Company Overview: DigitalX Limited, formerly Digital CC Limited, is an Australia-based software solutions company developing products and services. The Company is involved in the activities, which include development of software for retail-based consumer applications; Bitcoin trading and the operation of a liquidity desk, and Bitcoin mining. The Company operates through two segments: Software Development and Trading. The Company offers AirPocket, which is a short message service (SMS)-enabled, international mobile bill payments platform and mobile money remittance application. The application supports international Airtime transfers for the United States consumers to approximately 10 countries in Latin American in a partnership. The application is available on Google Play and the Apple App store. The Company also offers DigitalX Direct, which is a business-to-business liquidity platform that is designed to provide real time liquidity to institutional investors and commercial operators.


DCC Details

DigitalX is a Blockchain technology consultancy company with offices in Perth and New York. It provides Initial Coin Offering (ICO) advisory services, Blockchain consulting services and Blockchain related software development services to deliver innovative products to global markets. It is Australia’s leading provider of Blockchain consulting services and products. The Company’s strong brand and status as a thought leader in the cryptocurrency space resulted in the procurement of ICO advisory clients of an exceptional quality. Due to strong demand, it has organised a conference in Perth, Sydney and Melbourne, in addition to one-on-one meetings with potential buyers and partners. By virtue of on-going efforts, the group has been able to add many business lines to the core structure.
 

Overview of Company’s Roadmap (Source: Company Reports)
 
Appointed as a Blockchain Advisor: ShareRoot Limited (ASX: SRO) announced that it has appointed leading blockchain and digital advisory company, DigitalX Limited as the Company’s Blockchain advisor. The Company has engaged DigitalX with the aim of introducing a suitable, high-quality Blockchain solution that can be incorporated into ShareRoot’s proprietary User Generated Content platform, which will help to track and facilitate the ownership and sale of UGC. The introduction of Blockchain technology has the potential to add an additional layer of legal protection to SRO’s UGC platform that will further protect the customers using the platform. DCC will also provide additional Blockchain consulting services to SRO’s Board and Management. Blockchain could allow for ShareRoot’s UGC platform to be further enhanced with more secured and effective methods of proving the ownership and legal rights of the content through ‘smart contracts’.


DCC Clients (Source: Company Reports)

DCC was also appointed as corporate adviser for the Initial Coin Offerings (ICOs) for Shivom and Bankorus – both finalists in the Global Blockchain Competition. Bankorus is the world’s first private wealth management platform powered by Artificial Intelligence (AI) and built on the Blockchain. It will be paid in a mix of cryptocurrency (Bitcoin/Ether) and native (BKT) tokens in the project. Shivom is aiming to become the largest genomic data-hub platform in the world. For services rendered to date, DigitalX has received US$500,000 in Ether and will receive US$1M in native (OMX) tokens in the Shivom project. DCC has been appointed as the corporate advisor to MailGuard, the world’s largest private Software as a Service (SaaS) email security company. It will advise MailGuard in the development of a Blockchain cybersecurity ecosystem called GlobalGuard. It is pleased to be involved with this project as GlobalGuard and will connect a network of collaborators to identify and thwart cyber threats instantaneously.

Blockchain Consultant to TTL: DigitalX Ltd has been appointed as Blockchain Consultant to Perth based software and data management company Transcendence Technologies Limited (ASX: TTL). DCC will review the company’s current product offerings and will provide Blockchain consulting services to the board and management of TTL. DigitalX will then commence a process of exploring how distributed ledger technology could be integrated into TTL’s current business model. Transcendence Technologies Limited (TTL) is a listed tech-company that operates the E-Collate data management and compliance software platform, as well as a collaboration with Prime XConnect, for the management of wholesale trading and supply chain for meat products. It will provide Blockchain consulting services and business development introductions for TTL to explore Blockchain solutions that will best suit their business.

New fund under management division: DCC continues to diversify its offerings and expertise by opening a new fund under management division, DigitalX Investments, to give investors access to a portfolio of cryptocurrencies.


Performance of 3 cryptoasset for 26 months (Source: Company Reports)

DigitalX first fund will invest predominately in the leading cryptocurrencies, with a smaller allocation towards special trading opportunities including ICO. It will hold a 73 per cent of interest in DigitalX Funds Management Pty Ltd, which will be the Investment Advisor and will seed the fund with approximately $750,000 from the Company’s existing Bitcoin and Ethereum asset base. The Company announced a joint venture with a digital media company Multiplier to launch new crypto business news website and online cryptocurrency education platform. Under this, 2 websites to come up are Multipliercrypto.com and Coin.org and will be operated by a joint venture company-Digital Multiplier Pty Ltd. These sites will be a platform to educate new investors from around the world about the opportunities and risks of crypto-assets. 

Financial Performance: DigitalX posted a record profit in the first half of the financial year, with revenue primarily driven by strong growth in its Blockchain and Initial Coin Offering (ICO) advisory services. The Group’s consolidated profit after tax for the period ended 31 December 2017 was US$8,031,669 (2016: net loss US$1,590,182). The profit was mainly impacted by the growing revenue from ICO consulting commissions and change in the fair value of Digital Assets held. The Group generated a revenue (consulting) of US$3,531,602 for the period. It leveraged its marketing partnerships and applied its robust focus on compliance to deliver a comprehensive consulting offering to ICO clients. DCC consulted Blockchain companies around the world that collectively raised more than AUD$300 million during the period. Consulting Revenue contributes to about 40 per cent of the Group’s total income for 1HFY18.


Asset and Liabilities (Source: Company Reports)

Basis Earning per share for the period was US $2.25 and whereas was recorded at (US$0.09) for the same period in the prior year. The Total Assets and Cash and cash equivalent for the period increased from US$391,930 (as at June 2017) to US$15,307,339 (31 December 17) and from US$972,498 (31 December 16) to US$4,078,107 (31 December 17) respectively. As at 31 December 2017, the Group generated net cash inflows from operating activities of $443,353 against 2016 net cash outflows of $1,063,422 and a working capital surplus of $14,988,460 (2016: $485,724). It also recorded an increase in the value of its digital assets after the price of cryptocurrencies such as Bitcoin rose to record levels in December.

Outlook: After successfully scaling up of its ICO advisory division, DigitalX is continuing to consider ways to expand its business verticals by building on its strong position as a leader in the Blockchain space. It remains focused on expanding its portfolio of clients across its core divisions of ICO advisory and Blockchain consulting and on generating commercial value from Blockchain development. Blockchain technologies for data management and compliance are becoming integral in the next generation of cloud-based eCommerce software solutions. During the first half of the year, DigitalX provided consulting services to some high profile ICOs including Power Ledger, Bankera and Etherparty. It played an important role in the emergence of ICOs as a mechanism for raising capital for new and exciting technologies. The collaboration between MailGuard and DCC will be a significant step towards commercialising the GlobalGuard technology.

Stock Performance: DigitalX is in a strong position both financially and operationally, and it is confident of delivering ongoing growth. It maintains a strong focus on compliance and developing a recognised presence as a thought leader in cryptocurrency and Blockchain technology applications.  It has capitalised on the strength of its technical talent, industry experience and cryptocurrency network to provide high-level consulting services to new Blockchain companies seeking advice in this rapidly evolving industry. Demand for high-quality ICOs is growing in 2018 and DigitalX is pleased to be working with companies that already have an established global market for their technology. The development of funds under management division expands DCC’s revenue streams. The Company requested for a voluntary suspension of the Company’s securities from the commencement of trading on 4 April 2018 and was lifted from the suspension on 10 April 2018. Recently, the Company issued some fully paid ordinary shares upon exercise of certain Unlisted Options at $0.0324 expiring 1 September 2020. One of the Company’s Non-Executive Director Mr Toby Hicks, completed a sale of 650,000 shares in the Company. The stock prices were up in the past six months that is by 196.9 per cent but started declining in the past three months (38.7 per cent). Given the latest series of events, we put a “Speculative Buy” recommendation on the stock at the current price of $ 0.195, in view of the ongoing demand in the cryptocurrency and blockchain landscape.


DCC Daily Chart (Source: Thomson Reuters)

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