Banxa Hldgs Inc

Welcome. My name is Dominic Carozza, founder and chairman of Banksa. What I'd like to do today is to present the other speakers, Holger Arians, our CEO, and Shyam Deo, our group CFO, who will be presenting with me today. What I'd like to do is just give those investors who are new to Banksa, who haven't heard the story, just a couple of minutes overview in regards to what we do as an organization. And then Sham will talk about the financials and Holger will give us a business update. So in terms of our vision is really about democratizing finance, about providing equal access to financial opportunities to every part of the world. And how we do that as an organization is that we onboard the masses by providing both payment and compliant infrastructure to global digital asset platforms. And I'll talk more about what that means in a moment. So in terms of a quick snapshot on the company, we're actually the world's first stock exchange listed fintech payment service provider regtech company specifically for the digital asset industry. And what we're doing is we're building a bridge, a bridge between the fiat world. And when I say fiat, I mean US, Euro, Canadian, Australian dollar world with the digital asset world being Bitcoin, Ethereum and other coins through what we call the fiat on ramps. as well as through the fiat off-ramps, also called the buy function and the sell function. Our business model is B2B2C. We operate in a highly regulated environment that's only becoming more regulated, which in fact is music to our ears, which we'll touch on. And it's a highly scalable business model. And more importantly, whether the price of Bitcoin goes up or down, we basically clip the ticket. There are four core things that we do as an organization. First of all, we bring together and aggregate a series of both global and local payment methods. And when I say global, I mean MasterCard, Visa, and Apple Pay. and then local payments being Interact in Canada, SEPA in Europe, POL in Australia, and many, many others. We bring those together and Hogger will talk more about why local payments are absolutely critical to the success of not only banks, but also the industry. secondly we wrap that with our regulatory compliance platform to operate these days the company needs to have licenses around the world it's unlike when we started in 2014 where some considered it the wild west now the industry is regulated and only becoming more regulated and so part of the the banks of secret source is to provide that regulatory compliance platform as well as payments to our partners And then point three and four is really about our own proprietary technology stack that we've built. It's a highly scalable technology platform that does everything from data pricing to payments to ultimately delivering the coin to the customer in the most efficient way. And whether that's off-chain or on-chain, I'm not going to get into the nuances, but it's basically making cost-effective and efficient for the customer as well as ourselves. We then wrap all of our technology, our payments and our compliance into what is called an API or a widget, which is just another fancy name of a connection, a technical connection into our customers like Binance, KuCoin, Edge and many others. And we help our customers acquire more customers because we take care of the payments infrastructure, as well as all the compliance. And once again, Holger, we'll just, you know, unwrap this a little bit more detail. One of the key ways that we measure performance in the company is through a measure we call TTV, total transaction value. And as you can see, for the last 18 months, actually even longer, the business has been on a very strong growth path. We will talk more about that in a moment. We will be releasing our September quarter accounts at the end of November. So watch out for those and there'll be some further updates with regards to TTV over the coming months. In terms of capital structure, there's just over 45 million shares on issue. In terms of stock options, just over 4 million stock options. And the majority of these are ESOPs, is part of the employee ESOP, which is really about aligning our team with the performance of the company. Where our core exchange is the TSXV with code BNXA. And the secondary listing is the OTCQX ESOP. BNXAF and FSC, which is Frankfurt on AC00. There is some research available on the company, which is available at banksa.com, which you're free to review and download. Now, what I'd like to do is hand over to Shyam, our group CFO, who will take us through the numbers. Over to you, Shyam.

Thank you, Dom. Everyone, today I'm pleased to be able to share with you our financial year results. You would have recently seen that we lodged our accounts for FY21, and the results I want to talk to you today is in relation to that in comparatives for FY22. So FY21 has been a very strong year for Banksa. It's been listed with many firsts, albeit we've had the TSX listing, as well as the geographic expansions into North America and Europe region. Now, all of these factors have led to a strong TTV growth that banks has experienced. As you can see, it's 688 million, which represents close to nine times growth on prior year. The second part of this, which is our revenue, the revenue is 46 million for FY21, which represents a gross take rate of about 7%. Both these factors, of course, have been underpinned by a strong focus on our partners and trying to expand that partner network that we currently have. Then taking the profit and loss performance and reflecting it further, we can certainly see a strong cash or liquidity position that's starting to emerge at Banksa. At financial year end, we had $25 million worth of liquid asset. This comprised of cash deposits as well as digital asset in our industry. And then the other perhaps key highlight for the financial year has been the made in profit result. The adjusted EBITDA of 1.7 million was reflective of banks' activities throughout the financial year. Perhaps we move to the next slide, Dom. And I think just moving into the next slide, this gives you a little bit further detail in regards to the EBITDA. But perhaps two key things that I'd like to pick up on from this slide is regard to our gross profit margin as a percentage of TTV, or referred to as the net take rate. Throughout the year, we've ended up at 2.5%. And compared to prior year, which was at 3.9%, we've certainly seen this net take rate compress. And this has been a factor of a couple of key points in our industry. One has been the geographic mix that we've expanded into, as well as then encountering some of the competitive market conditions around pricing. As I alluded to earlier, all of this is regard regardless of that has kept us in good stead. The business has continued to invest in its product, talent and systems. And as a result, we've continued to expand with regard to OPEX. OPEX during the year reached close to 15 million or representing roughly 2% of TTV. Vast portion of this operating expenditure is largely related to employee headcount. As you can see during the year, we've scaled in excess of close to 100 new employees that have joined the Bankster team. And the last point on this slide perhaps is just to talk through to the EBITDA. The EBITDA of 1.7 million is in line with our income from operations. Now, this was realised within six months of listing and despite the operational expansion spend that the business has undertaken. On the left-hand side, the table shows a number of different EBITDA adjustments, but largely just to categorise them. The bulk of the items are really non-cash items. And the other major categories, of course, the listing expense of $2.7 million. All of these, once reversed from the loss before tax, end up in a $1.7 million adjusted EBITDA position. Just to the next slide, please, Tom. Now, just moving along from the profit and loss is more around the performance of our balance sheet. I think the key takeaways or highlights here are banks that has been able to translate its top line growth into a significantly stronger balance sheet position. As I noted earlier, there's $25 million worth of liquid assets. Now, this also translates into a much stronger working capital position. We've seen an eight times growth in our net working capital, as well as in our quick ratio. We've seen a quick ratio of about four times at present point. I think the other notable point on our balance sheet is perhaps to take account is the fact that despite banks are being a technology business, all our research and development costs have been expensed. We have not capitalized anything on our balance sheet and we'll continue adopting this policy going forward. Now, just moving across to the next slide. It's worthwhile spending a little bit of time on this particular accounting policy, which is regarding our revenue recognition. The revenue recognition is an area that Banksa, it's perhaps not unique to Banksa, but it's certainly slightly different and we certainly want to spend a little bit more time on it. And the nuance with the revenue recognition is all in relation to agency versus principal. Banksa undertakes two primary activities, which is on-ramping and off-ramping. And I just wanted to quickly shed some light with regards to what is classified as agency revenue and what is principal and what's the determination factor. So with regards to unwrapping and the small diagram on the right-hand side of the screen, the unwrapping activities are largely seen as a service provision where banks participate as an arranger of service and hence determined to be an agency relationship. With regard to our unwrapping activities, essentially under the agency classification, it's recognised on our profit and loss as a net sale in contrast to on-ramping is an off-ramping activity. And this is where Banksa or a customer sells their cryptocurrency to Banksa. The major nuance that's taken account here is the fact that Banksa is in control of the actual coin. And with that, Banksa carries the coin control risk, hence deemed to be principle in nature and recognized as gross sales on our profit and loss. I hope this helps with the revenue recognition. I'll pass it back to Dom.

Thanks, Sharm. Just one point that I wanted to highlight for investors, and Sharm, feel free to jump in. When we're talking about the GP as a percentage of TTV, of total transaction volume, for FY21 being 2.5% versus 3.9%, I think one of the other very important points to mention here is in FY20, the business was predominantly focused on the Australian marketplace. And in FY21, the business expanded very aggressively outside of Australia or into Europe, into North America. And hence the Australian market is, let's call it, less competitive than some other countries around the world. And I think we're now at a point where the You know, 2% to 2.5% as a take rate or GP as a percentage of TTV is really the, let's call it the industry average. So we're basically trending at that industry average. I just wanted to mention that for shareholders. Now, in terms of the business update, I'd like to hand over to Holger.