- Website: www.exxegroup.com
- OTC Filings and News: https://www.otcmarkets.com/stock/AXXA/news
I am sure a lot of companies are looking forward to 2021 given the turbulent year 2020 gave us. How is the start of 2021 treating AXXA so far?
Exxe Group (ticker symbol: AXXA) has performed beyond expectations considering the global turmoil resulting from the coronavirus pandemic. The company has seen record breaking growth in both revenues and profits thus far in FY-21.
If current FY-21 trends continue, AXXA could see year-on-year revenue growth in the region of 100%. In FY-20 AXXA grossed $15.3 million. In FY-21 AXXA is tracking for a ballpark revenue range of $30-33 million, and has already grossed $15.8 million. $30 million gross approximates to $0.06 per share of revenue on an annualized basis given AXXA’s current share structure.
AXXA’s revenue growth has come with net profits. The first half of AXXA’s FY-21 saw approximately 315% year-on-year revenue growth with $15.8 million in revenues and net profits of $2.2 million. This compares to $3.8 million revenues and a loss of $1.1 million in the same period in FY-20.
We are also pleased that our asset base has continued increasing in value in FY-21. As of September 31, 2020 Exxe Group held gross assets per share on its balance sheet of approximately $0.43 as compared to approximately $0.35 per share in September 2019, which is a roughly 22% increase in gross assets year-over-year.
You had some very exciting news back in November regarding the company’s currency exchange platform, including bitcoin. Can you give us an update when the launch is expected, projected/target first year revenues, etc?
In November 2020, AXXA announced the rebranding of our UK-based financial services asset Vinza Limited as 1Myle Limited. The opportunity stemmed from the restructuring of some of Vinza’s existing assets following an internal acquisition by our Swiss management company, Myle-One Beteiligungen AG.
The outcome of the transaction was to dedicate Vinza’s existing alternative finance assets, which operated successfully for several years, as a focused exchange services operator and high frequency Bitcoin and Alt cryptocurrencies arbitrageur.
In this role 1Myle serves the UK and Swiss markets, buying and selling Alt currencies, including Bitcoin, taking advantage of price differentials. Critically for AXXA the opportunity expanded our geographic Bitcoin and cryptocurrency reach into Switzerland where we see untapped demand.
As Bitcoin and Alt currencies rise in US Dollar denominated terms, AXXA sees a direct benefit on its balance sheet because part of the 1Myle hedging strategy is to increase the size of the Bitcoin and crypto assets in the private wallets controlled by 1Myle.
If our internal projections prove accurate 1Myle should contribute approximately $12-15 million in revenues to AXXA’s consolidated Statement of Operations in FY-22 which starts April 1, 2021. As events pan out, AXXA could see somewhere in the region of 25-33% of FY-22’s total gross revenues resulting directly from cryptocurrency exchange services operations. This would be a major broadening and simultaneous transformation of AXXA’s revenue base.
Addressing the second part of your question: Since the Vinza rebranding into 1Myle, the Company has been working on a range of pre-launch activities. These include rebranding the Vinza software internally to 1Myle, license amendment and name registration process changes from Vinza to 1Myle with various Crypto Exchanges, completing the revamp of the professional community public-facing website, completing all legal compliance work in the UK and Switzerland, etc. The meetings we have been holding with our tech teams have been very successful, and everything is completely in-line with our expectations.
Does this mean the company is planning on creating a platform in which people can buy and sell various crypto currencies, such as bitcoin, much like brokers like CoinBase and Binance?
1Myle / Vinza as it was, developed and was operating its own Bitcoin and other Alt asset exchange services long before Axxa took it over in June 2020. In fact Vinza’s software had a multi-year track record of successfully working with Alt currencies and Bitcoin.
One of 1Myle’s key advantages in the marketplace is its proprietary software which continuously hedges currency fluctuations.
Behind all of this, revenue is generated through proprietary in-house algorithms offering small traders the ability to access liquidity on the largest global exchanges. This enables 1Myle to capitalize on the volume of the traders combined trades. The Software as a Service (SaaS) platform also provides a turnkey solution for traders and financial organizations operating at the intersection of fiat and digital assets that covers all stages of the transaction life from origination to financial statements.
Expanding on that, does the company plan on pursuing further Bitcoin/Crypto focused ventures/acquisitions in 2021?
AXXA’s Vinza acquisition gave us several software platforms that could be restructured and repurposed including, but not limited to, a money-management platform, digital merchant services, and investment services. In addition to the aforementioned services, the Vinza acquisition came with a fintech development lab that develops future, potentially broadly used applications. Current products under development include micro-lending, peer-to-peer lending, and new payment processing solutions.
While the company makes no commitments as to timelines or actualities, these technologies are potential digital ventures current and prospective shareholders may see rolled out in the future.
How is the new acquired Swiss medical company, MMeditech GmbH, doing? How were its revenues for 2020?
Exxe Group acquired MMeditech GmbH in October 2020. The company globally sources medical supplies and sells them into the Swiss medical market. As may be expected, upticks in coronavirus spread have seen increased demand in Switzerland for items such as PPE.
AXXA closed its Q3 on December 31, 2020, so it’s too early to state specific numbers for the Quarter just ended. Broadly speaking the MMeditech acquisition brought immediate revenues to Exxe, a high level of operating profitability, and a backlog of $2.8 million for 2021. The indicators are for revenues of $3.6 million and EBITDA of $1.2M in 2021 and we fully expect to see these numbers.
From an acquisition strategy perspective MMeditech was immediately revenue generating and profitable, and was in an essential sector – high-use consumable medical supplies, including hygiene products, syringes, bandages, and sterilization materiel. Operating in a critical industry ensures revenues and no possibility of shutdown in the event of further coronavirus lockdowns or restrictions.
This acquisition in some respects typifies the impact the coronavirus pandemic has had on management thinking and corporate strategy: focus on continuity of business, revenues, and profits.
It looks like AXXA was quite busy in 2020 with many high-profile acquisitions. Does the company plan on continuing this trend of closing various acquisitions in 2021?
AXXA is working on several transactions in different industrial segments.
While the company doesn’t comment on specific transactions before they have occurred, we are currently in the final stage of the closure of a new acquisition. This acquisition will be used across the Exxe Group assets, in addition to bringing in its own independent revenue and client base.
Can you give your shareholders a brief update/rundown on what the company plans on doing in 2021 to continue to increase shareholder value?
In March 2020 Exxe Group started with a diversified range of assets scattered across ten countries in the Americas, Europe, and Asia. Broadly speaking the portfolio included prestigious real estate assets in New York City and Miami, FL, as well as development properties in Germany and Switzerland. Outside of AXXA’s real estate assets the company also owned a range of hardware and software technologies, and various Special Opportunities assets. Special Opportunities are typically distress, non- or minimal-revenue generating assets that may be in need of restructuring. Once restructured these assets can bring outsized financial performance to Exxe Group.
As the coronavirus pandemic took hold in 2020 AXXA rapidly executed a strategy centered around current revenue generating assets, coupled with increased focus on assets with the best profit margins.The choice of actions were tailored to preserve revenue in a totally uncertain economic operating environment while simultaneously deferring expenditure on Special Opportunities assets which didn’t generate immediate revenues.
Looking ahead into 2021, the largest immediate new revenue source will be 1Myle. For now revenue generation will be limited to 1Myle’s professional level trading network, and trading activities are focused on the UK, EU, and Swiss markets. AXXA has internal projections of $12-15 million within the first 12 months of full revenue generating operations. If the rollout works as projected, AXXA could see a total annual gross revenue base of somewhere between $40-45 million.
Exxe Group is considering registration of a U.S, Bitcoin and crypto exchange services entity in the event 1Myle is successful in its goals and the market continues to be supportive. The potential to offer services across Europe and the United States offers huge upside potential.
Outside of Bitcoin, the trend to online purchasing and services that started to take place in recent years was hyper-accelerated by the coronavirus pandemic. This is in some ways highlighted by AXXA’s decision to effect a telemedicine company acquisition in May 2020 and a medical supply services company in October 2020. These medical industry acquisitions allow AXXA to remain at the forefront of providing goods and services to the communities and countries we are active in. The company expects to increase its reach inside this sector now that it has two firm footholds.
In addition Exxe hopes to expand its e-commerce activities, and expects to see additional e-commerce business in general across the Group.