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Operator: Good morning, ladies and gentlemen, and welcome to the Currency Exchange International Q3 2025 Financial Results Conference Call. [Operator Instructions] Also note that this call is being recorded on Thursday, September 11, 2025. I would now like to turn the conference over to Bill Mitoulas, Investor Relations. Please go ahead, sir.
Bill Mitoulas: Thank you, operator. Good morning, everyone. Welcome to the Currency Exchange International conference call to discuss the financial results for the third quarter of the 2025 fiscal year. Thanks for joining us. With us today are President and CEO, Randolph Pinna; and Group CFO, Gerhard Barnard. Gerhard will provide an overview of CXI's financial results with the latest perspective on the company's operations. Randolph will then provide his commentary on CXI's strategic initiatives, sales efforts and business activities, after which we'll open it up for your questions. Today's conference call is for shareholders, prospective shareholders, members of the investment community, including the media. For those of you who may happen to leave this call before its conclusion, please be advised that this conference call will be recorded and then uploaded to CXI's Investor Relations website page, along with financial statements and MD&A. Please note that this conference call will include forward-looking information, which is based on a number of assumptions, and actual results could differ materially. Please refer to our financial statements and MD&A reports for more information about the factors that could cause these different results and the assumptions that we have made. With that, I'll turn the call over to Gerhard. Gerhard, please go ahead.
Gerhard Barnard: Thank you, Bill, and thank you, everyone, for joining today's call. These results are presented in U.S. dollars and my overview of the company, CXI, will also incorporate the results of the discontinued operations of Exchange Bank of Canada. As a reminder, on February 18, 2025, the group announced its decision to seize the operations of its wholly owned subsidiary, Exchange Bank of Canada. All customer activity has ceased as planned by the end of August 2025 and preparation for administration and financial statements year-end audits are underway to submit an application to the Minister of Finance in Canada to discontinue Exchange Bank of Canada from the Bank Act. The application to discontinue is expected to be made in the fourth quarter of 2025 with the actual discontinuance of the bank being subject to receipt of all necessary regulatory approvals. Starting in the second quarter of 2025 and following the Board's decision to discontinue the bank's operations, the group updated its financial statement's preparation and presentation to predict continuing and discontinuing operations separately in accordance with IFRS accounting standards. Therefore, included in the group's financial statements are the results of the United States operations under continuing operations and the results of Exchange Bank of Canada under discontinuing operations. Now the group reported net income of $4.2 million for the third quarter, 8% higher than the prior year and this reflects net income of $5.2 million from continuing operations and a net loss of $1 million from Exchange Bank of Canada. These third quarter results included a net restructuring credit of about $100,000 related to discontinued operations in Canada. Now management anticipates that certain operating expenses and personnel costs that are currently shared with EBC will be 100% borne by CXI after EBC's exits from Canada and the current annualized estimated cost would be approximately $3 million after tax. This estimate is subject to change throughout EBC's discontinuance proceeds. Before we go into the results, I'd like to note that the group measures and evaluates its performance using several financial metrics and measures, some of which do not have standardized meanings under General Accepted Accounting Principles, GAAP, and may not be comparable to other companies. We call these measures non-GAAP financial measures and/or adjusted results. Management believes that these measures are more reflective of its operating results and provides a better understanding of management's perspective on performance. These measures enhance the comparability of our financial performance for the current period with the corresponding period in 2024. Management included a full reconciliation of the key performance and non-GAAP financial measures in the MD&A. When we refer to reported results, we refer to the results reported in the financial statements based on IFRS. And when we refer to adjusted results, such as adjusted net income, we refer to performance of non-GAAP measures. With that, here is a summary of the third quarter's results comparing this year's third quarter to the prior year's third quarter. Revenue grew to $21.3 million by roughly $1.3 million or 7%. Now operating expenses increased to $13.1 million or just under $1 million, close to 8%. Our EBITDA grew by -- grew to $8 million by $0.3 million or roughly 4% over last year, and our reported group net income grew to $4.2 million by $0.3 million or 8%. So that's an important one. Net income grew to $4.2 million by roughly $0.3 million or 8%. Adjusted group net income was $0.5 million or 10% lower than last year due to EBC's revenue tapering during the current quarter as a result of the discontinuance of its operations. Let's look at the consolidated performance of the third quarter of 2025 compared to the prior year's quarter. Our revenue growth was driven by 24% growth in the payments product line and 4% growth in the Banknotes revenue, primarily through direct-to-consumer channels. Now wholesale banknotes grew roughly $0.25 million or 3% and represents 44% of the total revenue. And while trading volumes declined due to a weaker consumer demand for foreign currencies, this product line grew 4% over the last year due to the continued addition of new domestic financial institution customers in addition to certain large customer transactions at the end of the quarter. Direct-to-consumer banknotes grew roughly $0.4 million or 5%, and this represents 40% of our total revenue with growth coming mainly from the OnlineFX platform due to increased demand for exotic and foreign currencies and the addition of 138 new airport agents in various locations. Our Payments revenue grew $650,000 or 24%, now almost 16% of our total revenue. The growth was supported by a 30% increase in trading volume activity for existing financial institution customers and the onboarding of new customers. Following is a highlight of operating expenses from continuing operations for the third quarter '25 compared to the same quarter last year. CXI's operating expenses increased about $920,000 or 8% compared to the same period in the prior year. Now variable costs, mostly our cost of goods sold, post the shipping bank charges, sales commission and incentive compensation, totaled roughly $3.3 million, a 4% decrease compared to the $3.5 million of the prior year. Salaries and wages increased mostly driven by Google Vault staff growth and the addition of company-owned branch locations, in addition to general inflationary increases. Legal and professional expenses increased due to audit and tax services as well as other legal and advisory services provided in the normal course of business. Marketing and publicity increased as CXI continued to focus on marketing initiatives, campaigns, retail investments and establishing a customer referral program that supports corporate goals with a focus on the direct consumer business growth. Net foreign exchange losses for the current quarter were primarily driven by hedging costs and foreign exchange losses in the prior quarter were associated with CXI's banknote holdings in the Mexican pesos. Bank services charges are primarily driven by the Payments product line. In the current quarter, CXI continued to process certain payment transactions via EBC's correspondent bank and received a chargeback allocated via intercompany allocations. Now it's important to remind that intercompany allocations are excluded from the results of continuing operations as per IFRS 5. It is relevant to mention that CXI's payment processing has fully migrated away from EBC's correspondent bank during August 2025. Stock-based compensation includes a noncash amortization expense related to the vesting of the company's equity-based stock options in addition to certain cash-based awards represented by RSUs and DSUs. CXI incurred a net expense in the amount of $73,000 related to DSUs and RSUs, which is lower when compared to about $185,000 for the same quarter last year as a result of the decline in the stock price in the current quarter compared to the previous quarter. Interest expense decreased as a result of the decline in the average borrowing of funding EBC's operations and working capital requirements, and it's tapering significantly following the decision to discontinue operations in Canada. Average outstanding borrowings for the quarter was about $1.3 million compared to $2.1 million during the same quarter last year. The average interest rate is also decreasing, and it was 6.7% compared to 7.7%. Income tax expense in the current quarter represents taxable income growth over the prior year and reflected an effective tax rate of 26%. Summarizing the results of continuing operations for the 9-month period ended July 31, 2025 and 2024. As stated in the beginning of this document, all earnings from continuing operations have been revised to exclude EBC's results and all associated intercompany transactions. Now for the 9 months for CXI, the continuing operations, revenue grew to roughly $52.5 million or $2.1 million of growth, roughly 4%. Operating expenses increased to $35.5 million, $0.5 million higher or 1% more than the prior 9-month period. And EBITDA grew to $16.7 million, which is about $1.3 million higher than the prior year or 9%. Reported group net -- group net income grew to $7 million almost $1.7 million or 33% higher, while the adjusted group net income grew to $7.5 million, about $100,000-or-so and 2% higher than the prior year. Deep diving into the 9 months ended July 31, 2025. CXI's Payments revenue. So now we're just going to look at the 9 months income statement revenue growth. Payments for the 9 months grew 16% or $1.2 million with a 27% increase in trading volume activity where business grading volumes for the 9 months was roughly $4.7 billion compared to $3.7 billion in the prior year. Direct-to-consumer and wholesale banknotes combined grew 2% or $940,000, driven by growth in customer demand for certain foreign currencies such as euro and the Mexican peso, which offset the declining volumes from other currencies, such as the Canadian dollar. During the current year, that's the 9 months, CXI added 192 new non-airport agents and 2 new states to the OnlineFX platform, reflecting increased volumes from exotic currencies. The group reported net income of $7 million versus for the 9 months again, including the results from discontinued operations compared to $5.3 million for the same period last year. This included net income from continuing operations of roughly $9.6 million compared to $9.9 million from the same period last year. As I mentioned, the group had an adjusted net income of $7.5 million in the current 9-month period, 2% higher than the prior year. Now looking at the results of discontinued operations. And again, this relates to the Exchange Back of Canada. The bank had a net loss of $1 million in the third quarter compared to a net loss of roughly $1.2 million for the same period in the prior year. For the 9 months ended July 31, 2025, the bank had a net loss of $2.6 million compared to last year's $4.6 million in the same period. Diluted loss per share from discontinued operations was a loss of $0.17 for the third quarter compared to -- and a loss of $0.41 for the 9 months ending compared to roughly $0.18 and $0.70 in the same period last year. The application to discontinue is expected to be made in the fourth quarter of 2025 with the actual discontinuance of the bank being subject to receipt of all necessary regulatory approvals. Now reviewing the balance sheet as at 31st of July 2025, due to the company's business being subject to seasonality, CXI is using a trailing 12-month net income amount to calculate ROE, which was a consistent 12% over the last 12 months and it includes the discontinued operations results. Now CXI has net working capital of $67 million and total equity of $84 million and 100% available, a 100% available unused line of credit totaling $40 million, all debts were paid. Maximizing the return on capital to our shareholders through share buybacks remain a key focus. During the 9-month period ended July 31, 2020, the group purchased for cancellation to 190,300 common shares at the normal market prices trading on the TSX for roughly $2.85 million under its second share buyback program or Normal Course Issuer Bid. On August 20, the group announced a retroactive increase in its second NCIB. The Board of Directors and management believe that the market price of the common shares may not, from time to time, fully reflect the long-term value of CXI and between August 1 of this year and September 10, yesterday, the group had purchased for cancellation an additional 92,100 shares for a total of about $1.4 million. Our total repurchase shares through to September 10 is now 282,400 common shares, equivalent to roughly USD 4.25 million. Now at this time, I will turn the call over to Randolph Pinna, our CEO, for his perspective. Thank you, Randolph.
Randolph Pinna: Thank you, Gerhard, and thank you all on the call. I appreciate everybody being available and especially those out West who are up early in the morning. As usual, I'd like to start with EBC. I think you've heard clearly, we are in the final stretch of our discontinuance according to our approved discontinuance plan. It was a sad day to see the last transactions here in Toronto, where I sit right now. And we are in the final phase of completely exiting Canada. I'm sitting in the EBC office, which is mostly vacant. And this month will be the last month that staff are in this office. As whatever staff is remaining will be working from home as we discontinue Exchange Bank of Canada. We will be filing, as I mentioned, this year, and we will be then waiting for regulatory approvals. Moving to CXI. As you can imagine, with no longer having a wholly owned subsidiary bank, we are in the final phase of updating our strategic plan for the next 3 to 5 years. In this process, we actually have went out and recruited the voice of over 1,000 U.S. consumers to get the voice of the consumer, whether they want to exchange money at their bank, at a Bureau they change, at an airport or what have you. We also did a deep dive and got the voice of our customer, not just to the banks and financial institutions, but also our agent customers and other customers to understand the customers' needs and goals for the next 3 to 5 years as well. And lastly, we have done quite a few meetings with our shareholders. And we do have that incorporated in our strategic plan as well, the voice of our shareholders. We are going to focus for the fiscal '26 year on continuing to grow our revenues while also focusing on efficiency, utilizing automation and simplification efforts. We hope that the '26 year will be a clean year, won't have all the noise of continuing and discontinuing. And so we are excited to embark on our new fiscal year with our updated strategic plan. On the actual business itself, as you see, we are continuing to grow in our consumer area with our online store with the new states, we're now well over 90% of the entire U.S. population can be serviced through their home and office should they not want to visit their customer bank, I mean their bank or their CXI locations. We are continuing to selectively add company-owned and operated retail stores. The new market in -- the new store in Phoenix, Scottsdale, Arizona has opened and doing very well. We're adding another location in New York, and we will continue to add selective locations each year. And most importantly, our agent program, as you see, is continuing to grow. We really enjoy the agent relationship. It is a win-win-win situation for all involved, and we will continue to focus on our agents. Overall, our consumer business is healthy, but we feel there's a lot more growth, both in the online agent and physical stores by adding additional products and services, utilizing the same infrastructure in place. Moving to the Wholesale business. We will continue to always focus on selling banknotes to financial institutions that is both banks and credit unions, but we are also complementary selling the Payment product. As you can see, we continue to invest our sales efforts and successfully adding new locations to continue to allow our Payment business to diversify our total group revenues. And lastly, I wanted to just talk about M&A. Gerhard and I have been quite busy reviewing and investigating opportunities that are strategic and would be accretive to the company. There's nothing imminent. However, we are continuing to explore and always looking for an opportunity that will complement our business and accelerate our growth. That's all I have for the -- my mini update, and I thought the best thing now would be to open it up for questions that Gerhard and I can answer for you, so thank you.
Operator: [Operator Instructions] First, we will hear from Robin Cornwell at Catalyst Research.
Robin Cornwell: I wondered if I could ask the first question is, if you could expand on the EBC referral agreements? You indicated that it's over a 4-year term. I wondered if you could give us some idea whether it's the material amount you'd be expecting? And what kind of potential income that might be generated from that?
Randolph Pinna: Thank you, Robin. I appreciate the question. We have 2 referral agreements in place, one with a financial institution here in Toronto that is focused on the wholesale banknote business. We have not yet received the first report from that company. Although I have heard, they seem to be doing well. And we do not predict or forecast future earnings. As you know, we don't give guidance. And so I don't have an estimate to provide to you, but I do confirm that the existing bank note referral agreement with the Toronto institution is in place and customers have migrated to them. And so we will know more as it is reported in our next quarterly report, which I don't think will be highlighted as a separate line item since to be a separate line item, it would need to be more than 10% of total revenue. So it will not be that large, but you will see additional fee income from that. The second referral agreement is with a money service business based in Vancouver to take over payment clients. This is not expected to be as material as the bank notes since only 3 employees and their "book of customers" migrated to the new company, so that referral agreement would be less material indeed. So that is all I can comment on the referral agreements. Did that hopefully help answer the question?
Robin Cornwell: Okay. And one little quick question. The payments revenue was up quite significantly, had any of that volume was it related to tariffs and the front-ending of imports and things like that in the United States, could you comment on that?
Randolph Pinna: I don't know the direct impact of any tariff activity. I do know that the tariff activity has reduced foreign demand to come to America. And -- but as far as payment revenue, it has -- I don't think has had a material impact on it. Our payment growth increases is because we're continuing to add new clients as a result of the integrations we've done with the software providers that run bank software systems. And so the growth that you're seeing is real growth from new and existing relationships. And again, I don't have any insight into whether some of that is because of prebuying of the tariffs. I don't believe it is.
Robin Cornwell: Okay. And Randolph one more...
Gerhard Barnard: Robin, maybe to comment on that point. As Randolph mentioned, we saw that about $0.5 million of that growth or, let's say, close to 2/3 was by adding new customers and that just creates an annuity stream for us and existing customers also grew in that payment space that we have. So as you saw, the volumes continue to pick up, the additional payments that we do, you look at those billions of dollars of money that we move, that gives you a good sense of Payments current velocity.
Robin Cornwell: Terrific. Okay. Thank you for that extra thought. Randolph, I do have one question for you, and it's a broader-based question. It's planning or how you plan to grow perhaps the Software-as-a-Service capabilities because you've invested a tremendous amount of money in the SaaS and you're using it now. But do you have any more insights as to where you might drive your business with the software?
Randolph Pinna: Thank you for that question. And just as a -- for the whole audience, we're going to try to limit questions to 2 per person. I'm happy to do the third one, Robin. But if there are more, please requeue just out of respect for the other people on the call. But yes, I'm very excited about the fact that we have got past our pilot where we have some clients paying a fee to utilize the software since it is true payment rails for both foreign currency wires as well as U.S. dollar wires. And so we expect in '26 that we will be seeing a noticeable new fee income from a software licensing as opposed to our current model of where our banks get our software in return for doing their wires with us. We are pivoting that way where we are going to be seeing additional income from our Software-as-a-Service. So I don't -- like the other, I can't forecast what that number is. But I do confirm that, one, you're right, we have invested and built out an excellent system for both foreign currency and U.S. dollar wires. And this is being sought by quite a few banking companies, lots of which are customers using banknote services. So we have a captive audience to continue to expand this business line.
Operator: Next question will be from Peter Rabover at Artko Capital.
Peter Rabover: I have a big one for you, Randolph, and then I have a housekeeping one for Gerhard. But maybe now that you're kind of unencumbered from Canada, could you just talk about the big drivers and kind of give a scorecard of your business as it stands today, the U.S. business? And what's most sensitive to? And what are you seeing out there so just the conditions?
Randolph Pinna: Thank you, Peter. First of all, yes, it feels good to not be having spent as much time in Canada, which will be going down to 0 soon. And so that allows me 100% focus on our overall business in the United States. And as I said, with the updating of the strategic plan, it is focused on our core areas of expanding our relationships with financial institutions across the United States for both banknotes and payments. And as I was just telling Robin, our payments business line will continue to grow with additional new clients as well as Software-as-a-Service fee income. In the actual currency exchange business, as I had said earlier, we see a lot of opportunity online. We feel that the fact that we can service 90% to 95% of the whole U.S. population, we will be continuing to invest into marketing and growing our online presence and selectively opening new stores with possibly a new service that could add fee income. We are very focused on our agents. We see that as winning a large national retail chain, adding the new service of currency exchange will be significant for us. And as I said, the wholesale business will continue to grow because of the new customers we add and the expansion and diversification of the Payment revenue. And lastly, we are looking and have identified opportunities. But again, we will only do a transaction if it's accretive and in line to our existing business. The voice of the shareholder revealed that 1 or 2 shareholders just basically want to stay focused on our core business and not "chase a shiny object." So you will see that the next 3 years will allow for a clean business here in the U.S., and it will -- that growth in revenue will come from both the consumer channel as well as our wholesale channel. So Peter, is that what you were looking for or was there anything...
Peter Rabover: I mean, I definitely appreciate the color what the business drivers are. I was actually asking more on like what's going on today, what you're seeing in the macroeconomic kind of competitive conditions, but this was just as good. So I don't want to -- I mean, I have one more small question to Gerhard, but if you want to answer my...
Randolph Pinna: Yes. So Peter, I didn't get -- I can't forecast what the tariffs are doing or the people getting shot in America and what international visitors are thinking of America right now. So I can't guess as to what the year ahead will be from a macro level. We just know that our focus is we have a valuable service to potential clients. We have a good revenue stream with a lot of expenses supporting that. And so we feel that we continue to double down on our sales and adding new clients, all while Gerhard and the entire company focuses on efficiency through internal automation and even elimination of certain items now that we're no longer a bank group and so no longer having that bank group structure will allow for improved efficiency in our current business in the United States. So that's the macro comment.
Peter Rabover: Okay. And then my follow-up is on the cash line. There's a $12 million line of cash to be paid to shareholders. Is that basically the release of funds of the cash that was held by the bank back to the group that will be more available to you that wasn't available in the past? Is that the way to read that?
Gerhard Barnard: So Peter, you're referring to Page 18 of the financial statements. That 18 is definitely a portion of it because we have to be reminded that this is at the end of July 2025. We still got 2 months of business to run. We -- as I mentioned, we've repaid intercompany loan accounts. We have lower working capital requirements. So if you look at that number, you have to consider the fact that there is various other items that has to be run through the cash mill, if I can call it that until the end of the year. We are still heading towards a repatriation of some capital at the end of the year and the full -- and once the working capital decreases to close to 0 as the bank continues its discontinuance.
Peter Rabover: Okay. I mean that's great. But just -- I just want to be clear. The way to read that is that cash was not available because it was held by bank as part of capital requirements. And now it will -- whatever that number will end up being, and now it is more available to you as -- to use for acquisition and share buybacks.
Gerhard Barnard: Absolutely right. Yes. And obviously take out working capital, take out intercompany transactions and then just running the bank for the next 3 months. But yes, you're on the right track.
Operator: [Operator Instructions] Next, we will hear from Stephen Ranzini at University Bank.
Stephen Ranzini: First of all, congratulations on a pretty good quarter operationally in the United States. We're very happy with our investment in CXI, because of the good job that you are doing. We've increased our ownership to 12.44% at a cost of less than book value. So I was very pleased to see the increase in book value. My question relates to the discontinuance of the bank in Canada, and it had some licenses, particularly with the New York Federal Reserve that you guys had been utilizing for the whole business. How are you going to handle those things that you don't have now that you don't have a Canadian bank to help you gain access to it? Are you losing any functionality? Do you have plans to replace that functionality? What are you doing? Will it have any other follow-on impacts?
Randolph Pinna: Thank you, Stephen. Yes, I want to just point out that the Exchange Bank of relationship with the Federal Reserve Bank of New York through the FBICS program is completely ceased. We have closed our accounts with the Federal Reserve. But that business did not help CXI whatsoever because the license that we have with the Federal Reserve prohibited Exchange Bank of Canada to sell or buy U.S. dollars in America. So CXI had 0 benefit from that. We, of course, as a group, established a relationship, and so I'm very proud to tell you that our payment business is a part of the Federal Reserve Fed Direct program, and therefore, it has enabled our payment business to be more attractive to U.S. financial institutions. And as you can already see, the Payment revenue growth is well underway. And as one of the previous questions alluded to, there is a lot of opportunity in the '26 year. The other capability that Exchange Bank provided us was that CXI processed the majority of its wires through Exchange Bank, and hence, its correspondent relationship. As Gerhard mentioned in his commentary, we have totally migrated all of that activity away from Exchange Bank as a part of our discontinuance plan and that is currently being processed by 2 U.S. financial institutions with their global network. But we are always looking for additional strategic relationships. But the Fed relationship at Exchange Bank was in a specific wholesale banknote business product which was bulk U.S. dollars and, of course, other foreign currencies selling. We have exited that business line in Canada, and CXI is not replicating international bulk U.S. dollar activity globally. While we do have some select relationships that are international based in our Florida office, but that is not the same as what Exchange Bank was doing with banks that we had in France, in U.K. and Switzerland and so forth, so that wholesale banknote business will not be replicated, at least in the next year or 2 at CXI. Did that answer your question, Stephen?
Stephen Ranzini: Yes, completely. My follow-up question, second and final question is with respect to Crown Agents Bank. You had mentioned previously that you're working on setting up some relationships with them. How is that going? What functionality are you gaining from that? Is there good progress volumes? Is this helping your business yet or not? Or do you think it will be material in the future or not?
Randolph Pinna: So as I said, we are always looking to have strong strategic banking relationships. Crown Agents Bank specialty is with exotic currencies around the world, which is not a top wire that we do. So we do have a relationship with them, but there are limitations to their capabilities. And so the 2 primary U.S.-based financial institutions that are currently our wholesale correspondent bank have been sufficient. But we do, I would call it, cherrypick with Crown Agents as they do have some strengths that are attractive to payment providers like ourselves. So we do work with them some, but not as much as I would think we could have done, but because of some of their limitations.
Operator: Next question will be from Jim Byrne at Acumen Capital.
Jim Byrne: I just wanted to clarify on the expenses, want to see the run rate from this quarter continuing operations. Is that what we should expect kind of going forward, obviously, given seasonality? I just wanted to clarify, given your comments about that $3 million in expenses that will be absorbed. I just want to make sure that, that has been absorbed in this quarter.
Gerhard Barnard: Jim, good question. As we stated, continuing operations excludes currently any intercompany transactions. So if you look at the stranded cost that we are reporting, we'd probably be $3 million after tax. That consists of roughly 40% as bank charges. Of course, the correspondent relationship we have with EBC, and we have fully migrated that relationship in the middle of August to CXI, hence, in the fourth quarter, pretty much half of all the bank charges will actually be in continuing operations. So 40% of stranded cost bank charges, 40% of stranded costs is basically salaries and wages as we obtain the 100% portions, the non-100% portions of the FTE. And then we've got about 1/4 of computer and systems, insurance and licenses. So what you see right now with continued and discontinued operations is not fully incorporating all the stranded costs because there is still expenses running through Exchange Bank of Canada, that is in discontinued operations. So if you look forward, you would probably be able to add about $100,000 to $150,000 a month to our salaries and wages line, which moves you closer to about $2.4 million per month. And then if you look at bank charges, as I mentioned, 40% of that $3 million after tax will start spilling over to CXI when we -- as we fully operationalize that new relationship of us, but we are actively, as a management and a Board, going through all our various expenses as part of our strategic plan in really mitigating that enhanced cost structure that's coming through.
Jim Byrne: Okay. That's helpful. And then just as a follow-up, I wanted to just doublecheck on your IT spend. It's come down and is that, again, kind of the continuing run rate that we should expect?
Gerhard Barnard: IT spend is -- well, you know what constantly depending on the systems and any additional pushes that we do. We -- I would not predict that -- or I would not determine that what you currently see as the run rate going forward. IT is extremely important to us as well as our cybersecurity and we continue to invest in it. So not an increase, but don't see a decreasing run rate in IT. As we know our payments business are growing, our volumes are growing and IT for us is a strategic driver with OnlineFX platform and so forth. So that is one item that we are comfortable to make the necessary capital investments in to continue to grow our business.
Randolph Pinna: I can confirm that we have a very well-structured IT department. Our Senior Vice President, Paul Ohm, has ensured that we have a fully capable team. So we won't be hiring any new IT gurus or anything like that. So I think what Gerhard is trying to show you is that while we will continue to do integrations and so forth, hence, we have a pretty fixed cost structure in IT, and we are not going to be hiring any additional people in IT that would significantly increase that. But because the banks closed, doesn't mean you'll see a big reduction in IT because our cybersecurity is always a focus. And so we have a pretty consistent IT team now, and I don't think there'll be any radical changes in either direction.
Gerhard Barnard: Yes, maybe just to complement that point. If you really go through our operating expenses, you'll see that IT is either we hold it fairly stable. If I look at the 9 months, it's about $100,000 higher than the prior 9 months. And if you look at the quarter, you can say, depending on 1 or 2 things that we've specifically done in this quarter, it might be $50,000 to $100,000 higher than the prior quarter. So that $731,000 for the 3 months ending July versus $517,000 for the prior year on Page 31, I would say our quarterly $0.75 million gives you a fair indication of the future projections, taking staff increases and inflation and so forth into account.
Operator: Next question will be from Yale Bock at YH&C Investment.
Yale Bock: Two questions. First, regarding the agent relationships. There was a dramatic increase in, I guess, the AAA. And if you could just provide a little color on duty-free and maybe with the cruise industry, there was an announcement of a partnership? And then the second one is your thoughts on the Genius Act and stablecoins and potentially how that might impact the foreign exchange market over time and how you're thinking about it?
Gerhard Barnard: Okay. Thank you, Yale. Good to hear from you. To begin with the agent growth that is because of the AAA relationship, continue to grow. If you're familiar with the AAA structure, they have their "clubs" in each market. And the nice thing is there's still several clubs that are not under our umbrella. However, as we do CXI and AAA headquarters have a strong relationship and is encouraged that all clubs migrate to CXI. So you will continue to see that. Duty Free is still a good customer. Unfortunately, because of the challenges that, that business has had, it has not afforded the attention we required for us to add all of their southern locations, but we do hope that in fiscal '26, we will be adding their locations down south. And we are always looking for additional agent relationships, especially ideally with a national provider -- national retailer that has good real estate and a good audience, but does not offer currency exchange. So we are going to continue to focus on that. On the payment side, we have spent quite a bit of time keeping up with the change with stablecoins. And we -- from a practicality where banks, our customers that are moving their customers, corporations, money around the world -- we don't see that there will be in the next 3 to 5 years, a material impact on foreign wire transfers. We're seeing the stablecoin being a U.S. dollar-centric push. And whether how fast the adoption rate goes to stablecoins or even broader crypto activity is unknown. We still are tapping into existing flows of payments, and we feel that there is a lot of upside potential in our current payment model, which does not incorporate utilizing a stablecoin.
Operator: Next is a follow-up from Peter Rabover at Artko Capital.
Peter Rabover: One of my questions was answered on the $3 million and whether that was absorbed. So I guess I'll ask a question or I know you won't really be able to answer the way I would ask it. So now that you're a mostly U.S.-based company, would you -- or soon will be, would you say it's inefficient for the stock to be traded on a Canadian exchange?
Gerhard Barnard: We -- one, I confirm in fiscal '26, we will be only a U.S.-based company, regardless, even if for some reason that our bank did not get the final regulatory approval. As I said, our here, and I'm sitting in Toronto, our lease here ends October 31. We will be actually exiting the building sooner than that, and we are basically going to have a clean empty shell that will be audited at fiscal year-end, and that will be the crux is supporting the application to discontinue. So in 2016, we will be a U.S. company only and not a bank group. And as far as our Toronto Stock Exchange listing of the Ontario Securities Commission and the TSX has been a very good, solid market for us. We have a large Canadian shareholder base. We do recognize we have also a good U.S. shareholder base. And so NASDAQ is being evaluated as far as what additional costs and increased regulatory concerns because this SEC, we imagine is much heavier than the OSC. So it is not a plan to move right away to Nasdaq, but it is being explored as an alternative to where our stock trades. But right now, because of our upgrade on the OTC market, we have seen an improvement and reaction from some U.S. shareholders that is good step. And of course, I believe where you're headed with this is you think we should be on Nasdaq, and we would consider it. But right now, I've asked our team to evaluate the total cost structure, not only just the listing fees, but the legal implications of that as well as any other costs, like Director and officer liability costs go up. And so we have to do a wholesome review of the costs relative to the reward of being on the bigger exchange.
Peter Rabover: Okay. Well, I think you know how I feel, I think the reward is pretty good if you for -- especially for our companies undervalued as you. But I appreciate the -- at least the consideration of it.
Randolph Pinna: No problem here. We understand, and it would be nice if we did. It got big enough to be on the Russell 2000 and so forth. So we do see the upside, but it is only prudent of us as the guidance of our company and all of our shareholder money, we want to ensure that we understand the full cost and ramifications of a potential stock market switch.
Operator: Next is a follow-up from Stephen Ranzini of University Bank.
Stephen Ranzini: Yes. The last question prompted me to make a follow-up. So I would encourage you to discontinue the Canadian filings and go and stay on the OTCQB. We're also on the OTC markets. Our bank holding company is not the OTC markets. We're simply UNIB. Every investment bank that I talked to, every institutional investors that I talk to does SEC registration and in our company history, we were a SEC registered at one point for well over a decade. Isn't a good idea unless you're able to be in the Russell 2000 index? And you spend a significant sum of money doing all the SEC filings, but the market being made in Nasdaq versus the market being made in the OTCQX in your case, is not materially different according to investment banks. It's only if you get to the Russell 2000 that the full benefit of being a Nasdaq is actually unleashed. So I don't know if you have any reaction to that, but that's the advice that I'm giving.
Randolph Pinna: Thank you, Stephen. And as I just told, Peter, that is why we need to take a holistic view. We need to understand all the costs and all the benefits. So we can -- the Board and I can make a final decision. So we appreciate that feedback. And I do confirm it is something that is on our radar to consider. But that is why we did upgrade on the OTCQX and so we're comfortable where we sit now. However, being fully American, it does indicate or imply that you should probably be on an American exchange fully. So we will consider that and it will be discussed in the upcoming Board meetings.
Operator: And at this time, gentlemen, we have no other questions registered. Please proceed.
Randolph Pinna: Okay. Thank you. I just want to thank all of our shareholders for their interest and support of CXI. I wanted to thank our entire management team; a special call out for Katie Davis, our Group Treasurer; as well as the interim CFO of Exchange Bank, who's done a fabulous job sticking to our discontinuance plan in ensuring all the many, many, many pieces of completely exiting Canada are done and on time. So a real hats off to her. So thank you for that. But again, and all the people in Canada that have unfortunately had to find new jobs here. It is a bit of a sad day. But again, I want to give a big thanks to all of us together, both the shareholders and the team for getting us where we are and having a clear path ahead in the '26, years to come. So thank you.
Operator: Thank you, sir. Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending. And at this time, we do ask that you please disconnect your lines. Enjoy the rest of your day.