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Significant increase in quarterly cashflow, first strategic deal advanced for AirPocket app rollout in Latin America
Strong increase in operating cash flows during the quarter and improved cash balance
Company generated a positive operating cashflow of US$746,000 in Q2 FY16 and US$387,000 for the first half FY16
This represents a 33% increase in Q2 cashflow and 15% uplift for the half year when compared to the same periods last year
The Company had cash and bitcoin inventory of US$3.4 million at 31 December 2015. This consisted of US$3 million in cash and US$0.4 million in bitcoins.
Increase in cashflow is due to significant increase in transactions and improved Bitcoin prices
Substantial increase in total trading revenue to US$7.3 million in the last two months of the year compared, with US$5.4 million in September and October
Company has made significant progress in commercialising its unique money transfer and value transfer app, AirPocket, with key partnership agreements currently being finalised
Successful public beta test involving around 50 users using AirPocket to transfer money from the United States to the Dominican Republic
Larger scale trials involving up to 1,000 users across several Latin American markets is currently underway
Fintech company DigitalX Limited (ASX: DCC) (the "Company" or "DigitalX") today announced its quarterly report for the quarter ended 31 December 2015.
DigitalX recorded a positive cashflow of US$746,000 in the three months to end December, a 33% increase over the same period the year before; and US$387,000 for 1HFY16, a 15% increase over 1HFY15.
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Operational OverviewThe Company has made significant progress towards commercialising its unique funds transfer and value transfer app, AirPocket, in the latest quarter that is anticipated to culminate in significant partnership deals in the current half year period.
The progress made by the Company follows the successful public beta trial of AirPocket by around 50 users that was completed ahead of schedule in October last year. This is the first time AirPocket has been used by members of the public to transfer value from the United States to the Dominican Republic.
The beta testers evaluated AirPocket's usability, interface and AirCode concept after going through a real- time verification process. The feedback has been overwhelmingly positive with over 80% of users finding the app user friendly and easy to use, while nearly 90% agreeing that the product offered highly competitive fees.
Since the trial, DigitalX has made further improvements to the app to improve response times and is currently undertaking an expanded up to 1,000 user beta test that will cover more markets in Latin America.
It is anticipated that the expanded trial will be completed by the end of March this year. The Company is also finalising agreements with key strategic and commercial partners for the AirPocket rollout. The Company will release further details shortly, immediately upon execution of the agreements.
A surge in Bitcoin market sentiment and trading has underpinned DigitalX's strong cash position in the December quarter with the Company's trading desk increasing the amount of bitcoins held during the quarter. This resulted in a favourable mark-to-market return that was driven by higher Bitcoin pricing.
The pick-up in cashflow was particularly pronounced in the last two months of the year with total trading revenue hitting US$7.3 million compared with US$5.4 million in September and October 2015.
According to industry figures, the number of global transactions jumped 65% in the six months to end December over the first half of calendar 2015 as Bitcoin gained wider acceptance.
The growing popularity of Bitcoin is supported by increased investment in this technology, evidenced by the Bitcoin network security (based on hash rates) more than doubling over the same periods due to greater processing power being added to the network.
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The hash rate refers to the number of calculations per second and is the measuring unit of the processing power of the Bitcoin network. The hash rate has jumped from around 350 million Gigahash per second (GH/s) at the end of June 2015 to around 800 million GH/s.
DigitalX is well placed to benefit from the uptrend despite the volatility of Bitcoin pricing with the cashflow from the trading division underpinning the commercialisation activity for the Company's AirPocket app.
The Company had cash and Bitcoin inventory of US$3.4 million at 31 December 2015. This consisted of US$3 million in cash and US$0.4 million in bitcoins.
The Bitcoin market is highly liquid and bitcoins can be easily and quickly exchanged into cash if and when required.
The strong growth momentum experienced by DigitalX at the end of 2015 has continued into the New Year and the Company anticipates positive news flow over the next two quarters.
The Company believes that its flagship product AirPocket will achieve key commercialisation milestones in emerging markets like Latin America and the Caribbean, where the need for a low-cost, fast and secure money transfer app is the greatest.
While AirPocket is seen as the future of the company, DigitalX will also benefit greatly from the growing popularity and acceptance of Bitcoin and the blockchain technology that Bitcoin is based on.
Global financial institutions are already undertaking projects to utilise the blockchain at a time when Bitcoin is gaining considerable traction in the marketplace.
"This has been an exceptionally pleasing quarter for DigitalX as we ended 2015 on a high note. Not only have we proven the commercial viability of AirPocket through our first public beta trial, but we have made great inroads in our negotiations with a number of global partners to bring AirPocket to market.
These potential partners include some of the world's most recognised companies and investors should be excited by what lies ahead of the Company in 2016."
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For further information, please contact:DigitalX Zhenya Tsvetnenko Executive Chairman Tel: +61 8 9389 2000 | Alex Karis Chief Executive Officer Tel: +1 (617) 544-3150 (x) 1010 |
DigitalX is a Blockchain-based software solutions group disrupting the payments industry. Its products allow consumers to make secure and cost-effective money transfers worldwide. Partners can use DigitalX's technology to offer new financial products. DigitalX is based in Boston and has offices in New Jersey and Australia.
DigitalX Limited issued this content on 29 January 2016 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 03 February 2016 13:37:17 UTC
Original Document: https://digitalx.com/wp-content/uploads/2015/10/December-2015-Quarterly-Report-Appendix-4C-1.pdf
