Coinsilium Group Limited (LON:COIN) (OTCQB:CINGF) said it has completed a follow-on investment agreement with IOV Labs Ltd, the parent company of smart contract platform RSK, while the two parties have also agreed to expand the geographical scope of the IOV Labs Asia joint venture (JV) from regional to worldwide.
The Aquis-listed blockchain, decentralised finance (DeFi) and crypto finance venture firm said IOV will invest GBP330,000 in Coinsilium by way of a private placement, subscribing for 11mln new shares at a price of 3p each, a 22% premium to its closing price on Thursday. A warrant will also be issued for every two subscription shares with an exercise price of 4.5p each.
IOV Labs will have the right to appoint one director to the Coinsilium board, while the firm’s holding in the group will increase to 13.9%.
Meanwhile, Coinsilium said it has agreed with IOV to broaden the scope of the IOV Labs Asia JV to include “the pursuit of commercial opportunities globally, rather than being limited to the Asian markets alone”, which it said will allow the JV to make the best use of Coinsilium’s worldwide network of relationships and contacts.
IOV Labs Asia is expected to be operational during the first quarter of 2021, and subject to coronavirus travel restrictions, regional director Eddy Travia is expected to relocate to Singapore in advance in order to oversee the setting up of operations.
Coinsilium also said that following the strategic investment from IOV Labs and based on minimum projected revenue assumptions, it is fully funded for all its proposed ventures, activities and budgeted commitments through to at least January 2022.
The group also said the funds will be used towards joint initiatives between Coinsilium and IOV and to further the growth and development of the company.
In a statement, Travia, who also serves as Coinsilium chief executive, said: “We welcome this timely follow-on investment from IOV Labs. Both IOV Labs and Coinsilium share big ambitions for the company and its potential to create the next generation of digital asset platforms as a Blockchain, DeFi and Crypto Finance venture operator. Since IOV Labs’ original investment in January this year, both parties have been working ever closer to ensure the alignment of our mutual interests ahead of Coinsilium’s forthcoming relaunch as a focused Blockchain, DeFi and Crypto Finance venture operator.”
“Having a partner and significant shareholder with the size and scale of IOV Labs provides Coinsilium with a solid foundation from which to launch a range of ambitious blockchain and crypto finance ventures, targeting the markets where we have identified the greatest potential. We also believe that the removal of territorial constraints with regards to our joint venture activities is a significant development and will open the way to even greater opportunities for our common endeavours. The timing of this follow-on investment and the expansion of the scope of the IOV Labs Asia JV is also particularly favourable, given the burgeoning growth and activity we are seeing in the sector, largely driven by the resurgent cryptocurrency markets which are now trading at levels surpassing those seen at the end of 2017”, Travia added.
Coinsilium chairman says expansion of JV to accelerate RSK technology adoption
Speaking to Proactive, Coinsilium chairman and co-founder Malcolm Palle said that the key advantage of the RSK smart contract platform developed by IOV Labs is that it provides enhanced functionality to the Bitcoin blockchain, akin to that currently available on the rival Ethereum but with the added benefits of Bitcoin’s scale and security.
With this in mind, Palle said that the “extremely ambitious” joint venture and its expansion will allow Coinsilium to provide a “commercial proposition” for RSK, which he said presents “tremendous opportunities” for the group.
“We originally set up this JV with IOV to focus on the Asian market as it is a high growth area, but this expansion and work we’ve done over the last year has provided us with confidence that Coinsilium shouldn’t be limited to one jurisdiction”, Palle said.
The chairman continued, saying that the range of clients for RSK that the company is targeting will be “enterprise-level” entities and that Coinsilium will leverage its knowledge of the “very new” industry to attract potential clients across the world.
“The knowledge of how to operate in this sector is still in the hands of a very small number of players…what we have are the connections, the knowledge and the experience to bring this together”, Palle said.
–Adds Coinsilium chairman comments–