Coinsilium Group Limited (COIN)
Coinsilium Group Limited: Final Results for the years ended 31 December 2019
Dissemination of a Regulatory Announcement that contains inside information according to REGULATION (EU) No 596/2014 (MAR), transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
31 July 2020
COINSILIUM GROUP LIMITED
("Coinsilium" or the "Company")
Final Results for the year ended 31 December 2019
STATEMENT OF THE BOARD OF DIRECTORS
Coinsilium Group Limited, the blockchain venture operator and advisor, is pleased to announce its Final Results for the year ended 31 December 2019.
* Loss for the period includes loss in value of tokens over the period of £257,401
The Directors present their report, together with the Group Financial Statements and Auditor's Report, for the year ended 31 December 2019. The comparative period is the year ended 31 December 2018.
Review of the Year
Coinsilium is now in its fifth year of operations as a listed company and 2019 was a year of transition for the Company with a major focus on positioning the Company in Gibraltar in readiness for a more focused role as an active venture operator in the Decentralised and Crypto Finance space as announced post period on 13 July 2020.
When compared to 2018, the Company's advisory activity was subdued throughout the year in review, reflecting the sharp decrease in token issuance activity via Initial Coin Offerings ('ICOs') and Initial Exchange Offerings ('IEOs') which were the main drivers for the new token offerings during 2018.
Whilst our successful achievements as advisors to some of the most substantial blockchain projects undoubtedly helped the Company to build a strong global reputation and awareness for the Coinsilium brand, token sale advisory work 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 Coinsilium's advisory services revenue.
In anticipation of the impact this reduced activity would have on the Company's revenues, Management proceeded to reduce overhead costs continuously over the course of 2019. Cost reduction measures were broad-based and also included the relocation of the Company's main operations from London to Gibraltar, a jurisdiction which Management believes will be in line and conducive with the Company's next stages of development.
In November 2019, the Company announced a Memorandum of Understanding with Devmons Management Limited, a Gibraltar registered technology management company, to jointly launch a blockchain software and smart contract development studio in Gibraltar, utilising the Company's wholly owned Gibraltar registered subsidiary, TerraStream Limited. Devmons' co-founder Matej Galvanek was appointed as Technology Advisor to TerraStream.
The value of Coinsilium's portfolio of investments appreciated somewhat in 2019, in part reflected by a successful investment round in portfolio company Indorse, which received an investment from Brand Capital, the strategic investment arm of India's largest media house, The Times Group, at a valuation of USD $15m, representing a 350% uplift in the two years since Coinsilium's initial investment at the pre-seed and seed stage. Coinsilium maintains a 10% equity stake of Indorse.
The Company also strengthened its ties with IOV Labs Limited (IOV Labs), a Gibraltar-registered company in which Coinsilium holds a vesting interest of 1,951,846 RIF tokens, through a collaboration agreement in Southeast Asia. This eventually led to a more decisive rapprochement with a Strategic Investment of £250,001 into Coinsilium in tandem with a MoU and the execution of a joint venture agreement, as stated post period.
Post year end
Throughout 2019 the Company strengthened its relationship with global Blockchain Protocol company IOV Labs. This was demonstrated by a strategic investment of GBP250,001 from IOV Labs by way of a private placement in the Company (subscription of 9,434,000 new ordinary shares at 2.65p per share) announced on 28 January 2020. IOV Labs now holds 6.94% of the Company's issued share capital.
This was followed by the execution of a Joint Venture Agreement between the Company and IOV Labs as announced on 8 July 2020. Under the terms of the Joint Venture agreement, IOV Labs and Coinsilium are to establish a Joint Venture Company in Singapore to promote and commercialise IOV Labs' products, services and technologies principally in the Asian markets to corporations, entrepreneurs, governments and NGOs. Each shareholder will hold 50% of the total shares of the JVC at incorporation and the JVC will be financed by IOV Labs by way of a loan to be repaid from the future revenues of the Joint Venture Company.
In January 2020, Coinsilium's wholly owned subsidiary TerraStream Limited, started working on its first development contract for a DeFi-related project in collaboration with Gibraltar registered Devmons. The project was successfully completed and delivered in May 2020 on a revenue share basis between TerraStream and Devmons. There is the potential for further collaboration with Devmons based on a similar revenue share model without the requirement for a formal joint venture agreement as originally envisioned.
In March 2020, Coinsilium's wholly owned subsidiary, Seedcoin Limited ('Seedcoin'), completed the process of its re-domiciliation from the British Virgin Islands to Gibraltar. Seedcoin is the entity which holds shares in Coinsilium's portfolio companies.
For the Group's and Company's 31 December 2019 financial statements, the COVID-19 outbreak and the related impacts are considered non-adjusting events. There has been no significant disruption to the Group's and Company's activities to date from COVID-19, although the Board continues to monitor any risk.
Despite impressive developments announced by certain of Coinsilium's portfolio companies, particularly Indorse, with significant milestones achieved both in terms of client wins and organic revenue generation, over the course of 2019 it became increasingly apparent that the market, as reflected in Coinsilium's share price, was struggling to recognise the potential for value creation and growth within Coinsilium's investment portfolio.
As a consequence, the Company has faced significant challenges in maintaining the level of momentum required in order to effectively pursue further investment opportunities on reasonable and realistic terms for the Company and its shareholders.
At the same time there is a fast growing wave of interest in blockchain-based Decentralised Finance ('DeFi') and Crypto Finance applications, and the global Crypto Finance market is showing strong month-on-month growth with active collateral on DeFi platforms now at over USD3Bn, up over 600% year-to-date. Management believes that Coinsilium has the right experience, network and access to the most suitable technical and commercial partners, such as its joint venture partners IOV Labs, in order to effectively execute a new strategy with a specific focus on pursuing substantial opportunities in DeFi and Crypto Finance.
This has led Management to take the decision to initiate a Strategic Business Review, details of which were announced on 13 July 2020, covering the Company's existing operational activities and equity investment portfolio, in order to pave 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.
The Company is currently working on several DeFi models with the aim of launching substantial commercial solutions either independently or through its partner network. Given the current pace of growth in the sector the Company believes that such solutions have the potential to generate meaningful revenue streams for Coinsilium.
Coinsilium has also commenced income generating staking operations using its crypto reserves as active collateral, thereby utilising existing internal resources to accelerate and enhance new revenue generation. Staking activities are expected to increase over the coming months as the Company looks to develop further in-house expertise to expand its operational capabilities.
As part of the process of general business restructuring, and in line with the ongoing Review, Coinsilium's investment holding company Seedcoin Limited has been redomiciled from the BVI to Gibraltar in preparation for a proposed transaction.
Initial early stage discussions with certain interested parties are ongoing and whilst there can be no guarantee that these discussions will lead to a value accretive transaction, it is Management's view that, given the substantial progress made by certain companies amongst Coinsilium investments, the Seedcoin equity portfolio holds materially greater value than is currently recognised by the market.
Total comprehensive income, including fair value gains and losses on financial assets and digital assets, reported a loss for the period of £106,378 compared to a loss of £1,495,424 in the previous year.
Loss for the period from continuing operations was £258,943 (2018: loss of £982,034). This loss is the result of administrative expenses of £639,274 during the period, an increase in net fair value of equity investments of £572,805 and impairments to other current assets of £257,401 (loss in the value of tokens).
As at 31 December 2019, cash and cash equivalents amounted to £235,079 (2018: £592,171).
It is important to note that the Company received an investment of GBP250,001 post period in January 2020.
No dividends were paid or recommended to be paid during the year.
30 July 2020
The Directors of Coinsilium Group Limited take responsibility for this announcement.
For further information, please contact:
Token Advisory Services
Coinsilium advised two companies on their TGE in 2019 which were completed before 31 December 2019:
The Company started to advise another client at the end of 2019 and which may complete its token issuance or a traditional fund raise in 2020:
Investee Companies Update
In June 2019, portfolio company Indorse Pte. Ltd. announced that Brand Capital, the strategic investment arm of India's largest media house, The Times Group, will invest up to USD $6.5m in the Singapore-based skills verification platform Indorse. 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.
Throughout 2019, Indorse has deployed three distinct and complementary product lines which have been very well received by their Corporate clients which include Fortune 500 companies such as Grab, OCBC Bank, Dell and Rolls Royce.
The services offered by Indorse include:
Indorse has been working with a number of SMEs from Singapore; these range from 20-person start-ups to 200-person recruiting agencies and, in the Autumn of 2019, Indorse has established a UK subsidiary company with sales representation to act as a springboard for expansion into the European and U.S. markets.
In 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 like Slack. This 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 is co-organising with Coinsilium 'Post Covid Hack', 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 is due to start in August 2020 include Gibraltar Finance, IOV Labs and Singapore-based Tribe Accelerator.
Throughout 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.
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.
In 2020, Blox unveiled a new branch of their operations, Blox Staking, which is focused on providing decentralised 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 has identified a need to provide custody-free Eth2 staking as a service and plan to roll out this service as soon as Ethereum 2.0 launches its initial go-live phase (phase 0).
During 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.
In 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.
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, PegNet should increase liquidity and demand for Factom's tokens. PegNet CPU mining went live in August 2019 and it is today described as 'The Stablecoin Network for Decentralised Finance'.
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.
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.
In 2019, StartupToken moved its main activities to Singapore where it has been based since then. Through a Strategic Advisory Agreement signed with IOV Labs in July 2019, StartupToken Singapore helped IOV Labs establish a presence in the Southeast Asian market.
In 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 bitcoin experience as simple as it should be.
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.
In 2019, Helperbit pursued the development of its cryptocurrency donation platform.
In 2020, Helperbit's collaboration with the Red Cross in Italy to finance medical equipment during the Covid-19 crisis via cryptocurrency donations was praised by various Blockchain and Crypto organisations including the Binance Charity Foundation.
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.
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). 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.
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 decentralised 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.
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, 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.
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. RNS simplifies the blockchain Domain Name System (DNS), by turning traditional blockchain domains that appear as a series of randomised letters and numbers into a human-readable format.
In September 2019, IOV Labs and NXTP, an early entrepreneurial capital company that invests in technology start-ups that create a positive impact model for all Latin America, launched the first regional blockchain acceleration and adoption program aimed at start-ups and companies interested in developing their blockchain products, or migrating them from "off-chain" to "on-chain". On top of developing their capabilities with RSK'S stack technology benefits, the selected companies may be able to receive up to $100,000 in investments in order to implement their growth for the duration of the acceleration program. The search focused on Latin American start-ups at varying degrees of maturity and which are developing innovative products or services that can be optimized by adopting RSK'S blockchain stack technologies.
On 27 September 19, IOV Labs, the creator of the RSK Bitcoin Smart Contract platform and the RIF token, announced the acquisition of Taringa, the top Spanish-speaking social network in the world with 30 million users and over 1,000 active online communities. Having access to Taringa's user base will provide the company with invaluable information and data to test and distribute new decentralized infrastructure and apps powered by the RSK platform and the RIF token at a large scale. Jointly with Taringa's leadership, the company plans to create innovative consumer products and services for its communities, using RSK's decentralized infrastructure.
In November 2019, Monday Capital, in partnership with IOV Labs Innovation Studio, announced the completion of the first round of investments of its Ecosystem Fund. Two of the three investment recipients, Vega and Multis, were announced in early October, with the third, Pocket Network, set to close its own seed round within the month. Vega is a protocol for creating and trading derivatives on a completely decentralised network. Multis is a cryptocurrency lender, multi-sig wallet, and user-friendly interface all in one, designed to facilitate a convenient online banking experience for companies. Pocket Network is a middleware protocol that provides an incentive for individuals and businesses to run full nodes for any blockchain.
In December 2019, after eleven months of simulations, testing and two audits, Money on Chain is launching the Alpha version of its decentralized stablecoin protocol on the RSK network. Backed by Bitcoin, the protocol consists of two tokens that provide several use cases for Bitcoin holders, including leveraged Bitcoin operations. The first token is Dollar on Chain (DOC). Users can quickly send and receive any amount of DOC, a token pegged to the value of the US Dollar. The second token is BitPRO (BPRO), and it is specifically designed for Bitcoin holders to earn passive income on their coins. BPRO holders have several streams of revenue: they receive a percentage of platform-collected fees, an interest rate, and a small leverage on the price of Bitcoin. The platform is decentralized and secured by Bitcoin miners, with none of the collateral held in a bank account. All the collateral is held using Smart Contracts that run on the RSK network.
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.
Events after the End of the Reporting Period
28 January 2020 - Coinsilium Group Limited announced that it has entered into a Strategic Investment Agreement and signed a Memorandum of Understanding with IOV Labs ("IOV"), a Gibraltar registered company and parent to RSK, the developers of the first smart contract platform secured by the Bitcoin network, in which Coinsilium holds a vesting interest of 1,951,846 RIF tokens. IOV Labs have completed an investment of GBP250,001 by way of a private placement in the Company, subscribing for 9,434,000 new ordinary shares of no-par value ("Ordinary Shares") at 2.65p per share. The funds will be used towards joint initiatives between the Company and IOV and to further the growth and development of the Company.
2 April 2020 - Coinsilium Group Limited announced an update in respect of investee company, Factom Inc. ("Factom"). The Company has been notified by the directors of Factom that in a board meeting on 31 March 2020 they concluded that, in the absence of further funding, they will need to begin the process of assignment of assets for the benefit of creditors.
On 21 April 2020, Money on Chain ('MOC') 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 get exposure to RIF token price changes.
On 11 June 2020 Coinsilium Group Limited announced it is organising, jointly with portfolio company Indorse Pte. Ltd. ("Indorse") the 'Post Covid Hack' a global online blockchain hackathon from August to November 2020.
23 June 2020 - Coinsilium Group Limited announced an update in respect of investee company, Factom Inc. ("Factom"). Further to its announcement on 2 April 2020, the Company has 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 advise that Chapter 11 Subchapter V provisions preserve the position of the existing shareholders and structures the means of paying creditors. The directors of Factom expect Factom to emerge from the Chapter 11 reorganisation in 60 to 90 days.
8 July 2020 - Coinsilium Group Limited announced an update regarding its Joint Venture Agreement (JVA) with IOV Labs Limited (IOV) to establish a Joint Venture Company (JVC) in Singapore and notification of a Strategic Business Review of the Company's operations and investments. IOV is a Gibraltar registered company and parent to RSK, the developers of the first smart contract platform secured by the Bitcoin network in which Coinsilium holds a vesting interest of 1,951,846 RIF tokens. Where each shareholder will hold 50% of the total shares of the JVC at incorporation. JVC will be financed by IOV by way of a loan which is to be repaid from the future revenues of the JVC.
13 July 2020 - Coinsilium Group Limited announced a Strategic Business Review (the "Review") of the Company's operations and equity investments is now underway. The objective of this Review is to align the Company in readiness for its participation within the recently announced IOV Joint Venture (JV) and to ensure that the Company is optimally positioned and resourced 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, including cryptocurrencies.
COINSILIUM GROUP LIMITED GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2019
COINSILIUM GROUP LIMITED STATEMENTS OF FINANCIAL POSITION
AS AT 31 DECEMBER 2019
The Financial Statements were approved and authorised for issue by the Board of Directors on 30 July 2020 and were signed on its behalf by:
COINSILIUM GROUP LIMITED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2019
COINSILIUM GROUP LIMITED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2019
COINSILIUM GROUP LIMITED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2019
|OAM Categories:||1.1. Annual financial and audit reports|
|EQS News ID:||1107635|
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