Defi Technologies Inc

Q1 2025 DeFi Technologies Financials. And today we're going to discuss our progress through the quarter, touch on a little bit about what we accomplished last year and what we're looking forward to over the course of this year and the next couple of years. My name is Curtis Schlaffman, VP of Marketing and Communications. Joined by our CEO, Olivia Rusi-Newton, co-founder Johan Wattenstrom, our CFO, Paul Pozzocchi, capital markets head guy, Russell Starr, and our corporate secretary, Kenny Choi. First, I'm going to read forward-looking statements, and then we'll jump into this. Risk and forward-looking statements, the presentation given, and certain statements made within this earnings poll, which are not historical facts, such as expectations, anticipations, 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 to, focus, can, have, likely, should, would, could, continue, in other words, or term similar meaning of negative thereof. Others can be identified from the context in which these statements are made. Forward-looking statements give the company's current expectations and views of the future developments in light of its 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 such forward-looking statements to be reasonable, no assurance can be given that they will be proven correct. These forward-looking statements are not guaranteed of future developments and results mentioned therein. Forward-looking statements involve known and unknown risks and certainties and other factors such as lit, but not limited to general economic and industry conditions, which are in some cases beyond the company's control. which may cause actual results to materially differ from those expressed in such statement. The statements are made as per the date of the presentation and this 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. Also forgot to mention, we're also joined by Andrew Forsen, President of DeFi Technologies and Chief Growth Officer of Valor. Welcome, Andrew. This is your first call. All right, let's get into it. Oli, I'll hand it off to you.

Thank you, Curtis. And thanks to everyone who's joining us on this call. So we are delighted to give our first presentation as a NASDAQ-listed company. and also encapsulate another record quarter for the company. We own and operate several subsidiaries, our own venture portfolio, trading desk, treasury strategy, and several industry partnerships, which allow us to seamlessly tap into the extensive $33 trillion sector in a regulated manner, which we've done so since inception of the war and also DeFi as a public company. So high-level numbers, EBITDA for Q1. I'm curious if you go back. Go ahead. High level numbers, we're 44, just under 45 million Canadian, translates to 31.2 USD, Q1 2025 EBITDA, market cap of 1.9 billion Canadian, equivalent to 1.3 billion US. We have 65 listed exchange traded products across a number of different jurisdictions. I think it's almost six or seven now. Six highly scalable business lines. And we are going to get more into how we plan on growing all of this in the coming quarters and years. So this is our Q1 2025 key financial and business metrics. Book value 79.7 million Canadian equivalent to $55.5 million USD. Q1 2025 net revenue 62.7 million Canadian. Q1, 2024 earnings per share is 13 cents CAD equivalent to nine cents USD covered the market capitalization. Assets under management, just under a billion. Canadian translates to 640 million USD. AUM as of 31st, 2025. We've obviously seen somewhat of a slump, I would say, over the last kind of four to five months in digital assets associated with macro environments that we're seeing a nice rebound in. We've covered Q1 2025 EBITDA, $44.8 million. And as of now, as of today, our cash digital asset treasury and venture portfolio stands at $117 million Canadian, equivalent to $81 million 0.5 million USD. We've updated our revenue guidance, which we can get into in further detail on the call from, I believe it was 130 million USD up to 201 million USD, $285.6 million Canadian equivalent. So a big jump based on how we're forecasting digital assets towards how they've picked up dramatically in the last quarter and into the year end. If anyone's kind of new to DeFi technologies, this is kind of an overall infographic on all of the specific subsidiaries and business operations that we own and operate. I'll start from left to right. We have our own research unit called Reflexivity Research that we acquired from Anthony Pompliano and Will Clemente. About a year ago, it's been highly complimentary to our Velour business unit where we can provide cutting edge pragmatic research for the holders and prospective investors looking for exposure across our 65 plus exchange traded products. So we compliment that with high level research. We've recently closed the acquisition of Stillman Digital, which is a leading market-making, liquidity service provisioning, custody, and OTC desk that is growing extremely rapidly and has enabled us to expand our internal DeFi Alpha profitability and trading execution capabilities. So we're extremely happy about having that integrated finally. It was kind of a regulatory hurdles of transitioning their Bermuda-based licenses into our overall corporate structure. We own a 5% stake in the first licensed FINMA Licensed Swiss bank, which is AUM, has been growing along with the cryptocurrency industry trend, which is nice to see. And we also have a fairly new business unit called DeFi Alpha, We identify low-risk arbitrage opportunities that present themselves and generated just under 100 million US in 2024, equivalent to 133 million Canadian, and recently announced a trade, I believe it was a week and a half ago, of $30 million. So we continue to assess opportunistically amidst the volatility of the cryptocurrency landscape, risk-free arbitrage opportunities that we see opportunistically picking up. We have a venture portfolio that is really kind of used to take stakes, early stage stakes in companies that we believe have promising potential for the securitization and creation of exchange traded products, which we continue to do. And also very excited about the, I believe it was a month ago, we closed the majority stake, 52.5% of a pioneering company called Neuronomics. that has been devising equity-related artificial intelligence strategies for close to a decade and for the last four or five years has refocused their efforts in the cryptocurrency space. So we look forward to utilizing our Valor infrastructure and new fund infrastructures that we are working on to encompass artificial intelligence strategies overlaid with digital assets.

All right. Thanks, Ali. Paul, let's turn it to you and go a little deeper into the financials from Q1.

Paul, you're on mute. Sorry about that. Thank you, Curtis. Thank you, Ali. I'll start with a balance sheet review. So while Q1 saw significant volatility in crypto prices with declines from December 31st to March 31st, it's also reflected in our total assets declining from Canadian $1.3 billion to just over CAD $1 billion at March 31st. I'd like to point out that our average Q1 AUM was $1.13 billion Canadian, or 2.7% higher AUM of 1.1 billion. So just shows that we're also susceptible to very volatile crypto prices, but over time we've actually had a stronger AUM in Q1 than we did in Q4. Similarly, on the back of that, while our AUM did decline at March 31st at a point in time, the quarter we had a net positive inflow of $72.4 million into our ETP products, reflecting continued investor interest despite the volatility. The company launched four new products in March 2025, bringing its total ETPs to over 65, and we continue to target over 100 by the end of the year. Our focus remains on maintaining a conservative balance sheet with cash of 20 million at March 31st, crypto treasury holdings of 43.4 million and the venture portfolio investments of 53.9 million. At March 31st, 2025, we have shareholders equity of 79.7 million Canadian. Our loans at March 31st, 2025 total 12.6 million, which represents, which represents Constitutes a 2.4 million margin loan at one of our crypto exchanges that we use to facilitate trade clearances and the 10.2 million loan payable to Genesis that's in receivership. The Genesis loan is fully collateralized by 359 Bitcoin at March 31st, which have been fully impaired and thus offset the loan. So it just represents a gross of our balance sheet. As a P&L review, the company states 66% of its cryptocurrency and earned Canadian 14 million of staking income in the first quarter for an effective yield on the entire AUM of 5%. On the staked only portion, the yield 7.6%. The 5% effective yield is up from 4.7% in 2024. Our staking policies will allow for higher staking. We, of course, manage it in our risk management as well, considering in terms of how much we stake. Management fee income for Q1 of 2025 was $3.6 million, representing effective yield of 1.3% on our entire AUM. And investors are aware that most of our funds have a 1.9% management fee, but there are Bitcoin and Ethereum funds with zero. So the average is 1.3. This is unchanged from 2024. The net investment result of our unrealized and realized changes in our digital assets, equity investments in digital assets and ETPs in Q1 was 42.4 million positive in the quarter. This contributed to the company earning IFRS net income of 43 million. A large part of the result was driven by a $45 million reversal of our 124.5 million DLOM provision at December 31st, 2024. The DLOM is the discount for lack of marketability on some of our tokens that are locked up. The remaining DLOM at March 31st, 2025 is 79.5 million, which will also fully reverse back into income over time as the coins are unlocked. The DLOM provision in Q1 came down with the reduction in Solana and Avalanche prices in the quarter, hence the reversal. In the non-IFRS adjustment section of the MD&A, we have detailed this adjustment along with a smaller adjustment related to our Genesis loan, Bitcoin. The company did receive back six Bitcoin from the receiver related to our Genesis loan, which is a positive in our income. Stillman Digital recorded trading commissions of 2.9 million in Q1 2025 consistent with Q4 2024. Stillman contributed Canadian 1 million to our bottom line in Q1. Stillman is guiding for revenues of 12 to 16 million in 2025 while maintaining margins. Reflexivity recorded revenue of $262,000 Canadian compared to 507,000 in Q1 of 2024. Reflexivity earns most of its revenue in the second half of the year when it hosts various events that support its core research business. The company is upgrading its revenue guidance from Canadian $227.2 million to Canadian $285.6 million for 2025 on the back of a positive Q1. Thank you.

Thanks, Paul. Now let's turn it back to Ali Johan and Andrew to talk about some additional highlights, particularly about Fowler's product pipeline, our AUM, and that inflows and explain that business a bit deeper as it is our most important business or subsidiary under the DeFi technologies umbrella.

Maybe I should jump in here and take that. Sure. So what we see here is the AUM in different products, the development over time. And as you can see, we have lost A lot of new products, the last few quarters, and a lot of the new inflow is also in the new products, which is actually over our expectations, as a lot of these are the smaller cryptocurrencies. I'm not sure if we can go back. Okay. So I think, yes, hold on this slide for a little bit. And obviously, if we could see the crypto prices here, you could obviously see that our AUM is very much correlated to the markets, obviously, but the inflow has been constant since the inception of the company. And what we've seen is that we have a very... an investor base that are very loyal and seem to invest in all the new products to some extent. We can see that the same brokers, the same type of flows go in directly on the first day of listing. We have over 65 products now. I think we have probably over 85 within two months. And what you can see in white here is the inflow into these smaller coins. And obviously still Solana is a big chunk of the AUM. But an important point here is that this also reflects the improvement in product mix over time. We started out early on with the Bitcoin and Ethereum zero, which had zero management fees. uh but the the more products we we put out there we have higher margins of those there's more staking rewards uh possibility to land for higher rates and we have a higher management fees most of them are 1.9 we have some higher for some more complex products um we have we're also listing now the uh leverage products in in scandinavia i think within a few days uh we have more basket products actually managed certificates and so on where the management fees will be a bigger portion would actually manage products will also have a a two plus 20 type uh structure similar to a hedge fund what hedge funds use. So we will see other types of revenue occurring from those products as well, hopefully within the third quarter. I'm not sure if someone wants to add anything here, but obviously an important point that Paul notes here that we had actually the average AUM in Q1 was higher than Q3 last year, even though we saw a large dip in the market. um and um yeah with the recent bounce of 20 over 20 percent for for bitcoin more on average for our portfolio we're in great shape for for q2 here which is uh kind of linear to to um to to the am the the income from this so yeah i don't know is there anything important time

I think that, you know, covers the kind of ebbs and flows specifically of the, you know, obviously the AAM is highly correlated with the prices of crypto. We definitely see retention amongst retail and institutional users and customers of Allure. They're definitely kind of, I would say, hodling customers. um, coins over the longterm. So we, we don't see, um, um, extreme amounts of outflows. Um, um, you know, there, there's been volatile, um, periods, but, um, I think, um, you know, within the coming months we will have, you know, out of, out of any, um, issuer of digital assets, structured products, the largest portfolio out of anyone in terms of selection for altcoins, neurocoins, indexes, as Johan mentioned, warrants, different types of certificates. We've also been working behind the scenes on the creation of an index calculation agent that will enable us to mix digital assets with equities. You know, obviously there's kind of a large trend in the capital markets of equities that are taking on new strategies in the form of accumulating coins and people, you know, trading, you know, certificates and or structured products around those to have more effective exposure. So that will enable us to kind of offer this new plethora of, I would say, emerging structured products in the form of equities in digestible exchange-shared products to our clienteles in existing European markets and markets that we're expanding into aggressively.

Maybe I also should emphasize this chart we have up right now. I think a lot of investors have heard it before, but it's worth reiterating that the AUM represents where it's taking money. We have no month within this period or historically since inception with net outflows. We have separate days without net outflows, but not on a weekly or monthly basis. I have also data from this from 10 years back from starting XPT in 2015. And on a daily series, we see the same thing that investors hit. tend to be long-term, very few swing traders or short-term traders. And it's used in the long-term savings and represents very sticky money. And we see this pattern continue and even strengthen when looking at daily data.

All right, let's move into some of Valor's global expansion and strategic market development efforts. Johan and Andrew, if you guys want to tackle those.

Maybe I'll speak up here. Obviously, strategically, we are very strong in Europe and the Nordics. And as we continue to reinforce our marketing and communications and technology, market access processes in these regions. We're also looking strategically into regions where our technology, our vertical integration, and the fact that we are very effective at providing regulated access to crypto and digital assets is something that is actually in high demand in a lot of regions that are looking to expand the access to crypto and digital assets. Some of those regions being the Middle East, we have been having ongoing discussions in the UAE, in Qatar, in Bahrain and other jurisdictions. We have been having very advanced discussions with East Africa, which is probably one of the primary hubs of expansion and use of digital assets globally. So we have the agreement that has been announced with the Nairobi Securities Exchange, which is a traditional securities exchange, which is seeking to adopt and expand into the digital asset space. And there in particular, we are also working on building a digital assets exchange to be known as a Kenya Digital Exchange and partnership. We have significant outreach into the LATAM region, and in particular also Southeast Asia, specifically Singapore, people have to understand that a lot of what we're doing is completely groundbreaking. So it actually involves interaction with regulators, local legal support, and in some instances actually contributing to regulatory frameworks with regards to virtual assets. It is oftentimes slow, It is frequently unpredictable, but we advance inexorably towards listing our products in different markets.

I think one important thing to also note specifically in terms of moving into these markets, whether it be Singapore, Africa, the five or six jurisdictions we're targeting in the UAE, five or six others in Asia, Southeast Asia, is that we're market-first entrance. So, you know, we are working, hand-holding the regulators on how to structure basically these offerings. It helps... Thanks to Johan that we have the longest track record of operating digital assets on regulated stock exchanges. And a lot of these countries, I think specific to, for instance, take Nairobi, for example, You know, there's been sovereign nations that are adopting or putting in place legislation to acquire cryptocurrencies and for pension funds, sovereign wealth funds, government funds in these developing nations. They don't want to get left out. They want baskets of cryptocurrencies, but they don't want to buy it on a foreign cryptocurrency exchange. They want to buy it through their regulated stock exchange. And that gives us kind of an unparalleled advantage in going into these jurisdictions where we want to be the first and will be the first to operate within these jurisdictions and dominate the market.

we'll move on from there. Let's discuss that. Let's move into, touch a little bit on Stillman Digital and DeFi Alpha.

Yeah, I mean, I can take this, I think, and Paul chime in, in respective to the Stillman financial outlook, but I know the, you know, the Q1 25 forecast was small due to the timing of the acquisition. Is that correct?

We acquired them in October of 2024. They ramp up more in the second half of the year.

So yeah, it's a very robust business. Lean and mean continues to exceed our expectations. And I think, you know, over the next, over the coming quarters will be a significant contributor to our bottom line, along with the enablement of trading technology to be utilized specifically within operations such as DeFi Alpha and Valor.

Sorry, go ahead. Oh, I just wanted to add that with regards to Stillman Digital too, with this explosion in growth and stablecoin adoption globally, what we're finding is companies are actually coming to us. Any brokerages, digital asset platforms, any platforms that are looking to provide merchant access to stablecoins or crypto to enable payment by a stablecoin or crypto, They're coming to us. They're looking at the Stillman platform. And indeed, the Stillman team is incredibly responsive. I've been pleasantly surprised by the degree of interest in what they have to offer and the size of counterparties that are interested in engaging with Stillman and using their services.

Great. Thanks, Andrew. And then, Johan, could you touch on some of the progress for DeFi Alpha and how that's shaping out for the rest of the year?

Yeah, for sure. Maybe for context, for new listeners, I should also reiterate a little bit what we do in DeFi Alpha. So it's... Basically, on our balance sheet, we hold quite a lot of different digital assets and fiat assets, obviously. And we're as a part of starting with a threshold function to optimize the earnings and the monetization of our full balance sheet. We last year started DeFi Alpha as a more focused effort to do trades that are not typically within our treasury or optimization strategies that are typically more stat arb type of basis trading, arbitrage, lending, staking and so forth. while CFA Alpha looks at more in beginning opportunistically at large trades, distressed ones and other trades with foundations, with funds and with other counterparts within the ecosystem where we have a unique position given our platform, our vertical integration for our businesses and the assets on our balance sheet where we actually without market risk are pursuing these trades where we did over 100 million US dollars last year and we have just recently announced as we said earlier the first 22 million dollar revenue generating trade for the year but also during the last year from our last fall our title has strengthened significantly especially now when with the market coming back up we are uh much even more optimistic than on the last call regarding the next few trades in the new near future but also for the pipeline for the rest of the year um so it's um from from had been an optimistic part of treasury we it's a self driving business at this point, where we build infrastructure to institutionalize these earnings as well. And we found a great way to actually go out and offer our services and trades and balance sheet to counterparts where we can do these trades. And it's been much more optimistic start of the year than I actually thought at the last call here. Yeah, I'm not sure really if there's anything more here to focus on. For the full-year forecast, we're having really a big part of the increase in the full-year forecast is the higher market now, which actually organically give our base cash flow becomes much stronger. That's a big part of that. A little part of that is also the alpha that we have actually added quite a few very concrete deal to our pipeline here in DeFi Alpha. But yeah, I think that's the essence.

And then, oh, go ahead. Yeah, no, I was just going to touch on DeFi Alpha because we often get asked how to project out the specific revenue numbers and logistics I think it took us three years to feel comfortable or even more so four years to start projecting a financial forecast for Velour as we gathered specific information on inflows, outflows, specific product launches. There was a bunch of technicalities around there. I think we're... nine nine or ten months in if that with DeFi alpha and I feel confident that you know within within the coming months we will be able to you know project with you know a high level of certainty what we're expecting as we've seen and sequenced trading data patterns associated with some of the trading strategies kind of employ. So kind of going forward, investors, shareholders will be able to kind of, as we adequately predict, hopefully also forecast specific numbers that we're projecting for the alpha business unit.

Moving on, Oli, could you quickly touch on how we plan to utilize and integrate Neuronomics for the rest of the year and sort of touch on product pipeline and integrating that into our IP infrastructure?

Yeah, I mean, I've touched on it specifically. You know, DeFi had acquired an initial stake in Neuronomics a few years ago. We've built a relationship with the team, world-class team of artificial intelligence engineers that have really spent the better part of the last decade looking at artificial intelligence before it was cool to figure out how to manage and optimize equities. Due to the nature of data points available within the digital asset sector, they thought it was a much more market-ready approach for them. One of the key components of this acquisition is a FINMA license, which allows us to distribute funds and products within Switzerland and within fund frameworks that are comfortable with the Swiss fund regulatory landscape, which is one of the largest in the world. So we are extremely excited to kind of target these AI-specific digital asset products and funds to Swiss-based and Swiss funds that invest in Swiss structures, which is one of the largest fund markets in the world. So we're extremely excited about that. And I think as institutional investors develop cryptocurrency portfolios, you know, similar kind of akin to, you know, some five, six years ago. you know every fund had to have some sort of uh esg mandate of you know five percent five ten percent of their assets into esg assets i think you know um fund managers will be scared um not to have um artificial intelligence um enabled um products capturing returns for them and um We are in the process of updating the Neuronomics website with the performance of their funds today, which are extremely well-performing.

I could add also that they have a number of AI driven strategies where we can engineer the risk profiles that our clients are asking for. So we will launch a few pure alpha type strategies, but also some long class overlay portfolios and also some overlay portfolios for investors who are already long crypto. And this will be driven out of the signals and the AI IP we have here, and then we distribute it through active limited certificates, hedge funds and mutual funds, also probably through Euclid's funds within Europe, depending on how we skew them a bit. So, and this is all, first step is all crypto, but these also show extremely well, good results in actual trading for equity markets. So we see a a continuation long-term within other active classes and also maybe also try and following multi-asset class type products.

And finally, Olli, could you speak on progress regarding SolFi tech and CoreFi?

Yeah, for sure. You know, as, as we, you know, went through, I mean, what was a four year trajectory with the SEC, a defy, you know, and coming out of coming out of it at the end. We've been actively kind of working with lawyers to optimize the trajectory and launch of, you know, but both companies, CoreFi and obviously the Solana ecosystem are both growing and maturing very well. And we will have, you know, updated guidance on those go-to market strategies that would, that are definitely more efficient given the new stance of digital assets that the SEC has embraced and is just kind of coming to light. So as opposed to when these strategies were launched some six months ago, taking approaches that would have potentially hindered the success and ability for them to reach their kind of pinnacle market capitalizations and exposure to international capital markets. We now have adequate plans to launch these vehicles.

Excellent. We'll now go into questions from analysts. I have a list of questions prepared. First from Mike Rondle at Northland. I think this is for Johan. Can you detail what areas of business drove your 2025 guidance higher?

Yes, for sure. Thanks for the question. So, yes, two components, basically. The main drivers of the base cash flow from our ETPs, that's a major part, maybe half of our revenues last year. That's totally dependent on, obviously, the levels of the market and in and out flows. And it's just the market coming up back over 20% have obviously compared with Q1, especially end of Q1, markets are and our AUM is now at a significantly higher place. So we basically just every day earn More than, I would say, 25% more on all the staking revenue, lending revenue, management fees, and so forth. So that's what just informed us to conservatively shift our monthly... or forecast for the year for the market, which is basically a big part of our income, like for a brokerage firm where they take a percentage in commission. So that's a big part of this. And the other part where we have seen where we did a small upward shift in the forecast was on the DeFi Alpha and that's just because the one trade we actually did execute now was not even in our pipeline before and we've seen quite a few other trades becoming very close in time hopefully so we have we have a much more insight in when and how much, to what value we can do these trades than we had a month ago. So that's a major shift for the DeFi Alpha. But I would say, so that's one part, DeFi Alpha, that's one part. The other big part is the higher AM. Obviously, if the market goes down here, the base inflow from our monetization of our balance sheet will go down with it. But Our forecast for the year has shifted up with the market since end of year, but it's obviously was much lower, not only for Bitcoin, but for all our assets. On average, I think for our portfolio, it was a much higher shift upwards in our AM, market to market prices, which is actually what half of our revenue stems from. So, yeah, that's the simple answer.

And then, Andrew, could you talk about new geographies for ETPs and any rough timing as it relates to any of the specific regions?

Yeah, thank you very much for the question. I would say that the ones that are most mature in the process are East Africa, because we've been able to work. at the highest levels of government at the regulatory framework. And the wonderful team in Velour has been very effective in determining the plumbing that is needed to get this done. But close in that race for listings, you also have Southeast Asia. We're in continued discussions in Singapore. continued discussions in some of the Gulf Coast countries. And increasingly, we're looking at LATAM. Now, I have to, I'm trained as a financial risk manager. So I have to caveat all of this with everything we're doing, as Ali, our CEO mentioned, is basically tip of the spear market access. That means we are at the intersection of regulatory approval, and the actual products that we have and know have been well accepted throughout Europe. So at any one time, it is not exclusively the domain of Valor to determine the timing of the entry into a particular market, but sometimes it depends on when a capital market authority decides to have their sitting to review instruments. What I can personally attest to is that we don't deal at the, government bureaucracy level uh we are dealing at the highest level director general level ministry level in order to ensure that they have a clear understanding of what we want to do that our objective is to get listed and to get listed in a timely manner so that their populations will have access to our instruments and we can grow shareholder value

I also think it's important to touch on the time it takes us to establish and list these products in these specific regions is by nature a moat itself. Time is acting as a moat once we have Valor's instruments listed there.

You're absolutely correct. This requires a significant investment in personal relationships, regulatory relationships, and as you've accurately mentioned, Curtis, just time. And we are nurturing these in a number of jurisdictions. I would expect that we will start to see significant progress, obviously, through this fiscal year. But then we're also going to see somewhat of a cascading effect because every time we hit a new market, we get better. We get more efficient. We know who to speak to. And we're more accurate in our offerings.

Thank you, Andrew. Question from Mark Palmer at Benchmark. What do you see as the tangible benefits of DeFi technologies uplisting to the NASDAQ in terms of cost of capital and other metrics? I think Ollie can answer that one.

Cost of capital, well, I mean, in terms of, you know, financing, I think, you know, we're still a few days in, but I would assume that, you know, as people recognize the uniqueness of DeFi's business compared to, I would say, kind of leveraged, over-leveraged companies, plays to acquire Bitcoin, we will see kind of a unique shareholder-based form around our equity as we continue to execute as we have. And obviously, with more enhanced liquidity, visibility, access to larger institutions, you see kind of a more efficient cost of capital to be utilized for potential acquisitions and or other strategies that we might have up our sleeves. Did I miss anything in that question, Curtis? Because I'm just typing some.

Yeah, I don't think so. I think you covered it pretty well. We'll speak to Mark after if he has any clarifying questions. Another question for Mark, and this one is for Paul. I know you covered it earlier, but just to refresh, what percentage of the Valor's AUM did the company stake during Q1 2025? And how does that percentage compare with what was staked in Q4 of 2024 and in prior quarters?

It's about consistent. So we've traditionally staked in this 66% to 70% range.

OK. And then questions from Michael Kim at Zacks. Can you provide an update on your plans to launch ETFs here in the US via the partnership with Professional Capital Management? And could you flesh out the strategy in terms of which products you plan to bring to market and how you plan to position your offerings relative to other players in the market? Ali, can you tackle that one?

Sorry, I'm just trying to answer these questions, Curtis.

This was, I guess, do a refresher on the plans to launch ETFs here in the U.S. with professional capital management, where that stands or what the thinking behind that is and

I mean, the thinking behind that was we have a relationship with professional capital management and assessing the potential viability of that entrance into the US is something we're still considering. Obviously the market dynamics have changed formidably since we've launched that. We've seen a lot of competitors of ours make the mistake of trying to enter the US market. And we do not want to compete with BlackRock, Fidelity, VanEck, you know, established US financial institutions who have all the retail and institutional reach for their products. So we're still assessing North America, specifically the US as a market. We're finding, you know, we're just making sure that we do that acutely so that when we do launch things, we have a specific market niche that isn't competing against, you know, 100%. multi-hundred billion dollar companies and waste a bunch of money, which nearly killed, if not killed, some of the competing ETP markets, which I can't complain about.

And then another question for Michael, in terms of capital management, can you provide an update on your current thinking around returning excess capital to shareholders via share repurchases and or potentially instituting a dividend at some point?

Yeah, I mean, we have actively utilized our NCIB, I'm not sure what the US share buyback program, continuously when we believe our share prices is undervalued and we may do so opportunistically with our cash and shares. And obviously our company has gone, transitioned from being kind of having debt on our balance sheet having not raised any institutional capital, clearing that debt, having a very sizable cash treasury, now extremely profitable. So the natural transition of a company of our nature is once we reach a comfortable revenue milestone. The board would consider dividends if it made sense for a company of our nature. Keep in mind, we are still a growth company. So we're very early in in our kind of trajectory. And when you typically look at high growth tech companies, you know, they're not paying dividends immediately, but that's not some, you know, not to say that we wouldn't rule it out in the future when we have excess cashflow, And, you know, happy shareholders and we can redistribute some of that to shareholders. It's something the board can consider when the time is right. But I think we have, you know, before that, at least a few quarters to grow and And our focus is on making this as an efficient cash engine and really the most profitable crypto company listed on the public stock exchange, which I think we have a very good opportunity of doing.

I think we see ourselves as a high growth company and we have no problem to profitable deploy funds so even though we have a really high cash flow and they make good money here we have high returns on our free cash and the cash flow on the balance sheet both in in different trading strategies, but also in things we're building. We don't invest in long-term, very unclear projects. We have some where we know exactly how to deploy the funds. We earn a very high return on our funds internally. We haven't seen any better way to invest our money or pay it back. because we serve as a high-growth company and we have a great pipeline of highly profitable products and strategies to deploy our funds at. And also, I would say that one part of our funds is also the working capital for our trading and liquidity market making business where we earn a lot of money on all the flow in and out of our product so which we still which is still a field that's growing with our growing portfolio and so forth so we have several highly profitable ways of deploying the capital and it's I think it's like Olivia said mentioned it very early for us to consider probably dividends at this point.

Just a quick one for me that we did subsequent to quarter end buy back 505,000 shares at a cost of 2.1 million Canadian. So the company returned just over 2 million Canadian to its shareholders.

Paul, Ali, and Johan, in addition to this, here's a question. Can you speak to where you see DeFi technologies in two to three years? What are the key initiatives, markets, or innovations that you believe will shape the company's future trajectory?

Yeah, I think going back, it feels like 10 years ago, but it wasn't so far long ago when FTX and these kind of occurrences happened. We took the initiative to build our own internal technology trading engines, custody, fully vertically integrated technology company. We see, I think the first thing I told Johan when I met him was, he had a single product called XBT provider, the world's first Bitcoin ETF. And I said, why don't we do this for thousands of products and derivatives and warrants and all types of products. So I want DeFi by way of Valor and its other pertinent subsidiaries to be one of the largest operators of products, derivatives in the emerging niche markets where we, you know, like the Nordics entirely dominate the space and have first mover advantage. And in doing so, acquire, incubate and build trading technologies that compliment all of our unique businesses. Keep in mind, DeFi Alpha came out of an idea Johan had a few months ago, and now it's making potentially hundreds of millions of dollars a year. So as we are entrepreneurs at our core, we will continue to innovate, strive to innovate, look at, you know, acqui-hires and or acquisitions that complement the robustness of our trading technology. And I think we have a very good opportunity to be the most profitable, specifically kind of vertically integrated trading technology and asset management company in the digital asset space.

I agree 100% on that and also what we've seen and really optimized now is how this model works in Europe and not least in Scandinavia and obviously also on the marketing PR side we learned a lot the last two years and I think that blueprint is something we're expanding now geographically but also in terms of vehicles because Now we have the ETPs, the ETMs, but we also now have the asset management license in Switzerland. We will do other types of vehicles like funds, usage funds, hedge funds, and make sure all pools of money can access our asset and strategy. So both trackers, different types of both get the leveraged product, but also the alpha type strategies. and make sure we can distribute it even more efficiently across other types of vehicles so all types of asset managers from retail to institutions can invest. Not everyone can buy equities, not everyone can buy EPPs. Others can only buy convertible bonds or corporate bonds or hedge funds or mutual funds and so on. So the expansion, which is really high pace right now, is not only on the geographical side, it's also on the type of vehicle side where we see huge demand from new pipe from investors that have not been able to participate, but we will make it possible for them to participate where we're assuming in the same geographies where we are successful now. So I think to say we have a lot to build still.

Thanks, Johan. Final question from Edward Engel, and this one is for you again, Johan. How do higher crypto prices impact the outlook of DeFi Alpha opportunities? Do higher valuations create more trading opportunities, or can they widen the spread you earn on some of these trades?

I think it's a bit mild now also to that. I would say maybe we don't get higher margins, but we could probably do larger tickets per trade. And obviously, with higher markets, we see more opportunities, though, for sure, because there might be opportunities for us to buy distressed assets or discounted assets from different types of actors in space. And if the market is higher, they are more likely to be willing to sell to us or do another type of structured deal within this framework. I think the higher markets will make our counterparties more trigger-happy for sure. The margin probably remains about the same, but the ticket sizes might be higher for sure. So yeah, all in all, it's positive that the market goes up on all fronts.

Great. That concludes today's call. If you do have any follow-up questions, please email us, ir at defi.tech or curtis at defi.tech. Thank you all again for your support and your participation. There will be a recording of this provided shortly after. It'll be emailed and tweeted out and also on the company's LinkedIn page. Thank you again. Enjoy the rest of your day.