from Coinsilium Group Limited (isin : VGG225641015)
Coinsilium Group Limited: ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
Coinsilium Group Limited (COIN)
COINSILIUM GROUP LIMITED
("Coinsilium" or the "Company")
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
COINSILIUM GROUP LIMITED STATEMENT OF THE BOARD OF DIRECTORS Coinsilium Group Limited (“Coinsilium”, the “Group” or the “Company”), the venture builder, investor and adviser to early-stage blockchain technology companies, is pleased to announce its Final Results for the year ended 31 December 2023. Financial Summary
Operational Highlights
The Directors present their report, together with the Group Financial Statements and Auditor’s Report, for the year ended 31 December 2023. The comparative period is the year ended 31 December 2022. Review of the Year Throughout the period the digital asset markets continued their strong recovery from the 2022 lows, with a corresponding markedly positive impact on the Company’s cryptocurrency treasury position. The prices of BTC and ETH began the period at US$16,612 and US$1,202, respectively and by the end 2023, BTC had risen 156.7% to US$42,650 while ETH had increased by 89.8% to US$2,281.00. The strong performance of both cryptocurrencies has continued beyond the year end with BTC reaching a new all time high of $75,830 on 14 March 2024 and is currently trading at US$67,800 representing a percentage increase year-to-date of approximately 54.7%. Having navigated the challenges from the previous down cycle and the lows of December 2022, we emerged stronger in 2023, fulfilling our commitment to resilience and growth. Throughout the year, we strategically laid the building blocks for future success, focusing on Web3 and exponential converging technology opportunities, particularly in the realm of artificial intelligence (AI). Web3, which represents the next generation of internet technologies incorporating decentralised platforms and blockchain, is a cornerstone of our strategy. Our emphasis on AI and other converging technologies positions us to leverage innovative solutions and drive substantial growth. This proactive approach has prepared us well for the strong sustained market recovery we are now experiencing in 2024, where we now find ourselves in a robust and advantageous position. On 14 March 2023 – Coinsilium announced that the Company had entered into Heads of Terms (“HoT”) with Tokenomi, a blockchain and Web3 advisory services firm (“Tokenomi”) established in 2017, and with its owner and managing director, Alexis Nicosia, to acquire the advisory service business and certain intellectual property assets of Tokenomi. On 19 May 2023 the Company reported that the acquisition of the Tokenomi business had completed and that Tokenomi’s owner and managing director, Alexis Nicosia, had joined Coinsilium’s Advisory Team. Consideration for the acquisition of the Tokenomi business was GBP116,500, of which GBP19,000 was paid in cash and GBP97,500 was paid through the issue of 3.25m Shares in the Company in the year at a price of 3.0 pence per share, subject to a 6-month lock-in agreement, with a follow on further 6-month orderly market arrangement. Projected revenue estimates were provided at the time of the announcement with a further update provided at the time of the completion announcement dated 19 May 2023, covering the subsequent 12 to 24 month period, contingent on those advisory clients successfully completing their TGEs (Token Generating Events) within this period. Revenues generated from advisory services are in most cases contingent on the success of the client’s TGE. In the context of the pace of recovery from the market lows as of the end of 2022, and prevailing market sentiment, several advisory clients have since elected to push back their TGE’s until more optimal conditions prevail. It is therefore likely that we will see many of these projects relaunching their TGE processes from towards the end of this year or over the course of 2025 subject to conducive market conditions. On 21 April 2023, Coinsilium announced that it had raised GBP258,150 gross of expenses via a company share subscription and broker placing through Peterhouse Capital and SI Capital, of 17,209,999 new ordinary shares of no-par value at a price of 1.5 pence per share from existing and new shareholders and directors of the Company. Following the issue of the 17,209,999 Ordinary Shares, the Company has 191,958,234 Ordinary Shares in issue, which also represents the total number of voting rights in the Company. Each Placing Share had an attaching warrant to subscribe for a further new ordinary share at an exercise price of 3p ("Warrants"), valid for two years from the date of admission of the Placing Shares, being 27 April 2023.
The Directors' participation in the Subscription was as follows: On 15 June 2023, the Company announced that Greengage had successfully raised £1m, the first tranche of a proposed £5m fundraise, at a £30m valuation and that Coinsilium participated in Greengage’s latest funding round with an investment of GBP25,000. At the same time, we also reported the conversion of the principal and interest of the GBP200,000 convertible loan notes made to Greengage in September 2021 by Coinsilium, via its wholly owned Gibraltar registered subsidiary Seedcoin Limited. Coinsilium’s total shareholdings in Greengage increased to 27,133 and based on the fundraising values the Company’s stake at £652,537. On 4 September 2023 – Coinsilium announced a Master Collaboration Agreement with global lifestyle fashion brand company Blvck Limited ("Blvck Paris") to establish a framework for engagement on future projects including Web3 projects. The agreement provides a structured framework for both parties to work together and move forward on a range of strategic Web3 initiatives currently under review. On 14 September 2023 Coinsilium announced that Seedcoin, its 100% owned Gibraltar subsidiary, had signed a Convertible Loan Agreement and Option Agreement with Silta as a cornerstone investor in their funding round. The Convertible Loan Agreement provides a loan principal amount of USD50,000 at a pre-money valuation of USD5m. The loan is granted for a period of six months, converting at maturity into 22,306 new common shares of Silta at a price of USD 2.2416 per share. As at the time of this report we note that there has been a delay in the issuance of the new shares and it is expected that the new shares to be issued to Coinsilium within the coming weeks. The Option Agreement for up to USD500,000 provides the rights to subscribe to up to 163,575 new shares in Silta at a pre-money valuation of USD7.5m valid for 12 months. Subject to Loan conversion and Options exercised in full, Seedcoin will hold a total of 185,881 shares or 6.7% of the total share capital of Silta. Post period on 12 February 2024 the company announced that Silta has notified Coinsilium that it has recently received an investment from a top 10 global infrastructure development bank as part of a strategic partnership agreement to build a climate financing marketplace, powered by AI, for bankability and sustainability assessments. This strategic partnership aims to help support governments, infrastructure developers, and financial institutions to reach their goals of deploying US$800B towards Climate Financing by 2030. On 2 October 2023 we announced the launch of the new Coinsilium website marking the culmination of the Company’s work towards repositioning itself and its commitment to capitalising on emerging opportunities in Web3 technology, Artificial Intelligence (AI), particularly at the intersection of AI and Blockchain, whilst providing investors with a valuable resource for gaining a better understanding of Coinsilium’s Web3 investments and advisory services work. Coinsilium also announced that it has embarked on a number of global awareness and promotional initiatives, including the Company’s engagement as main sponsor for the “When Shift Happens” podcast run by renowned Web3 entrepreneur and podcast host Kevin Follonier. “When Shift Happens” has a large global following and features regular interviews with famous names and rising stars in the Web3/Crypto space. On 1st December 2023 portfolio company Indorse announced the unveiling of the ‘Byzant’ Web3 ecosystem. Byzant is the product of an active collaboration between a syndicate of major digital advertising and blockchain industry partners, including Coinsilium and portfolio company Indorse, working together to deploy a decentralised Social Network for creative professionals and a suite of Web3 applications and tools, developed by Indorse. These applications and tools will provide solutions that address many of the functionality and User Experience (UX) challenges currently hindering mass Web3 adoption and are needed to achieve parity with Web2 functionalities. Indorse is the principal technology partner for Byzant with Coinsilium providing strategic advisory services. Coinsilium’s participation and economic interests in Byzant will be represented through a material stake in new project tokens at the founding member level. Post period, on 15 March 2024, the Company announced that A-ADS had joined the Byzant Collaboration as the latest new syndicate member. A-ADS is one of the largest and longest established Crypto/Bitcoin advertising networks, currently serving 191 million impressions per day, and is working with Byzant to develop Adbazaar, a smart contract-powered advertising solution within the Byzant suite of applications specifically built for Web3. On 28 November 2023, Coinsilium announced that it had signed Heads of Terms (“HoT”) with investment portfolio company, Singapore-registered Indorse Pte. Ltd, a blockchain development company, to acquire a further 2,773 shares representing an additional stake of 14.76% in the post-transaction share capital of Indorse. Coinsilium currently holds 1,433 shares or 10.156% of the current share capital of Indorse. Post period on 29 January 2024 the Company announced that Coinsilium and Indorse had agreed to not proceed with the negotiations at this time, given the complexity of the proposed share acquisition transaction and the time required to complete the necessary due diligence work and that both Coinsilium and Indorse will focus on their collaboration towards the successful development and launch of the Byzant Ecosystem and its applications, as referred to in the Company’s announcement on 1 December 2023. The Company ended the period with the value of tradable crypto tokens of £466,341 and rights to future crypto tokens of £451,678 . Cash and cash equivalents amounted to £283,757. Director Share Purchases
During the period, Chief Executive Eddy Travia purchased a total of 1.5m Coinsilium shares on the market:
Director No. Shares Price
24 August 2023 Eddy Travia 1,500,000 1.25p New Advisory and Investment Agreements Post Year End On 20 February 2024 Coinsilium announced it had signed an agreement with global trade exchange platform LC Lite (“LC Lite”) for the provision of strategic advisory services in respect of the forthcoming token launch for its decentralised trade finance platform, now rebranded as Nexade Finance. LC Lite has been recently acquired by Incomlend, a regulated global invoice finance marketplace for SMEs with licences to operate in Singapore and in Hong Kong. Incomlend was founded in 2016 to address the US$2.5 trillion global trade finance gap and was named one of the Top 15 Fastest Growing Companies in Singapore in 2022. LC Lite aims to bring Web3 decentralised technology to Incomlend, with improved marketplace liquidity, multi-currency solutions for cross-border export financing and a broad usage of stablecoins. LC Lite will also be well positioned to capitalise on emerging business opportunities from within the fast-growing digital asset market. Partnerships IOV Labs Asia JV On 28 February 2023 the Company provided an update on the status of IOV Labs Asia Pte. Ltd. (“IOV Labs Asia”), the Company’s Singapore-based 50/50 joint venture company (“JVC”) with IOV Labs Ltd (“IOV Labs”) The Company advised that it had submitted its formal proposal for resolution of the JVA to IOV Labs on 1 December 2022. On 18 August 2023 the Company provided a further update stating that both parties agreed to proceed to a mediation process under the auspices of the Singapore Mediation Centre (‘SMC’), Singapore’s leading provider of alternative dispute resolution services. The mediation was conducted on Thursday 17 August 2023. However, despite Coinsilium’s best efforts, unfortunately no mutually acceptable resolution was reached. In view of the fact that the mediation process has now run its course, both IOV Labs and Coinsilium have agreed in principle to wind up the JVC. As at the time of this report, both parties are currently working on expediting the winding up process for the JVC which is now entering its final stages. Post Year End Funding Update On 8 March 2024 the Group announced the placing of 18.9m new ordinary shares at 2.5 pence per share to raise £472,500 in gross proceeds for application against strategic investing activities and general working capital requirements. At the same time, the Group announced the allotment of 3.356m new ordinary shares on the same terms in settlement of various services received by the Group. The Group further announced the granting of 22.256m of warrants to subscribe for ordinary shares at 3.75 pence per share, being one warrant attached to each subscription and service share allotted, exercisable for a period of 3 years from grant. The Directors' participation in the Subscription was as follows: The Financing underpins the Company’s working capital position and importantly, enables an acceleration of certain operational and investing activities at a time when AI and Web3 are rapidly advancing and Coinsilium wishes to remain at the forefront of various Web3 technology initiatives. Financial Review Total comprehensive income, including fair value gains and losses on financial assets and digital assets, reported a loss for the period of £660,684 compared to a loss of £2,056,974 in the previous year. This result is largely driven by an increase in the fair value of digital asset tokens of £284,069 (compared with a decrease in the prior year of £1,289,582). As at 31 December 2023, cash and cash equivalents amounted to £283,757 (2022: £667,816). Outlook The Company ended the period with the value of tradable crypto tokens of £466,341 and rights to future crypto tokens of £451,678 . Cash and cash equivalents amounted to £283,757. Following the year end, the Company undertook a strategic financing with director participation raising approx. £470,000 in new cash funding in addition to seeing a substantial increase in the value of its crypto currency tokens (predominantly BTC and ETH), further bolstering the Company’s strategic funding reserves. As an investment and advisory business focused on Web3 and blockchain technologies, Coinsilium’s growth trajectory has historically been linked to the cycles in the crypto markets. In this sense, 2024 is already poised to be a pivotal year for the Company, with significant momentum across many macroeconomic fronts, heralding the arrival of a new bull market cycle for the crypto markets. The successful launch of Bitcoin ETFs in the US at the beginning of the year has been a game-changer, boosting investor confidence and driving substantial capital inflows into the sector. Additionally, the anticipated imminent launch of the Ethereum ETF further bolsters market optimism. These developments are underpinned by impressive statistics, with Bitcoin ETF trading volumes exceeding expectations and signalling strong institutional interest as over half of all US Hedge Funds now own BTC ETFs in some form. Bitcoin ETFs have now reached a significant milestone, with over 1 million BTC now held in custody by these investment vehicles. According to data shared by Michael Saylor, the executive chairman of MicroStrategy, on X (formerly Twitter), more than 30 Bitcoin ETFs collectively own 1,002,343 BTC as of May 24, 2024. One of the most pivotal events this year was the Bitcoin Halving in Spring 2024. This event, which reduces the supply of new Bitcoin entering the market, establishes a new scarcity model. Historically, the Bitcoin Halving has catalysed bull phases in the digital assets value cycle, setting the stage for substantial long term price increases and market expansion. However in the short/medium term we can expect the crypto markets to remain volatile. One of the reasons for this being the immediate impact the halving has had on miners who will be experiencing a significant reduction in their mined block rewards, effectively halving their potential revenues. This has led many miners to reassess the profitability of their operations, with a substantial number forced to shut down due to decreased financial viability. To navigate this period, many of the miners will be increasingly selling Bitcoin to cover operational costs and sustain their activities. This pattern is consistent with previous halving cycles, which have similarly led to short-term market adjustments as part of a natural market cleansing process. Despite the immediate challenges, this phase is not viewed as a long-term detriment to the Bitcoin network but rather a cyclical adjustment that helps maintain market balance and scarcity. For companies like Coinsilium operating in the Web3 space, the medium to long term market set up is exceptionally positive. Web3 represents the next generation of internet technologies, incorporating decentralised platforms and blockchain. The increased investor confidence and capital inflows we are now starting to see as a direct result of these macroeconomic developments, provides the resources needed in the sector for innovation and growth. Significantly, Coinsilium has built its investment and advisory operations in a manner such that it is now uniquely well-positioned to leverage these opportunities, driving forward our strategic initiatives in Web3 and AI, and setting the foundation for short and medium term value generation and critically, long-term growth. Advisory Services Coinsilium’s advisory services capability was first launched in 2017 at the start of the first wave of Initial Coins Offerings (“ICOs”). During the prevailing period the Company acted as advisor to over 10 ICOs including major projects at the time such as ICON, Fantom and HDAC. The projects we worked with at the time raised an aggregate of over US$500m with Coinsilium recording £1.68m in revenues for the year to 31 December 2018. Given the cyclical nature of the industry, there is a clear window of opportunity now approaching for Coinsilium to align its efforts with the prevailing cycle and for our Advisory Services Division to once again outperform. In this respect, our confidence is borne out by the resurgence of interest we are now seeing from projects that are once again looking to advisors such as Coinsilium with a proven track record of delivering results for its clients, through successful advisory work, and supporting them through their Token Generation Event (“TGE”) journey. With the Tokenomi Web3 advisory business now fully integrated within Coinsilium’s Advisory Services Division, and with improving market conditions, the advisory team is now poised to expand the scope of its global advisory services offering. Going forward, our enhanced offering will go beyond our original strategic advisory model to include a much in-demand technical services capability and potential funding solutions offering as well. Given the growing demand for such services, we anticipate this “one-stop shop” approach to be well received in the market and highly value accretive for the Company. In this respect we are now actively evaluating opportunities in Southeast Asia, focusing on a new potential technological and commercial collaboration and partnership. Negotiations have now reached an advanced stage, and we look forward to updating the market on significant developments in due course. Byzant Collaboration Development work for the various elements of the Byzant Web3 Ecosystem is progressing well and we are most encouraged to see that the most advanced applications, namely the Bastion account abstraction wallet and Adbazaar the smart-contract powered advertising network, are already attracting significant interest from industry parties and discussions with several potential integration partners are ongoing. One cannot overstate the role that advertising plays as a revenue driver in developing the Web2 social media industry. Advertising revenues have fuelled the whole industry since its early days - as an example, in 2023 Facebook ad revenue reached $131.948 billion - and whilst we see Web3 as the foundation to move social networks beyond the exclusive reliance on advertising driven revenue models, we also believe that ad revenues can become a significant engine for growth in the Web3 space. 2024 has so far seen no let-up in our business developments, with an array of significant announcements and milestones on the horizon from our growing roster of investments and advisory clients. The board remains resolute in its commitment to unlocking and delivering the inherent and expanding value of our enterprise and investments. With the growing interest from clients and improving market conditions, we look to the rest of the year with renewed confidence and optimism. Finally, the Board would like to thank our valued shareholders, partners and team members for their continued support, and we look forward to continuing to provide the market with regular and what we believe will be exciting progress updates for the remainder of the period and beyond.
Eddy Travia Chief Executive Officer 27 June 2024
Extract from Auditor’s report:
“Conclusions relating to going concern Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group’s or the parent company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.”
The Directors of Coinsilium Group Limited take responsibility for this announcement.
COINSILIUM GROUP LIMITED DIRECTORS’ REPORT
Investee Companies Update Indorse 20 March 2023 - New Multiverse NFT standard submitted by members of the Indorse tech team becomes the ERC-5606 NFT standard with the potential to benefit the entire Web3 Ecosystem. Due to shifting market dynamics Indorse has elected to no longer focus exclusively on Metaverse technology and Metalinq but rather to apply their efforts on the broader scope of their role as developers within the Byzant Web3 Collaboration. On 29 August 2023 Consilium provided details regarding the unveiling of new Web3 software product ‘Bastion’, an open source, modular wallet and Software Development Kit (“SDK”) from portfolio company Indorse Pte. Ltd. (“Indorse”). Wallets are the first points of interaction between users and Web3 applications and recent developments such as Ethereum’s ‘account abstraction’ allow newcomers to use decentralised applications in a much easier way. Through the Bastion wallet, users will be able to log in via their Web2 social media accounts and start using their wallet before uploading digital assets without having to worry about the transaction fees (or ‘gas’). Account abstraction also allows simple wallet recovery, a reassuring feature for all newcomers to Web3. These functionalities remove most of the friction inherent in current Web3 applications and make the wallet experience much more user friendly. Post Period, on 15 March 2024 Coinsilium announced the inclusion of A-ADS as the latest member of the Byzant Collaboration. A-ADS is one of the largest and longest established Crypto/Bitcoin advertising networks, currently serving 191 million impressions per day, and is working with Byzant to develop Adbazaar, a smart contract-powered advertising solution within the Byzant suite of applications specifically built for Web3. Advertising is the backbone of Web2 social media monetisation and an underdeveloped source of revenues in the Web3 social media space, and Coinsilium is therefore confident that Web3 advertising can represent a significant opportunity for early entrants in the Web3 space such as Adbazaar, especially with its backing from crypto ad network veterans such as A-ADS. Web3 advertising further enables the integration of new tools, such as on-chain analytics and programmatic advertising solutions, which can offer granular targeting for advertisers based on the assets held in the ad viewers’ digital wallet. Adbazaar is integrating Singapore-based Linkko technology to leverage its on-chain analytics feature, expanding its capability beyond the basic, ‘one-size-fits-all' banner ad-serving model currently used within Web2 applications.
Carrying Value in GBP as at 31 December 2023: £852,492 (2022: £991,899)
SSV Network (formerly Blox Staking) On 20 January 2023, SSV Network announced a USD50m ecosystem fund to support Ethereum proof-of-stake decentralisation and ETH staking technologies. On 5 April 2023, SSV Network announced the release of JATO (Jat Assisted Take Off) as the last testnet version before Mainnet release. On 12 April 2023, Alon Muroch, CEO of Coindash, tweeted in reference to the significance of the Ethereum ‘Shappella’ upgrade: “Today’s Shappella fork marks a huge milestone for ethereum and @ssv_network. It marks a full circle from beacon chain genesis in Dec 2020 to withdrawals activation today. For SSV, a necessary milestone for mainnet rollout. Huge things are about to happen after 2 years of work.” Throughout 2023, Alon Muroch (CEO of Coindash) has announced several technical enhancements of SSV Network and numerous partnerships with major Ethereum staking platforms.
As of 26 April 2024, there are 600,000 ETH staked on SSV Network (about $1.88Bn worth at the same date) and a network of 391 operators and 1,833 validators.
Post Period Updates As of 26 April 2024, there are 600,000 ETH staked on SSV Network (about $1.88Bn worth at the same date) and a network of 391 operators and 1,833 validators.
Carrying Value in GBP as at 31 December 2023: £176,744 (2022: £185,981)
Elevate Health Elevate Health has evolved into a 'DeSci' (Decentralised Science) project, specifically a platform designed to decentralise and reward its members for the collection and access to data, research, and treatment in preventative healthcare. Currently, Elevate Health is in discussions with an undisclosed decentralised launchpad that has historically raised approximately $1 billion for various projects over the past three years, concerning the launch of the Elevate Health token. Notably, DeSci project tokens have recently outperformed other tokens in post-launchpad trading. Carrying Value in GBP as of 31 December 2023: £78,553 (2022: £82,658)
Arcadian Youth Pte Ltd (formerly “StartupToken”) Over the course of 2023, StartupToken CEO and founder, Yacine Terai, has been assessing new directions for the company. Post-period, StartupToken has pivoted towards developing a Web3 Real World Asset ("RWA") tokenization model, focusing on Bali real estate. The company also changed its name in the year to Arcadian Youth Ptd Ltd. The project will begin with a real estate data-focused application, proven successful in mature markets such as France. Bali's real estate sector is highly active with a large volume of transactions, generating extensive data and attracting real estate agents as well as personal and professional investors. The blockchain-based application is in its early stages of development, with a Web3 technical team based in Indonesia. Further updates will be provided on the application's technical progress and commercial rollout.
Carrying Value at 31 Dec 2023: £360,905 (2022: £360,905)
Greengage Global Holding Ltd
On 15 June 2023 Greengage announced that it had raised over £1m at a £30m valuation intended to be the first tranche in a £5m fundraising program. At the same time, Greengage triggered the conversion of noteholders’ convertible loan notes into ordinary A shares. With the conversion of the principal and interest of its GBP200,000 Loan Notes, Coinsilium receives a total of 11,094 Greengage A Shares: 10,395 A Shares from the conversion of the principal and 699 A Shares from the conversion of the interest accrued over the period (GBP16,821.92) at 5% per annum. In accordance with the terms of the loan notes instrument of 30 June 2021, the conversion price for the principal amount was £19.24 per share, calculated on the basis of a 20% discount on the full price of £24.05 per share which was the price applied to the conversion of accrued interest. Based on the 11,094 A Shares resulting from this conversion, Coinsilium received 7,510 Warrants to subscribe to Greengage shares at an exercise price of GBP28.87 per share, at a valuation of GBP36m and valid for two years. Furthermore, we decided to show continuing support to the project by participating in the equity subscription round, purchasing 1,039 A shares for £25,000 and receiving 860 warrants to subscribe for new A shares at an exercise price of £28.87, exercisable for 2 years. Post Period Updates |