Coinsilium Group Limited (COIN)
COINSILIUM GROUP LIMITED
("Coinsilium" or the "Company")
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 2018, a period of significant corporate progression.
* Equity holding in Indorse Pte. Ltd. ('Indorse') increased from 3.5% to 10%.
* Initiation of wholly-owned private fund in Gibraltar to hold cryptocurrency and digital tokens granted to and earned by Coinsilium for equity investments and advisory services.
* Appointment of Richard Lloyd as Mining Industry Sector Advisor to TerraStream Ltd. ('Terrastream'), the Company's Gibraltar-registered wholly-owned subsidiary.
* Advisory client Fantom Foundation ('Fantom') successfully completed token sale, with a 60 times oversubscribed whitelist of token buyers and the sale of the maximum number of tokens available, in a single day, representing proceeds of a total of US$39.8m.
* Eight new advisory clients engaged Coinsilium as a Blockchain Advisory Partner, increasing the total portfolio to 18 advisory clients, nine of which are in the private sale or presale stage of their token sale.
Post Period Highlights:
Significant Developments of Coinsilium's Investment Portfolio Companies:
In September 2018, FastForward Innovations Ltd. (LSE: FFWD) executed a 'simple agreement for future equity' (SAFE agreement) with Factom, under which it has advanced US$6m to Factom, which will be converted at a future date at a 25% discount to the price of Factom's proposed series B fundraise.
In June 2018, The U.S Department of Homeland Security (DHS) awarded a grant of $192,380 to Factom to support beta testing of a platform aimed to secure data from Border Patrol cameras and sensors.
In April 2018, Factom partnered with FPT Software, an IT services company based in Vietnam, to develop a new blockchain technology platform through Factom Harmony - a system that creates audit records regarding data, decisions, activities and events. The purpose of the platform is to digitise and store files utilising simple API's and Factom's blockchain solution to audit and verify information.
In March, Indorse partnered with fellow Ethereum project Dock.io to collaborate on a number of areas including: user authentication, data importing, work experience population and skills validation.
In May 2018, Indorse deployed its 4th production smart contract on the Ethereum mainnet, known as the 'Claims Contract', in its bid to implement the 'Anonymous Indorsement Protocol' (AIP). This is believed to be the first 100% proxy-upgradeable smart contract on the Ethereum protocol.
In the same month, the company partnered with independent research platform ICOCrunch to provide verification for projects aiming to list on the ICOCrunch listing index.
In March, CoinDash launched its portfolio tracking app Blox, and following user feedback and community discussion, rebranded the whole company to Blox.
In April, Blox distributed tokens as part of its 3rd and final airdrop to early adopters and the Blox community, sending out 5m CDT tokens and taking the total amount of airdropped tokens to 15m CDT.
In May, RSK Labs ('RSK') announced that its sidechain and smart contract functionality, which will operate on the bitcoin protocol, was secured by 10% of the mining power provided to support the Bitcoin network, spread across 80% of mining pool power cumulatively, with 80% of miners signalling support for the future.
In June, RSK released the latest upgrade to its 'Bamboo' mainnet Network Release (v0.4.3).
In September 2018, RSK's development team launched a new service which provides programmers with a variety of tools to build decentralised applications on the RSK platform.
Finally, in the same month, RSK launched an online course via popular blockchain and crypto website Blockgeeks.com, offering an introduction to the RSK technology.
Eddy Travia, Chief Executive Officer of Coinsilium, said:
"As the Company moves into the busy last quarter of the year with a healthy pipeline of quality Token Sale Advisory clients, it continues to build upon our early successes in this fast-growing sector with a cash generative Token Sale Advisory Services division.
"With nine live clients at the moment, and a number of strategic equity holdings across a solid portfolio of cutting edge blockchain companies, Coinsilium remains well-positioned to leverage its expertise, contacts and know-how to build a foundation for long-term shareholder value."
The Directors of Coinsilium Group Limited take responsibility for this announcement.
For further information, please contact:
Three years since its admission to the NEX Exchange, Coinsilium continues to deliver on its vision to offer retail investors exposure to a diverse range of high-quality opportunities in the fast growing Blockchain technology sector.
The Company's early mover status has provided it with invaluable industry experience, connections and access to investment and partnership opportunities with some of the 'best in class' blockchain projects out there. The Board believes that the investments and commercial opportunities executed to date present a unique opportunity to create shareholder value.
The Company is now positioned at the forefront of the burgeoning Token sector, having supported some of the most successful and high-profile projects through their Token Generation Events ('TGE'). In its recent development, Coinsilium has established a reputation as one of the pre-eminent advisory services providers with an enviable industry track record of success in a highly complex and fast moving market. Advisory service fees are made up of monthly retainer fees and a final success fee; the latter usually being a fixed fee or single digit percentage of the global proceeds of the project token sale, payable on its successful completion. Whilst these revenues can be meaningful, the success fees are usually denominated or payable in cryptocurrencies or tokens and are therefore often subject to the high levels of volatility witnessed in this industry.
CEO of Coinsilium, Eddy Travia remains at the forefront of this emerging space and continues to represent the Company as an advisor to a growing number of high-profile projects in the Digital Token space.
According to PwC's 2018 Global Blockchain Survey, 84% of companies are 'actively involved' in blockchain systems development. Another study by Netscribes predicts annual growth of 42.8% and $13.96 billion in annual revenues by 2022.
Blockchain, along with AI, is one of the breakout technologies in recent times and the world is now starting to see mass adoption.
Increased security, speed, automation through smart contracts and the tamper-proof nature of the distributed ledger means Blockchain offers a number of major benefits compared to other systems. That has attracted the financial, healthcare, legal, automotive, energy, media, retail and supply chain management industries.
The Company remains focused on delivering its stated strategic objectives:
In the period under review, revenue for the six months ended 30 June 2018 increased 1,362% to £1,333,515 compared to £97,895 for the six months ended 30 June 2017. The increase is attributable to the fees generated from Token Sale Advisory Services.
The Group generated a profit for the six months ended 30 June 2018 from continuing operations of £554,605 which was compared to a loss of £205,378 for the six months ended 30 June 2017.
The earnings per share was a profit of £0.005 for the six months ended 30 June 2018 which was compared to a loss of £0.002 per share for the six months ended 30 June 2017.
The value of the available-for-sale financial assets amounted to £1.37m at 30 June 2018 and this compared to £1.08m at 31 December 2017.
The total other current assets, which is a combination of crypto currencies and tokens, amounted to £728,448 at 30 June 2018, which was an increase from £652,495 on 31 December 2017.
Cash and cash equivalents amounted to £747,422 as at 30 June 2018, compared to £1,396,070 as at 31 December 2017.
In summary, the Board is very pleased with the Company's profitability and improved performance during the past six months.
As at September 28, the Company's investee portfolio totalled 12 blockchain companies - including Bundle Network and Elevate Health (post-period investments: Elevate Health investment was announced on 31 July 2018 and Bundle Network investment, announced on 15 August 2018).
At the start of the period, Coinsilium announced that its advisory client, FANTOM Foundation ('FANTOM') successfully completed its Token Sale, selling the maximum tokens available in a single day to reach a total of US$39.8m. FANTOM is the world's first Directed Acyclic Graph ('DAG') - based Smart Contract platform which aims to solve the scalability issues surrounding existing distributed ledger technology. The platform distinguishes itself from traditional block ledger-based storage infrastructure by employing an improved version of existing DAG-based protocols. The FANTOM platform adopts a new protocol known as Lachesis Protocol to maintain consensus. Applications built on top of the FANTOM OPERA Chain enjoy instant transactions and near zero transactional costs for all users. The transaction throughput capability of the FANTOM protocol offers a potentially significant improvement on today's leading protocols.
The success of FANTOM's public token sale, in a short time-frame, illustrates the high level of interest in this project from the investment and blockchain communities globally. The team must now demonstrate the value of their protocol, but we see indications that FANTOM's technology is being considered very seriously, both at the enterprise and government levels.
In July, the Company announced the appointment of Malcolm Burne as a project advisor to TerraStream Limited ('TerraStream'), its Gibraltar-registered wholly-owned subsidiary.
Malcolm has a long-standing career in financial markets in the UK, Australia and Canada including directorships at a number of listed mining companies. He has led various successful natural resource ventures and has also built Ambrian Capital Plc into London's premier natural resource broker at the time. He is currently Founder Chairman of Golden Prospect Precious Metals, a closed end fund, and advisor to Altus Strategies and Arlington Group Asset Management.
TerraStream was formed with the objective of creating a blockchain powered platform to support the offering of Token based alternative funding solutions with potential applications across several industry sectors. Initial focus will be on the mining industry and in particular, precious metals and natural resources extraction.
The build and development of the TerraStream Platform is expected to be funded predominantly via the proceeds of a non-dilutive digital Token Sale under Gibraltar's Regulatory framework.
Malcolm will be working alongside TerraStream's Mining Sector advisor Richard Lloyd and the Coinsilium management team.
Later in the month, Coinsilium was appointed by Elevate Health ('Elevate') to provide advisory services in relation to its proposed Token Generation Event ('TGE').
Further, the Company agreed to convert part of its advisory fees into Elevate Health equity for 5% to be issued share capital, demonstrating Coinsilium's partnership ethos.
Elevate is aiming to facilitate a number of cost-reducing reward-solutions for healthcare providers, insurers, health authorities, families and employers through a range of technological innovations including mobile apps, wearable devices, smart contracts and reward tokens.
The co-founders of Elevate include Simon Lewis, Sid Bouziane and Alastair Mordey, the team behind The Cabin Addiction Services Group founded in Thailand in 2009, which grew to become the largest addiction and behavioral healthcare group in Asia, before increasing its presence globally. In 2017, The Cabin Group had revenues of over US$9 million and was sold to a private equity investment group for a valuation of US$40 million.
Elevate's original approach of tackling health threats and improving lifestyle and health standards on a global scale, combined with the teams' highly successful track record, is a clear differentiator for us.
We also see significant opportunities for enterprise-level stakeholders, such as insurance companies and healthcare service providers, to enhance their offering by joining the Elevate platform, and we look forward to working closely with this talented team to help them achieve their goals.
Following Coinsilium's March 2018 appointment as an advisor to Bundle Network Limited ('Bundle Network'), a Malta-registered company developing an online platform connected to multiple exchanges and facilitating cryptocurrency trading on these exchanges, the Company was pleased to report over the summer period it had completed an investment of US$125,000.
As part of the agreement, Eddy Travia joined the Board of Directors of Bundle Network as the group moves towards its Token Generating Event ('TGE').
Universal Reward Protocol
In August, the Company reported that it had entered a strategic partnership with Paris-based Occi SAS, the company developing the Universal Reward Protocol ('URP'). Coinsilium is providing advisory services for its forthcoming TGE.
URP is creating a protocol for shoppers and retailers to interact in real-time and on a personalised basis. The URP technology will allow retailers to reward consumers for any type of shopping behaviour, online and offline, and for sharing the corresponding shopping data. Retailers can use the collected 'Proof-of-Behaviour' data to offer deals tailored to each specific individual shopper's activity. The URP solution will provide shoppers complete control over the use and sharing of the data, using blockchain to store all opt-ins (and opt-outs) to each individual reward campaign.
Shoppers earn URP tokens by fulfilling the behaviour described in the campaign and agreeing to share their data. They can then redeem these tokens through personalised offers from a retailer of their choice.
Following the unprecedented level of interest in blockchain and price surge of cryptocurrencies and digital tokens towards the end of 2017, the period under review saw a significant retraction in the global cryptocurrency markets, marked by high levels of price volatility.
Whilst it is understandable that the markets may correlate cryptocurrency price trends with the prospects for investors and service providers in the sector such as Coinsilium, it does not tell the whole story.
As market conditions have become more challenging of late, it is clear that token buyers are also becoming more selective and discerning. Combined with this, the strong reputation Coinsilium has built in the industry is now starting to pay dividends and is helping the Company to attract a large number of higher calibre projects which hold stronger chances of success in more challenging and competitive conditions as demonstrated by the oversubscription of certain token sales such as Fantom. In turn, Coinsilium's advisory services division has been quick to adapt to these new market conditions by selectively choosing to engage with the most well-funded projects with strong management teams. Building on the recent period numbers, with a strong pipeline of quality advisory projects, the Board believes that this strategy should provide enhanced margins whilst building a stronger and more robust revenue model going forward.
In parallel with the recent crypto market developments, the Company is also now starting to see a shift in interest, emanating from the newly setup 'crypto funds' and investors, away from the pure 'token play' model, which was the prevailing trend during 2017, and now towards the acquisition of equity stakes in Blockchain companies. Given Coinsilium's long standing equity investment experience in the sector, the Board believes that the Company would be set to benefit from this, should the trend develop.
It is also worth emphasising that none of the tokens or Cryptocurrencies currently held by Coinsilium have ever been purchased by the Company; they have either been earned in payment from clients for advisory services or granted as a bonus for equity investments made.
After a boom year in 2017, the trend in 2018 has also been towards a deeper level of scrutiny from global regulators, though only a few jurisdictions thus far have taken a pro-active stance in terms of regulation. Coinsilium continues to build on its strong relationships with legal and financial service providers in Gibraltar which is currently the only jurisdiction to have an operational Distributed Ledger Technology ('DLT') Regulator and is in the process of introducing a regulatory framework specifically for token sales.
In conclusion, whilst the prevailing market conditions will inevitably present certain challenges for the sector in the near term, they are also symptomatic of a rapidly maturing industry undergoing an unprecedented pace of development and growth. And whilst current conditions prevail, Coinsilium will continue to play to its strengths, optimising its revenue streams, pursuing growth opportunities and leveraging its industry position and relationships in order to enhance shareholder value.
Across the Company's investing, venture building and advisory divisions, we look forward to the future with growing confidence and enthusiasm and the Board would like to thank all shareholders, partners and team members for their continued support.
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 2017, 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 2017 audited financial statements. Statutory financial statements for the year ended 31 December 2017 were approved by the Board of Directors on 31 May 2018. The report of the auditors on those financial statements was unqualified.
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 2017 Annual Report and Financial Statements, a copy of which is available on the Company's website: www.coinsilium.com. The Group's key financial risks are liquidity, equity securities price risk and foreign exchange movements.
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 2017 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 2018 that would be expected to have a material impact on the Group.
The consolidated interim financial statements for the 6 months ended 30 June 2018 and for the 6 months period ended 30 June 2017 has not been audited.
3. Directors Remuneration
Directors of the Company received total remuneration of £138,000 for the 6 months ended 30 June 2018 (30 June 2017: £72,842).
4. Earnings Per Share
Basic earnings per share is calculated by dividing the 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. Available For Sale Financial Assets
At 30 June 2018, the Company owns unlisted shares in:
The Directors do not recommend the payment of a dividend.
7. Approval of Interim Financial Statements
The interim financial statements were approved by the Board of Directors on 28 September 2018.
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