Coinsilium Group Limited: Final Results for the year ended 31 December 2022
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Coinsilium Group Limited (COIN)
21 June 2023
COINSILIUM GROUP LIMITED
("Coinsilium" or the "Company")
Final Results for the year ended 31 December 2022
STATEMENT OF THE BOARD OF DIRECTORS
Coinsilium Group Limited (“Coinsilium”, the “Group” or the “Company”), the Web3 investor, advisor, and venture builder, is pleased to announce its Final Results for the year ended 31 December 2022.
Financial Summary
* Loss for the current year includes loss in value of tokens over the period of £1,289,903.
Operational Highlights
The Directors present their report, together with the Group Financial Statements and Auditor’s Report, for the year ended 31 December 2022. The comparative period is the year ended 31 December 2021.
Review of the Year
2022 will undoubtably go on record as one of most challenging periods for the Digital Asset industry to date, driven in the main by deteriorating global macroeconomic conditions and regulatory concerns, with the crypto markets remaining highly volatile throughout the period and the price of Bitcoin and Ethereum ending the year down by some 58% and 64% respectively.
The news in June 2022 of the collapse of the Terra Labs ecosystem proved to be the catalyst for several significant large-scale failures including Three Arrows Capital, a backer of Terra Labs, that was holding hundreds of millions of dollars in cryptocurrency for other funds, exchanges and blockchain companies. The contagion caused multiple bankruptcies and extraordinary losses for certain private and public companies who were providing unsecured loans to third parties such as Genesis Trading, Voyager Digital, BlockFi and Blockchain.com. Then in November came the collapse of cryptocurrency exchange FTX, the third-largest cryptocurrency exchange by volume with over one million users.
As we have stated previously, neither Coinsilium nor any of its investees or advisory clients had any direct exposure to these failures, though as one would expect, the fall-out from these events resulted in significant ongoing uncertainties for the broader digital asset markets for the remainder of 2022.
In contrast, the year saw Coinsilium making solid operational progress across its investment and advisory activities. In this respect, several significant investments and advisory contract wins were announced throughout the year namely, Blvck Paris (advisory agreement), Yellow Network (SAFT or Simple Agreement for Future Tokens), Silta Finance (Early Contribution Agreement and advisory agreement), GGS.io (SAFT and advisory agreement), and Metalinq (Token Purchase Agreement and advisory agreement). Full details of all these investments and client wins are provided in the ‘New Advisory and Investments Agreement’ section below.
Over the course of the reporting period, we continued to manage our resources pragmatically with a determination to remain on the right side of this extremely challenging market cycle, in preparation for more favourable market conditions which, post period, have now started to emerge. Having survived the worst that the market had to throw at us, we now find ourselves well positioned and ready to resume the drive for growth with an expanding portfolio of exciting Web3 advisory clients and investments.
The Company ended the period with the value of crypto assets held as at 31 December 2022 £1,002,159 comprising tradable tokens of £478,211 and rights to future tokens of £475,285. Cash and cash equivalents amounted to £667,816.
Director Share Purchases
During the period, Executive Chairman Malcolm Palle and Chief Executive Eddy Travia purchased a total of 1.75m Coinsilium shares on the market:
Director No. Shares Price
4 October 2022 Malcolm Palle 500,000 1.90p 7 October 2022 Eddy Travia 500,000 1.95p 28 October 2022 Malcolm Palle 250,000 1.90p 28 October 2022 Eddy Travia 250,000 1.95p 31 October 2022 Eddy Travia 250,000 1.90p
New Advisory and Investment Agreements in the Year
On 18 February 2022 we announced that Coinsilium had been appointed as advisor to global lifestyle fashion brand Blvck Paris for the launch of its ‘Blvck Genesis’ NFT collection. Under the agreement, Coinsilium provided expert advice in respect of the NFT market and the promotion of their NFT collection. The collection features 9,999 unique NFTs, each design element has been crafted by Blvck Paris founder, Julian O'hayon, with the avatars created through the random combination of these graphical elements through a Blvck randomiser. The collection successfully sold out within one day of the launch.
On 21 April 2022 we announced that Coinsilium had entered a Simple Agreement for Future Tokens ("SAFT") with Layer3 FinTech Ltd to purchase USD200,000 of YELLOW tokens, the native token of Yellow Network. Yellow Network is a decentralised finance (DeFi) infrastructure that aims to provide a suite of financial tools and services to its participants. One of the services offered by Yellow Network is a decentralised clearing system for trading firms called ClearSync. ClearSync is a system for trading firms that reduces counterparty risk and helps settle trades quickly and efficiently using smart contracts on the Ethereum blockchain. Traders deposit collateral into an Adjudicator smart contract to ensure trades are settled, offering a secure and transparent way to trade without traditional clearing houses. Yellow Network aims to enable trade between firms without pre-funding and without immediate settlement required. The platform increases the capital efficiency for accessing spot markets by a factor of 5 to 10 times. By using netting and batching of transactions, Yellow Network aims to improve performance and lower costs. The generalised problems they are aiming to address are Market and liquidity fragmentation, lack of decentralisation and lack of regulatory frameworks. Yellow Network is a highly ambitious venture and potential game changer, headed up by a very capable and impressive team of experienced trading software and blockchain industry veterans. In a private token sale that took place on 1 September 2022, in collaboration with Launchblock, the $YELLOW token allocation sold out in under a minute where 1,388,888 $YELLOW tokens were sold at a price of USD0.036 each. On 28 January 2023, Yellow Network successfully completed a VIP sale round on the LaunchBlock platform selling 2,631,578 Yellow tokens at a unit price of USD0.038. At this stage we cannot confirm a price for tokens to be granted to Coinsilium under the SAFT allocation, however the LaunchBlock VIP sale price achieved of USD0.38, is indicative of an expected minimum uplift of 400% from the price at which Coinsilium’s Yellow tokens are expected to be allocated. Further information about Yellow Network can be found on their website https://www.yellow.org/
On 5 May 2022 we announced that Coinsilium had been appointment as advisor to Switzerland-registered Silta Finance AG (“Silta”) and that the Company had entered into an Early Contribution Agreement (“ECA'') with Silta to purchase USD75,000 of future SILTA tokens, the utility token of the Silta ecosystem. Silta is another exciting and highly ambitious project with the objective of building a bridge connecting DeFi protocols across multiple chains to real world assets (RWA) infrastructure. Silta aims to provide developers of real-world assets with a new and easier line of credit for funding impact-conscious infrastructure. The Silta Score, which reflects the creditworthiness as well as the social and environmental impact of an infrastructure project, is encapsulated in a dynamic and periodically updating NFT (non-fungible token).
Coinsilium provides strategic advisory services to Silta in relation to market trends, innovations, and new developments in DeFi and blockchain-powered project finance. Further information can be found on the Silta Website https://silta.finance/
On 22 June 2022 we announced Coinsilium’s appointment as advisor to Delaware-registered Company GGs.io (“GGs.io”) and that it has entered into a Simple Agreement for Future Tokens (“SAFT”) with GGS.io, to purchase USD100,000 of future GGs.io tokens, the utility token of the GGs.io gaming ecosystem. GGs.io aims to build Latin America’s first ‘Play and Earn’ blockchain gaming hub while promoting Web3 education and social mobility. The GGs.io founding team members have considerable experience in this space having contributed to the build of successful e-sports ventures in the Latin-American (Latam) markets, launching and operating successful communities and events for brands such as Razer, Red Bull, Claro Gaming, ViacomCBS, Supercell, among others over the past 5 years. GGs.io has been accepted as the first gaming project to join the Origami program, an accelerator for Decentralised Autonomous Organisations (“DAOs”) operated and founded by Y Combinator alumni and founding members of Orange DAO. Other early investors in GGs.io alongside Coinsilium include Boost VC an early-stage VC firm in California founded by Adam Draper – and Ripio Ventures, the venture arm of Ripio the access gateway to the new digital economy in Latin America.
Play-to-earn has now evolved into ‘Play and Earn’ where the game is not seen as a ‘job’ but as an activity which is fun first, and potentially lucrative second. With the inclusion of blockchain technology, Web3 games now use NFTs as leverage and provide true ownership of in-game assets, something missing from Web2 video games.
On 25 July 2022 we announced Coinsilium's appointment as advisor to Metalinq Labs Inc (“Metalinq Labs”) and a Token Purchase Agreement to purchase USD200,000 of future Metalinq tokens (“MLINQ”), the utility token of Metalinq, a next generation metaverse interoperability Layer3 protocol, backed by the founding team behind portfolio company Indorse Pte. Ltd. (“Indorse”) enabling interoperability between metaverses. Under the terms of the Token Purchase Agreement, Coinsilium should receive USD200,000 in value of MLINQ digital tokens. The tokens should vest over a period of time following the MLINQ token generating event (“TGE”).
Metalinq is the first Layer 3 protocol built to enable interoperability between Metaverses. The Metalinq protocol will allow projects to launch wearable (NFT) collections across multiple metaverses simultaneously. For the first time, users will be able to purchase truly interoperable wearables. The protocol is built with a focus on interoperability and with the objective to remain blockchain agnostic; this will allow users to transfer their digital assets across multiple metaverses and applications. NFT traders will be able to track their wearables and assets across all platforms, chains and wallets. The interoperability is encoded into the “Meta NFTs”, including the 3D file formats and ownership details specific to each metaverse.
Coinsilium has agreed to provide strategic advisory services to Metalinq Labs over a period up to and beyond the MLINQ’s TGE. The services will include strategic advice on token economics, strategic development, and partnerships.
New Advisory and Investment Agreements Post Year End 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, has joined Coinsilium’s Advisory Team. Furthermore, Tokenomi’s advisory client book currently consists of seven retained Web3 blockchain project clients, including three additional deals closed since the announcement of signed Heads of Terms on 14 March 2023, with a prospective pipeline of ten further project clients. With the addition of these three 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 forthcoming 12 months, 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. Consideration for the acquisition of the Tokenomi buinsess was GBP116,500, of which GBP19,000 was paid in cash and GBP97,500 is 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.
Partnerships
IOV Labs Asia JV
On 26 October 2022 the Company announced that IOV Labs had advised the Company that it has been re-structuring its goals, targets and strategy and proposed that Coinsilium considers terms under which the Company would be prepared for the current JVA to be replaced with an alternative business model. The Company advised IOV Labs that it would be willing to review the objectives of the JVA with a view to commencing negotiations towards a mutually agreeable outcome which may or may not include an alternative business model.
Post year end, on 28 February 2023 the Company provided a further update stating that it has since reaffirmed its position to IOV Labs that a prerequisite to progressing an alternative business model would be the satisfactory resolution of the existing JVA arrangements and that the Company had received a substantive written response from IOV Labs to a formal proposal made by the Company on 1 December 2022.
Any further material updates will be provided by the Company to the market as required in a timely fashion.
Nifty Labs
Nifty Labs was established as an NFT development studio in Gibraltar, under a partnership with portfolio company Indorse. Indorse’s tech team has significant experience in drafting smart contracts and designing Web3 decentralised applications. The first product built under Nifty Labs was an NFT Marketplace software solution, initially developed to be compatible with any EVM (Ethereum Virtual Machine) blockchain such as Layer 2 blockchains. Later in the course of 2022, the Indorse tech team proposed and successfully launched the ERC-5606 Multiverse NFT standard. Nifty Labs initially aimed to commercialise the Nifty Marketplace as a ‘white labelled’ Software as a Service (SaaS) business solution, however, due to the uncertainties and complexities around the evolving regulatory landscape, the commercial model is now being revisited with a focus on Web3 social media applications where NFTs play a central role.
The Web3 social media space has been growing fast over the last 12 months powered by the development of infrastructure solutions such as Lens Protocol, the scalability and cost efficiency brought by Layer 2 blockchains and the emergence of new Ethereum standards such as ERC-4337 enabling crypto wallet log in using Web2 credentials. One feature of Web3 social media platforms is their reliance on NFTs and smart contracts, both of which are core areas of expertise for Nifty Labs. We believe that, through a pragmatic, incentivised and compelling model, the numerous benefits of Web3 will attract a wave of Web2 users currently focusing on the efficiency and network effect of Web2 platforms. We believe that tomorrow’s social networking will be done via open source, blockchain-powered, decentralised applications and Nifty Labs is ideally positioned to develop leading market-relevant applications in the growing Web3 social media space. Further details about the potential commercial models to drive users to Web3 to be unveiled in a timely manner to the market.
Post Year End Funding Update 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. The funds raised will predominantly be used for investment purposes and specifically for follow-on funding rounds in certain ventures of the Company’s portfolio. 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 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 expected date of admission of the Placing Shares, being 27 April 2023.
The Directors' participation in the Subscription was as follows:
The funds raised are to be used predominantly for investment purposes and specifically for follow-on funding rounds in certain ventures within the Company’s portfolio. Financial Review Total comprehensive income, including fair value gains and losses on financial assets and digital assets, reported a loss for the period of £2,056,974 compared to a gain of £13,774 in the previous year. This result is largely driven by a decrease in the fair value of digital asset tokens of £1,289,903 and impairments of equity investments totalling £273,292. Administrative expenses in the year of £936,931 represent a significant decrease on the prior year figure of £1,693,041. As at 31 December 2022, cash and cash equivalents amounted to £667,816 (2021: £1,513,892). Outlook The Company ended the reporting period with the value of crypto assets held as at 31 December 2022 at £1,002,159, comprising tradable tokens of £478,211 and rights to future tokens (valued at cost) of £475,285. Cash and cash equivalents amounted to £667,816. The period end also marked a low watermark for the Digital Asset Markets which have recovered significantly since January 2023. This in turn has had a materially positive impact on the Company’s crypto treasury position since the end of 2022. Whilst volatility in the market remains, the marked improvement we have witnessed since January 2023 gives us optimism that the worst of the bear market may be behind us and that we are now in the early stages of a building recovery phase.
We are also most encouraged to see the growing level of activity building in the wider Web3 venture space, and the steady stream of demand we are witnessing for our Web3 advisory services, particularly in the SE Asia region. The timely completion of the Tokenomi Web3 Advisory Business acquisition brings its founder, Alexis Nicosia, into our advisory team as we now look to scaling up and further developing our Advisory Service capabilities as a revenue generating adjunct to Coinsilium’s investment and venture building activities.
As market conditions continue to improve, we will also be looking to add to and broaden our growing portfolio of investments, notably in the Metaverse, Asset Tokenisation and the Web3 space. The Web3 social media space has been growing fast over the last 12 months powered by the development of infrastructure solutions such as Lens Protocol, the scalability and cost efficiency brought by Layer 2 blockchains and the emergence of new Ethereum standards such as ERC-4337 enabling crypto wallet log in using Web2 credentials. We are looking closely at this space as we believe we can tap into our NFT experience and into some of our portfolio companies’ talent to develop market-relevant applications. We will update the market in a timely manner with news of developments in that direction.
Artificial Intelligence (AI)
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. AI has been in development some time but, with the release of ChatGPT4, its adoption has been much faster than anything humanity has ever seen before, going from zero to 100m users in under 2 months and with the potential to bring infinite scalable knowledge into the economic system.
As noted above, on 21 April 2023 we announced a successful share subscription and broker placing through Peterhouse Capital and SI Capital raising GBP258,150 gross of expenses 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. On 15 June 2023, we announced the first of these, where we 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. We look forward to providing shareholders with updates on further new and follow-on investments over the remainder of the year.
The strong recovery from the December lows in the Digital Asset markets provides us with a renewed level of optimism that a continuing recovery process is now underway, albeit at a slow and steady pace, and as we head towards the next Bitcoin halving in Spring 2024, a time which has historically catalysed previous bull phases of the Digital Assets value cycle.
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 exciting progress updates for the remainder of the period and beyond.
Eddy Travia Chief Executive Officer 19 June 2023
Investee Companies Update Indorse On 27 January 2022 Coinsilium Group’s CEO Eddy Travia, together with Gaurang Torvekar, CEO of Indorse co-presented an online web event entitled "The Metaverse, Play to Earn & BlockBots" hosted by Startup Grind Gibraltar. This showcase and educational session were designed to provide attendees with an entry level understanding of these emerging technology applications. The event was streamed through the Startup Grind platform and simultaneously in the Metaverse, at the Indorse virtual headquarters in CryptoVoxels.
On 19 April 2022, Indorse announced the launch of the Public Alpha version of its BlockBots NFT Play-to-Earn (“P2E”) game called “Block Bouts” with a prize pool of USD33,000 and various BlockBot NFTs. On 13 May 2022, Indorse announced the successful completion of the 2-week Public Alpha of the BlockBots NFT game with more than 360,000 gameplay during the period. On 17 May 2022, Indorse announced the V1 of the BlockBots P2E game to be launched in June and through which players can stake and earn IND tokens and PowerUps. The team also announced an upcoming BlockBots x Minecraft Battle Royal Game for Summer 2022. On 25 July 2022, Coinsilium Group announced its appointment as advisor to Metalinq Labs Inc (“Metalinq Labs”) and that it has entered into a Token Purchase Agreement to purchase USD200,000 of future Metalinq tokens (“MLINQ”), the utility token of Metalinq, a next generation Layer 3 protocol solution enabling interoperability between metaverses.
In the year, Metalinq Labs announced the launch of development work on Metalinq, the Metaverse interoperability Layer3 protocol, backed by the founding team behind portfolio company Indorse Pte. Ltd. (“Indorse”) and the BlockBots NFT-based Play-to-earn game.
Post Year End Updates 20 March 2023 New Multiverse NFT standard submitted by some members of the Indorse tech team 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. What is ERC-5606? ERC-5606 is a new standard for creating multiverse NFTs on multiple metaverses, Web3 games and platforms. These tokens can represent unique assets across different virtual worlds, enabling interoperability between these worlds. With ERC-5606, creators can design NFTs that are not limited to a single blockchain or platform, unlocking new possibilities for the use of NFTs in gaming, art, and other industries. The standard provides guidelines for implementing NFTs on different blockchains, ensuring compatibility and ease of use for developers and users alike. In addition, ERC-5606 offers a range of features that enhance the functionality and flexibility of NFTs. For example, it supports the creation of composite NFTs, which combine multiple assets into a single token. This allows for the creation of more complex and valuable NFTs that can represent entire collections or sets of assets. To become a new NFT standard, EIP-5606 was initially submitted as an Ethereum Improvement Proposal (“EIP”) on 6 September 2022. After review by members of the Ethereum Protocol Developers and the Ethereum community, the proposal became the ERC-5606 NFT standard.
Carrying Value in GBP as at 31 December 2022: £991,899 (2021: £889,587)
SSV Network (formerly Blox Staking) In February 2022 it was announced that SSV Network (the decentralised protocol) had raised USD10m from reputable crypto companies such as Coinbase, Lukka, OKX and Digital Currency Group. At the time, media reported that SSV Network’s test net included 2,661 operators and 7,954 validators with 254,528 ETH staked. It is important to note that these companies did not acquire shares in Israeli-registered Coin-Dash Limited (Coindash), nor entered the cap table of Coindash as shareholders but acquired $SSV tokens at an undisclosed price.$SSV tokens were valued at USD9.9321 as of 31 December 2022 (SSV tokens are not considered in the Company’s valuation method). Given the high number of SSV Network tokens held by Coindash and the focus of its team to develop SSV Network it is clear for Coinsilium’s management that Coindash and SSV Network are intrinsically linked and the success of SSV Network should have a positive effect on Coindash. Post Period Updates 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 (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.” As no new valuation data has been found in the current year, and there is no indication that the operations of the investment company suggest impairment of the current carrying value, the Company has decided to maintain the brought forward valuation for the purposes of the current year of account. Consequently, the investment is held at the carrying value of £185,981 as at 31 December 2022 (having been revalued for movements in the GBP/USD exchange rate from the initial cost of USD225,000). Carrying Value in GBP as at 31 December 2022: £185,981 (2021: £166,798)
Elevate Health As the proposed project could not be pursued under the initially planned Gibraltar legal structure, the Gibraltar incorpoprated project company is being wound up by its founders, with Coinsilium’s economic interest in the project being novated into a receivable token to be received in 2023 and 2024. Coinsilium should consequently receive 30m Elevate tokens over a vesting period of 18 months. The Elevate tokens should 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 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 £82,658. Following regular communications with and updates from the founders of the investment project, the directors do not believe there is any indication that the carrying value of this project should be impaired. Carrying Value in GBP as of 31 December 2022: £82,658 (2021: £74,132)
StartupToken
Throughout 2022, StartupToken has been looking at developing customisable NFT storefronts and enterprise solutions for SMEs in the Southeast Asia region. 2022 has been an annus horribilis for the crypto space in general with several headline-grabbing collapses of multi-billiondollar firms, depressed cryptocurrency prices and a negative sentiment across the crypto markets. It has been particularly difficult for NFTs with declining trading volume and prices. In these difficult times the liquidity of MINTY tokens has fallen below a threshold the Company considers adequate to maintain the value of its MINTY denominated assets and has decided to fully impair the value of its MINTY Token holdings of £78,484 (recognised in “Loss on token value” in the current year), and partially impair the investment in StartupToken to reduce the carrying valuer to the historic cost of the initial investment. Although several tokens have managed to recover from very low liquidity levels in the past, the Coinsilium Board prefers to adopt a cautionary approach with regards to the value of the MINTY tokens and their knock on impact on the value of the investment in StartupToken. Consequentially, an impairment charge of £273,292 has been recognised in the current year against the value of the investment in StartupToken, bringing the year end carrying value to £360,905.
Carrying Value at 31 Dec 2022: £360,905 (2021: 595,001)
Greengage Global Holding Ltd
On 19 April 2022, Greengage announced its acquisition of Silver Lined Solutions Limited (SLS). SLS is a highly rated Salesforce consultancy in the financial services space and has been actively engaged in building a differentiated core IT architecture for Greengage. Silver Lined Solutions has been rebranded as Greengage Solutions Ltd (GGS).
On 21 December 2022, Greengage shared an Investor Update, the main points of which are listed below:
Post Period Updates
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. Att the same time, Greengage has 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 will receive 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 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 prce of £28.87, exercisable for 2 years. Given the positive news released over 2022 and the current funding round at a £30,000,000 valuation which represents a 9.9% higher valuation than the initial round during which Coinsilium initially invested in 2021, the directors believe that the cost of this investment is reflective of the Fair Value at the reporting date, such that no further revaluation of this investment is required. Initial Investment and Carrying Value in GBP as at 31 December 2022: £501,530 (2021: £501,530)
COINSILIUM GROUP LIMITED GROUP STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2022
COINSILIUM GROUP LIMITED STATEMENTS OF FINANCIAL POSITION
AS AT 31 DECEMBER 2022
The Financial Statements were approved and authorised for issue by the Board of Directors on 19 June 2023 and were signed on its behalf by:
Eddy Travia Chief Executive Officer
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
COINSILIUM GROUP LIMITED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2022
COINSILIUM GROUP LIMITED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2022
FOR THE YEAR ENDED 31 DECEMBER 2022
ACCOUNTING POLICIES
1 General Information
Coinsilium Group Limited (“the Group” or “the Company”) is a limited liability company domiciled in the British Virgin Islands and is quoted on the Aquis Growth Market. The Company was incorporated on 25 September 2014. Coinsilium is a focused Web3 Investor, Advisor and Venture Builder operationally based in Gibraltar. As an innovator with proven technological and commercial expertise and development capabilities in the Web3 arena, Coinsilium provides revenue-generating strategic advisory services and teams up with leading tech experts to build Web3 ventures. Through its subsidiary Nifty Labs, a Web3 and NFT technology development centre in Gibraltar in partnership with blockchain tech experts Indorse, the Group enables major Web2 players to successfully transition into the Web3 space. 2 Summary of significant accounting policies The principal accounting policies applied in the preparation of these consolidated Financial Statements are set out below. These policies have been consistently applied unless otherwise stated. 2.1 Basis of preparation of Financial Statements
The Group and Company Financial Statements have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union (“IFRS”). The Financial Statements have been prepared on the historical cost basis, except for the measurement to fair value of certain financial assets and financial instruments as described in the accounting policies below. The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group’s Accounting Policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated Financial Statements are disclosed in Note 4. On 25 September 2014, Coinsilium Group Limited was incorporated to act as the holding company for the Group. On incorporation, 1 share was issued at £Nil par value.
2.2 New IFRS standards and interpretations
New Standards and revisions to existing standards issued that are effective at 1 January 2022
Certain new accounting standards and interpretations have been published that are effective at 1 January 2022:
These amendments had no impact on the consolidated financial statements of the Group. The Group intends to use the practical expedients in future periods if they become applicable.
COINSILIUM GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022 ACCOUNTING POLICIES (continued)
New Standards and revisions to existing standards issued that are not yet effective
Certain new accounting standards and interpretations have been published that are not yet effective
The Group is currently assessing the impact of the amendments to determine the impact they will have on the Group’s accounting policy disclosures.
2.3 Basis of Consolidation
The Group Financial Statements consolidate the financial statements of Coinsilium Group Limited and the financial statements of all of its subsidiary undertakings made up to 31 December 2022. Subsidiaries are all entities over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the subsidiary and has the ability to affect those returns through its control over the entity. Where an entity does not have returns, the Group’s power over the investee is assessed as to whether control is held. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases. Associates are entities over which the Group exercises significant influence but does not exercise control. Examples of Associates are Joint Venture undertakings in which the Group has less than 50% of the shares in issue but exercises significant influence by virtue of holding in excess of a 20% interest in the company or by other means, such as holding the right to appoint directors to the board of the Company. Where the Group holds an interest in an associate, this interest is accounted for under equity accounting, whereby the initial investment is recognised at cost, with the Group’s post acquisition share of the profit or loss of the associate being recognised going forward in the Statement of Comprehensive Income. Inter-company transactions, balances, and income and expenses on transactions between Group companies are eliminated. Profits and losses resulting from intercompany transactions that are recognised in assets are also eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group. Investments in subsidiaries are stated at cost less provision for impairment. 2.4 Going Concern
As described in the Results and Dividends section of this Directors’ Report, the Group has reported an operating loss for the year.
In considering the Group’s ability to continue in operation for the foreseeable future, the Directors have considered the forecast operating cash-flows up to the end of 30 June 2024, along with the expoectations of additional cash investments into digital token projects which remain entirely in the Company’s control.
As at the reporting date, the Company had £668k in cash reserves and £478k in readily convertible digital asset tokens. Furthermore, the Company successfully raised £258k (before expenses) folllowing the reporting period through a private placement of new ordinary shares.
As the Directors have continued to maintain a high level of control over operating expenditures throughout the period, which it feels remains appropriate given the current size of the business, operating cashflows to 30 June 2024, along with expectations of additional digital asset token investments, are projected to be fully met from existing cash resources (including post period end cash raised via the private placement) without the need for any reliance on realisation of readily convertible digital asset tokens in the Company portfolio, which remains available for any additional investment deemed advantageous over this period.
COINSILIUM GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022 ACCOUNTING POLICIES (continued) As a consequence, the Directors have a reasonable expectation that the Group and Company have adequate resources to continue in operational existence for the foreseeable future. Thus, they continue to adopt the going concern basis of accounting in preparing the annual financial statements. 2.5 Business Combinations
The acquisition of subsidiaries in a business combination is accounted for using the acquisition method. The cost of the acquisition is measured at the aggregate of the fair values, at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the acquired, plus any costs directly attributable to the business combination. The acquiree’s identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under IFRS 3 are recognised at their fair value at the acquisition date.
2.6 Foreign Currencies
The functional currency of the Group and Company is UK Pound Sterling (£) and all values are rounded to the nearest Pound. This is on the basis that the Group is based in the United Kingdom, its overheads are generally incurred in sterling, its funds are generally held mainly in sterling bank accounts, and its investors have invested in sterling-based instruments. The Group financial statements are presented in UK Pound Sterling, which is the Group’s presentational currency.
Transactions in foreign currencies are translated at the exchange rate ruling at the date of each transaction. Foreign currency monetary assets and liabilities are retranslated using the exchange rates at the reporting date. Gains and losses arising from changes in exchange rates after the date of the transaction are recognised in profit or loss. Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated at the exchange rate at the date of the original transaction.
2.7 Intangible Assets
Brand and trademark intangible assets have been recorded at cost, being their estimated fair value at the time of acquisition. They are amortised over their estimated useful economic lives. 2.8 Property, Plant and Equipment
Property, plant and equipment is stated at cost less accumulated depreciation and any accumulated impairment losses. Depreciation is provided on all property, plant and equipment to write off the cost less estimated residual value of each asset over its expected useful economic life on a straight-line basis at the following annual rates: Office equipment - 33.33% straight line over the life of the asset
Assets that are subject to depreciation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use.
COINSILIUM GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
ACCOUNTING POLICIES (continued)
2.9 Financial Assets
From 1 January 2018 the Group and Company classifies its financial assets in the following measurement categories:
The classification depends on the business model for managing the financial assets and the contractual terms of the cash flows. Financial assets are classified as at amortised cost only if both of the following criteria are met:
Financial assets at amortised cost are subsequently measured using the effective interest rate (EIR) method and are subject to impairment. The Group’s and Company’s financial assets at amortised cost include trade and other receivables and cash and cash equivalents. A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognised when:
The Group recognises an allowance for expected credit losses (ECLs) for all debt instruments not held at fair value through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original EIR. The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms.
For trade receivables (not subject to provisional pricing) and other receivables due in less than 12 months, the Group applies the simplified approach in calculating ECLs, as permitted by IFRS 9. Therefore, the Group does not track changes in credit risk, but instead, recognises a loss allowance based on the financial asset’s lifetime ECL at each reporting date.
The Group and Company classifies the following financial assets at fair value through profit or loss:
The Group and Company measures all equity investments at fair value through profit or loss.
COINSILIUM GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
ACCOUNTING POLICIES (continued)
2.9 Financial Assets (continued)
Unquoted investments are valued by the Directors using primary valuation techniques such as recent transactions, last price or net asset value.
Where the fair value of an equity investment cannot be estimated reliably, such as investments in unquoted companies, fair value is based on cost less any impairment charges. In this case impairment charges are recognised in profit or loss. The Group assesses at each period end date whether there is any objective evidence that a financial asset or group of financial assets classified as available-for-sale has been impaired.
Loans and Receivables
Receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. After initial recognition, these are measured at amortised cost using the effective interest method, less provision for impairment. Discounting is omitted where the effect of discounting is immaterial. The Group’s cash and cash equivalents, trade and other receivables fall into this category of financial instruments. In relation to the Company, loans to and from subsidiaries are also recognised within this category of financial instruments.
Individually significant receivables are considered for impairment when they are past due or when other objective evidence is received that a specific counterparty will default on payment.
Other financial assets are also classified within the loans and receivables category.
Impairment of Financial Assets
The Group and Company assesses at the end of each reporting period whether there is objective evidence that a financial asset is impaired. For equity investments classified as available-for-sale, a significant or prolonged decline in the fair value of the security below its cost is evidence that the assets are impaired. If any such evidence exists for available-for-sale financial assets, the cumulative loss – measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognised in profit or loss – is removed from equity and recognised in profit or loss. Impairment losses recognised in profit or loss on equity instruments are not reversed through profit or loss.
For loans and receivables, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the asset’s effective interest rate.
Impairment testing of available-for sale financial assets is described in Note 4.
2.10 Other Current Assets
Crypto Tokens
Other current assets – Crypto Tokens are digital assets, including tokens and cryptocurrency, which do not qualify for recognition as cash and cash equivalents or financial assets, and have an active market which provides pricing information on an ongoing basis. Other current assets are initially measured at fair value. Subsequently, digital assets are measured at fair value. Gains and losses on measurement are recognised directly in profit or loss. Where a digital asset is disposed of, the cumulative gain or loss previously recognised in other comprehensive income is reclassified to profit or loss. Digital assets are included in current assets as management intends to dispose of them within 12 months of the end of the reporting period.
Rights to Future Tokens
Projects and entities looking to launch a blockchain network or product make use of agreements such as a ‘Simple Agreement for Future Tokens’ (‘SAFT’) to attract early-stage investors and lock in funding from interested parties. A SAFT is an early-stage investment, where the investor provides upfront funding to a project in exchange for an entitlement to receive a variable number of digital assets or tokens in the future upon a successful launch of the respective project. The number of digital assets or tokens is usually detailed in the agreement but can vary, COINSILIUM GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
ACCOUNTING POLICIES (continued)
impacting the determination of the accounting treatment. Factors to consider include (but are not limited to) the characteristics and features that the digital asset or tokens will have, and the rights to which the future holders will be entitled.
The Rights to Future Tokens in the Group consist of such agreements for future tokens and are accounted for at cost less impairment. When such rights crystalise and result in the receipt of the tokens in question, these assets will be recognsied as Crypto Tokens and measured at fair value.
2.11 Cash and Cash Equivalents
Cash and cash equivalents comprise cash in hand and current and deposit balances at banks with maturities of three months or less from inception.
2.12 Current and Deferred Taxation
The tax expense represents the sum of the tax currently payable and deferred tax. The liability for current tax is calculated using tax rates and laws that have been enacted or substantively enacted by the reporting date.
Deferred tax is the tax expected to be payable or recoverable on temporary differences between the carrying amounts of assets and liabilities in the group or parent company financial statements and the corresponding tax bases used in the computation of taxable profit and is accounted for using the balance sheet liability method.
Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be recognised. Such assets and liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.
Deferred tax is calculated at the tax rates and laws that are expected to apply in the period when the liability is settled, or the asset is recognised based on tax laws and rates that have been enacted at the reporting date. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited in other comprehensive income, in which case the deferred tax is also dealt with in other comprehensive income.
2.13 Financial liabilities
Financial liabilities are recognised when the Group and Company becomes party to the contractual provisions of the instrument and are initially measured at fair value. They are de-recognised when extinguished, discharged, cancelled or expired.
The Group’s and Company’s financial liabilities comprise trade and other payables.
Trade and other payables are recognised initially at their fair value and subsequently measured at amortised cost using the effective interest rate method, less settlement payments.
2.14 Equity
An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. Equity instruments issued by the Company are recorded at the proceeds received net of direct issue costs.
The share premium account represents premiums received on the initial issuing of the share capital. Any transaction costs associated with the issuing of shares are deducted from share premium, net of any related income tax benefits.
The share capital account represents the amount subscribed for shares at nominal value. Since the Company’s shares have a £Nil par value, no amounts are credited to share capital and all amounts received on the initial issuing of shares are credited to the share premium. COINSILIUM GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
ACCOUNTING POLICIES (continued)
Treasury shares represent the cost of the Company’s investment in its own shares.
Other reserves represent the accumulated fair value adjustments on other current assets that are not permanently impaired.
Share option reserve represents the fair values of share options and warrants granted.
Retained earnings/(deficit) include all results as disclosed in the statement of comprehensive income.
2.15 Share Based Payments
The Group makes payments to third parties through share-based schemes, under which the entity receives services from third party suppliers as consideration for equity instruments (shares, options and warrants) of the Group. The Group may also issue warrants to share subscribers as part of a share placing. The fair value of the equity-settled share based payments is recognised as an expense in the income statement or charged to equity depending on the nature of the service provided or instrument issued. The total amount to be expensed or charged in the case of options is determined by reference to the fair value of options granted:
In the case of shares and warrants, the amount charged to the share premium account is determined by reference to the fair value of the services received.
2.16 Revenue
Revenue comprises the fair value of the consideration received or receivable for consultancy and advisory services provided, excluding VAT and relevant sales taxes.
Revenue is recognised for services when the Group has satisfied its contractual performance obligation in respect of the services. The amount recognised for the services performed is the consideration that the Group is entitled to for performing the services provided. Consultancy and advisory services are recognised over time whereas success fees on completion of a Token Generation Event are recognised at a point in time.
The majority of contracts for services and success fees are for a fixed number of tokens and cryptocurrency, which equates to the fair value of services provided. Revenue is recorded at the token or cryptocurrency rate as quoted on the date the performance obligation is fulfilled.
2.17 Leases
Payments associated with short-term leases and all leases of low-value assets are recognised on a straight-line basis as an expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less.
COINSILIUM GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
3. Financial Risk Management
3.1 Financial Risk Factors
The Group’s activities expose it to a variety of financial risks being market risk (including interest rate risk, and currency risk), credit risk, and liquidity risk. The Group’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group’s financial performance.
Market Risk
At 31 December 2022, management maintained the majority of the Group’s cash assets in sterling bank accounts to minimise foreign currency risk. The Company will continue to hold any significant cash assets in sterling.
In respect of investments, management believes that the foreign currency risk is a far lower risk than the market risk and do not currently actively look to manage foreign currency risk arising from investments.
The Directors will continue to assess the effect of movements in exchange rates on the Group’s financial operations and initiate suitable risk management measures where necessary.
Interest rate risk is the risk that the value of a financial instrument or cash flows associated with the instrument will fluctuate due to changes in market interest rates. As the Group has no borrowings, it is not exposed to interest rate risk on financial liabilities. The Group’s interest rate risk arises from its cash held on short-term deposit, and from the provision of convertible loans, which are not significant.
The Group is exposed to equity securities price risk because of investments held and classified in the Statement of Financial Position as financial assets through profit or loss. To manage its price risk arising from investments in equity securities, the Group could diversify its portfolio. However, given the size of the Group’s operations, the costs of managing exposure to securities price risk exceed any potential benefits. In addition, the Group is exposed to high levels of price volatility in cryptocurrency and tokens. The Group currently seeks to manage price volatility risk by actively monitoring its portfolio of digital assets. The Directors will revisit the appropriateness of these policies should the Group’s operations change in size or nature. The Group has no exposure to commodity price risk.
Credit Risk
Credit risk is the risk of loss associated with counterparty’s inability to fulfil its payment obligations. The Group’s credit risk is attributable to cash and cash equivalents and trade and other receivables. The credit risk on cash is limited because the Group invests its cash in deposits with well-capitalised financial institutions with strong credit ratings. The Group’s exposure to credit risk is reduced as it deals with less new clients and more established clients.
Liquidity Risk
The Group’s approach to managing liquidity risk is to ensure that it will have sufficient liquidity to meet liabilities when due. As at 31 December 2022 the Group had unrestricted cash of £667,816 to settle trade and other payables of £121,836. Most of these accounts payable have contractual maturities of less than 30 days and are subject to normal trade terms.
COINSILIUM GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
3.2 Fair Value Estimation
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either: · In the principal market for the asset or liability; or · In the absence of a principal market, in the most advantageous market for the asset or liability
The principal or the most advantageous market must be accessible by the Group.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant's ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs. All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
· Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities · Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable · Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable
For assets and liabilities that are recognised in the financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy, as explained above.
The following table presents the Group’s assets and liabilities that are measured at fair value at 31 December 2022 and 2021:
COINSILIUM GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
3.2 Fair Value Estimation (continued)
Movements in financial assets at fair value through profit or loss are disclosed in Note 9 to the Financial Statements.
All financial assets are in unlisted securities, and many are in companies which are pre-revenues.
Movements in other current assets for the year ended 31 December 2022 are disclosed in Note 14 to the Financial Statements. A level 2 hierarchy has been attributed to tokens as the traded exchanges are directly derived from the active market for Ether and Bitcoin exchanges.
There were no transfers between levels during the year.
The Group recognises the fair value of financial assets at fair value through profit or loss at the cost of investment unless:
3.3 Capital Risk Management
The Group's objectives when managing capital are to safeguard the entity's ability to continue as a going concern, so that it can continue to develop and support its interests in cryptocurrency and blockchain technology products and services and provide returns for shareholders and benefits for stakeholders.
The Group actively and regularly reviews and manages its capital structure to ensure an optimal capital structure and equity holder returns, taking into consideration the future capital requirements of the Group and capital efficiency, prevailing and projected profitability, projected operating cash flows, projected capital expenditures and projected strategic investment opportunities. Management regards total equity as capital and reserves, for capital management purposes.
The Group sets the amount of capital in proportion to risk. The Group manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Group may adjust the number of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets.
COINSILIUM GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
3.2 Fair Value Estimation (continued)
The Group considers its capital to include share capital and share premium. Net cash comprises cash and cash equivalents only as there is no debt held.
4. Critical Accounting Estimates and Judgements
The preparation of the Group and Company Financial Statements in conformity with IFRS requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, at the date of the financial information and the reported amounts of revenue and expenses during the reporting period. Although these estimates are based on management’s best knowledge of the amounts, events or actions, actual results ultimately may differ from these estimates.
Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
Significant items subject to such estimates and assumptions include, but are not limited to:
On acquisition, investments are valued at cost as this is deemed to be the fair value. Subsequent to this, management uses valuation techniques and other relevant information to determine the fair value of financial instruments (where active market quotes are not available) and non-financial assets. This involves developing estimates and assumptions consistent with how market participants would price the instrument. Management bases its assumptions on observable data as far as possible, but this is not always available. In that case management uses the best information available. Estimated fair values may vary from the actual prices that would be achieved in an arm’s length transaction at the reporting date.
Estimating fair value for share based payment transactions requires determination of the most appropriate valuation model, which is dependent on the terms and conditions of the grant of share options and warrants. This estimate also requires determination of the most appropriate inputs to the valuation model including the expected life, volatility and dividend yield and making assumptions about them.
Critical judgements in applying the Group’s accounting policies include, but are not limited to:
(i) Assessment of Control and Significant Influence
Where the proportion of equity held in an investment is near or above 20%, the Directors consider carefully whether the Group has significant influence over the entity. The Directors consider the percentage of equity held, representation on the Board and the extent to which they are actually involved with management of the entity and their ability to change the percentage of equity held/ influence management in the future. Where management believes that the Group exerts significant influence over an investment, the investment will be considered an associate investment and equity accounted in the Financial Statements.
In the case of many of the investments acquired from Seedcoin Limited, Coinsilium Group Limited has agreed not to exercise its rights as a shareholder to influence the operation of the investees’ businesses for the first twelve months after it acquired an interest in the investment. These agreements override any potential rights to exert significant influence or control these businesses, either as shareholder or through the appointment of Directors. Accordingly, the Directors have concluded these investments should be classified as financial assets at fair value through profit or loss as the Group has agreed and is legally bound not to exert any significant influence or control over these investments.
Following the lapse of the 12-month period over which the Group is legally bound not to appoint a director to the Board, or to influence strategic or operational policy over the investee, the Group may henceforth be required to reclassify some or all of these investments as either associates or subsidiaries as may be the case considering the situation at the time.
(ii) Impairment of Financial Assets
Financial assets at fair value through profit or loss have a carrying value of £2,122,974 at 31 December 2022. COINSILIUM GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
4 Critical Accounting Estimates and Judgements (continued)
The Group follows the guidance of IFRS 9 to determine when a financial asset is impaired. This determination requires significant judgement. In making this judgement, the Group evaluates, among other factors, the duration and extent to which the fair value of an investment is less than its cost, and the financial health of, and short-term business outlook for, the investee, including factors such as industry and sector performance, changes in technology and operational, financing cash flow and proposed fundraising.
5. Segmental Reporting The Directors how determined that the Group operates three distinct business segments over multiple geographical areas and that these three segments form the basis of Group performance monitoring; Investing activities, Advisory activities and Corporate activity.
The Group generated revenue of £211,523 during the year ended 31 December 2022 (2021: £529,812). The Company generated revenue of £115,000 during the year ended 31 December 2022 (2021: £355,182).
COINSILIUM GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
COINSILIUM GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022 5. Segmental Reporting (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
6. Expenses by Nature
7. Intangible Assets
The intangible assets comprise two trademarks purchased for TerraStream and Tokenomix.
8. Property, Plant and Equipment
COINSILIUM GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
8. Property, Plant and Equipment (continued)
9. Financial assets at fair value through profit or loss
The Group classifies equity investments for which the Group has not elected to recognise fair value gains and losses through other comprehensive income as financial assets at fair value through profit or loss (FVPL).
At 31 December 2022, the Group and Company owns unlisted shares in:
COINSILIUM GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
9. Financial assets at fair value through profit or loss (continued)
Financial assets at fair value through profit or loss are denominated in the following currencies:
10. Investments in Subsidiary Undertakings
Investments in Group undertakings are stated at cost, which is the fair value of the consideration paid.
COINSILIUM GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
10. Investments in Subsidiary Undertakings (continued)
Details of Subsidiary Undertakings
The registered office address of Coinsilium Limited is Salisbury House, London Wall, London, England, EC2M 5PS.
The registered office address of Seedcoin Limited is Portland House, Glacis Road, Gibraltar.
The registered office address of Nifty Labs Limited is Portland House, Glacis Road, Gibraltar.
The registered office address of Flowstone Capital Limited is 5-9 Main St, Gibraltar.
The registered office address of Flowstone Management Limited is 5-9 Main St, Gibraltar.
The registered office address of Coinsilium Gibraltar Limited is Portland House, Glacis Road, Gibraltar.
11. Investments in Associates – Group and Company
During the prior year the Group entered into a Joint Venture agreement with IOV Labs for a 50% interest in the IOV Labs Asia project. Amounts in the prior year totalling £44,769 were recognised as additions to the cost of this Joint Venture project and subsequently written down as the Group’s recognition of the Joint Venture’s loss for the year. However, as these amounts relate to expenditure undertaken on behalf of the Joint Venture against a loan payable to the Joint Venture for receipt of advanced funds, rather than against the cost of investment, recognition of these amounts as a cost of investment and subsequent share of the Joint Venture loss was in error. As the amounts are not material, this charge in the prior year has been reversed in the current year, resulting in a credit to profits for the year of £44,769 and a reduction in the loan payable of the same amount.
As the Group does not exercise control of the Joint Venture, it accounts for this investment as an associate and applies equity accounting.
COINSILIUM GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
12. Trade and Other Receivables
The fair value of all trade and other receivables is the same as their carrying values stated above.
The carrying amounts of the Group and Company’s trade and other receivables are denominated in the following currencies:
The maximum exposure to credit risk at the reporting date is the carrying value of each class of receivable mentioned above. The Group does not hold any collateral as security.
13. Cash and Cash Equivalents
14. Other Current Assets
FOR THE YEAR ENDED 31 DECEMBER 2022
14. Other Current Assets (continued)
The net impairment of digital asset tokens in the year of £1,289,582 comprises the above figures for “impairment” and “unrealised gain on token value”.
Other current assets are digital assets, including tokens, the rights to future tokens and cryptocurrency, which do not qualify for recognition as cash and cash equivalents or financial assets, and which have an active market which provides pricing information on an ongoing basis.
Breakdown of digital assets:
15. Trade and Other Payables
COINSILIUM GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
16. Financial Instruments
17. Share Capital and Premium
Issued share capital
Treasury shares
During the prior year, on 5th January 2021, Dynamic Investors acquired 450,000 of treasury shares at 4.5p per share. In April 2021 there was a further sale of 100,000 treasury shares at 18.5 per share, followed by a sale of remaining 4,580,000 shares at 10p per share on 17th November 2021, leaving Nil shares as at 31 December 2021.
COINSILIUM GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
18. Other Reserves
The movement in Share options reserve in the year arrises on the recycling into retained earnings of the fair value of options which lapsed in the year.
19. Share Options and Warrants
Movements in the number of share options and warrants outstanding and their related weighted average exercise prices are as follows:
Share options outstanding and exercisable at the end of the year have the following expiry dates and exercise prices:
COINSILIUM GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
19. Share Options and Warrants (continued)
20. Employees
The Group had no full time employees and four Directors in the period. Details of Directors’ remuneration are disclosed in Note 21.
21. Directors’ Remuneration
All Directors are considered to be key management personnel.
The above amounts are stated net of employers’ national insurance contributions totalling £2,610.
The above amounts are stated net of employers’ national insurance contributions totalling £6,077.
No pension benefits are provided for any Director.
COINSILIUM GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021 22. Auditors Remuneration
During the year, the Group obtained the following services from the auditor:
Fees payable to the auditor in the year for statutory audit services includes £7,400 in fees agreed post the finalisation of the results for the year and not accrued in these financial statements due to being beneath materiality.
23. Finance Income / Costs
24. Taxation
No charge to taxation arises due to the tax rate of 0% in BVI and the losses incurred in the UK.
The Company has UK tax losses of approximately £1,728,294 available to carry forward against future taxable profits. A deferred tax asset has not been recognised because of uncertainty over future taxable profits against which the losses may be utilised.
COINSILIUM GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
25. Earnings per Share
Group The calculation of basic earnings per share of £(0.0177) is based on the loss attributable to equity owners of the parent company of £(2,056,974) and on the weighted average number of ordinary shares of 174,748,234 in issue during the period.
In accordance with IAS 33, basic and diluted earnings per share are identical as no share options or warrants were in the money based on the average share price throughout the year.
26. Commitments
The Group leases office premises under the short-term operating lease agreement. The future aggregate minimum lease payments under the short-term operating lease are as follows:
27. Related Party Transactions
Loan from Coinsilium Group Limited to Seedcoin Limited As at 31 December 2022 there were amounts receivable outstanding from Seedcoin Limited of £804,649 (2021: £347,213). No interest was charged on the loan.
Loan from Coinsilium Group Limited to Coinsilium Limited As at 31 December 2022 there were amounts receivable of £453,321 (2021: £491,303) from Coinsilium Group Limited, against which a provision for 100% of amounts receivable has been recognised. No interest was charged on the loan.
Loan from Coinsilium Group Limited to Nifty Labs Limited As at 31 December 2022 there were amounts receivable of £160,186 (2021: £140,068) from Nifty Labs Limited. No interest was charged on the loan.
Loan from Coinsilium Group Limited to Coinsilium Gibraltar Ltd As at 31 December 2022 there were amounts receivable of £805,124 (2021: £601,785) from Coinsilium Gibraltar Ltd. No interest was charged on the loan.
Transactions with Indorse During the year, management fees totalling £97,031 (2021: Nil) were incurred from Indorse Ltd for the provision of services from Eddy Travia. These amounts have been included in the directors remuneration disclosures in note 21 to these financial statements.
All intra-group transactions are eliminated on consolidation.
28. Ultimate Controlling Party
The Directors believe there to be no ultimate controlling party.
COINSILIUM GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
29. Events after the Reporting Date
Since the end of the reporting period:
On 27 April 2023, the Company issued an additional 17,209,999 additional ordinary shares to new and existing shareholders in a private placing at 1.5 pence per share, raising total proceeds of £258,150 before costs. In addition, one warrant to subscribe for ordinary shares at 3 pence per share were issued for each share subscription, resulting in a total of 17,209,999 warrants being issued, exercisable over a two-year period.
14 March 2023 - Coinsilium entered into a 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.
19 May 2023 - Coinsilium reported that the acquisition of the Tokenomi Web3 advisory service business had now completed and Tokenomi’s owner and managing director, Alexis Nicosia, has joined Coinsilium’s Advisory Team. Furthermore, Tokenomi’s advisory client book currently consists of seven retained Web3 blockchain project clients, including three additional deals closed since the announcement of signed Heads of Terms on 14 March 2023, with a prospective pipeline of ten further project clients as at the date of this announcement. With the addition of these three new agreements, based on the agreed terms, projected revenues from all signed Tokenomi advisory service agreements to date can now be expected to reach up to USD1,268,400 (GBP1,018,005) over the next 12 to 24 months, subject to those clients successfully completing their TGEs (Token Generating Events) within this period.
15 June 2023 – Coinsilium reported that Greengage had announced a subscription of £1m, including the development that Greengage has 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 will receive 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. Further to the above, Coinsilium announced that it was 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.
Dissemination of a Regulatory Announcement that contains inside information in accordance with the Market Abuse Regulation (MAR), transmitted by EQS Group. The issuer is solely responsible for the content of this announcement. |
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| ISIN: | VGG225641015 |
| Category Code: | MSCM |
| TIDM: | COIN |
| Sequence No.: | 252106 |
| EQS News ID: | 1661309 |
| End of Announcement | EQS News Service |
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