VIDEO: GreenBank CEO Danny Wettreich on Taking Small Cap Companies to the Public
GreenBank Capital Inc. (CNSX:GBC) (OTCMKTS:GRNBF) (FRA:2TL) is a merchant bank that incubates and nurtures private, small cap companies, and eventually takes them public on the CSE. CEO Danny Wettreich talks to James about the companies in their investment portfolio, including a mining and bitcoin company.
James West: Danny, thanks for joining us today.
Danny Wettreich: My pleasure.
James West: Let’s start with an overview: What does GreenBank do?
Danny Wettreich: GreenBank is listed on the CSC, symbol GBC, and we’re a merchant bank that focuses on small cap companies. We incubate and nurture private companies and take them public on the CSC. We’re basically a private equity business which charges no fees to the investors, and provides them with liquidity because they can trade our stock. And our focus on the small cap market is pretty unique; we don’t think anybody’s in this space of any consequence, and in fact, it’s a neglected space, we think.
James West: Being CSC focused.
Danny Wettreich: CSC, but more importantly, they’re private companies. Most of the Bay Street bankers focus on 100 million and up; we focus on 100 million and down, and it’s a space, I think, that certainly needs some assistance, and that’s why we can provide some money, some management capability and the public company experience to take these small companies public.
James West: Mm-hmm. So the business model is, you access capital markets public equity, re-deploy it into selected private juniors –
Danny Wettreich: Correct.
James West: Give them management nourishments, access to a network I’m assuming, and then take them public on the CSC when the time is right?
Danny Wettreich: That’s right. And we’re focused – in the initial investment phase, we’re focused on private companies, not public. So the idea is, we identify these small companies, and frankly we’ve got more deals than we know what to do with, currently.
James West: Is that right?
Danny Wettreich: Yeah.
James West: Okay. Why don’t you give me some examples of some of the current deals, or the ones that have been the most successful in the portfolio now?
Danny Wettreich: Well, our model is to take minority positions in these small cap companies, nurture them, incubate them, and take them public. And usually, it’s between six and 24 months in terms of the incubation period. So we’re focused on two listings next year, one is for one of our mining companies, and one is for a Blockchain company that we have a piece of. The mining company is called Ubique it’s a zinc property in Newfoundland. They’ve just completed a drilling program which was pretty impressive, in my eyes: 17 percent zinc over 28 feet, that’s pretty strong results.
James West: That’s very good, yeah.
Danny Wettreich: And it’s, you know, 10 kilometres from the former Daniels Harbour Mine, which produced 7 million tonnes at an average of 8 percent. So we think that particular mining property is really quite exciting. Just finished a 43-101 and hope to take that public the first half of next year.
James West: Okay.
Danny Wettreich: The other one is Blockchain Evolution, which is unique in the Blockchain concept since it’s based on identification. All other Blockchains focus on anonymous users; perhaps not by design – in some cases they don’t have a choice, because it’s extremely difficult to attach identification to a Blockchain. But we’ve resolved that issue, or rather, Blockchain Evolution has, and so we’re focused currently on first proof of concept, which is a social security Blockchain where we record all the social security records of a particular country, say, the UK for example. The UK has 27 million Social Security recipients; their problem is that they pay 1.5 billion a year to dead people. People die but they don’t tell the government, and cheques keep coming. So that kind of fraud is very significant for a government, and frankly applicable in all jurisdictions, not just the UK.
James West: Sure.
Danny Wettreich: So you know, we would create a Blockchain where all those Social Security recipient KYC information is recorded – KYC being they’re your client, the same concept as you would when you open a bank account – and then every three months, the Social Security recipient would either go online or go to the local Social Security office and prove they’re still alive. In the absence of proof of life, cheques stop. Saves the government a fortune, and obviously, that’s something we can run for the government on their behalf.
James West: So the government doesn’t do that kind of verification now manually?
Danny Wettreich: If it does, it doesn’t work. I mean, they’ll admit it to me in the UK, they’re losing £1.5 billion a year.
James West: That’s a significant number.
Danny Wettreich: Very significant.
James West: Okay. So then, at this point, how much capital do you still have in the coffers, so to speak, to deploy, and what other sort of transactions are you looking at?
Danny Wettreich: Well, in terms of capital, we basically use the capital provided largely by the directors and their supporters. Now we’re actually at the point of looking at raising some funding for GreenBank; our monthly cap is around 40 million currently, and so we think that’s timely for us to bring in some additional funds so we can accelerate this process. We have a lot of deals that are offered to us. It’s quite encouraging to have all these small caps realize that this is a place they can go to and, within a reasonable space of time, through our assistance and our guidance, go public.
So lots of deals to look at, and we could do with some more capital to invest. From the Greenbank investor point of view, if they buy GreenBank stock, effectively they’re getting a piece of a private equity portfolio. We have nine companies currently in our portfolio. And at the same time, unlike other private equity funds, there’s no fees to the investor, and they have liquidity, because they can sell the stock.
James West: That sounds interesting. Are there any sectors that you won’t go into?
Danny Wettreich: We’re pretty agnostic on sectors. It’s a deal-driven scenario.
James West: Anything that makes sense?
Danny Wettreich: Anything that makes sense, and has some upside potential. Obviously we’re constantly looking for unicorn-type transactions, but you know, a good, solid business with significant upside, that’s always of interest.
James West: Sure. Okay, that’s a great introduction. Let’s leave it there for now, Daniel. We’ll come back to you in a quarter’s time or so and see how you’re progressing. Thank you for joining us.
Danny Wettreich: My pleasure.
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