Jeremy Raper discusses POSaBIT $POSAF

Here’s my conversation with Jeremy Raper on POSaBIT (POSAF); you can find Jeremy’s POSaBIT article that sparked our conversation here. You can follow the podcast on Spotify, iTunes, or most other podcast players, as well as on YouTube if you prefer video! And please be sure to rate / review the podcast if you enjoy it, or subscribe to this Substack to get all new podcasts and transcripts delivered right to your inbox!

Disclaimer: Nothing on this podcast or on this blog is investing or financial advice; please see our full disclaimer here. The transcript below is from a third party transcription service; it’s entirely possible there are some errors in the transcript!

Transcript begins below.

Andrew Walker: Alright. Hello and welcome to Yet Another Value Podcast. I'm your host, Andrew Walker. And with me today, I'm excited to have, my friend Jeremy Raper on for the fifth time. Jeremy, how's it going?

Jeremy Raper: I'm doing well, man. How are you? Thanks for having me again.

Andrew: Hey, thanks for having me. I'm going to tell you what I was telling you before the podcast. Congratulations. Jeremy just had his second kid about a month ago. So congratulations. Thanks for coming on here on the heels of that.

But let me start this podcast in a way do every podcast. First, a disclaimer to remind everyone that nothing on here is investing advice. That's going to be particularly true today. Jeremy traffics in very small, very quirky international stocks. Everyone should remember smaller, quirkier, international, all of those are synonymous with higher risk. You need to do a lot more diligence. Nothing on here is investing advice. Please consult your own financial advisor or whatever it is.

And then the second way I start every podcast with, a pitch for you my guest, but you know, forget about that. This is your fifth appearance on the podcast that's groundbreaking stuff. I've done about 75 podcasts and you're five of them. So if that doesn't speak out how much I admire you and how much I like you, I don't know what is.

So, we'll skip all of that and we'll start by going into the company that I think you're coming on. Your newest, most exciting idea. I think you post an article on Seeking Alpha. I'll be sure to link to it in the show notes. Then, this is your best idea right now. The company is POSaBIT and the U.S. trades OTC under POSAF. I remind everyone one more time - risky. Please do your own work.

With that out the way, I'll toss it over to you, Jeremy. What is POSaBIT? And why are we so excited about them?

Jeremy: Sorry, sorry. I have to get this in before I talk about POSaBIT. You said you've done 75 podcasts and I've been five of them. I'm not sure what's more shocking than you've done 75 pods, or that I have like, what's that a seven percent market share of your podcasts.

Andrew: You know, I think we're, I think the last one we did was 50 and you were four of them. So, your market share is creeping down, man. Your stocks in the gutter market shares are creeping down. We're diversifying over here.

Jeremy: Much that you did. I'm a value guy. Okay. I'm, I'm not about the growth, I'm about the value. Just keep that in mind. But yeah, no, thanks for having me.

So, POSaBIT. Okay, so, just to kind of add on to your disclaimer at the beginning, this is a smallish company in a very fast-growing regulatory young industry, Cannabis. It's listed in two locations, actually. You mentioned the OTC listing. It's formal, I guess it's the main listing. Today is still on the Canadian Securities Exchange and of listing under the ticker PBIT.

So, if you can actually traded on an exchange which will get to, that's a bit of an issue for many, many market participants. If you can trade on that XJ, you can do it in Canadian dollars. Most listeners will be familiar with cannabis, kind of the Cannabis evolution in the sense that a lot of Securities could not be listed in the U.S. initially for regulatory reasons, due to the lack of federal legislation around cannabis. And so, a lot of the companies are usually went to list in Canada. So, that's kind of part of the reason for the background for why PBIT is listed in Canada and only recently listed here. Well, only recently became OTC tradable in the U.S.

I do expect this company will graduate to a more normal listing in the U.S. for overtime, and the CEO of the company has already thrown out 2022 as a likely NASDAQ uplisting year. Although that's obviously to be determined. Having said all that much. [interrupted] Yeah, sure.

Andrew: Yeah, just so you know, as you said I've done podcast on cannabis, actually, I think tomorrow Aurora Cannabis is going to come on to do another cannabis podcast. But most cannabis companies who operate in the US trade in Canada because of federal legislation stuff, but these guys aren't technically operating cannabis, they're just doing payments. We'll get to that in a second, but because of that, they think they could go to NASDAQ at some point.

Jeremy: I'm not sure if that's entirely the reason. In other words, I'm not sure. It's because we don't actually cultivate and sell cannabis; therefore, we could list on NASDAQ. I think it was more of a this is a fast-growing thin tech company, NASDAQ is the logical place for it to list. And there are other service providers to the Cannabis industry that are listed on NASDAQ like Weedmaps, for example.

So, to me, I'm just trying to be completely upfront. I haven't checked the actual letter of the law as to, what's preventing them, from being on NASDAQ. I do know the Legacy history of the company why it ended up in Canada. And then there's a natural [crosstalk] process

Andrew: Hold it up. We're going to talk about that too, so yeah.

Jeremy: And then there's a, there's a natural process to get listed on a better exchange, which takes time and money, which is kind of what they're starting to go through at the moment, but actually what the company does. So, let's kind of talk about it.

So, there are Vertically Integrated Payment Processing Companies providing services to the Cannabis industry specifically to cannabis retailers, called dispensaries, but it's officially shops where you go and buy cannabis. It's a US company. It's based in Seattle, Washington. It's, I think it's six or seven years old. So maybe, I'm sorry, maybe 2017 sounds [crossalk].

Andrew: So, it's 2015, I think it's meant. Yeah, I was looking at it, so, yeah.

Jeremy: And then it started, it started operations for maybe 2017. So, it's an entirely U.S. business today. As I said, they're in 14 different states. They, essentially, they take part of the role of the acquirer in a typical kind of banking card Network and part of the role of an issuing processor, but mostly you could think of them as an acquirer. That is they provide Merchant-oriented services. They manage the payment account for the merchant with regard to the financial institution. That is the issuer or the bank. They receive a fee, they do various different things. But essentially, the bread and butter is they receive a fee per transaction for providing those services, and therefore like many other payment businesses, as the hopefully the volume scales aggressively as it grows. You kind of earned this annuity type Revenue stream on a growing pie of transactions.

Andrew: Jeremy, just, you know, a normal business at Chick' fillet at McDonald's or something, who would the acquirer be for when they process? It would be, POSaBIT is only debit cards, I believe. But wouldn't it, when a McDonald's processes a credit card transaction who would as its typical acquirer be there?

Jeremy: That would be someone like, I'm just blanking, but [crosstalk]

Andrew: No, I am just for the reason why but I think it would be like, the square, the clover, that type [crosstalk] Yeah.

Jeremy: Oh, so yeah. It would be, a square is like the "vanilla" for this industry outside of cannabis space. So, it could be a square. I mean, there's actually a lot of the bright but square is all traded moved to a dominant position in recent years, so we'll go with square.

Andrew: Yeah. I was just doing that so people could start thinking, you know, an acquirer can get a little jargony. So, people can start thinking, "Dude, it's competitive," but please continue.

Jeremy: Yeah, so basically, I guess a few layers to the investment, right? So, you have your overall kind of the way. To think about it is this, on a macro level, that's kind of two or three layers. The first layer is, how fast is the End Market growing, right? So cannabis adoption obviously growing very quickly. You can look at your external Consultants, but the market has been growing at kind of like a compound team to write it for the last few years. It's slated to be a 25 billion opportunity at the retail level. This year. It's expected to grow at High Tenths for the foreseeable future. That's a function of continuing legalization by the State. So right now, cannabis is legal in various forms where medical or recreational and I think 39 States. So, there's the ongoing expectation that over time, you'll get to 50 states. Over time you'll get Federal legalization of cannabis, which most people realize is the big issue in the industry, that it may be legal at the state level in various states that you can actually transact across state lines. You can't bring cannabis from say, Colorado into California, so, it's essentially two different markets right now. And that has big Banking and processing implications we'll discuss.

So over time, you have this long tailwind from kind of retail growth and adoption, 25 billion a year, now. This could cook for C.Billy compound at 20% or more for many, many, many years. That's layer one but layer 2 is actually more interesting to a company like POSaBIT and that is the percent of transactions in cannabis is so heavily cashed today that you don't just get the tailwind from so kind of the industry growth, you get this massive secondary derivative to tailwind from converting cash transactions to card transactions.

So, if you think about it, in a typical retail environment, you go to McDonald's, or you go to where you've McDonald's is probably more a lot more cash and other places that, you go to Zara, you go to H&M, you go to a department store, 90% of transactions today in the U.S. take pace by card or live set non-cash transactions recorded digitally.

And, if you go to a cannabis today, that number is closer to 10%, maybe 15%. So, an interesting anecdote that the CEO of POSaBIT says is the day one when they go into a store, immediately the usual transactions go to 30%. So, to get 30% of the revenue in the store day one, that's generally the conversion from an overwhelmingly cash to a slight adoption of card. So, in the stores herein today, it generally is around 30% doing card versus cash. But obviously, you would expect all else equal, that consumers favor plastic and over time the card percentage share of transactions will suits creamy. The cashier transactions will go down progressively, probably very quickly and the card share will go up very quickly. And obviously, that will be a tailwind to every processing card transactions, which POSaBIT is one player. So, you have the overall growth of the market very high. Then you have this conversion of cash to card or cash to digital. Cash to non-cash, essentially. And that is going to be very high.

And then the third layer is more like the company-specific opportunity which is POSaBIT winning share from other payment processes. POSaBIT winning share from other POS providers, so they have a POS offering as well. We'll talk more about some of their offerings outside of pure payment processing.

And so you have this kind of three-pronged approach. The core of the investment is if they don't even do that well on the third leg, which is the most difficult leg and that is the, we knew business slave, even if they simply ride the wave of those first two legs, that is the growth of the industry and the conversion of cash to non-cash payments and cash to digital or card payments, then, this in my view, this will be a home run given the size of the opportunity in the valuation today.

Andrew: Perfect. Let's pause there. So first quick question, so, you know, I am familiar with cannabis doors. I've been to one or two in the past, but I thought they were all cash. Right? So, my first question is, who else is processing cards - it's only debit cards, not credit cards yet - but who else is processing card transactions?

Jeremy: So, to be completely clear, there and it is again, it depends on the State and it depends on the store.

Andrew: Okay.

Jeremy: But it is a bit of... the group... it is a bit of a gray area but essentially, what you need to, in order to process non-cash transactions within a cannabis environment today, you need to have a relationship with State-level banks, essentially. State-level banks credit unions that are comfortable operating in an interest state environment. Right. Not within the ages of definite of the federal banking system. In other words, you go to a State, let's say you go to Colorado and you go to a local state Colorado Bank and they're happy to be... they're happy to have a bait banking relationship with Colorado, only dispensaries and kind of like a closed network within the State, let's say.

And so, on that basis, you can do typical pin debit transactions. You can do digital ATM transactions. That's called point-of-banking, it is the technical term for it. You can actually do credit card transactions via a two-step Loop using cryptocurrency. So, in other words, it is possible to walk into a Cannabis store, use your credit card, and walk out with cannabis. But what actually happens is you use your credit card to convert it into Bitcoin or Ether or whatever. And then, that Bitcoin or Ether is used to buy Cannabis products.

As it is a totally separate secondary transaction, you don't actually have to, you know, all the credit card grail see is a conversion to bitcoin. Then the Bitcoin is used to buy the Cannabis, and the motion ends up with Bitcoin, which is then converted back into cash, presumably, at some point and onwards. And then, the credit card grail sees another Bitcoin transaction. So, that's the kind of on-off way to do a credit contraction, credit card transaction. And again, that's not very common right now, as you can imagine, it's clunky and expensive.

And then, the fourth option is you can link your bank account. So, in other words, if you really wanted to and POSaBIT tries its functionality, but it's pretty expensive and it's very cumbersome so I don't think many people do it, you can do an ACH transaction where you give your ABA number and your routing number and actually, essentially do an ACH grails transaction within the store to pay as well.

However, to answer your question directly, the most common forms of payment today are what's known as point-of-banking or digital ATMs which used to be common in the casino industry as well. Essentially, handing over ATM, giving them the card number, and then handing you back chips. So, think of that, but doing it with cannabis instead. The problem is it's basically like an out-of-network charge. So, in other words, basically your bank, the customer's bank is going to look at that as an out-of-network transaction; therefore, slap you with a big out-of-network fee.

So, the Olin, if you're spending like I don't know, $60, $70, the $60, $70, $100 average spend and is up to $100 in some shops, but let's say, $60, $70 in your spending, couple dollars, convenience fee plus in-network, out-of-network kind of out-of-network ATM, virtual ATM fee. And then, you're also paying, on top of that, the typical processing charges. All of a sudden, the customers having a bad experience, and the merchant is not really...the merchant is not making any extra money. They're paying those fees on to the banking partners, right? So, the customer is paying more for the same service.

So, the industry seems to be gravitating more towards typical pin debit, debit to the penny as it's called, which again, is made possible on a State-by-State basis because people like POSaBIT do the heavy lifting of going to local State Banks and State Credit Unions, underwriting the relationship with specific merchants and bringing and basically forming a relationship. It's totally compliant, totally above board at the state level with willing Partners.

So, I think that's very clear to keep...sorry, I think that's very important to make clear because I think a few of the questions in your comments right on Twitter we're asking, "Are you sure that these Banks know they're dealing with cannabis merchants or cannabis stores?" And the answer is of course, of course. This isn't, this isn't some kind of baiting switch where POSaBIT is introducing businesses, and not telling their banking Partners what products they're selling, that's ridiculous. Yes, they're familiar with these entities with these dispensaries. They operate in the same neighborhoods. They operate in those states and their local banking institution.

But you know, the question is, I guess we can get to it later on. I guess the real question is what happens to suppose Federal legalization to just kind of [crosstalk] its case an ecosystem.

Andrew: Let's get there when we get there because this was great.

Jeremy: Sure.

Andrew: You answered my...they mention on their website a lot, they do blockchain. I was going to ask you about blockchain, but you already answered that with the crypto and credit card questions. So, I guess let's dive into the mode over it 'cause it does seem like until we get Federal legalization, it seems like these guys are going to have a pretty nice mode, right? Like in order to, if I was, you know a square, you can start up a payment transaction pretty easily. You know, obviously, you need a tech guy and stuff, but it's not going to be too hard to get a bank, and a bank to accept a bunch of transactions if you're just like, processing clothes or something, right? Whereas for this, it seems like it's going to be really difficult.

There aren't a lot of cannabis companies out there. So, you're going to have to go, you know, literally state-by-state, store-by-store, knocking on doors to sign up these cannabis companies. And then, you're gonna have to have enough size where you're going to go to the local Community Bank and say, "Hey, you know, work with us process payments for these 30 customers who are probably higher risk, you know, all the KYC stuff." So, they might think like, it's probably a...now, legalization is gonna be an issue, but it's probably a pretty big mode in the meantime. Are there any big competitors here or anything?

Jeremy: Yes. There are a number of competitors, but I think you're framing of the situation is correct. So, there are two regimes. There's the regime as it exists today where despite the fact there's a number of competitors, it's also very kind of a difficult Market to attack. So, there are these two angles to that. First of all, the market is actually quite small. So, if...I just mention that it's good, it's a 25 billion dollar opportunity, that's at the national level. If you consider U.S. retail value is a few trillion dollars. This is irrelevant to someone like Square. Essentially today, it's irrelevant to a square, it's irrelevant to a fighter. It's irrelevant to a, to a Fidelity National some of the other bigger payment names.

So, there's a look, it's obviously going to become more relevant, you know, in five years time or ten years time and it will be attacked by bigger players, but for now, it's a very, very small market. And that's the national level and you actually have to break it down state by state. So, the numbers get lots more. Excuse me. I'll take...

Andrew: No problem. Wash it.

Jeremy: Sorry, a touch of the old, just a touch of the old COVID kicking. I'm just kidding. I'm just kidding, but no, no.

So the point is, that's quite important. That creates...the size of the market creates a bit of a moat in itself because it's still very, very Niche. Very Niche and that's important in partaking the economics.

The second point is, you're right. The regulatory environment today is its own mode and that will change in the coming years. The question, of course, is how long does it take and what shape does that change take? So, it's a very different scenario to say, you know, press a button federal legal safe banking at past, all the sudden you can Bank cannabis transactions. Does that mean will be a free fall? And as you kind of alluded to know, the reason it was still a no is because it was most definitely still be classified as what's known as a high-risk industry.

So, in the kind of payment processing and/or Credit Card World high-risk industry is one where, for whatever reason, the underlying business is deemed to be. Well, the high risk of default, high risk of non-payment of obligations, and higher taint attached to it, let's say. So, for example, online pornography used to be, well still lived classified as high risk, even though, you know, it's an illegal industry. Online gambling is obviously another one. Tobacco is classified in some like dealing tobacco online, out some kind of online. Alcohol retail is also classified that way.

So, basically, the point is the economics derived from the risks undertaken by the various counterparties in the transaction whose underwriting the transaction, whose taking the risk of processing these transactions. And that's less a function of legalization or non-legalization. That's a big blanket term. That's more a function of the categorization of the industry. Is it a high-risk industry? Or is it just going to Czar and buying clothes, which is obviously a low-risk kind of activity?

So, when you combine that with the fact that it's still a very small market in the grand scheme of things, that creates a bit of an economic moat. Having said all that, you asked, "Are there any other competitors?" And the answer is, of course, there are lots of competitors. It is a competitive space. Just the competitors are not your Fidelity, Nationals, your squares, right? The competitors are other smaller, mostly, other small kinds of Niche-Focus Cannabis-oriented Payment Processing Company.

Now, the biggest competitor today is a company called Transact First which is unlisted privately held. I believe, they just did a funding around. I'm not entirely sure of the details, but I think, it was well more than ten times sales. I think it was largely a secondary sell down. Don't quote me on that because I haven't seen the deal docs, I only heard through kind of my network. So, I think [crosstalk]

Andrew: I did transcripts in the podcast now, so you're gonna get quoted on it. I hate to tell you, there is going to be a transcript.

Jeremy: Well, I get it. If you quote me, just say, "By Jeremy who heard it through his network of, you know, a network of high-risk sources," you can say that.

But no, too answer, to follow up quickly, Transact First is a real competitor. They are much larger than POSaBIT today. The reason they're much larger is because essentially, they locked in a lot of the...they were quite smart. A couple years of...they locked in a lot of the larger episodes to long-term contracts. So, they locked in, unlike POSaBIT, will sign companies to say one-year deals plus with option for extensions and trust the quality of their service to maintain the relationship and keep the business. Transact First went the other way and locked in customers to three to five years committed relationships for the processing.

So, if you talk to a lot of the customers, or a lot of the merchants, I should say, in the industry, they're not really happy with Transact First. It seems like to be an opportunity for people like POSaBIT to pick off. As in when some of these customers come up for Renewal. Also, I personally don't believe Transact First Technology is that great. I think POSaBIT's offering is at least competitive, if not more competitive, particularly on some of the key in your offerings like debit-to-the-penny.

So, pin-based debit transactions, as opposed to the old method of point-of-banking digital ATMs, which was the dominant salute, still is the dominant solution per day but is being de-emphasized over time for reasons that I mentioned. The out-of-network fee charged the customer the clunkiness of the transaction.

So, Transact First is what I would call the Legacy strong player in this specific Cannabis Payment Processing Niche. POSaBIT is definitely a challenger. So, if you think about it this way, there are over 8,000 dispensaries in the United States, POSaBIT is in 300-plus growing at a hundred...going at 200 percent at the revenue line, but growing the entry-level number, you know, over 50%. And they're entering new States all the time.

So yeah, I mean, they're definitely not...it's not a situation where you have one player with huge market share and a long tail, it's a completely fragmented market, very fragmented. Even Transact First market share is not, I mean, I don't have the exact stats in front of me, but it's not like they have a dominant market share and everyone else has no hope. It's very...as you would expect, right? There's not really one market. You have to think about, in terms of 35 to 40 different markets, state markets where various operators have different resources that have made the decision to invest in you.

As you said, KYC, completely compliant Solutions, and banking relationships, and POSaBIT, it's done then in a few States, but definitely not all of the states and transact bursts done that in more States and has had a couple of better longer-term relationships with what ended up being larger entities, but they're not, you know, kind of a...not like a Draft Kings or anything like that.

Andrew: Let me jump in here. So, in a second we're going to talk about your wishes, but you covered a lot there. And I just want to go through a couple of things you covered.

So the first, you know, if people can remember 5 or 10 minutes ago when you were talking about Industries with taint, I thought you had a great thing in your Seeking Alpha piece where you were talking about. "Hey, here's how much possible charges per transaction." And you know, when I think of a normal credit card transaction, you know, it's like, if I go to the bodega across the street or something, it's going to be...I think they charge 30 cents per swipe plus 2% of the transaction or something, right? But Industries with higher taints are going to charge higher chargeback.

So, you just had a great thing in your Seeking Alpha piece of here's how much the average industry with taint is charged by the credit card issuer. And here's how much POSaBIT is charging. And I think that will help remove this a little bit more.

Jeremy: Sure. I hate to be unprepared. I do actually have this Seeking Alpha article in front of me, but it's on the net so people can pull it up. But the gist of it is essentially as you said, the high-risk average take rate today is well north of 5%. Right, all in. Let's say all in the, a blended take rate is normal for the 5%, meaning the economic cost to the ecosystem from processing this transaction, let's say it's a hundred dollars is more than five dollars versus today's POSaBIT's top ticket. In other words, the servant that all in charge, they get the most, I think 5.2% for one of their services. I think it's a debit, pin -debit transaction, meaning it's not wildly out of line. It's not wildly out of line with legal federal, legal high-risk Industries today.

So, my point is if you believe and this is a belief, not a fact that if you believe that cannabis regulation, or at least the payments' ecosystem in cannabis follows the Playbook of other high-risk industries, such as pornography, or online gambling, or all yet, online betting or things like this, then you're never going to have a situation where the take rates are, you know, 30 basis points, 50 basis points. It's always going to be some kind of multiple, huge multiple of that. And if it's in line with these other industries, there's no reason it shouldn't be close to 5%. Having said [crosstalk] yeah go on, go on.

Andrew: I was just going to say, in your article, I just thought that was such a great point because, you know, when I...when you first hit this talking, talk about some of the other red flags, one of the things my mental model was, "Oh, well, yeah, they're generating great Revenue right now," but when it gets legalized, you, first the big players are going to come in and then you know, these guys are charging 5%, the big players are going to weigh undercut them. So, they're going to be churning and they're going to have to reprice all their contracts and I think you've done a great job of addressing why if legalization came, which is a big if, I'm actually kind of taking the, I think it's going to take longer for federal to legalize than we would kind of hope. But even if it came, I think you addressed the big risk.

It's not going to all switch to square in one day and they're not going to have to go from 5% charges to 2% charges and you know, see their revenue get cut in half or something overnight, but were you going to say one other thing on this?

Jeremy: Well, I think I maybe I was, but I think what you raise is more interesting. It's really important to talk about the pace of federal legalization. This is a key investment risk and a key kind of determining the outcome of the investment. So, when Biden got elected, kind of backed up a little. Why are all U.S.- Canada stocks are in the toilet? They've been a massive underperform. Your buddy Aero, I'm sure we'll talk about it tomorrow.

But essentially there was this belief that when Biden was elected, it would be a free fall. We will move to Federal as Federal legalization very quickly, and it obviously, with all the consequences for guys like POSaBIT Payment Process.

Now, what's turned out to happen is all of a sudden, not only is federal legalization kind of still in the background but even the safe Banking Act is not passed. It got stuck in the Senate. Who knows if it makes progress? But now, it seems as if the market is coming around in this to Federal legalization is at least 18 months away, maybe longer.

And that could get continue to get pushed. I've spoken with a lot of people who think it's not going to happen during a binary ministration. To be fair, he's probably a one-term president. So, I'm not saying that's all that long, but when a company is going to a hundred percent a year, you only really need one or two more years to make the numbers work especially this valuation. That's point one.

Point two, yes and I guess it's the point you raised the day Safe Banking Act passes, the day and that, that could be well before actual federal legalization matter on it, but let's say, you know, Federal legalization happens, completely shortly thereafter.

Amazon is not rushing in to sell cannabis. Okay, there's still going to be highly restricted. Think of it like alcohol or tobacco or anything, the actual point-of-sale opportunities, still going to be regulated state level. You're not going to be, it's not as if it's going to be a free fall where cannabis is available everywhere. And VISA and MasterCard are rushing to new pandamas transactions, and all your typical payment processes that service traditional Industries like SQUARE is just diving straight head first in and undercutting everyone.

It's interesting you mentioned Square actually because I believe they actually entered the CBD market, and even though they have all this huge scale from there, you know, the step function high-volume business and they're very fast-growing traditional transactions business to normal Industries, they're still charging from what I heard, they're still charging kind of 4% to 5% take rates on the CBD business that they actually try to pursue.

Andrew: Interesting.

Jeremy: So, it's obviously one as if they went in there and the reason is simple. It's because, and by the way, CBDs are legal, right? It's not cannabis, but the point is, maybe C..., I need to check them, check the light letter of the law, but maybe CBD is classified as a high-risk industry. It may well be. And if that's the case, then the economics of the payment processor are still going to be dependent upon giving up portions of that take rate throughout in the partners at high-risk levels. Which means, theoretically the take rate, I mean, obviously, someone could come in and just use it as a massive loss leader, right, but why would you come in and use it as a massive loss leader when the revenue pool is still de-minimis, in the grand scheme of things? That's it.

Thirty billion-dollar revenue even in a cup in a year is at the national level, right? It's a drop in the bucket for U.S. retail, so, it doesn't still...the point is the day after or even in the immediate aftermath of the federal legalization, it's unclear to me exactly what is going to change very rapidly. You're still going to have a highly regulated industry. It's still largely going to be dominated by the States. The Status quo will largely be maintained. Although you will be able to transact across state borders and you obviously will be able to bank the industry properly. That's it. That's a huge benefit.

I just don't think because you're able to bank properly that means one take me to get compressed into all of a sudden. You see, all these big boys just jump into a still small market.

Andrew: And this goes back to actually my next question, a transition pretty nicely. So, you said, even if Federal gets the license are like the cool thing about these Merchants requires, right? Because POSaBIT is also POS, is this right? It runs your point-of-sale and your point-of-sale is a very sticky product. Like this is one of the reasons why point-of-sale companies get value too highly.

Once somebody chooses to go with you for point-of-sale, it's not like somebody chooses Jeremy's product, and then the next day I come over and I say, "Oh, Jeremy's charging you 2.4%, I'll charge you 2.3 percent," and they jump for joy and switch over to me. Right? Like you have to literally rip out your entire system, retrain your whole staff like it's a super sticky thing.

So, even if they're all got legalized tomorrow and everybody was like, "Squares' Technology is great." All this, it would take, you have to go door-to-door, you have to plan these big transitions, it takes a long time. So, that transition to another thing, I wanted to ask, you mentioned when we were talking about Transact First versus them, that POSTaBIT has one-year contracts with their customers. Do you know what the term for their customers after the one-year contracts are up this?

Jeremy: To be frank, I don't but I would assume it's what I would assume, it seems like it's very low if and only because they seem to be growing very rapidly in adding new customers. So, meaning in absolute terms, they had, you know, far fewer customers last year than they have this year, meaning if they were churning a meaningful portion of their business, they have to almost replicate the whole business again, overnight if you see what I'm saying.

So, the fact they're in 300-plus dispensaries today and they're in 250 years ago, 280 months ago, If they were actually churning say, 10% of their business every year, then obviously, those numbers would be much likely to be growing so rapidly that have to retain the business. If you're awesome anecdotally, they say they keep most all the business, but they don't lock their customers into you know, these long-term relationships specifically because that was a huge pain point mentioned by other customers who have either considered the Transact First ecosystem well left the Transact First ecosystem.

Now, to be to be clear, I want to be totally upfront. The, probably, the biggest knock or at least the risk that I could see other than Federal legalization for this company is the fact that it's obviously still subscale, and majority of their customers are still, what I would call Mom-and-Pops or smaller.

So, they do have a couple of MS-DOS multi-state operators. So, they just entered New Mexico with the multi-state operator and they just closed to customers that aren't too normal 20 stores. So, they're pretty big, pretty big organizations, but one real risk and this is a real risk that they need to demonstrate, they can kind of get beyond is what happens if the market consolidates and all of a sudden, you have, you know, you have six or seven, big National cannabis players at some point and you're not banking or you're not processing the transactions for any one of those because you happen to back all the "losers." let's say. That's a real issue for them in the future.

The reason I'm less worried about it, is for two reasons. Firstly, the Cannabis industry today is growing 15% to 20%. And possibly, its growing 200%, They doubled the size of the business every year, ever since they launched. They're guided to grow well north of 100% for the foreseeable future and they said the business is accelerating and it grew at 230% last quarter.

So, they seem to be doing something right. They're growing much faster than the overall industry, and by definition, that means winning customers. Whether that's Green Field, whether it's brownfield, they do seem to be doing something right, you know, in a competitive space.

And the second point is if you think about it right. Like all these multi-state operators would be locked into these Transact First relationships, these are going to the anniversary, right? So, as these anniversaries and as the market, as they encounter more people like POSaBIT and including POSaBIT who could offer a full suite of products that I don't believe Transact First can compete on, and some of these other products that we talk about. I do expect, they'll be some switching.

And the third point is you have to remember this company is still a very young company. It was listed on micro-cap backward Canadian exchange with the hideously high cost of equity capital as recently is nine months ago, even six months ago. And therefore, they couldn't really hire a sales force. I mean, it's a small company, it's a very small company, right? Even today, they're doing what, 20 million Revenue this year. And that's, you know, that's up. Well, over a hundred percent, right? So it's a very small company. They didn't have the resources to hire the salespeople.

So, one of the things they're doing now that their cost of capital started to come down a little bit, is they're investing in growing. So I think that yes, they need to do a better job of proving they can win bigger clients, but I think part of that will come when they actually have the people to pick up the phone, to make the calls, to do the actual sales work, and to sell the product, which they've been a little bit hamstrung until now.

Andrew: Jeremy, I am so mad because I thought my big, you know, all the research, I thought my big question was going to be "Hey, Federal legalization might not be the issue with square, it might be that all the Mom-and-Pops get bought out in the...get bought out by, you know, there's a big private Equity roll up and you know, my old friends, over at private Equity, buy up all the Mom-and-Pops, roll them all up and they don't go with POSTaBIT, they go with squares offering and that ends up kicking POSTaBIT off." I thought I was gonna get you with that, but you thought it through.

The only other thing I would say [crosstalk], go ahead.

Jeremy: All I can say, I mean, look, it's, it's how I think about it, but it's definitely a key risk. I mean, I think you're right. Like, the real risk is this industry consolidates faster than the End Market gross. In other words, their ability to acquire new customers is fast but not as fast as these massive multi-state operators, (They) can consolidate most of the Vault, most of the transactional volume in the industry, and all of a sudden there.

It's kind of like a game of musical chairs and photo reason POSaBIT is not nimble enough doesn't have enough capital, or is and cannot move fast enough to get a seat at the table. That is eminently a possibility in that situation or again, weeks, according to Glide path, right? Before we get to that endpoint, I think it's far more likely to get acquired for their good business, but it's a possibility and that's that's definitely one of the risks within the investment.

Andrew: The other thing and I might not be thinking about this correctly, but the other thing is like your big risk is it thrive with the equity side roll-up where you know, a private equity company just comes in, buys all the Mom-and-Pops, and puts them on one standard operating procedure. Right? Like very much like a McDonald's would, right? McDonald's owns all yet, doesn't own all the restaurants they franchise and they're all on the same systems though.

But if you think about it, like cannabis retailer, he's like it might just be like liquor stores where there's not really change of liquor stores. Right? Most of them are Mom-and-Pops and they're owned locally. I think a lot of people think cannabis might be different because right now, the major guys are required to be completely vertically integrated were, for the most part, they want to own, not they want to grow and they want to own the retail front. That's not how it works in alcohol. That's not how it works in a lot of Industries. It might end up that the major guys end up operating, huge farms, and then there's just lots of mom-and-pop shops selling locally. Much like liquor and if that...if that's how it plays out, that plays right into POSTaBIT. You're saying yes or no, what do you think?

Jeremy: I mean, I would love it if it played out like that. I really would. Aaron, you cannot scare in about it tomorrow seeing as you talking [crosstalk]
cannabis with him later.

Andrew: I will.

Jeremy: I think, I think honestly being completely realistic, I think it's...I think it would more turn towards consolidation, but I'm pretty comfortable with that Balcom like as I said, you ultimately have to back the management, you have to back them to execute and win bigger clients. And they already have a number of multi-state operators. And as I said, once the sale now that they have a proper sales force or getting to that point, I think they can go after bigger clients. And I think, I think that'll happen. So, yeah, I mean, it would be great if mom-and-pops stayed around and carried the flag for a small business in the United States by the Cannabis industry.

In reality, I think big box cork tends to win, and they just have to prove they can compete and they're on the way to doing that. And I don't think the valuation accounts for any of that anywhere, any of that by any stretch. So, I think that's something always to keep in the back of keeping the foreground, as we consider the investment, and to make sure we grade them on that in the coming kind of 12 to 24 months.

Andrew: You know, maybe we need to launch a liquor store roll-up. Maybe that's what we need to do because if they're going to win in cannabis retail that we could do the liquor all. But let's talk about valuation here. The...you know, possibly you mentioned hyper Growth Company right now. What...You've got people can refer to Seeking Alpha article again. It's going to be in the notes to see, you've got some nice charts and stuff. But let's just talk a simple valuation. What are you paying for POSTaBIT right now?

Jeremy: Oh, so, I think the stock is like $1.85. So I always look at the Canadian line just out of habit because I think that's the main listing out. The volume is probably a little bit higher in the U.S. line, but I'm talking about in the Canadian dollar stock price, but everything else will be US dollar. So, I just with the effects. So, the $1.85, I think it's about a $200 to $215 million all in U.S. Dollar EVY Enterprise Value. It's basically net cash neutral. I mean, I have like maybe five, six million in cash. There's a, there's a lot of warrants. Excuse me. We're back. We're back.

There's a lot of warrants outstanding. So, you know, as those warrants get converted, they get some cash in the door, but basically [crosstalk], uh, Normal EVY, oh, they're struck very low. I mean a lot of the the warrants are struck at, you know, 30 cents, 40 cents, kind of this. So, they're all in their money. And those kinds of get her visually converted which is why there's been some volume in the stock, I think. Early investors, kind of cashing out whatever.

So yeah, the EVY today is about 200 million, maybe 215 million and I think they're going to do north of 50 million Revenue next year at a mid-30s gross margin. We can talk about the profitability build if you like.

This year, I think they're going to do close to 22 million Revenue. So it's about nine times Revenue this year, but four times next year's. I think they're going to grow again 130% at the Top Line next year. So yeah, if you think about it, as I said, this company's kind of doubled its business every year its existence and it's going to grow this year, top Line at a 190%. Next year, I still think it's going to go to 130% and you know, it's trading at four times the revenue. So it's, and so that's point one.

Point two is the revenue pool is very small. Still, meaning where hyper hyper early in a company's S curve which normally means you get a higher multiple, right? You get a higher absolute multiple because you have a, you have a very large tan here, right?

So, theoretically, investors would be willing to pay a higher multiple of a lower absolute number given the underlying growth rate is so hyper. Actually, we're paying a far, far, far below sector median multiple for hyper-growth.

Andrew: Through the one shop? You said [crosstalk]

Jeremy: I'm sorry.

Andrew: Good.

Jeremy: No, I was just going to say, I do think there are real earnings here. Right? So, I use revenue just because I'm a value guy, right? As, you know, everyone knows I'm not a hyper-growth guy. Maybe I do the on GARP investment. This is a GARP investment to me, but I'm not just about buying a revenue multiples. But the point is, it's very, it's very easy to see how this could become a very high earning real business quickly if they wanted to be, right.

So, Payment Processing, obviously a huge operating leverage industry, more volume goes through the same infrastructure of saving fixed investment drops mostly to the bottom line. Impossible, specific haste company has guided to 3o% to 32% gross margins this year, but there's a very clear guide past Glide path to getting those margins to mid-40s.

And this, look, this isn't probably going to happen next year, but could easily happen if they wanted to flick the switch and get there in the next two years, they probably could just depends on how much they want to invest, but basically they're talk line take rate as we discussed earlier, is a bit north of 5%. I had that coming down a bit for various reasons, but essentially it's north of 5% but of that 5%, they give up a lot of the economics to Partners right now.

So, for example, they give up a lot of the economics, they share with the issuing Bank. In return for doing things like TYC, underwriting the merchants, helping them with the back-in infrastructure. Then they also give a lot of that economics out to other partners. They Outsource some of the services which they're forced to do because they were so small. And also, because you know as a small Niche cannabis Payment Processing organization with you know, as recently as 2019 and they had three million dollars in revenue, right? It wasn't clear that Banks would want to deal with them. So, they had to bring in larger players to help build those relationships. But obviously, as you grow, you can bring some of that in-house. And obviously, the take rate that the cop that the, your partners will take. In other words, the banking partners will take is very clarified and will drop as volumes grow.

So actually, the CEO has said this on a number of calls to publicly, recently, he basically said, "As soon as the gross transactional sales number gets about 500 Million, you get a margin kicker back, a rebate in other words. And as soon as you get above a billion, you get another margin kicker." And he actually Quantified this by saying, "Look, as soon as we get above a billion run rate grows transactional sales, we should...you could add as much as double digits to our margin profile," and that was when the margin was 30% to 32%.

So, that's basically how you get to low 40s. Then, you bring some of that partner business back in-house that gets you to mid-40s. So, in other words, I'm not making any of that, none of that. That's all gravy, but I still think it should be a mid-30s margin business next year, right. And just doing very low incremental, after that. In other words, incremental meaning incremental e-bit on incremental Revenue. If my incremental or margins are only kind of like 15% - 20%, where normally in the payments industry, they're above 50% from mature business, so that's again, this is just kind of back of the envelope to kind of conceptualize it. Even then, I think...I think I'm paying thirty times a year, next year for a company growing hundred, hundred fifty percent.

Andrew: And you know, 30 times Evita ibadah is not the cheapest, most as you said it's going a hundred times revenue and just to give people an idea, look VISA and MasterCard aren't perfect comps in any way shape or form, right? But they're the first things that come to mind when you think of payments. Those trade at 25 times even all, right.

So, 30 times even [crosstalk]

Jeremy: Exactly.

Andrew: Particularly for something hyper-growth, you know, if I thought, I don't even know what multiple Square trades at, but something like fist serves which I think owns Clover and there have been these activists saying, 'Clovers worth more than the whole market cap.' I think that trades up like 15 times Evidah if I remember correctly. And that's, that's not a hyper-growth business, by any way, shape, or form. So, just to give people an idea.

I want to come back, actually, we covered that, you mentioned nine times Revenue. I mean, that's not just crazy expensive for a company if you believe that they can grow a 150% next year. And then, you know, after that, they're not going to grow 150% forever. But there are a lot of tailwinds here. There's no reason this can't be a 30% - 40 % grower for a pretty long time, I would say.

Jeremy: Totally, totally. Yeah, I mean, I totally agree. I mean, if people want to refer back to my article, they could say we have a, we have a couple of...my daughter just right into the room. Sorry.

Andrew: No problem, DVD's pause for a second, she wants to say, hello.

Jeremy: No, no. It's fine. I try to keep her off the screen actually, for privacy purposes but...

If people want to refer back to my article, they can look at and try to do this analysis where I look at the valuation of other payment stocks. And to be fair, most of them are much bigger than POSTaBIT, right? So, it's...take that with a grain of salt but basically the 10 or 15 most direct comps payment comps...

Sorry, my daughter just pulled my...

Take 10 or 15 of the most direct payment comps and kind of run regression between valuation and organic growth. So, obviously, there's a hyper-growth industry business in a growth industry, so, it's dominated by growth investors, and what growth investors normally look for is what they really solve for when they value these companies is growth versus the valuation.

So, it a very high correlation between the multiple according to the EVY that done multiple according to the company and its organic growth rate. Like 90% are squared. So basically, correlation is almost one. And if you run that regression and you look at POSTaBIT, this stock should be training already at over three times where it currently trades given...even if you assume growth normalizes to say 50% the next few years, which again, very simplistic, very kind of what's the way to put it...unsophisticated kind of quick valuation math, but just to kind of give you a sense of the potential relative valuation of this versus other similar kinds of hyper-growth, or even some of those things are growing, you know, teens, right?

Other kinds of assets within this space, there's a big employee discount here and maybe they, maybe we've now is the right time to talk about why there's this massive implied discount even in stocks done well recently.

Andrew: Good.

Jeremy: Yeah, so I think...I think there are a few things. So, the first and by far the most obvious one, I actually don't think it's the Cannabis part piece of it, I think the Cannabis piece of it is real, but I don't think that's the main reason because there's a lot of other cannabis-related businesses actually trading in the U.S. at very high valuations. And private company Cannabis businesses are training at far, far bigger premiums than huge premiums to where possible trades today.

So, for example, if not even payments businesses like other software providers to the Cannabis industry are a company called Duchy. Just did a private funding round where they raised a lot of money. I think it's the only million dollars at a 3.75 billion valuation.

Now, they're not a cannabis retailer. So it's a different model. They are picks and shovels software providers to the Cannabis industry. They don't do payments. They do other things, they do a bit of POS. So, it's analogous. I mean it's not identical but it's analogous in that they do provide services to the Cannabis industry. So, picks and trouble software and they traded it. I mean, the last revenue number I saw from them is under 50 million.

So, I mean, this thing starting at some astronomical valuation, and it's a private company, so, I don't have all the details, but any kind of hyper-growth fintech asset in the private markets, you can pick, you know, you won't find one trading below 10, 15 times forward sales. So, that's kind of like a quick, quick, quick check.

Andrew: So, the question is why does POSTaBIT treat a discount? And I have a feeling it relates very much to the last Red Flag I wanted to talk to you about. They came public by NRTO over reverse I call it a reverse merger. I guess RTO reverse takeover or something, but that's you know, any investor who's spent a lot of time in the public markets knows NRTO is immediate about the biggest red flag you can get. So, do you want to discuss that because I think that's where you were driving for the valuation multiple?

Jeremy: Absolutely, absolutely. So the as in a lot of other previous rates of capital Investments, I guess, kind of to touch on the topic we might come to...

Andrew: But let me ask for one second. What if the rate per capital Investments is a Polish trash company, that may or may not allegedly have ties to the Mob? So, Jeremy is willing to go look at things with some hair on them. Just I had to throw that out there.

Jeremy: Yeah. That's interesting and we could talk about that in a second. But yeah, so, there's invariably what I look for is a bit of Legacy Hair or yeah, I mean, kind of there has to be...that has to be, it has to be a source for the value, right? Like where are you going to derive your value? That has to be some kind of taint on the kind of specifics of the company or its idiosyncratic situation. Otherwise, there wouldn't be any value for someone like me to kind of pick overwrite soon.

In this situation, you're right. It's the Legacy listing was a huge mistake. I'll give you talk to the CEO today. He said he will admit it. Maybe he basically says that in his presentations, but they shouldn't have done it. They got bad advice. The reason they got bad advice was, well, the reason they took the bad advice, I guess was, was probably a mistake, but they really want access to Capital. They thought, even if they did an RTO risk take over and ended up on an exchange, I think they were sold something that ended up they weren't. They thought being listed meant being listed. They didn't realize that being listed in a certain geography or exchange is really not being listed role. And that's what they ended up being.

So, they ended up listing on a, honestly, I'd never even heard of this exchange. But before this, I found this company. I had never heard of the Canadian Securities Exchange. This isn't the Venture exchange. The Venture Exchange has the junior Exchange in Canada which in itself, is not idealistic, but this is not that. This is like, imagine if you go to the Outhouse at the end of the town, right in, I don't know Yuma, Arizona, at an old cowboy town, and you go to the crappiest little Salon at the end and then you keep walking and you go past there to the ram Buck shackle ramshackle Hut at the very end of that street, kind of if anyone knows what I'm talking about. I'll be surprised that this is the version of that from the financial exchange's point of view.

I have never looked at any other company listed on this exchange. I doubt many other investors have, it really is a total Backwater Financial Services Backwater and they should never have been on this exchange, especially with this exciting story to tell. On the other hand. I would never have the opportunity to own this stock if it was listed already on the Venture Exchange even or let alone a U.S. Exchange.

And you can see that and, you know that's a factor because as soon as they list them on OTC, the stock started going up, right? And we're talking OTC in the US. We're not talking a proper Market. The over-the-counter in a proper geography. The stock is already gone from I don't know where it was a dollar, $20, $30, or something to $1.80 now, in Canadian dollar terms, right?

So, it's already gone up a fair bit just purely from that. So, part of the historical issues here around listing our real issue and this is something we've monetized before with Brag, with Gann was a great example of this again, but much much kind of less crappy levels than this particular exchange. But this is a well-trodden concept in the reaper couple Playbook. And when I hope to continue monetizing over and over and that is finding companies that don't deserve to be in these backwaters with real businesses, real prospects trading at irrationally high discounts and then writing the kind of closing off that gap. That listing arbitrage, as they kind of, you know, just basically, just get up to speed and list on proper exchanges, over time. Obviously, underwriting the fundamentals along the way, but that's the kind of a key had last year.

Andrew: And it's one that I, you know, I have a circle under traded because damn was coming out, you and I were talking a lot and I was like, "There's a lot of red flags here," and you're like, "Bro, just keep it simple." It's growing fast and it's going to a major exchange and you were right. Though, you interestingly with Gann, it basically a round trip, right? Because they came out. It was a hot stock.

Yeah, which has been very interesting but I'm with you, you know, the Arty of it is, it is just such a red. It's just so hard to get over that RTO that right? Like an RTO on the Backwater Backwater exchanges and I get like Bankers can be very compelling and they can do, it's..they can really convince you like "Hey just get on there. Everybody's going to love you. You're growing quickly. It's going to be fine. You can raise capital and you go do it." And you like "Oh gosh. It's an irreversible decision, but it's just a big great." [crosstalk]

Jeremy: Let me try to give you at least some context. So, Ryan Hamlin, CEO of the company. His background, he's a software engineer, essentially. He ran a large security software suite at Microsoft at 1500 reports for a long time. So, he's not prototypically a finance guy, right? He's a software guy.

So, if I was to try to understand the decision to know the RTO and you know, Grind's super smart, he's doing a great job, but I would have to say there was a learning curve with being an executive even for a very small company. There's a big learning curve with being a CEO and also Capital allocation with being a manager of capital and lowering that cost of capital and they just didn't have the right perspective on that. I'm sure they got bad advice and I didn't get...they didn't. Unfortunately, they didn't have the right connections when they were very early stage Venture company to guide them towards the right causes to the right, the right sources of capital, let's say.

And so, they made that decision, they have to live with that decision. But that is why we have the opportunity today and to be clear Ryan, I believe, Ryan Salons in excess of 10% of the company. I need to double-check but from what I understand, management still owns a big chunk of the equity.

Andrew: Perfect. Well, hey, Jeremy, I know we wanted to go through the rest of The Eclectic Jeremy Raper Capital Playbook, but, unfortunately, it is 9:30 our time and I haven't had dinner yet. So, it's starting to get out the route. But is there anything else on POSTaBIT you want to say before we wrap up? I think we actually did a really nice job of covering a bunch of different angles here.

Jeremy: Sure. Sure. The only thing we didn't cover, which I think is quite important and is worth mentioning is this is not just a pure payments processor. In other words, they are trying to build a vertically integrated operator. So, if you look at their penal today or the revenue break down, you'll see they're already do POS. So, they do have a hardware offering. They do have a POS offering. They do have this somewhat Innovative solution in that they have handheld POS capability which Transact First doesn't have.

So, the guy selling you the weed, the Cannabis, what it's called a budtender can walk around the store with his little, you know, handheld POS and take your payments within the store floor. You kind of like an apple, apple store kind of [crosstalk] which is...

Andrew: For anyone listening, anyone listening who's interested, go look at their website. I looked at their website and watch some videos, it looks like when you see the POS, it looks exactly like a company running the square stuff in the hand, the handheld technology. It looks really cool. Like it is up to speed. You would think a real serious tech company built this stuff from the video. I'm sure the video is a little bit spruced up, but it looks really good.

Jeremy: Yeah. No, I think I think they're doing a good job. And I guess, the point is they're trying to build an ecosystem where it's not purely about the payments to a point about, you know, someone bigger coming along and cutting them out or roll, holding up all the payments for one entity. They want to entrench themselves within the merchant's ecosystem. Right? So, POS is part of that. They've also [crosstalk]

Andrew: Got loyalty. They've got some Customer Loyalty secondary...

Jeremy: Exactly and they're expanding their offering. So, they trying to do B2B services for the merchants as well. Outside of the pure customer-facing portion of the business, they're going to... Apparently, the next thing to tackle is B2B payments and B2B Services. They also do other you know, more mundane things like you know, back end[?] reporting integration, you know, onboarding and installing a system to the customer for the software introduction to the local banks or a lot of these guys, you know, it sounds like it's pretty plain vanilla stuff. But a lot of these, as you mentioned, smaller shops in this industry, they don't have banking relationships or they don't have good banking relationships. So, they do a lot of that and that's actually a revenue generator as well because they can get kickbacks from the bank for those introductions.

My point is they're trying to build out their offering from Pure Payment Processing to these other value-added services and to become vertically integrated. They're well on the way to doing that, and I think that will hopefully future-proof the business to an extent and allow them to stay more entrenched with their customers. That's the only thing I would mention that we didn't cover.

Andrew: Perfect. Well, Jeremy, I mean this is such an interesting one. Typical Raper Capital stuff, Hyper-Growth Company, Backwater Exchange, Bitly, I think you've done great work here. You know all the questions I had, you're just addressing them.

Everyone should of course follow Jeremy's stuff, rapercapital.com is absolutely fantastic. I'll link to his Twitter in the show knows. I'll link to the Seeking Alpha article he put on up here, so, go read that...

Jeremy: Thank you.

Andrew: And you'll learn a little bit more about the company. But, Jeremy, this has been fantastic, man. Thanks so much for coming on and I'm really looking forward to having you on for the sixth appearance.

Jeremy: Thanks, man. We'll have to do the recap of all the stuff that will happen, that worked or didn't work. And when you've had your dinner, we can do that another time.

Andrew: We will. We will have to do it soon. Thanks again, man. We'll talk soon.

Jeremy: Thanks, man.

[END]