CEO: Mark Binns
WSA: Good day from Wall Street, this is Juan Costello, Senior Analyst with the Wall Street Analyzer. Joining us today is Mark Binns, the CEO for Netcoins Holdings. The company trades on the Canadian Stock Exchange, ticker symbol NETC, as well as here in the U.S. over-the-counter GARLF. Thanks for joining us today there, Mark.
Mark Binns: My pleasure.
WSA: Certainly. So yeah, please start off by providing us with a history and overview of the company.
Mark Binns: Yeah, for sure. The Netcoin was started in 2016 by two brothers, Michael and Dominic Vogel, they’ve been affectionately termed the “Bitcoin Brothers” here in Canada. They saw a need in the marketplace, where it was actually fairly complicated and difficult for the average consumer to buy cryptocurrency by, you know, wiring money to foreign countries, dealing with online exchanges that were difficult for the average consumer and fairly primitive in nature. So, they created a software product called Netcoins, essentially Software-as-a-Service that they started installing in retail stores. So the average consumer or investor could walk into a corner convenient store buy $200, $500, and $1,000 worth of Bitcoin and receive it on the spot and walk back out. The software basically goes out onto the exchanges in real-time, buys crypto, puts it in a digital wallet that’s created by our software, and emails it to the customer. So the customer just needs an email address in order to walk into a store and get their Bitcoin and go home. And that’s where the company started.
And then, we’ve built out a team around those guys. I came on as the CEO. We raised $14 million at the end of last year. We did an RTO and went public. We’ve expanded our retail locations to 21,000 currently across Canada, the U.K., and Australia. And we’ve opened an OTC desk, which allows institutions and higher net worth individuals to buy much larger quantities at a minimum of $25,000 U.S. usually, but we do deals into the millions of dollars now. So we have two lines of business, retail and OTC, and we also list coins on our network for distribution; we put up the top seven by market cap, and then we’ve added at least 11 more to-date, Alt Coins, as you might call them that were interested in being part of our network for distribution. And that’s how we got to where we are today.
WSA: Sounds good. And so yeah, bring us up to speed on your most recent news, you put out some great Q3 numbers; you also started a partnership with Polymath.Yeah, absolutely. So the most exciting recent news is listings of coins. We’ve been continuing to add the coins as we talk about, and that’s tremendous value. To start with, the coins pay us a listing fee, which is the recurring annual fee. So it’s great from a revenue point of view, straight upfront, but it’s also great from a volume – transactional volume point of view. And there’re more coins on our platform, there’s more things for you know, people to buy and sell, essentially driving transactional volumes, and transactional volumes give us transactional revenue. And it’s a bit of a network effect, the more coins on our platform, the more valuable it is, the more people will use it, the more coins wanted to be on it, et cetera. And it’s a bit of a network effect, the more coins on our platform, the more valuable it is, the more people will use it, the more coins wanted to be honored, et cetera. So, the listings are going really well. And that’s in the last few press releases.
We also announced an expansion of our retail network with a partner called NeoSurf, the second largest voucher company in the world. And they’re going to bring us out to an additional 150,000 locations across 55 countries. With a plan to launch here in November, we’re essentially in soft beta testing right now. So that’s a big expansion of the retail network, big distribution. And then, finally the most recent news is we partnered with Polymath, who is probably the leading advisor for ICOs in the world to be essentially the OTC desk for their coin. So, you think of someone who works with Polymath, they go out, they do an ICO, they raise $25 million or $50 million. So we can help those companies actually sell off their coins, or their investors sell their coins, as they need to get converted back to fiat, through our existing OTC channel. So they’re a great partner. They’re going to drive us a lot of the business, and we’re just getting started with them.
WSA: Well, great. And what are the key trends that you are seeing right now in the sector, and how are you positioning the company through a platform to continue to capitalize?
Mark Binns: Yeah, I see three big trends in the industry right now. One is institution, two is Custody, and three is what I would call Regulated Retail. The start of that are institutions, you see J.P. Morgan and Goldman Sachs, and Fidelity recently getting into the game, you got Galaxy with Novogratz. The institutional money is flowing in crypto now and finding ways to create real institutional value. And because of those institutions, that’s why our OTC desk is becoming so popular. They need a good source of liquidity, whether loading up an ETF or hedge fund, you know, any number of reasons we can transact with those guys, and we have a very deep liquidity pool and global network already in place. And we can provide them with coin, and we can also help them sell coins. So we are in the right place to help these institutions.
And the second key set is Custody. These coins need to be custodied in somewhere safe, both for the institutions that are getting into the game and also Regulated Retail, which I’ll talk about in a second. So we’re establishing a custody arm and getting ready to launch coming up soon, and that is so when we do transactional institutions if they want us to hold the coins, we can.
And the third part of that is the Regulated Retail. What I mean by that is, in Canada, in the U.S., most of the wealth is tied up in consumer’s investment accounts, their traditional brokerage house; it’s not sitting in their checking account. Right now, through those investment accounts, they can’t trade direct crypto, can’t own Bitcoin, for an example. So we are using our OTC software on our OTC platform to create the back-end for traditional brokerage houses to stock up their currencies to their retail base, or their institutional investor base, as well. And part of that is also the Custody solution, because when we sell we execute deals for traditional broker. They’re not going to deliver the coin to their customer, no more than they would deliver an Apple stock certificate. These coins go into custody, they’ll be held safely, and then be told when the investor is ready to sell.
So those are some of the trends I see, institutions are coming on, custody is becoming important, and retail investors, they’re going to be able to buy crypto direct from investment account, it’s coming one way or another because the industry likes that, regulators like it, it keeps them safe and keeps the consumer safe. So we are tapping into those opportunities now at multiple levels of our business.
WSA: Great. And so, what are some of the factors that you feel make you guys unique from some of the other players in the sector?
Mark Binns: Well, I would say our positioning right now, we have a relatively low market cap sitting probably around $20 million versus the fact that we have a growing real revenue base. We are not a company that is trying to decide where our product market fit is, or you know, what our product is going to be, and how to monetize it. It is in the market, it is making money, it’s growing. Transactional revenues are growing and it’s pretty unique in the crypto space. We also aren’t tied to the price of crypto. So, our business has exploded over the past few months with crypto sitting at $6,200, $6,500 U.S. for Bitcoin, well down from the highs, because we’re not tied to the price. We’re a transactional business, we help people buy and sell, and whether Bitcoin goes to $4,000 or $8,000 or $9,000 next month, we’re still going to be helping people buy and sell. And we are in a good position. So we are uniquely positioned in the marketplace, I guess, you would say, not tied to Bitcoin, relatively low market cap versus a real business with product market fit, growing and escalating revenues, and we have a lot of upcoming catalysts that are going to help us drive our stock higher as well.
WSA: Sure, and perhaps you can walk us through your background experience and talk a little bit about who the key management team is?
Mark Binns: Yeah. So I am a sales and marketing guy and a software guy. Actually, I started my career writing software, tech industry back in the dotcom days; got some good startup experience, I got my MBA at Western. And, I really got interested in the business side of technology. So I spent most of my career building software or technology companies from a sales and marketing point of view, and then selling them. So what I got excited about with Netcoins is, it is a technology company, it’s been a fast and growing sector and space, and my expertise really is around building teams, finding the right product market fit for the for the company and their products, and then bringing it to market and growing and scaling businesses, and that’s what my past is.
And over here, we’ve added an amazing management team, which is a real differentiator. We got Dave Kennett as our VP of Sales, a long track record of success. He’s worked for me actually in the past in different businesses very successfully. I was lucky to be able to recruit him, because his previous company got sold to Apple. He is – one of his early claims to fame is he helped take auto trader from an offline magazine, to the online powerhouse they became and eventually sold.
Another key member of my team is Mitch Demeter. Now he’s our Bitcoin expert. He actually opened the world’s first Bitcoin ATM in 2013 here in Vancouver. There was literally in the world there was a lot of fanfare, you know, CBC came, all the news outlets came.And he turned that into a global business of traditional Bitcoin ATM machines. He then started a crypto exchange, and he eventually sold those businesses. He has been there from the start. He knows as much about Bitcoin and cryptocurrency and business model tied to it as probably anyone in the world. So we’re very lucky to have Mitch on the team.
And then finally, we have Michael Vogel, the Founder of that company running the technology side. And he has been in this business since the early days and has built this company from scratch, and he is still very involved in helping build the product going forward that we need to tackle the market. So we have a great team in place, and we are ready for the next wave up there.
WSA: Sure. And so, once again joining us today is Mark Binns, the CEO for Netcoins Holdings. The company trades on the Canadian Stock Exchange, ticker symbol NETC, and here in the U.S. over-the-counter GARLF. Currently trading at $0.11 a share U.S., market cap is about $13 million U.S. And before we conclude here, Mark, to recap some of your key points, why do you believe investors should consider the company as a good investment opportunity today?
Mark Binns: Yeah, I mean a quick recap, significant growth, we are moving into the United States soon, where the market is 10 times bigger than Canada. We’ve accomplished most of this just in the Canadian market so far. We are about to expand our retail network from 20,000 to 170,000 locations. We are setting up our dealer broker business to be the back-end for, even in Canada 172 regulated traditional brokerage houses alone, not to mention the U.S. We are continuing to bring on new institutional clients, and we are brokering, we are starting partnerships with the traditional brokerages to have them sell our very unique retail network as well as add-on to listing on their platform
So there’s tons of catalyst for growth. We are just at the start. We are not tied to the price of crypto. We make money on every trade. So that’s why it’s a great investment at this point.
WSA: Well, we certainly look forward to continue to track the company’s growth and report on your upcoming progress. And we’d like to thank you for taking the time to join us today, Mark, and update on investor audience and Netcoins. It was great having you on.
Mark Binns: My pleasure. Thanks very much for your time, Juan.