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FRMO Corporation (OTC:FRMO) Q2 2023 Earnings Call Transcript

FRMO Corporation (OTC:FRMO) Q2 2023 Earnings Call Transcript January 17, 2023

Operator: The broadcast starts now. All participants are in listen-only mode.

Photo by Nicholas Cappello on Unsplash

Therese Byars: Good afternoon everybody. This is Therese Byars speaking, and I’m the corporate secretary of FRMO Corp. Thank you for joining us today for the Company’s second quarter 2023 earnings conference call. The statements made during this call only apply as of today. The information contained in this call should not be construed as a recommendation to buy or sell any particular security or investment fund. The opinions referenced in this call today are not intended to be a prediction of future events or a guarantee of future results. It should not be assumed that any of the securities transactions referenced today have been or will prove profitable or that future investment decisions will be profitable or will equal or exceed past investment performance.

For more information, you can visit the FRMO Corp website. at frmocorp.com. Today’s discussion will be moderated by Murray Stahl, Chairman and Chief Executive Officer, and Steven Bregman, President and Chief Financial Officer. They will review key points related to the second quarter 2023 results. A replay of this call will be available on FRMO Corp’s website. until the summary transcript is published. And now I’m going to give the floor to Mr. Stahl.

Murray Stahl: Okay. Thank you, Thérèse, and thank you all for being with us today. Before I start talking about FRMO I just wanted to acknowledge that the ultimate founder of FRMO was a lawyer called Lester Tanner and he passed away a few days ago and Sunday was his funeral. I just want to acknowledge it. He was just an incredibly bright and warm human being and we probably wouldn’t even have a FRMO Corporation, and in fact I should say we probably wouldn’t have a FRMO Corporation if not for his leadership and insight, and if we had more time i would tell you about his simply amazing wife he did amazing things even in retirement. So I just wanted to recognize him as a human being. He will be greatly missed. He was a good guy. He is one of a kind and will be greatly missed.

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de minimis: The thing I want to focus on for the quarter is developing our currency strategy. I’ll talk about Horizon first. So Horizon itself has done pretty well. Horizon is for the year ending December 31, 2022 we have collected a number of performance fees and a fair amount of net income so this is going to ripple through to next quarter FRMO revenue as you will recall we have our revenue share. And there are also investments in FRMO and there are very comparable investments in Horizon, so they’re going to perform very similarly, so expect some good news there. And you will remember that everything is reported when it comes to Horizon with a lag. So in our next quarter, which for us is the timeline ending February 28, Horizon information will be included from December 31, just for your edification, and I know we’ve said this many times before, but just to bear that in mind, so there’s always a lag.

So right now, from Horizon’s perspective, we’re reporting things that are really September 30, as if they happened on December 31, because that was a bit of information that we had at when we prepared these financial statements. And the financial statements for us, let’s not forget, as of November 30th. Now our cryptocurrency strategy, you’ll recall, we entered cryptocurrency you might say cautiously and we’ve been particular about maintaining that position over the past year. Over the past year, with the possible exception of the last week, the Bitcoin-led cryptocurrency has been in near-constant decline. Cryptocurrency mining machines declined even more and cryptocurrencies declined more than Bitcoin. The reason for this is, and we’ll get to that later, there are three vectors that actually govern the price of cryptocurrency, specifically Bitcoin.

And you can bid on cryptocurrency, but you have to be very aware that it’s a function of the halving still to come, the halving, that we’re going to have the halving basically means allotment overall for bitcoin mining is going to be halved, that’s why they call it halving and it’s halving by about 470 days.

de minimis: The thing I want to focus on for the quarter is developing our currency strategy. I’ll talk about Horizon first. So Horizon itself has done pretty well. Horizon is for the year ending December 31, 2022 we have collected a number of performance fees and a fair amount of net income so this is going to ripple through to next quarter FRMO revenue as you will recall we have our revenue share. And there are also investments in FRMO and there are very comparable investments in Horizon, so they’re going to perform very similarly, so expect some good news there. And you will remember that everything is reported when it comes to Horizon with a lag. So in our next quarter, which for us is the timeline ending February 28, Horizon information will be included from December 31, just for your edification, and I know we’ve said this many times before, but just to bear that in mind, so there’s always a lag.

So right now, from Horizon’s perspective, we’re reporting things that are really September 30, as if they happened on December 31, because that was a bit of information that we had at when we prepared these financial statements. And the financial statements for us, let’s not forget, as of November 30th. Now our cryptocurrency strategy, you’ll recall, we entered cryptocurrency you might say cautiously and we’ve been particular about maintaining that position over the past year. Over the past year, with the possible exception of the last week, the Bitcoin-led cryptocurrency has been in near-constant decline. Cryptocurrency mining machines declined even more and cryptocurrencies declined more than Bitcoin. The reason for this is, and we’ll get to that later, there are three vectors that actually govern the price of cryptocurrency, specifically Bitcoin.

And you can bid on cryptocurrency, but you have to be very aware that it’s a function of the halving still to come, the halving, that we’re going to have the halving basically means allotment overall for bitcoin mining is going to be halved, that’s why they call it halving and it’s halving by about 470 days.

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