from Coinsilium Group Limited (isin : VGG225641015)
Coinsilium Group Limited: UNAUDITED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
Coinsilium Group Limited (COIN) COINSILIUM GROUP LIMITED
(“Coinsilium” or the “Company”)
UNAUDITED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
Coinsilium Group Limited (AQUIS: COIN) (OTCQB:CINGF), the Blockchain, DeFi and Crypto Finance venture operator, is pleased to announce its unaudited consolidated interim financial statements for the six months ended 30 June 2023. Financial Highlights:
Corporate Highlights:
Post Period End Highlights:
The Directors of Coinsilium Group Limited take responsibility for this announcement. For further information, please contact:
DIRECTORS’ STATEMENT The Company ended the period under review with over £0.6m cash at bank and £1,071,553 in other current assets including Cryptocurrencies, tokens and rights to future tokens. The digital asset markets have recovered significantly since the start of the period, which has had a markedly positive impact on the Company’s cryptocurrency holdings as the loss from continuing operations decreased to £104,247 from a loss of £1,284,830 in H1 2022. Whilst the cryptocurrency markets remained highly volatile during the period, overall prices continued to improve, with Bitcoin and Ether ending the period up 85% and 60% respectively from their 2022 year-end lows. Throughout the period, Coinsilium continued to make solid operational progress across its investment and advisory activities. In April 2023 we announced a successful Subscription and Placing in the Company of GBP258,150 including Directors’ participation of GBP100,500. The funds raised are predominantly for investment purposes for follow-on funding rounds in certain ventures within the Company’s investment portfolio. Notably, in May 2023 we reported the completion of the acquisition of Tokenomi’s Web3 advisory services business interests, thus scaling up and further developing our Advisory Service capabilities, as a revenue generating adjunct to Coinsilium’s investment and venture building activities. We were also pleased to report in June 2023 a follow-on investment in Greengage and the conversion of the principal and interest of our GBP200,000 convertible loan notes. Greengage’s latest funding round, at a valuation of £30m, represents a 9.9% higher valuation than the initial round during which Coinsilium invested in 2021. Post period, we announced several exciting developments including the unveiling of portfolio company Indorse’s new Web3 software product, ‘Bastion’, an open source, modular wallet and Software Development Kit, the signing of a new Master collaboration agreement with global lifestyle brand BLVCK Paris and a Convertible Loan and Option Agreement with AI powered Infrastructure Finance platform, Silta Finance AG. Subscription and Placing On 21 April 2023, Coinsilium announced that it had raised GBP258,150 gross of expenses including Directors’ participation of GBP100,500, 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. The funds raised are predominantly to be used for investment purposes and specifically for follow-on funding rounds in certain ventures of the Company’s portfolio. Each Placing Share has an attaching warrant to subscribe for a further new ordinary share at an exercise price of 3p ("Warrants"), valid for two years from the admission of the Placing Shares.
Acquisitions and Investments Tokenomi Advisory Service Acquisition On 14 March 2023 Coinsilium announced that the Company had entered into Heads of Terms with Tokenomi, a blockchain and Web3 advisory services firm 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, has joined Coinsilium’s Advisory Team. Furthermore, that Tokenomi’s advisory client book had increased to seven retained Web3 blockchain project clients. With the addition of these new agreements, based on the agreed terms, projected revenues from all signed Tokenomi advisory service agreements as at the date of completion can be expected to reach up to USD1,268,400 (GBP1,018,005) over the subsequent 12 to 24 months, subject to those clients successfully completing their Token Generating Events (“TGE”’s) within this period. Investors should note that projected revenues are principally success based and contingent on the successful completion of a project client’s TGE or public token sale. The TGEs are generally expected to occur during the course of 2024, with a proportion of success fees, in certain cases, to be received over a subsequent 12 month vesting period. The timing of these events is usually contingent on conducive market conditions. In the event of any deterioration in market conditions, the TGEs may be subject to delays or postponement which would in turn impact on the timeline and projected revenue flows. The Consideration for the acquisition of the Tokenomi business was GBP116,500, of which GBP19,000 was paid in cash and GBP97,500 payable through the future issue of 3.25m Shares in the Company 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. Greengage Global Holdings Loan conversion and Investment On 15 June 2023 we reported that Coinsilium investment portfolio company 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 the GBP200,000 Loan Notes, Coinsilium received 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 is £19.24 per share, calculated on the basis of a 20% discount on the full price of £24.05 per share which is the price applied to the conversion of accrued interest. Based on the 11,094 A Shares resulting from this conversion, Coinsilium will receive 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 Greengage 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. The latest funding round at a £30,000,000 valuation represents a 9.9% higher valuation than the initial round during which Coinsilium invested in 2021. Post Period Events IOV Labs Asia JV On 18 August 2023 Coinsilium 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”). 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. With the mediation process having now run its course, the Company is considering its options in consultation with its Singapore legal advisors. The operations of the JVC have been funded to date by IOV Labs through a loan agreement between IOV Labs and the JVC. Coinsilium is not a party to the loan agreement. Since the mediation process has now run its course, both IOV Labs and Coinsilium have agreed in principle to wind up the JVC. In the event of the winding up of the JVC, Coinsilium CEO Eddy Travia will not have further involvement with the JVC. Portfolio Company Indorse Unveils ‘Bastion’ modular Crypto Wallet SDK On 29 August 2023 Consilium provided details regarding the unveiling of its 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. Master Collaboration Agreement with BLVCK Paris for strategic Web3 initiatives On 4 September 2023 Coinsilium announced that it had signed a Master Collaboration Agreement with global lifestyle fashion brand BLVCK Paris to establish a framework for engagement on future projects including Web3 projects. The Master Collaboration agreement with BLVCK Paris, builds on the success of our established relationship and gives us a conducive framework to work with the talented BLVCK Paris team on some exciting new initiatives and move forward on a range of strategic Web3 initiatives, as well as potential partnerships in the fashion and lifestyle sector, currently under review. Coinsilium cornerstones funding round for AI powered Infrastructure Finance platform Silta Finance AG On 14 September 2023 Coinsilium announced that it is to cornerstone a funding round for Switzerland-registered Silta Finance AG (“Silta”) via the Company’s 100% owned Gibraltar registered subsidiary, Seedcoin Limited through a Convertible Loan structure and Option Agreement. Silta is developing an advanced Artificial Intelligence (AI) powered platform designed to revolutionise sustainable infrastructure financing by automating the due diligence, feasibility, and project preparation processes. Silta’s advanced AI methodology will analyse vast amounts of data automatically, swiftly evaluating a project’s potential, feasibility, and risks; thereby accelerating the evaluation process and readiness for financing. Under the terms of the Convertible Loan Agreement, Seedcoin has provided a loan for an aggregate principal amount of USD50,000.00 ("Loan") at a pre-money valuation of USD5m. The interest-free Loan is granted for a period of six months from the date of the Agreement. At Maturity, the outstanding Loan amount shall convert into 22,306 new common shares of Silta at a price of USD 2.2416 per share. Under the terms of the Option Agreement, Seedcoin has the right to subscribe to up to 163,575 new shares in Silta for an aggregate value of up to USD500,000 at a pre-money valuation of USD7.5m. The Option may be exercised at any time during a period of 12 months from the date of the Option Agreement (“Effective Date”). Subsequent to the Loan conversion, should Seedcoin exercise its Option entitlement in full, it will hold a total of 185,881 shares or 6.7% of the total share capital of Silta. Outlook The continued cryptocurrency price improvements we are now seeing, particularly with Bitcoin and Ether gives us confidence that the market recovery phase is now gaining traction, as we head into the Bitcoin ‘halving’ expected in Spring 2024, a time which has historically catalysed previous bull phases in the Digital Assets value cycle. Having managed to remain on the right side of what has been an extremely challenging market throughout the last two-year downturn, Coinsilium now finds itself well positioned and ready to resume its drive for growth with an expanding portfolio of exciting Web3 investments and advisory clients. Whilst we continue to caution investors with regards to the prevailing regulatory uncertainties and challenges facing the broader Digital Asset industry, we have been most encouraged by certain developments over the past months relating to the potential advent of a spot Bitcoin ETF. A spot Bitcoin ETF would offer a regulated route for institutional and professional investors and eventually retail investors to diversify their portfolios into Bitcoin without having to worry about the custody of their bitcoins or figuring out how to use a cryptocurrency exchange. The cryptocurrency community and financial markets in general are closely following the potential approval of the first Bitcoin spot ETF in the United States and there is a consensus about the positive impact such an approval would have on the crypto markets overall. The clock is now ticking, and the SEC is under increasing pressure to approve the first US-based Bitcoin spot ETF. In early September 2023, the SEC lost a court case against Grayscale Bitcoin Trust that had filed to transform its publicly listed trust into a Bitcoin spot ETF backed by the thousands of bitcoins held in custody by Grayscale Bitcoin Trust. This could open the door to a review of its stance by the SEC. Notable Bitcoin spot ETF applicants in the US include BlackRock, Inc., Ark Investment Management (in collaboration with 21Shares) and Fidelity Investments. Artificial Intelligence (AI) Investments As noted in our annual report for year end 2022, we are also very excited by some of the opportunities we are starting to see emerge within Artificial Intelligence (AI) applications, and notably at points where they intersect with blockchain applications. In this respect we were delighted to announce, post period on 14 September 2023, Coinsilium's first AI investment in Silta Finance AG, where we acted as cornerstone investor for their latest funding round. Further information about Silta can be found on their website: https://silta.finance/. The combination of artificial intelligence and blockchain technology can create several business synergies and opportunities to improve data security, transparency, efficiency, and trust in various industries and business applications. Looking ahead, shareholders may expect to see further updates from the Company relating to investment and advisory opportunities as Coinsilium looks to further its foothold in this fast-evolving and potentially highly lucrative space. Web3 Ventures and Social Networks The Web3 venture space is also continuing to gain traction and our Web3 advisory services division remains highly active in the SE Asia region. As reported, the timely completion of the Tokenomi Web3 Advisory Business acquisition brings its founder, Alexis Nicosia, into our advisory team as we now look to scale up and further develop our Advisory Service capabilities as a revenue generating adjunct to Coinsilium’s investment and venture building activities. As Coinsilium continues to evaluate opportunities in the Web3 space, more recently the Company has started working with and providing strategic advisory services to certain partners engaged in the development of applications for a soon to be released decentralised Web3 Social Network ecosystem project. Web3 can enable the creation of decentralised social networks that give users greater control over their data and content. Users can own their data, control who accesses it, and even potentially monetise their contributions. Activity in Web3 Social Networks has been rapidly scaling over the last 12 months, powered by the development of large-scale decentralised network infrastructure protocols such as Lens, a blockchain based open-source social graph. Subject to the Project’s successful launch, Coinsilium’s participation and economic interests will be represented through a material stake in the Project network tokens. We expect to be able to provide a further, more comprehensive update at the time of the Project launch, currently slated for Q1 2024. Finally, as we head into what will hopefully be a period of more conducive market conditions, the Board would like to thank valued shareholders, partners and team members for their continued support throughout, and we look forward to continuing to provide the market with regular exciting progress updates for the remainder of the period and beyond. Financial Review In the period under review revenue for the six months ended 30 June 2023 was £56,417 compared to £138,888 for the six months ended 30 June 2022. The Company generated a loss for the six months ended 30 June 2023 from continuing operations of £104,247, which was compared to a loss of £1,284,830 for the six months ended 30 June 2022. The earnings per share was a loss of 0.06 pence for the six months ended 30 June 2023 which was compared to a loss of 0.7353 pence per share for the six months ended 30 June 2022. The financial assets at fair value through profit or loss increased to £2.21m at 30 June 2023 compared with £2.14m at 31 December 2022. The total other current assets, which is a combination of cryptocurrencies, tokens, and the right to receive tokens at a future date, amounted to £1,071,553 at 30 June 2023, which was an increase from £1,002,156 on 31 December 2022. Cash and cash equivalents amounted to £608,355 as at 30 June 2023, compared to £667,816 as at 31 December 2022. Significant Developments for Coinsilium’s Investment Portfolio Companies Greengage Global Holdings Ltd As noted above, Greengage undertook the first of its intended $5m raising which the Company participated in, along with conversion of its debt, resulting in an additional position in the Company at a relative value increase of 9.9% to the effective value of our initial investment in Greengage. Investment value equivalent in GBP as at 30 June 2023: £652,549 (Investment value in GBP as at 31 December 2022: £501,530) SSV Network (formerly known as Blox Staking) On 20 January 2023, SSV Network announced a USD50m ecosystem fund to support Ethereum proof-of-stake decentralization and ETH staking technologies. On 5 April 2023, SSV Network announced the release of JATO (Jet-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.” As a result of these positive developments, and in the absence of any new valuation data points to support an upgrading of the fair value of this investment, the investment is being held at the current carrying value of £177,075 as at 30 June 2023 (having been revalued for movements in the GBP/USD exchange rate from the initial cost of USD225,000). Post Period SSV Network mainnet launch Decentralized ETH staking network SSV Network launched its mainnet on 14 September 2023. The newly launched mainnet is meant to provide infrastructure for those who want to run an Ethereum (ETH-USD) validator using a Distributed Validator Technology Network, or DVT Network. Following the Ethereum Merge that took place last year, DVT has emerged as an inclusive solution to the notoriously complex staking process. Distributed Validator Technology (DVT) has received considerable attention in recent months and is touted to increase validator participation while remaining true to the decentralized ethos of blockchain technology. As one of the original pioneers in DVT, SSV Network’s mainnet launch allows multiple node operators to participate in community staking via partner applications, with reported plans to facilitate solo staking as part of the final permissionless phase. Investment value equivalent in GBP as at 30 June 2023: £177,075 (equivalent to USD225,000) (Investment value in GBP as at 31 December 2022: £185,981)
StartupToken StartupToken has evolved into a Web3 agency helping Web2 companies and new ventures to launch successful Web3 projects. StartupToken provides solutions in the Token, NFT and DeFi spaces. Investment value equivalent in GBP as at 30 June 2023: £360,905 (Investment value equivalent in GBP as at 31 December 2022: £360,905) Elevate Health As the proposed project could not be pursued under the initially planned Gibraltar legal structure, the Gibraltar incorporated project company has now been closed by its founders, with Coinsilium’s economic interest in the project being novated into a receivable token to be received in 2023 and/or 2024. Coinsilium should consequently receive 30m Elevate tokens over a vesting period of 18 months. The Elevate tokens are expected to be worth USD300,000 according to the project’s public price. Dates and price can vary. Given the level of uncertainty over the realisable value of the Elevate tokens to be received in settlement of the novation of the Company’s investment in Elevate, the Directors have determined not to revalue this investment above its historic cost level of USD100,000. Consequently, only foreign exchange revaluations have been booked to the carrying value of this investment, which at the reporting date stands at £78,700. Investment value equivalent in GBP as at 30 June 2023: £78,700 (Investment value equivalent in GBP as at 31 December 2022: £82,658) Indorse On 20 March 2023, Indorse announced that the new Multiverse NFT standard submitted by members of the Indorse tech team including Gaurang Torvekar becomes the ERC-5606 NFT standard with the potential to benefit the entire Web3 Ecosystem. Following submission of the EIP-5606 (Ethereum Improvement Proposal) in September 2022, the new ‘Multiverse’ non-fungible token (NFT) standard ERC-5606, successfully completed the Ethereum community approval process. Post Period On 29 August 2023, Consilium provided details regarding the unveiling of Indorse’s new Web3 software product ‘Bastion’, an open source, modular wallet and Software Development Kit (“SDK”). 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. Investment value equivalent in GBP as at 30 June 2023: £944,400 (Investment value equivalent in GBP as at 31 December 2022: £991,899)
Malcolm Palle Executive Chairman
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