The beginning of the analysis was completed at the stage of studying the first document of the project - Whitepaper. We will continue to consider the documents that the project shares with investors.

2) Certificate of LAGATA INVESTMENT LIMITED incorporation (Cyprus)
(https://zrcoin.io/files/Lagata_cert.pdf), with the date of approval on June 12, 2012.
From March 10, 2017, this offshore company became the founder of ZIRCON LLC (INN: 9701065073) by ~ 49%. Apparently, the project team has already acquired a "ready offshore", because (according to the infographics of the project's schedule plan) the idea of the project emerged only in March 2014. Based on the information, found in the project blog and FAQ, money collected as the result of the ICO, will be accumulated (in rubles) through this legal entity. This offshore has a dollar trust account, which receives, stores and transfers money in rubles to the Russian loan account of ZIRCON LLC.
http://www.fotolink.su/v.php?id=a5fd83755e817a3531cffe629ebb4a2d
Project's schedule plan, posted on the official website of the ZRcoin.io project

3) Business plan (https://zrcoin.io/files/business_plan_ru.pdf),
This business plan mentions 4 entities:
I. VEKS Ltd. is customer-developer (initiator / investor);
II. Zeolit Scientific-Productional Centre Ltd. (33% director and founder - Merzlyakov Vitaliy Nikolaevich) is a contractor company that is the developer of the project;
III. OgneuporPromGroup Ltd.is a contractor company that is the developer of the project
IV. Legal and Business Consulting LLC is the developer of the business plan.
The affiliation of 4 entities with the project team was not carried out, as the team used its own funds to develop the project.
We continue to consider the project, starting with the stage of creating an industrial asset.
The team designates a sufficiently short time for its creation, which means that with the contractors, as well as with the customers, preliminary contracts / supply contracts are likely to be signed. And ZrCoin will be able to demonstrate them, as it is stated in paragraph 8 of the FAQ. [Https://zrcoin.io/faq]
So, let's try to analyze the costs in the business plan:
[Costs in the business plan]
http://www.fotolink.su/v.php?id=3278a1f065da0c2b706feb7a9382bf34

Alas, it is impossible to understand this table without its "authors", because there is no decoding for cost items and it is absolutely impossible to understand how these costs have been formed.
Meanwhile, the business plan reveals inconsistency: first, it is indicated that the bases are planned to be bought in the industrial zone at the address: Magnitogorsk, Russia, Agapovsky district (the bases satisfy all the requirements of the project). And then, the text refers to the wording associated with the construction of the workshop. Perhaps, it was meant: the configuration of the workshops with equipment and other inventory necessary for production, since real estate objects on those lands (their cadastre numbers are provided in the documentation) have already been built.
Let's dwell on the table in the business plan, which is indicated by number 6 - "Cash flow generation (thousand rubles) - a pessimistic option with the consideration of the main taxes." Despite the fact that, according to the notes to the table, the pessimistic option means that the capacities are loaded by 60%, in the model it is 100% of the production load. Whether it is a misprint or in reality the project team makes decisions based on erroneous calculations, one can only guess
Let's turn to the table in the business plan, which is indicated by the number 6.3 - the main indicators of the effectiveness of the investment project:
http://www.fotolink.su/v.php?id=e2cb5274e6d7366134af4680a845e22b

The revenue part of the project has no confirmation in the form of references to the preliminary concluded MPs, the contract of sale with deferred conditions / signed agreements of intent (indicating the volumes and the price of the supply) or other documents guaranteeing revenue receipts. Accordingly, it is not possible to confirm the planned EBITDA. Nevertheless, based on this information, we will calculate the future value of the company. I propose not to consider this table too cautiously, but to analyze the company's cost using the EV / EBITDA method and understand the cost of 49% of the project (the share of ICO investors in the project).
The project team provides the value of EV / EBITDA, which they are most likely taken from similar companies. Its value is 8.1. Let's try to understand where the given value came from, and for this we will turn to the well-known corporate appraiser Asvat Damodaran, having found the estimated multipliers of interest for us in the European region.
[Estimated Ratios]
http://www.fotolink.su/v.php?id=a4578d25cc419f0448689f94185f2257

Basing on the tabular data, we can find out that the value of 8.1 in the table is absent, and in general is somewhere between the "Pulp industry" and " Retail sale of cars." But it is definitely not suitable too us, and the closest industry is "Metallurgy and mining" with a value of 9.94. Apparently, taking into account the correction for Russia (considering political and economic risks), the value is 8.1. Well, let's agree. Thus, there are no questions on the calculation of the cost (I will once again pay attention to the fact that the revenue could not be confirmed) ☹

So, taking the proposed EV / EBITDA with the value of 8.1 and EBITDA for the financial model for 2018 with the value of 618 million rubles, we get an estimated value of 5 005.8 million rubles. However, from this assessment it is necessary to take away the net debt that the company serves (these are the options that the company issued) in order to obtain the value of capitalization.

By the way, there were no sources of liability coverage, other than free cash flow to option holders in the financial model.
Let me remind you that the company issued options for 594.1 million rubles. (Calculated as $ 10.2 million excluding a 2% commission for cash withdrawal - an estimate of the debt as of June 9, 2017). The options were issued at a 50% discount. Thus, the total amount of debt is 1,188.1 million rubles, and the company's capitalization will be 3,817.7 million rubles. (5,005.8 - 1,188.1 million rubles)
Based on the capitalization received, we can calculate how much the 49% stake held by offshore LAGATA INVESTMENT LIMITED and the 51% stake held by the project partners have. By the way, we will estimate later who exactly are the partners of the project and which estimated share value will each have.
[Enlarged calculation of the cost of project shares]
http://www.fotolink.su/v.php?id=226f6e1029e2c4f7e7f69c882efd0739

Therefore, if investors as a result of ICO became 100% owners of LAGATA INVESTMENT LIMITED offshore, then their share has a value of 1,870.7 million rubles. (US $32.8 million at the rate of 57 rubles / US dollar), while controlling partners have a cost of 51% - this is 1,947.0 million rubles. ($34.2 million). This valuation of the shares does not take into account the premium for the controlling stake, which in fact means that 49% in terms of unit of interest are cheaper than the unit of the project share in the controlling interest. But in this case, for simplicity, we omit the bonus. ☺
To be fair, it is worth saying that this value can be realized as the fair value of the token (and not speculative, which is now) as soon as the project can confirm its revenue.
This means the following: (I would like to stress one more time: if everything is as planned) at the end of 2018, the capitalization of the token will be 1,870.7 million rubles, and each dollar invested will bring the investor 1.15 dollars or profitability for the period from June 9, 2017. To March 31, 2019 (the date of the final public reporting for 2018) will be 215%. As a result, for 19 incomplete months, the monthly return is expected at a rate of 11.3%. Well, this is quite an interesting profitability, but again, for such a price dynamics and generally the cost of the token, it is necessary to confirm the revenue of the project.
Further, the business plan mentions risks and methods of their decrease. I have no desire to comment on this section ☺
I expected something else, but not a copy of the standard business plan from Google ☺
Let's go further according to the documents:
4) A record sheet on making changes to the Unified State Register of Legal Entities "Zircon" Ltd. (TIN:1177746175826) https://zrcoin.io/files/listzapisiegryul.pdf on March 17, 2017.
This sheet reflects that LAGATA INVESTMENT LIMITED, which is the title owner of all coins collected as a result of the ICO, received 49.01% in the authorized capital. So, the team, as well as wanted, left a controlling stake in the project as a result of the ICO.
Founders of LLC "Zircon"
[Calculation of the cost of shares of project partners]
http://www.fotolink.su/v.php?id=d21b8b8cc29c3c9d14cb21f99b8e44f8

5) Technical passport at the railway path https://zrcoin.io/files/techpassportrail.pdf (passport by 2010). Inventory value of 87 thousand rubles. Year of commissioning of the facility is not specified.
6) Technical Passport to https://zrcoin.io/files/techpassport.pdf Building (passport by 2011). The facility was put into operation in 2011.
7) Permission to commission the workshop https://zrcoin.io/files/permission308.pdf
Photo of the production hall (https://zrcoin.io/files/Object.png)
Commenting on documents 5-8 is not particularly appropriate, so I will abstain.
Let’s stop on these documents, I will analyze the remaining documents in the next part and write a conclusion about the project.

● The author is not a professional adviser on investments.
● Articles are personal opinions of the author.
● The author can have a financial share in the securities mentioned in the articles.
● The reader assumes full responsibility for the actions taken due to reading this information.
● The information presented in each article is incomplete, obtained as a result of working only with open data.
● Publicly available information is the only source of information for this article.

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Meanwhile, I continue to collect ZRcoin wallets, to which investors sent their assets, in order to understand if "the funds invested in the ICO were used in a targeted or inappropriate way." Therefore, if you entered on the Pre-ICO, ICO stages, then, please, send the wallet numbers to which you transferred your crypto-funds, to the contacts mentioned above.
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