DLT Resolution Inc.

What they do

The company operates a hosted PBX and IP voice telecommunications business (DLT Telecom) serving Canadian businesses, and owns RecordsBank.org, a cloud-based health information exchange for medical records retrieval. As of the latest filings, all revenue is generated by DLT Telecom, Inc., following the sale of DLT Resolution Corp. and other subsidiaries.

Revenue drivers

• DLT Telecom Hosted PBX — Monthly subscription service for cloud-based IP voice communications, including features like voicemail to email, call recording, CRM integration, and mobile apps. This segment generated all $64,325 in revenue for the six months ended June 30, 2024.
• RecordsBank.org Health Information Exchange — Fee-per-record service for secure medical record retrieval and exchange, HIPAA/PIPEDA compliant. No current revenue disclosed; described as part of the legacy business strategy.
• Legacy telecom/IT solutions — Annual revenues declined from $218,707 in 2022 to $142,738 in 2023, attributed to loss of customers due to liquidity constraints.

Recent performance

For the six months ended June 30, 2024, revenue was $64,325, with net loss from continuing operations of $624,386, and a net loss of $346,549 overall. Cash flow from operations was negative at $196,001. The company had $600,851 in current assets and $326,598 in current liabilities as of June 30, 2024. In 2023, net income of $1.2 million was driven by $1.44 million from discontinued operations, offset by a $238,060 loss from continuing operations.

Strategy

Management is focused on growing the DLT Telecom hosted PBX business while maintaining the health information exchange as a legacy offering. They are raising capital through common stock sales to fund operations and clear accounting backlog. The company sold its DLT Data Services and Union Strategies subsidiaries in March 2023 and DLT Resolution Corp in April 2024, signaling a shift to telecom and health information technology.

Risks

• Going concern risk — Management states substantial doubt about the ability to continue as a going concern due to recurring losses, accumulated deficit, and negative operating cash flow.
• Dependence on external financing — The company must secure additional funds to continue operations; if not available, investments could be lost in entirety.
• Limited liquidity and customer attrition — 2019-2023 revenue declined each year, attributed to loss of customers due to a lack of liquidity impairing operations.
• Small scale and sporadic trading — Only eight employees, no established public trading market, and shares trade limited and sporadically on OTCBB.

Outlook

Management plans to raise additional equity financing and borrow under a private credit facility. They expect to continue reducing the accounting backlog and have issued shares for business acquisitions, including a GMT International acquisition in 2024. No revenue guidance or growth projections were provided.