IOT signs $5 million advisory deal

Published at Jul 24, 2018, in Technology

In an important development for IOT Group Ltd’s (ASX:IOT) subsidiary, International Blockchain Advisory Corp Pty Ltd (IBAC), has been appointed advisor for a Blockchain project to develop the Royalti Blockchain Group’s (RBG) Blockchain Mining Services.

Highlighting the significance of this development, RBG is one of the world’s first fully automated digital currency mines, guided by Artificial Intelligence to deliver substantial energy savings.

RBG is prominent in its own right being Bitfury’s – a globally significant and leading Blockchain technology company – authorised Australian integrator and approved partner.

Under the Binding Contract Terms, IBAC will receive 5 million tokens of the Blockchain Project with a proposed value of AUD$1.00 per unit. IOT can book the deal for $5 million for this financial year and sell down the token in Q4 if required. The deal will generate cash inflows.

Of course the deal remains early stage and investors should seek professional financial advice if considering IOT for their portfolio.

As RBG will initially be listing on an Australian Coin Exchange, the currency is determined as Australian dollars.

IBAC will receive all 5 million units as ERC20 Tokens on the Ethereum platform within the next 14 days.

This issue of tokens represents the consideration for IBAC’s provision of services under the contract.

Subject to working capital requirements and prevailing investment market conditions, IOT will trade the RBG tokens on the relevant exchange (once listed) to realise the cash value.

Investors should note that the basis for the token valuation is, in fact, unknown at this stage and is only notional. Valuation will only be known once the tokens are planned to be listed on an exchange in the December quarter.

IOT group bitfury valuation
IOT group bitfury valuation

IOT’s role purely advisory

This isn’t IOT’s first dealings with RBG.

In May, IOT signed a conditional binding Terms Sheet with Royalti Blockchain, BitFury’s Authorised Australian Integrator and approved partner, for the supply 20 megawatts of power over a ten-year term at an estimated cost of 11 cents per kwh.

IBAC’s role is to advise and introduce qualified technical management to complete the RBG Blockchain Mining Project and has signed a binding contract with RBG to advise on the best Blockchain protocol solutions for the RBG Initial Coin Offering (ICO).

Importantly, IOT’s and IBAC’s role is limited to advising RBG for the Blockchain solution, and IOT will not itself directly, indirectly or jointly undertake the ICO.

IBAC will not be participating in a digital currency other than in receiving tokens as compensation for services.

Management believes rewards outweigh risks

Should the ICO fail to take place, the tokens will not be redeemable and therefore IOT will not receive any monetary compensation for this project.

Accordingly, there are significant risks associated with the valuation and liquidity of the tokens and investors should be aware of these risks.

Note: Should the ICO proceed, a white paper disclosing relevant information will be made available when the coins are offered, anyone who wishes to acquire the securities will need to complete the application form that will be in or accompany the white paper’.

IOT see this contract as significant, being the company’s first contract in this burgeoning market.

In its advisory capacity, IBAC is taking the first mover advantage, rapidly expanding its blockchain capabilities and engaging with industry to both realise and drive the opportunities inherent in this new technology.

S3 Consortium Pty Ltd (CAR No.433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information only. Any advice is general advice only. Neither your personal objectives, financial situation nor needs have been taken into consideration. Accordingly you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs, before acting on the advice.

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