Defi Technologies Inc

Beliefs and estimates are forward-looking statements. These statements may include, without limitation, any statements preceded by, followed by, or including words such as target, believe, assume, expect, commit, aim, intend, may, anticipate, foresee, see, estimate, plan, project, will, is, focus, can, have, likely, should, would, could, continue, and other words in terms of similar meaning or the negative thereof. Others can be identified from the context in which the statements are made. Forward-looking statements give the company's current expectations and views of future developments in light of the current experience and perception of historical trends based on numerous assumptions regarding the company's present and future business strategies and the environment in which it will operate in the future. Although the company deems such forward-looking statements to be reasonable, assurance can be given that they will be proven correct. The forward-looking statements are not guarantees of the future developments and results mentioned therein. Forward-looking statements involve known and unknown risk uncertainties and other factors such as, but not limited to general economic and industry conditions, which are in the same cases beyond the company's control, which may cause actual results to material materially differ from the expressed in such statement. The statements are made as per the date of the presentation and the earnings call, and the company does not assume any obligation to review, update, or confirm any forward-looking statements contained herein, except to the extent legally required. With that, I'll hand it off to our CEO, Olivia Rusi-Newton.

Thanks everyone for joining us on this Q3 webinar. I'm excited to have you all here and very, very excited for presenting what we've been up to as a company in this very fast moving, fast paced world, political, world and macro asset class that we're associated with in the form of digital assets. Curtis, can we go to the next slide here? So yeah, this should be kind of a self-explanatory, but we are DeFi Technologies and we are situated connecting the traditional capital markets with a rapidly evolving high-growth world of decentralized finance and Web3. Through our wholly-owned subsidiaries, venture portfolio, trading desk, treasury strategy, and industry partnerships, we enable traditional investors to seamlessly tap into the extensive and fast-growing $3 trillion sector in a regulated manner. DeFi as a public company has been operating for four years. Valor, our main subsidiary, Johan and myself have been working on for just around eight years. To date, we have 28 exchange-traded products and adding to those very quickly. in DeFi technologies. Our 2024 year state net income in Canadian dollars is 97.2 million. You know, our market cap's hovering around $90 million. We have a founder-led team, as I explained, Johan and myself have been at our core subsidiary of Allure for just around eight years and at DeFi, the public company, for about 15 years. on this phone call. We have a diverse business line, but very cross-complementary in the form of ETPs, trading, infrastructure, research and more. Our diversified revenue model provides broad exposure to the wave of blockchain-based assets, services and applications. forward, strong balance sheet as of now, and looking forward to taking a lot of our business units into international expansion. And we continue to look at strategic acquisitions to expand and propel further growth. Curtis, I think we can flip to the next slide here. So here's a kind of quick snapshot and visual representation of our key financial and business metrics. Our book value as of now is $139.2 million Canadian. As I mentioned in the last slide, year-to-date net income, $97.2 million. Earnings per share is, as of September, 30th, 33 cents a share. Assets under management as of a day ago is $1.1 billion Canadian. Our year to date net revenue is $152.4 million. And we've revised our guidance on forecasted revenue for 2024 to sit just under $200 million at $198.6 million Canadian. there's a little asterisk there, but projections based on current asset prices and does not account for additional gains in DeFi Alpha and our other business units. So to kind of give everyone kind of a bit of an explanation in terms of a visual representation of where DeFi technology kind of sits and it's wholly owned business units. I'll start off with our kind of joint ventures, Bitcoin Suisse. We've We've partnered with them on a number of exchange-traded products. Neuronomics, a very interesting and long-standing history developing artificial intelligence technologies applied to asset management and specifically digital assets. Hive, a company I founded in 2017, we have a partnership with them and we execute for cross-exposure and collaboration. Zero Computing, a company we recently signed a partnership with to explore and develop new technologies that benefit our trading stack that I can go into in a bit later in more detail, and Professional Capital Management, a business set up by Amplify, our products, technology offerings in the fast kind of changing regulatory environment in the United States. Our wholly owned subsidiaries include Reflexivity Research, which has been a great addition to our offerings where we basically kind of correspond and also gives us as a firm a lot of insight into trends, potential trading opportunities in the form of DeFi Alpha. So we're very fortunate to have that part of a fast-growing research firm, kind of a great kind of cornerstone company that gives us a lot of data to make actionable decisions across our other subsidiaries. We're kind of, you know, fortunate to have finalized recently our full acquisition of Stillman Digital, which is a very fast growing team, I think, you know, led by some formidable younger savants in the led by kind of their expertise in technological trading in a very competitive marketplace. But we are enthusiastic that that transaction closed, took a bit of time with the various regulatory licenses to be essentially amalgamated within our parent company. But we're excited that's done. Subsidiary and operating asset continues to expand and lead the charge in innovative exchange-traded products, which we'll obviously touch on a bit later. Our partially owned stake in Aminabank, which seems... both of their assets under management and continually are seeking and getting approvals globally for operating banking services in the Middle East, Hong Kong and Singapore. DeFi Alpha, our rather new business unit compromising around trading activities, which has been off to a great start. And I know we get a lot of questions about guidance and how often, how frequently we perpetual or nature of our training occur, which we'll touch on a little bit later within the presentation, but we are, you know, we, risk at DeFi Alpha. So there's never losses and things of that nature, but we are kind of algorithmically and with human intervention, always assessing trades and hope to have a few more under our belt to be able to provide, I would say, our shareholders a better glimpse of what that looks like kind of going into the future. We have our DeFi Ventures portfolio that's been active. I would say our primary mandate of our venture portfolio is to take stakes in innovative companies that we either directly see a financial return on or that we can basically foster into a relationship and be the first to bring them to the market in the form factor traded products and or other institutional wrapper offering through Velour. So it kind of cross pollinates across our subsidiaries. And I think you'll find all of them do. And then we have kind of one of our old nodes for Solana, Pyth, Core and assessing others as we kind of go into these markets. But it's a profitable business unit and also gives us a bunch of proprietary understandings of how these blockchain operates and growth perspectives and how to position ourselves within those ecosystems. Curtis, I think we can go to the next slide here. So our specific kind of business lines to give a bit more clarity in numeric form factors. So, yeah, obviously we have, you know, diverse range of scalable businesses, our Velour business unit. yesterday, but just over a billion dollars in assets under management. We've seen that growing very, very quickly this year, not just because of price increases, but seems to be very geared towards new products, investing, diversifying outside of, I would say, the kind of blue chip Bitcoins, Ethereums, top 10 coins. People constantly want new products and we're working tirelessly to get as many new product offerings to the market. There's been a lot of, I would say, somewhat complex infrastructure that we're building out at Velour in the form of our exchange offerings that we can go into more detail. I would say extremely fundamental importance of Valor for new exchange relationships that we've accrued in the last kind of few weeks and months to expedite us being a market leader of bringing ETPs to the markets. Our DeFi Ventures portfolio, as we've seen a kind of robust move in digital assets, stakes in whether it's Amina and other kind of protocols re-rate as we hopefully see digital asset prices rebound. DeFi Alpha, the trust trading desk, has seen kind of great growth and a great start. We continue to work tirelessly on assessing trading opportunities and we can kind of go into the specifics of how that looks. how we assess and execute those trades a bit later. Our revenue, yeah, as kind of mentioned previously, is $132 million to date. And yeah, I think we've touched on what defined infrastructure reflexivity and still mean to the company, but I think conducive manner to overall growth of DeFi technologies. Curious if we can slip to the next slide. So yeah, one company that's growing really quickly in our venture portfolio previously called Ceiba, now called Amina Bank. But I think we led their Series C investment in late 21 when the AUM was about a billion dollars. So that's kind of close to tripled as of now. And that bank is, as I mentioned, getting a bunch of new licenses globally to operate as a digital native crypto first bank. A topical kind of conversation and a large focus of ours is to seek an uplisting onto a major US exchange. In mid-September, we filed our Form 40F registration statement. reach a lot of U.S. institutional and retail investors, global investors that aren't able to, for different reasons, participate in the Canadian market, enhance liquidity and valuation metrics. I'm sure existing shareholders and potentially prospective shareholders are aware we you know, even, you know, very low compared to kind of a normal S&P 500 trading multiple. And obviously within the U.S. capital markets, there is, you know, a bunch of increasing demand. And we've definitely had, you know, an inundation of calls and interests from U.S. ins a top priority for the company. And, you know, given the recent election results, pro-crypto stance, I believe Gary Gensler resigned in the last 24 hours, which is a gentleman who definitely didn't make our lives easy for the last few years. So we were very, I would say, optimistic about our prospects. And definitely, you know, hopefully these get found for those in Canada. So to give a detailed rundown of our financial highlights of Q3, the company reported cash and USDT, which stands for Tether, one-to-one stablecoin balance of approximately 25.4 million Canadian dollars, up from 6.1 million on The company's holdings also included 204 Bitcoin, 81 Ethereum, 246,000 ADA, which is the ticker for Cardano, 86,616 DOT, which is Polkadot, 5,745 Solana. Robert Alverson- 491 uni, which is a uni swap token 400,033 avalanche tokens and. Robert Alverson- Just under 3 million or 275. 2,755,000 core tokens, totaling approximately to 36 million in digital asset treasury positions as of September 2024, which I would assume have greatly greatly increased in value with the bull run.

And Ollie, do you mind if I just interrupt just quickly there? Everyone who's on the call, everyone needs to understand that the minute we convert our cash into crypto and carry it as crypto assets on our balance sheet, It disappears from our cash flow statements. And there's a lot of commentary that we are not making any money and that our cash flow statement is negative. The reason why that is occurring is that the minute we move anything into a crypto asset, our regulator considers that not as cash. and not as a liquid asset, despite the fact that we could sell it in a millisecond and have that exact cash balance on our balance sheet and on our cash flow statement. So at the end of this quarter, we actually had about 61 million Canadian worth of crypto assets. Obviously, since then, crypto has catapulted higher. I don't have the exact number, but you could look at all of the assets we have, and you'll quickly see that it's probably somewhere closer to 70 or 80 million Canadian that we now have as crypto assets. that we can liquidate and could become cash and sit on our cash flow statement. But it's extremely erroneous for people to make any comments that this is a company that is not making money and has negative cash flow earnings. It is solely because the regulator views crypto not as cash. I just wanted to throw that in there because it's a consistent theme that I continue to hear. And I think it's just as a result of people not understanding the regulatory environment in Canada. Sorry to interrupt, Ollie. And thank you, everyone, for listening.

Yeah, no worries. I'll go on with our venture portfolio, which we've covered, but investment. 0.1 million as of September 30th, 2024 total value of $106.8 million as of September 30th. Total revenues were $24.2 million for the three months ended September 30th, 2024, and $152.4 million for the nine months ended September 30th, 2024. A significant improvement from the total revenues of $6 million and $2 million respectively for the same periods in 2023. Net income was $24.9 million for the three months ending September 30, 2024, and $97.2 million for the nine months ending September 30, 2024, reflecting robust operational performance. EBITDA was $26.2 million for the three months ended September 30, 2024, and $102.3 million for the nine months ended September 30, 2024. Onto Velour, Velour generated staking lending income of 8.8 million and management fees of 2 million Canadian dollars. Our AUM grew 51.6% from 508.1 million as of December 31st, 2023 to approximately 77.5 million as of September 30th, 2024. And a record high as of a day ago to 1.1 billion. in the last day. Moving on to DeFi Alpha, which is our specialized arbitrage trading desk, generated 20.6 million with zero losses to date after reporting 111.5 million in Q2 2024, totaling 132.1 million for the nine months ended September 30th, 2024. Reflexivity research in Q3 generated $261,000 for the three months ended September 30th, 2024 and 1.1 million for the nine months ended September 30th, 2024. So this is a, you know, important visual representation of our AUM our total business. Johan, I'm not sure if you wanted to comment on this slide in more detail or what it means from kind of an analytical perspective in terms of the growth of Velora's business.

Yeah, I think that maybe the main takeaway from this chart is that if you see the yellow line here, aggregate the net sale in dollars, which represent our inflow. So obviously AUM fluctuates with both the market levels, the AUM in our respective products, because of the market as a function of the market level. But the yellow line here is actually the net inflow over time aggregated into our products. So I think the important observation here is that throughout our whole history since 2020, we have had almost zero, I think, week-on-week outflows. So as you can see, we have inflows even during the crypto winter, during the crash from when Bitcoin went from 69,000, 70,000 down to 17,000, 16,000, 17,000. There's been obviously a consolidation phase with smaller inflows. during this time, and we can see, obviously, a hugely improved inflow on a daily basis now in the bull market. But as soon as there's more volatility or a stronger market, we obviously see this shifting aggressively upwards. But even during the crypto winter and crashes in the market, we see accumulated inflows in the products. Basically, the AUM is very sticky money, similar to what many funds can see. Everything we've seen this year, including the last month here, Yes, it makes the conviction harder that this will, in the bull market, we see exactly the same patterns as in earlier bull markets, that the inflows will be massive in relation to the sideways markets. And obviously, on top of this, I have daily data from 2015, from my earlier venture as well. which shows exactly the same pattern. So sticky money and the constant inflow, no matter the market regime, I would say is the main takeaway here.

Johan, one question maybe that the readers or listeners would be really interested in, how many new products do you think we'll be launching by the end of this year? And maybe where do you think we'll get to next year? Just because obviously in a big crypto market, as you're increasing products, leverage and scale are massive. And of course, that's assuming nothing changes in terms of a Middle Eastern African launch, just sort of what we'd have in Europe.

Yeah, for sure. And one important point here is where we see the most aggressive inflow at inception is products where we have the only product in the world. We're first movers. And we are, I think, planning to launch at least 23 products before the end of the year, within three weeks. I would say that none of these has any ETPs anywhere else in the world. so we would have the first mobile advantage of all of these from the three new underlines that we were listed. And we're also in a unique position globally to list new products that most of our competitors do not have the infrastructure or the exchange partnerships that's needed to both supply the market making or the access to these exchanges. So I think we are extremely hopeful that these hand-picked 23 tokens that are also both supports in the world but also projects that we think are really strong and I hope for a lot of these who also have a partnership with and hope to be able to do a lot of trades on the back within the DeFi Alpha opportunistic portfolio. So I think we will see a lot of these new rollouts within the next two or three weeks. For the next year, we're also looking at the next generation of products, including actively managed certificates, including leveraged products, warrants, and so forth. Not mentioning, yes, obviously the geographical expansion into Africa, into the Middle East, and so on, that now is very tangible and very close in the future.

And everyone, just, you know, like, obviously I'm sort of the one speaking to retail and funds on a more regular basis, but You know, if we do our job and all we have done with Johan and Ollie is do our job, but if we can get another 20 products launched, that's 48 products that we'll be transporting to the Middle East and to Africa. And if we can, if we can do as little as 20 million in each of those products, you're looking at an additional, uh, almost billion in AUM in both of those jurisdictions off of, off of as little as 20 million in each of those products. And as Johan said, you know, we're not looking to compete with, um, you know, 15 new Bitcoin products. We're looking at DeFi protocols that are one of a kind, um, For example, Sui, which is being one of our best performers, Core, which is being one of our best performers, that no one else has even contemplated launching. And so when you look at that type of expansion just in Europe, but also then transporting all of those products to the Middle East, all of those products to Africa, And of course, we're going to look at Asia. Of course, we're going to look at Latin America. And quite frankly, in the right economic and regulatory environment in the U.S., Johan, is it far-fetched as an idea that we might transport a SUI product to the U.S.? Some of these products, BlackRock, Vanguard, Fidelity, they're not even going to care to compete with us on them. Is that a fair statement? Yeah.

Yeah for sure, we're already in discussions on structures for that purpose and I think on the back of our European operation we are very well placed to be first movers on a lot of these assets for sure and do unique products for that marketplace rather than competing with everyone else on Bitcoin for extremely low monetization rates. No, thank you.

I just wanted to make sure that was clear for our listeners.

I think one of the came from Johan was moving all of our products in the Nordics over to an exchange called the Spotlight Exchange, where we have very good alignment with the majority of the shareholders and founding team. Before our products were listed on the Nordic growth market, which I would say was not as aligned with us, on digital assets. So this allows to, you know, this allows for us to, you know, essentially kind of promulgate our, our product initiatives extremely quicker, save costs, and also have market first products on a internationally recognized and exchange, which allows us to have competitive competitive advantages to, to kind of passport our prospectuses, which is, you know, the, the technical terminology for taking our, EuroClear, European Union approved products and bringing them into the Middle East, Asia and other jurisdictions So yeah, this is an overview of our increasing kind of range of products that we continue to expand into. I think kind of just to give people an idea of what people are after from, I think, probably around 200,000 or a little bit less than 200,000 clients of the lore but we try to offer what will be, I think by the end of the year, the largest diversified regulated exchange traded product portfolio in the world. And can continue kind of putting out innovative new products into the marketplace. and obviously these are a few other ones and anyone looking for further information, overviews on these products can find them on velour.com. So let's get into our growth outlook for Q4. Velour's ETPs have witnessed over a 900% increase in AUM from the market lows in late 2022, alongside growth in trading volumes. Velour's AUM stood a record high of 1.1 billion as of November 13th, 2024. Annualized revenue and DeFi Alpha, the company is staking and lending in cover changes in gains and losses on digital assets and ETP payables. as well as management fees, are closely correlated with capital inflow for Velour's ETPs and the price of digital assets underlying Velour's ETPs, which has continued to grow since the end of 2023. Furthermore, revenue from arbitrage and liquidity provision is highly linked to overall market activity and turnover in Velour's listed ETPs. The company formed DeFi Alpha in Q2 2024, which generated approximately $132.1 million as of September 30th, 2024. Given these factors, the company's annualized revenue is forecasted to be approximately $198.6 million for 2024. Further arbitrage opportunities and growth in Valor AUM may lead to proportional increases in revenue. We continue to evaluate additional DeFi Alpha trading as I mentioned Valor, our real main focus is obviously, as we alluded to earlier, new products and innovation, but also kind of bringing those past, you know, bringing those products through this passporting and prospectuses to new geographies. So our ETP lineup to meet growing global demand, targeting 40 ETPs by the end of 2024. 100 by 2025. Alongside product growth, we're seeking regulatory approvals to enter markets in North Africa, Asia, the Middle East, and other emerging regions, providing secure digital asset access to new investors. Our newly acquired business unit, Stillman Digital, plans to expand into custody for an exchange and proprietary trading with projected 2024 revenue at US 6.7 or Canadian 9.3 million at a 50% average net margin reflecting 127% average annual growth over the past two years. Major technology upgrades set for Q1 2025 will enhance competitiveness and enable further growth through DeFi technologies distribution network and strategic partnerships. On kind of balance sheet related matters, elimination of debt as of October 16th, 2024, Melora successfully eliminated all outstanding debt. The achievement culminated with a final repayment of 5.5 million Canadian on October 16th, bringing a total debt reduction of 36.5 million US, which is well over 50 something million We're quite glad to have done that as a company without substantial dilution to our shareholders and internalized that through our revenue producing business lines. While Velour is now debt free, DeFi technology retains the remaining loan balance of 8.1 million Canadian with Genesis Global Capital, hopeful as as things proceed through the courts in an expedited expedited expedited fashion we will be kind of remunerated promptly here and you know Ryan I'm not sure if you wanted to touch on on that process specifically or give any further clarity than what's stated I know I can yeah how that process is working

We originally had a collateralized loan with 475 Bitcoin there. In Q3, we did receive 95 Bitcoin back. So reducing the collateral down to 380. It continues to run through the process as the state for Genesis, you know, pays out its liabilities and settles its claim. Our legal team in the US is constantly in touch with us to let us know developments. And as Ali mentioned, we're hoping to receive the money more recovery in q4 and as as q4 and and in the future as as the state settles up everything so you know as alluded to earlier um geographical

product innovation as probably our number one priority as a company and specifically under Valor, our largest operating subsidiary. We had a milestone launch in London in October on the LSE, the London Stock Exchange. And we are actively working on other products there. In the US, we announced a joint venture with Anthony Pompliano's firm, Professional Capital Management. Not to leave out my home country, Canada, but we are actively working on initiatives there and market-first products, which we will keep people aware of. To think of this kind of world map where we're actively pursuing operations kind of more digital asset friendly. And we see that going into the future. Lots of places in the Middle East are as well. Asia, Hong Kong, Singapore, Korea, Japan recently approved legislation on digital asset products on the Nikkei Stock Exchange. And we've seen kind of a lot of interest in localities like Africa. So as we continue to our partnership with European Union regulated stock exchange and I think you know it's important to note also Johan first listed XBT provider in 2015 on a Swedish stock exchange so as we have discussions with new new counterparties and exchanges, whether it be in Brazil, Middle East, Bahrain, UAE, Singapore. We have a great track record that expands on so we can you know confidently say that we have the you know largest skill set and team that has successfully managed the first exchange traded digital asset product and continues to innovate market new products as we expand into these geographies so you know our product road mentioned in previous presentations, we have a large, growing, and as Johan pointed out, a very sticky customer base at Velour. So we are outside of digital assets, also exploring other thematic multi-assets. investment vehicles of various constructs to accommodate various sorts of institutions. And there's a bunch of types of exposures that we're also exploring and actively managed strategies through our AMC program. And Johan, I'm not sure if you wanted to kind of touch on management space, but obviously our main business in the form of these ETP form factors is growing exponentially. And we've been working quite diligently on regulatory prospectuses to encompass new product offerings. So maybe you wanted to touch on that and what you've been up to.

Yeah, for sure. So we've seen a great demand from a lot of funder funds and asset managers to allocate into alpha type returns into other types of return distributions and products. So on the base of this, obviously, we're going to launch actively managed certificates as one means of distributing these type of strategies. Some of these are obviously from in-house, others are in collaboration with partners. As a management, we are looking to partner up more deeply or acquire, also as a spin-off of some of the strategies we work with within DeFi Alpha. Particularly those that are scalable to a huge scale, for sure. And we're looking not only at ACMs, but also at funds and all types of vehicles that make this possible for all types of institutions to invest. Obviously, most can invest in ETPs, but quite a lot of these larger ticket type of institutions wants to invest in fund ETFs or actively managed certificates, managed accounts or other vehicles, which also includes tokens, which might be based on actively managed strategies. So these are a few of those we're looking into launching in the near future.

Thanks, Ian. Yeah, as of that, this week, we've recently launched two initiatives, Solify Technologies along with Corrify Strategy Corp. I really think the genesis behind these two new initiatives culminate from obviously our kind of So I'll start with Soulfly Technologies. So we've seen obviously MicroStrategy develop a compelling business model of leveraging capital markets to essentially and efficiently acquire large amounts validator nodes, proprietary trading technologies. We've seen the opportunity to partner with institutions essentially to set up our own initiatives that will be essentially spun out of DeFi technologies as a company. We will be definitely elaborating on the structures and then what that means to shareholders, but An analogy, given we're listed in Canada, is typically a gold mining company potentially comes across a silver asset on their mining field or block of commodities and spins that out into a new company. We're extremely proud at DeFi Technologies of being differentiated the ability to return a lot of money to our shareholders. As we are approached by institutions, foundations, you can think of this as a similar business line to what we do with compelling products and ETP form factors, we see a lot of opportunity to introduce new capital market opportunities in the form factors of novel companies ways through these offerings. So to keep the efficiency and dynamics of our profit engine at DeFi Technologies, we are assessing the most efficient ways to essentially kind of spin off these specific companies that will be financed in their large balance sheets, intended large balance sheets of Solana and with CoreFi, specifically large amounts of Core. We're obviously very bullish on both of these asset classes. And this has been something that we've internally been working on this framework for a little over or a little under a year. a year now, I think just really reflecting on where we are in the digital asset space and what's moving, I would say kind of on chain, there is a lack of innovation happening in the capital markets, potentially partly due to regulatory constraints, but launching Hive in 2017. We've seen, you know, a number of, you know, I'm not sure exactly what the number is, but 30, 50 potentially more publicly listed mining companies focusing on blockchain infrastructure, which has been great to see that CapEx intensive business receive institutional investors to, I think, secure what is now potentially you know, 40 to 50% of all Bitcoin hash power globally. And now, you know, powering AI infrastructure, which is critically needed. But, you know, aside from that business segment, you have companies like DeFi, Galaxy, Coinbase, MicroStrategy, and that's basically it. listed companies. So with DeFi technologies, we essentially want to look at compelling new use cases of technologies and ecosystems that we're close to and use kind of the capital markets for what they're good for, capital efficient formation, and the ability to uniquely within the finalization of regulatory frameworks that are conducive to these new companies, be sharing more information on the specific structures and path forwards for these two unique companies that we're very excited about. Is that the last slide, Curtis? Oh, there we go.

I think we can maybe open it up for questions now. I'll just pick from the Q&A. Let's see. First question from Mark, where is the 14 million USD in alpha trading profits in the income statement? I think that's a question for Ryan.

So that shows up in the digital assets, or I think the line item is called realized gains or losses on digital assets. So it's embedded in that, in that 51 million for the quarter. Sorry, I don't have the, I'm just going to pull up the income statement. 51 million in the quarter. Okay. I guess the total is 282 in a nine-month period.

And then I think I was just going to say, hey, Ryan, maybe just quickly while you were talking about that, you and I were texting a bit. Everyone needs to also understand that we have an extremely robust book value with Amina Bank carried at cost, despite the fact that Bitcoin prices have erupted. And obviously, Amina Bank is worth substantially more than what we paid the cost. Where do you think our book value sits at, Ryan?

Well, bulk value at the end of the quarter was $139. Like you mentioned, Amina is valued up by market base at this point, using a lot of you know, primarily older data. Again, just the lack of information out there is being a mean of being private and not many comparatives. So if it was valued at say a hundred million or 90 million, you could easily just take the 40, subtract the 90 and add that to our book value. So make it.

So it'd be closer to 200, closer to 200. Okay. Thank you very much.

Another question for Ryan. This quarter had 22 million in exchange gains. What's the source and nature of the occurrence? How repeatable is this? It backed out this, you would appear we made no money. Can you explain how this works in the business?

Yeah, so we do deal with a lot of foreign currencies, particularly at Valor. Most of the majority of the ETPs are based in SEC. That currency fluctuates against our U.S. reporting currency at Valor. We do also maintain a large SEC balance to facilitate activity on Valor. buys and sells and redemptions of ETP certificates daily. So depending on where the currency moves, and it did substantially increase against the US dollar this quarter, it was a positive event for the company in terms of the appreciation of that against either the transactional values of prior periods, as well as the actual amount of currency we carried up to that period.

But to be clear, these are mark to market, right, Ryan? These are just due to regulatory requirements. And these are actually not losses in revenue or losses in profit. These are mark to market adjustments associated with currency fluctuations.

Well, there are revaluations of the currency, yes. If we were to monetize that into US dollars, that would realize it. But again, we do need a certain amount of SEC on our balance sheet to facilitate trading.

Yeah. Next question. Has DeFi made inroads with institutional investors in the last six months? Can you cite general examples? I think this one's more for Russell.

Yeah, I can answer that. We absolutely have been penetrating the institutional market. Unfortunately, being on the Canadian market, as many people are aware, shorting and predatory algorithms are allowed and the regulators Despite the fact that we have ample proof of it occurring and will be taking it forward, the regulators do not care. But yes, when you have three or four institutional research analysts covering you, you always end up with a few insties buying. And I wouldn't be surprised if there's a few buying today. I'm at the Cantor conference today. and had several very, very good meetings with some very, very large funds the other day. And it's unfortunate to see your stock down after an incredible quarter, especially when you're talking about book values and $130 to $200 million level with EBITDA at a hundred million and you look across the ecosystem where miners are losing money, negative earnings per share and trading up substantially. And, you know, our hope is that with an up list, which, you know, again, it's a forward looking statement and you can never be a hundred percent certain, but without Gensler interfering and, and having, you know, Having a much more pro-crypto SEC, I would surmise that an uplist is a when, not an if. And depending on the timing that Gensler and the SEC change their stance on crypto, we could be uplisting this month, next month, or sometime in Q1. And again, the irony is Galaxy trades up 50% on the news that crypto is likely going to be accepted in the US. And for whatever reason, we don't see that same benefit. But the reality is that this company... is making money hand over fist. Ollie and Johan are creating incredible products. We're about to expand into jurisdictions where there's absolutely no competition. Our AUM stands to grow, not just in small increments, but in double and triple and quadruple increments. And this share price is not reflecting any of that currently. And so we will continue to attend all these conferences There are more analysts that are looking at launching coverage on us. And like I said, you know, a U.S. NASDAQ uplist. And I can tell you this just categorically from a fund meeting I had yesterday. They were like, we're going to be buying now because we want to be long ahead of the catalyst of the uplist. So big and bright future for this company as soon as we uplist, that's for sure. Along with institutional buying.

Next question from Troy, will future acquisitions be paid with share dilution? Also with the pace of share payments, will the company's diluted shares continue to grow or will it contract?

I can answer that quickly. We will never use shares to make acquisitions when our valuation is trading this low. The only way we make a share-based acquisition is if we can actually make that acquisition at a lower multiple than our shares are trading at so that from a cost of capital, it's always accretive. So really, truly, it depends on what the acquisition is what the relative valuation is for the acquisition and where we're trading at, which is obviously an extremely low multiple. So those acquisitions, if paid for by shares like Stillman, have to be trading at an even lower multiple than we are.

I mean, to touch on that, all of our share based acquisitions have been, I'd say, discounted price to net profit of the acquiree. basically just implicitly on the fact that we're so undervalued, they get to bootstrap themselves onto our cash engine and we will continue to evaluate acquisitions in cash and or shares at a discounted multiple to net profit.

Next question, how can you guarantee DeFi Alpha will stay profitable as more players enter the game over time? Is there other avenues you see for robust revenue?

Yeah, go for it.

I can answer that one. So with DeFi Alpha, I would say that it was established in Q2, obviously, to have a distinct focus on the opportunities that we see, not only in the growing market, but also with the opportunities of our balance sheet, growing balance sheet and liquidity. And a lot of the areas where we see both systematic earnings and where we improve the monetization of the balance sheet, uh on those areas we have zero competition uh but also a lot of the uh the uh opportunities we opportunity look at right now are also based on our relation to a lot of the projects where we have had significant partnership with where we have significant holdings on the back of the etps i would say a lot of the trades we do are not open for any firm to just jump in and do prop trading I've been doing obviously prop trading, systematic and the optimistic last 10 years in crypto. And within these areas, nothing has much changed here. What has changed is our balance sheet, our flows, our liquidity and our opportunity to to efficiently go after opportunities that not very many competitors can actually even execute if they wanted to. So I think we both on the systematic side and the opportunistic side, we see no change in this in the near future, but rather the growth of the ecosystem, the growth of mainstream adaptation and so on, It gives us more and more opportunities, more than we actually have time to look at in spite of our growing bandwidth and focus on this area. For the near future, I don't see that change anytime soon. I thought in the 2015-16, actually, that the basis trade would go away after a few months, but it's still a healthy business, even though it's a commoditized type of trade that most large trading firms engage in. So in other fields where we don't see much competition, it will take even much longer for change, I'm sure. Thank you, Johan.

I'm aggregating a few questions into one, more so reflecting on people's curiosity around our plans to move forward with professional capital management with ETFs in the US. One we'll be able to list on the Nairobi Exchange and the Middle East, Asia, et cetera. Polly, I think if you want to take this one and clarify a little more. You're muted.

Quickly before Ali steps in, just so everyone knows.

Yeah, sorry. I muted myself there. But go ahead, Russ.

I was just going to say, Ali, just Gensler is rumored to be resigning. We don't know for sure if he has. I just wanted to correct that just in case people were wondering.

So, yeah, obviously, you know, as Russ alluded happening in the US regulatory environments. So we are constantly talking with US Council about how to strategically and opportunistically approach that marketplace. Again, for all shareholders and prospective shareholders, something material in terms of agreements, exchange partnerships, we press release them immediately. So we are actively working around the clock on Africa, Middle East, Asia, and other growth perspective opportunities to push our products out as quickly as possible in all of those marketplaces.

And then I think a lot more questions around the mechanics of Sol-Fi and core strategy. Just, Ali, if you could clarify how that specifically relates to DeFi shareholders.

Yeah, so the idea between... you know, around these kinds of companies is so to, in a nutshell, we have developed proprietary systematic technology for both Solana and Core that allows the maximization of yields and staking returns across those specific asset classes. We're extremely bullish on Solana and Core. Our press releases, Salon is on an absolute tear in terms of every sort of metric across the board, as well as Core in terms of, I think, recently going over 80% of all hash power in the world attributed to their chain. Started the year off with $3 million in total value locked on the protocol. I think as of today, it's well over $800. or approaching 900 million, potentially even a billion dollars. So we're bullish on these. We've developed proprietary technologies in-house to maximize the potential of holding these. And we are partnered with a lot of institutions maximal value of the underlying spot value of those digital assets. As people have seen within MicroStrategy, there is anywhere from a 1.5 to 2.5 multiple on those underlying assets within a public company construct. So our idea is to retain a large amount of the shareholding of these is to then repatriate that value to our shareholders. In crypto, they have a term, if you hold a crypto coin and you receive kind of remunerations in the form of what we call an airdrop, this could be kind of looked at as a regulated share dividend or airdrop to our DeFi shareholders. regulators and exchanges to clarify succinctly the best course of action forward and efficient structures forward to be able to enable this and also kind of bringing in and integrating advice from U.S. Council on how to best approach the formation of these entities for them to see expedited data is all culminating in a great time for us with the shift towards a pro-crypto White House and us formulation. a new regime change for us to kind of essentially structure these entities, remunerate our shareholders in the form of new opportunities as they arise, and ultimately continue to innovate and potentially assess further opportunities of unique digital asset classes that deserve their own capital market platform.

Thank you, Ollie. A question from Alan Klee, one of the analysts that covers us, and this is probably best for Johan to answer. Guidance implies Canadian $46.2 million in revenue for Q4 2024 over double 3Q24 results. Can you rank the factors pointing to higher revenue in the fourth quarter? Sure.

It is a big variety of factors. Obviously, part of this is that we were quite conservative for the full year guidance earlier. And obviously, we have a much higher market level. We have much higher AUM right now. We have a much better product mix right now, which drives our monetization rate much higher. I think we were at 8.2 or something of the AUM in Q3. We see that going higher in Q4, along with the AUM, along with the new products we have launching, and also along with the DeFi Alpha strategies that we are now scaling up as well. It's obviously hard to guide on any opportunistic trades, one-off trades, so we haven't included those in these numbers, but we are looking very closely at a few opportunities we hope to conclude before the year end. But this is mainly driven by the growth of AUM, we see the growth in monetization and the systematic activities within DeFi Alpha. and the usually improved product mix within our AUM portfolio. Also, there's a few opportunities. We will enable with the launch of these 23 new products within two to three weeks that will help to drive the revenues in Q4.

And then, Johan, if you could... give as much clarity on, I guess, revenue generation for DeFi Alpha moving forward or how many opportunities we might expect to come of that?

Within the DeFi Alpha, it's not just these opportunistic deals we're looking at, which are, it's very hard to say how many per quarter there will be. We see a few opportunities that we actually will be able to go after once we have more assets on those in the balance sheets, which we think we will have when we launch a new product. That's one part of it. We'll see more of that in the next year. But obviously, we have also the systematic trading and the rationale for forming DeFi Alpha was also to make the monetization of the balance sheet in total, both fiat and crypto assets, much more efficient and drive the monetization rate. So within that context, obviously, without taking any market exposure, we see a lot more opportunities now in Q4 in terms of arbitrages and short-term transactions that actually doesn't affect our exposure, but we couldn't do earlier in that low turnover, lower AUM environment. So both the flow and the increased AUMs and the increased number of assets are driving our opportunities we see and the opportunities we engage in at the moment and going forward throughout Q4. So it's not just going after one-off trades. It's also about building the infrastructure that we've been focusing on a lot since Q2. We have increased the bandwidth quite a lot in the team in regards to both development of infrastructure agreements with counterparties and the focus and the research into these opportunities. It's very hard to be very specific, but this early on, because obviously it's something that we grew, it's an immense growth in our ability to participate during this quarter and last quarter. And a lot of the fruits of this work we'll probably see more of next year. But in this market environment, since the bull market started here and Bitcoin broke up to new all-time highs as well, that has just been an immense change for the daily opportunities in the more commoditized type of both model driven and pure arbitrage opportunities we see as well.

yeah that also paired obviously with our stronger balance sheets but i'm not sure what more specifics i could say in this but yeah but everyone needs to understand if if if we get uh middle east and africa launched um let's just say within the next week or two and we generate an incremental billion in aum within the first quarter or two of next year in each of those jurisdictions That's an extra 200 million US in revenue. And no one, none of the analysts, no one on this call, no one who's trading this stock is factoring in that potential additional revenue source. And we've been very, very clear that these efforts are happening near term, not long term. So while DeFi Alpha is incredible, you actually may see a world where next year the AUM numbers far outpace the DeFi Alpha numbers. And obviously from an analyst perspective, analysts like to put higher multiples on reoccurring revenue versus one-offs like trading desks. But ironically, in our share price currently, none of that is being reflected, neither DeFi Alpha successes nor international growth. Just wanted to throw that out there because obviously Africa and Middle East and quite frankly, Asia and Latin America are massive opportunities for us with basically zero competition.

Yeah, so to underline that, obviously, it's not just Deeper Alpha. We're looking at much higher revenue streams from our core business. One factor is obviously that our AUM has increased, I don't know by how many percent, but I think the average AUM was around 500 million US for Q3. We're far above that level right now. And with this trajectory and the improved monetization rates, we should see a huge improvement in the pure cash flow from the core business. So that's a big part of this as well.

Great. Thanks, Johan. Let's make this our last question as we're running a bit over time. Oli, could you just touch on the JV with zero computing, what we're looking at in terms of integration, and what the goals are that we want to accomplish along with zero computing?

Yeah, for sure. We should definitely have some very exciting updates in the coming few weeks. The zero computing, very kind of cryptographic intense technology, but essentially for a lot and pertaining to kind of DeFi Alpha and some of our trading operations, we've been working in the last few weeks on a zero knowledge powered dark pool. to essentially make our trading technologies more efficient. There's also this huge issue pertaining to MEV, which stands for maximal extractable value, essentially kind of inefficiencies associated with blockchain transactions. So we're zero knowledge and zero computing is at the forefront of all of these technologies. And we're co-developing products and initiatives that will make our, you know, ideally our trading revenues more more robust and allow for higher systemic cost cutting along with you know essentially a technology advantage as we approach trading in in new marketplaces like on-chain Solana transactions you know being able to build positions in I see related basically competitive advantages and we'll be happy to share some of those new product innovations and also products we intend on opening up as consumer and institutional platforms as we proceed.

Cool. So that's going to wrap up our call. Thank you all for your questions. Thank you all for your attendance. And of course, we also value you as shareholders. If you do have any follow-up questions, please email ir at defi.tech, or you can directly email myself or Russell, curtis at defi.tech, rstar at defi.tech. We're usually the ones answering them. Anyway, we try to be as transparent as we're allowed to be. And if you need any clarity at any time, we always encourage you just simply email us. We'll answer any and all questions we can and provide any clarity if you have any concerns or just are curious about progress in general about things. So thanks again and have a great weekend, everybody. Thanks, everyone. Thanks, everyone.