The leader within distributed ledger technologies

CEO Letter

The second quarter of 2021 marked the beginning of a new era for DLT ASA and our pursuit of developing, operating, and supporting the best use cases in distributed ledger technologies. The priorities this quarter has been establishing the organizational structure and culture necessary to deliver on our strategy, the development of our first non-dilutive cash generating venture and updating our corporate profile. We have come a long way in building our organization, we have announced a non-dilutive joint venture and are today introducing our new company profile.

We invite you to have a look at our new website to see more of our new visual identity. The website will receive several additions over the next month as we continue to build out its functionality and make information about us and our activities more accessible. Taking inspiration from a blockchain, a growing list of records linked together using cryptography, the x in our new logo is a visual representation of the links in a chain and symbolizes the connection our team and the company has to the blockchain ecosystem.

As a continuation of our new company profile, we will call for an extraordinary general meeting this fall to approve a name change to DLTx ASA. We believe this change will make us more recognizable in the digital ecosystem, and in combination with our new corporate profile it will help us reach a greater audience and potential new investors seeking exposure towards distributed ledger technologies and its role in shaping the new global digital economy.

DLTx is on a mission to expand the impact of distributed ledger technologies, and we were very proud to announce the development of a Filecoin storage provider, File Storage Partners LLC, earlier this month. The joint venture, of which DLTx owns 51%, has generated revenue since the first day of operation and will be a source of operational revenue going forward. Like the snowball effect the revenues will continue to increase as the facility adds more and more storage.

The File Storage Partners joint venture is a very good example of our strategy of building non-dilutive cash generating ventures to create value for our shareholders. Partnering with a strong technical partner, raising capital from external investors, and securing Filecoin from an external party has allowed us to accelerate the development of the facility without diluting our shareholders. Since we made the initial investment in the project, the value of our share of File Storage Partners has risen by USD 9m. We strongly believe in the future of Filecoin and are actively pursuing opportunities to expand the operational capacity of the facility through similar structures.

The development of a first-of-its-kind multi-signature collateral solution for Filecoin in cooperation with industry leaders Protocol Labs and Genesis Global Capital is an example of the innovation the DLTx team brings to the blockchain industry. We look forward to bringing more innovation to the market as we work towards developing more non-dilutive ventures in Filecoin and other blockchain protocols.

Several of the technology companies we are supporting are showing great progress, and especially due to our position in Rhodium we have seen significant appreciation of our assets in the Q2. During the quarter DLTx participated in a roll-up, where we exchanged our interest in Rhodium 30MW into Rhodium Enterprises at a value of USD 15.46m. -. This represents an increase in value of approx. 30% compared to the value of the position at the time of the transaction in March of this year. Using conservative estimates, we value our current portfolio of investments at USD 20.57m, which is an increase of 26 % compared to Q1 (excluding new investments during the quarter). The continued development of these companies has been very good since the end of closing Q2, and we expect to see further appreciation in Q3.

DLTx believes in positive environmental change through the adoption of DLT technologies and are proud signatories of the Crypto Climate Accord. DLTx supports the efforts of CCA to decarbonize the blockchain industry and are committed to achieving net-zero emissions from electricity consumption associated with all crypto-related operations.

For the coming 12-month period DLTx estimates operating revenue between USD 7m and USD 13m provided that the Filecoin price stays above USD 50, and financial income of USD 18m to USD 21m.

DLTx’s journey is just beginning, and I am extremely proud that already in our first full quarter we can show a profit before tax of more than USD 2m. Looking ahead we will focus on delivering more non-dilutive cash generating projects within Filecoin and other distributed ledger technologies, and I am excited to be on this journey with our team and our shareholders.

We look forward to presenting our third quarter results 25 November 2021, but first of all I ask you to save the date for 14 October 2021 for the DLTx Capital Markets Day. At Tårnet Kulturarena in Oslo, we will present a deep-dive to the market, the DLTx strategy, and we have invited some of the brightest minds in the industry to this very special event. Stay tuned, and save the date. Invitations will follow in September.

Thomas Christensen