Investment of £200,000 in Argo Blockchain plc

RNS Number : 9477D

Vela Technologies PLC

05 February 2018

 

Prior to publication, the information contained within this announcement was deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). With the publication of this announcement, this information is now considered to be in the public domain.

5 February 2018

Vela Technologies plc

("Vela" or the "Company")

Investment of £200,000 in Argo Blockchain plc

Introduction

The Board of Vela (AIM: VELA), the investing company focused on early-stage and pre-IPO disruptive technology investments, is pleased to announce that the Company has invested £200,000 to acquire a minority equity stake in Argo Blockchain plc ("Argo Blockchain") (the "Investment").

Vela has subscribed for 2,500,000 shares in Argo Blockchain, at a price of 8 pence per share. The Investment by Vela has been funded from the Company's existing cash resources. The Investment by the Company is part of a larger fundraise which was completed by Argo Blockchain on 2 February 2018 and which raised £2.5 million for the company on a pre-money valuation of £8.0 million (the "Fundraise").  Following completion of the Fundraise, Vela is interested in approximately 1.9 per cent. of Argo Blockchain's share capital.

Background to Argo Blockchain

Argo Blockchain is a recently incorporated private company whose business activities will be focused on Mining as a Service (MaaS) which enables its users to access blockchain mining rigs and carry out cryptocurrency mining without the need to acquire, configure and maintain complex mining hardware. Until now this process has been reserved for those with a strong technical background and the resources to buy large amounts of server space.

Cryptocurrencies operate on a distributed ledger called a blockchain. In order to update the blockchain with transactions (transfers of cryptocurrency) computing power is needed to aggregate transactions and form them into blocks which comply with the rules of the relevant blockchain. Cryptocurrency mining is the process of aggregating the transactions into blocks and adding them to the blockchain.

The creation of a block requires the transactions to be cryptographically 'hashed' which creates a fixed length alphanumeric string which can easily be verified. This string is added to the strings for other transactions, and the hash of those combined transactions must comply with the rules of the relevant blockchain. Computers are used in cryptocurrency mining to carry out this hashing process and can be measured in the number of hashes per second it can provide. This hashing power is the unit of measurement for Argo Blockchain's contracts.

When a block is added to a blockchain the party or parties responsible for adding it to the blockchain receives a cryptocurrency reward. This cryptocurrency reward is funded partly through transaction fees charged in respect of those transactions recorded in the new block and partly through the creation of a new amount of cryptocurrency in accordance with the rules of the relevant blockchain.

Users of the Argo Blockchain service will pay for a monthly mining contract up front for which they receive an amount of hashing power for the period of the contract. Any cryptocurrency reward received as a result of that hashing power is distributed by the blockchain network or cryptocurrency mining pool directly to the user.     

Financial information on Argo Blockchain

Argo Blockchain is a newly established company and was incorporated in England and Wales on 5 December 2017 under the name of GoSun Blockchain Limited and the company's name was changed to Argo Blockchain on 20 December 2017. No accounts have been published as yet by Argo Blockchain and the company is pre-revenue. Argo Blockchain did not trade until 15 January 2018 and as at 15 January 2018 its net assets were £190,000.

For further information, please contact:

Vela Technologies plc

Brent Fitzpatrick, Non-Executive Chairman

Antony Laiker, Director                                                                    Tel: [phone]

Allenby Capital Limited

(Nominated Adviser)

Nick Athanas/Katrina Perez/Asha Chotai                                 Tel: [phone]

Smaller Company Capital Limited

(Broker)

Rupert Williams/Jeremy Woodgate                                           Tel: [phone]

 

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