Frmo Corp

Good afternoon, everyone. This is Therese Beyer speaking, and I'm the Corporate Secretary of FRMO Corp. Thank you for joining us on this call. The statements made on this call apply only as of today. The information on this call should not be construed to be a recommendation to purchase or sell any particular security or investment fund. The opinions referenced on this call today are not intended to be assumed that it should not be assumed that any of the security transactions referenced today have been or will prove to be profitable, or that future investment decisions will be profitable or will equal or exceed the past performance of the investments. For additional information, you may visit the FRMO Corp website at www.frmocorp.com. Today's discussion will be led by Murray Stahl, Chairman and Chief Executive Officer. He will review the key points related to the fiscal 2025 second quarter earnings. And now I'll turn the discussion over to Mr. Stahl.

Okay, thank you, Suarez. Thanks for joining us everybody today. So first off, let me explain why my colleague, Mr. Bregman, is not with us today because he came home from vacation and found a pipe burst in his home, and there's no heat in his home as well. And it's pretty cold out there, and there's a lot of work that needs to be done to repair that, which my understanding is very little has been done so far. So he has his own headaches. So we can excuse him, and I will be doing the call. Hope you don't mind. And let's turn our attention then to FRMO. So I'll start with just some highlights. of these recently released financial statements that may not be entirely obvious, even though you can find some of this information in the footnotes. To begin with, so you're probably aware that Horizon Kinetics is now a publicly traded company. So you'll see on our balance sheet, investment in Horizon Kinetics Holding Corporation, formerly Horizon Kinetics LLC at November, and you'll see it's carried at $16.2 million. It's important to state that is done via the equity method. That's not done via the market value method. So you took the market capitalization of Horizon Kinetics and multiplied by a proportional ownership This is not the number you're going to get. You're going to get a bigger number. So I just want to make that clear to everybody. Also, in case it isn't clear, no matter what Horizon Chemex does in terms of its revenue, we've been keeping this revenue participation at cost. And all I'll say is there are alternative ways to value it. I just want to point out that we carry it at cost. Now, some other things. The column I refer to sometimes, security sold short, and you'll see proceeds of $10.8 million plus, market value over $1 million. We are shorting, selling short, path-dependent ETFs. And you can tell how much we sold short in the quarter because all you have to do is compare November 30th Security sold short to the May 31st number. You can compare the market values. So these path-dependent ETFs are really dysfunctional. And sometimes they go against you, and that happens sometimes on our balance sheet. But in the pulse of time, they will gradually and inexorably make their way to zero. And you can see the unrealized profit we have. and that has contributed in no small measure to our cash balance and we're going to keep doing that. It's not a big part of our strategy, but it's a very lucrative thing and we keep doing it. Now, right under that, you'll see this deferred tax liability. A little of the deferred tax liability relates to that. A lot of the deferred tax liability relates to these securities we own that we just never sold. And part of the deferred tax liability relates to where we are, FRMO, physically located, our place of domicile. And if our place of domicile were different, it's possible that number could be lower, maybe even considerably lower. Can't promise anything, but That's something that we are in the process of studying. As a matter of fact, five minutes before this call took place, I was involved in a conversation relating to that and expressed my views on that subject. So we'll see what we can do about that. Now, there's some other things that don't readily appear on a balance sheet, and they don't give you a lot of information about the footnotes. In the footnotes, I'll just mention two of them. And one of them is Winland. In Winland, you'll be aware, as of the quarter end, for us this is 1130, we had 1,946,677 shares of Winland. We purchased more since the end of the quarter. So we own, in round numbers, this is not exact, of course, we own about 40% of Winland. And one of the things we're doing is we buy stock in the open market. We also make... direct equity investments in Winland. Now, we're doing it with a view to not just increasing our ownership as an economic purpose. It's worthwhile to explain what the economic purpose is. We are changing considerably the way we mine. There are two dimensions to the way we mine. I'm not going to go into the mining technology too much, other than to say that If we ever get above 50% of Winland, Winland's going to be a reporting company, and we're going to tell you a lot more about what's going on in Winland. In any event, the shares, which are used to buy equipment, the shares are issued on day one. The equipment takes some number of months to break even. In our specific case, what we're buying, we're going to break even in, depending on the breaks, eight or nine months. So the dilution is immediate because the shares are there. It takes eight or nine months to make up for it, and then we progress. The objective being that the number of coins we have per share should be increasing. That's really, really important. That's the thing that I want to stress. Why should anyone buy a mining company? In preference to... an ETF. There's only one reason. Because an ETF, the number of coins per unit because of the fees are going to be going down. So you can mine and you can get the number of coins per unit or per share if you prefer to go up. That makes the corporate form a better way of accumulating Bitcoin than ETF. That's the object of the exercise. That's what we're doing. We're doing the exact same thing in consensus mining. You'll note in the footnotes we have a small investment in consensus mining. It is to be hoped that consensus mining will be publicly traded, listed, and reporting. I'm told, don't hold me to this because I'm told by my legal advisors, that we should be traded in... about 30 days. Whether that's true or not, time will tell, but that's where it is. The way and manner which consensus differs from Winland is consensus has not issued any shares in a very long period of time. So as we are improving our mining technology, there's no shares issued, the expense of which has to be overcome. So the full benefit of any changes in technology are realized by your shareholders with an immediacy, literally that day, as opposed to what would happen in Winland where it takes a certain number of months. That being said, that's the only considerable difference, the only considerable difference, matter of fact, the only material difference between the mining strategies. Exactly what they're doing technologically is the same. We're trying to keep it within reason the capitalization of both companies. So you don't favor one relative to the other. And they're both doing exceedingly well. As I said before, if we ever get to the point where Fermo owns 50% or more of Winland, we will be consolidating Winland. Winland will become a reporting company, and you'll be able to see a lot more than you currently see. So there's a lot of fun things happening in the world of cryptocurrency mining that hopefully you'll be learning about shortly. One other thing I'd like to point out, that our book value per share, and our book value is a record, so that when I say book value, I'm referring to the line that's entitled, shareholders' equity attributable to the company, $413.6 million, divided by number of shares outstanding. We have a book value, and that's a hard book. of $9.39 a share. There's a lot of things going on at FMO that you really can't express in a book value. The things we said about cryptocurrency are just one important part of it. And as far as the investments we have, you can observe them. You can see what's going on. You probably have some questions about those. And when I find out about them, I'll answer it. But that's the overview. So everything is going reasonably well, and we're going to do our best to make it a lot better. So with that, Therese, I hope that's an adequate introduction of what we're doing. And maybe you could read me these questions, and I will endeavor to answer each and every one of them.

I'll be happy to. Your first question is consistent with the thesis on my acts. Has management ever looked at a box exchange and the symbol is A, B, X, X, F like Frank?