End of the Year Letter to the Shareholders - 2023

Dear Shareholders,

As 2023 draws to a close, we extend our sincere appreciation for your unwavering trust and support throughout this dynamic year.

2023 in Review

Throughout 2023 we focused on restructuring our organization, with a focus on creating a lean core team and cost-effective structure. This enabled us to focus our attention on a few core holdings and actively manage our portfolio. Additionally, we diversified our investment approach by engaging in specialized funds like Permanent Ventures and doubled down on our early-stage incubations.

In the second quarter, we welcomed Sebastian Markowsky to lead several new innovation initiatives such as ABX Analytics as an Advisor and Venture Partner. We collaborated with AVS-Valuation GmbH to conduct a comprehensive valuation of our top ten portfolio holdings, resulting in a total value of €40 million. Through the initial assessment of the top ten portfolio holdings of the corporate group by an independent valuation company, Advanced Blockchain AG emphasizes its position as an innovation leader in the industry. 

The latter half of the year saw significant additions to our supervisory and advisory boards, including experts from the capital markets, academia, and technology sectors, such as Rüdiger A. Günther, Håkan Saltin, Sebastian Markowsky, Prof. Dr. Marcel Tyrell, and Klaus Rainer Kirchhoff. The team’s focus was given to refining our business strategy, the restructure of the organization and developing new initiatives to achieve our revenue targets. 

As part of some larger portfolio developments, Composable established the Composable Foundation in Switzerland with focus on further decentralization of the protocol with a major breakthrough in cross-chain interoperability. We are confident that the team is on a promising growth path and has some very exciting months ahead. The recent listing of Picasso (PICA) on Gate.io and the upcoming ETH/IBC mainnet launch holds a lot of additional value and promise for all early-stage investors, including Advanced Blockchain.

As 2023 draws to a close, our focus remained on sharpening our strategy, closing OTC deals to achieve our revenue target, and implementing additional cost-reduction measures. Additionally, our team attended the Deutsches Eigenkapitalforum in Frankfurt, where we provided insights into the current market trends, our recent advancements, and ABX.VC product roadmap as well as demo. Remarkably, we experienced an exceptional level of attendance, highlighting the growing interest in blockchain technology and Advanced Blockchain's role in this expanding industry.

‍

Ecosystem

Our portfolio companies demonstrated substantial growth in 2023, with notable achievements from Peaq, Laconic, Myso, Panoptic, Neon Labs, Polymer Labs, Talisman, and others. 

Notably, Panoptic, one of our early-stage incubations, recently closed a $7 million Series-Seed financing round, further adding value to the group’s diverse portfolio. Recently the team has announced the commencement of the first epoch of their beta launch.

Continuing with Composable’s recent innovation in fostering interoperability through their Ethereum IBC testnet, aimed at establishing connection between Ethereum, Polkadot, and Cosmos blockchain ecosystems. In early 2023, Composable was awarded a grant from the NEAR Foundation to facilitate and incentivize the integration of Centauri with the NEAR Protocol through Cosmos. Additionally, the PICA token was listed on Gate.io, reaching an unprecedented trading volume peak recently, hitting close to $5 million. This surge coincided with a significant increase in its price within the last couple of weeks.

Peaq's team collaborated with ELOOP to integrate 100 Teslas into the peaq ecosystem and the wider Polkadot network. This partnership marks the first occasion where individuals from any location can invest in these Teslas and generate income from their revenues. The Peaq team partnered also with Gaia-X moveID and introduced a peer-to-peer parking and charging system on the Peaq ecosystem at the IAA - the most important mobility conference worldwide - in Munich. 

Krest token price has been steadily rising since its launch in August this year, underscoring the project’s traction. This increase in price which led to a boost of the value of the Krest tokens held by ABAG’s subsidiary Incredulous Labs Limited.

Neon Labs team launched their awaited NEON token which received a robust traction from their community and the wider market, surpassing $21 million in daily trading volume for the first time since its launch. Additionally, the token recorded a notable price increase of over 400% in the past thirty days. As a result of the price increase, Advanced Blockchain, through its subsidiary Incredulous Labs, holds rights to receive NEON tokens currently worth over $2 million.

On the first Monday of each month, we were pleased to publish our Ecosystem Update on our website. If you find some time over the holidays, feel free to (re)read them here: https://www.advancedblockchain.com/blogs

‍

Market

‍While the year had a dramatic start experiencing the collapse of large global banks (Credit Suisse, Silvergate and Silicon Valley), which highlights the urgent need for reform in the financial system, there has been quite positive developments on the regulatory landscape, such as the Germany's announcement of the "Future Financing Act" and the European Parliament's approval of the Markets in Crypto Assets (MiCA) regulations.

The involvement of major asset managers like Blackrock, Fidelity, Valkyrie, Invesco, and WisdomTree in filing for a BTC spot ETF marked a critical moment in restoring market confidence and encouraging more institutional adoption, which is vital at this stage of the market's overall development.

The recent surge in Bitcoin's price, surpassing the $42,000 milestone, exceeding its highest value since April 2022, along with achieving a market capitalization of over $812 billion and becoming the 10th largest asset by market capitalization, paints a promising future for 2024 and 2025, particularly following the expected approval of the BTC spot ETF.

‍

Strategic Outlook for 2024

Our focus for 2024 is on solidifying our market position, expanding recurring revenues through new services such as ABX Analytics and capitalizing on Token Generation Events (TGEs). 

Enhancing transparency and communication with investors is a priority, with newly implemented initiatives such as quarterly investor update calls and Q+A sessions. We will also continue with the bi-annual assessment of our top ten holdings which will continue to give our investors and partners insights into our portfolio growth.

Establishing a global presence, particularly in the UAE, is a key area of focus, presenting substantial opportunities for collaborations in real-world asset tokenization (RWAs) and other exciting sectors.

‍

Closing Words from the CEO

From the beginning, we understood that our vision for Advanced Blockchain could not be fulfilled unless we had the trust and support of our committed team, partners and shareholders. Thank you for your unwavering support in 2023. Looking ahead, Advanced Blockchain is poised to benefit from the next phase of blockchain market development, and we are eager to continue our work as an early leader in the space.

As we welcome the New Year, I hope you reflect on 2023 with the same pride and sense of accomplishment that I feel today. The Advanced Blockchain team expresses our heartfelt gratitude for your ongoing support and wishes everyone an exciting journey into the new year.

Yours sincerely,

Simon Telian 

CEO - Advanced Blockchain AG