REG-Clear Leisure Plc: New Business Venture <Origin Href="QuoteRef">CLPC.L</Origin>

Quantum Blockchain TechnologiesAnnouncement

27/12/2017 12:35

                                                                                               
27 December 2017

Clear Leisure Plc

(“Clear Leisure” or “the Company”)

New Business Venture

Clear Leisure to assign GeoSim holding into a new technology venture and
joint venture investment in a bitcoin mining blockchain date centre

Clear Leisure (AIM: CLP) is pleased to announce that it has established a new
technology venture (“Newco”), supported by its largest shareholder,
Eufingest SA (“Eufingest”). Initially, Newco will comprise two
investments: the Company’s 4.53% interest in Geosim Systems Limited
(“Geosim”), the 3D mapping company; and, a proposed Bitcoin mining
blockchain data centre, further details of which are set out below. Newco, a
wholly owned subsidiary of Clear Leisure, will seek to add other Information
Technology (“IT”) focused businesses to its portfolio followed, in the
longer term, by a possible stock market listing of Newco.

Background

Since the current Board was appointed in July 2015, it has sought to find the
most beneficial way to monetise the Company’s assets. Shareholders will be
aware that this has been a challenging task because of the need, in respect of
some assets, to establish clear ownership whilst negotiating with, sometimes
hostile, creditors. There has been no such issue with the Company’s 4.53%
holding in GeoSim, the fair value of which is carried in Clear Leisure’s
audited accounts, at 31 December 2016, at £634,000. Until now, however, there
has been limited opportunities to crystalize the value of this non-core asset.

An opportunity has now arisen for Clear Leisure, with Eufingest’s support,
to participate in establishing a Bitcoin mining blockchain data centre in a UK
incorporated joint venture company, Miner One Limited (“Miner One”). The
Board believes that this will be an ideal asset to include in the proposed new
technology venture.

 Clear Leisure has entered into a binding agreement with its joint venture
partner, 64Bit Limited, (“64Bit”), a Malta data centre operator
specialising in Bitcoin “mining” and powered by low-cost renewable energy.
64Bit’s CEO and founder is Mr Marco Mirra who has a long history of working
in IT security and data management sectors. Mr Mirra has already successfully
extracted tens of Bitcoins with his existing Bitcoin mining data-centres and
has extensive experience in setting up and managing data-centres.

Francesco Gardin, will represent Clear Leisure on the board of Miner One. He
has extensive experience in the IT industry including lecturing for 30 years
at Udine, Milan and Siena Universities in Italy, where he focused on Theory
and Application of Computing Machines, the key to understanding the theory
behind cryptography and blockchain technology.

Professor Remo Pareschi, former head of Telecom Italia’s R&D department,
professor of Computer Science at Molise University and co-founder of DLT Labs,
a blockchain technology IBM partner, will be advising Miner One.

Bitcoin and Bitcoin Mining

Bitcoin (“BTC” or ”XBT”) is the first computer generated decentralised
“cryptocurrency”, which is powered by a public ledger, “the Bitcoin
blockchain”, that records and validates all transactions chronologically.
Bitcoin is thought to have been invented between 2008 and 2009, and released
as an open-source software.

Bitcoin is a cryptocurrency and worldwide payment system. It is the first
decentralized digital currency, as the system works without a central bank or
single administrator standing behind it. The network is peer-to-peer, which is
already a familiar concept within the world of finance, and transactions take
place between users directly through the use of cryptography, without an
intermediary. These transactions are verified by network nodes and recorded in
a public distributed ledger called a blockchain.

Bitcoins can be created by the process of “Bitcoin mining”, which entails
processing the so called proof-of-work
(https://en.wikipedia.org/wiki/Proof-of-work) system, running on specialised
computers, called ‘miners’. Bitcoin mining is a computing and energy
intensive activity where very fast specialised hardware and cheap energy can
confer a material competitive advantage. The analogy with the term
‘mining’ is based on the uncertainty factor of how much energy and time is
required, as with traditional resources mining operations.

Funding and Potential Returns

The projected capital cost of the envisaged data centre is €400,000, of
which Clear Leisure will contribute €200,000 for a 50% interest in Miner One
Ltd, which will be incorporated in the UK and operate via a wholly owned Malta
subsidiary; however, the mining blockchain data centre will be located in a
European country chosen for its very low electricity energy costs.

The partners intend on entering a revenue sharing agreement with an identified
supplier of low cost renewable energy. 64Bit will receive an additional 15%
share of Bitcoins annually extracted in return for managing the data centre
and making available proprietary “know how” on load balancing techniques
and algorithms to achieve greater efficiency in the exploitation of the
specialised mining hardware of the data centre.

The joint venture partners project an extraction rate of about 20 Bitcoins per
year at a cash break-even production cost of US$4,752 per coin compared to the
current bitcoin price of approximately US$15,500. Actual Bitcoin recovery
might be higher or lower than predicted depending upon mining difficulty,
hardware effectiveness and actual energy consumption.

Subject to prompt availability of best of class mining ASIC (Application
Specific Integrated Circuit) hardware, the Bitcoin mining data centre is
expected to become operational in Q1 2018.

Eufingest SA

Eufingest has committed to lend to Clear Leisure €200,000 to fund the
Company’s 50% share of the joint-venture’s mining data centre. Clear
Leisure is investigating other sources of additional finance, including
Eufingest’s direct participation, as well as third parties, with whom the
Company is already in discussion. The loan will be secured with a charge on
Newco’s shares, and is repayable within 24 months from the date of drawdown
and carries an annual interest of 2.5%.

Eufingest is the beneficial holder of more than 10 per cent of the ordinary
share capital of the Company.  Eufingest is therefore a “related party”
for the purposes of the AIM Rules. The directors of the Company (each of whom
is independent from Eufingest), having consulted with the Company’s
nominated adviser, consider the terms of the transaction to be fair and
reasonable insofar as shareholders are concerned. Eufingest, as the largest
shareholder, remains fully supportive of the board’s efforts to realise
value from its investments and fund new investments.

Francesco Gardin, CEO and Executive Chairman of Clear Leisure, commented,

“We have been looking now for some time at reorganising our portfolio of
investments, and creating a technology venture vehicle to which we assign our
4.53% holding in GeoSim is the first step. We are seeking further
opportunities to generate income whilst awaiting the results of the various
legal actions engaged in Italy and in the UK, the outcomes of which could be
lengthy and are uncertain as per any litigation.

“This has led the Company into discussions with cryptocurrency experts and
the Company believes that this proposed investment is an opportunity worth
pursuing. We believe that the combination of cheap energy, available nowadays
in certain European countries, combined with the software optimisation skills
provided by 64Bit Limited, we can create a competitive edge to better exploit
specialised Bitcoin mining and more in general the strategic blockchain
technology, of which crypto currencies is one of the many applications.

“We believe this is confirmed by the Australian Securities Exchange, which
has recently become the first major bourse in the world to announce the
adoption of blockchain technology - the same kind of technology which
underpins the bitcoin cryptocurrency - to record shareholdings and manage the
clearing and settlement of equity transactions.”

-ends-

For further information please contact:

Clear Leisure Plc                                       
                           +39 335 296573
Francesco Gardin, CEO and Executive Chairman

SP Angel Corporate Finance (Nominated Adviser & Joint Broker)        
+44 (0)20 3407 0470
Jeff Keating / John Mackay                                  
                                                   
          

Peterhouse Corporate Finance (Joint Broker)             +44 (0) 20 7469
0935
Lucy Williams / Heena Karani

Leander (Financial PR)                                    
                     +44 (0) 7795 168 157
Christian Taylor-Wilkinson

About Clear Leisure Plc

Clear Leisure plc (AIM: CLP) is an AIM listed investment company with a
portfolio of companies primarily encompassing the leisure and real estate
sectors mainly in Italy. The focus of management is to pursue the monetisation
of all of the Company’s existing assets, through selected realisations,
court-led recoveries of misappropriated assets and substantial debt-recovery
processes. Under its existing investment policy the Company can seek new
investment opportunities, in different sectors, including information
technology. For further information, please visit, www.clearleisure.co.uk



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