This slide should do it all. I'm not a killer PowerPoint guy. I'm kind of a stuck-on-one-slide guy. So Heritage Global is 15 years old. It's in the valuation business, the disposition business, the lending business, and the refurb and resale business under two real distinct groups: industrial assets and financial assets. Industrial assets is a legacy, old-school business originally founded by my grandfather right after the Great Depression, that my father joined, that my brother and I ran, that now Nick Dove, sitting over to the left, my brother's son runs. It sells machinery. It sells equipment, primarily via auction.
Started out as a bankruptcy auctioneer, regionally selling small stuff, through various iterations over the years, became a national and an international auctioneer. It does two things: it sells assets for a plant closure when a company is in financial jeopardy or insolvency when it closes, i.e., an Enron, a Solyndra, etc. So it does those kinds of insolvency auctions. It also does corporate asset management, where our largest client is Pfizer. Amgen is a client. We're very big in pharma and other sectors where it auctions off surplus assets.
When does that happen? Not through distress, but through mergers and acquisitions, through technological advances, etc. So we get them from all angles. We get them when they're in trouble, and we get them when they're out of trouble and when they're growing, and we sell those surplus assets. That's about a couple hundred auctions a year for us. It's a growing industry, not as big as the outside the building of Ritchie Brothers, which is construction equipment. Inside the building, manufacturing equipment: pharmaceuticals, semiconductor, metal, wood, etc. So that's over there on the industrial side.
It's accompanied by a valuation business that does appraisals for banks and lending institutions. That business is growing now. Why? Because right now there are plant closures. There's somewhat of a fear that there's a little bit of distress in the marketplace. People want to know what the machinery's worth. They especially want to know what it's worth now, coming out of the venture community, where we're moving a lot of the companies from Series B to C to D, and they're not getting funded.
There's been a big push away from the traditional prior venture-funded companies into everybody putting their capital into AI, into new companies, the Series A and Bs, putting their money into cybersecurity, and not putting their money into a lot of follow-on investments in pharma, etc. So you're seeing that a lot of those companies basically are going out and trying to get traditional loans because they're not getting venture loans anymore. And to get traditional loans right now, they're looking at their assets. And to get asset-based loans, you need a guy like us to tell us what the widgets are worth.
And then a lot of the banks, basically, who did enterprise loans are now looking because some of those companies aren't getting sold, and some of those companies are basically missing their monthly nut. So at that same time, they want to get them reappraised from an asset value. Our clients are people like Bank of America, Wells Fargo, and smaller regional banks. The third business over there was an acquisition: ALT, American Lab Trading. We acquired that company several years ago because the market changed to where all of a sudden, selling used equipment, all my life selling used equipment, we were a junk dealer.
We were a liquidator. We were a low guy. And then all of a sudden, selling used equipment, we became popular because we became environmental saviors, so to speak. We were keeping assets out of basically getting salvaged, keeping assets out of getting scrapped, and really helping the environment. So all of a sudden, we went from junk dealers to environmentalists. ALT had been in that business for 20 years, repurposing assets and refurbishing assets and putting assets back into the secondary marketplace. So we looked at that and said, "Here's a chance for us to be not just a junk dealer, but one of the good guys." So they had 6,000 service parts.
We could then sell assets with warranty. We could sell assets in the open market that, generally speaking, before that would have got basically put into scrap and salvage. So put all those businesses together, and you have an industrial asset division that's been about half our revenue. This year, a little bit less because financial assets have been hot. Now switch over to financial assets. Two businesses there: NLEX, quarter-century old. It's a business that was founded, most of you are probably too young to remember, not all of you, it was founded after basically the S&L crisis.
We had an S&L crisis. We won a bunch of government contracts, sold billions of dollars of non-performing loans: real estate loans, credit card loans, auto loans, etc. When that business ended, we had this huge database of buyers and no seller. And so we said, "Shit, we're out of luck." We built this business, and all of a sudden, the world doesn't need us anymore. We went out to money-center banks, figured out they did need us, and we became "the junk dealer," the end of the line for banks selling charge-offs. Twenty-five years later, we've never had a losing quarter.
Flash forward in that business, it started really growing, and it started really growing with the advent of fintech. And with fintech, all of a sudden, we had peer-to-peer loans to sell. We had buy now, pay later loans to sell, and we were thriving. Then along came (I won't use any of Trump's language) along came this thing called a pandemic. And with along came the pandemic, everyone stayed home. So all of a sudden, there was no supply of non-performing loans. Our business got a little slower, and at that point in time, there was nothing we could do about it. So we basically, our revenue went off a little bit.
But at the same point in time, no one was lending to the buyers of those assets, or the people who were, were charging massive interest rates. So we opened up Heritage Global Capital. So basically, that was our sweet spot for a while, but they were also overpaying during the pandemic. So some of those loans turned out to be more difficult than we thought, and we're now working our way through that. On the financial side, NLEX is on fire now. What happened is the pandemic ended. Everyone went out on a huge spending spree. We now have $1 trillion in credit card debt with the most defaults in U.S. history.
We now have five or six years into buy now, pay later. And buy now, pay later was almost like somebody invented it. My grandfather, an old-school Jewish liquidator, would call it a mitzvah that somebody invented this thing called buy now, pay later because it was almost designed for a liquidator. Of course, everyone doesn't pay later. So you go on a cruise boat, and you take a one-week cruise, you drink a bunch of rum, you have a great party, you gamble in a casino, you get off the boat, and you get your bill. Some people go, "Oh, shit, how can I pay this now?
I'm really broke." So that's the kind of paper we've been getting, and that paper is accelerating. So that business is growing. We think over the next two or three years, you're going to see a lot of growth in the non-performing loan financial asset brokerage business and a lot of banks that have been holding back selling the assets, selling them. So where are we at now as a company? We think, and you can challenge us here, and we'll talk about it, we think we're dramatically undervalued. This is a company that's going to make $10 million net operating income, $12 million EBITDA. It's got a $70 million market cap.
You guys are all at the conference. Go find another CEO that can stand up here and tell you, "I'm going to make $12 million," and then go ask him what his market cap is. It won't be 70 million. It'll be $150 million or $200 million. Why are we at a low trade? Maybe because the CEO's old and bald. I don't really know the exact answer, so I'll go with that one. So that's where we are. How are we going to grow? We're going to grow right now because we have zero bank debt. We have a $10 million-plus bank credit line. We have $15 million cash in the bank. We're going to make $10 million this year.
And at the end of the day, we have a tax carry forward. We're not going to pay any taxes on it. So we have a lot of free cash flow in a marketplace that's ripe for M&A. On both sides of the business, we're seeing increased activity in M&A. We've decided to step up and be a player and take our $10 million NOI that we think we're going to make this year and see what we can do with the right kind of M&A strategically on both sides. On the industrial side, it's an international expansion where 95% of our revenue is now in North America. It is a sector expansion where 95% of our revenue is inside the building, and there's a lot of outside-the-building construction assets that fall under a $15 billion Ritchie Brothers.
On the financial side, it's moving out of just charge-off credit cards into also charge-off real estate. We think if we do the right acquisitions along with de Nova Growth, that this is a hell of a good entry point into an already good company. I'm an auctioneer. I'll keep talking forever if you don't raise your hand and ask a question. So there, thank you. I'm tired of my own voice. Where do you think the focus of the company is? Is it auctions? I heard, listen to the last conference call. Would it be on the auction side or focusing on the company? So right now, on the auction side, there are a couple companies, in theory, in Europe that are small.
The largest auction company in Europe, Troostwijk Auctions, bought the second largest auction company in Europe, Surplex. They become one company. When you have one powerhouse, it opens up opportunities underneath them. So underneath them, there are opportunities. So I see potentially industrial auction acquisitions in Europe to build our European base at a boutique level, at a bolt-on level, possibly in Canada as well. And at ALT, there are similar dealers, small dealers, that I think we could add on that are experts in certain kinds of assets and potentially not just pharma.
Medical would be an example, etc. On the financial side, somebody small like us, NLEX is number one in selling charge-offs of credit cards and auto paper and fintech. There's other people number one in selling real estate loans, number one in selling utility loans, etc. So basically, bolt-ons on both sides. Companies you're paying $5 million, $10 million for, not a big one-time killer acquisition. Is that a fair answer? Come on, next question. Nobody got a question? There we go. With all the money I'm making? With all the money I'm making.
So we have, well, they won't let me take it home. I've tried and tried and tried, but they've limited our salaries. So we're going to reinvest it. We have a buyback program because we think our stock is undervalued by a lot. So we're instituted a buyback program years ago. We've now expanded it and raised the buyback program to $6 million in aggregate, which gives us $4 million in cash that we can still put into a buyback program. On top of the buyback program, we're not just looking at M&A. We're looking also at industrial transactions where you can buy the equipment and the building where we've had significant gains.
So we need a lot of cash because we operate as a principal as well as operating on a fiduciary basis. So we need the cash at all times because you never know when we could go buy a building and equipment for $8-$10 million. So some of the cash will sit on our balance sheet. Some of it will deploy in M&A, and some of it will deploy in the buyback. Who's next? If you guys don't raise your hand, I'm going to keep talking, make stuff up. No more questions? Go ahead.
What's the question?
Why is NLEX profitable?
Huh?
Why is NLEX profitable?
NLEX is profitable. NLEX is not a company that takes any financial risk. So NLEX itself is not a lender, and it's not a principal. It's a pure broker, and it's never lost money because in the end of the day, as a broker, it operates with a controlled OPEX and enough volume. It's been growing because volume's been growing. So years ago, it used to make $1 million a year, then $2 million a year, then $4 million a year. Now it could make $7 or $8 million a year. But we've managed it very well, or they've managed it very well, the people that run it.
And that business is growing. So as that business grows, we grow. So if you ask yourself the simplest of all questions and you say, "Okay, I kind of understand Heritage Global. I kind of understand HGBL. When is a good entry point? When should I buy it? When is a good exit point? When should I run for the hills and get out of it?" Then it's a kind of a simple answer, I think, as an old guy who's been doing it forever. It's not so much looking at the stock price, although that's important. It's looking at over the next two or three years where you think the business is going to go.
So you can ask yourself, "Is this guy full of BS on the M&A? If he's not and he can get deals done, I should look at buying it." But also, as important, is supply going to grow or stay static or shrink? Because if you believe supply is going to grow, we will always grow with supply because we win our share of the marketplace, period. It is the simplest analytics. You go see 50 companies here. I'm offering you the simplest way to figure it out of any of those 50 companies because you only have to ask yourself one question: Will supply grow?
Now you can take only two businesses and say to yourself, "Will supply grow in one of them, both of them, or none of them?" On the financial asset side, you don't have to look at my company. You can look at empirical data. You can look at absolute published data, and you can see that not only do we have $1 trillion in credit card debt, we have a record number of defaults. We have the most consumers ever not paying off their credit card every month but paying the minimum payment. In the history of credit cards, we have the largest amount of auto loan delinquencies in the last quarter century.
And I can go on and on. With the advent of these new lending platforms, the peer-to-peer that comes out of the lending clubs, the merchant stuff that comes out of the PayPals, the buy now, pay later, all of those are escalating in the non-performing loans. As those non-performing loans escalate, X amount of them turn into charge-offs. When they turn into charge-offs, the number one player in brokering charge-offs in North America is us. So are we going to get more volume? I don't see how we avoid that business growing. I don't see how we can't trip over more success there.
So the answer is there'll be more supply over there. Now, on the industrial side, the National Association of Manufacturers, everybody talks about two things. They talk about manufacturing coming back to North America and growing, but they also talk about manufacturing rightsizing, and they also talk about lean manufacturing. They talk about how AI is changing the technology and the advancing of the machinery in the plant. As the machinery advances and as technology advances, companies must upgrade to keep up with their competitors.
As these companies upgrade, as they deploy more AI, as they employ a different kind of processing, they create surplus. That surplus is still technologically functional. So as long as it's technologically functional and it is not suffering from obsolescence, it may not be the latest and greatest for a Fortune 1000 manufacturer, but it gets sold. It goes out into the secondary market, and it moves offshore, etc., and especially now when these companies that normally might have scrapped assets are forced to keep them out of landfill, and because they have ESG requirements to keep them out of landfill, they're trying harder and harder to move them out into the marketplace.
Does that create more surplus? Yes. Is there going to be more surplus industrial assets to sell? Is there going to be more used equipment to sell? There is going to be. There's also going to be more used equipment as we run through certain industries that got overfunded. Biotech has been hot, a little slower this year, but it got overfunded during the pandemic. A lot of these companies are hitting where they would need a Series C or D. They are not profitable companies. So at the same time that they're not yet profitable, there are too many of them that are not income-producing at once.
You're going to see asset flow there. When I tell you, "I think we're going to see supply on both sides," I can tell you that as supply grows, we grow. And if we can also use that leverage of our free cash flow and our cash and take advantage of the fact that there is going to be basically more assets to sell, but probably a consolidation and less people selling them, we can be at the forefront of the M&A along with the growth in the industry. And we can take this stock and do some pretty good nifty things with it. Next question.
Go ahead, sir.
I have two questions. Number one, the interest rate risk that the consumers face, is that impacting the continuity of which you deal assets? And number two, with the industrial assets, is there any ties to governmental assets that are being liquidated due to offshore?
All right. So in the first place, the interest rate thing is interesting because interest rates going up helps me on the financial asset side and the fact that interest rates going up create more people having more distress in making their payments and increase the volume. So there is a plus on interest rates going up there. On the industrial side, interest rates going up sometimes slow down the purchase of new equipment because you're getting new equipment financed with interest rates. And when you're not buying as much new equipment, you're not selling as much used equipment.
So it has some dual uses. And at the same time, it's just not great economically for our country. So it's not necessarily a plus when interest rates rise, but it does create financial distress to the consumer, and it does create more assets. It also creates at Heritage Global Capital a more difficult time on collections, and the second question, do it again for an old guy. My second question was for governmental assets that are being liquidated due to obsolescence or some other reason. Do you guys tap into that market for the reason of government? No. If you look, there's a public company that's a competitor of ours called Liquidity Services that is much bigger in the government market.
We do government work for the companies that basically are contractors to the government. So we would do auctions for companies like a Boeing, a Lockheed, a Raytheon, a Halliburton, etc. So we would get assets when they lose government contracts or when they get a new government contract and have to retool. So we would be more on the contractors than the direct government. But yeah, it does benefit us when there's a shift there. We got one minute left. A gre at question. Who wants to? There you go, sir.
Maybe just one on the interest rate sensitivity question. So industrial assets, when the rates go lower, that's going to be a positive for industrial assets. But if rates go lower, financial assets, it's not a positive.
If rates get lower, then on the financial assets, you have less distress in theory. If rates get lower on the industrial assets, it can create two good things. It can create M&A, and even small M&A creates surplus. If anybody buys anybody, they generally speaking have duplication, and we get assets. So lower interest rates help with borrowing, and they spur the economy, which spurs growth. Is that it? I got 30 seconds left. So thank you all. I will just tell you that not only do I think it's a good entry point for the stock, but our buyback will kind of prove that we're putting our money where our mouth is, and if you guys are interested in the stock, this is a good time to pay attention.
I very much appreciate you all coming out here, so thank you very much.