REG-Quantum Blockchain Technologies Plc: Interim Results
22/09/2021 07:05
22 September 2021
Quantum Blockchain Technologies plc
("Quantum Blockchain Technologies", “the Group” or "the Company")
INTERIM RESULTS
For the 6 Months Ended 30 June 2021
Quantum Blockchain Technologies plc (AIM: QBT) announces its unaudited Interim
Results for the 6 months ended 30 June 2021.
HIGHLIGHTS
*
Raised £1.7million through two equity placings
*
Received shareholder approval to commence new blockchain & cryptocurrencies
strategy
*
Appointed sector expert to create new optimisations for mining Bitcoin
POST PERIOD HIGHLIGHTS
*
Created several specialist working groups to investigate multiple approach
solutions
*
Commenced work on D-Wave Systems quantum cloud service
*
Achieved first speed improvement in mining Bitcoin
For further information please contact:
Quantum Blockchain Technologies Plc Francesco Gardin, CEO and Executive Chairman +39 335 296573
SP Angel Corporate Finance (Nominated Adviser & Broker) Jeff Keating +44 (0)20 3470 0470
Leander (Financial PR) Christian Taylor-Wilkinson +44 (0) 7795 168 157
About Quantum Blockchain Technologies Plc
QBT (AIM: QBT) is an AIM listed investment company which has recently
realigned its strategic focus to technology related investments, with special
regard to Quantum computing, Blockchain, Cryptocurrencies and AI sectors.
The Company has commenced an aggressive R&D and investment programme in the
dynamic world of Blockchain Technology, which includes cryptocurrency mining
and other advanced blockchain applications.
For further information, please
visit, www.quantumblockchaintechnologies.co.uk
Chairman’s Statement
Overview
The early months of 2021 marked a distinct change of direction for our
company, reflected in a change of name from Clear Leisure to Quantum
Blockchain Technologies Plc (QBT) and more practically, a new foundation on
which the Company’s future will be built.
In February 2021, the Company raised £680,000 and £1,000,000 (both amounts
before expenses) via two equity placings, respectively at 0.6p and 1p per new
ordinary share of 0.25 pence each in the Company (“Ordinary Shares”).
These new funds facilitated the launch of the new Investment Strategy focused
on the development of an innovative and disruptive technology for Blockchain,
Cryptocurrency and Quantum Computing.
The new strategy was approved by shareholders on 6 May 2021, at a General
Meeting where the Company received approval for the following:
*
To amend the Company’s Investing Policy with a focus on Blockchain,
Cryptocurrency, Quantum Computing and Artificial Intelligence.
*
To change the Company’s name from Clear Leisure Plc to Quantum Blockchain
Technologies plc.
*
To authorise the granting of options to the CEO and current and future
management team of the Company.
*
To grant authorities to the directors to issue shares in the Company.
In June 2021, the Company formally announced the launch and current progress
status of its new in-house Research & Development (“R&D”) programme in
respect of advanced proprietary techniques for Bitcoin mining. The Company
further announced the appointment of a UK based, international cryptography
expert, whose specialism is cryptocurrency mining blockchain optimisations. As
part of the appointment, the consultant was awarded share options over
10,000,000 new Ordinary Shares at an exercise price of 5p each, which can be
exercised between 15 February 2022 and 15 August 2022.
The aim of the R&D programme is to develop Bitcoin mining tools and techniques
which will significantly outperform existing mining equipment, both in speed
and energy consumption. While the Board is aware this is an ambitious project,
given the radically advanced technologies and methodologies being used, it
believes that the goal is achievable.
Legacy Assets
In May 2021, the Company reported in respect of the Sipiem S.p.A.
(“Sipiem”) legal claim, that the Court of Venice appointed independent
expert had filed his report on the economic merit of the damages suffered by
Sipiem and valued up to an amount of €7.8 million, subject to the Judge
ruling that the conduct of Sipiem’s former board and internal audit
committee was unlawful. However, at the hearing, the Company was informed that
as one of the defendants had sadly passed away, it was required to take a few
additional mandatory procedural steps, and this inevitably delayed the
proceedings. The Court of Venice has re-scheduled the hearing for 10 November
2021 at which time the Judge will receive the parties’ comments on the
report of the independent expert.
At the beginning of the year, the Company was notified that the Bologna Court
elected to continue the €1.03 million legal claim against the previous
management of Sosushi Srl, through an arbitration process (formally started on
18 January 2021), which will provide a legally binding decision on the matter.
On 20 January 2021, the Company (at the conclusion of the mandatory public
bidding process), was assigned a legal claim against the former management of
Mediapolis S.A. and its internal audit committee, for a consideration of
€50,000, which will be deducted from the amount still receivable from the
Mediapolis Bankruptcy procedure.
As announced in June, the Company increased its stake in Forcrowd Srl
(“ForCrowd”) from 20% to 41.17% for a consideration of €34,000; having
taken advantage of a special situation that had arisen amongst previous
minority shareholders. ForCrowd also launched a new crowdfunding campaign in
2021 that has already received pre-launch investment commitments, enhancing
the probability of a successful conclusion.
PBV Monitor srl (“PBV”), is focusing on the efficient marketing of its
data intelligence service to law firms and in-house legal counsels, whilst
consolidating its editorial partnerships in Italy (to print and sell sectorial
printed directories) and establish new relationships, especially in the USA.
PBV also expects that, in the light of the general improvement of the Covid-19
pandemic in Europe, it will re-launch its industry award events for the legal
sector later in 2021. The next step in the roadmap for PBV is the soft launch
of its new legal networking platform.
Geosim Systems Ltd (“Geosim”) is also moving forward, and it is currently
completing the first Phase in the development of a 3D Reality Model for a
major North American airport
Financial Review
The Group reported a total comprehensive loss for the period to 30 June 2021
of €1.1 million (30 June 2020: loss €363,000). The operating loss for the
period was €714,000 (30 June 2020: operating loss €228,000). At 30 June
2021, the Group improved the net liabilities to €1.4 million, compared to
negative €1.9 million at 30 June 2020. The Net Current Assets of the Group
also improved during the period under review, to €6.1 million, compared to
€2.1 million at 30 June 2020.
Post 30 June 2021 Events
In July, the Company announced the agreement to use the Leap™ quantum cloud
service from D-Wave Systems Inc (“D-Wave”); marking an important step
forward in the R&D programme.
Subsequently, in August, the Company provided an update on the status and
findings of its R&D project as follows:
*
Creation of the R&D team, comprising 13 sector experts
*
Formation of working groups for:
*
Quantum Computing
*
Cryptographic Optimisation
*
Deep Learning and Artificial Intelligence (“AI”)
*
FPGA / ASIC Design
*
Algebraic and Boolean Equation Reduction
*
BTC Large Big Data
*
High performance computing architectures
The initial findings of the new R&D work have been very encouraging, with a
9.56% speed improvement already achieved as compared to the standard Bitcoin
mining algorithm on the same type of machine. The Company is currently
investigating other optimisations for Bitcoin mining, based on its innovative
approach (people and technology), which it believes will deliver further and
radical speed improvements which the Company is planning to file under an
international patent.
In the early stages of the AI Deep-Learning tests to optimise the Bitcoin
mining algorithm, QBT’s AI system autonomously generated one of the already
existing optimisation provided to the Company by its expert. This first result
strongly supports the AI Deep Learning strategy adopted by the Company.
The Company has also started to implement the first set of optimisations on
FPGA, expecting early completed versions of the FPGA to be ready by the end of
October 2021, while the optimisations covered by the above-mentioned patent
are due by December 2021. ASIC development work is expected to start in
parallel in October 2021.
Based on the performance achieved by the FPGA chip, it may be decided to use
it as the Company’s first mining engine.
QBT’s Quantum Computing team has now started working on the D-wave Quantum
computer, programming the quantum processor, whilst the Company completed the
design of the new IT infrastructure. This new infrastructure includes a 128
core Machine Learning workstation and an initial one Petabyte memory
expandable unit, in order to host the proprietary enriched Bitcoin mining
“BTC Large Big Data”.
Outlook
The Board remains committed to return value to its stakeholders, over the next
24 months, by:
*
Positioning the Company in the Quantum Computing, Blockchain and
Cryptocurrency sectors, both via new investment activity and its in-house R&D
projects.
*
Realisation of its legacy assets, for which positive outcomes are expected
from the legal claims being pursued by the Company.
*
Further reduction of the debt position (if and when the conditions are deemed
appropriate).
The Board maintains a positive outlook with regards to the Company’s new
investment strategy focused on Quantum Computing, Blockchain and
Cryptocurrency in combination with its existing technology investments and
remaining legal claims which, the Company believes, are drawing towards a
positive conclusion.
Francesco Gardin
Quantum Blockchain Technologies PLC
CEO and Chairman
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 30 JUNE 2021
Note Six months to 30 June 2021 Unaudited Six months to 30 June 2020 Unaudited Year ended 31 December 2020 Audited
Continuing operations €’000 €’000 €’000
Revenue 6 32 12
Cost of sales - - -
6 32 12
Administrative expenses (720) (260) (1,123)
Other operating income - - 24
Operating loss (714) (228) (1,087)
Other gains and losses - 6 -
Finance charges (392) (141) (121)
Loss before tax (1,106) (363) (1,208)
Taxation - - -
Loss for the period attributable to owners of the parent (1,106) (363) (1,208)
Other comprehensive loss:
Loss on translation of overseas subsidiaries - - -
TOTAL COMPREHENSIVE LOSS FOR THE PERIOD ATTRIBUTABLE TO OWNERS OF THE PARENT (1,106) (363) (1,208)
Earnings per share:
Basic and diluted loss per share 3 (€0.13) (€0.001) (€0.182)
GROUP STATEMENTS OF FINANCIAL POSITION
AT 30 JUNE 2021
Note As at 30 June 2021 €’000 (Unaudited) As at 30 June 2020 €’000 (Unaudited) (Restated) As at 31 December 2020 €’000 (Audited)
Non-current assets
Investments 1,014 1,114 980
Total non-current assets 1,014 1,114 980
Current assets
Trade and other receivables 5,315 6,627 5,191
Cash and cash equivalents 1,083 1 -
Total current assets 6,398 6,628 5,191
Current liabilities
Trade and other payables (265) (490) (334)
Borrowings - (3,910) -
Derivative financial instruments - (121) -
Total current liabilities (265) (4,521) (334)
Net current assets 6,133 2,107 4,857
Total assets less current liabilities 7,147 3,221 5,837
Non-current liabilities
Borrowings (8,606) (5,213) (8,212)
Total non-current liabilities (8,606) (5,213) (8,212)
Total liabilities (8,871) (9,734) (8,545)
Net liabilities (1,459) (1,992) (2,375)
Equity
Share capital 8,080 7,397 7,397
Share premium account 48,463 47,124 47,124
Other reserves 8,787 8,376 8,787
Retained losses (66,789) (64,889) (65,683)
Equity attributable to owners of the Company (1,459) (1,992) (2,375)
Total equity (1,459) (1,992) (2,375)
GROUP AUDITED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2020
Group Share capital €’000 Share premium account €’000 Other reserves €’000 Retained losses €’000 Total equity €’000
At 1 January 2020 7,397 47,124 8,376 (64,526) (1,629)
Total comprehensive loss for the year - - - (1,208) (1,208)
Lapsed share options - - (51) 51 -
Equity portion of convertible loan notes - - 462 - 462
At 31 December 2020 7,397 47, 124 8, 787 ( 65,683) (2, 375)
GROUP UNAUDITED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS TO 30 JUNE 2020
Group Share capital €’000 Share premium account €’000 Other reserves €’000 Retained losses ( restated ) €’000 Total equity (restated) €’000
At 1 January 2020 7,397 47,124 8,376 (64,526) (1,629)
Total comprehensive loss for the period - - - (363) (363)
At 30 June 2020 7,397 47,124 8,376 (64,889) (1,992)
GROUP UNAUDITED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS TO 30 JUNE 2021
Group Share capital €’000 Share premium account €’000 Other reserves €’000 Retained losses €’000 Total equity €’000
At 1 January 2021 7,397 47,124 8,787 (65,683) (2,375)
Issue of share capital 683 1,339 - - 2,022
Total comprehensive loss for the period - - - (1,106) (1,106)
At 30 June 2021 8,080 48,463 8,787 (66,789) (1,459)
GROUP UNAUDITED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED 30 JUNE 2021
Six months to 30 June 2021 Unaudited €’000 Six months to 30 June 2020 Unaudited €’000 Year ended 31 December 2020 Audited €’000
Cash used in operations
Loss before tax (1,106) (363) (1,208)
Fair value changes 248 6 -
Impairment of investments - - 89
Other gains - - 50
Finance charges 146 141 247
Decrease/(increase) in receivables (124) (23) 1,417
(Decrease)/increase in payables (69) 93 (61)
Decrease in derivatives - - (121)
Net cash (outflow)/inflow from operating activities (905) (146) 413
Cash flows from investing activities
Purchase of investments (34) - (2)
Proceeds from issues of new ordinary shares (net of expenses) 2,022 - -
Net cash inflow from investing activities 1,988 - (2)
Cash flows from financing activities
New borrowings - 150 150
Repayment from borrowings - (3) (561)
Net cash inflow/(outflow) from financing activities - 147 (411)
Net increase in cash for the period 1,083 1 -
Cash and cash equivalents at beginning of year - - -
Cash and cash equivalents at end of period 1,083 1 -
NOTES TO THE FINANCIAL STATEMENTS
1.
General Information
Quantum Blockchain Technologies plc is a company incorporated and domiciled in
England and Wales. The Company’s ordinary shares are traded on the AIM
market of the London Stock Exchange. The address of the registered office is
22 Great James Street, London, WC1N 3ES.
The principal activity of the Group is that of an investment company pursuing
a strategy to create a portfolio of companies.
2. Accounting policies
The principal accounting policies are summarised below. They have all been
applied consistently throughout the period covered by these consolidated
financial statements.
Basis of preparation
The interim financial statements of Quantum Blockchain Technologies Plc are
unaudited consolidated financial statements for the six months ended 30 June
2021 which have been prepared in accordance with UK adopted International
accounting standards. They include unaudited comparatives for the six months
ended 30 June 2020 together with audited comparatives for the year ended 31
December 2020.
The interim financial statements do not constitute statutory accounts within
the meaning of section 434 of the Companies Act 2006. The statutory accounts
for the year ended 31 December 2020 have been reported on by the company’s
auditors and have been filed with the Registrar of Companies. The report of
the auditors was qualified in respect of the valuation of the investment in
Geosim Systems Ltd, and the omission of Mediapolis Investment S.A. from the
consolidated accounts. The report of the auditor also contained an emphasis
of matter paragraph in respect of a material uncertainty regarding going
concern. Aside from the limitation of scope relating to Geosim Systems Ltd and
Mediapolis Investment S.A, the auditor’s report did not contain any
statement under section 498 of the Companies Act 2006.
The interim financial statements for the period ended 30 June 2020 have been
restated for the adjustment made in respect of Zero Coupon Bonds and Other
Convertible Loans, further details of which can be found in the financial
statements for the year ended 31 December 2020.
The interim consolidated financial statements for the six months ended 30 June
2021 have been prepared on the basis of accounting policies expected to be
adopted for the year ended 31 December 2021, which are consistent with the
year ended 31 December 2020 except as stated below:
Going concern
The Group’s activities generated a loss of €1,106,000 (June 2020:
€363,000) and had net current assets of €6,133,000 as at 30 June 2021. The
Group’s operational existence is still dependent on the ability to raise
further funding either through an equity placing on AIM, or through other
external sources, to support the on-going working capital requirements.
After making due enquiries, the Directors have formed a judgement that there
is a reasonable expectation that the Group can secure further adequate
resources to continue in operational existence for the foreseeable future and
that adequate arrangements will be in place to enable the settlement of their
financial commitments, as and when they fall due.
For this reason, the Directors continue to adopt the going concern basis in
preparing the interim accounts. Whilst there are inherent uncertainties in
relation to future events, and therefore no certainty over the outcome of the
matters described, the Directors consider that, based upon financial
projections and dependant on the success of their efforts to complete these
activities, the Group will be a going concern for the next twelve months. If
it is not possible for the Directors to realise their plans, over which there
is significant uncertainty, the carrying value of the assets of the Group is
likely to be impaired.
In relation to the impact of COVID-19 on the Company, the Company's employees
can carry out their duties remotely, via the network infrastructure in place.
As a result, there was no disruption to the operational activities of the
Company during the COVID-19 social distancing and working from home
restrictions. All key business functions continue to operate at normal
capacity.
Notwithstanding the above, the Directors note the material uncertainty in
relation to the Group being unable to realise its assets and discharge its
liabilities in the normal course of business.
Risks and uncertainties
The Board continuously assesses and monitors the key risks of the business.
The key risks that could affect the Company’s medium-term performance and
the factors that mitigate those risks have not substantially changed from
those set out in the Company’s 2020 Annual Report and Financial Statements,
a copy of which is available on the Company’s website:
www.quantumblockchaintechnologies.com. The key financial risks are liquidity
and credit risk.
Critical accounting estimates
The preparation of interim financial statements requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the end of the reporting period. Significant items subject to
such estimates are set out in note 3 of the Company’s 2020 Annual Report and
Financial Statements. The nature and amounts of such estimates have not
changed significantly during the interim period.
3. Loss per share
The basic earnings per share is calculated by dividing the earnings
attributable to ordinary shareholders by the weighted average number of
ordinary shares outstanding during the period. Diluted earnings per share is
computed using the same weighted average number of shares during the period
adjusted for the dilutive effect of share warrants and convertible loans
outstanding during the period.
The profit and weighted average number of shares used in the calculation are
set out below:
Six months to 30 June 2021 Six months to 30 June 2020 Six months to 31 December 2020
(Unaudited) (Unaudited) (Audited)
€’000 €’000 €’000
Loss/profit attributable to owners of the parent company:
Basic earnings (1,106) (363) (1,208)
Diluted earnings (1,106) (363) (1,208)
Basic weighted average number of ordinary shares (000’s) 836,537 618,891 662,371
Diluted weighted average number of ordinary shares (000’s) 836,537 618,891 662,371
Basic and fully diluted earnings per share:
Basic earnings per share (€0.13) (€0.001) (€0.182)
Diluted earnings per share (€0.13) (€0.001) (€0.182)
IAS 33 requires presentation of diluted earnings per share when a company
could be called upon to issue shares that would decrease earnings per share or
increase net loss per share. For a loss making company with outstanding share
options and warrants, net loss per share would only be increased by the
exercise of out-of-the money options and warrants, so no adjustment has been
made to diluted earnings per share for out-of-the money options and warrants
in the comparatives.
4. Investment Policy
The Company intends on identifying and investing in investment opportunities
which it believes show excellent growth potential on a stand-alone basis and
which would add value to the Company's portfolio of investments through the
expertise of the Board or through the provision of ongoing funding.
It is the intention of the Company that the majority of investments will be
made in unlisted companies; however, pre-IPO and listed companies may, from
time to time, be considered on a selective basis.
The Company believes that the collective experience of the Board together with
its extensive network of contacts will assist them in the identification,
evaluation, and funding of investment targets. When necessary other external
professionals will be engaged to assist in the due diligence of prospective
targets. The Board will also consider, as it sees fit, appointing additional
directors and/or key employees with relevant experience as part of any
specific investment.
The Company may offer shares as well as cash by way of consideration for
prospective investments, thereby helping to preserve the Company's cash for
working capital. The Company may, in appropriate circumstances, issue debt
securities or borrow money to complete an investment.
5. Copies of Interim Accounts
Copies of the interim results are available at the Group’s website at
www.quantumblockchaintechnologies.co.uk.
Copies may also be obtained from the Group´s registered office: Quantum
Blockchain Technologies PLC, 22 Great James Street London WC1N 3ES.
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