# GSTechnologies H1 has been one of significant progress for the Group

- Link: https://www.directorstalkinterviews.com/gstechnologies-h1-has-been-one-of-significant-progress-for-the-group/4121039669
- Published: 2021-12-21T07:36:21+00:00
- Author: Giles

**GSTechnologies Ltd** (LON:GST), the fintech and information technology solutions
company, has announced the Company’s interim results for the six months ended 30
September 2021.

**Period Highlights**

·    Collaboration agreement signed with Wise MPay, the Singaporean blockchain payment
solution provider, to provide the Company with software and services to facilitate
the Company’s blockchain related fintech plans.

·    Placing to raise £1.4 million at 1.0 pence per ordinary share and publication
of a prospectus on 6 September 2021.

·    Resumption of EMS operations following the relaxation of government measures
against Covid-19 controls resulted in an increase in revenue for H1 2021 to US$2,261,000(
H1 2020: US$769,000).

·    Net loss for the period of US$1,094,000 (H1 2020: US$561,000 loss).

·   As of 30 September 2021, the Company had US$2,749,000 in cash and cash equivalents(
30 September 2020: US$1,789,000).

**Post Period Highlights**

·    Appointment of Jack Bai as Chief Executive Officer and Shayne Tan as Chief 
Operating Officer.

·    Conditional acquisition of Angra Limited.

·   Placing to raise gross proceeds of £1.0 million at 2.0 pence per ordinary share
on 19 November 2021.

·    Launch of the GS Money protocol on the Coalculus platform.

·    Receipt of 100 million COAL tokens as part of the ongoing collaboration with
Wise MPay.

**Chairman’s Statement**

Despite the backdrop of the continuing pandemic the period has been one of significant
progress for the Group.  The Group’s revenue continues to be provided by our subsidiary,
EMS Wiring Systems Pte Ltd (“EMS”), whilst the GS Fintech companies are currently
pre-revenue.

Although the world has had to shut and open its doors repeatedly and often shifted
into a lower gear, our EMS corporate customers still needed IT support and new services,
whilst navigating the uncertainty and challenges of the global pandemic.

EMS remains a predominantly Singapore focused business and Singapore’s GDP showed
positive growth in the first half of 2021, even though the growth was from the lower
base in 2020.  For 2021, Singapore’s GDP expanded by 1.5% in the first quarter, 
followed by 14.7% in the second.  Likewise, the construction sector grew sharply,
up by 106.2% on a year-on-year basis in the second quarter of 2021, compared to 
the same period last year when construction activities ground to a halt during Singapore’s
circuit breaker measures.  While the Ministry of Trade and Industry, upgraded Singapore’s
official growth forecast for 2021 to between 6% and 7%, labour shortages arising
from restrictions on the entry of migrant workers, are weighing on the recovery 
of the construction sector.  Against this background we are pleased with the performance
of EMS during the period and anticipate that the business will recover further in
the second half.

However, the primary focus for the future of the Group has been on the new ‘GS Fintech’
subsidiaries in the UK and Singapore and the Company’s planned expansion into blockchain
related technologies, specifically its plans to launch a borderless neobanking platform
providing next-generation digital money solutions.

During the period we significantly progressed these activities with the signing 
of a collaboration agreement with Wise MPay, the Singaporean blockchain payment 
solution provider, on 28 May 2021, with a view to Wise MPay providing the Company
with software and services to facilitate the Company plans.  The collaboration is
progressing according to plan and post period end we announced a number of developments
which are described below.

**Fund Raising**

On 6 September 2021 the Company raised gross proceeds of £1.415 million through 
a placing of 141,500,000 ordinary shares at a price of 1p per share.  This was followed,
post period end, on 19 November 2021, with a placing of 50,000,000 ordinary shares
at a price of 2p per share raising gross proceeds of £1.0 million.

The funds raised from the two placing are being principally used to accelerate the
implementation of the Group’s strategy, in particular covering the planned sales
and marketing costs, and the costs of further development and implementation of 
the Wise MPay technology.

**Management Changes**

Post period end we were delighted that Mr Bai GuoJin (“Jack Bai”), an existing Executive
Director, was appointed as the Company’s new Chief Executive Officer on 12 October
2021.  Jack Bai, who joined the GST board in January 2021, has over 30 years’ experience
in software development for the financial and telecommunication industries.  He 
is a successful technology entrepreneur, who has successfully built and exited multiple
companies, including in fintech and payment solutions.  He is a co-founder of Wise
MPay, the Company’s collaboration partner, and leads the development of the Coalculus
blockchain technology.  He is leading the Group’s blockchain technology activities
and its plans to launch a borderless neobanking platform providing next-generation
digital money solutions.

On 20 October 2021, additionally Mr. Tan Guan Han, Shayne (“Shayne Tan”), an existing
Executive Director, was appointed as the Company’s new Chief Operating Officer. 
Shayne Tan, who joined the GST board in January 2021, holds a Bachelor of Business
Management Degree from Singapore Management University and has more than five years
of sales, operations, and management experience in growth-stage companies operating
exclusively within the blockchain and cryptocurrency sector. He is, alongside Jack
Bai, a co-founder of the Coalculus blockchain platform.

**Post Period End Developments**

On 5 October 2021 the Company announced that it had entered into a conditional agreement
to acquire the whole of the issued share capital of Angra Limited (“Angra”), a UK-
based foreign exchange and payment services company.  Angra, which operates under
the AngraFX brand name, is a Financial Conduct Authority (“FCA”) approved Authorised
Payment Institution (“API”), conducting fast, secure and low-cost foreign exchange
business and payment services internationally.

The acquisition of Angra is now only subject to FCA approval for the change of control.
If approved Angra will provide the Company with an operating business in the UK 
and an API licence in order to be able to connect to traditional banking payment
systems and agent networks, operate a remittance business in the UK and grow revenues
from the stablecoin network and applications that are being developed.

On 30 November we reported that we had successfully tested all four of the enterprise
chains provided by Wise MPay (representing four digital currencies pegged to the
US Dollar, the Pound, the Euro, and the Yuan), together with implementing a mainnet
upgrade on the Coalculus platform, provided by Wise MPay.  This marked the launch
of the GS Money protocol.  This was followed on 17 December 2021 by GST receiving
100 million COAL tokens from Wise MPay and the enabling of the COAL token staking
capability on four full nodes managed by the Company.  The value of the COAL tokens
provided by Wise MPay, as one of their deliverables under the collaboration agreement,
was approximately £475,000 at the current COAL token trading price.

The four digital currencies are strictly pegged to the US Dollar, the Pound, the
Euro and the Yuan which will allow GST to carry out transactions immediately through
blockchain ledgers, which can be used in place of wire transfers that generally 
take several days to complete.  The four enterprise chains work alongside one another
to form a decentralised and highly efficient multicurrency cross border payment 
system for digital transactions that utilise the Coalculus blockchain ledger technology.
Additionally, each enterprise chain’s total supply will allow GST to issue up to
10 billion digital currency units.

With the launch of the GS Money protocol, this blockchain technology is now available
to GST and its future clients.  The Company intends to deploy GS Money early in 
2022 in limited cross-border payment trials, and then gradually roll out GS Money
for commercial operations in the coming months.

The future roll-out of GS Money is intended to be focused on three initial use-cases:

International Money Transfers: GS Money will initially be used in restricted cross-
border payment testing before being gradually expanded to include commercial activities.

Borderless accounts: GS Money will be integrated into a GST borderless account payment
service. This borderless account will allow customers to retain many digital currencies,
but the biggest advantage is that they may be converted at the prevailing exchange
rate and in any currency, with minimal, transparent fees.

Private Stablecoin: Ultimately it is intended that GS Money will also be focussed
on private stablecoin. The objective is to establish public trust, maintain stability,
and enable claims backed by reserves.  By establishing a private stablecoin ecosystem,
GST intends to encourage market players to allow transactions to settle in GS Money
digital currencies, as well as be integrated into various other payment services.

**Summary**

The period under review was one of significant achievement as we progressed our 
blockchain based financial services ambitions.

Given the ongoing pandemic situation, forecasting the future is especially difficult.
We expect uncertain worldwide economic conditions to continue, depending on how 
the pandemic evolves, particularly with the emergence of new Covid 19 variants. 
However, this is likely to have a much more significant impact on our EMS business,
but with anticipated improvement in future construction demand we are optimistic
for the future of this business.

However, our primary focus is on progressing our plans to launch a borderless neobanking
platform providing next-generation digital money solutions, based on blockchain 
technology, which has been significantly less impacted by the pandemic.

In doing so we will continue to practice prudent financial management, and working
capital management, to ensure the Group maintains appropriate liquidity, while being
mindful of operational expenditure.  Operationally, we are constantly striving to
improve our work methods, and the skills and capabilities of our people.  We continue
to advance GST’s digital capabilities, developing innovative technological solutions
to improve our project productivity and efficiency.

I would also like to extend my appreciation to GST’s shareholders for their continued
support, and to my fellow board members and staff for their support and hard work
during the period.  Whilst we still have a lot to do, GST has come a long way in
a short period of time.  I look forward to the future with confidence and reporting
on our further progress in the coming months.

**Tone Kay Kim GOH **
**Chairman** **GSTechnologies**

**Financial Highlights**

·    Resumption of operations following the relaxation of government measures against
Covid-19 controls resulted in an increase in revenue for H1 2021 to US$2,261,000(
H1 2020: US$769,000).

·    As of 30 September 2021, the Company had US$2,749,000 in cash and cash equivalents(
30 September 2020: US$1,789,000).  In the interim period, the debt/equity structure
has shifted to lesser dependence on debt financing to support its operating activities.
Post period end, on 19 November 2021 the Company raised a further £1m (gross) through
a placing of ordinary shares.

·    Net loss for the period is US$1,094,000 (H1 2020: US$561,000 loss). Major contributing
factors for the increased net loss for the period are due to the decrease of US$
203,000 in government grants being received and the increase of US$112,000 in foreign
worker levy paid arising from the cessation of the government assistance incentive
on the foreign worker levy waiver. Costs incurred in relation to share placement
and the preparation of a prospectus amounted to US$479,000.

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