(Oslo, 8 April 2023) DLTx ASA ("DLTx", OSE: DLTX) announces that the Company and its wholly owned subsidiaries have today signed an agreement to sell all foreign operating subsidiaries, including its interest in Filecoin cloud storage partnerships Storify and Helix. The sale is a strategic move in response to the blockchain market downturn, the divisions mounting liabilities and the significant investment required to achieve profitability for the Filecoin division. The sale is an important part of the company's effort to improve its financial position and facilitate new strategic initiatives. The Filecoin division faced a challenging 2022 with the downturn in the cryptocurrency and blockchain markets. The business model of funding discrete special purpose vehicles to finance the growth and development of the division proved difficult given the reigning market conditions. As a result, the division has struggled to reach critical size, resulting in growing liabilities and increasing financial pressure on the parent company. The Filecoin division requires significant investment to reach profitability, a commitment that DLTx has determined is not viable under the current market conditions. The buyer is a company controlled by James Haft (chairman of DLTx), David Johnston (Chief Strategy Officer) and Jacob Farber (who has previously been engaged by DLTx). While the agreement does not meet relevant thresholds for being subjected to the general meeting, DLTx has taken appropriate measures in the negotiations to safeguard the interests of the group. As consideration under the agreement the buyer will assume liability for approx. USD 25 million of outstanding debt with the entities sold in the transaction. In addition, the sale includes approx. USD 3 million of seller's credit to be settled by the buyer within 31 December 2028. The signing of the agreement and the closing of the transaction occurred simultaneously. "The sale of the Company's operational blockchain subsidiaries represents a shift in our strategy and is in line with our goal to improve our financial position. Moving forward our immediate focus will be the values of our investment portfolio, and we will act opportunistically to further improve our financial situation," says Roger Lund, Managing Director of DLTx. The transaction will significantly reduce the Company's overall debt burden and give DLTx a better foundation to adapt to the changing market conditions. DLTx will move forward with a streamlined organizational structure pursuing new opportunities. "It was a difficult but necessary decision to ensure operational viability for DLTx ASA," added Roger Lund. "I believe this sets DLTx up to follow its long-term strategy of finding new business combinations with companies focusing on disruptive and sustainable business models. While this endeavor was expected to be a result of the agreement with Blockchain Moon Acquisition Corp. ("BMAC"), the Company will now pursue these strategic initiatives under different circumstances." As part of the agreement DLTx ASA will change its name and will call for an extraordinary general meeting ("EGM") in the near future. Following the transaction, the DLTx balance sheet will consist of its Web3 investment portfolio, the outstanding receivable towards the buyer, and outstanding receivables towards Ambershaw Metallics and Eardley Settlement Ltd, connected to the company's legacy investment in Ambershaw Metallics. This information is considered to be inside information pursuant to the EU Market Abuse Regulation (MAR) and is subject to the disclosure requirements pursuant to MAR article 17 and section 5-12 of the Norwegian Securities Trading Act. This stock exchange release was published by Roger Lund, acting Managing Director and VP Strategy, on 8 April 2023 at 22.26 CEST. For further information, please contact: Roger Lund, acting Managing Director, +47 95 16 11 13 or [email protected]
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© Oslo Bors ASA, source Oslo Stock Exchange
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