AGM 2024

Mar 20, 2024

Good afternoon, ladies and gentlemen. Before proceeding with the formal business of the meeting, thank you for attending today. I would also like to thank those joining us via webcast. Once the formal business of the meeting has been completed, management will provide an update on the business, after which there will be an opportunity to ask questions. Please reserve your questions until that time. We have the following items of formal business to address at today's meeting. Presentation of the financial statements of the corporation for the year ended October 31st, 2023, and the report of the auditors. Appointment of Grant Thornton LLP as the auditors of the corporation for the ensuing year and to authorize the directors of the corporation to fix the remuneration. Election of the directors of the corporation for the ensuing year and transacting such other business as may properly come before the meeting or any adjournaments or postponements thereof. Thank you, ladies and gentlemen. I would now like to turn the meeting over to Chirag Bhavsar, Chair of the Board of Directors of the corporation. Is that yours? Yep. Thank you, Margaret Kingerski. Good afternoon, ladies and gentlemen. Welcome to the annual general meeting of shareholders of Currency Exchange International. I'm Chirag Bhavsar, the chair of the board of directors, and I will act as chair of this meeting. Before proceeding with the business of the meeting, I'd like to introduce CXI's board of directors, and I ask when I call your name, please stand. Joe August. Mark Mickleborough. Jim Sardo. Chitwant Kohli. Stacey Mowbray, and Daryl Yeo. Unfortunately, Carol Poulsen could not be here in person this year. Also joining here are several members of the CXI's management team. Since there are so many of them, instead of calling each one out one by one, I'll ask them all to stand at once. All shareholders. Yes. Okay. I will now call the meeting to order. In accordance with the bylaws of the corporation, I shall preside as Chair of this meeting. With the consent of the meeting, I shall ask Margaret Kingerski, the Secretary of the Corporations Act, as secretary of the meeting. With the consent of the meeting, I shall ask Arlene Arellano and Anup Das of Computershare Trust Company of Canada, the corporation's registrar and transfer agent, to act as scrutineers to report on the shareholders present in person and the number of shares represented in person or by proxy at this meeting. At any adjournment to compute the votes on the polls taken or ballots cast at this meeting or any adjournment, and in each case to report to me as Chair. The scrutineers provided me with a preliminary report regarding shareholders' attendance and representation at this meeting. The scrutineer reports that there are present at this meeting, in person or by proxy, 51 shareholders holding 3,498,453 common shares. Accordingly, I declare that the requisite quorum of shareholders is present, and I declare that the meeting is duly and properly constituted for the transaction of business. I direct that the scrutineers' complete report on attendance be annexed to the minutes of the meeting. The notice calling this meeting and accompanying management information circular, form of proxy, and the consolidated financial statements of the corporation, together with the auditor's report of the financial statements, have been mailed to all shareholders of the corporation. The corporation utilized the notice and access mechanism under National Instrument 54-101, Communication with Beneficial Owners of Securities of a Reporting Issuer, and National Instrument 51-102, Continuous Disclosure Obligations. Additional copies of such materials are available at this meeting and also on sedarplus.ca, envisionreports.com, and on the corporation's website. An affidavit of mailing and the documentation required to be mailed under the notice of access provision has been provided by Computershare Trust Company of Canada to the corporation, and I direct that this affidavit be annexed to the minutes of the meeting. Accordingly, unless there is an objection, I'll dispense with the reading of the notice of the meeting. Go ahead. Technical difficulty. Technical difficulty. Always love them. I propose to conduct a vote by show of hands on the resolution put to the meeting for the election of directors and the appointment of auditors. In order to expedite the business of the meeting, I've requested that certain persons make and second the formal motions, and I'll call on these persons at the appropriate time. Shareholders may make comments specific to these motions prior to the vote, but should hold any comments on general matters until the question period to be held following the presentation. The financial statements of the corporation as of October 31, 2023, together with the report of the auditors thereon, have been mailed to all shareholders of the corporation. It is not proposed to ask the shareholders to approve the financial statements which have been presented before the meeting. However, after management's remarks of the operations of the corporation and after any formal business of the meeting, there will be a question and answer session. We will now proceed with the appointment of the auditors of the corporation. I've been advised by the scrutineers that the proxies deposited for the meeting have been overwhelmingly voted for the appointment of Grant Thornton LLP as auditors of the company. I would ask Beatrice Hosneli to move the following resolution. I so move. May I have motion seconded? Mr. Chairman, my name is Margaret Kingerski, and I second that motion. I will now call for a vote on the motion. All those for the motion, please raise your hands now. Against. I declare the motion carried. We'll now proceed with the election of directors of the corporation for the ensuing year. The number of directors to be elected at the meeting is nine. I now declare that the meeting is open for nomination for the election of directors for the ensuing year or until their successors are elected or appointed. I now ask James Devenish to move the motion nominating the persons as specified in the management information circular delivered with the notice of the meeting. My name is James Devenish. I nominate Joseph August, Chirag Bhavsar, Chitwant Kohli, Mark Mickleborough, Stacey Mowbray, Randolph W. Pinna, Carol Poulsen, V. James Sardo, and Daryl Yeo as directors of the corporation for the ensuing year until successors are elected or appointed. I now ask Ahmed Agmal to second the motion. My name is Ahmed Agmal, and I second the motion. Are there any further nominations? Since there are no further nominations, I hereby declare the nominations closed. I ask Paul Ohm to move the resolution electing those nominated as directors of the corporation. My name is Paul Ohm. I move the following resolution. It hereby be resolved that the nine persons nominated by management be elected as directors of the company to hold office until the close of the next annual meeting of shareholders or until their successors are duly elected or appointed in accordance with the articles and bylaws of the corporation. I now ask that Greg Page second the motion. Hi, my name is Greg Page. I second the motion. I will now call for a vote on the motion. All those for the motion, please raise your hands now. Any against? I declare the motion carried. Is there any other formal business that may be properly brought before this meeting? If not, that concludes the formal business brought before this meeting. I wish to thank you for attending, and I'll ask for a motion that this meeting be terminated. I move that this meeting be terminated. Thank you, Katrina. Sorry. Need a second. I second that motion. Any to the contrary? I hereby declare the motion carried and the meeting terminated. I would now like to ask Randolph Pinna, President and CEO, to address the meeting regarding the performance of the corporation. Thank you. Bill's going to drive the slide. I don't need the microphone. They say I talk too loud already. Can't hear me now anyway. You can just use the arrows, yeah. Just use the mouse. To begin with, a lot of you are long-time shareholders. Some of you are newer shareholders, and I want to thank all of you for being here and introduce the team that we've had. As you know, a lot of these directors have been on our board for some time, and we have some new people. One of them is out west and was not able to make it. We have an experienced board of directors, and we have a very experienced management team, both from an operational point of view as well as what they call in banking second line of defense, which is the risk and compliance, governance, and so forth. We're very proud to have a great team of people with a low turnover. As you know, our primary business is foreign exchange. That includes banknotes, international payment, and check processing. Why banks and corporations utilize our group is because of our software. While our service is very good, number one is actually the software capabilities because of its integration with live databases around the world, stopping risk and compliance issues, such as right now, if you type in the name of a certain person and they're on a watch list somewhere else in the world, it'll actually check it live. 21 different lists, and it makes us have a competitive advantage over the other providers. Our processing center is run by people here in Toronto as well as in Florida, where in which we actually facilitate all the foreign exchange transactions. How we get to our customers, of course, is through our software, but we have two models. Our core business, both in Canada and the U.S., is in a wholesale distribution model where we go to a financial institution or a corporation and enable that company to provide the services of foreign exchange, again, in a safer manner, fast manner, and of course, supported by an experienced management team. We do, only in the U.S., have a direct-to-consumer business, and that's where people don't need to go to their banks. They can actually come to our own branch offices. We're now up to 42 branches of what we call company-owned stores, where we have our own leases, our own staff, and we keep 100% of the revenue that's generated. We also do have an agent program where we utilize their location, let them pay the rent, let them pay the staff, but then it's a revenue model where we share that. Of course, the online system where we don't even have a store, it's online and you can actually place an order and get the bills to 90% of the U.S. population where we can deliver it to your home and office. As I was starting to tell you some of the advantages of us is our software, our online capabilities. We have a great supporting team that, again, financial institutions have dumped large, some of the biggest banks in the world, for a small company like ourselves because of our software and its integration to all the Interpol and all the different lists, like I said, 21 of them. We developed. Paul was part of this development team. Paul's been with the company for, what, 17 years now. We developed our proprietary compliance verification system. CVS, at the heart of it, is what's called Live Stop. Live Stop is checking these lists, putting it against the rules that the client puts in, which is maybe above the government rules. The government rules, of course, are embedded in the systems, hence keeping them in line with the law. Certain types of financial institutions, like a foreign-owned bank that operates in the U.S., may prescribe its own rules from their home country on top of the U.S. rules. The CVS system will have all those rules, and then when a transaction happens that exceeds it will stop the transaction live, not allowing it to go forward, and therefore may ask for additional information. Exchange Bank of Canada is our wholly-owned subsidiary here, and we're going to talk further about Exchange Bank, but that allows our total infrastructure there. We've embedded a lot of risk and compliance within our group because of our bank, and it has enabled us to win major contracts from large institutions because they get the comfort of being a bank group. As we said, I've told you we're licensed in 41 states. We can reach over 90% of the U.S. population. We've integrated into companies like Fiserv, Jack Henry, and Astra, where in which they, a financial institution namely, can use their core system without having to toggle over to our system and get the benefits of our software through their system. That has been very successful on our payment front, especially. I've told you about our company stores. We're, I think, now up to 42 of them. We have our own company stores at key areas. We're in all 10 of the markets of the highest amount of inbound and outbound U.S. tourists going out and foreigners coming in, such as places like Philadelphia, New York, Chicago, L.A., Miami, et cetera. We've had a great, good year. Our assets continue to grow. Our equity's growing. Our revenue's growing. You can see it broken down by our two business lines, the banknotes and payments revenue, and there's our EBITDA. We have, as I said, a great leadership team here. You can see these graphs show and illustrate the continued growth that we're focused on for delivering return for our shareholders. These are some additional statistics on our shareholder equity, stock prices, company locations, airport locations, and wholesale customer relationships. Quarter-by-quarter statistics. We continue to grow our network with expansion of our wholesale customers as well as our retail locations. We have new locations coming in. The airports have been a really big success for us with the addition of these agent relationships where they're paying the rent. They're dealing with the government because an airport authority is like a heavy regulator. They're very tough to deal with. We stayed away from that. We did test in one market in Orlando, our headquarters, where we have our own direct relationship, and I can attest that they're like dealing with the government because they are kind of like the government. Our expansion with additional airports will be focused on agents. We tested that model. We have renewed our lease there because it is our home base, and it is making a little profit, but the work is not worth further expansion. Our primary customer is ICE, International Currency Exchange, which is dominant here in Canada, has all of the Canadian airports. It's the recommended net model of going forward. A new entrant, which has been a customer of ours called The Change Group, has just opened at Vegas airport, so we are a supporter of that. It's an interesting statistic to give you today, is that right now, with the exception of the CIBC, one, maybe two booths at the Toronto Pearson Airport, so take that out, and ICE is in Toronto as well. Every airport in North America, U.S. and Canada, uses CXI, either through our agent program or through the wholesale program where we wholesale ICE. When ICE exchanges money in Vancouver, that is actually those pesos came from us, where we source that from Mexico to deliver to their locations to sell to customers. That is a real focus of our business. Again, some more statistics on our financials here. This is our strategic plan. Every year, our management team gets together early. We've already started the process. We've engaged in the last few years an expert on strategic consulting. Between Gerard, myself, and the senior executive team, including some mid-management, we really survey ourselves and what we feel is the strategic direction we should go. We compound that with feedback from the market, looking at the industry, looking at the trends, emerging trends, and so forth, and we present to the board in June. Our proposed strategic plan for the next three years. Of course, the board questions, gives us what they call up here in Canada, often gives us challenge as far as whether this is good, valid direction to go. Are these numbers correct? Is this the right use of our capital? Because our focus has become clearer and clearer on our use of capital and the return on the capital being deployed. We continue to see that these four areas of revenue growth, and of course, the fifth down here at the bottom, ensuring you have the corporate infrastructure of people and systems to support that growth continues to be our plan. Again, this year, we're looking at all the fintechs coming up and the fear that money cash is going away. Although, luckily for our cash business, cash usage has resumed its increase. It had been going down, and then since the pandemic, well, the first year of everybody was afraid they were getting COVID from money, that was one year that it went down. Since then, it's been going up, and that's been reported by the five major markets we look at, which is the U.S., Canada, the U.K., Mexico, and Australia. Cash continues to be our primary focus of both CXI and Exchange Bank. Our preferred delivery model is right here. That's our sweet spot. We service over 22,000 banking centers in the U.S., and we service several larger institutions here in Canada, and we have just opened a new relationship with a big bank right around our corner here. We are going to be expanding our cash services with additional banks both in the U.S. and Canada. Internationally, our focus is with Exchange Bank. As you know, or most of you should know, we have a unique advantage. We are the only Canadian bank, and it blows me away to say, "What? Royal Bank? The biggest bank in Canada doesn't get their money from the U.S. government? Nope. Do they get it from their subsidiary, right? Do they have a bank in Los Angeles? Nope, because you have to be approved by the U.S. Federal Reserve System to be a distributor of dollars around the world because the Fed is very cognizant of where all their dollars that they print go and where, of course, where they're coming. They're coming back where they have. The license is called the FBICS, Foreign Bank International Cash Services program. There's only three banks authorized to do that currently, and our bank, Exchange Bank of Canada, has that unique advantage. It's an asset that you don't see on our books, but that allows us to sell dollars on behalf of the U.S. Federal Reserve globally. We see a lot of growth opportunity for Exchange Bank of Canada in that marketplace. Our payments business was initiated as a diversification of the fear that cash could go away one day, and so we continue to do that. Exchange Bank of Canada goes corporate by corporate, and we have recognized looking at CXI, who doesn't go corporate by corporate. CXI goes bank to bank to bank, who has a book of corporation, and enables those banks, especially the small to mid-size, when they don't have the infrastructure, to do international wires with the safety and security of our software and benefit and allow them to compete with the Bank of America and the Wells Fargo of the world by using that. That business, by integrating into their core with the Fiserv and the Jack Henry & Associates, has enabled U.S. banks. Now Exchange Bank of Canada is focusing on doing the same with smaller to mid-size financial institutions here in Canada. We'll never win a Scotiabank or RBC payment customer. However, the smaller banks, even the new one that just opened up on Adelaide, like Canadian Western Bank, could be a bank that we could actually do business with, utilizing that integration to that core banking system, enabling that bank to improve upon its capabilities on international. Then our consumer business. It's been a very successful part of our company, represents about 1/3 of our total revenues and profitability, and it has three pieces to it. As I said, the stores, we have our agents, and we have our online business. In the start of this last fiscal year, allowing me to continue to focus on the overall group strategic direction and strategic transformational opportunities that exist, we appointed three managing directors, two of which have worked with me for close to 20 years. In fact, Matt Shill has worked with me for over 25 years. Matt is now running the consumer unit. Wade Bracy, who would have been here, but unfortunately, his daughter just had appendicitis, and so he wasn't able to make it today. James Devenish, who's been our man. He's been with the bank over four years, is now our man, and has been our managing director for the last year of Exchange Bank of Canada, allowing me to stay focused. That goes to this corporate infrastructure, ensuring we have the right executive team and the right systems to continue to grow, enable us to double or even triple the company. Again, this one provider, one platform has been extremely successful for us in the States. We continue. While I use Jack Henry and Fiserv because they are comfortable with me openly telling people, we have also integrated with probably five other systems that are proprietary to the financial institution. That allows them to have their one provider, which is us, CXI, utilizing their one platform, which is theirs, even though their platform is using our platform, but it's integrated. From the usage, from the day-to-day usage, that has been the secret sauce for our continued growth in payments and in bank notes. I started telling you about the FinEx program. We are continuing to grow that business. It's on another slide, but we just today luckily have our executed agreement with the trust company that now has enabled us to get customers that have been afraid to do business. Ever since the bank failures in the U.S., credit tightened heavily, and we saw volumes drop. You'd recognize it from the banner year we had before, and this year you saw that our international revenues have gone down a bit because our banks overseas recognized that Exchange Bank, its assets are like $25 million. In trade size, typically on a bulk shipment is $30 million. The trade exceeds the size of the bank, and that's tightened down. We have four banks all ready to go. They've even been onboarded, waiting for this multi-billion-dollar trust company to stand as part of these transactions, providing that credit comfort that they needed. We'll continue to focus on the sales and trading with these banks, establishing central bank relationships. Just like we have a central bank relationship with the Federal Reserve, Mexico, Europe, and select other countries are on our list to continue to grow our international global bank note business. Our consumer, I already explained this to you. These are airport locations. This is our top one, JFK, but Fort Lauderdale just came on. I mean, sorry, Philadelphia is the new. That's the one that just came on. We're continuing to grow that through the agent relationships. The beauty there is we're not paying any rent or payroll. If you're looking forward, a lot of these locations, they just came on about two, three months ago. A lot of these are not in an annual number. We're talking about 2023 numbers. There's a lot of stuff that just came on. I guess that's why Philadelphia is not on here, because it just came on. As someone here from Philadelphia, they know that's a very big international airport. Looking forward, we will have new revenues to continue to allow us to keep up the good double-digit growth that our group has been doing. We will continue to selectively add our own stores. We're very cautious about our store selection. We don't like high rent. We don't like a ton of payroll seven days a week. However, you do get to keep the whole margin. You don't share the spread. The fee income, which is typically a $5 handling fee, is 100% ours. The bad news is you got to pay the rent every month. We are continuing to add locations. Our newest location will be opening next month in Buckhead, Atlanta, if you know that area, which is an upscale part of Atlanta, Georgia, a new major market for us. We will selectively expand. We're looking at places like Boston or more in New York, which is another great market. We'll continue to be selective in our approval of this. When the unit, this consumer unit proposes, it has to actually present the business case to the executive team and get sign-off from the executives and myself before we continue to grow that. The online business is easy to expand because it's online. Where you invest into that is through integrations to travel companies that book travel and want to co-sell a foreign currency exchange transaction and do some revenue share there. In advertising, our investments with Facebook and other online platforms has proven, and we've continued to invest into that business. We see this as a huge part of our company going forward, and it's a diversification to the bank unit. If all the banks merge and there's only one bank, we didn't have that, we'd be in trouble. By having our own network distribution to consumers is definitely a part of our strategic vision. These are what some of these stores look like. This is our only company-owned airport location. I'm proud of that one. It's the first time that I actually, instead of being nice in sales, I basically was yelling at them saying, "You're in Orlando Airport. You don't have a currency exchange." We finally made a deal. The reason they didn't have a currency exchange is they wanted too much, and we made a deal. Again, it makes a little money. It's not hugely profitable. We're not going to continue to try to chase airports because we have a great airport operator that we have a great relationship with, and we will be encouraging them to continue to grow. The new entrant Change Group from overseas has just opened in Vegas. They actually are just literally opened up in last week. We will see some continued growth in airports. The company-owned stores are typically in shopping malls. This is one of our newest ones. It hasn't even been open but a couple of months there in the Philadelphia area. This is how a store looks. It's branded with our brand. It conforms to the mall's needs of not having too much signage, and so it's been successful. These are some more of the agent models. These are the locations there. Surprisingly, they are paying. We didn't buy that bus. They did. That little bus is cool because it's how they. If you've been to Newark, it's a big airport. They literally will drive to the gates that are leaving, and then they have another one that drives down to arrivals and stuff like that. The local airport operator, and that's why we love the agent, is because it's run locally, and they know how to maximize those locations. JFK continues to expand. We're now in terminal 4, terminal 8, I think terminal 7. They do the build-out. Of course, our marketing department approves of the usage of our signage and display. Of course, the airport has to approve, too. It's been very successful, and we will continue to focus on this type of growth for the future. Back to the payments here at Exchange Bank. We are going to continue to focus on our software. We have our EBC-FX. I told you about how we're going to be doing integration with some of the domestic financial institutions here in Canada as well. Same reason why they like our system. They like the fact that we're a bank processor, and it will continue to allow Exchange Bank to grow. This has been a big focus. Hence, yes, this last year, we've had a hell of a lot of costs with consultants and implementation costs and so forth. I'm very proud that Gerhard has implemented Oracle NetSuite, which has been an eye-opener for the management team. We now have live data. Gerhard doesn't like to call it a report. He calls it the dashboard because just like in your car, you can see where you stand live. He's very proud of this, and we all are now getting very good at using it to get live data of what's happening every day. We literally get a daily stat showing how much money we made, where it came from. We can drill down to each store. You can drill down by currency. It's quite awesome. We are continuing to implement our updated treasury management system called Kyriba. Similar to NetSuite, it allows for more automation and more real-time data to help us manage the foreign exchange risk that does exist by buying positions, selling positions, and owning foreign currency, which need to be mark-to-market every day because our auditors, that we just elected, make us report every day a mark-to-market on all of our foreign currency positions. This Kyriba system will automate that even further. That's being finished this year as well. There'll be a little more cost in implementation this year. However, the heaviest lift, going from the old system, which was the GL system we had from day one of this group to just recently, now that was a heavy lift. There was, as you saw, some charges where we had to write off some unreconciled items. Now we have a clean sheet going forward, and we're operating on the best system that we feel is for our company. I already told you about the three managing director structure. I love that. It doesn't mean I have less work to do. It actually allows me to focus on what I like to do, which is identifying opportunities, transformational transactions that can really potentially double the company if we or I am successful in creating that transaction. We are focused both at CXI and Exchange Bank on opportunities to improve the return for us shareholders. There's our historical stock price, 6.4 million outstanding. I personally own 1.3 million. A little more than that actually. We are a tightly held company. Some shareholders say there's very little activity in the trading of that, but we are a public company. There it is, 50% is probably institutions, 28% is management, and then there's individuals that own it, and that makes up our overall group. We're flush with cash. It says our debt is CAD 3.7, but we have over, I think, about CAD 40+ million in credit facility, which will allow us to flex up. Like this summer, we're expecting a very busy summer again, touch wood. Nothing, no COVID to happen again or anything like that. If you've been traveling like I have, you'll know it still is extremely busy. I just flew back from my personal trip, packed plane, airport, both in Toronto, both where I left from were packed. It's an indication that we will have a very strong year this year. We're now ready with the systems, the people, and the structure in place. Here we go. It's a recap of what we've done. Most of you know, but some of you may not know, we have recognized as one of our uses of capital, we feel it is a why for us, the current value of our stock, in our opinion, is under the intrinsic value of the company, and we are continuing to try to buy as much stock as we've gotten approved there. It's been well-received. There were some shareholders that would call up, potential shareholders, "I want to buy, but why haven't you bought your stock? You've got cash." The board has approved that we are authorized to continue to buy back our stock. The amount of stock is limited to what has been approved by the Toronto Stock Exchange. Again, a recap here. I'm not a good read-off-the-page. I'll let you read if you want, but I'm here really to answer your questions. That, I think, concludes my presentation on CXI, what we're doing, and kind of where we're going. I do welcome a very open conversation. One year we were here, and it was one of the funnest times. It was about the same amount of people, but they put us in a boardroom that had a huge round table, and we all sat around the table and we all started talking business. Even though you're all facing me, I still open it up to good or bad. Please open up anything that's on your mind because we're all owners of this company, and I believe we're all focused on the growth going forward and the return that that'll generate. Any questions? Yeah. Jake, I guess on the retail business with the agent issue for helps. Like the agent model is kind of COVID result of COVID. Over the next few years as those changes maybe mature and we get well past COVID, do you anticipate any changes to the rent structure you might have in your company-owned branches or in the agent relationships? Are those guys coming up for renewal with the airports? Is it going to be more competitive? How do you see those pieces sort of? It's a good question. We typically negotiate in advance. We normally sign a 4-year lease, and we normally go for 3%-4% raises on price increases. Luckily, it's a small market in the banknotes world. I talk to our competitors, and they talk to us, and they say, "Why are you so cheap? We always charge 10%, 12%, and you're still at 6% or 7%." We listen to each other, and I may or may not listen or do what they're saying, because they think we should raise our prices, which is something we every year do an annual price increase. We do that. We do have reasonable 3%, 4% price increases on them. The whole industry now is trying to do this revenue share model with the landlords at airports because it works. How an agent started with the airports was JFK called and said, "Vendor who's been here 20 years," the UK name. I'll just out of respect, won't call it out. "But they're not here anymore, and we are accepting proposals." I told them, "Well, don't expect one from us. I recommend ICE." "Oh, no, we know ICE, but we want another bid." I said, "Well, we won't give you one, because if you want us to bid, I'm not going to pay the rent." "What?" I said, "It has to be a revenue share. If you had the model that I envision, your operator would probably still be there. But they went out of business because all the landlords, like you, kept charging a ton." The JFK minimum rent requirement pre-COVID was $5 million a year to operate at their airport, minimum. That's why they charge 13%, 15% in the exchange rate, because they got to cover the rent. I said, "But if you want a model that I think will be very successful and it'll enable the long-term, you'll never have this issue to happen again, because if COVID happens again, everybody feels the pain, but it won't put the company out of business." It's a revenue share between the airport, the retailer, and ourselves. Yes, we're still charging 13%, 14% because the airport wants a big chunk. I got a call after that first year from them in November saying, "We had the best, most profitable year at JFK ever for currency exchange." Now, yes, it was also exacerbated by the bounce back was huge, as we all saw in our financials. I just told them, "Remember that in February," because in February, it's a quieter time, shorter month, so there's less days of profitability. I said, "But overall, this is a model that's sustainable." Our directors, they said we should variabilize our business as best we can, so we could go up and down with the wave of the world, as opposed to when it's great, we're making more, and then when it's bad, we're actually wrapped. that model is the focus of our group. that's why we're really having this agent model. will they try to say, "I want another percent or so forth"? the answer is, well, do you want to charge another 1% to the consumer? it's for a collaborative approach. I don't know if that answered your question, but it is the strategy and the conversation we're having with landlords saying, "Do you want this service?" They all do. Malls like it. The airport based in an international. That's how I got in L.A. I said, "What is with you? You're like the biggest international. Miami and Orlando are the biggest spots. You don't even have it." They want it, and malls really want it because it brings cash into the store, brings people to the mall. Especially the foreigners, now they've exchanged their 1,000 GBP, they got $1,500, now it's worth $1,300. They go, "Oh, honey, look at the earrings. We're on vacation." They love that. I don't think that the profitability of our consumer unit will be hurt at all. I think that model is the right model for the long term. Is there a clip of renewals or something? I don't know if next year or 2026 or. Well, they've been popping up as they go. JFK was first. Because normally airports do five-year leases. For the next couple of years, I don't see any deviation. Like the Philadelphia we're just starting. San Francisco, believe it or not, just started. Atlanta went with ICE. Both of those are ICE's newest locations where they're a wholesaler. For us, it's not for us to be into that because they took care of it. They sorted it out with the landlord, and we are just a wholesaler. We do reasonable price increases each year, because guess what? All these guys, the management want a raise every year. That's just the natural evolution that with inflation, costs will go up slightly over time. Does that answer the question? Yes. Thanks. Good question. Any questions? Jason's been a shareholder for several years, probably 10 now, right? Yeah. We appreciate the longstanding shareholders. Maybe someone newer may have a question. Please feel free to, good or bad, if you have said, "What the hell are you doing in here?" Yes, sir. Okay. Well, Scott Jones. I'm a newer shareholder, I was here last year. Anyways, with regard to cost, I know you're probably sick of answering the cost question, but let's go. In the first quarter- In the quarter you most recently announced. Okay your losses and shortages were, let's say, quite a bit less. Correct. Were they where you want them? Obviously, you want them at zero. Were they, let's say, at budget? Or what do we expect going forward? We had in the year previous, because of the boom time, and then the overnight shipper caught on to what's in these boxes. There was a ring of people. Literally, it was a group of employees that were stealing. I don't want to call out their name, but there's only two major overnight shippers. Because we do, unless it's a big shipment, then it's armored. Otherwise, it comes in a box. They had this ring in their hub. Luckily, we were able to put an end to it totally and catch it because the different police, the state police, the federal police, and then their own security all caught on because they were taking the currency and exchanging it with our customer bank. We were able to get the whole trail all the way down. They didn't want to just do a one-off. They wanted to bust the whole ring. It took a while, which was painful for us. Another large financial institution that, it's small to their business, but they have this into their overall group, but they had worse losses than us. That has stopped. We do budget for losses every quarter. Another thing is we deviated. We were 100% with that one that had the problem, and we have switched to another, not just because of the diversification and trying to spread it out so it's not as clear. It was also because they gave us a much better price. That's why you've noticed our volumes continue to go up, but our shipping leveled out. Yes, we anticipate that that loss level is more like the norm. We actually budget a little more from that because we had such a loss history. It was an improvement big time. The other thing that we had last year that we didn't have this year was we had to clean up the GL. Because when we're on the old system, there was items that we were still chasing, trying to get. You owe us. We shipped you GBP 5,000. Your client didn't credit our account, whatever it may have been. We just, instead of annoying the customer, maybe having them stop the service altogether, took it on the chin and just ate that so that Gerhard wanted clean books going forward, reconciled daily type thing. That's a good point you noted. Yes. It's now at a reasonable level. We hope for none. I feel when someone takes GBP 5,000, I want to know who the hell did it. We will not let rest on our laurels because, "Oh, it's within our tolerance." Any theft will not be tolerated. If there was somebody in our group, they'll be fired immediately. You'd say at or below budget for the last year? It's correct. Okay. Correct. Our fraud manager is also appointed. Yes, that was another thing. We hired someone that actually within our retail unit that knew the business very well. Strangely, he's from Hawaii, and he wanted to come to the mainland anyways. He's a great guy, and he's working with Dennis, who runs our risk office. Dennis is right here tonight. He's Chief Risk Officer, and we've empowered him to have a resource to really crack any fraud capability and, most importantly, stop potential issues going forward. He helps with that ability. For the amount of money we had to lose in the last year or two, you could pay for that guy three times over. It's a good question. Thank you. Any other questions? This is the conversation I love. Yes, sir. Adam, though. Yes. Can we talk about the Canadian payments business? Yes. Maybe some of the puts and takes there with performance and how you're kind of thinking about that segment moving forward. Yes. Well, that's been a big focus of ours. We recognize the competition that these have taken some customers, which we saw this last quarter, as well as to keep those other customers, we've had to compress our margins. That has hurt us, and that hurt our overall group because Exchange Bank continues to lose money. That is a focus of ours. We have put a team, like an action plan around how we're going to diversify the revenues to cover the cost and get it into profitability soon. I started, I was telling you through the presentation, the main thing we're doing different is instead of dealing customer by customer, we're going to the banks themselves. Sure, we get less margin, but if we can get a group of corporates and not have the credit risk, because we did experience a loss, a fraud that was sizable. That's the bad thing about payments. Transaction sizes are big, and if it's a fraud, then it's a big hit. that whole top model. we're diversifying into the integration with the financial institutions. even we found a fintech in Montreal that will allow us to be more efficient in taking on more customers. that business is under review, and we're not closing it down or anything like that, but it is a focus of ours. The bank note business is continuing to grow, and we now, with our trust account in place, the international revenues will be very noticeable in the next few months. It will take about a month or two to operationalize the actual trust account. Each new financial institution not only has to be onboarded by us, but the trust company has to go through and actually onboard because they set up a trust account per client. Of course, that's how they make their money. We will see that EBC should go into the green sooner than later, basically. We're very focused on that. The payment part of EBC is the one area that's been sticking out like a sore thumb for all of us. Thanks. Just one quick follow-up. In terms of the trust companies, the trust accounts, how should we think about the timing of that and how that starts to work its way through the business and reflect in the financials, et cetera? Good question. Again, it's going to take probably up to two months at the most to operationalize. We've already, with four banks, I think all four, but it's not in the final stages, but a couple of them are already approved. It's just now the trust account getting set up. Within two months, you'll see new revenues coming in. The existing customers will be back because once we show them this, they will get comfortable and resume the higher volumes they used to do. Thank you. Yes, Neil. Again, thank you. The board and the management team for being good stewards of capital. As a shareholder, I very much appreciate it. I have a few, so. Okay. Fire away. All right. First one I saw, I think, there's a partnership that was just announced with the Golf Group in, I believe, in the U.K. Along those lines, are there other partnership opportunities, be it with national vendors, maybe Travelocity bookings or anything along those lines, that the company is working on to extend leadership in the foreign exchange area? Because I would think that there's a ton of potential opportunities. You've talked about a little bit, but. Correct. There's a software technology. I'm not sure if I'm allowed to say their name, but they are an online integrator connect. We connected and the other company, but I'm going to use a name that I'm not authorized to say it, but Expedia. That's not who it is as far as. I'm using that as an example of a global travel site online that integrated into this hub. We integrate with that hub, which is currently underway. That connects the two together. Instead of me integrating to Expedia, which would take a long time, it connects the two together. Then when that travel company sells an international ticket to Costa Rica or to Rome, it'll pop up, "You need euros for there." It'll come straight into us. It is like our online FX, where we have to debit their credit card, get their information, and we ship it to the home. We make a profit, and we owe back, literally to the hub in the middle, and attract what we've pre-agreed with the other side of what they get. That's how we will continue to see our online growth going. Yes, that's already there. We actually employ a full-time person to chase all the connections that are already existing because the hub basically says, all these companies fit what you would want. Now you still need to deal with them to say, "Hey, offer this, do this, turn this on," so to speak. Yes, we continue to focus on capturing more market share. Okay. About the vision for data and the cloud. I'm just wondering, what would your assessment be today with where the company is in terms of using cloud technology and your data? Maybe share with us your vision for the future on that. How much time do you have? Yeah. As Randolph mentioned, we're very excited to have NetSuite in place and continue with Kyriba. We're also spending a lot of time in our data strategy team to work with Snowflake, which will assist us a lot in understanding where our data is. For me, I would say vision is to really, as Randolph mentioned, understand the day-to-day operations. The example I use is Amazon. They basically asked the previous CEO, "How do you actually keep your hands wrapped around the company?" He said, "Well, I look at 343 different dashboards that updates continuously on what's happening in the company." I think part of our dream is to get to that with Tableau. Before you get to that with Tableau, right now, for instance, we have an income statement that can update in 20 minutes whenever we need it to pull from all the source systems. We have Nat and her team in FP&A updating all the various comments, and we can pull income statements from each one of these product lines that we have to roll through. That's what this data set is going to deliver to us. Now you think across CXI, and you go EBCFX, CXIFX. We look at the various data sources that we have. Once we start linking that, Tableau has the ability to link a website or a data source or a NetSuite. From a financial point of view, we also look at NetSuite add-ons. We have NetSuite budget and planning. We just finished our forecast for the first time ever in a very short time period, where we can now distribute directly out of NetSuite the actuals, forecast the future 9 months, pull all of that back into the NetSuite model, and see exactly where our financial position is. The better data we have, like garbage in, garbage out, we all understand that concept, but the cleaner our data is, the better it is, the faster we can update it. I think one of the stats that I found very interesting that I saw the other day is we have ran up to, I think, 160-something million lines into Snowflake at this point in time. Paul can comment that, but there's probably a lot more to come. We deal with a lot of data, and we have to take data, make it information, like an income statement is a good piece of information. Intelligence is the next level. The so what question that everybody looks at. You see a, so what? What does it mean? How does it trend? What's the history? Can you click on a number, get data? That's what we're after. Yeah. To do that, we need to go. I think that was part of your question. Are we going to go 100% into the web? I mean, into the cloud and get rid of our co-location facilities, which we have in Mississauga. Mm-hmm. In the States, we have that. Yes, we're migrating there. What are we, Paul, like 40%? Yeah. About there, yeah. We're about 40%, hopefully soon 50%, but our goal is over the next year, 2 at the most, to get 100% in the cloud, and we could actually shut down the co-location facilities. There's a lot of advantage. Yes, there's a little cost to it, but it eliminates all the support to the co-location facility. The beauty is like Amazon Web Services is probably where we'll continue to stay, in their clouds, allows you to rent extra servers during your peak period and then not have to pay for those servers in slow periods and so forth. We do have this data migration plan that enables what everything Gerhard's talking about. That is our vision of our executive team. As a follow-up, how are you thinking about using, obviously, the buzzword, or is it AI? With all of the data- Go ahead, Paul. Please, go ahead. Sorry. We just had a consulting firm, of course, they're wanting to show us why they can hold our hand on this journey. Paul just presented to our board of directors yesterday our vision with where we're currently at. Paul, you want to go ahead and we'll switch off? Yeah. I think it goes along with the same theme, getting the data together, getting it into the cloud systems. You're enabling those massive tech companies like Snowflake, like AWS, to build at such a rapid rate. They build the AI functions for you. They're innovating so quickly, and as long as you're getting your data into those platforms, you're opening up all the doors in terms of technical innovation. AI is definitely one of them we're looking at. Yeah, the generative and Yeah, generative AI is certainly the hot topic. All of these providers are building those capabilities into their platforms and attracting your data to them. What we're doing currently right now is we just implemented finally, which I know a lot of companies have had live chat for a while. As an extension of our direct-to-consumer unit, you can now text us and have us respond. The AI has now been picking up on all the common questions and the common answers. Before a human has to intervene, very often the client will actually be able to get an answer, like what are your store hours and so forth. They get that without even a human being involved. We've recognized that's enabling us to reach more consumers. We still do have our call center, and we still do have a live chat agent, and they've been enabled to actually turn that inquiry into a sale. Say, "Oh, do you want to get this euros?" Or, "Oh, you're going to Costa Rica? I'll make sure it's ready. You're going to our new store in Buckhead, Atlanta?" We place what's called an online system. Our online system, which already does this, sends a confirmation. "You have just ordered this, your currency's ready for pickup." It turns into it. Matt, who's running the consumer unit, was very proud to show our conversion rate is going up from just an inquiry to actually real sales, and showed me the numbers. You will continue to see significant growth. That's an example of how we are selectively using AI to improve our service, and most importantly, make more money by giving that good service and keeping the customer sticky to us. Bill, can you imagine if we can actually run this gen AI, and we can start predicting volumes, currencies, locations with all the data we have? It's happening. It's not lost on us. It's just you have to get your proper database in place, get Snowflake in place, and then start. If your data isn't good, it's no use dreaming of intelligence. It's a building process. Yes. Thank you. The last one. I'm not trying to monopolize. How are you thinking about Do that. However, now that we have a clear dashboard and we see the highest return on capital deployed is in our core business, because we do it very well, is banknotes. I would now go back and say, "No, I would love to buy, let's say, a competitor and take them out." Because that's our core business, and it adds the efficiency of scale, because now with our vaulting system and the automation, which we hadn't talked about, it's not AI, it's just a machine processing. It's improvements on ATM-type processing, is enabling us so that we can literally double our cash volume without having to double the amount of tellers in the vault there because of these cash, what's called recycling machines, where you can feed an incoming package, it goes into the machine, sorts it, and then that same machine will ship, put out the cash. It's basically keeping us from needing to hire a whole bunch of tellers. Our new deal with our overnight shipper is enabling us to have longer cutoffs. We are ready. We're poised to continue to capture market share in the banknote space, both in the U.S. and Canada. Maybe to complement that, if you think of payments, we also think of the OPAP strategy there. As Randolph has taken us through, if you look in Canada, that is a very interesting new line of business or new stream of business that we're focusing on. Chris Johnson and his team with Wade's leadership has also done some marvelous work in the U.S. on the payments growth that we see there. There's definitely a new business line, and there's also a continued growth in the U.S. Always split payments in two, and see corporate payments up south, see sort of OPAP strategy down north, and then take the OPAP. You have that backwards. I'm still thinking Canadian. Take the OPAP strategy and say, how do you actually take that strategy and run it through both the U.S. and Canada? What he's saying is we're focused on improving and continuing to grow that payment business, but we're not going to double down on trying to buy a bunch of payment companies, especially because they've been all way too expensive. We're focused on growing our core business because that is the highest return. It's what we do best, it's what I know the most. That is our primary focus at CXI, is to continue to dominate. My long-term goal is to be that the government comes in the U.S. and says, "Every airport, every bank exchanges cash with you. We got to break you up. You're a monopoly." I know that's beer talk, but if that answers the question of the vision is, we see that the cash business is our highest return, and we are the strongest in that, so we should do what we do best. It doesn't mean, okay, we're out of the business. That's something that we have to say, how can we improve what we got? Good question, Neil. Thank you. No, thank you for your. No, my pleasure. Any other questions? Those are great questions. Yes, Steve. Currently, you're in 41 states in the United States. It is true. Sorry, 42. You just added, I think it was Alabama. Oh, sorry. I'm behind. It's fine. I'm behind one. Okay. Wisconsin. Yeah. Wisconsin's the last. Okay. Have you applied for the other eight licenses, or are you just doing it sequentially? All of them. Every state, I require, because we had a head of sales at one time that had us get a license in Colorado, and now we're using it. Literally two years into the license, the state came to do their audit, and we reported zero activity. They said, "Well, we're going to take the license away if you want to." We have a business case for each state. It's driven by the online requests that we have to deny because, oh, we don't ship to Alaska. Not yet. We keep track of this type of request. Of course, what agent location. It's no mystery that AAA has made a corporate decision to switch to us. If you understand the AAA structure, it's a bunch of small AAAs that make up the whole AAA. When that club, as they call it, now says, "We want to start offering the currency exchange in Alaska." That's not a state that we have, but I'm using that as an example. We haven't gone there because until we have a business case, because it's all about the return. I have been criticized about chasing every shiny object. Now I'm very focused on return from that shiny object before I go chase it. No, they're not all there. There are, I think, three more states. We will be at 50 before you know it. It's case by case by case, and it's about the return on capital deployed. I just want to make a comment on a prior question. We see in our business that the response time to a customer inquiry is critical to converting that inquiry into a sale. I really encourage you, like this chatbot and other things that you can do, whatever you can do to shorten that cycle down, because consumers have a very short level of patience before they go on to the next provider, right? Absolutely. We were just discussing today in the board of how we're going to improve the number of clicks on our online system because there's a cash distributor, but they're not a currency exchange. They sell cash more like ARC. They get collectible currencies and stuff, and they do tremendous business. I was talking to him because I want to buy the business. It's very successful. He was explaining the reason he's so successful is one, it's in the marketing. I got it. Then how quick he, "Oh, it's hot. Let's buy it." Boom. Literally, he can sell a transaction 3, 4 clicks, whereas ours is like 10. We are going to be improving our user interface to make it faster, easier, and more appealing. Yes, and that's why we did the live chat. That's why our call center now is not just saying, "Yeah, go to the mall. Oh, got it for you." We're like, "Oh, let me take your information. I'll make sure it's ready for you." That way, then they go in the mall, they come in, "I'm Stacy, and here, I ordered it. I've already paid." They're like, "Oh, hey, Stacy, it's already boxed up for you. Here you go. It's fast and easy." We are focused on that. Yes. It's a journey, not a destination. We got to continue to improve and improve. That's the message that we're trying to deliver, is that we are focused on our core strengths. Good question, Stephen. Thank you. Any other questions? Yes, sir. Within the direct-to-consumer U.S. business, there's a lot of growth. A lot of growth there in the last quarter. How do you think about, within that market overall, the growth rate between online and in-person? In online specifically, what does that competitive landscape look like? Well, online, some of the banks have online, and there's not a ton of people. Like here in Canada, a couple of the banks do it as well, but in Canada, we don't do it. In the U.S., our focus is that online. I was explaining about how we're tying into this hub that allows us to integrate with other online retailers. We have our own plan in how to improve marketing, improve the user interface, and so forth for the marketing, and growing that business. On the retail stores, sure, there's not another Manhattan, but however, we've recognized Manhattan's a great market for us, and we could consider another location. We selectively grow the retail stores, ensure availability. That's another thing, because if they come to your store and you don't have those Thai bahts, then you miss a transaction. We even are dealing with that. "Oh, thanks for being here. We can deliver it to your home, no cost. And we're going to waive that normal $5 fee because you didn't have it like you wanted." We have a plan on how to continue to grow both our company stores. Again, agent stores, we now have a dedicated agent sales process where we're trying to go to national retailers, like one of the big marts in the U.S. that has a whole money service business that currently can do a Western Union or MoneyGram payment and so forth. We're trying to enable those national retailers that are open seven days a week, that are on the U.S.-Canadian border or on the U.S.-Mexican border, and enabling foreign exchange in new areas of agents. Every part of our consumer business, from our own company stores to our agents, and to our online, each of those business units have their own marketing plan and strategy to continue to improve. The other thing we also do is we've determined there's a direct correlation, as you can imagine, between the marketing spend and a certain growth in revenue. We've discussed with our board, and we have tripled the marketing spend in that specific product of ours. With the new NetSuite that we have in place, and thanks to the good work of one or two teams that we have, we're also able to determine per currency what our margin and what our profit per currency is. We can constantly look at those currencies that we trade, whether they're exotics or travel currencies, and determine whether we're still relevant, if we're still priced according to the rest of the market, and then make the necessary adjustments. Whereas we saw in one currency, every other competitor was 4% higher. We saw an opportunity to raise our margin while still being better than the competition, but we could get more margin. That's that clearer dashboard that our management team has. Did that answer the question about the consumer side? It does. Just one follow-up. Sure, keep going. Is this a market that's in the process of moving from in-person to online? Did that happen 10, 20 years ago? Is this a shifting thing we're still- You would be surprised that the online business has been growing year after year. However, the in-person business is growing, too. We feel we're capturing market share from going to your big sleepy bank or a lot of, like for Americans going outbound, they think dollars are good around the world, and we're educating that, "No, it's better to get off the plane and have your colones in Costa Rica." Sure, they will take your dollars, but then you get hosed because you don't know what the hell the exchange rate is over there. We think both of those businesses will continue to grow. Since I've been in this business, I've been doing currency exchange now for over 30 years, I've been hearing, "The credit card's going to put you out of business." The fact is, you know what? Just like paper was supposed to be gone, and there's still paper around, and no. I know the old saying is cash is king. Our new marketing thing we might roll out is called Cash is Queen, because the queen's on all the main currencies we exchange. I don't see the cash business declining, but it does go up in waves based on tourism, and inflation, all the factors that make the good years versus the bad years. Does that answer the question? Yes. Great. These are great questions. Thank you. Any others? Well, I think that concludes our presentation. Are we doing any social here or is it just? Yes, in the next room. Okay, there's some snacks and some beer and stuff, and sodas over there. You're welcome to socialize. At 5:30, some of us are going to our bar. Please, the board's here. They're going to stay for a little while. I know some of the board won't be going to our thing, but I'm having another social, and our social right here in the building, for our executive team to hang out, and some of our shareholders are coming as well. Thank you very much for your attendance, your support of CXI, and please join me for a beer or a glass of wine. Stay dry.