Quantum Blockchain Technologies Plc - Interim Results
("QBT", “the Group” or "the Company")
INTERIM RESULTS
For further information please contact:
SP Angel Corporate Finance (Nominated Adviser & Broker)
Leander (Financial PR)
About
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
-
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
- 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,
In
This sequence of events did not occur as foreseen in the Settlement, however, for in
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
Finally, as announced on 9 January, QBT reached an agreement with
Financial Review
The Group reported a total comprehensive loss for the period of €1.3 million (
At
The Company’s cash position at the period end was €1.6m, compared to €2m at
Post
In
In
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.
CEO and Chairman
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED
Note Six months to 30 Six months to 30 Year ended31
June 2024 June 2023 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
equity-accounted - - (59)
associates
Finance charges (231) (292) (296)
Loss before tax (1,342) (1,481) (4,348)
Taxation - 42 142
Loss for the period
attributable to (1,342) (1,439) (4,206)
owners of the parent
Other comprehensive - - -
income/(loss)
TOTAL COMPREHENSIVE
LOSS FOR THE PERIOD (1,342) (1,439) (4,206)
ATTRIBUTABLE TO
OWNERS OF THE PARENT
Earnings per share:
Basic loss per share 3 (€0.104) (€0.143) (€0.382)
(cents)
Diluted loss per 3 (€0.056) (€0.090) (€0.256)
share (cents)
GROUP STATEMENTS OF FINANCIAL POSITION
AT
As at As at
As at
30 June 30 June
31 December 2023
Note 2024 2023
€’000
€’000 €’000
(Audited)
(Unaudited) (Unaudited)
Non-current assets
Intangible assets 2 - 2
Property, plant and equipment 141 198 169
Financial assets at fair value 322 689 396
through profit and loss
Investments in equity-accounted 7 66 7
associates
Total non-current assets 472 953 574
Current assets
Trade and other receivables 3,067 4,643 3,243
Cash and cash equivalents 1,584 752 2,057
Total current assets 4,651 5,395 5,300
Total assets 5,123 6,348 5,874
Current liabilities
Trade and other payables (744) (369) (413)
Borrowings - - (7,451)
Derivative financial instruments - - (459)
Provisions (98) (210) (98)
Total current liabilities (842) (579) (8,421)
Net current assets/(liabilities) 3,809 4,816 (3,121)
Total assets less current 4,281 5,769 (2,547)
liabilities
Non-current liabilities
Borrowings (7,079) (8,286) -
Derivative financial instruments (690) (610) -
Total non-current liabilities (7,769) (8,896) -
Total liabilities (8,611) (9,475) (8,421)
Net liabilities (3,488) (3,127) (2,547)
Equity
Share capital 9,219 8,586 9,219
Share premium account 54,165 51,497 54,165
Other reserves 14,629 14,182 14,228
Retained losses (81,501) (77,392) (80,159)
Total equity (3,488) (3,127) (2,547)
GROUP AUDITED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED
Share
Share Other
premium Retained losses Total equity
Group capital reserves
account €’000 €’000
€’000 €’000
€’000
At 1 January 2023 8,378 50,541 13,812 (75,953) (3,222)
Total comprehensive loss - - - (4,206) (4,206)
for the year
Issue of shares 841 3,624 - - 4,465
Grant of share options - - 416 - 416
At 31 December 2023 9,219 54,165 14,228 (80,159) (2,547)
GROUP UNAUDITED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS TO
Share
Share Other
premium Retained losses Total equity
Group capital reserves
account €’000 €’000
€’000 €’000
€’000
At 1 January 2023 8,378 50,541 13,812 (75,953) (3,222)
Total comprehensive loss - - - (1,439) (1,439)
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
Share
Share Other
premium Retained losses Total equity
Group capital reserves
account €’000 €’000
€’000 €’000
€’000
At 1 January 2024 9,219 54,165 14,228 (80,159) (2,547)
Total comprehensive loss - - - (1,342) (1,342)
for the period
Modification of bond - - 401 - 401
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
Six months to 30 June Six months to 30 June Year ended 31
2024 2023 December 2023
(Unaudited) (Unaudited) (Audited)
€’000 €’000 €’000
Cash used in
operations
Loss before tax (1,342) (1,189) (4,348)
Impairment of 74 - 303
investments
Share of post-tax
losses of equity - - 59
accounted associates
Non cash foreign - 10 -
exchange movements
Finance charges 231 (142) 296
Depreciation expense 28 28 55
Decrease/(increase) 176 (25) 1,383
in receivables
(Decrease)/increase 331 95 (164)
in payables
Share based payments - 370 416
R&D tax credit - - 154
received
Net cash
(outflow)/inflow from (502) (853) (1,846)
operating activities
Cash flows from
investing activities
Purchase of - (28) (27)
investments
Purchase of - - (2)
intangible assets
29 6 -
Interest received
Net cash inflow from 29 (22) (29)
investing activities
Cash flows from
financing activities
Proceeds from capital - 1,164 3,465
issue
- - (9)
Net interest paid
Net cash inflow/ - 1,164 3,456
(outflow) from
financing activities
Net increase/ (473) 289 1,581
(decrease) in cash
for the period
Cash and cash
equivalents at 2,057 463 463
beginning of year
Exchange differences - - 13
Cash and cash
equivalents at end of 1,584 752 2,057
period
NOTES TO THE FINANCIAL STATEMENTS
1. General Information
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
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
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
The interim consolidated financial statements for the six months ended
Going concern
The Group’s activities generated a loss of €1,342,000 (
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 30 Six months to 30 June Year to
June 2024 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 of 1,291,314 1,009,060 1,102,309
ordinary shares
(000’s)
Diluted weighted
average number of 2,043,195 1,664,647 1,727,130
ordinary shares
(000’s)
Basic and fully
diluted earnings per
share:
Basic earnings per (€0.104) (€0.143) (€0.382)
share
Diluted earnings per (€0.056) (€0.090) (€0.256)
share
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:
-ends-
