002 for the six months ended 30 June 2019 which was compared to a profit of £0.005 per share for the six months ended 30 June 2018.
The financial assets at fair value through profit or loss increased to £1.69m at 30 June 2019 and this compared to £1.4m at 31 December 2018.
The total other current assets, which is a combination of cryptocurrencies and tokens, amounted to £164,945 at 30 June 2019, which was a decrease from £251,810 on 31 December 2018.
Cash and cash equivalents amounted to £475,340 as at 30 June 2019, compared to £592,171 as at 31 December 2018.
In summary, given the prevailing market conditions during much of the period under review, the Board are pleased with the Company's profitability and performance during the past six months compared to the full year ended 2018.
Corporate
TerraStream Limited
Coinsilium's wholly owned Gibraltar-based subsidiary, TerraStream Limited was established with the aim to facilitate the application of blockchain technology for Token based alternative funding solutions with potential applications across several industry sectors; the initial focus being on the mining and resource extraction industries and precious metals in particular.
From a regulatory perspective, this business model would likely be considered as 'asset backed' lending and in the Company's Strategic Business Update announced 14 January 2019, the Company highlighted the need for greater regulatory clarity before committing further resources towards TerraStream's development. The Directors are now considering a revised development strategy for TerraStream and in light of the recent improvement in market conditions, early stage discussions with potential industry partners have been initiated. In the event of material developments, further announcements will be made in due course.
Flowstone Capital Limited
In October 2018, the company announced the establishment of Flowstone Capital Limited, a 100%-owned private crypto fund registered in Gibraltar. In light of the prevailing market conditions during the period under review, the Directors took the decision to defer seeding and launch of the fund until such time as market conditions improved. Due to the flexible structure the Company has utilised, Flowstone Capital has required minimal funding and management time to maintain. With market conditions improving the Board has been evaluating the necessary requirements for Flowstone's launch. During and post period the Company has received several expressions of interest from parties wishing to collaborate with Flowstone. Further updates will be provided to the market in due course should any of these expressions of interest be pursued. In the meantime, the Board continues to explore alternative models with the aim of maximising shareholder value of Flowstone Capital.
Advisory Clients
OASISBloc
In June 2019, Coinsilium announced its engagement as advisor to Singapore registered OASISValue Pte. Ltd. ("OASISBloc").
OASISBloc, backed by DoubleChain Inc in Korea, is the first blockchainised data platform designed for trading useful data and value in the business world. OASISBloc consists of Oasis Chain and 21 Domain Chains focused on various industries.
OASISBloc aims to build a solid ecosystem by gathering partners from many industry sectors to act as a data marketplace. OASISBloc adds extra value to data through AI and big data analysis. The Domain Chains benefit from OASISBloc's value-added services and market data platform. A token ecosystem, with the OSB token at its core, will provide fair rewards to all participants and contributors.
The Oasis Chain and the Domain Chains will use the innovative ePOA consensus algorithm (equitable Proof of Authority) to ensure that block generations and verifications are conducted by a selected trusted authority. OASISBloc is developed by Korean blockchain studio Doublechain Inc, a Top 10 Blockchain Technology Solution Provider (as ranked by APAC CIO Outlook), and is led by Mr. William Samgu Chun, pioneer entrepreneur and innovator in blockchain technologies.
DIRECTORS' STATEMENT
Coinsilium is now in its fourth year of operations as a listed company and the Directors remain focused on delivering its vision of providing retail investors with exposure to a diverse range of high-quality, extensively profiled opportunities in the fast evolving Blockchain technology sector.
The start of 2019 was very much a continuation of the end of 2018, with the Bitcoin price at the start of the period at US$3,730, marking around an 80% fall from its November 2017 peak of just under US$20,000.
Whilst the Company's focus remains predominantly on the underlying blockchain technology, the prevailing real-time cryptocurrency price-feed still demonstrates a persistent tendency of dictating global market conditions and sentiment in the sector, for better or worse. Consequently, our operations during the first quarter of the period, particularly with regard to our token sale advisory services, were somewhat constrained by less than favourable global market conditions.
By March 2019, the crypto price environment had markedly improved and by June 2019, Bitcoin was once again trading at over US$11,000, marking a 300% rise from the start of the period. With the recovery in cryptocurrency prices, market conditions also started to improve as we saw a resurgence in demand for our token sale advisory services towards the end of the period, with a more pronounced escalation in momentum post period end.
There are many lessons to be learned from our experience as advisors in the token economy space where our activities first commenced in 2017. The initial wave of ICO's or 'token sales', drove a high demand for our services more or less from a standing start and we were fortunate enough to be able to capitalise on this throughout 2017 and much of 2018.
During this time, we have supported blockchain startups such as Indorse and Blox (formally Coindash) through their ICO process, whilst obtaining material equity stakes in those two companies, which are now rapidly developing into highly promising, revenue generative businesses. We have also been contracted for major advisory roles with some of the largest base-layer blockchain protocols such as RSK, ICON, HDAC and Fantom.
Whilst our successful achievements as advisors have helped build a strong global reputation for the Coinsilium brand, our token sale advisory work also presented some material challenges along the way, in terms of scale and sustainability. In addition, there has been an ongoing need to actively manage the wild swings in cryptocurrency prices, which have historically been the main denominator for much of our advisory services revenue.
During the period, we also relocated our advisory services division from London to Gibraltar where we have now established a wholly owned operating subsidiary, Coinsilium (Gibraltar) Limited ('CGL'). Gibraltar remains at the forefront of regulatory innovation in the global blockchain and distributed ledger technology ('DLT') industry with many of the largest crypto exchanges, such as Huobi, LMAX and eToroX creating a presence there under Gibraltar's unique DLT regulatory framework. The jurisdiction is also attracting numerous other fintech businesses including multi-currency digital wallet providers, e-money institutions and innovative payment services providers.
In this regard, the move of our core operations to Gibraltar has presented CGL with a broader opportunity to expand the scope of our commercial activities beyond the original token sale advisory model to now include more strategic advisory services such as education and business support services to the industry, where we are already pursuing some compelling potentially revenue generative venture opportunities, which will complement our token sale advisory work.
An example of this can be seen in the post period announcement of 11 July 2019 where we reported that CGL has joined forces with StartupToken and IOV Labs to accelerate the Southeast Asian adoption of RSK Smart Contract and RSK Infrastructure Framework (RIF OS) Blockchain solutions. RSK was one of Coinsilium's most successful early stage investments and since its successfully completed private token sale, together with the acquisition of RSK by IOV Labs (formerly RIF Labs) as announced on 19 November 2018, RSK has been hard at work building out its infrastructure to support global adoption of the RIF token, which currently sits as the 75th largest crypto currency globally by market cap. With this agreement, we believe that there is now a significant opportunity for Coinsilium to play an even greater role in RSK's future success by providing support and community development services in RSK's targeted regions for adoption, where Coinsilium also has a strong presence, particularly in Southeast Asia.
Another significant highlight during the period was the Company's 19 June 2019 announcement reporting the investment in Indorse by Brand Capital, the strategic investment arm of India's largest media house, The Times Group. The initial investment of USD $2m, via a convertible note, was set at a valuation of USD $15 million, representing an uplift of 350% from Coinsilium's initial investment two years previously. Coinsilium maintains a 10% equity stake in Indorse and was its first investor at the seed stage. It is therefore most gratifying to see its potential now starting to be realised and we fully expect Indorse's rapid growth trajectory to soon be reflected by a material valuation uplift within our portfolio of investments. Shareholders are invited to review the post period Operational update from Indorse announced on 2 September 2019.
Malcolm Palle
Executive Chairman
CONSOLIDATED STATEMENT OF TOTAL
COMPREHENSIVE INCOME
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Note
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6 months to 30 June
2019
Unaudited
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6 months to
30 June
2018
Unaudited
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£
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£
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Revenue from contracts with customers
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108,967
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1,333,515
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Cost of sales
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(55,314)
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(12,423)
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Gross Profit
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53,653
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1,321,092
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Administrative expenses
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(368,560)
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(550,341)
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Reversal of impairment to other current assets
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116,267
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-
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Net fair value gains/(losses) on financial assets at fair value through profit or loss
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440,922
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(216,451)
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Profit/(Loss) before Income Tax
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242,282
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554,301
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Financial Income
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375
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375
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Financial Expenses
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(4,870)
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(71)
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Profit/(Loss) for the Period from Continuing Operations Attributable to Owners of the Parent
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237,787
___________
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554,605
___________
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Other Comprehensive Income
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Change in fair value of other current assets
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-
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(339,815)
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Total Comprehensive Income for the Period, Attributable to Owners of the Parent
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237,787
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214,789
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Earnings per Share
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Basic and diluted earnings per share attributable to equity holders of the Parent
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4
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0.002
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0.005
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