TSXV:MPT - WIRED Money – July 1, 2014

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TSXV:MPT - WIRED Money July 1, 2014

Transcript of TSXV:MPT - WIRED Money – July 1, 2014

Page 1: TSXV:MPT - WIRED Money – July 1, 2014

TSXV:MPT - WIRED Money – July 1, 2014!

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Forward Looking Statement Disclaimer!

All statements, other than statements of historical fact, contained in this presentation constitute “forward looking statements” and are based on the reasonable expectations, estimates and projections as of the date of this presentation. Forward-looking statements include, without limitation, possible events, trends and opportunities and statements with respect to possible events, trends and opportunities, including with respect to, among other things, the growth of the FX and payments markets, global market trends, expected industry demands, capital expenditures, currency fluctuations, government regulations and industry self-regulatory regulation. The word “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “does not intend”, or “anticipates”, or “does not anticipate” or “believes” or variations of such words and phrases or statements that certain actions “may”, “could”, “would”, “might”, or “will be taken”, “occur”, or “be achieved” and similar expressions identify forward looking statements. Forward looking statements are necessarily based on a number of assumptions and estimates that while considered reasonable by the company as of the date of such statements, are inherently subject to significant business, economic and competitive uncertainties and contingencies. The estimates and assumptions contained in this presentation, which may prove to be incorrect, include, but are not limited to, the various assumptions of the company set forth herein. Known and unknown factors could cause actual results to differ materially from those projected in the forward-looking statements. Such factors include but are not limited to potential conflicts of interest of officers or directors involved in the company’s future business, changes in national and local government legislation, taxation, controls, regulations and political developments in jurisdictions in which the company does or expects to do business; risks associated with obtaining any licenses or permits. Many of these uncertainties and contingencies can affect the company’s actual results and could cause actual results to differ materially from those expressed or implied in any forward-looking statements made by, or on behalf of, the company. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. All of the forward-looking statements made in this presentation are qualified by these cautionary statements. These factors are not intended to provide a complete list of the factors that could affect the company. The company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, or to explain any material difference between subsequent events and such forward-looking statements, except to the extent required by applicable law. Investment in early stage companies involve a high degree of risk and my not be appropriate for all investors. The forward-looking statements set forth herein are for the purposes of providing potential investors with information concerning the company’s future business plans in order to assist potential investors in determining whether or not to invest in Units of the company and may not be appropriate for other purposes. The reader is cautioned not to place undue reliance on forward-looking statements.!

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3!Midpoint Summary!

o  Fintech company which created the world’s first Peer to Peer (‘P2P’) Foreign Exchange marketplace!

o  US patent granted in 2007 on our multi-party, multi-currency matching computerized business method!

o  Went public via RTO in April 2013 in Canada on TSXV under the ticker MPT !

o  FCA authorization in UK as a “Payments Institution”!

o  The FX market at $5.6T/day is the largest liquid market in the world and is extremely fragmented with no central exchange or key player!

o  Target market: SME’s involved in import / export, overseas professionals and property owners, foreign students – anyone involved in international payments!

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Payee in currency 2

$ £ €

Midpoint.com

Order Matched!

Client Bank Account

5!

Client Segregated Trust Account At Earthport

Customer in currency 1

£ € $

Customer needs to pay foreign payee in other currency!

Payment made!

4 !Funding segregated trust account!

6 !

2 !

How Does Midpoint Work?!

No need for clients to prefund. No counterparty risk

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Other multi currency links

Three way currency link: i.e Triangulation

6!Midpoints Multi-Currency Matching Patent!

Corporation ‘A’

Has USD and desires GBP

Corporation ‘B’

GBP available and desires EUR

Corporation ‘C’

EUR available and desires USD

Midpoint!Matching!System!

Traditionally FX has been done bilaterally with a buyer of one currency being the reciprocal seller.!!Midpoint is different: it nets multiple parties across multiple currencies (either 2 way, 3 way, 4 way, 5 way, etc) so that direct offsets are no longer required. It holds US Patent 7,194,481 on this computerized business method!

Unique technology reduces volume of transactions required to make matches

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£!£!

£!

£!

£!

£1000 Order

£100 Via a direct match!!

£250 Via a 4 way !multi-currency match!

£250 Via a 3 way !multi-currency match!

£150 Via a direct match!

£250 Via a 6 way!multi-currency match!

Orders can comprise several different multi-currency matches!

7!Midpoint’s Multi-Party Matching Mechanism!

Ability to complete a transaction through multiple matches lowers liquidity costs

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8!Matching System Efficiency!

The value of Midpoint’s algorithm has been validated

97%

75%

0%

20%

40%

60%

80%

100%

Normal Trading Pattern

Low Supply of Two Currencies

% of Client Requests Cleared o  Midpoint’s matching system was reviewed by

actuaries to establish its efficiency!

o  The model analyses an environment where 6,250 requests for currency are made in a 6-currency environment!

o  Assuming ‘normal’ trading patterns, based on data from the Bank of Settlements, 97% of orders were matched!

o  Even in a ‘stressed’ scenario, with low availability of two currencies, the Midpoint system still matched 75% of orders!

o  Midpoint can still provide matches for 100% of orders through purchasing additional liquidity!

Note: Results from a simulation of 6,250 randomly-distributed orders in a six-currency environment.

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9!

o  Once matched, Midpoint clients remit funds to a segregated client trust account via Earthport Plc - eliminating any counter-party risk!

o  Midpoint has a deep integration with Earthport’s API for money movement and payment execution!

o  Earthport is a global financial services organisation providing a cost effective, transparent service for secure international payments!

o  Their ecosystem is supported by 30 of the worlds largest banking groups!

o  Founded 1997 and traded on the London Stock Exchange (AIM EPO)!

o  Over 150 million trades a day across 200 countries!

o  Other clients include Bank of America, HSBC and Standard Chartered Bank!

Segregated Client Trust Accounts!

Midpoint Client Funds are as safe as they would be with the safest competitor

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10!

Traditional FX Method!GBP/USD!

Buying a GBP!

1.6978 !

Selling a GBP!

Existing FX Market Pricing!

1.7435! 1.7208! 1.6979 ! 1.6977 ! 1.6753! 1.6454!

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The FX Market is Huge and Highly Fragmented!11!

Spot FX Market is 5.6Trillion/Day!!76% of that involves USD, Euro & GBP

! !9% of that involves corporate payments!!90% of that is in Midpoint Target Transaction Range of $1K - $1M!!Gives Midpoint a Potential Market of $345 Billion/day or $76 Trillion/year!!UK imports/exports: > GBP 500 B/year!!FX market growth trend: !>20%/year (2007-2010)!

<10%!

<1%!

<1%!<1%!

>87%!Direct – Banks!Dealers – Margin

trading!

Reverse Auctions!Aggregators!

New peer to peer!

FX - the world’s largest market!

>15,000 banks*!

* Source: IMF, January 2014

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Emerging Peer-to-Peer Landscape! 12!

P2P

Wholesale/ Principal

Retail

Corporate

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13!Senior Management Team!John G. Booth LLM!

Mike Hampson!

Chairman, CEO & Co-Founder !25 years experience in the international capital markets as investment banker, broker, strategy consultant, lawyer and fund manager for firms including Merrill Lynch, ICAP, ABN AMRO, CIBC, World Bank and CFI. Midpoint is his third start-up in the financial services sector. He holds roughly 19.8% of the company!

!Managing Director!25 years experience in financial services and technology working for global banks at senior and board level, including Morgan Stanley, Credit Suisse and ABN AMRO where he ran wholesale banking until its acquisition by RBS. Co-Founder of Bishopsgate Financial. BSc in Computer Science. He holds roughly 9.2% of the company.!

Craig Astle CA CPA! CFO!Qualified accountant in private practice for past 25 years with a bias towards audit and tax. He was involved in helping raise the third private round of financing prior to the RTO and holds roughly 5.8% of the company.!

Brad Lemkus! Director of Operations!Extensive experience in building & leading businesses with turnover from £10-100 million. He has successfully developed markets on four continents and holds roughly 4.8% of the company.!

Marketing Manager!Michael has extensive experience with both online and general marketing in financial services having worked at Newton Asset Management & ABN AMRO. He is leading the Midpoint social media and online marketing and managing the outsourced marketing agency.!

Technology Manager!Dan manages D2i, Midpoint’s outsourced technology partner. Dan and his team have built the website, matching engine and Earthport API and are now focused on a client API and App.!

Dan Drogman!

Michael Yiatanou!

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Midpoint & Transfer Ltd!(UK)!

FCA Authorized Operating Company!

Midpoint Holdings Ltd! (Canada)!

TSXV: MPT Public Holding Company!

14!Corporate Structure!

100%!

o  Midpoint Holdings Ltd TSXV:MPT!!o  51,859,160 Common Shares in issue!!o  $2.9M raised April 2013!!o  Management holds > 40% of shares!

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Progress in Past Year!

Since the last round of investment and RTO in April 2013, the Company has focused on further de-risking the business and investment offering in term of:!

o  Product offering - improved the customer interface (UI), advanced calculator and currency offerings to 10 – USD,CAD,GBP,EURO,CHF,DKK,SEK,NOK,AUD,NZD!

o  Systems - improved the matching engine’s scalability in terms of currencies and transaction volume capabilities!

o  Operations - streamlined client onboarding and improving customer service!

o  Marketing – gathered digital marketing data to enable us to scale social media!

o  Compliance – FCA authorization as a Payments Institution allowing compliance passport across the EU and permission to process an unlimited volume of transactions!

o  Proving out the business model – growing client numbers, transaction numbers and transaction volumes while constantly monitoring and revising the value proposition and its stickiness with the growing client list!

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16!Why Midpoint and Why Now?!

The only publically listed peer-to-peer FX marketplace:!

1.  Which offers the chance to be part of a revolution in foreign payments!

2.  At a time when consumers are demanding more transparency!

3.  When the market for electronic payments has moved from early adopters to mainstream!

4.  And, Peer-to-peer models of all kind are starting to take hold in other financial services!

Most of all, it’s a compelling client proposition – using Midpoint, clients changing £50,000 into US dollars could typically realize savings of £1,000 per transaction!

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17!Contact Us!

Midpoint Holdings Ltd.Suite 3680, The Echange Tower, 130 King Street West, Toronto, Ontario, Canada !

Midpoint & Transfer Ltd.26 Finsbury Square, London, EC2A 1DS, UK !

TSXV – MPT !