Former bitcoin miner Digital X has announced its financial results for the year ended June 30, 2016, posting a net loss of $3.4 million.
The company told shareholders that the improvement over FY15's $6.8 million loss was driven by the appreciation in the value of bitcoin of $1.3 million, optimisation and divestment in the bitcoin mining operations, and the strong growth in its liquidity desk revenue.
While the FY16 loss is a 50 percent improvement over FY15, the company is yet to post a profit since landing on the Australian Securities Exchange (ASX) in June 2014, via a reverse takeover of investment firm Macro Energy.
Growth in sales from the company's trading business was one of the main drivers for a 10 percent increase in total revenue in FY16 to $40.4 million.
Of Digital X's $40.4 million total revenue, trading revenue from bitcoin operations accounted for $38.5 million, with its bitcoin segment generating a $666,000 profit for the 12-month period.
The company spent $37.8 million on bitcoin purchases, and as of June 30, 2016 it held 6,051 bitcoins, the equivalent of $163,380 in total, valued using the closing Bitfinix price of $673 per bitcoin, compared with the FY15 closing value of $262 per bitcoin.
The Bitfinex bitcoin value as of Wednesday was $575 per bitcoin, Digital X said.
The cost of property, plant, and computer equipment was listed as $42,000 for FY16, with Digital X claiming $18,444 in accumulated depreciation.
$2.2 million was spent on power and hosting equipment for the year, with the company saying expenditure had reduced as a result of divesting its bitcoin mining operations.
In October last year, DigitalBTC, trading as Digital CC, underwent a name change and shift in business model as well.
Digital X raised AU$3.5 million to fund the development and rollout of AirPocket last year, its app-based cash remittance product, and after rebranding, Digital X announced its focus would be on the AirPocket platform, saying that the new name and direction represented a strategic change from a focus on bitcoin as a mechanism to store value to a focus on software development.
The company then partnered with telco giant Telefonica in May to market AirPocket in Latin America via an SMS campaign.
The partnership built on an existing distribution and sales agreement the companies signed earlier this year, which gives customers in North America access to transfer funds directly into mobile phone accounts of Telefonica users in Argentina, Columbia, Costa Rica, Ecuador, El Salvador, Guatemala, Mexico, Nicaragua, Panama, Peru, and Uraguay.
Although Digital X is based in Perth, AirPocket is not available in Australia.
Digital X chairman and co-founder Zhenya Tsvetnenko announced his resignation in July, with the company telling shareholders Tsvetnenko would "relinquish" his executive role to pursue "personal interests".
Tsvetnenko, along with two others, has been accused by prosecutors in the United States for scheming customers with unsolicited text messages, according to Reuters.
"The matter is before the court, and Mr Zhenya Tsvetnenko will be defending all allegations against him," Evelyn Duffy, a spokesperson on behalf of Tsvetnenko, told ZDNet.
Other board changes occurred at the same time, with non-executive director Brett Mitchell stepping down from the board, but remaining as a corporate advisor; and Leigh Travers joining the board as executive director.