Horizon Kinetics Holding

Okay, yes, all right, we're here. All right, so good afternoon, everyone. Thank you for joining us on this call. My name is Mark Ernden, Chief Financial Officer of Horizon Kinetics. We are pleased that you have joined us for our call, where we will cover our results for the first quarter of 2025. First, a reminder that today's presentation may include forward-looking statements. Reliance on forward-looking statements involves certain risks and uncertainties, including but not limited to uncertainty about the future security valuations or our performance. During the course of today's call, Words such as expect, anticipate, believe, and intend may be used in our discussion of our goals, events, and the future. Management cannot provide any assurance that future results will be as described in our forward-looking statements. Furthermore, the statements made on this call apply only as of today, and 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 a forecast of future events or a guarantee of future results. It should not be assumed that any of the security transactions referenced today have been or will be profitable, or that future investment decisions will be profitable or will equal or exceed past performance of the investments. We encourage you to read our filings with the SEC on our Form 10-K as well as our more recent 10-Q and other filings which describe the risks and uncertainties associated with managing our business. The company does not assume any obligation to update any forward-looking statements made today. These filings can also be found at the OTC Markets website, and our press releases or other information is at our corporate website at www.hkholdingpro.com. Today's discussion will be led by Murray Stahl, Horizons Kinetics Chairman and Chief Executive Officer. I will also be available to answer applicable questions and will moderate the questions. If you would like to ask a question, you will need to be logged into the GoToMeeting platform. So those of you on the telephone connection will be in listen-only mode. And again, so for those of you on the GoToMeeting platform, you can submit the question via the chat function. Please direct those questions to the presenters, where I will summarize and relay as best I can so that we can address as many questions as possible today. That's the end of our opening statements, and you wanted to say a couple words, and then I'll come back.

Yes, okay. So what we're doing, this is the format for today. So what's going to happen is I'm going to let Mark tell you the highlights of the quarter. Then I'm going to build on the highlights of the quarter. I'm going to talk about what I would call strategic highlights, or better yet, strategic points, what direction we're going in, the meaning of various efforts. the resources we're devoting into it, and so on and so forth. And after having covered that, we're going to do questions and answers. We're going to answer every question that is posed. So with that, Mark, if you could give the highlights of the quarter, what you regard as highlights of the quarter, we'd greatly appreciate.

Sure, sure. And so this will be a little bit historical, and it's been only a relatively short period of time since our year-end update. We were just discussing that it's been about 18 days, and that had a variety of complex information. on that call, so I'll again provide a short recap of what we filed recently and why. This form 10 updates continues our required GAAP presentation that includes certain proprietary funds as consolidated entities, and our press release continues the presentation of both our GAAP presentation as well as a supplement that presents our financial statements excluding those funds, essentially the advisor-only entity. And we think that is important for investors to look at and understand. Consistent with what we have previously reported, this is a presentational matter that does not impact the company's earnings that are available to HKHC shareholders or the shareholders' equity of HKHC. It does result in higher total assets, as we have included the assets of those funds that have been consolidated on our balance sheet. as well as a new line item called redeemable non-controlling interest. And that line item essentially represents our clients' account balances that are supported by the assets of those funds, which you'll see identified in our financial statements as consolidated investment products. The other notable change is the treatment of management fees charged to those consolidated investment products. Under GAAP, those revenues are eliminated for consolidation since that fund is presented within the financial statements. It is akin to an intercompany transaction. However, the economic benefit resulting to the HKHC shareholders remains, and you can see that, or that economic benefit is reflected through a smaller allocation of the investment returns of the consolidated investment products to the redeemable non-controlling interest than they would otherwise have received. You can also see the impact of those items in the table within our NB&A of our 10Q file. Our results for the quarter continue to be favorable for our HKHC shareholders. The company recorded revenues of $19.8 million for the quarter, which is a meaningful increase from the $12.1 million in the first quarter of 2024. And this increase is primarily the result of the overall increase in asset vendor management across the portfolio of investment products and client accounts. As our supplementary schedule indicated, the annual revenues based on the advisor-only model this is without the consolidation of the investment products, resulting in quarterly revenues of $22 million, which was a similarly meaningful increase from the $14 million in the first quarter of 2024. The results of the consolidated entity were also favorably impacted by the consolidation of the funds, which had $70 million in investment returns during the quarter, of which approximately $59 million was allocated to our client accounts and the redeemable non-controlling interest line item. From a balance sheet perspective, the company has substantial cash and investments, including amounts outside of those consolidated investment products, and we have no third-party debt outside of our office spaces. The company's cash position was significantly bolstered during the quarter as a result of the collection of incentive fees in 2025 that were earned in 2024. Some of those fees were also paid to the company in securities, which we used to settle certain pre-acquisition legacy debts to affiliates, as well as to make an additional investment in a non-consolidated but affiliated other investment item. So those were my highlights for the quarter, Murray, and we can get into whatever level of detail you'd like after that.