This correction amends PRN of 7am, 23 September 2024: The following amendments
have been made to the Financial Review Section - Group net assets were reported
instead of net liabilities; net current assets should be €3.8 million, rather
than €3.9 million. All other details remain unchanged.
23 September 2024
Quantum Blockchain Technologies plc
("QBT", "the Group" or "the Company")
INTERIM RESULTS
Quantum Blockchain Technologies (AIM: QBT), the AIM-listed investment company
focusing on a R&D and investment programme within blockchain technology, is
pleased to announce its Interim Results for the six months ended 30 June 2024.
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, John Mackay +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 a London Stock Exchange AIM listed Research & Development and
investing company focused on an intensive R&D programme to disrupt the
Blockchain Technologies sector, and which includes, cryptocurrency mining and
other advanced blockchain applications. The primary goal of the R&D programme is
to develop Bitcoin mining tools and techniques, via its technology-driven
approach, which the Company believes will significantly outperform existing
market practices.
Chairman's Statement
During the first half of 2024, QBT continued to focus its efforts on developing
the first commercial Bitcoin mining products and services that utilises its
intensive R&D programme.
R&D
The R&D programme has achieved several positive milestones so far:
- Asic UltraBoost: Designed to improve Bitcoin mining by eliminating
redundant computations in a key part of the mining algorithm, resulting in
faster and more efficient operations. A patent application has been filed with
patent offices in the UK and the EU (which also covers the UK ), as well as the
USA , Canada , Australia and South Korea .
- Asic Enhanced Boost: An optimised approach to SHA-256 computation for
Bitcoin mining that enables partial pre-computation of future blockchain blocks.
A patent application has also been submitted to the UK and EU patent offices.
- Quantum Mining: A quantum version of the Bitcoin mining algorithm
that utilises qubit-based quantum computation and quantum logic gates. A patent
application for this is being drafted and expected to be filed as soon as
practicable in jurisdictions to be determined.
- Method A: A Machine Learning ("ML") based approach aimed at reducing
the SHA-256 search space compared to the brute-force method used in Bitcoin
mining currently.
- Method B: Another innovation leveraging ML and statistical
optimisation to reduce the SHA-256 search space, but with a fundamentally
different approach than Method A.
- Method C: An AI Oracle developed by the R&D Machine Learning team to
assess in real-time the likelihood that an input to SHA-256 will generate a
winning hash. A patent application is under consideration.
Company Objectives:
The Company's short-term goal is to develop commercial products and services
from the above R&D activities, prioritising Methods A, B and C. The longer-term
goals are to develop an in-house ASIC chip for Bitcoin mining as well as a
quantum computing based miner.
Current Developments:
Currently, the Company is testing Methods A and B through pool-based live
mining. These tests are being conducted in order to assess the improved
performance of commercial ASIC chips when these chips are controlled by the two
Methods. Significantly, the two Methods can be applied to existing ASIC-based
mining machines simply as a client-server software upgrade. QBT's recent
software switch from CG Miner to ESP-miner is expected to assist and facilitate
the testing programme. If the results of the live testing are successful, Method
A and B could thereafter be made available as SaaS products.
Method C, which requires its integration at chip-level, is undergoing real time
mining tests using slower FPGA chips on historic blockchain blocks. This
provides the Company with a Bitcoin mining difficulty compatible with the
hashing power of available FPGAs in order to allow the team to understand the
chip mapping process for the purpose of scaling up towards commercial ASIC
integration.
Should any of the tests confirm the R&D team's findings, the Company may
consider potential partnerships with either miners or chip manufacturers to
quickly deploy Method A and Method B on ASIC Mining Machines and Method C on an
ASIC chip. In preparation for this eventuality, QBT has already initiated high
-level discussions with key industry players.
QBT's longer-term strategy of using its Quantum Mining Algorithm still requires
more advanced quantum computing power than is currently available, so the
Company will review this project in 2025.
QBT's previously announced project to build in-house its own Bitcoin mining
chip. This is anticipated to commence once the relevant patents have been
granted. As previously stated, the chip will be based on a large format ASIC
and, while it will not be competitive in the market, it will serve as a
demonstrator model for the major Bitcoin miners serving to prove the disruptive
nature of QBT's enhancements. A second option under consideration whereby the
Company may exploit its patents (once granted) would be to partner with a chip
designer and, through a licensing arrangement share QBT's patented Method C
intellectual property. This second option is less capital intensive than QBT
manufacturing its own chips but the Company also anticipates that such an
approach would be expected to reduce future revenue.
Conclusion
Despite the slower than anticipated progress with the results from the R&D
programme, which should not be considered unexpected given QBT's stated
objectives, the Company firmly believes in the results it has obtained so far
and it is working diligently to complete all the necessary testing in order to
launch one or more Bitcoin products.
Legacy Assets
The board believes that its legal matters are moving closer to a positive
resolution.
The Company continues its court action against the former management and
statutory committee of Sipiem Srl In Liquidazione ("Sipiem"). The claim is being
conducted by QBT's wholly owned subsidiary, Clear Leisure 2017 Ltd ("CL17").
In April 2024, CL17 reached an agreement with certain of the Sipiem jointly
liable defendants with an agreement to settle these defendants' liabilities for
€700,000 (this amount, net of costs, was received by CL17). CL17 also secured
the right to 30% of any future sums recovered through the litigation by
acquiring the Sipiem Receiver's rights for €170,000. The intention was to
provide CL17 with damages already received (€700,000) as well as maximise
eventual receipt of those damages QBT hopes to recover pursuant to the 2022
judgment of the trial court in CL17's favour (the remaining €5.575 million plus
interest and inflation adjustments - together with the damages already received,
the "Settlement"). The Settlement, however, was itself subject to the approval
of trial court in Venice being granted prior to the Venice Court of Appeal
making a ruling on the appeal of the 2022 judgment filed by the defendants.
This sequence of events did not occur as foreseen in the Settlement, however,
for in June 2024, the Venice Court of Appeal issued its appeal judgement
upholding the 2022 ruling in favour of CL17, with a minor exception of certain
items of damages that were judged as awarded on inadequate grounds amounting to
€105,412,19 while confirming the award of €6,083,562 (plus interest and
inflation adjustments) in damages, along with overall €134,176 in legal fees
accrued since the start of legal proceedings. Since, however, the Appeals
court's decision was issued before the trial court's approval of the Settlement,
the terms of the Settlement were not confirmed.
The Company is currently reviewing the situation with its legal team but retains
the funds received to date, less the €170,000 payment to the Sipiem Receiver.
Discussions are ongoing with all relevant parties to assess the legal and
contractual implications of the voided Settlement.
In other litigation activity, the Company continues to also pursue its claim
against the former management of Sosushi Srl, amounting to approximately €1
million. The matter is subject to arbitration and although the arbitration
process has stalled, QBT intends to relaunch it soon.
Regarding QBT's investee companies, the Company is happy to report that in late
June 2024 Forcrowd Srl obtained authorisation to extend its crowdfunding licence
across all EU jurisdictions. With respect to PBV Monitor Srl (now More Legal
Srl), the Company's stake has decreased to approximately 0.45% following a
recent fundraising round.
Finally, as announced on 9 January, QBT reached an agreement with MC Strategy
S.A., the sole bondholder of its €3.5 million Zero-Coupon Bond issued in 2020,
to extend the bond's maturity from 15 December 2024 to 15 December 2026, and to
increase the yield on maturity from 1% to 3%. Similarly, bondholders of QBT's
Zero-Coupon Bond issued in 2013 agreed to extend the maturity date from 15
December 2024 to 15 December 2026, and to amend the conversion price from £0.05
to £0.03.
Financial Review
The Group reported a total comprehensive loss for the period of €1.3 million (30
June 2023: loss €1.4m). The operating loss for the period was €1.1 million (30
June 2023: operating loss €1.2m). There were no charges relating to the
recognition of share options within administrative expenses (2023: €370,000)
however, within finance costs there are charges for the revaluation of
derivatives totaling €231,000 (2023: €142,000). The difference of these items is
strictly dependent on the volatility of the Company's share price during the
first half of 2024, used for the calculation according to the relevant
accounting standards.
At 30 June 2024, the Group is in a net liabilities position of €3.5 million,
compared to a net liabilities position of €2.6 million at 31 December 2023. The
Group is also at a net current assets position of €3.8m compared to net current
liabilities of €3.1m at 31 December 2023.
The Company's cash position at the period end was €1.6m, compared to €2m at 31
December 2023.
Post 30 June 2024 Events
In August 2024 the Company announced that, with regards to the porting of the
Methods to existing commercial ASIC-based, it decided to migrate away from
CGMiner to AxeOS (ESP-miner), a more recently developed and, in the Company's
opinion, a better designed public domain operating system software for Bitcoin
mining devices.
In September 2024, the QBT announced the appointment of Mr. Jose Rios as
Strategic Adviser Mr. Rios is the former General Manager of Blockchain and
Business Solutions in the Accelerated Computing Systems and Graphics Group at
Intel Corp, where he spent 25 years. He was instrumental in the Blockscale ASIC
project - Intel's dedicated chip for Bitcoin mining - and he brings extensive
expertise in ASIC chip design, production and proprietary architecture
development to QBT.
Outlook
The Board remains committed to return value to its shareholders by:
- continuing to focus on its R&D programme, which is providing
promising and consistent results;
- investing in the technology sector (both in a direct and an indirect
manner);
- managing the Legacy Assets portfolio, where positive outcomes are
expected from the Company's various legal claims; and
- Further reduction of the debt position (if and when the conditions
are deemed appropriate).
The Board remains positive as the technology investments are deemed sound and
promising in fast growth markets, while the legal claims have strong merit
against defendants who are expected to remain solvent, thereby enhancing the
prospect of collection of the judgment debts.
Francesco Gardin
Quantum Blockchain Technologies PLC
CEO and Chairman
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 30 JUNE 2024
Note Six months to Six months to Year ended
30 June 2024 30 June 2023 31 December
2023
(Unaudited) (Unaudited) (Audited)
Continuing €'000 €'000 €'000
operations
Revenue - - -
- - -
Administrative (1,111) (1,190) (4,025)
expenses
Other operating - 1 -
income
Operating loss (1,111) (1,189) (4,025)
Other gains and - - 32
losses
Share of loss from - - (59)
equity-accounted
associates
Finance charges (231) (292) (296)
Loss before tax (1,342) (1,481) (4,348)
Taxation - 42 142
Loss for the (1,342) (1,439) (4,206)
period
attributable to
owners of the
parent
Other - - -
comprehensive
income/(loss)
TOTAL (1,342) (1,439) (4,206)
COMPREHENSIVE LOSS
FOR THE
PERIOD
ATTRIBUTABLE TO
OWNERS OF THE
PARENT
Earnings per
share:
Basic loss per 3 (€0.104) (€0.143) (€0.382)
share (cents)
Diluted loss per 3 (€0.056) (€0.090) (€0.256)
share (cents)
GROUP STATEMENTS OF FINANCIAL POSITION
AT 30 JUNE 2024
Note As at As at As
at
30 June 30 June 31
Dec
ember
2024 2023
2023
€'000 €'000
€'000
(Unaudited) (Unaudited)
(Audited)
Non-current
assets
Intangible 2 - 2
assets
Property, 141 198
169
plant and
equipment
Financial 322 689
396
assets at
fair
value
through
profit and
loss
Investments 7 66 7
in equity
-accounted
associates
Total non 472 953
574
-current
assets
Current
assets
Trade and 3,067 4,643
3,243
other
receivables
Cash and 1,584 752
2,057
cash
equivalents
Total 4,651 5,395
5,300
current
assets
Total 5,123 6,348
5,874
assets
Current
liabilities
Trade and (744) (369)
(413)
other
payables
Borrowings - -
(7,451)
Derivative - -
(459)
financial
instruments
Provisions (98) (210)
(98)
Total (842) (579)
(8,421)
current
liabilities
Net current 3,809 4,816
(3,121)
assets/(liab
il
ities)
Total 4,281 5,769
(2,547)
assets
less
current
liabilities
Non-current
liabilities
Borrowings (7,079) (8,286) -
Derivative (690) (610) -
financial
instruments
Total non (7,769) (8,896) -
-current
liabilities
Total (8,611) (9,475)
(8,421)
liabilities
Net (3,488) (3,127)
(2,547)
liabilities
Equity
Share 9,219 8,586
9,219
capital
Share 54,165 51,497
54,165
premium
account
Other 14,629 14,182
14,228
reserves
Retained (81,501) (77,392)
(80,159)
losses
Total (3,488) (3,127)
(2,547)
equity
GROUP AUDITED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
Group Share Share Other Retained losses Total equity
capital premium reserves €'000 €'000
€'000 account €'000
€'000
At 1 January 2023 8,378 50,541 13,812 (75,953) (3,222)
Total - - - (4,206) (4,206)
comprehensive loss
for the year
Issue of shares 841 3,624 - - 4,465
Grant of share - - 416 - 416
options
At 31 December 9,219 54,165 14,228 (80,159) (2,547)
2023
GROUP UNAUDITED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS TO 30 JUNE 2023
Group Share Share Other Retained losses Total equity
capital premium reserves €'000 €'000
€'000 account €'000
€'000
At 1 January 2023 8,378 50,541 13,812 (75,953) (3,222)
Total comprehensive - - - (1,439) (1,439)
loss for the period
Issue of shares 208 956 - - 1,164
Share based payment - - 370 - 370
expense
At 30 June 2023 8,586 51,497 14,182 (77,392) (3,127)
GROUP UNAUDITED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS TO 30 JUNE 2024
Group Share Share Other Retained losses Total equity
capital premium reserves €'000 €'000
€'000 account €'000
€'000
At 1 January 2024 9,219 54,165 14,228 (80,159) (2,547)
Total comprehensive - - - (1,342) (1,342)
loss for the period
Modification of - - 401 - 401
bond
At 30 June 2024 9,219 54,165 14,629 (81,501) (3,488)
GROUP UNAUDITED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
Six months to Six months to Year ended 31
30 June 2024 30 June 2023 December 2023
(Unaudited) (Unaudited) (Audited)
€'000 €'000 €'000
Cash used in operations
Loss before tax (1,342) (1,189) (4,348)
Impairment of investments 74 - 303
Share of post-tax losses of - - 59
equity accounted associates
Non cash foreign exchange - 10 -
movements
Finance charges 231 (142) 296
Depreciation expense 28 28 55
Decrease/(increase) in 176 (25) 1,383
receivables
(Decrease)/increase in 331 95 (164)
payables
Share based payments - 370 416
R&D tax credit received - - 154
Net cash (outflow)/inflow (502) (853) (1,846)
from operating activities
Cash flows from investing
activities
Purchase of investments - (28) (27)
Purchase of intangible - - (2)
assets
Interest received 29 6 -
Net cash inflow from 29 (22) (29)
investing activities
Cash flows from financing
activities
Proceeds from capital issue - 1,164 3,465
Net interest paid - - (9)
Net cash inflow/(outflow) - 1,164 3,456
from financing activities
Net increase/(decrease) in (473) 289 1,581
cash for the period
Cash and cash equivalents 2,057 463 463
at beginning of year
Exchange differences - - 13
Cash and cash equivalents 1,584 752 2,057
at end of period
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 First Floor,
1 Chancery Lane, London, England , WC2A 1LF.
The principal activity of the Group is that of an investment company with a
portfolio of companies primarily encompassing the leisure and real estate
sectors mainly in Italy and, more recently, technology sectors. 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. The Company has also realigned
its strategic focus to technology related investments, with special regard to
interactive media, blockchain and AI sectors.
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
2024 which have been prepared in accordance with UK adopted international
accounting standards. They include unaudited comparatives for the six months
ended 30 June 2023 together with audited comparatives for the year ended 31
December 2023.
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 2023 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.
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, the auditor's report did not
contain any statement under section 498 of the Companies Act 2006.
The interim consolidated financial statements for the six months ended 30 June
2024 have been prepared on the basis of accounting policies expected to be
adopted for the year ended 31 December 2024, which are consistent with the year
ended 31 December 2023.
Going concern
The Group's activities generated a loss of €1,342,000 (June 2023: €1,439,000)
and had net current assets of €3,809,000 as at 30 June 2024 (June 2023: net
current assets €4,816,000). 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.
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 2023 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 2023 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 loss 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 options and convertible loans outstanding during the
period.
The loss and weighted average number of shares used in the calculation are set
out below:
Six months to Six months to Year to
30 June 2024 30 June 2023
31
December
2023
(Unaudited) (Unaudited) (Audited)
€'000 €'000 €'000
(Loss)/profit attributable to
owners of the parent company:
Basic earnings (1,342) (1,439) (4,206)
Diluted earnings (1,136) (1,492) (4,424)
Basic weighted average number 1,291,314 1,009,060 1,102,309
of ordinary shares (000's)
Diluted weighted average 2,043,195 1,664,647 1,727,130
number of ordinary shares
(000's)
Basic and fully diluted
earnings per share:
Basic earnings per share (€0.104) (€0.143) (€0.382)
Diluted earnings per share (€0.056) (€0.090) (€0.256)
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. No adjustment has been made to diluted earnings per
share for out-of-the money options and warrants.
4. Investment Policy
The principal activities of the Company are focused on the R&D programme
relating to bitcoin and as an investing company with a portfolio in technology
sectors. The main focus of management is to successfully run the R&D programme
and release new products to the market. The management is also pursuing the
monetisation of all of the Company's Legacy Assets, through selected
realisations, court-led recoveries of misappropriated assets and substantial
debt recovery processes
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, First Floor, 1 Chancery Lane, London, England , WC2A
1LF.
-ends-
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Quantum Blockchain Technologies Plc
Quantum Blockchain Technologies Plc - Correction: Interim Results
23rd September 2024, 09:06
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