CSE Bulletin: Consolidation – Cypher Metaverse Inc.

Overview

Cypher Metaverse (CSE:CODE,FWB:C5B,OTCQB:BKLLF) makes strategic investments in emerging sectors and markets, including cannabis, technology, and select cryptocurrencies. Cypher Metaverse is led by a hands-on team of entrepreneurial and technology experts who invest in early-stage ideas. The team operates with the understanding that emerging sectors, like technology and cannabis, are evolving rapidly and can bring early opportunities for strategic investments.

Cypheris a technology investment firm focused on foundational technologies, like blockchain, cryptocurrency, non-fungible tokens (NFTs) and decentralized finance (DeFi), in emerging digital environments. Billion-dollar investments by the world’s largest companies, Meta (formerly Facebook), Apple, Alphabet and others, in technologies and digital spaces of the future are powering Web3, the most significant technology revolution since the introduction of the world wide web.

With these changes comes an environment rich with opportunity for entrepreneurs and investors. The elite Cypher team of technology, business and financial experts are vanguards in society’s digitization leveraging a deep insight into metaverse technologies to connect investors to this exciting disruptive, new asset class.

Cypher Metaverse has formed Code Cannabis Investments, which focuses on identifying cannabis assets and start-ups that require capital and expertise to accelerate their business models, and in order to scale to meet the demands of the market.

It intends to initially pursue investment opportunities in the North American cannabis market, but is expected to primarily focus on the UK. The subsidiary has since made moves to enter the US hemp-derived CBD market by moving to acquire a 45-acre certified-organic farm in New Berlin, New York. The company acquired Love Hemp (OTC:WRHLF), marking its strategic investment in the cannabis industry.

As for the company’s technology strategy, Cypher Metaverse has made strategic investments in four aspects of technology: Metaverse, Trdr, bitcoin mining, and Arcology. The company believes that blockchain technology can radically transform how business is conducted throughout the world. The company is based in Vancouver, British Columbia, and has expanded into the US through its wholly-owned subsidiary in the Silicon Valley, Cypher Metaverse USA.

Virtual immersive social platform app that allows users to trade a wide range of options – from celebrities and sports teams to Instagram stories and stocks – with real money, in exchange for rewards at the world’s top companies. Since the CODE investment TRDR has grown from 4.3 million users to over 7.0 million.

According to Cypher Metaverse technology advisor Jeff Koyen, “Blockchain is a shared ledger used to record transactions across a decentralized network of computers. ‘Decentralized’ is the key word here. Because they have no central authority figures, blockchains are governed by the network operators. Before any transaction is recorded to the ledger, a certain level of agreement must be reached by the entire network.”

Blockchain technology is being adopted across a number of industries, including banks and financial institutions. The market has grown faster than anticipated, and is expected to be worth US$23.3 billion by 2023, according to a report by Markets and Markets.

Unlike many companies in the blockchain landscape, Cypher Metaverse’ focus is to invest in technologies that are using blockchain in varied and innovative ways. To this effect, the company has acquired or invested in companies that use blockchain to pursue its mandate. Cypher Metaverse has made strategic investments into five technology platforms: Pressland, ICO Ranker, Arcology, Blockchain ranker, and SV Cryptolab.

Web3 will fuel an entirely new, trillion-dollar industry. The metaverse is an immersive, 360-degree digital world where people learn, work, play, create, and socialize as avatars. The metaverse will create global leaders -– companies and people — just as Amazon, Facebook, and Shopify emerged from the last tech wave. Cryptocurrencies, non-fungible tokens (NFTs), and blockchain are parts of the technology infrastructure of the metaverse.

Decentralized finance, virtual and augmented reality and more bring people into the metaverse supporting their experiences and commerce. In these new digital worlds, consumers outfit their avatars in popular brands, compete for original art – verified by NFTs, and acquire land in select locations to establish virtual homes and businesses.

Cypher investments are designed to accelerate the aggregate development of the sector through access to capital markets, while creating long-term shareholder value from early-stage investment. The Company’s strength is their big picture view of the technology landscape. Through this lens the inter-relatedness of technologies expose companies and technologies positioned to realize sustainable, exponential growth. The layering of technologies opens immense opportunities revealed only from a dynamic, big picture focus and constant oversight. Cypher’s strategic, early-stage investments in the metaverse and related technologies diversify portfolios with future focused, globally relevant tech sectors. Investors are exposed to a completely new asset class without the stress of navigating technically complex direct investment channels or acquiring a macro understanding of emerging technological universes.

This includes SV CryptoLab, a social hacker community space by day and a cryptocurrency mining operation by night. Cypher Metaverse recently acqPressland is an open-source media directory looking to relaunch as a blockchain-powered platform combating fake news. Arcology is a blockchain platform expected to use machine-learning and pattern-recognition technology to create hierarchical blockchain structures.

The ICORanker.com and BlockchainRanker.com websites provide the company with access to the token industry. The sites act as a platform that vets and rates blockchain applications, services, and software providers. Cypher Metaverse has also initially invested $100,000 in ePIC Blockchain Technologies, a blockchain processing hardware company that is developing scalable and energy-efficient mining tools and infrastructure to cryptocurrency miners.

In September 2021, Cypher Metaverse completed the delivery of 115 Antminer S17+ 76Th Bit Mining units to their hosting facility in New York State. All 115 units are online and earning revenue. To date, the revenue from mining operations reached C$142,210 with facility operating costs of C$68,306. Cypher Metaverse is currently holding 2.908 BTC with a market value of approximately C$238,288.

Cypher signed a $2.5 million (USD) definitive agreement to acquire bit mining infrastructure based in the USA for long term revenue generation on 15 January 2021. Cypher’s investment will deliver an initial tranche of 9,450 Terahash per second worth of mining rigs fully hosted in the USA. The Company also has the option to further expand the initial investment, with the first right of refusal on a second tranche of an equal number of mining rigs for a period of one year. CODE is assessing opportunities to expand aggressively based on the Company’s Bit Mining Investment.

Part of what sets Cypher Metaverse apart from its peers is that the company entered the space early on and put together a knowledgeable management team that takes its time to properly assess potential deals. This team includes Jeff Koyen, who plays the role of technology advisor, and George Tsafalas, who is the president and CEO of Cypher Metaverse USA. The company has cumulative decades of experience in technology, business development, corporate finance, media, insurance, and capital markets

Cypher Metaverse recruited an elite team of technology thought leaders in the cryptocurrency, blockchain, and Web3 spaces. Cypher synthesizes their knowledge, drive and experience to create an executive team of technology experts with the passion and vision of entrepreneurs wrapped in a deep understanding of the progressive digitization of society.

Cypher Metaverse owns strategic investments in several foundational Web3 technologies; cryptocurrency (Bitcoin), blockchain, and non-fungible tokens (NFTs). As the world’s richest companies pledge billions to Web3 product investments and global brands are showing up in the metaverse, Cypher is prepared. Cypher Metaverse is mobilizing to expand its portfolio of strategic Web3 investments at a time when consumers and capital is flowing into digital currencies, NFTs, DeFi and all elements of the metaverse.

Company Highlights

• Early mover in funding blockchain technologies beyond cryptocurrencies, acquiring or invested in companies that deploy blockchain-based technology.
• The company has strategic investments to enter the US hemp-derived CBD market by moving to acquire a 45-acre certified-organic farm in New Berlin, New York.
• Cypher Metaverse acquired Love Hemp (OTC:WRHLF), marking its strategic investment in the cannabis industry.
• Knowledgeable management team that makes well-researched and informed decisions regarding their acquisitions and investments.
• Cypher Metaverse delivered 115 Bit Mining units and generated C$142,210 BTC revenue as of October 2021.

Key Projects

Arcology: Providing Hierarchical Structures to Blockchain

In April 2019, Cypher Metaverse increased its equity stake in Arcology, a first-of-its-kind blockchain platform from Alberta, to 30 percent. Subject to the terms of the agreement, the investment would increase up to $2 million for 51 percent of the company.

Arcology is a blockchain platform that utilizes machine-learning and pattern-recognition technology to develop hierarchical blockchain structures that solve common market problems including speed and scalability. Arcology has been designed to be more scalable and ‘intelligent’ than the current leader in its market, Ethereum.

Arcology is the world’s first dynamic, hierarchical, blockchain. It boasts enterprise-grade transaction speeds and scalability, and highly competitive transaction costs, ideal for commercial use at scale. To drive industry adoption, Arcology offers an interoperable developer environment.

“In identifying this opportunity, Cypher Metaverse will help advance blockchain technology to where it needs to be in a decade, not just years, from now,” said Tsafalas, “The blockchain revolution is just beginning, and we’re proud to be at its forefront.”

As of April 2018, Arcology has recruited a team of experts from the fields of AI, machine learning, and biologically inspired adaptive network design to build new blockchain technologies that will address the inefficiencies in the current platforms on the market and compliments Archology’s current blockchain platform. Revenue from this project will come from a variety of traditional sources, such as subscriptions, licensing, and consulting fees.

Arcology has been testing its blockchain-enabled data handling offering. The tests were able to prove that it is possible to eliminate restrictions that have made distributed databases and blockchain technology incompatible. Arcology can also take advantage of parallel data insertion and querying on multiple databases by incorporating a distributed database. However, the most significant findings highlighted an increase in network speed and reliability across a distributed model and that data storage on Arcology’s blockchain network could be 100 times cheaper and faster.

Arcology has also integrated Ethereum virtual machines into its proprietary blockchain technology, allowing developers to move their existing apps, dApps and other assets to Arcology without issue. By offering third parties greater speed, scale, and efficiency, Arcology intends to become the platform of choice for enterprise and industrial-grade developers.

CryptoLab: Mining and Community Building

In January 2018, Cypher Metaverse acquired 60 percent of the outstanding shares in SV CryptoLab, a cloud-based cryptocurrency mining organization. Since then, the company has raised its ownership to 80 percent, exercising its right as part of the agreement.

Under the proposed agreement, Cypher Metaverse would have the option to acquire the remaining 20 percent and keep SV’s current CEO to lead the advancement operations as a key component of the company’s management team. During weekdays, SV would continue to run a part hacker part social space that hosts meetups. Meanwhile, during nights and weekends, the lab would use its computing power to conduct its cryptocurrency mining operations for the economic benefit of Cypher Metaverse.

“We are excited to reach this milestone, completing our initial acquisition in the blockchain space, so that we can scale this concept,” said Tsafalas. “We are working to replicate SV CryptoLab’s business model, together with its proprietary evaluation algorithm, in other cities soon.”

Since the submission of the LOI for the original acquisition in November 2017, SV has further developed its cryptocurrency mining operations to include on-site Bitcoin mining, adding 370 ASIC microprocessors to its enterprise. Additionally, SV has also entered into contracts to mine Ethereum and Zcash, among other rapidly growing cryptocurrencies. Cypher Metaverse has also indicated that it is exploring the possibility of opening a second location in the same format on the eastern coast of the US.

Pressland: Media Transparency Through Rewarded Crowdsourcing

In April 2018, Cypher Metaverse acquired Pressland, a media directory and website focused on media transparency. Pressland was launched in 2015 and offers a crowdsourced directory of 20,000 media outlets and professionals. Pressland is led by Koyen, who brings over 20 years of journalistic experience. With the help of Cypher Metaverse, Pressland’s mission is to provide the public with blockchain-powered tools that will help expose unreliable news items.

Pressland publishes its own digital publication, News-to-Table, which covers media trust and transparency. The publication releases up to five articles per week and recruits writers from its partner Study Hall, a global online community of over 2,000 journalists that offer resources, news, analysis, and original reporting to its members. The partnership is also expected to increase industry awareness of Pressland’s mission to fight fake news.

“Today, thanks to the innovative power of blockchain technology and utilizing Cypher Metaverse’ expertise and resources we have the unique opportunity to expand Pressland’s mission to debunking fake news and exposing unreliable players in the media,” said Tsafalas.

The platform will function as a reward economy built on its own cryptocurrency token. With the use of the token, Pressland community members will be incentivized to contribute intelligence and insights and verify data from media outlets and media figures. “This data will then power a suite of tools designed to debunk fake news on other platforms, such as Facebook,” said Koyen.

In May 2018, Pressland announced that it will be issuing its own transactional currency in the form of a blockchain-based cryptographic token. In July 2018, Pressland partnered with Token Agency for marketing purposes for its upcoming token sale.

“To run a successful token sale, it’s critical to communicate your project’s mission, goals and value proposition. This is no simple task in the buzzy world of crypto and blockchain,” said Koyen.

Additionally, Pressland has signed an LOI to form a commercial partnership with Membit, the maker of the Membit augmented reality (AR) photo-sharing app for iOS. Membit will be using Pressland’s data to help verify original journalism produced on its platform. The two companies are also in discussion for jointly creating a platform for journalists in the field that would allow journalists to validate and verify their reporting in the field.

In March 2019, Pressland announced its intent to develop the world’s first data management platform to fight fake news. The platform will use artificial intelligence (AI) and natural language processing to analyze the world’s news output. The company expects the platform to have applications in a variety of industries and will be made available to its partners and clients under SaaS licenses.

“We’re building an enterprise service for global media companies, social media networks and other third parties fighting the spread of misinformation online,” said Koyen, “This is a highly scalable, disruptive technology that will serve the public interest by stopping the spread of fake news.”

To this end, Pressland has partnered with iO Ventures, a developer of a hyper-personal device that delivers custom news, user-centric learning and on-demand wellness information. The two companies will be working together to verify trustworthy news before distributing it to iO’s users.

Pressland has also signed an LOI to form a commercial partnership with OutVoice, a freelance payment option for publishers that can be integrated directly into content management systems. The focus of the partnership is to drive client engagement in the media-tech space by reducing inefficiencies. Pressland also expects the partnership to accelerate the company’s time-to-market for its SaaS offerings. The company will use OutVoice to pay its contributors to its ICORanker and Blockchain Ranker websites.

ICORanker.com

In July 2018, Cypher Metaverse acquired the iCORanker.com and BlockchainRanker.com websites with a suite of professional services and marketing data for US$1.75 million in cash and stock. BlockchainRanker.com vets and rates blockchain platforms, services and software providers and will relaunch under Cypher Metaverse’ management.

“Acquiring ICORanker is our entry to the lucrative world of token analysis, ratings and recommendations,” said Koyen, “The token sale ecosystem has a bright future, and we’re excited to take ICORanker to the next level of profitability.”

According to a report published by PwC, token sales have raised US$13.7 billion in the first five months of 2018 which has doubled the totals from 2017.

Since acquiring the website, Cypher Metaverse has broadened the scope of ICORanker.com. The website no longer focuses exclusively on ICOs and now offers marketing services to all token sales, such as initial exchange offerings (IEOs) and security token offerings (STOs). ICORanker also has expanded its news coverage to increase the site’s reputation and visibility.

Cypher Metaverse’ Additional Investments and Acquisitions

NOS Blockchain Inc. Joint Venture

In November 2017, Cypher Metaverse entered into a joint venture agreement with NOS Blockchain, which provides the company with first right of refusal on all NOS blockchain technologies. NOS is a subsidiary of Nerds On Site, which specializes in providing cost-effective, leading-edge solutions to small and medium-sized enterprises. The company has a client base of over 12,000 and a customer satisfaction rating of 96.5 percent.

“Cypher Metaverse has invested $100,000 in NOS to accelerate the development and implementation of NOS’s existing, advanced blockchain technologies,” said Tsafalas. “The leadership team at NOS Blockchain Inc. has an extensive track record of success, building a technology company from the grassroots into a market leader in the IT solutions space. Their advanced stage blockchain technologies are the basis of our decision to structure a joint venture and invest $100,000 at this time.”

ePIC Blockchain Technologies Inc.

In January 2018, Cypher Metaverse initially invested $100,000 in ePIC Blockchain Technologies, a blockchain processing hardware provider. ePIC is focused on designing scalable and energy-efficient cryptocurrency mining tools and infrastructure. Currently, ePIC is designing a cryptocurrency chip that is specifically designed for bitcoin mining.

“Cypher Metaverse has invested $100,000 in ePIC to accelerate the development of ePIC’s purpose-built cryptocurrency mining chip,” said Tsafalas. “ePIC has a defined focus that resonates strongly with our team. The infrastructure required to mine cryptocurrencies represents a massive business opportunity and we are focused on finding start-up technologies that can empower the blockchain revolution and deliver significant results to our shareholders.”

Code Cannabis Investments

Cypher Metaverse’ subsidiary, Code Cannabis Investments, was formed to identify cannabis companies that require capital and expertise to accelerate their business models and scale to meet the demands of the market. The subsidiary intends to initially pursue investment opportunities in the North American cannabis market, but is expected to primarily focus on the UK and EU, especially in countries such as Germany, Spain, Italy, Greece, and Malta.

According to a report by Consultancy EU, the European cannabis market is expected to reach 123 billion euros by 2028. The European CBD and medical cannabis markets offer cannabis companies numerous advantages due to Europe’s large population. In the UK alone, it is estimated that six million adults have used CBD and 11 percent of the population has consumed a CBD product within the last year.

“With our leadership team’s deep experience in the cannabis space, we believe that the UK is entering a period of acceptance for CBD and medicinal cannabis that was evident in Canada and North America five to seven years ago,” said Cypher Metaverse president and CEO George Tsafalas. “That spells opportunity to our team, and on behalf of our shareholders, management, and representatives have engaged in meetings in the UK specifically aimed at identifying and investing in early-stage companies in the space that can benefit from both our capital and expertise.”

Since its formation, Code Cannabis Investments has signed a letter of intent (LOI) to acquire a 45-acre organic farm in New Berlin, New York. The company intends to grow organic hemp there and enter the hemp-derived CBD market in the US. In December 2018, the US Senate passed the Farm Bill which removed hemp as a Schedule 1 drug, creating a hemp-derived CBD market. According to a report by BDS Analytics and ArcView Market Research, the US CBD market is expected to reach US$20 billion by 2024.

Love Hemp

Cypher has a strategic investment in World High Life, an investment company focused on CBD wellness and medicinal cannabis in the UK and Europe, and owns Love Hemp, the UK’s top supplier of CBD. Love Hemp is the Top CBD Brand in the UK. Global UFC (Ultimate Fighting Championship) CBD Brand Partner. Love Hemp’s products are in over 2000 stores in the UK including major retailers Boots, Holland & Barrett, Sainsbury’s, Ocado, and AmazonUK.

Management Team

George Tsafalas – President, CEO, and Director

George Tsafalas is an entrepreneur with extensive experience in senior operational management, corporate business development, and corporate finance in the private and public sectors. Currently he is a Senior Partner at Stadnyk and Partners. He specializes in the execution of strategic budget plans and monitors the development of the portfolio programs, including review of the financial objectives and milestones. He has over ten years of senior management experience in the oil and gas sector, as well as in the hospitality industry and professional sports sectors. He has experience in the attraction of private equity capital, including angel investment groups and firms, and has assisted in several successful equity capital fundraising efforts.

Jeff Koyen – Technology Advisor

Jeff Koyen is an award-winning journalist and entrepreneur who has been active in cryptocurrency and blockchain as an investor and trader since 2014. As a media strategist and advisor, Koyen is valued for his keen eye for weak signals, emerging trends, and early discovery. He has a proven track record of launching new digital properties for both startups and legacy media companies.

Brian D. Keane – Director

Brian D. Keane serves as a consultant at Stadnyk and Partners in New York, and formerly served as its managing director. He has over 17 years of capital markets, investing, and chief-level consulting experience. He has invested in, advised upon, or restructured over 75 emerging growth companies in the US, Canada, Caribbean, and Asia, representing over US$2 billion in transaction value. He has advised several buy-side investment funds and worked at investment banks including Rodman & Renshaw, Ladenburg Thalmann & Co, and TechVest. He earned a bachelor’s of science degree from the University of Scranton and a juris doctor from New York Law School.

Tatiana Kovaleva – CFO

Tatiana Kovaleva has extensive experience working in the capital markets. Over the last 20 years, she has served in the capacity of chief financial officer for multiple publicly traded companies. Serving in the roles of chief financial officer and corporate director, Kovaleva has utilized her specialized executive management experience in public company financial planning and demonstrated a successful track record with timely and accurate financial forecasting, budgeting, reporting, and consolidations, as well as IFRS and GAAP accounting.

Jacob Chernoff – Technology Advisor

Jacob Chernoff joined Cypher Metaverse in March 2021 to assist with ongoing investments and operations within the Bitcoin Mining and Blockchain ecosystem, and as an advisor. He is a seasoned investor and entrepreneur, integrating aspects of traditional venture capital within the blockchain and cryptocurrency markets. With over six years of experience working with blockchain developers and company management, Chernoff is essential in Cypher’s plans to explore and capitalize on emerging market trends within the Blockchain ecosystem. He has worked with a number of public companies – evaluating and revising Blockchain-based business proposals, raising seed capital, and deconstructing complex technical aspects of blockchain and cryptography.

Harrison Ross – Director

Harrison Ross served as a CFO for DC Acquisition, and worked at the Capital Pool Company on the TSXV, raising over $2.5 million in funding. He is the current CFO at Health Logic Interactive, a pioneering point-of-care health technology company at the forefront of chronic kidney disease testing. Ross is a public and private capital market finance professional, having co-managed over $500 million at Duncan Ross Associates, in addition to serving as an analyst at Belkorp Industries

Laurent Zhang – Arcology Founder, CEO

Laurent Zhang is the president of Capital Block Tech and founder of Arcology. He got his bachelor’s of science degree from Oxford Brookes University and holds a master’s of science degree in Intelligent systems. Zhang previously worked as senior research engineer and managers at MKS instrument, University of Alberta and Baker Hughes. He has extensive experience in solving large-scale real-world applications with most creative solutions. Zhang is an expert in artificial intelligence, distributed computation and distributed ledger technologies.