Abaxx Technologies (OTCPK:ABXX.F) FY Conference Transcript

Summary of Abaxx Technologies FY Conference Call Company Overview - Company Name: Abaxx Technologies (OTCPK:ABXX.F) - Industry: Commodity trading and technology - Focus: Development of software tools for commodity traders and finance professionals in Canada [1][2] Core Points and Arguments - Market Inefficiencies: The company identifies significant inefficiencies in the trading of commodities, particularly metals, due to outdated market structures [3][5] - Unique Positioning: Abaxx aims to be a full-stack commodity exchange and clearing house, focusing solely on commodities rather than diversifying into other financial products like crypto [5][6] - Regulatory Milestone: The company is one of the first globally regulated commodity clearing houses since Dodd-Frank, with operations based in Singapore [7][8] - Flagship Products: - Liquefied Natural Gas (LNG): The world's first physical futures contract for LNG, which is expected to become a major commodity market [10][11] - Battery Metals: Contracts for nickel sulfate and lithium carbonate, addressing the lack of physical pricing in these markets [13] - Gold Contracts: A kilo bar gold contract tailored for the Asian market, differing from existing US-based contracts [14] Market Dynamics - Commodity Market Characteristics: The commodity market is described as "sticky," with established contracts holding significant market share, making it difficult for new entrants to gain traction [12] - Growth Potential: The total addressable market (TAM) for LNG and related products is estimated at 300,000 average daily volume (ADV), with current trading at approximately 1,000 ADV [19] Revenue Model - Trading Fees: Revenue is generated through fees for trading and clearing contracts, with potential high margins due to the fixed cost structure of exchanges [18] - Future Revenue Streams: Plans to expand into data services and technology solutions, including a SaaS model for digital title management [15][36] Technology and Innovation - Cloud-Native Infrastructure: Abaxx operates as a fully cloud-native exchange, leveraging modern technology for trading and settlement processes [22][23] - Tokenization and Real-Time Transactions: The company is focused on real-time tokenization of assets, addressing issues of legal finality and privacy in blockchain applications [24][25][27] Competitive Landscape - Competitors: Major competitors include CME, ICE, Hong Kong Exchanges, and Deutsche Börse, but Abaxx differentiates itself by focusing on underdeveloped commodity markets [38][39] - Human Capital Advantage: The company boasts a strong team with extensive experience in commodities, which is seen as a competitive advantage over larger, established exchanges [40] Financial Position - Market Capitalization: The enterprise value is approximately $1 billion, with significant backing from institutional investors [30] - Funding and Runway: The company has a solid balance sheet and over a year of runway at current operating costs, with ongoing efforts to ramp up revenue [31] Additional Insights - Education and Outreach: Abaxx emphasizes the importance of educating the market about its products and the commodity trading landscape through initiatives like podcasts [42] This summary encapsulates the key points discussed during the Abaxx Technologies FY Conference Call, highlighting the company's strategic focus, market positioning, and growth potential in the commodity trading sector.