Banxa Hldgs Inc

Dominic Crozer. Yeah, my name is Dominic Crozer. With me today is Holger Ardians, our CEO, and Shyam Deo, our CFO. We've just got a few problems in regards to him coming up in terms of his video. So anyway, let's just sort of continue as we are. And moving forward, just to kind of give everyone a bit of an update, what we're going to do is take everyone through a high-level overview of Banksa. And then both Holger and Sian will take you through the business and the financials, and then we'll wrap up and open it up to key questions. And so there's a Q&A button. So please feel free to basically ask questions, feel free to ask questions during and we'll do our best to address every single one. We expect this to go to about 20 minutes, 25 minutes and then Q&A for about 15 minutes for those that are managing time. So really our vision is about democratizing finance and really onboarding the masses by building the fiat to crypto bridge across digital assets. We're actually the world's first stock exchange fintech PSP, payment service provider, red tech company. And so what we're doing is building the bridge between the fiat world. And when I say fiat, I mean US, Euro, Canadian dollar world and the digital asset world. And when I say that, I mean Bitcoin, Ethereum and the other coins. And in effect, the best way to describe the company is we are like the PayPal of the crypto industry. Just from a corporate perspective, we listed both on the TSXV and the OTCQX and in Frankfurt, market cap of around $100 million. Our revenues are, we're trading about 1.2 to 1.5 times revenue to enterprise value and roughly $19 million US cash in the bank, with insiders being absolutely aligned with the performance of the company with around 20%. And there's about 200 people in the company. So at this point, what I'll do is hand over to Holger that will take us through the business.

Thank you, Dominic. Hello, everyone. I'm Holger Ariant, CEO of Banksa. I just want to touch on the pillars in our business. We really stress that we do have local payments in many, many markets and global payments to reach almost everyone in the world where we are allowed to. Local payments are really important for this industry because local bank transfer is just often more trusted it's in your own currency it usually happens immediately and it goes through um almost 100 so there is no there is less fraud than a credit card payment and there are um it's just a more trusted payment method for consumers and compared to a credit card you don't have to give your details to anyone and it's mostly free So we do that in a number of countries, as you can see here. And that's really one of our core pillars, how we differentiate from the competition as well. Why? Because payments are hard. If you want to have a local payment here in Australia, you do need to have a local bank account for that. You need a local entity directors. People on the ground need to go to the regulators. And that's the next point here. We do have the regulatory licenses and we're registered with the relevant authorities in those countries that we can perform those services and it's not just receiving the payment it's also doing the settlement of the cryptocurrency into the user's wallet and that's where the virtual asset service provider licenses come in and we already have a few and are just subsequently getting those licenses so that we can offer those local services And again, just to draw the bigger picture, why is that important to our partners that we integrate with? Because they really want to deal with the old world, the fiat world, the banks and the regulators. But the moment they offer any payment services, they will have to do transactional monitoring. They will have to receive payments. they would have to do the fraud assessment they have to deal with chargebacks so banks that takes care of all that it's actually quite hard which is good for us because we've been doing this for eight years we know the ins and outs we have the connections we know who to which which stakeholders to engage and how to process those payments with a very high throughput conversion rate which eventually is a win-win-win situation. The user wins because their payment goes through and they can get their coins into their wallet. The partner wins because value is being uploaded into their exchange or platform or wallet, whatever they are offering. And certainly banks have benefits from this as well. So conversion rates is throughput is really, really important. It's like if you go to an ATM and you're not getting your money out, that's a frustrating experience. But with banks, the solution, especially the local payments, you will mostly get through, are able to convert your fear to crypto. The third point here, data science automation. We've built our proprietary platform for many years. It's very, very scalable. It's been pressure tested over the last two years, certainly. And we just continue to build that out. We just hired our chief data officer who's been head of data at EY in Australia before. And there are just so many capabilities. efficiencies that we are working on every day we're really learning what we can do with all this data in terms of customer experience cost optimization and many many other improvements and again we're not just processing a payment we're not a pure payment service provider um we are also settling the coins and that's also quite complex we have to source them at the cheapest price possible and the fastest way possible because um crypto should ideally be very fast so we have to make sure that we um get our coins and get them into the user's wallet as soon as possible in the most economical way and we're working um on improving improving that every day as well um dominic if you don't mind going to the next slide please Just going to touch on a few points here. I already mentioned that we are basically shilling off our partners from any chargebacks or fraud for the services we're providing. So what they're basically just seeing is their users uploading value in form of coins into their platforms. And that's what they want us to do. So we take care of everything that's happening before, if that is the Simon Ruetzmann- ID verification of the customer we check them against sanction lists and political. Simon Ruetzmann- Exposure and we do the whole fraud assessment with internal and external tools and again our idea experience really, really comes into this year because fraud is evolving as well. And then we process the payment again with a very high conversion rate because we offer local payments. And then we do the settlement of the coins. So this whole process is what banks are doing. It's quite complex, but our partners really appreciate that we do the hard work and that they can then continue working in the blockchain world and innovate there while we connect the old world with the new world for them. I'm dumped to the next slide, please. So we've just been continue building our portfolio of partners. We focused really on the big end of town, but it's a long tail of the market because that's where most of the volume is. And if you think about it, those global exchanges, let's take a Binance, for example, it doesn't make too much sense to have local entities and local payments in all those countries. It's not scalable for one business. Banks can do that at scale so that the industry can piggyback on our licenses and our payments. So again, we're building the infrastructure, the plumbing of this industry. And I think that's really what the partners appreciate. And that's where also some of those partners have backed us financially in the early days. So we share this mission of really building the infrastructure and connecting the old with the new world. Dom to the next slide, please. Just an overview of our growth strategy. We really just want to go much, much harder into the execution of onboarding new partners, increasing our TTV. We are going into new Geographic expansion. I've seen that was a question from Usama. We'll get to that later as well. We really want to be more local. The localization of payments of our services and getting the required licenses in many, many more areas. Currently, we're working on LATAM, which is very big territory and has a very high crypto adoption. So we're setting up people on the ground to have those payments and licenses in these areas, certainly looking at more penetration into Asia as well. So there's a lot happening. And I think that's just going to strengthen the core of our business. I'm so sorry. Go ahead, Holger. Now, just to the last point, and Osama, you also asked, or it was someone else, I've seen the question about, are you going into other segments or verticals? Absolutely. So what we're doing is we really just do the conversion of your fiat currency in the safest way. and then we connect all those platforms out there today there are mostly centralized exchanges because that's just where the industry has has gone so far but then we've seen the emergence of nft platforms we've seen decentralized finance platforms um We've talked about the metaverse, whatever that eventually is, but the reality is we need to build a bridge to those use cases. And for banks, it doesn't really matter what the use case is on the other side. We do our bit on the way in and out, do the conversion the settlement of the currency into that platform whatever the platform is doing so we're creating these connectors we integrate with all those sectors blockchain gaming is another one which is emerging um and if you ask me we're just at the very very beginning so um if you look at the on the right side here um i think in total crypto today is a two trillion dollar industry. Apple, which is just one company, is a $3 trillion business. For everything that crypto can do and can replicate in the digital asset space, there is going to be so much more is my personal view. So we have set the foundation. We started with 50 people in, we came with 50 people into 2020. We're now 200 people. And I think we're now at full force to really go out there and sell much harder. and get our product into the market. So very optimistic. And with that, I guess I'm going to hand over to Shyam for financial perspective. Thank you.

Thank you, Holger. And hello, everyone. My name is Shyam Deo. I'm the Group CFO at Banksa. And I just wanted to share with you today, I guess, how the numbers are represented in terms of what Holger and Dominic have mentioned so far. So you've heard about the growth strategy and the focus that Max has had. And there's been certainly strong focus around the partner and volume expansion, as well as coupled with the market tailwinds, which has allowed us to achieve a record quarter of TTV in December for approximately $600 million. This is also translated very positively for banks in terms of a half year revenue number of 40 million. And as you can see on the chart on the right hand side, that approximately achieves close to 90% of the full year FY21 revenue in a half year period. Just moving to the next slide, please. Gareth J. So, in terms of financial highlights the top line has been a strong focus for banks in terms of acquiring new partners, as well as expanding the existing partner user base, and this is all translated into a very stable and expanding liquid asset profile for banks so. So as a December we had $26 million worth of liquid assets comprising of cash deposits and digital assets, and these are the funds that banks are utilizes to fund our trade working capital requirement to expand and grow the transaction volumes that you see today. In terms of the bottom line, the statutory loss of 3.1 million, this includes various non cash items approximately close to 4 million. This comprises of various provisions and share based compensation for management team as well. So just moving on, I do want to step through the three key statements. So starting off with the profit and loss, main point here perhaps to touch on is the net take rate, which is really the expression of gross profit as a percentage of TTV. The net take rate is at 1.9% and it's largely based on the geographic mix and the optimisation that Banksa has been able to achieve in the current period compared to the same period prior year. In terms of our continued investment in OPEX, Banksa has continued to invest in products, talents and systems. This has resulted in our OPEX spend increasing to about 17 million. However, this is in line with our our transaction volume also. So on a like for like basis, it represents about 2% each period of a total transaction volume. Employee costs remains a dominant feature, and we continue to invest in our team. So employee costs for OffOffX is roughly about 60%. And this is largely underpinned by our headcounts. Holger's mentioned we had roughly 200 employees. This is a 3X growth on the same time prior period. And finally, the adjusted EBITDA loss of 2.5 million. This period we're impacted by 3.8 million in terms of FX losses. And this is largely derived from the fact that Australian dollar depreciated against some of the major currencies that we transact with, predominantly Euro and USD. Moving to the next slide. In terms of the balance sheet, and I'll predominantly focus on the chart highlighted in the red text box. As I mentioned, liquid asset is our core focus. It's got a composition of those various items and it's stable and expanding at 26 million. In terms of some of the other key metrics to observe is the net working capital at 19 million. And moving further down is a quick ratio. This has come back somewhat to three times. And that's largely the factor of as the business is expanding, we're carrying greater liability associated with employee entitlements and tax provisioning, but still a very healthy quick ratio of three times. And the final point here is around the debt equity ratio of zero. And I think the key point here is banks at present point has a debt-free balance sheet. and that largely can be credited towards our liquid asset position, which we've maintained and expanded to then for it to be utilized to fund our trade working capital requirements. Okay, great. Thank you for the next slide. And finally, the cashflow. Great place to start on the cashflow is as of the end of December, we had close to 14 million off cash. This is a 4X growth on the same time prior period A key point to mention here is cash excludes deposits held with exchange, and deposits held with exchange are denominated in various fiat currency as well as stable coins, which banks utilise to fund, as I mentioned, our trade working capital. Should this be reclassified as a cash, you would have a situation where the adjusted cash from operating activity would be a positive representation of $1.5 million. So all in all, strong three financial statements for this period. And I'll pause there and I'll pass it on to Dominic.