Good afternoon, everyone. Now presenting will be Chris Loeffler from Calibre.
Thank you. All right. It's nice to see you guys. I am Chris Loeffler. I'm the CEO of Calibre. I've been in this business that I'm going to describe to you for 17 years because I'm also the co-founder. So a lot to share with you today. This is the first time we presented to the Planet microcap crowd and to the microcap club group and did a little research on on the the philosophy so normally what i would present to you today would be a typical this is who we are this is what we do and this is why it's interesting presentation i decided to depart from that in light of the sophistication in the room so let me take you through it in pieces and hopefully it will give you the whole journey first and foremost what i'm bringing to you today is a proven platform a company that's at an inflection point in profitability, and what we believe is a credible path to becoming the leader in the market for tokenization of private real estate assets. So let me start with what you can already see. Presuming that you've taken a look at our stock, what you're going to see is a small cap NASDAQ company, limited trading volume, no analyst coverage, a real estate company that appears to be negatively affected by interest rates in the downturn in real estate and a company that recently expanded into digital assets. Pretty fair. What the business actually is is a 17 year old company with 2.6 billion dollars in managed assets and funds that we manage. A fee generating platform so what we are not is we're not a small REIT with a business model that's not working or a fee earning business. Asset which is a return to profitability from a platform that's been profitable in the past. And last but not least, the tokenization component of our business is not an abandonment of the prior business. It's an expansion of the existing business. And I would venture to guess that the best way to think about it is take a very well established operating business and apply a software upgrade to make it run faster, more effectively, more efficiently, and potentially more profitably. So thing number two, this is the first time I've ever presented this to investors, but I said, what are the top three reasons why I would pass on the stock? Let's take the skeptic's point of view. Value trap, it's a busted real estate story. If you look at it as a real estate company, it kind of looks like the small REITs, they go public, the stock goes down, they can't escape, there's no escape velocity, you're never going to get out of that trap. We are not a busted small REIT. We're a fee generating business. That's how we earn income. We're not in the same category as those companies. And in fact, we are unique, which I will prove to you throughout the presentation here. The second is the company's balance sheet has been improving. Debts down, liquid assets are up. The trajectory is pretty good. And then the third thing I wanted to share with you is the first time we've ever issued guidance to the public markets is recent. we did that because we wanted to be clear on the guidance and we wanted to be able to follow through on the guidance. And the guidance is showing nice revenue growth and a return to profitability this year. Thing number two, it's just another crypto play. When Calibre expanded its business into the world of digital assets, there were about 200 other companies that entered into the digital asset treasury business in a roughly three to four month period of time. Hundreds of millions, of dollars of capital were raised in these companies. Of the 100, 200 companies, 190 of them roughly had the same business model. Raised a lot of money really quickly in a structured finance deal, buy a bunch of digital assets, whether it's some sort of token, see those digital assets acquired at the all-time highs, and then see crypto crash. Calibre didn't do that. We announced what we were doing. We acquired the token that we think is part of one of the most important protocols in the blockchain industry that's core to the tokenization of real estate funds and we bought it slowly we didn't do it in a structured finance deal we applied no debt to the treasury and we have now dived deep into the technology and made a lot of progress and the last thing is you guys are micro cap investors you hear this all the time too small too illiquid to matter uh too small of a market cap no way to raise growth capital into a small vehicle like this and what i want to remind you of is we manage 2.6 billion dollars of assets and funds and our business model is designed to raise capital on a programmatic basis into and that we generate revenue from um and let's see if i can get away from this disruption. And we do that in a non-dilutive basis. So we manage a bunch of funds. The funds generate revenue for the company. We can raise capital consistently and grow our business with or without the public capital markets. We certainly would prefer to have that with the public capital markets. So what is Calibre actually? We are a 17-year-old real estate asset management business with a proven business model that's been continuously operating in the same business throughout that 17 years. We are essentially presenting to you an institutional quality investment manager with a boutique and unique real estate investment deployments strategy. We're one of the top 10% opportunity zone fund investors in the country, and we are really good at what we do. If you're a real estate investor, you're going to understand this inherently. If you're not, hopefully this will be valuable to you. The public company is the black box in the top. That's a sponsor of a real estate fund. That's what generates the fees, the profit sharing, and the carried interest that we manage in the funds that we manage underneath. Underneath that, we have discretionary funds that we manage and operate. And then we have single asset funds that we manage. So if we're going to go buy a hotel together, I'm going to create an LLC. We're going to raise $10 million to buy land and build a hotel. Maybe we'll raise some of that money directly into the project. We'll raise the rest into a fund that invests in the project, both of those two entities Caliber manages and generates revenue from. So as a shareholder in the operating company, you own a piece of the revenue we generate and the profits we generate from managing real estate funds. Inside the business, when you come to us as a customer, we present to you an ability to find unique and interesting real estate investments, invest in those investments, and then we execute all of the services from start to finish in managing those investments. So from acquisitions to construction, development, asset management all the things that are necessary to take you from point a to sale of a real estate asset and we have a compounding business model that's kind of cool and kind of unique in the public markets especially for a company of our size we raise capital we're think of us as a manufacturer of investments so we manufacture a real estate investment that's unique we raise money into the investment as we acquire assets we grow the assets under management or the management and managed assets of the company that generates revenue for the business, which generates greater profitability. And hopefully as we sell those assets, our investors get their money back. They reinvest in future deals and we continue to grow the business. We also have a really unique asset, which is a fundraising engine that we own internally. So we don't just raise this capital from institutional investors. We raise it direct from a, uh, group of about 2000 families that invest with us on a programmatic basis over the last 17 years those are all relationships we manage in house with our own team and we have a marketing engine that meets these investors educates them on real estate investments and grows that base and we also have a wholesaling platform so we sell to professional investment advisors broker dealers etc so you can find a caliber fund on schwab you can allocate capital to fund and that's how we grow our assets we have a leadership team that is I think the right combination of entrepreneurial founder-led along with highly experienced and highly credible professionals in the space. People have run some of the largest real estate investment companies in the country in the past. So moving from what we are, let me talk to you about now. Timing is everything in the real estate investment business. We are a cyclical business and if we were talking three years ago you'd say well interest rates just went up up. Obviously, there's going to be a decline in real estate values. Let's talk in three years. Well, it's three years now. So now's the time. Let me prove it to you. Caliber was born in late 2008. And we've spent the first five years of our business in the following the 2008 financial crisis. So we are very good at operating in a distressed and disrupted environment, taking advantage of declines in asset values and delivering those advantages to our clients. we are back to that real estate values nationwide have declined the largest amount in commercial real estate since 2008 it's about a 30 decline nationwide depending on the asset class that you're talking about that happened between 2023 and 2025 and where we're at today is that banks lenders etc institutions are starting to take back assets sell amount of foreclosure and create new opportunities for new real estate investors on the other side we think the best two opportunities are in multi-family and hospitality and that's where we're positioned to take advantage of the market why on the multi-family side most of the markets were overbuilt and they were overbuilt with three percent money and then at some point in time when those investors that built those assets and filled them up wanted to refinance them the cost of capital was six percent and none of the math worked. So we're acquiring existing multifamily out of distress, and we're also acquiring broken construction projects. On the other side, on the hospitality side, you have the same environment, but you have kind of the double black swan event. You have COVID and interest rates, and that's also creating opportunities for us to do two things. One is acquire distressed hotels at a discount to what it costs to build them. And two is, interestingly enough, to build hotels in markets that have a huge supply and demand imbalance because no hotel has been built in that market for a very long time because of COVID and interest rates. We invest in a very niche area, which is Arizona, Colorado, and Texas primarily. We're focused on markets that are growing at twice the rate of the rest of the country. It's a very simple strategy. This business is incredibly hard to replicate I could spend three hours explaining to you how to build one of these things and no one would do it because it's hard it's difficult it requires you to manage through cycles and in Calibre's case we've been executing extremely well as a management team but interest rates market environment etc makes us look like we're not executing so you got to kind of combine these things. What we think we present to you as an investor is an opportunity to access a business model that is unique in the public markets. You always get the question, what are your comparables? We don't have any, we don't have any. The companies that have a business model like us, they stay private. They wait till they're scaled to 50 100 billion in AUM, then they go public. And those companies are Blackstone own Apollo, Aries, all the alternative asset management businesses that are public. I don't know of another alternative asset management business that's public doing what we're doing. And I certainly don't know of anyone who's actually applying that to an upgrade with tokenization. I want to talk about the earnings power of the business. We, like I mentioned to you before, we have a history of profitabilities. In 2019, we did great, very profitable business. In 2020, we obviously sheltered our business through COVID, lost some money, kept our employees intact, returned to break even in 2021. We were profitable again in 2022. And then we moved from about a 50-person business to about 110 people in 2023 and 2024 in pursuit of a very large opportunity that we ultimately didn't close. So we have gone through the painful step of shrinking the business back down to roughly 50 people, back to the level where we can be consistently and stably profitable. And I think if you do the homework and dig in on our story, you will find that we are one of those micro cap companies that's hard to find that has the ability to be consistently profitable. We make money in three buckets. This is the revenue model. So first bucket, asset management fees. If you invest in my Opportunity Zone fund, it's a 10-year fund with a three-year wind down for 13 years, I'm going to earn a fee off of your capital. If you're a hedge fund guy, two and 20, it's the 2% fee part. The 20% part is the profit sharing interest. That's our performance fee. That's where you're going to get a carried interest in the project. If the project is profitable beyond a certain minimum rate of return to the investors, and we have about $99 million of estimated carried interest in our portfolio today that is an off balance sheet asset third asset services when we acquire a hotel together we're then going to hire ourselves to develop it to manage the construction to provide the asset management to eventually sell it and earn a brokerage fee in that case those are the asset services where essentially we're hiring ourselves to provide services to our portfolio and if you understand our business model the model hangs off of can we perform? Do the underlying investments produce a good rate of return for the clients? This is the historical track record. And I think the reason why I highlighted these two deals at the bottom, Northsite and Southridge, both of these deals were bought in 2021 when the market was at all-time highs. And both of them were sold in 2023 when the market was depressed. And to generate those types of returns in that kind of an environment means that we're doing something right. We're buying right. We're transforming the assets the right way. We're producing a great value for investors. So if we stop the presentation today, and I said, real estate platform, 17 years of operations, cycle is tailwinds, not headwinds anymore. And we're positioned to buy distressed assets. That is a good story. I would invest in that if I was in your shoes. What we did roughly nine months ago that we announced, but we've been working on for quite a long time before nine months ago was we said there's an opportunity for us to move from being just a real estate asset manager to being a real estate and digital asset manager we see that the technology around tokenization and blockchain has been refined over eight years now and it's looking really good we see that the regulatory environment for this has changed fundamentally with the genius act that's passed and other things that are coming and we believe fundamentally that this technology is going to transform our industry. We think of it as the upgrade in finance that finance hasn't seen from a technological standpoint in 50 years. And we said, hey, what does this do to a real estate fund? Most of you might have heard of tokenization, tokenization of stocks. That's the big, big thing right now. Nasdaq's tokenizing all their stocks. New York Stock Exchange is offering to tokenize stocks. Tesla tokenized their shares. Their stock went up 10% in a day. What does tokenization do? It's kind of like a bobble. It's a nice little extra wrapper for the stock. You get to trade 24 hours a day now. You don't necessarily have to have a U.S. brokerage account to get to buy the stock. That's nice to kind of expansion of access. It's cheaper to manage the trading. but that's not necessary for the stock market to function and it doesn't actually transform stocks in a meaningful way in my opinion this is different for real estate funds private real estate funds have two problems they're hard to value and they're illiquid so investors don't like them for those two reasons some of them like them some of them don't but those are the two biggest issues with real estate funds tokenization technology affects both of those issues. The first, we can automatically calculate a net asset value in a transparent manner. So if you own 2% of my Opportunity Zone fund, you know what it's worth on a daily, weekly, monthly, annual basis. Beyond what I report to you and in a way that's transparent and automated. Once you take that 2% interest in my fund and you make it obvious on what it's worth and something that's trusted in the market, and then you transform the security from a piece of paper to something digital, then it can be used as collateral in a loan. So just like you have margin loans on a stock, all of a sudden you could take all of your illiquid real estate positions and your LP positions in different deals and borrow against them. That's layer one of liquidity. People think of tokenization as a way to trade the shares on an exchange, it's great. But most importantly, if I could take my investors and let them borrow back 30, 40, 50% of their investments to go do other things with or to invest more with me, that would be transformational. The last thing is, if you want to sell it, right now, your option is ask me to buy it back from you. It all has to be funded from the deal itself or from other investors buying your shares. That's layer one, layer two of liquidity and real estate funds. Layer three is now margin loans. on your position layer four is you can list your token on an exchange and sell it changes are new there's not a lot of trading volume it's going to take time for them to evolve but at some point in time this is how real estate's going to function and there's nobody building it on the building side so why can we do it shouldn't the technologists the blockchain guys that have been doing this hiding in their basement for the last eight years build this? No. They already built the tech. The tech works. They needed the regs. The regs are here. What you need is someone who actually understands these investments, manages funds, is willing to tokenize their own portfolio, and in doing so, willing to then offer those services out to the world. Because I can't tell you how many family offices and how many large portfolio owners I've talked to and said, hey, if you could gain these benefits on your portfolio, would you do it yeah in a heartbeat so we believe that we have an opportunity to be the market leader in tokenizing private real estate funds just as securitize is emerging as the market leader and tokenizing public stocks and there are other market leaders emerging and tokenization of deposits bonds credit funds etc we haven't seen it yet in real estate funds and we think we can do it so why do we invest in link token why do we build the digital asset treasury because link token in Chainlink in particular is a foundational layer of infrastructure that allows tokenization to occur. Why? They have an automated compliance engine that we're using, which we've announced. That means that if you buy a reg D fund, you have to be an accredited investor in the US and you can't be OFAC and this, that, the other thing, all that stuff that we need to verify, you can verify automatically through their technology so that you can actually exchange shares. They have the valuation layer that we're working through. They have a lot of things that bring value to us. So we invest in the technology and we use those relationships to build our relationships across the blockchain. Chainlink happens to be trusted by Swift, MasterCard, DTCC, S&P Global. The top 100 banks you could name off the top of your head is using Chainlink. So I'll leave you there. Questions? I know that we're presenting kind of an interesting and differentiated business model. I'll go back to where I started, which is, this is a proven business. We are the small cap company in the micro cap body. We do great work every day in the real estate world. We'd love you to be a real estate customer, but we'd also love you to be a shareholder. And if you believe like we believe that real estate funds being easier to value, more transparent, and more liquid is a good thing, then I would highly recommend you jump on the train. So if you have questions, I've got time because I wanted to have a little time for questions and yeah, so just if I step you through the balance sheet, we have about 100 million of carried interest that's off balance sheet. That's we calculated that inside of our net worth, but the market doesn't. We've got about 35 40 million of cash invested in the portfolio, which is about 35 40 million of about 500 million of cash invested. So we have about seven, 8% of the capital. And then we have liquidity and other things like that. Correct. Yeah, typically about 20 to 30% of the upside of the deal after a 6 to 8% minimum return. That's that $100 million that we have off balance sheet, roughly. Any other questions? Awesome. Sounds good. Thank you very much. Appreciate it, guys.