Today I have Streamex. It trades under the ticker STEX on Nasdaq. I am happy to welcome Henry McPhie, the CEO of the company. We have about 30 minutes today, including the Q&A. If you have any questions, you can submit them at the Q&A section at the bottom of your screen. With that, I will let you take over, Henry.
Amazing. Thank you very much, Ashley. I really appreciate it, and excited to be here, and excited to sort of get into Streamex and what it is. To kick it off, I will give everyone a quick introduction on myself, just so you know who is speaking. Like Ashley said, my name is Henry McPhie. I am the co-founder and CEO of Streamex. My background itself is very focused in the digital asset space. I also have a mining engineering degree, and so this is, I think, a pretty good combination of both. The goal within Streamex, when we founded it, really was to innovate within an industry that traditionally does not see a lot of innovation, which is the mining and commodity space, and using tokenization, which is a very new, or which was at the time a very new concept.
With that, I think we have built something very exciting. GLDY is our sort of flagship product, which we will discuss today, which is live, and sort of talking about the path forward and how we see the growth of the company and the business, including where we are at now and where we expect to go. Getting started, welcome to Streamex. Excited to give the presentation today. Starting with some disclaimers. We will give that a second. Into the important stuff. What our mission statement is here at Streamex really is to unlock the full potential of commodities and using tokenization to be able to do that. What that means and what that creates is a company, and that is essentially focused in an industry that I think is probably one of the fastest-growing financial technology industries in the world, which is tokenization.
Couple that with an industry that is one of the largest TAM markets in the world. We are, I think, at a very good intersection for growth. Getting into what Streamex is and what it is not, just so everyone has a good idea there is Streamex, we are a financial technology company. We build and operate a tokenization platform for commodities. Like I said, it is a scalable platform. It is for all commodities. GLDY is the first asset. We are the issuer of assets on that platform. Something that is really important to note is the platform that we created, like I said, is scalable. It can scale across many different assets, but unlike other tokenization firms, we actually own the assets that we create.
Unlike, say a white labeled solution where we only take fees on the sort of front end or the minor management of these assets, we get to keep the economics of the asset itself for the lifetime. Tokens themselves are normally pretty durable, so this adds pretty exponential fee streams to the company and very high operating leverage with what we do. We are regulated first, so we took the path from the very beginning that we were going to create assets that were institutional-grade and available for U.S. investors and U.S. institutions to be able to participate in. That is very much shown through GLDY and in how we operate. We are not at the beck and call of the CLARITY Act, wondering if something is going to pass that will make us compliant. We are already compliant today.
With that, what this really creates is a recurring revenue platform where as we create new assets, as we scale AUM and the assets that we already have, it creates a significant sort of flywheel and recurring revenue model for us to be able to essentially grow as a company, and we will get deeper into that as the presentation goes on. A couple things to note is Streamex, we are not a cryptocurrency company. We are not issuing or trading crypto assets. We are a tokenization firm. We are not an ETF. We do not essentially create a tokenized wrapper or of a fund. We create the physical asset itself, so ownership of the physical asset itself, whether that is gold or silver or any other metal or commodity. We are not a mining royalty company, and we are not a single product story.
Something that is really important to note is we will talk about GLDY and gold a lot in this presentation, but we will also talk about the roadmap and talk about sort of where we are going beyond gold, beyond GLDY, into assets like silver, like oil and gas, like copper, et cetera, and really showing how this platform that we have created scales beyond there. As an investor, which most of you are, who are probably here in the presentation today, I think there is a couple key points to look at on why should you put your money to work and invest with Streamex. There is a couple really key points here. One would be, like I said, we own the rails.
We keep all of the economics, from the tokenization fees and the platform fees itself, all the way out to the transfer fees, the management fees of the assets themselves that we create. That is all on the infrastructure that we have built. There is an enormous market out there. Like I said in the beginning, we are operating at the intersection of the fastest-growing financial sector, which is tokenization, and the commodity sector, which is one of the largest TAMs in the world. We have a very strong, I think, advantage here with the assets that we create, and I think there is a massive opportunity to grow. The operating leverage is very strong. We have primarily a fixed cost base, and then the three fee streams that I discussed are for every token that we create. The operating leverage is massive.
As AUM grows, as issuance grows, and additional assets grow, it gets very exciting, and the operating margin is very high at scale. Distribution itself is really the multiplier to what we're doing. We have right now a very strong balance sheet with over $41 million in liquidity. We have no debt, and we have a very exciting, I think, path for growth. For us, dilution is not something that we're looking at. Raising money is not something that we're looking at. We are able to focus on growing the business. The last part is the infrastructure itself is built. Our main focus now really is adoption.
As we've built out this infrastructure over time, as we've sort of gotten to a point where we are able to scale exponentially, we are very excited to be able to show how that works, bring in these first couple institutional orders, and then be able to scale with a very much a snowball effect into the end of this year and into 2027. Super excited for everything that's going to come there. Overview of our Q2 earnings, which we did just around a month ago. First off, we recognized the first revenue ever as a company and anticipate this to scale as we continue to grow AUM. We reduced our operating costs by over half as we went into Q2, and we also removed all of our debt. That was something that was very powerful.
As of right now, we are a company with no debt, a company with very good liquidity, like I mentioned. The GLDY AUM is continuing to scale, and we expect that to continue to scale over time. We also signed some really good partners, which we'll get into, that allow us both to do for distribution and custody. When we look over the next 90 days, and this is something for you as investors to look at, is keep an eye out for the first institutional allocation, something that the company will announce. I think that is a very big catalyst for us. The next is the launch of liquidity bootstrapping for GDLC and launch of that in the second half.
I'll get into GDLC and what it is a little bit more prior in the presentation, but it opens up GLDY and tokenized gold to everyone in the world with no minimums and no KYC. Equity Trust is a big partner that we're very excited to be able to bring on. We've talked about it publicly. It is a $70-plus billion IRA custody platform with over 460,000 clients on there. Opening up GLDY as the first tokenized asset to be offered to their clients. Continuing to provide attestations and yield. We paid out six yield payments so far in GLDY. They've all been over 3.5%. We provided our attestations and the next one coming out very shortly here. Tokenization itself is, like I said, a very exciting industry to be in right now.
I think it is something that when we look at the space, it is growing exponentially, especially even this year. The numbers sort of speak for themselves. When we first started Streamex, it was a very nascent story. There was stablecoins, there was people talking about tokenization, but had not seen the adoption that we are seeing right now in the industry. For us, this is just proof that tokenization really is and will be the future of financial markets, in my opinion. I think it is something that when you see large institutions like BlackRock, like Nasdaq, like ICE, talking about tokenization and moving towards this 24/7 settlement, 24/7 trading, tokenized assets, et cetera, you want to be on that wave. We are perfectly situated to really, I think, benefit from the adoption that we are seeing in the industry.
When you think about catalysts and things that are coming for Streamex, there is a couple things that I think are important to note. One, like I mentioned, first institutional order. This is something that will be a major catalyst for the company. This is something that I think when you look at Wall Street in general, everybody loves to be a fast follower. Everybody, from conversations that we have been having, love the GLDY asset. The ability to get yield on gold, the ability to get paid 3.5% plus getting gold exposure is a very novel product. It is one of the most powerful gold investments out there in the market right now. But people want to see other people go in first. As we bring in this first institutional order, we anticipate that to scale exponentially from there. The second would be growing the distribution channels.
Partnerships like Equity Trust, partnerships with other custodians, partnerships with other distributors and broker-dealers, ETFs, et cetera, are all things that I would also sort of look out for. As we get into 2027, seeing the launch of additional assets coming online, and then the growth of the AUM of both existing assets that we have and then others, silver, oil, gas, copper, et cetera. Commodities, like I said, obviously a very, very large. I will not spend too much time, but it is a very, very large industry with a big opportunity for innovation and disruption. Getting into GLDY, and this is a plug for the asset. If any investors on this call are interested in purchasing it, you can go directly to streamex.com and be able to buy the asset, pass KYC, and then fund directly within the platform.
It should be quite simple and very easy. Streamex and our business model, like I said, our goal really is to be a disruptor, be able to provide essentially better solutions for investors and people looking to get commodity exposure with a very capital-light operating model. I touched on our partners earlier, but we have been able to align ourselves with some of the top partners and companies within the space. Everyone from Monetary Metals on the leasing side to Wintermute on the liquidity side, tZERO, Seabird, Anchorage, Coinbase, Orca. These are all top-tier partners that we work with, and then we work with some of the best service providers in the place to really create that institutional-grade product, which has been our focus since the beginning. Talking about GLDY a little bit now, looking at what it is as an asset.
I touched on it earlier, but at its core, really what it is, it is a tokenized security that gives investors spot gold price exposure with a 3.5% yield on top of that. We have paid out six dividend payments so far in additional GLDY, so additional gold, and the NAV has tracked gold price one for one since launch. Stacking that up to sort of other assets like an ETF or say a physical gold, it is the only asset that pays you to be able to hold gold, and it is the only asset that I think is a true hedge against inflation. The yield itself is generated through a partnership with Monetary Metals. They are our gold leasing provider. They are one of the largest gold leasing providers in the world. What that does is it gives us the ability to earn that yield.
The simplest way to think about it and simplest way to think about this exclusive partnership is we rent the gold through Monetary Metals to qualified institutions and companies. They pay us to be able to use that. We are able to pass on that yield to holders. Talking about the difference between GLDY and other assets, which I touched on briefly there, something really important to note is the yield becomes very powerful over time. Most gold investors, when they are looking to invest in gold, it is something that traditionally for 5,000, 6,000 years has been an unproductive asset. It has just sat there. It has really done nothing. Now with GLDY, it really flips that on its head, and it turns this unproductive asset or an asset that you are paying to hold into something that is productive and pays you.
You compare that to a gold ETF where you are, say GLD, holding a gold ETF, you get spot price exposure, but you are paying 40 basis points to hold it. Or physical gold, where you, again, get the spot price exposure, but you need to pay storage fees and insurance. Flip that on its head with GLDY, all of a sudden you are getting gold price exposure with a 3.5% yield, which is almost a 400-basis point spread to the incumbents, which is a very, very powerful number, especially over time when you are dealing with large investments. Comparing it to other sort of markers in the market, PAX Gold, Tether Gold obviously being the two largest, they have proved that gold and tokenized gold is probably the most efficient way to trade gold out there in the market. Neither of them provide a yield.
Looking at BlackRock, SPDR, OUSG, these are tokenized money market and treasury funds, also very large. They pay a yield, but they are not as liquid as GLDY, and so I think we have a very interesting product. They also have very high minimums, whereas GLDY's is just $25,000. When we look at Streamex and the valuation metrics, there are a couple key numbers that we look at. One is called the lifetime value of a token. Every time that we issue one GLDY, one ounce, which is one ounce of gold, we take the fees, we discount them back, and we get a $1,500 NPV for the token itself. This helps us a lot with our cost of customer acquisition when we look at, hey, what does it cost for us to mint one token to acquire that customer?
If it is under $1,500 from an NPV and NAV basis, we are doing the right thing. Our cost of customer acquisition right now is exponentially less. Same thing with the token trading and just generally as we look at the market and we look at trades in the market. The trading fee itself becomes a very fat tail case scenario for the asset. As it trades, as that 10 basis point fee on trading accrues, obviously the revenue that the company makes accrues exponentially with that as well. Our goal really is to grow assets under management, grow liquidity, grow trading avenues so that we can recognize this revenue, and you can see that it becomes very powerful over time.
Talking about our strategic roadmap as we are wrapping up here, I know we are getting pretty close to time and want to give the opportunity for questions. I touched on silver. I touched on oil and gas. These will be the next assets that we launch into 2027, and I think they are going to be very exciting for the company. Into sort of the second half of this year, touched on GDLC and other permissionless products. The ability for people to get into tokenized gold and grow the AUM of GLDY in a permissionless farm is very, very exciting. Being able to launch silver, oil, gas, copper, et cetera into next year is also a very exciting thing for the company. Lastly, touching on our team. We are built with a very strong and very, I think a very good team for what we are looking to do.
Everyone from across, myself in the digital asset side, Mitch Williams as our Chief Investment Officer who has managed OppenheimerFunds, Wafra. Christine from Coinbase, who is the Global Controller. Laura, who recently just joined us, who is the award-winning Investor Relations individual. Morgan, who has deep ties in the mining commodity space. Our board, backed by Anthony Marciano, who is on the board of NYU Stern, and one of the head professors there. Kevin Gopaul, CEO of VanEck, Canada, ex-CEO of BMO. Don, myself, Morgan, Mitch as well on the board. Overall, I really appreciate everyone being here. I really appreciate everyone taking the time to listen to the story. If we haven't connected yet in the conference, would be more than happy to connect after and also happy to answer any questions that people might have.
Ashley, really appreciate you setting this up. I am excited to be able to answer some questions.
Thank you so much, Henry, for doing the presentation. I would like to remind everybody in the audience, if you have any questions, you can submit them at the Q&A section at the bottom of your screen. Henry, just as a starter, what country is the physical gold stored in?
Yeah, great question. The physical gold is initially custodied with Asahi in New York.
Oh, wow. Okay. At the end of 2Q earnings call, you mentioned and showed a 90-day time frame, and now you're referencing another 90 days again. Are you referring to the 90 days from now, or how are we supposed to interpret the timeline?
100%, yeah. That would be the 90 days from the earnings call.
Okay
essentially pretty much 60 days from now.
From now, okay. Okay, that's helpful. Just you've moved from building the infrastructure to generating your first revenue from GLDY. What are the two or three KPIs that investors should be tracking to measure the commercial adoption over the next 12 - 18 months?
Absolutely. I think the main APR, the main thing for people to look at would be the AUM growth of the asset. Seeing how that grows both in ounce terms and in dollar terms. I think that's the main thing for us, which is our main focus is growing that AUM and growing the total amount of GLDY outstanding. I think as that scales, also looking at trading volume, this is all data that is publicly available, because it's all on chain and which is the beauty about blockchain. I think AUM and trading and distribution growth.
Right. When do you expect the AUM to go up? It hasn't really moved a lot in the last few months. Any expectations on when you see movement in that?
Yeah, absolutely. How we've messaged it is, especially in that 90-day time frame, it's closing on the first institutional order, the first couple institutional orders in the next 60 days. I anticipate those closing in short order here. From there, I anticipate it to be very much a snowball effect from people see these institutional orders come in, then from there, the comfort level of investing in the asset obviously rises. As AUM grows, it becomes more of a step function, and I think the growth is more exponential than we have seen. It's been our real big focus from the team and internally to be able to get those first couple institutional orders in and then build out the infrastructure for the next ones to follow very quickly after.
Right. There's a question from the investor asking, why did you issue GLDY on Ethereum, but use Solana for the decentralized liquidity? Do you intend future commodities to be native to multiple chains?
Yeah, absolutely. We issued GLDY on Base. It's obviously on Solana as well, tradable through Orca. That's about just expanding avenues for the asset to be able to operate. We utilize Chainlink CCIP for cross-chain compatibility, so users are able to participate both on Solana and Ethereum ecosystems. As you know, with many tokenized assets, you want to have as wide of a distribution network while not fragmenting liquidity too much. Using Solana and Ethereum as the two main chains to start, I think is a very solid approach on our side and will most likely be what we do for additional assets as we move forward. From there, potentially being able to expand onto more chains.
When you look at the concentration of liquidity and then concentration of capital investors, Ethereum and Solana have the two biggest concentrations at the moment.
Right. Can you walk us through the economics of GLDY through Streamex's perspective? For every $100 million of GLDY outstanding, what type of annual revenue opportunity could that present to Streamex?
Absolutely. We haven't provided any formal guidance on this, but I think the best way to think about it is you look at the three main fee streams, one being the tokenization fee, which is 25 basis points, one being the management fee, which is one percent, and then two being the management fee, that's one percent, and then three being the trading value and the trading fees. You can create a very simple model around that where you can multiply the AUM outstanding based on how many times you expect it to trade, and you can get numbers from that. What I would say is when you look at the existing gold tokens in the market, they trade around 100x per year.
Obviously, we're not at that point yet, but as AUM scales and as the liquidity and decentralized trading avenues scale as well, those will continue to, I think, be more prevalent and increase.
Right. What has the adoption looked like since the launch? Are you primarily seeing crypto-native investors today, or are there RIAs and institutions, institutional wealth managers bringing-
Yeah, absolutely. Absolutely. We've seen a mix of both. We've seen both institutional managers performing their sort of tests and looking to sort of see how it all works and then coming in with small amounts before they potentially scale in larger amounts. We've seen individual accredited investors coming in for $25,000, $50,000, $100,000 tickets. What we're really excited for is that first sort of institutional order, million dollars plus to be able to get the ball rolling on the institutional side. I think that's where a lot of capital can flow from very quickly.
Right. Somebody who owns GLDY today, can they demand delivery of physical ounces of gold? If yes, exactly what are the minimum redemption size, fees, delivery locations?
Yeah
Eligibility requirements for that?
Yeah. Absolutely. Yes, the answer is yes, you can redeem GLDY for physical gold. The current minimum redemption on physical is 1 kg, it's around, I think, just under $100,000 right now. The reason for that is the mechanics behind physical redemption is there's a decent amount of friction compared to redeeming for cash, which you could do instantly. It isn't an asset that is designed for people who want to buy physical gold, but there is that ability. If anyone would like to, it would be much more efficient for the investor to sell or redeem for cash than it would for physical. With that being said, you can if you would like to.
And you had hiccups in the beginning regarding onboarding. Are those issues resolved now? Are you still confident to reach the end of your AUM target of about $100 million?
Yeah. What I'll say is the operational, say, hiccups that you mentioned that we had in the very beginning, I think are par for the course for any new company, and they are things that we have actively solved over the period of time that has passed since launch. We continue to upgrade the platform to make it easier for people to onboard and purchase the asset. As we look at scaling into the end of the year, we're confident in being able to get in these first institutional orders, then being able to see the scale come from that.
Yeah. Henry, we've been seeing a lot of regulatory risks around the tokenized securities. The regulation around it is still evolving. Which developments would most accelerate your growth, and how are you positioning ahead of them?
Yeah. For us, I think the good news is that we operate in a fully compliant manner today. We're not waiting on anything to happen to be able to be operationally compliant or institutional grade. With that being said, I think there's a couple of catalysts that'll help the industry as a whole. One that recently came out was the Innovation Exemption, so if you look at our partnership with Orca creating that decentralized exchange, that is directly relevant to the Innovation Exemption and is a very powerful thing. I think when you look at the CLARITY Act, which has obviously been a lot of speculation recently in the press, that passing, I think that has much more to do with liquidity coming on-chain and these more TradFi institutions being comfortable being able to allocate liquidity on-chain.
It doesn't impact us per se from how we issue assets, how we are regulated, how we operate. I think in general it'll be a major catalyst for the industry and something that we're excited for, but it's not something that's mandatory for us. We're not necessarily waiting on it for us to be able to be operational.
Right. Speaking a little bit about GDLC, how do you think about GLDY versus GDLC? Are they addressing two different customer bases, or could GDLC ultimately cannibalize some demand from GLDY?
It's a really good question. I would look at them as targeting two completely separate customer bases. The good news for that is that as GDLC grows, GLDY grows in tandem because one GDLC is backed by GLDY. Every time that GDLC increases in value, we in turn create more GLDY. That's something that I think is very powerful because it's not a cannibalization. It's not people need to pick whether they want to buy GDLC or GLDY, and then from there it's one or the other. They actually grow together. GDLC is far more for the retail investor, for the international investor, people looking to get gold price exposure and use that on-chain.
Whereas GLDY is far more for the U.S. institutional investor, person looking to get a security asset that is compliant for their fund to hold, for an ETF, for a wealth manager, et cetera. Then from there, being able to get the yield on top of it. They are very complementary assets that both benefit the GLDY scaling and AUM growth.
Right. How is the yield created with the relationship with the Monetary Metals? What are their incentives?
Mm-hmm. Monetary Metals themselves, like I said, they are the gold leasing provider. The simplest way to think about gold leasing, and this is an analogy that I give, is say you have an office space and you are leasing that office space. You have the right to use the office space, you have the right to conduct business in the office space, but you pay whatever company you are leasing from a fee every single month to be able to rent that out. Very similar with GLDY. The jeweler or the refiner or whoever is being leased the gold does not own the gold. They simply have the right to be able to use it. Say a jeweler creates a ring or a chain or whatever it is, and then they sell that chain. They simply rebuy the gold.
The lease itself is always 110% over-collateralized, and they pay us to be able to use that every single month. We pass that yield on to the holders. It is a very powerful market, both for the jewelers and for us, because it gives us the ability to make that gold active and pay it out to holders, and also provides the jewelers a much more efficient hedge to gold as they are operating and working in that industry.
Right. Right now, the only way of buying GLDY or GDLC when it comes is going to be through the website. When do we see them coming on any of the major brokers, like on Robinhood or Schwab or anything like that?
Yeah. GLDY right now, there's a couple different avenues actually to buy it. It's not just through the website. You can buy it through the website.
Okay
You can also buy it through different broker-dealer channels, like our partnership with Seabird. Very soon you'll be able to buy it directly with Equity Trust and custody it with Equity Trust, as well as a number of other sort of decentralized channels like Orca and Wintermute, et cetera. With GDLC, we anticipate it to be available on many different centralized exchanges as well as decentralized exchanges. Anywhere that you would buy a traditional crypto asset, you would be able to buy GDLC, and our goal is to grow that exponentially as we continue on.
Right. I'd just like to end by asking if you can sum up the value proposition for investors who might be looking in this space and across this sector.
Absolutely. As an investor, when you think of GLDY, when you think of Streamex as a company and the value proposition for Streamex as a company, I think there's two things to think of, and I've mentioned this a couple of times over the call, is Streamex, we're a fintech platform. We're a fintech company operating in the tokenization industry in the commodity space. We are in the fastest growing financial sector in the world. Which is tokenization. We are in the largest TAM market in the world, which is commodities. You really have an exposure to both sides of the trade. I think the operating leverage that we have within the company is very real and is very exciting for us to be able to look at.
Right now, I think is a very strong opportunity with where the company is trading and where we are, that as exponential AUM growth comes, as this first institutional order comes, there will be I think very much a J curve for the growth of both AUM and the company itself. It's I think a very attractive time to become a Streamex shareholder. Like I said, we're speaking with a number of firms today. If we haven't, would love to speak with you. I would look at where the market's going. The market is adopting tokenization. Commodities and gold and silver, et cetera, will continue to go up and to the right in price, especially with everything that's happening in the world right now.
With Streamex, I think we're sitated at a very attractive sort of intersection of both of those trends and looking to continue to grow. We have no debt. We have significant liquidity. We have a number of catalysts coming. As an investor, I think this is something to look out for. I'm always open to answering questions, speaking to people, speaking to investors, and being able to tell them about the story and something that I am very excited about and very excited about continuing to grow.
Thank you so much. With that bit of time, I would like to thank you very much for sharing your story with us today. Also, I'd like to thank everybody in the audience for listening and spending time with us today. Thank you.
Thank you very much for having me.