“Datametrex appears set to outperform the data blockchain and business intelligence sectors; it has growing revenues in AI/Machine Learning with Federal Government contracts, has contracts for blockchain prototypes including a partnership with IBM and a Korean utility, plus its cyrptocurrency mining division has access to 140Mw of power (capable of powering up to 70,000 rig servers) with Gosun.”
Datametrex AI Limited (TSX-V: DM) (FKT:D4G) (OTC: DTMXF) is a Canadian-based technology focused company with exposure to four exciting verticals;
- Artificial Intelligence and Machine Learning through its wholly owned subsidiary, Nexalogy (
www.nexalogy.com).
- Implementing Blockchain technology for secure Data Transfers through its joint venture company, Graph Blockchain (
www.graphblockchain.com).
- Industrial scale Cryptocurrency Mining through its wholly owned subsidiary, Ronin Blockchain Corp (
www.roninblockchain.com).
- Big Data, collecting data from retail point of sale environments. Corporate website
www.datametrex.com.
Each division is early in its lifecycle, and ripe with potential for scale. Datametrex's share price is poised for significant upside revaluation as its current market cap (~C$42 million, DM.V trading at ~C$0.21) appears disproportionate relative to the sum of each divisions potential. Datametrex AI Limited was launched in the later-half of 2017 with the intent of DM.V being a vehicle for attracting some of the most unique cutting-edge technology businesses poised for break-out and individuals at the fore of their fields. The result is a targeted yet diversified approach that offers shareholders exposure to the hottest up-and-coming sectors of the new economy.
Datametrex's objective is to facilitate each division, so they are in a position to execute and hit milestones, by providing them the tools in their toolbox to build out the businesses, whether that be capital or introduction to new clients. Spearheading Datametrex's management team is Chairman & CEO Andrew Ryu, COO & President Jeff Stevens, and Chief Strategy Officer Michael Frank, all are highly experienced in the capital markets, and have several decades of success under their belt in the public markets. This management team is known for recognizing opportunity, moving quickly, their ability to raise capital, and structure deals.
The following is a synopsis of each division, in the order they were acquired/incepted, and why valuation is apt to rise.
1) Nexalogy Environics Inc. - Artificial intelligence and machine learning (a 100%/wholly-owned subsidiary of Datametrex): Nexalogy's technology is unlike anything that exists and is attracting increasing high-level federal government attention/contracts, this division has growing revenues. Nexalogy has NDAs that prevent disclosure of client specifics, however we do know Datametrex currently has 3 Federal Government agency contracts, and has stated it is targeting/involved with government agencies in security, health & safety, and public-Canada. Nexalogy has software and systems with the ability to scour the vast web of social media and detect weak signals/anomalies behind the noise, identify unknowns, and generate customized actionable intel for clients. Nexalogy is on target for ~C$2.5M+ in revenues for 2018 (up from ~$1.5M in 2017), and within a few years it is conceivable to see an increase to >$40M revenues. It is highly unlikely governments will spend less on counter-terrorism and the like, they are prone to increase appropriations, plus other governments are apt to adopt this technology. Important to note is that with AI/machine learning the increasingly clean data sets that Nexalogy generates through years of refinement (application specific teaching) position the product as the the go-to choice for anyone wanting actionable results. Nexalogy Environics Inc. currently employs ~13 people based out of Montreal, including best-of-breed stack developers and machine learning developers. Additionally, Nexalogy recently announced a new AI business intelligence product that focuses on delivering competitive analysis and stock market awareness for Fortune 1000 publicly traded companies. Nexalogy is a proven entity in the business intelligence market having already provided premium services for major names such as Ford, PWC, Petro-Canada, and YellowPages.
Nexalogy was started by astrophysicist, Claude Théoret, renowned for discovering that the best way to study black holes is to examine how stars interact with each other. He created algorithms to map relationships between the stars and gain a fresh understanding of the universe. In 2006, Claude began to apply the same algorithms to analyze connections between words and the people who write them throughout the social Web and advance Nexalogy to the point it is unparalleled. Claude recognized the best way to advance Nexalogy to where it can reach its potential was by taking it public with people experienced in public markets and with the right vehicle; he chose newly formed Datamatrex in late 2017 as the perfect fit -- Nexalogy was Datametrex's priority/
first acquisition. Claude is now a ~9% owner of DM.V and still leads the Nexalogy division. Since Datametex's acquisition of Nexalogy, management has refocused the division's resources toward higher-margin big-government and IR business intelligence products, and away from Nexalogy's old 'freemium' (try first - then upgrade) model. The social media analytics market is forecast to grow to US$5.4 Billion by 2020. Clearly the sum of the parts of Datametrex is greater than the whole, it is not unreasonable for investors to attribute a ~C$40+ million valuation now (on to much higher from there) for the Nexalogy division alone, based on where this is headed.
2) Graph Blockchain Limited (Planned spin-out): Graph specializes in implementing custom blockchain technology for secure data transfers for corporations and government agencies. Graph is a spinout that Datametrex is planning for 2018 that is expected to see
shareholders of DM.V receive 1 share of Graph Blockchain Limited for every 20 they hold of DM.V. (the record date not been set yet, look for guidance on this soon). Datametrex corporately will also retain a ~20% interest in the new publicly traded entity, the whisper number on Bay Street is that Graph Blockchain Limited will IPO at ~C$35 Million market cap (which would give DM.V's 20% retained interest an intrinsic value of C$8M).
Graph has already been sufficiently financed with a recent seeding of $3.5M (proceeds to be used to build its Graph Blockchain solutions), and thus it is likely only a very nominal financing will accompany the IPO for the main purpose of establishing price only. Graph is a 50-50 joint venture (JV) Datametrex started with San Francisco-based Bitnine which has vended-in its cutting-edge Graph Database technology.
Graph's technology
processes blockchain data up to 1,000 times faster than traditional methods and is 10,000 times faster at presenting data from the blockchain to the dashboard.
Currently Graph is contracted to
develop a blockchain solution prototype in partnership with IBM for a Korean conglomerate's utility for US$400K. This ~US$400,000 contract for the prototype, if successful (and there is no indication it will not be successful), we anticipate will turn into a full-scale multi-million dollar project for Graph.
Graph is also under
contract with a medical marijuana client to facilitate a blockchain solution for clinical trails (aside: this client project is an example of Datametrex cross-selling business divisions to close a deal, as the same client also signed a contract with Nexalogy to find people discussing/complaining of ailments online, then target them with client ads which lead to filter surveys qualifying them as prospective patients for clinical trial, and the results are stored on the Graph Blockchain -- saving millions of dollars and time for the client).
The global blockchain market is a megatrend and only just beginning. Expect Graph Blockchain Limited to announce additional contracts as 2018 progresses as the level of discussion for its solutions runs high. Considering that there are companies in this space going public on just a white paper and a promise to build a prototype and they get a $40M valuation, it is safe to say the aforementioned ~$35M IPO market cap whisper number for Graph reflects a desire by Datametex (and Bitnine) to give new shareholders room to experience appreciation from the get-go.
The following categorized list of blockchain projects have been defined as "in the pipeline" by Datametrex, either in some level of discussion (potential/targeted) or actual development:
A) Real-time Transactions
-
Public Infrastructure – building a bespoke secure payment gate solution for electric vehicle charging stations.
-
Fintech Industry – to provide Blockchain solutions for efficient processing of real-time transactions.
B) Asset Smart Contracts
-
Real Estate – to provide a Blockchain solution for financial transactions and smart contracts.
-
Vehicle and Equipment Sales – Vehicle history, smart contracts and financial transactions.
-
Logistics – to provide trusted shipping solutions.
C) Document and Certificate Authentication
-
Medical Industry - solutions to provide secure and managed transactions among highly connected entities.
- Education Sector – solutions to verify degree, diploma, and transcript authentication.
- Document Management – to provide document integrity and confidentiality management.
3) Ronin Blockchain Corp.- Industrial scale cryptocurrency mining targeting 140Mw, 70,000 rigs (a 100%/wholly-owned subsidiary of Datametrex): Ronin’s business model is based on a centralised AI powered mining platform to operate a geo-diversified footprint of industrial scale blockchain mining operations.
Ronin is positioned to become a cryptocurrency mining powerhouse, it benefits from several advantages stemming from its unique relationship with Gosun. Gosun is a public company in China which owns 90+ data centers across China (plus others globally), their tenants are major entities (e.g. Alibaba, Tencent, China Telecom, etc.) which use tier-1 and tier-2 data centers. One of the founding partners of Ronin was the Chairman and CEO of Gosun, and when
Ronin was acquired by Datametrex that interest was converted to becoming an ~8% owner of DM.V.
Datametex announced that Ronin has locked-in with Gosun 1) immediate access to Gosun's datacenters and infrastructure to house Ronin's server rigs, 2) power agreements for pass-through pricing, and 3) the ability to piggy-back on procurement. Datametrex via Ronin this February-2018 signed an agreement with Gosun giving it access to 100Mw of power immediately. Without the need to spend millions on space and infrastructure, Ronin has a contract that will allow A) immediate access to hosting capacity of up to 10Mw and 5000 server rigs, B) ability to increase capacity up to 100Mw and 50,000 server rigs by December 31, 2018, and C) commencing Q2 2019, ability to scale up incrementally with a minimum capacity of 10Mw and 5,000 server rigs per quarter up to a maximum of 140 Mw or 70,000 server rigs by December 31, 2019. Ronin also has a foothold in Quebec through Nexalogy which is from Montréal and has a deal with Hydro Quebec.
Datametrex does not intend on long-term
hodling, it will mine coins with instructions sent from Vancouver to the remote rig servers based on whatever its AI algos indicate is moving/poised for movement, once mined the coins will be scraped and traded. From a tax perspective there is unlimited trading between coins without triggering taxable profits, taxes are not triggered until digital coins are monetized/converted to legal tender. Datametrex will also employ the use of cold storage devices (treasures) when practically possible so as to maximize security.
Out of the gate Ronin has
announced it is procuring GPUs and will focus on alt coins (e.g. Monero, Ethereum Classic, Zcash, Litecoin, etc.) over ASIC (application specific integrated circuitry which is more for Bitcoin; ASIC uses more energy and is used to solve more complex equations). Down the road, as Ronin builds out systems, it plans to diversify to say 20% ASIC, however to start it will go with the flexibility of GPU. Ronin is facilitating procurement in increments, with the first mining rigs set to be delivered and installed in both locations (Asia & Quebec) late Q1 2018 and are scheduled to be operational in early Q2 2018. As Ronin's relationship with Gosun matures it is possible terms of procurement will sweeten as the rigs are expected to more than pay for themselves in short order. Gosun has some of the largest cryptocurrency companies knocking on their door asking if they have excess capacity, looking to get in, Ronin has first-mover advantage. We calculate that if Ronin were to mine at 100Mw, at current valuation of cryptos, Datametrex would be looking at annualized revenue rate in the order of ~$220 million at ~55% margins.
4) Shoptalk Analytics Group Inc.(Datametrex has a LOI to acquire 100%): Shoptalk Analytics is a Toronto based data collection company focused on independent pharmacies in the USA, offering plug and play retrofit solutions. Shoptalk solutions capture vital real-time Point of Sale (POS) and other related data for key decision making by a number of healthcare providers. The company has a key distribution agreement with McKesson Corporation. Shoptalk is able to tap into point of sale terminals, upgrading them to have benefits of new cloud based terminals; aggregating data, providing real-time access to data, and remote access to data. Datametrex went public with its own big data product as its qualifying transaction, however it quickly identified Shoptalk Analytics as an acquisition target as Shoptalk was much further developed, it was an opportunity to leap-frog some hurdles, and advance the aggressive anticipated adoption curve of Shoptalk. The Shoptalk acquisition plans were put on hiatus so Datametrex could focus on the Nexalogy acquisition opportunity. Now that is complete, Datametrex is revisiting the Shoptalk opportunity and is expected to close on the transaction soon.
Shoptalk Analytics has a foothold in independent pharmacies in the USA, McKesson introduced Shoptalk to a number of clients, and those opportunities converted into the relationships they have currently. The value of the data that can be gathered at the pharmacy level is huge and can be leveraged/monetized in many ways that make the Shoptalk product indispensable to the client once in use. Datametrex has impressive performance targets for Shoptalk written into the binding Letter of Intent to acquire, with staggered payments (cash and shares) totaling C$4M -- contingent upon Shoptalk hitting three aggressive milestones -- the final being 500 paying locations within 26 months. A paying location is defined as a pharmacy that has installed the device and has agreed to a 1 year contract.
The following URLs have been identified for additional DD on Datametrex AI Limited:
Corporate webpage:
https://www.datametrex.com
SEDAR:
Click here for SEDAR link
Recent Technology Journal Review:
https://technologymarketwatch.com/dm.htm
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Fredrick William, BA Ec.
Fredrick is a freelance information services professional for various media relation firms and consultant to several financial publications. He monitors and invests in the resource, technology, consumer staples, healthcare, agriculture, financial, energy, utilities, and biotechnology/pharmaceutical sectors and is the managing director of Market Equities Research Group.
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