PROEN No. 15/2022

Date: May 13, 2022

Subject: Notification of further progress of the acquisition of digital assets in cryptocurrency

TO:

President

The Stock Exchange of Thailand

Ref:

Notification to SET no. PROEN 14/2022 published on May 31st, 2022 D. Notification of the progress of

Acquisition of digital assets in cryptocurrency

According to PROEN Public Co., Ltd. (“The Company”), it has approved the investment of digital assets in cryptocurrency pursuant to the terms of its partnership with Bitkub Blockchain Technology Co., Ltd. (“Bitkub”). The company had clarified on the SET website on May 31st2022, and the Company would like to clarify more details as follows.

1. The Company will be the Transaction Verification Partner (Verification Node) as the PoSA (Proof of Stake Authority) on Bitkub’s Blockchain Transaction Verification System (Bitkub Chain). The Company is responsible for the legitimacy of transaction copies of electronic transactions on the Bitkub Chain platform. The company will be rewarded with transaction fees incurred on Blockchain in terms of KUB coins. When there is a high transaction rate, the validating node will earn more KUB coins accordingly. There is a chance of getting a high return of 40% by holding the coin according to the KUB coin holding agreement. Whoever is to be the validating node must stake KUB coins, which is the main requirement. The validating node must purchase KUB coins issued by Bitkub Blockchain Technology Co., Ltd. “The coin seller”, it is stated that the validator node must buy KUB coins for a maximum amount of 250,000 KUB per validator node, or may be able to buy a lower amount with the right of the validator node deducted in proportion to the amount of KUB coins held.

The Board of Directors considered the factors of the current situation and decided on the investment in cryptocurrency digital assets. The board of directors asked the managements to study the advisability of closing the transaction, the advantages, the disadvantages, as well as all the events and factors that may arise. The Company must have specialists who have the necessary skills and experience to study the value of an investment for the greatest benefit of the Company. The investment value required a lot of funds, which can hamper financial management, so risk management is necessary. In addition, the Board of Directors has carefully reviewed the investment risk to ensure that the investment is in line with the Company’s investment policy and plan and to ensure that the investment valuations are regularly checked.

2. Accounting is divided into 2 parts as follows:

2.1) The item regarding 250,000 KUB coins held with conditions prohibiting the Company from selling and/or trading these coins. The item will be recognized as a financing agreement because there is a price guarantee at the minimum price at maturity, the price of which must not be less than the purchase price.

2.2) The rewards element of being a validator node should be recognized as an intangible asset (digital asset). The initial accounting for the cost of digital assets is based on the cost price, which is the fair value at the date of acquisition of the asset. After recognition of the initial item, the price of digital assets is consistent with the cost price (weighted average method), net of the allowance for impairment (if any) at each reporting period end date. The Company will assess impairments of digital assets, and they will be recorded when the carrying value of the digital assets exceeds the fair value less cost to sell at the reporting period end date. Fair value calculated by the closing price on the reporting period end date from the Digital Assets Exchange website. The company will eliminate the digital assets element from accounting when the assets are sold, or expects it to derive no economic benefit in the future from the use or sale of the assets. The profit or loss from the sale of assets will be recognized in profit or loss. In this regard, digital assets will be included in intangible assets in the consolidated financial statements.

3. Risk management regarding trading operations in cryptocurrency digital assets as a validating node in the Blockchain system on the condition that the company needs to purchase KUB coins from Bitkub, which has

significant risks as follows:

3.1) KUB Coin Price Volatility Risk

The legitimacy of the transaction (Staking), accordingly, the Company is required to purchase KUB coins in the amount of 250,000 coins from Bitkub (in an amount not exceeding 72,949,815 Baht). Recently, information shows that the price of KUB coin has fluctuated greatly. It is unpredictable whether the price will rise or fall. In order to prevent the risk of below-cost price, Bitkub and the Company then agreed to modify and sign an amendment to the agreement on May 31.st, 2022, to ensure that the price should not be lower than the price invested by the company, referring to the price on the Bitkub digital asset exchange on the day the company invested. However, when the benchmark price of the digital asset exchange Bitkub is above the guaranteed minimum price, the Company may be able to profit from the trading price on that date, and in order to guarantee the buyback price at the maturity of May 31, 2023. The condition was later changed to the guaranteed minimum redemption price as per the agreement signed on March 30e2022, determining the new period from March 31st, 2022 to June 15, 2023 in order to respect the operating period of the Company and Bitkub. For the amended agreement above, there was no additional expense. The disclosure of the trading price of the digital assets was intended to assure the shareholders of the company that the investment will not pose any risk to the KUB coin against the high volatility of its price which increases or decreases.

3.2) Risk related to the operation of the business

Since the investment in digital assets is still a new issue, the company should study, analyze and evaluate the situation, information, as well as technological changes, statements and regulations issued by regulators for consideration and policy adjustment; and investment measures. in the digital assets of the company in order to prevent and reduce the risks that may arise. The Company has instructed management to review, present and propose the suitability of the transaction, investment policies and metrics to the Audit Committee and the Committee on a quarterly basis. The Company has a staff that has enough knowledge and expertise in Blockchain system technology to be a validation node as PoSA (Poof of Stake Authority) for transaction legitimacy on Blockchain, in order to to ensure that the investment maximizes the benefits for the Company and the Shareholders.

4. The company has formulated a digital asset investment policy

Digital assets, in terms of risk management policy, means an electronic unit containing a value similar to that

assets, intangible, built in an electronic system or network, capable of exchange for ownership, exchangeable without the medium, which operate online and on the Blockchain system. Transactions will be recorded electronically without the medium, and its value is created on a digital system. The Company’s investment policy is as follows:

4.1) Investment provided that the company is a validation node, responsible for the legitimacy of the transaction on Blockchain, which is the technology that processes and stores data in a decentralized way or Distributed Ledger Technology (DLT), the recording of data using Cryptography principle with consensus mechanism. Data recorded on Blockchain improves correctness and reliability of data, the validating node will earn rewards through transaction fees incurred for transacting on the network in terms of coins.

4.2) Investment for the study of Cryptocurrency Mining, to study, create distribution experience and be the designer of Cryptocurrency Mining system, Cryptocurrency Mining machine deposit service and provide service after-sales.

The Company has a study investment policy for the expansion of the Internet Data Center business. It is only to increase new products and services, there is no profit-making investment policy as the main business, and capital investment is limited to not more than 10% of total assets due to the investment in digital assets has a high risk compared to other assets, including the high volatility of digital assets, may significantly affect the financial condition and operation of the company.

Please be informed accordingly

Cordially,

PROEN Corp Public Company Limited

(Mr Kittipan Sri-bua-iam)

Chief executive officer

Disclaimer

Proen Corporation pcl published this content on June 13, 2022 and is solely responsible for the information contained therein. Distributed by Audienceunedited and unmodified, on June 13, 2022 03:02:03 UTC.

Public now 2022

All news from PROEN CORP PUBLIC COMPANY LIMITED

Sales 2021 1,058 million
30.4 million
30.4 million
Net income 2021 29.2 million
0.84M
0.84M
Net cash 2021 99.1 million
2.85M
2.85M
PER 2021 ratio 70.8x
2021 performance 2.21%
Capitalization 2,101M
60.4 million
60.4 million
EV / Sales 2020
EV / Sales 2021 2.04x
# of employees
Floating 32.2%

Chart PROEN CORP PUBLIC COMPANY LIMITED


Duration :

Period :




PROEN Corp Public Company Limited Technical Analysis Chart |  MarketScreener



Evolution of the income statement