Earnings call transcript: Abaxx Technologies' Q3 2025 sees stock rise as revenue begins

Abaxx Technologies presented its Q3 2025 earnings, marking its first revenue-generating quarter with $309.1 million in revenue. Despite reporting an EPS loss of -$0.29, the company's stock rose by 2.61% immediately following the announcement, closing at $39.73. The stock continued to climb, reaching $41.4, reflecting a 1.26% increase from the previous close. This performance places the stock near its 52-week high of $46.92, signaling positive investor sentiment. According to InvestingPro data, Abaxx has delivered an impressive 237.41% return over the past year, with a market capitalization now exceeding $1 billion.

Key Takeaways

• Abaxx Technologies reported its first revenue-generating quarter with over $1 million in volume-based revenue.
• The company's stock increased by over 150% in Q3, with a further post-earnings rise.
• Strategic investments and product launches position the company for future growth.
• The company continues to experience net cash outflow, raising sustainability concerns.

Company Performance

Abaxx Technologies has achieved a significant milestone by generating revenue for the first time. The company reported over $1 million in volume-based revenue, reflecting its operational progress. The stock price has seen a substantial increase of over 150% in Q3, indicating strong market confidence. Strategic stakes in Base Carbon and MineHub enhance its financial positioning, while new product launches and regional expansions signal growth potential.

Financial Highlights

• Revenue: $309.1 million in Q3 2025, marking the first revenue-generating quarter.
• Earnings per share: -$0.29, reflecting a loss.
• Cash reserves: Over $50 million as of November 14th.
• Net cash outflow: Approximately $25 million annualized.

Market Reaction

Following the earnings announcement, Abaxx Technologies' stock rose by 2.61%, closing at $39.73. The stock's upward trajectory continued, reaching $41.4, a 1.26% increase from the last close. This places the stock near its 52-week high of $46.92, suggesting positive sentiment among investors. The substantial stock increase of over 150% in Q3 reflects strong market confidence or speculative interest.

Outlook & Guidance

Looking forward, Abaxx Technologies is targeting significant growth, aiming for 1 million average daily volume (ADV) by 2030. The company plans to gradually increase operational spending and focus on technology pilot programs in early 2026. Additionally, a potential U.S. listing exploration in Q1 is on the horizon, which could impact market dynamics.

Executive Commentary

CEO Josh Crumb emphasized the company's strategic positioning, stating, "We are not just building a list of trading counterparties. We are effectively building a preloaded distribution network for our future technology products." He also highlighted the company's readiness to lead in market transitions, saying, "Our timing here has been impeccable. We are now positioned as one of the only platforms with the regulated rails to be at the forefront of this transition."

Risks and Challenges

• Continued net cash outflow raises concerns about the company's financial sustainability.
• The EPS loss may deter investors seeking immediate profitability.
• The exploration of a potential U.S. listing introduces uncertainties and potential dilution risks.
• Expanding into new markets and product offerings may face regulatory and competitive challenges.

Q&A

During the earnings call, analysts inquired about the company's partnerships and technological advancements. Abaxx confirmed Marex Group as a partner and emphasized technology's role in unlocking collateral velocity. The company also addressed concerns about DeFi and blockchain disruption, committing to minimizing shareholder dilution.

Full transcript - Abaxx Technologies Inc (ABXX) Q3 2025:

Tara Hayes, Director of Communications, Abaxx: Good morning, good afternoon, everyone. Good evening to all of us joining from Singapore. Thanks for joining us today for the Abaxx third quarter investor call. My name's Tara Hayes, Director of Communications at Abaxx, and I'll be directing today's call. After years of market infrastructure development, this is our first earnings call since completing our initial ramp-up as a revenue-generating exchange. We've made a number of format changes as we continue our evolution into the revenue and operating growth phase of the business. With us on the call today are Founder and CEO Josh Crumb, CFO Steve Fray, Abaxx Exchange Chief Commercial Officer Joe Raia, Head of Abaxx Technology Products Ian Forrester, and Abaxx Digital Title Lead Leah Wald. Everyone should have access to our third quarter reports and Monday's quarterly corporate update press release, which will be the primary disclosures for today's presentations.

We also want to make reference to all filings and risk disclosures found on Cedar Plus. We have published a short slide presentation to accompany today's call, which is being recorded and will be posted to our investor website, investors.abx.tech, and to YouTube as we have with prior investor calls and special presentations. We'd like to remind everyone that part of our discussion today will include forward-looking statements, which are subject to various assumptions, risks, and uncertainties, and which could cause actual results to differ materially from those expressed or implied on today's call. Please find our full statement and cautions regarding forward-looking statements on the slide attached. Before I hand the call over to Josh to update investors on the vision and strategy of the company, we'd like to specifically draw your attention to the highly regulated nature of our products and operations.

Given the early growth stage of our ramp-up and deep innovation pipeline for listing new products, it's important to reiterate the cautionary nature of our forward-looking statements with respect to products that are still subject to ongoing regulatory work and review. We'll endeavor to point out these cautions as we go, but as of today, our ABX Singapore entity's regulatory status is that of a recognized market operator exchange and approved clearinghouse in Singapore.

We have revenue-generating futures products currently trading in physical delivery LNG, the only product of its kind listed globally, Singapore Gold Kilo Bars, two voluntary carbon market carbon futures products, of which our Corsia contract became the first VCM contract to ever go to delivery through FCMs and a regulated clearinghouse this year, our Battery Materials products in lithium carbonate and nickel sulfate, and new since our last update in August, our first weather derivative contract in German onshore wind, which had its first block trade take place this week and has catalyzed a significant amount of new onboarding from global institutions since our last call. Any other potential products discussed today, including new markets planned for additional precious metals, base metals, additional weather derivatives, smart commodities, or even some of our innovative technology-enabled products in the pipeline, would be subject to meeting all regulatory requirements and disclosures before listing.

As we speak about our gold products today, we want to point out that our Abaxx Spot entity was newly incorporated in Singapore this year, but operating under a different branch of the Abaxx corporate family tree. Not part of the entities regulated by the MAS under Abaxx Singapore and the Monetary Authority of Singapore does not regulate spot commodity markets. Following Josh's presentation, we will open the call up for Q&A to answer investor questions, which you can submit anytime using the Q&A feature on the controls toolbar on your Zoom screen. With that, I'd like to hand the call over to Josh for some opening remarks and a walkthrough of our third quarter update and KPIs.

Josh Crumb, Founder and CEO, Abaxx: Thanks, Tara. Good morning, everyone. Thanks for joining us. It's very exciting to be presenting this new format today. A lot of hard work, over a half-decade in the making for our first exchange revenue-generating quarter with strong initial volumes in our gold and LNG contracts in particular during Q3. I want to start off today by acknowledging the tireless entrepreneurial endeavors of Sean Mei-Lin, our Chief of Market Operations and the Singaporean founder of ABX, President Dan McAuliffe, who led the build-out of ABX Clearing and is a lead designer of all of our futures products, and of course, the always steady hand leadership of CEO Nancy Sia, as well as Joe Raia, Tuck Seong, COTO Richard Fung, Xinhui, Celine, Natalie, Alistair, Taf, and the entire ABX Singapore executive team and board of directors.

ABX is quite possibly the first-ever global market of this potential and scale built completely from scratch, a suite of brand-new greenfield physical futures products on a brand-new exchange, a proprietary next-generation tech stack, and one of the only commodity clearing houses regulated and launched in decades. This is an accomplishment that none of our largest global commodity market infrastructure peers in their current form can claim, having bought or evolved most of their markets from existing platforms. I can confidently say that our people are unmatched in their grit and determination, combined with an innovator, trailblazing mindset that forms the DNA of this company and will serve us well as we make our next moves in this volume and revenue growth stage as we grow market share in the commodity futures business.

In this first exchange revenue quarter, volumes in our flagship LNG futures totaled 9,486 contracts in Q3, the equivalent of 27 physical cargoes. This LNG volume ramp-up shows strong momentum with an 83% increase in September over August. While volume and open interest growth should probably be compared on a half-over-half basis for a while, given the timelines of new institutional onboarding, it has nonetheless been good to see the early momentum growth as the second half of 2025 has progressed. In particular, as our North Asia LNG contract recently joined our US Gulf contract in daily trading volume. Our gold Singapore futures also saw accelerating adoption, reaching 54,128 contracts traded since its launch, and it was our first contract to start trading regularly through our club across calendar months, which was key to stress testing our market plumbing and proving out and optimizing our new systems.

We also have a strong balance sheet designed to support our strategy and growth. After our recent strategic financing, growing reserves and runway, as of November 14th, we had over $50 million in cash, as well as the strong mark-to-market positions of our strategic stakes in Base Carbon and MineHub. These are assets owned in order to drive long-term operating income in our core markets and software business operations. Our balance sheet affords the company financial flexibility to increase operating budgets into our revenue ramp-up phase over the next 12 months, while always remaining focused on minimizing share dilution, as always.

We've also realized a significantly improved cost of capital over the course of the quarter, with the ABX stock price re-rating strongly in response to the Q3 derisking events and daily volume growth of the exchange and the announcements of our ID++ digital title pilots, a greater than 150% increase in the stock price in Q3. While acknowledging these significant financial milestones and successfully starting our first transition from a company that builds hard things to a company that sells things, I want to step back and briefly to the long-term strategy and roadmap to put this quarterly update in perspective.

As I've outlined on previous calls this year, the core long-term asset we're developing with every onboarding and every IT connection for moving data into and out of our systems is that of the ABX network, the asset which remains the nexus of our markets and software development strategy. The daily trading activity over Q3 was supported by significant network growth. Our connected participant base grew 88% quarter over quarter to over 150 firms, including new onboarding of trading firms, indirect clearing firms, and interdealer brokers, all achieved during the quarter. Our market maker and liquidity provider base specifically grew 93% to 29 firms, strengthening liquidity across our product verticals. It's through this early network development that we've achieved the first step of our log-scale growth ambitions.

During Q3, we achieved our first 1,000 average daily volume, or I'll continue to call ADV through this call, on our targeted log-scale path to 1 million ADV by 2030. We also saw our first trading revenue on a path to significantly higher sales over that time. The combination of 1 million ADV contracts with 50% EBITDA margins is a powerful profit generator. This is the target, and continued execution over the next year will determine the slope and timing of that ABX path.

This kind of growth requires new nodes on the ABX network, which requires more products to drive more onboarding urgency, particularly among clearing members, opening up more regions to become a true global commodities venue and more data distribution so the market sees our prices and bids and offers, and a general equivalency of traders being able to execute in our markets as easily as taking liquidity in today's existing commodity benchmarks. When we continue to frame our milestone updates in this context for developing the singular asset, the ABX network, derisking the blockers to market access and allowing us to grow to 1 million ADV and beyond. This network is not just about the exchange. It is the foundation of our full-stack strategy. We use the regulated revenue-generating exchange as the flywheel to build, prove, and deploy our next-generation technology from the inside out.

This is where the two pillars of our business strategy converge. I want to be very specific about the strategic value of this network. We are not just building a list of trading counterparties. We are effectively building a preloaded distribution network for our future technology products. By onboarding these 150-plus firms to the exchange, we are establishing the commercial rails to sell them our digital title solutions tomorrow. These clients have a critical need beyond just hedging. They need to solve for the velocity of collateral and, in particular, to unlock the trap value of their physical commodities. We will discuss this technology again in more detail later in the call, but it is important to understand that every new exchange client is a future use of our full tech stack, positioning us to capture revenue beyond simple trading fees.

On the path to realizing that vision, over the quarter, we also made significant progress on the ABX ID++ private digital title and console suite. This technology segment is now moving from R&D to the operational reality. In Q3, we also officially launched Adaptive Infrastructure, our new wholly-owned subsidiary. Adaptive provides the institutional-grade custodial and settlement services that form the foundation of our new markets. It has already been approved as a custodian for our carbon futures contracts and will serve as the custodial foundation for the upcoming tokenized money market fund pilot. This brings me to the private digital title pilot program. I'm pleased to report that in Q3, we completed the core platform development to enable the creation and transfer of legally enforceable digital titles through the ABX private network.

This is the technology engineered to solve that identity privacy ledger trilemma that I talked about in previous calls, which is key to failing, which is the key failing most of the blockchain real-world asset projects today. We also announced a third pilot with MineHub to extend this digital title infrastructure to in-transit shipments of non-ferrous metals like copper and aluminum, as well as copper and aluminum. As a key milestone subsequent to quarter end, MineHub successfully completed its integration, testing our Verifier Plus kit in October. Finally, I want to flag a major macro development that validates this entire technology roadmap. Since our last call in August, with the momentum behind the US Genius Act and the global stablecoin volumes now exceeding $1 trillion a month, the market has decisively woken up to the need for something like on-chain finance.

In our view, they are all hitting the identity wall that we spent the last five years solving and that I walked through in detail in the last call. Our timing here has been impeccable. We are now positioned as one of the only platforms with the regulated rails to be at the forefront of this transition. I will explain later in the call how we plan to capture this massive shift, but we can get into more of those details as we walk through a few slides detailing our KPIs and path ahead. Tara, can you please pull up the first quarterly update slide? As I mentioned, we recorded our first revenue at ABX Exchange, which analyzed to just over $1 million in volume-based revenue in Q3.

This is a critical milestone, but it's important to understand that it's just the first of multiple long-term revenue streams we are built to capture. Our business model is a full-stack layer cake of revenues when fully executed. We are now live on exchange and clearing fees. We've also been live on royalties, but the model is designed to ramp up over time as we launch market data subscriptions, SaaS license fees for our console suite, and network transaction fees based on the assets in our digital title ecosystem. For the exchange and clearing fees layer, the key drivers for this and our future growth are average daily volume, ADV, and revenue per contract. The Q3 ADV was built on accelerating momentum in our flagship products. Again, LNG volumes totaled 9,486 contracts in Q3, 27 physical cargoes.

What is critical here is the early momentum, as we saw the 83% increase in September trading over August. This is the first sign of a true physically back forward curve forming on our screens. Our gold Singapore futures saw even faster acceleration. The contract reached 54,128 contracts traded since its launch through September 30. To give you more color on that ramp, volumes rose 242% month-over-month in July to 8,829 contracts, and then a further 167% in September to 23,563 contracts. This is not just on the future side. Our entire gold ecosystem is being built out. Abaxx Spot, our physical in-vault spot platform, has seen strong commercial engagement with 27 companies, including refiners, trading firms, and financial institutions, now either fully connected or in the process of onboarding. Total ADV across all contracts for September showed steady growth over prior months, which continued in October.

We're still a long, long way from our 1 million ADV goal, but we're making steady progress. We believe rate-limiting items like the CFTC's FBOT approval will unlock significantly more growth opportunities in ADV in the near future. Again, I'd like to point out that while initial month-over-month and quarter-over-quarter volume has been very encouraging, the true slope of the exponential curve towards 100,000, 1 million, and beyond should really be measured on a half-over-half basis over the next 12 to 18 months, as the key clearing member nodes that open up access to more firms and more taker liquidity and open interest can take more than a quarter to onboard. We can talk a little bit about that onboarding pipeline in the Q&A with Joe. Speaking of onboarding, ADV and RPC are lagging indicators in our view.

The leading indicator for future growth are the network KPIs, and these were arguably our most successful metrics of the quarter. Our connected participant base, which includes clearing firms, trading firms, and interdealer brokers, grew 88% quarter-over-quarter to over 150 firms that are now fully connected or in the onboarding process. Even more importantly, our market maker and liquidity provider base grew 93% quarter-over-quarter to 29 firms. This is the fuel for deeper liquidity in tighter markets. It's through this early network development that we've achieved the first step of our log-scale growth ambitions. Again, to maintain this kind of growth requires new nodes on the ABX network, which requires more regions, more products, and more market data distributions. We are actively building this network in the key strategic regions that matter. First, in China, this is a major strategic focus.

In Q3, we facilitated a high-level delegation from the China City Gas Association, which represents over 680 firms, to promote and educate the market on our LNG benchmarks. We are also progressing partnership discussions with Chung Gung Natural Gas and the Qingdao Exchange to strengthen the link between Chinese buyers and international suppliers using our platform. Second, in India, our network is also expanding into other key Asian markets. We have begun onboarding our first trading firms from Gujarat Province's GIFT City, which is home to over 1,000 proprietary trading firms. Third, in the United States, we continue active engagement with the CFTC regarding our Foreign Board of Trade application. As I mentioned earlier, this is a critical milestone for our commercial ramp-up.

While we have already onboarded major global FCMs, including our first bank FCM, many of these partners have significant client bases and trading desks in the U.S. that are currently restricted from accessing our markets directly. Securing FBOT status will allow these existing partners to fully turn on the pipes for their U.S. clients. We view this as a major development, sorry, we view this as a major dormant liquidity pool that we are working to unlock, further deepening the order books for all participants. Finally, in Europe and in new asset classes, over the medium term, we will look to expand the ABX network into the $2.5 trillion global fine art market. We have just announced a strategic investment in Artex AG, a regulated multilateral trading facility in Liechtenstein.

Crucially, this partnership opens the door for an entirely new asset class of hard asset futures products on ABX Exchange, fine art index futures. Right now, banks and insurers sit on billions of dollars of art collateral that they cannot effectively hedge. By listing a futures contract based on Artex's transparent trading data, we can offer these institutions the first real hedging instrument for the art market, effectively a beta index for the movement of art prices. On a side note, talking about the tech again for a second, this is also potentially a major technology development. Artex is also positioned to use our ID++ and digital title infrastructure to power these regulated transactions. This drives a unique viral network effect where Artex launches an IPO for a famous painting.

It creates a distribution event to drive mass adoption of our ID++ wallet nodes, acting as a Trojan horse that puts our identity technology in the hands of countless new users. Finally, in operational talent, to drive this commercial push, we've hired key talent like Russell Robertson as our new Chief Business Development Officer. Russell brings decades of experience in clearing experience from the Gulf Merck, CME Group, and ICE Clear Europe, and has already been representing ABX at key industry forums in India, Japan, Singapore, and beyond. This global network growth is also fueled by our product strategy. As I've discussed on past calls, we think about new products in three categories. Greenfield, these are the brand new markets we are building from scratch, like our physical LNG and battery metals contracts. Second, step out.

These are improved market structures or regional hubs for existing commodities, like our gold kilo bar contract. Third, spreads and lookalikes. These are products designed to plug into existing liquidity pools, like the cash-settled LNG and energy-related contracts we have in development. In Q3, we successfully finalized and subsequently launched a strategically vital new contract in our German onshore wind futures, which, as Tara mentioned, went live and had its first trades this week. This is our first weather derivative and our first contract to be settled in euros and a major step into the environmental products vertical. This is just the start. Our active pipeline includes stage three, which is our final development stage, work on silver market solutions and those complementary cash-settled energy contracts. We are in stage two development for platinum group metals and even an out-of-the-box thinking uranium product.

Before we transition to our technology update, I want to add a brief note on our operating leverage and costs. In previous calls, I mentioned that we had reached peak cash OpEx for our initial launch phase as we were maintaining an incredibly tight balance sheet and dilution until daily volumes started to ramp up. However, with our strengthened balance sheet and an improved cost of capital from our recent strategic investor, we are making the strategic decision to ramp up investment again. We have been running a net cash outflow of about $25 million annualized, which has picked up another roughly 10% over recent months. We are reviewing additional hiring to come on in 2026 to accelerate the growth curve. This brings me to an update on how we view our valuation some of the parts.

With the exchange now live, revenue-generating, and on initial trajectory to our medium-term target, we believe the market infrastructure side of our business is increasingly de-risked and just requires more hands and more patient and steady execution of our plan. However, because our software business is just entering its commercial pilot phase, we feel the market is currently assigning little value other than maybe a blue sky call option. We still see significant arbitrage here. In conversation with many investors, they see ABX as buying a de-risk by growing a volume exchange and getting a free option on the technology stack. Unlike a typical venture bet, this technology option is also de-risked because it has a pre-built base. We do not have to go find users of our digital title software.

We simply have to cross-sell it into clients already trading on our exchange as it provides utility and capital efficiency. We believe the structure offers one of the more asymmetric risk-reward profiles in the market, which is, again, all due to the structure of our business model inside a growing market network. Our cash outlay is all about building the network. We add new nodes by investing in new regions and new products, all of which feed back into our core flywheel and why we see adding budget now a no-brainer as a high-return activity and just needs more human capital for more products and more connectivity for liquidity to accelerate. Back to the tech and digital collateral opportunity. It is quite understandable that analysts have yet to sign tangible forecasts as we have yet to release pricing or rollout guidance.

We have invested roughly 20% of ongoing operational costs over half a decade now with full confidence in what we've built and with good timing on our rollout in 2026 as the world accelerates on a path to financial market tokenization. To achieve the top layer of business revenue and commercial products like SaaS license fees and the network transaction fees you see on our revenue model slide and new exchange products like real-time digital collateral, we had to build an entire full stack from the protocol layers up. This has been a long-term endeavor, and in Q3, this technology segment moved decisively from R&D to an operational reality. Tara, can you please pull up the technology slide? As you can see, our stack is built in layers. At the foundation, we have our open identity protocol, ID++, and decentralized storage.

In our current Smarter Markets podcast series, Re-engineering Tokenization, which I would encourage anyone to check out, we referred to this as building a human blockchain of trust. Instead of relying on anonymous algorithms or a central database that can be hacked, we anchor digital identity to real-world accountable parties like our regulated exchange members who have reputational skin in the game. This allows us to have a decentralized trust without sacrificing the privacy that institutions demand. On top of that sits our policy engine and our identity applications. In Q3, we delivered key upgrades here. ABX Verifier Plus was upgraded to support in-app approval flows for digital title transactions. Next is the application layer, our console suite. In Q3, we released ABX Sign to a technical preview with new interoperability between Sign and Drive, improving our workflow efficiency and document management for digital title applications.

Messenger, Sign, and Drive are the compliance-ready thin applications that let institutions manage assets across this ABX private network. All of this enables the top commercial layer, truly digital collateral, which we call our private digital title. This entire stack is now being deployed for our private digital title pilot program. In Q3, we officially completed the core platform development to enable the creation and transfer of legally enforceable digital titles. This technology is engineered to solve that identity privacy ledger trilemma I have talked about. It provides legal finality and built-in privacy, which is what separates our approach from standard blockchain tokenization. This is where the velocity of collateral business case becomes real. By using this technology, a trader can take a physical gold bar sitting in our Singapore vault and instantly pledge it as HQLA collateral for an LNG trade without waiting days for bank transfers.

This efficiency releases trapped capital on the balance sheet of our clients. We aren't just offering them a better trade or risk management through our exchange and clearing house, but soon we'll be offering them a better capital efficiency. We also announced a third pilot with MineHub to extend this digital title framework into in-transit shipments of non-ferrous metals and copper and aluminum. As a key milestone subsequent to quarter end, MineHub successfully completed some integration testing in October. We are now in the final phase of this zero-to-one rollout. We are currently finalizing the legal, partner, and regulatory work needed to make sure these business layer pilots are not just demos, but real transactions. These pilots will run with our completed tech all the way through the stack starting this December.

To provide the institutional foundation for these new markets in Q3, we officially launched Adaptive Infrastructure, our new wholly-owned subsidiary. Adaptive provides the institutional-grade custodial and settlement services that form the foundation of our new markets. It has already been approved as a custodian for our carbon futures contracts and will serve as the custodial foundation for upgrading of our upcoming securities pilots. I realize we're covering a lot of ground on the convergence of these technologies and business models today. For investors who want to understand exactly why our architecture wins here and the specific architecture beyond the identity-first approach, I again encourage you to listen to our Re-engineering Tokenization podcast series found on Apple or Spotify, YouTube, particularly episodes one and two. We also laid out the detailed technical roadmap for this architecture during our August investor presentation.

To conclude, it really has been a transformational quarter as many years of hard work have come together, significantly de-risking our long-term business model with this early market validation seen over the course of Q3. I want to thank you for your continued support as we execute on this vision. With that, I'll turn it back to Tara to start the Q&A. Thanks, Josh. Before I hand the call to our Chief Strategy Officer, Dave Greeley, for the Q&A session, we'd like to remind everyone that questions submitted to the ABX IRN box ahead of today's call will be answered with priority. For additional questions, feel free to submit them using the Q&A feature on the Zoom controls toolbar on your screen. Dave, over to you. Thank you, Tara. Thank you, Josh. I think everyone will agree this was a very comprehensive and detailed overview.

Detailed, in fact, that I think it will have hopefully answered many of the questions that were already submitted. I'll be trying to pick out the ones that I believe were not touched on as greater depth. If you feel like your question was not answered, please feel free to resubmit it in the Q&A on the Zoom toolbar. I'd like to start with some questions that came in on the exchange products and trading network. We have a couple of questions around FBOT. Given the importance of gaining FBOT approval, there are questions on when do we expect it and what will it do for the exchange once we obtain that FBOT? Hey, Joe, can I hand this one to you? Sure. Thanks, Josh. Thanks, Dave. FBOT is a critical new step in the milestone of the development for the exchange and the clearing house.

As Josh mentioned, it opens up the direct access for US customers, not only trading firms, broker firms, clearing firms that want to access our markets to do that directly without going through a carry broker or having to submit trades outside of the US. We won't give any guidance on when that will happen. We wish that it happened a while ago, but the CFTC moves in the path that they move in, and we can't really move that any faster than how they go. We've been interactive with the CFTC on it, and as Josh mentioned, we hope to see this come along very soon. Yeah, I'd probably just add one thing. Both Joe and I, just by chance, have been able to interact with the acting chairwoman. Yeah, look, unfortunately, I actually think they're doing a great job.

They're in a tough spot with where the commission's at right now. Look, we're very aligned with US strategic priorities. As Joe mentioned, we can't give guidance, but we do feel comfortable that we meet the requirements, that our application is complete, and we're just kind of in the hands of the process. Thanks, Josh. We also had a question on what is the catalyst for the German onshore wind futures launch. I think we could add on to that. What's the importance for the rest of the exchange products? Joe, can you take a— Yeah, sure. Yeah, sure. Thanks, Dave. Thanks, Josh.

Yeah, the German wind contracts, we started working on that about a year ago when there was outreach from the participants in that marketplace that were looking for a better way to manage their risk on an exchange-traded product, which would help just bring many new participants into the marketplace. The German wind market specifically is not massive, but the firms that trade it are quite significant to the commodity trading community. They even wanted to trade with more counterparties, and this allows them to do that. The NWEX set of indices are pretty well, I would say, looked after in the marketplace. The trading community likes to use that as a point of reference for managing their risk in the power output of the wind fields across Europe. We will be looking to engage with NWEX on further potential products down the road.

I think what the significance of it is for us is that it does bring onboard firms that may or increase the surface area, as we like to say, of the firms that may or are still struggling or waiting to onboard with us for other products like LNG, but have their trading desks that trade power and wind generation power wanting to trade this because of the uniqueness and the innovativeness of the product. That helps the onboarding with those firms. We have seen that with this product and looking forward to other products that we can launch using that index. This might be a good moment to clarify another question. A question had come in asking if Marex Group is a competitor or would they use your exchange. Maybe that is a good time to clarify that, Joe. Yeah, Marex is an interdeal broker.

They're also a clearing firm. They certainly are not a competitor of ours. They're a partner of ours. They see that, and we see that. They definitely are not a competitor. Thanks. I had another question on the exchange side on how are you competing with ICE and CME for LNG liquidity? I guess the best way to put that is there are no other LNG products in the marketplace. For lack of anything else over the years, the proxies that were used, Brent crude oil, JCC Japanese crude cocktail, TTF pipeline gas, and rehub pipeline gas were really only used as there was no other LNG product that directly correlated to the waterborne cargoes of LNG in the marketplace. We don't see ourselves competing with them in this product.

We see that there is demand from firms that want that direct correlation to use our product, and you see that as a result in the volumes that we're growing. Thanks. Maybe I'll take one more question that came in on the exchange side before moving over to the technology side for a bit. The question was, do you have a date for silver launch? Now, we can't give explicit dates, but maybe we could talk a little bit to how we're thinking about that. Yeah, I think that everything is we always submit our products and have to submit our products to our regulator, the MAS. We don't give out date guidance on when we will launch it. We will just have to continue to watch our news wires for dates once we get to that point. Yeah, thanks, Joe.

I'll probably add a few more comments here that ties into some of my prepared comments. Look, we think we have a pretty deep pipeline beyond just precious metals. There's a number of other actually kind of new innovative products as well. There's a couple of things. We do think that increasing the connectivity through FBOT and just the wave of onboarding that we've had the last few months since ramping up our products and our daily volumes. I think we probably want to get a little bit further in the sort of steady state before we allocate resources to new products. We want to keep growing liquidity in our existing products and onboarding. We probably, with sort of current staffing levels, we're probably in the order of something like 10 contracts a half out of the pipeline we've been building that we could launch.

I think things have changed a little bit and that we want to be a little bit more strategic. Look, I mean, very frankly speaking, I think for four or five years, even as a public company, there was a lot of disbelief that we were going to make it or we obviously did not have the cost of capital to run a proper budget against this pipeline. We were obviously always kind of in a rush. I think we want to be a lot more strategic as we roll these out with having that critical mass of liquidity.

We do have some very interesting products in the pipeline that I think can generate a lot of revenue or, sorry, a lot of volume and open interest and kind of right off the bat products that have been brought to us particularly by some of the market makers in Asia that do not have access to these types of products, very much like the German wind contract that I think would drive a lot of onboarding. We really want to focus on products that drive onboarding, broader surface area, and just keep building the critical mass of this network and market depth. Thanks, Josh. I wanted to turn to some questions on ID++ and the digital title pilot program. We have had a question on the tech stack. Where are we with the pilots and what happens once those are completed?

Yeah, maybe I'll start and then maybe see if Ian wants to chime in a bit as well. Look, I mean, we like to focus on completing all of the aspects of readiness. I pushed the team incredibly hard with some of our announcements over August. What I am pleased to say, as reflected in the comments, is I think we're there from a technology, legal, and sort of initial pilot partner standpoint, particularly on the gold pilots. We're now kind of in that window where it's under our control when we want to strategically roll these out, the formats. We have been working, we've been in outreach for a while. We've had a number of inbounds from our clearing members and market participants that saw our press releases and are excited about the potential.

We've had outbound generally extremely well-received both by financial institutions and commodity traders with what we're doing. We are in a window of readiness for the execution of the pilots. We are really taking this week and next as we roll into December and really optimum timing when we want to actually execute these trades. The format is just about getting the right information in the market. We are kind of in the execution and finishing phase with the pilots essentially ready from a legal and technology perspective. Ian, anything else you'd like to add there? Yeah, sure. I think the legal and technology perspective is great. The thing that we also are very mindful of is the adoption perspective. The reason for these pilots is for us to be able to sound out the market and figure out where the demand is.

Once we hit that demand threshold, of course, we're going to lean hard into it for our first use case. I think everybody's sort of wondering what's after the pilots, right? That's what's after. We sound out that demand and then lean hard into it where we find it. We obviously have some very well-developed thoughts about how this will play out, but that's really pure speculation until we run the pilots. Of course, anything we do will be heavily considering and weighting the business at Abaxx Exchange and clearing and leveraging the unfair advantages that we have with that relationship. Thanks, Ian. We had another question, Josh, on the interrelationship between what's happening on the exchange side and what's happening on the tech side. In what ways will the tokenization of assets be a risk to Abaxx Exchange's business model and moat?

In what sense is it, I think, an opportunity? Yeah, I mean, just kind of making assumptions on kind of the meaning behind that question. I think there's kind of a view out there that centralized exchanges and clearing houses are at risk because of things that are happening in DeFi and kind of moving that whole trading exchange settlement custody, collapsing that all into a blockchain. I think we spent a lot of time indirectly on this in the last call and that we just don't see that world, particularly in physical commodities and large transactions with large global institutions. We don't see that DeFi world really moving very rapidly into risk management of these types of wholesale businesses. That's very specifically because of the nature of what you actually own.

If you think about stablecoins specifically, yes, there's been dramatic growth and a number of use cases still primarily driven by sort of DeFi type trading on offshore exchanges as well as moving monies in sort of global jurisdictions that have less dollar access. We really have not seen the use case of stablecoins into large regulated clearing houses or used as collateral. I think I've mentioned in previous calls, we're sitting at somewhere around $1 trillion in assets sitting in central clearing houses for clear derivatives. At least the conversations I've had with regulators, again, at a high level, I think people are interested in the concept of stablecoins. The CFTC has been pretty vocal about a number of initiatives and pilots and reviews taking place.

In the conversations that we've had kind of in the depths of the plumbing with lawyers and clearing members, various jurisdiction regulators, we just do not see stablecoins as ready for prime time for a number of the reasons that we outlined on our last call with regards to the solvency gap and the liquidity gap of holding a US dollar stablecoin, particularly offshore. What do you actually own? I mean, that's why we're very focused on the infrastructure and roadmap that we set out years ago, looking at identity and privacy first. We have taken a very different approach, even though a lot of the underlying cryptographic components are similar. We've arranged them in a way to be able to move money markets or securities or even bills of lading and warehouse receipts in real time.

I know kind of a long answer, but the short answer is we do not really see a threat with what is happening in DeFi liquidity pools or stablecoins. We think we have got a better system to solve problems today and not sort of in a world that theoretically changes all the architecture and infrastructure. Thanks, Josh. This next question, you end up maybe directing to Joe, given he has been out at the FIA in Chicago this week. The question is, what evidence do you have that exchange customers are interested in or willing to purchase the digital title tech? Yeah, maybe just a couple of brief comments. Maybe Josh or Ian could probably follow on to that.

Just to your point, Dave, being at the FIA Expo here in Chicago, which is one of the bigger events in the futures industry during the year, particularly from the more operational side of things in futures markets, I would say that if anything, there was probably very little spoke about except for tokenization, the use of collateral, the use of stablecoins. It was on almost every single panel and discussion over two days. It is high on the FIA's and the customers' clearing firms and trading firms' targets in the marketplace. We will see how we can, I would say, bring the products that we've and the technology that we've developed to bring to them and see how they react to it. I think that will be an important next step for us. Yeah.

I want to reiterate that this is different in some software technologies where you're not just trying to take an existing system and maybe run it a little bit faster or a little bit cheaper or something. It's the nature of what this actually does to unlock collateral and velocity that really does change the game. We talk about something like 24/7 trading markets, cleared trading markets. That doesn't exist today. It needs technology like this in order for it to exist. There will be a situation, whether it's a type of contract or market hours or market regions, there will be a case where those that adapt our technology will be able to participate in a market that those that do not cannot, right? It is more than just upgrading your software.

It really is unlocking new forms of collateral and new use cases for trading in your business. That is why we're so excited about it. Again, I want to reiterate the way we've done it. I think Ian made a great comment on one of the podcasts, "Make paper great again," right? Whereas as blockchain wallet tokenization needs new legal frameworks, new ways of doing things, new workflows, new IT systems, we've built our tech stack in a way that mirrors the way that things have already been done. It just does it faster, safer, and more secure in the digital realm rather than the paper realm. We do not have the impediment that a lot of the blockchain impediments have with new frameworks for regulatory, new technologies for holding private keys for bearer assets.

Again, we're excited about the ability to take up our system much faster than, say, even something like stablecoins. I think Dave's interview with Peter Zaman was an excellent sort of distillation of that. They covered a lot of those topics. I just wanted to add too that what we're doing with ID++ and digital title is not mutually exclusive from blockchain. For us to win, they do not have to lose. We're built to work with or without. It really becomes up to the market participants and the market to really decide what set of challenges they want to embrace. I mean, personally, I think all of the activity around tokenization is accretive to what we're doing. Thanks, everyone. I wanted to move on to some questions a little bit more at the corporate or Pubco level.

We've had quite a few questions come in around potential thoughts and plans for moving to either another exchange, a US listing, etc. I just kind of like to roll them all up into one question where, while you can't get into any specifics, just, Josh, maybe if you could spend a moment or two on your thoughts on other listings. Yeah, great. Thanks, Dave. I mean, this is an ongoing conversation with our major investors and the board. Oh, I should mention we have been added to an MSCI Canadian Small Cap Index, which, and those types of, those types of additions will increase our liquidity. Even our market cap has changed the nature. There's a number of funds, even in Canada, that have market cap thresholds, of course, being revenue-generating in our primary business.

There are a number of things that have changed over Q3 that really make our listing very different than it was six months ago and over the previous years. I've also said in the past that we wanted to be at this stage of revenue growth and not kind of—I have always thought Canada has particularly good markets for sort of long infrastructure investment cycles, given the nature of commodity development and commodity infrastructure. It is kind of a better market to be pre-revenue as a public company. Of course, we are increasingly getting interest from the core market infrastructure investors, which happen to be in the U.S. We are now moving into that window where a U.S. listing would make sense. I want to caution, obviously, all of the regulatory work that needs to happen. We did start some of that a couple of years ago.

We kind of know what the roadmap looks like and are generally prepared from a corporate perspective. We would likely start that process in Q1 if that's the decision of the board. Thanks, Josh. We're coming up on the hour. In the interest of time, I'd also like to start bundling some of the remaining questions. We've had quite a few questions on where the various companies in the Abaxx family and companies that we've invested in fit into the vision you laid out in the first part of the call and what specific pieces they may tie into. Specifically, if you'd kind of do a minute or two on where things are with Base Carbon, MineHub, and more recently, Artex, and how they fit into the overall vision and development.

Yeah, I touched on it a little bit earlier, but it really comes down to distribution of our technology and sort of credibility and liquidity of our markets. It is all one integrated strategy. Particularly, if you look at MineHub, for example, they are also building very hard-won network effects in a very—look, there is an inevitability about digitizing commodity workflows, which is still one of the most paper-based in the world. There have been a number of companies—we do not think the big kind of the hyperscalers, that a lot of them always get bogged down when they try to move into digitization of commodities. It really takes very niche understanding when you get into this vertical. We think these digitization efforts will eventually hit network effects. That is why we backed MineHub.

They've become a great partner to distribute our technology as well as integrate with their customers, sort of one-click hedging and so forth. We are really helping MineHub become the nexus of the digitization of commodities. Similar with Base Carbon. Look, I know the carbon markets, particularly the volatile carbon markets, have kind of gone on the back burner for a number of people over the last couple of years. We still believe that environmental assets and tracking and tracing and all of the things to be active in that market are critically important. This major trend that's been happening since the Clean Water and Air Acts of the late 1960s, like trying to do things cleaner and more transparently, is not going to go in reverse.

We want to be active in that market and innovative in that market because it's really a forefront for commodities. Base Carbon, I think, has been a great financial investment for us. We took the opportunity after our strategic financing with relatively little capital to take our position to 19.9%. We still think that's been a very high IRR business. It also, again, the broader strategies around distribution. As far as some of our investments, again, they're always—essentially, think about them like customer financing or building networks off of our balance sheet. That's the way we look at them. We think as a portfolio overall, they've also served us well from a very—I mean, I think overall, we've invested less than $5 million in our total portfolio. Obviously, it is now marked to market at much, much greater values than that.

I think it's been a good financial return. The main priority has always been about building our network off our balance sheet, so to say. Thanks, Josh. I'd like to group together a few questions on the topic of dilution. There have been a number of questions just really kind of wanting your thoughts on dilution and what that could be like going forward. Some specifics mentioned were potential awards to officers and employees, dilution from the recent $22 million private placement, and the Artex investment. Yeah. I mean, I think most shareholders that know me realize I'm very, very aligned with minimizing dilution. We've always taken what, frankly, is a much, much harder path. Essentially, only giving yourself one year or less of runway to hit a number of milestones. It's forced an urgency and a survival mentality in all of our people.

We've always run things incredibly tight to—I often joke a $25 million budget at the global scale we're operating is really a rounding error even for some highly speculative tech companies, but absolutely for a major piece of global market infrastructure. I think we've done an incredible job with the capital that's been afforded to us. It's having that mentality of minimizing dilution. A comment that I think is important, kind of an indirect comment I heard there, was around stock-based comp and equity. I know we didn't talk about that in the prepared statements. I'm sure in the year-end statements that we present next, I guess, around April, we can get into a lot more financial detail on these types of metrics.

It is important to point out that a lot of the heavier grants that took place really waited till we hit some major milestones like launching the exchange last year. If you look at our sort of 2020 to 2024 equity comp, I think it was very, very reasonable. A lot of that comp came through for major milestone grants that were more or less one-off. I think going forward, we're going to probably maintain what's—although it's been approved for up to 20%, we're going to maintain around that 10% on an ongoing. The 20% was really needed for a lot of special grants, including some market infrastructure partners and so forth. We'll probably normalize closer to that sort of 10% type metric.

Again, as sort of a large shareholder, and most of our team really operates like owner-operators of this business, almost the entire executive team skews most of their comp to equity because they know the value of what we're building. We all, as management, think heavily about dilution and minimizing dilution because we know of the value that this business can be. Thanks, Josh. We're just about at the hour. I wanted to squeeze in one more question before we wrap up. That question came in, Josh, on the cost of capital question. Are we on a cost of capital path that accelerates the investments and growth of the vision? Yeah. Yeah. Like I said before, look, we're going to take this back to the board. We've been in conversation with our strategic investors.

I think the key thing is where our technology rollout kind of plays out. I mean, again, I think our exchange opportunity to reach 1 million ADV by expanding regions and products, I think that's a very high IRR, much lower risk investment at this point. We do see some ramp-up in sort of the current budget. Again, at our market cap, running at this type of budget against that kind of opportunity, this is sort of a multi-variable equation that the market cap would suggest that we should be probably more aggressive in that slope towards a million ADV. I think that one's a little bit of an obvious one where we can increase some spending.

The piece on the technology side, I think we probably want another quarter or two under our belts of getting the pilots completed, as Ian said, having that customer feedback before we accelerate into it. I would say the increased spending right now will be gradual and really focused on debottlenecking new products and new sales of our exchange products. We would probably look more like something like Q2 before we start reassessing the budget on the technology side. Yes, the cost of capital is a major variable there, but so is minimizing dilution, as we just talked about. Those are the variables we're working with. I think we're very aligned with shareholders on making the right choices there. Thanks so much, Josh. That's the Q&A for today.

If you have a question that was not answered, feel free to email us at our investor relations email address. With that, I will turn it back, Josh, to you and Tara to wrap up. Thanks, Dave. Nothing else from my end. Thank you, everybody, for joining us. As usual, we are pretty active and accessible for questions and further comments. Thank you for your time. Thanks, all. Just a short note before we close, a recording of today's meeting will be available on the Abaxx Investor Relations website and the Abaxx Tech YouTube channels by the end of the week. Thank you for joining us. Have a great day.

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