Q2 2024 FRMO Corp Earnings Call

Presentation

Afternoon, everyone. This is Tarang buyer and speaking, and I'm the Corporate Secretary of FRMO Corp. Thank you for joining us on this call.
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 funds. The opinions referenced on this call today are not intended to give forecasts of future events or a guarantee of future results.
It should not be assume that any of the security transactions referenced today and then or will prove to be profitable or the future investment decision will be profitable or will equal or exceed the past performance of the investment. The For additional information, you may visit the FRMO website at frmocorp.com.
Today's discussion will be led by Murray Stahl, Chairman and Chief Executive Officer. He will review key points related to the 2024 second quarter earnings. A replay of this call will be available on the FRMO website until the summary transparency is post-spin. And now I'll turn it over to Mr. Stahl.

Okay. Thanks, Therese, and thanks, everybody, for joining us. And I'll just go right into it. This quarter, I would argue was a milestone quarter for us reason. I say it was a milestone quarter for us as you'll observe that our biggest position PPL was actually down for the quarter and you can see the line of unrealized losses, of course, that's on all our realized losses because we're consolidating HK, hard assets, but it was down, however, it was more than balanced buy two other positions.
And the first one was Winland formerly known as Winland Electronics. Now we call Winland holdings, which is where we've been doing a lot of our cryptocurrency mining work. You might observe if you line up all the quarterly financial statements. And then you'll see we're gradually increasing our position that now as of quarter end, I think you can look it up on the summary page on the website, but I think we're up to 1,593,000 shares roughly, and we bought more subsequently. So I think we're around 35% of Winland. More about that in a minute.
And then the other position or other positions is the various ways we express ownership of bitcoin directly, not least of which actually most important of which is the Bitcoin Investment Trust GBTC. So this was the first quarter that the crypto earnings actually outweighed TPO. And incidentally, we increased our exposure to every one of our holdings.
We might also remark that despite all of that on the investing and you could see how much money we spent, we increased our cash balance not decreased our cash balance relative to fiscal year end. So and from our own share of equity, not the consolidator of equity, we will consolidate our noncontrolling interest in the HK, hard assets, but our own equity interest now exceeds $206 million. So there's substantial investment here with substantial liquidity and we expand in crypto little by little every quarter. So maybe the first thing I should tell you is why do we expand little by little every quarter when no one else seems to do that.
And I know it might be excruciating to watch, but if necessary, to do it that way. The reason we do it that way is because have two factories in the world of mining one is that no matter what point in the cycle you are this cycle, of course, relative to the having and Bitcoin, you're always every passing day you're approaching yet another having.
So I would look at the having or I would encourage you to look at having falling away. The black reward is kind of is cut in half. So another way of saying if you want to get the same block reward for your mining activity, essentially you have to have twice as many machines. Now in practice, you have to have many more than twice as many machines, many, many more than twice as many machines if the Blackboard is cut in half because the aggregate hash rate, meaning the number of machines you're competing with the entire between system is ever growing.
So if you want, even if it wasn't having you have to grow your equipment sets the first problem, the so you have to have twice as many machines, you get the same number of coins. It's another way of saying it's mathematically the same as if the cost of mining just went up and that's by way, one of the reasons that bitcoin goes up over time, so having plays a very important role and it would be ever cognizant of that.
So with the having if everything else was stable, which it never is. But if it if it was, it would be predictable, very high Breeze, a high return security probably know security is as predictable or as high return as you are going to encounter.
So the second factor is because you can think of it as if you need twice may machines to get the same in-orbit clean therefore, your costs are rising. You have to be very, very cognizant of your usage of electric power.
So you have to have machines that will be ever more economical electric power usage. So no one seems to believe me when I say this by repeated, yes, again yet again, last seven or eight years, the electric power usage per transaction is down 96%, doesn't mean the electric power usage your entire system is that it all electric power usage is system is up and occupier usage per transaction is down 96%. Now it has to continue and probably will continue.
And the reason that's relevant for going slow in terms of buying equipment is when that happens, your equipment could be obsoleted what you'd like to do is you'd like to constantly be growing your domestic crypto you have, which I think we've done. If you look at all the quarterly statements and you'd like to be doing it in such a way that you're always in a position to buy the most up-to-date equipment and you bought a small enough equipment for that you managed to use it completely and thoroughly during the cycles.
So we've been very careful buying equipment. One of the things you'll see in our cryptocurrency mining operations, we're now operating fully depreciated equipment. How long will be operating. That is a question that I don't know the answer to, but the goal was to get to the point where we can operate properly, fully depreciated equipment. Our policy is to depreciate new equipment over a two-year cycle and used equipment over a year, sometimes a year and a half.
So we're very conservative on it. Depreciation and on consensus mining, I believe in round numbers, we are up to 266 roughly outlook. This you know, I wrote it down that big apartment for up to 265 Bitcoins consensus mining. We also own in consensus mining as the most recent reckoning. This is data as of several days ago, but I think it will relevant. We have 6,618. Late point, like when you may be aware, is basically the same monetary policy a bit as bitcoin has just started later. So at the moment, it has a monthly higher inflation rate, but lend up the same at the same point as Bitcoin is actually more profitable to mine light coin than mine Bitcoin. And you can make an argument for LitePoint if LitePoint ever award to have the kind of use cases that Bitcoin is going to have a new service from the light clean aggregate hash rate would grow in relation in between adequate -- aggregate hash rate and you make a lot of money on it. And also we own as of several days ago with other words, most recent reckoning, we own 265 -- excuse me, 38.9 Bitcoin Cash is an interesting sort of an animal because between cash has the exact same monetary policy is bitcoin itself. Adjusted the bitcoin hash rate, weekly cash rate is maybe a half of 1%. The size of the bitcoin has rate, therefore to Mark capitalization between cash is something like one half of 1% of the Bitcoin and the hash rate and Bitcoin market capitalization. And as I said, if there was ever a use case for a bigger block size that one day there might be you can make a lot of money in Bitcoin Cash. So it's kind of interesting when reasons going back like claim that LitePoint is more profitable. Bitcoin has likewise engages merge mining. It's both good and bad sort of ridden with the same mining rig, you combine two points, you can mine LitePoint and you combine those coins does coin has very profligate monetary policy. Say, personally, they'll find that all that interesting. So we get paid entirely. And likewise, we think our Black reward entirely and light coin.
Now the more expensive Deutsch coin is the more of the electric bills you can pay with DoJ coin and therefore, the less money cost to mine LifePoint, therefore, less valuable LifePoint is.
So theoretically, since I would assert, DoJ coin has a profligate monetary policy. Those claim is going to underperform like coin does coin might even go down in value if it gets glued it enough and degree does coin underperforms like Queen Lake wind is worth more money. And just for that reason, you may make money off. Anyway, we are in the process of buying some L. seven miners, which is with mine life mines like Queen for Winland. So win-win before very many weeks throughout, we'll be mining from LitePoint as well as Bitcoin. I think we had a first and a publicly traded miners to mine some material amounts of light coin. I don't think any other publicly traded miners do that. Now Winland is public and consensus is going to be public, hopefully not too distant future show you'll be able to see their financial statements, and I hope you'll be impressed with the degree of liquidity we maintain, and I hope you'll be impressed with the degree to which we consistently increase the crypto holdings, which is very different than what other companies do in them. We intend to increase our exposure in this field. So the crypto business is alive it's healthy and it's growing and we didn't know seven or eight years ago when we started this venture, if crypto was a viable business or not, we just thought we knew enough about it to be able to make some reasonable assumptions about that, make some money at.
So that's what we ended up doing. And so far, it's working out well, so a couple of other things. I'll point you to in the balance sheet that I personally find intriguing, you can see why we are a long-term investor. If you look at our balance sheet November 30, a look at deferred tax liability of $25 million, longer we hang onto what we have more money. We're making off this, which is essentially an interest-free loan. So you really want to be long term pressures had some a small amount of money even to our now expanded shareholders' equity also puts you in a direction liability side of the balance sheet in securities sold short, these are largely the dysfunctional ETFs dependent ones we keep selling short, you'll observe as of the most recent reckoning $10,683,000 in short sale proceeds and from a market value of $1,291,000. So it's a not insignificant part of our cash generation and we continue to do it and we are likely to expand at them when opportunities present themselves.
Wondering one thing I'll point you to investments in securities exchanges were our biggest holding security changes the Miami options holdings, which is colloquially known as M. max X, has come public yet, but it may come down come up one day and I would pay attention to that valuation. That's a current valuation as a private company. You could look at their website. You can see how well the company is doing, and I expect that to continue. So we very excited and pleased what's going on that it may.
So in summary, we have our crypto businesses. We have our from our from the exchanges businesses. We have our own investments and last but not least, we have Horizon Kinetics of Horizon Kinetics is in the process of doing a reverse merger into a company known as Scotts liquid gold. And then it's publicly traded. So there's going to be when this deal closes, I guess theoretically, there's one now a publicly traded valuation on Horizon Kinetics. So we won't need to guess or estimate what the value of our investment in Horizon Kinetics is we'll be able to see it realized. So I would pay attention to that. I am expecting, but don't hold me to it this deal to close sometime around at the end of April. So let's say with good fortune and I'm April 30, and we maintain our and we're proportionately interest in Horizon Kinetics so that some lot of activity and a lot of publicly traded securities. So consensus coming public Horizon Kinetics is coming public. A lot of interesting things going on. I could probably continue, but I've given you a little tour of what's happening in a very busy. So I think the best thing to do is maybe invite whatever questions you have to fill in the gaps of what I did mention and maybe you could kick it off rather than just tell me what the questions are, and I'll be more than glad to address them.

Question and Answer Session

The first question, the two my excuse me, my impression is that most of the total FRMO assets on the balance sheet are valued using market prices, how much and what assets are not valued in that way? What is the best way for an investor to value FRMO more specifically, given its assets, especially the increased attention to crypto currency, why should it be for Brent price flash traded for more than the net asset value?

Okay. There's a lot of questions here. So let's say what it is that we take everything we can take at market, we take it market. So what's easier to talk about what's known market, which that market is our investment in mix from our holding is it's a little bit above cost. The reason it's a little bit of net greatly bunker reasons. A little bit above cost is because mix did some deals equity deal subsequent to our transaction, which is using that value. It's not a market price negotiated price step. We also have on the books at cost holdings of Digital Currency Group, which are people own grayscale, which among other things that are people who operate the Bitcoin Investment Trust that's now in the process of becoming an ETF, and that's at cost. And then last, but certainly not least is the horizon that you see on the balance sheet, Nunet cost, it's cost plus whatever accumulated earnings have been retained in the business, some rising CapEx as a pretty big dividend payout ratio from others may dividend Horizon Kinetics pays of, I think, a pretty robust dividend. We received that dividend. So whatever's left over after the dividend gets put back and retained earnings. So you're not seeing a market net. However, you will see a market that you figure out what what our proportionate interest is in Scott's legal gold. So to answer partially the question, and I'll come back to it in the second, why should it trade at it's market value? Well, we don't really know what the appropriate valuation should be of my x. We don't know what the appropriate valuation should be a Digital Currency Group. We will know. But we do not know at the moment what is the appropriate valuation of Scottsville gold, which is really going to be rising and X the market will tell us that right under the Horizon Kinetics notation on the balance sheet, you will see this revenue share. So we have a revenue share. In other words, we get a little bit less than 5% revenues of price in Canada. So the question is what is that worth? And I guess it depends on what the revenue of rising taxes. I guess it depends on how much you can grow or fail to grow reason mines pay differ about what it's worth. So we have it on. We created a number of years ago, which I don't know how relevant it is. There have been changed with a public valuation, people have more insight into it that might change as well. So I guess the trading price of Horizon Kinetics and the extreme price, whatever mode you like it reflects what some people believe might be the valuation of all the entities I talked about and I left out one which are going to add in right now, consensus, meaning it's not a big deal but done. We still own it public yet. It will be public and that will have to have a valuation for that. Then you will observe the real estate owned that's on the books at cost. And the question is what's that worth? And it might be worth. Some would argue it's worth more than what it's on the balance sheet for So differential between those public entities, the most publicly traded entities that we can value and the ones we don't or what people assume should be devalue, whether that's right or wrong. We're going to find out in the not-too-distant future. We'll have to see what happens. Copay addressed. Everything hopefully Did I cover all the main points and that Scott's liquid gold if you're interested is SLGD. And Tom, because you know what we're going to allow for what we do on the Horizon Kinetics, you look at you and you could look at the market capitalization of South Africa gold and you can figure out where it's more capitalization is going to be when the deal closes and you can draw some conclusions, I think, but you'll have to draw those conclusions on your own. So I think that thorough answer, I hope it's thorough answer. So maybe we can proceed to the next question, Therese.

Okay. Next question, I think has to do with the balance sheet as well as some of the commentary on the issue of noncontrolling interest confuses me and seems a bit contradictory. Perhaps Martin could comment and his thoughts as to how best to value the company, particularly with respect to the NAV of about $4 per share without noncontrolling and about $8, including noncontrolling?

Well, I'm not 100% sure. I understand the question. So from we take the shareholders' equity and divide by number of shares that your book value. And the way I would look at, as I mentioned in the prior question, a number of things they're not valued market through. Real question is, are they worth more than your stated balance sheet value. So is the are the building real estate worth more than their than their value? I think they are about them is my X worth more than it cost basis, I think it is is Aurizon worth more than it stayed here. I think it is revenue share more worth more than let's say the year. I think it is and so on so forth, consensus, meaning we're going to figure out what happens. So all I can tell you is that's the differential. And I can't tell you what exactly the value should be because everybody has to make up their own mind them. And all I can tell you is judging from the market price relative to book value, obviously, people think it's worth more not less than the carrying values and more that's not an unreasonable position to take.

I wonder if part of the question is about the noncontrolling interest and the shareholder book value attributable to the Company. It might be why is there such a large noncontrolling interest? It wasn't in the question, but it might be implied here on the screen.

I'm going to explain what you mean by that because I'm not sure what the question is okay.

So I think we have stockholders' equity attributable to the Company and then noncontrolling interest. So that may be confusing and I may be interpreting this wrong, but just what the difference is --?

Just what's the difference is. Okay. That's a good question that we own. We control two LLCs known as HK, hard assets, one HK, hard assets to you can see in the footnotes, how much we control of each So differential, which I think in the case of HK, hard assets, one, something like 78%, it doesn't belong to FRMO. It's other people of which apart from FRMO, the largest holder, let's say, of HK, hard assets. One is yours truly. So I online with personnel. So that's the different. And so FRMO doesn't own it. We obviously we're just partners in that. So you might say it's a fund. The market value of that fund is probably $160 million somethinh. It's growing usually every month mines are growing every month because the various partners, myself included are contributing more securities to constantly and hopefully the market value is going to grow as well. So basically that's what the noncontrolling interest happens to. It's basically these two funds, the market value of each corner assets. One is a lot bigger than the market value. H.k., hard assets to the simple reason that it can harness. It's one we've been in it for about seven or eight years, something like that, H.K., hard assets to we've been at it that I don't know year and a half sound right, something like that. So it's going to take a while to build up HK, hard assets to the way we build up HK, hard assets, whether that's noncontrolling interest. Now, maybe the question is what if you merge non-controlling interest into FRMO, would it make a difference that would make a difference at all because you still have the same book value. We take those assets and presumably we take shares to be more shares outstanding from O. have bigger, more capitalization, but it's got on assets, one owns the same things that FRMO owns, maybe the weightings there and a rounding error, slightly different, I don't know, but maybe around the year, they're slightly different, but they're not materially different. So we just own more of the same stuff. So I don't think that affects the valuation whatsoever, as we said reason, might may differ.

The next question, I'm a retail shareholder of FRMO Corp. in regard to the latest financial report, can you tell in which bucket I quote, assets and quote in the balance sheet are the crypto digital currency ASSETS reported?
I think it's crypto blasted, all currencies, but I did not find them directly mentioned, hence the question.
And then there was a second part to your question, but I'll answer the first CMO, I know it's related, I'm sorry, sorry. And in regard to the holdings of win-wins and consensus mining, are they under investment in limited partnerships and other equity investments at fair value?

Yes. So all that stuff is in investments, limited partner, limited partnerships and other equity investments. They all lumped in there. It's all in the public private school in there. And for the most part, it's all there. And digital mining assets are the individual mining assets there from the machines and the real estate, the reason the real estate and other digital mining assets. So just real estate because the property is used for mining and that's when accounts that you're mining asset.

In the first quarter 2024 conference call, Marisol stated Bitcoin Cash with the most undervalued asset with the most upside on the balance sheet. With regard to FRMO accumulation and Bitcoin Cash is it more cost effective to purchase the coins VERSUS mine? Then in addition, what is the ideal amount of Bitcoin Cash on the balance sheet in relation to Bitcoin?

Okay. I mean second part, I don't know what the ideal. I don't know what the ideal amount is. I've never really thought about that, Wes, and I hope I can answer it and I still stand behind the idea that it's really undervalued because it's got the same monetary policy. It just doesn't have a use case. And by the way, Bitcoin itself doesn't really have the use case that has ETFs, it doesn't really have a use case. So one of the issues between between in between cash really hasn't been an issue yet. There may be one day administratively material difference between bitcoin and Bitcoin.
Cash is Bitcoin. Cash has a bigger block size. Ordinarily, there wouldn't be an issue. Nobody you mined bitcoin really cared that much about the block size and a lot of people were against making a bigger block size. That's why at a time when Bitcoin Cash uses about seven years ago and Bitcoin Cash for and got existence. Most people, including ourselves, were not really enamored of between cash. And the reason was we didn't want a bigger block size. We don't want a bigger block size. The theory was that if you made the block size too big, some being a multinational company would come in and do one transaction if another high-speed transactions. And we write back the centralization. So the block size and big plane is by design and when likes it that way, it's small, really can't put a lot of stuff and now enter ETFs course years ago, people talked about EPS. We just couldn't visualize the one day. We have an ETF now we got and ETF. So why is that relevant? Well, if you're accreting units of an ETF unit is usually 25,000 shares since some ETFs will be 50,000 shares. So the difference in ETF and mutual fund is you can only add money to an ETF in certain increments of shares. Some leverage, you can't add $2,500 to an ETF. If you want to add money, you can buy 2,500 shares, you can buy $2,500 worth of market. You can't deposit $2,500 to. You have to deposit in set share amounts which nausea, it's the standard unit is 25,000 shares, whatever their other ETFs have 50,000 shares. And I forget what the unit amounts are and all the ETFCIC. approved the other day, you could look it up. So anyway, if you're creating units and you have to insulate your ETF and one must instantaneously buy Bitcoin one would think that you want to post that transaction sort of block and have it on the blockchain just for accounting purposes. So now if the block isn't big enough to accommodate that because there are many smaller transactions that preceded a solution within the context of Bitcoin. And that solution is to pay a transaction fee. So bitcoin mining, when it happens gets a little more profitable than otherwise would be because people one priority for their particular transaction, whoever it may be in terms of posting too much change, voluntarily pay a transaction fee. You don't have to pay a transaction fee if you don't want to voluntarily to pay a transaction fee. And that transaction fee gives you priority in posting some one would think that minors to the degree they wish to earn the transaction fees over and above the block. These might then find the use case or a bigger block size, which is the Bitcoin Cash currency as opposed to a big Crane Currency, same thing or put another way what if for whatever reason, there's no plans to do this by the way, the forever. Whatever reason someone decided to make a Bitcoin Cash ETF would that attract more mining activity if we attracted more mining activity, the hash rate was bigger in the market that it would be bigger by virtue of what we know is a network effect or Metcalfe's law. So there's a lot of upside there. So the same equipment that you mined bitcoin with you can mine Bitcoin Cash sort of change your equipment for mining bitcoin between cash, it's a switch. It takes at most thirty seconds. If it even takes thirty seconds to switch one way and there are thirty seconds to switch the other way. Generally speaking, the profitability measured in the Fiat realm is basically identical. So what we've done over time in our mining in consensus mining, Newmont Mining, to the extent we do mining in FRMO, we've devoted some machines to mining Bitcoin Cash now because there are many, many fewer people that are mining Bitcoin Cash, many, many fewer people at the price of Bitcoin Cash, much lower the price of bitcoin, but there are many fewer people mining at some number of coins you are getting per block of you're a miner is much greater. So if we had a handful of the machines set to mine Bitcoin Cash relative to machines that we have set the mine Bitcoin, we're going to accumulate Bitcoin Cash faster than we accumulate Bitcoin. So come a point in time when we will have, let's say, consensus, meaning as many if not more between cash coins as we have Bitcoins. And then it gets kind of interesting because if the theory is valid and by the way, I should tell you, I'm really personally even believes it so from more or less minority of one that you asked anybody else in the crypto realm, they are not a believer in this investment thesis on basically by myself by saying it's going to be use case one and it may be a very different use case than bitcoin may affect. I believe a lot of different cryptocurrency is going to have use cases. It's just hard to imagine what they might be right now, but it's going to happen. We could speculate, but I'm not going to do it because it's just speculation, but I can dream up lots of use cases. I've written about some over the years some they're only ideas that could be a lot of possible use case finding it's important to maintain Bitcoin Cash doesn't involve a lot of expense management. We repaid for the machines we can we switch back. So we are going to continue doing that late claim. Same thing I know you didn't ask, but likely the same thing and maybe in the fullness of time will come, we'll actually do some other clients as well over the years. We have now mined material materials on my name or now it's proof of stake system. We mine some cerium classic over the years. We still have it. So there's a lot of interesting things to be done. I guess Optex up on that question.

I suspect you will comment on the 11 new US bitcoin spot ETFs, given the expense differential Well, he transitioned out of GBTC. and if so, into which of them?

Well, I wish I could. I'm Catlettsburg. Let me be very careful how we answer the question. So I can't give you the kind of information that you're seeking. All I can say is I am well aware of what the differential is and there are a lot of options doing things. The only restraining factor is taxes. So we'd like, if possible, not to pay them. So in preparation, if we were to do something, which I'm not verifying we're doing or not doing. But if we were to do something, we would very likely much like do it on a tax-free basis. And even though we have verbal opinions, not to do anything unless we get a written opinion first or so, we don't have a written opinion yet, although we have a verbal opinion. So we'll have to evaluate when to speak. If we get to once we get a written opinion that we can do something on a tax-free basis and I will be able to give you a much more linked the and the detailed answer to your question, what and how or how many coins were mined in the recent quarter, what number were sold?
I coined and I don't have that at my fingertips. I will just tell you that we hold many more coins than we than we sell. So basically in consensus, meaning we basically have been filling any coins. So we have been selling coins as a generalization because we raised a lot of capital in our private offering and we never spent the money and interest rates now 5% see interest income as such, for name using income, we basically use the interest income to pay the electric bill. So I don't think we sell very many points at all in Winland we don't have such big cash balances. So we do sell coins, but we we don't have the figures in front of me. But basically, net, we grow our Queens every quarter we're not selling more coins than we might. The goal is to mine more coins than we sell. And every quarter we want to grow. Our number of coins is really really important to grow our number of coins every quarter. And I don't think we've ever gone down sequentially in quarter in terms of number of coins, high-producing short, a lot of companies do. I think we're always growing our coins and I pay very close attention if we share the figures in front of me. But you know, those are other publicly traded corporations and they'll have to speak for themselves, but it's very important that we keep increasing number of clients we have. And if Fabio do it, we're going to keep increasing the number of points.

We do list the crypto holdings on the FRMO website under Quarterly Conference Calls.

So yes, and people can see how we've grown the point you're looking, if you look at that, you can see we've grown the coins. We're not selling points. So you can compare linearly sequentially quarter by quarter. You can see what's happening.
So I'm going to look at it now just just for the heck of instruments, and we held directly and around 152 Bitcoin, this is November 30, and we held indirectly and there are 24, I'm rounding down, not up, then let's see if I can get something if I can. Since these conference calls are due to occur before, let's see if I can give you a number.
So held directly, we had I'm rounding down 24. I mean to be that [24.49]. So we increased and held indirectly 24 around them. I think it went up anyway when you're around. So if I can look it up, no, it's the same 24.17. So indirectly, we've got the same number directly. We've increased by [152.49], call it three coins to QUARTER, and it doesn't look accurate to me the simple reason that I know consensus increased number of coins should have went up. So it doesn't look accurate to me, but anyway and maybe can change as of November 30th. So since then, but I know wanted to find a well by well, I know, but August 31st to November 30th, that consensus increased them by gasoline. So it's definitely bigger. So you may want to actually buy a bigger part and we did increase some. It's very small, but we have a small holding. So as of November 30, the number is indirectly. It's some consensus on Winland, 24.26 and some held indirectly on August 31, 24.17. So did increase, as I said, we don't on a lot of them consensus yet and Winland. We have a lot of it, but it's a very small company, only has 65 coins. So we didn't mine that many coins for the quarter. So and grow by that much, many of our importers.

Okay. Without revealing anything that might reduce Horizon Kinetics or FRMO.'s competitiveness, could management give a bit more bit more information about FRMO and the associated subsidiaries, mining rig procurement process. I'm mainly asking this because the fact that FRMO is apparently being required to pay in Bitcoin for this equipment by manufacturers. As told in the previous shareholder meeting, it is a bit surprising to me, for example, that may one of the largest coin mining rig manufacturers. Those payment options on their website, including USD. wire transfer and their payment terms on their support page do not refer to any such policy of only accepting bitcoin.

Okay. Well, to begin with last couple of purchases. We did not pay in Bitcoin. We paid in USD and we didn't buy from Mid-Maine. We didn't buy the equipment Mid-Maine. We bought equipment from wholesalers. So why do we buy the equipment wholesalers, so line of miners to be treated once or equipment, and unfortunately, they can't pay for it. So it's sitting in a warehouse for the tariff was already paid out. So some wholesaler somewhere or some number wholesalers on this equipment, the intended recipient cannot pay or does not intend to pay or does not wish to pay whatever. So we've done that. We've done that in USD. So sometimes we'll put an order in with a wholesaler and we combine our order with that of other companies to make a really big order. And that order really does go to bid main. But the idea is to make it a really big order set all of participants in the agglomeration of the order, some can get the discount for volume, but then we're buying. We're paying the wholesaler. We're not pain. It means wholesaler responsible for delivering the equipment to us. Some of the confusion might be one of the things that I wanted to say when they will have a graph to show this what I'd like to do. I wish we had a graph of this maybe next time, we can have a graph to show this. So what I'd like do is show how much money it cost in bitcoin to buy the state-of-the-art machine. So put it this way, when we started mining, let's say, seven or eight years ago, we wanted to buy then state of the art machine, which was the S9, if memory serves, we had to it will be paid in dollars. But if we translate those data then into Bitcoin, we had to spend roughly nine bitcoin in that we might have paid in dollar. We have spent roughly nine nine bitcoin to buy then state-of-the-art the S9. I think it was something like a 10 or 11 Per hash machine today where we want to buy is the S21 coin MES, 21 machine shoes to wear and tear H machines. So it's got pricing power, probably 20 times what the S9 hand and one bitcoin can buy 10.75 of those machines and the right, they may be a whole admissions. So what's happening is the number of machines you can buy priced in Bitcoin is ever rising. So it's probably my fault. I probably wanted to say that at some meetings and I didn't express myself with the precision that I'm doing right now and maybe it's totally my fault. People took it as we're spending bitcoin to buy machines. But in the past, we've done that. We've actually that has happened. We've used bitcoin to buy machines. It recently we're using dollars. But what I want to say is whether we're using we're using Bitcoin, I really was trying to in a very articulate way to express the increased purchasing power of coins in relation to machines. That's a really important concept because one day we have a lot of coins, we'll be able to grow our pricing power if we had to buy just using bitcoin from Treasury if we need to make that happen. But we would have the option of that happening.
So I guess what I was trying to express the idea that sometimes a set of people, you're not in the Fiat world, you're in the bitcoin world, which is true. So maybe I was trying to express it as if we're going to do the account, we can't do the accounting of bitcoin because it's not proper, but it mentally we really should so because what's actually happening when people look at a quarter bitcoin and they'll say Bitcoin is up or down whatever it was three day. But you really shouldn't say what they really should say is the USD with down in relation to Bitcoin. That's actually what's happening because it's a change in price in US dollars. Changing price USD is losing its purchasing power relative to Bitcoin. You can see it if you had a graph of the machines expressed in Bitcoins and if everybody thought of it that way, people would say, well, my dollars losing value, I don't want to have any dollars. And when you have Bitcoin, people look at that way, but they look at Bitcoin as if it were a stock, there's no stock, it may be quoted this everyday as if it were stock, but it's not it's not it's just an alternative store value and it's gaining purchasing power in relation dollar, which to same thing, you're seeing dollars losing tremendous purchasing power relative to Bitcoin. And that's why we're amounts. It's a sociological revolution standpoint of view. So I hope I've expressed myself more carefully this time.

So I'd make my meaning more clear moving on to questions about the Horizon Kinetics. That's like a gold manager. As far as you or anyone knows, does Scotts was good gold there Scott illiquid gold announcement have any impact on FRMO.

Yes, it does because what'll happen when this deal closes, I believe don't quote me on this. This is my personal belief so I'm not the world's expert on John accepted accounting principles. By believe under generally accepted accounting principles, we're going to have to use the market value of Horizon because we're going to change the name of Scott single goal to Horizon Kinetics maybe used to market value, whatever that happens to be. And if the market value is higher than the $15 million-odd. We have it on the books for Matthews. The value I believe you're going to be required to do that time will tell if we really are not being required. So you're going to see it can have an impact and maybe not small on shareholders' equity. So I would pay attention to that.

I think you answered these two next two questions, which were also down larger on this shareholder says I own 11,000 shares of FRMO and my questions for management, what relative details can you share with FRMO shareholders about the decision to bring Horizon NetIQ's public through a reverse merger merger.
And why now and FRMO shareholders anticipate any material changes impacting the value of FRMO shares in connection with or subsequent to the If yes, please elaborate. I believe you, Justin, but if there's anything you want to add?

Yes, I'll just reiterate that if the value is what does that if you calculate what the value is today and you could as a way to do it if you were to calculate. And my personal view is I think we'd have to change the balance sheet value of pricing kinetics considerably. And maybe I don't know for a fact that maybe that might provoke a discussion of the value of the revenue share and we may have to change that as well. So there's that part of it. Why do we decide to do it? Well, there's two kinds of shareholders, Horizon genetics. They're the ones that are active in the business of which you're talking to one of them right now. So I'm not going anywhere I'm not selling any shares, you know, as far as I know, I'm in good health. But I like what I'm doing. I'm going to keep doing it. So everything is everything is fine. I'm not looking for a liquidity needed liquidity. Thank goodness, but there are people who own shares that are non activities, but they were just investors beginning and they got to a certain age and they may have some need of liquidity. So it's not fair to keep them locked up. So there are two options option. Number one is we could have bought their shares, in which case we had negotiated price and from their point of view, it's really not fair with the insiders. We're giving them a price which from their point of view, may or may not be fair. You can see that might be problematic might even be a conflict of interest if we were to CO2 price. So the other possibility is greater market, the market of permanent price and they want to sell they want to sell. They don't want to sell. They don't want to sell maybe want to buy more whatever it is and we're going to see what happens. But I will tell you at that, I'll reiterate there is a dividend policy in Horizon Kinetics, and we're not going to change our dividend policy. So the Scottsville gold shares to become Horizon getting shares getting a dividend, whatever it's going to be. So that's that's a big difference from FRMO and as a publicly traded vehicle and people can decide where they like it they don't like it, et cetera, et cetera, et cetera. So it moves liquidity needs that people were not active in the business. That's probably the best way of saying if they get to a certain age. And yes, our teams on the resource provide liquidity options in the next part.

Part of the next question is kind of a housekeeping question, which was asking about the annual meeting transcript. It has been posted since January 5 this year. And if you don't see it, please refresh your web page, the SCREAM refresh it and you should be able to see it now. So rest of that question also, FRMO is clearly an amalgamation of various investment funds, investment funds, fee streams. And I was wondering if you have ever considered providing some more detail that would allow investors to view the Company as a sum of the parts when particularly given Horizon will have a value market in the public market in the not-too-distant future. I've seen several public alternatives managers go through this exercise, and the shareholder refers to the Brookfield 2023 investor deck Investor Day deck on so that's the question basically.

Okay. Well, it's going to happen. So when bear these are financial slash accounting slash legal staff, they're probably busily drawing up documents as we speak. And we're going to file an S-1 registration. It's going to be a lot of information that thing and quarterly we can give detail on the revenue streams and all that. So it's all coming.
It is now lactide, frankly.

Next question in the interim consolidated financial statement on page 7, it lists the different number of shares owned in Winland compared to page eight what is the reason I think don't quote me on this, but you probably should ask the auditors.

I think the reason is the convention is and on one page, they state the number of shares that they owned at a date in time. And when do we own that FRMO and Dayton time and the other day state, the weighted average number of shares that were owned during the quarter. I believe that's the accounting convention. So in round numbers like right now, as of the second item, I don't know the exact number, but I would say we own in round numbers something like $1.6 million. It's been as close as I can get without seeing Dan adding it up. We have a 10b5 program open for Winland, and we're in the market every day buying share.

Another part of that question is it was announced on December 23, 2023, that Verizon kinetics is merging with that's a good call for.
Was there any consideration given to merging with FRMO and what was the reason for selecting cuts liquid gold as the public trading here and it was there any consideration given to merge with FRMO?

Not really. And so the next question would be why?
Well, looking at that point of view of the non-active shareholders so FRMO, even though it has interest in the Horizon Kinetics got all kinds of things, lot of its securities and from the interest of other shareholders, there might have been dilution and metric that would have been dilution and it might that have been so great because people could argue it just a security as an ongoing business. So an ongoing business trades at a multiple security is just worth this net asset value. So it might have been some it might have been from the point of view of somebody looking for liquidity, some it might not have been from some of your point of view, the best possible outcome. So we really didn't look at that way. Another reason is and FRMO is going in a non radically different direction, but a somewhat different direction.
So from oh, is you look quarter by quarter of how much we own the Winland wetlands and operating company?
It's mining crypto keeps increasing and we're increasing the size of Winland. So FRMO, we kept doing what we're doing with me operating company, not an investment management company, send somebody could say if you're taking operating company, managing crypto, NeoMagic, crypto mining, crypto in European, you're integrating that with an index measuring company. Is that going to help the multiple? Is that going to hurt the multiple and reason mines may differ in that. So rather than just make an experiment, we left alone, we didn't go in that direction. We're going to continue expanding the crypto mining business in a gradual, but deliberate manner choose I think you'll see is different and what pricing Qix is doing. But the asset management business did I answer one of them Yes.

What are the ballpark of that? All the related companies such as FRMO Winland consensus costs of liquid gold and AHMT., et cetera, will be combined someday into one New York Stock Exchange and the NASDAQ traded stock.

Okay. So just to list the entities, if somebody were to urge us to do it and we said, yes, these would be FRMO Horizon Kinetics, Horizon common HCM technology, otherwise down this half measure consensus, meaning Winland seems like I'm missing something. I know what it is. It seems like I'm missing something, but you get the idea that you would have a very big market capitalization just on net asset value basis vote and is that the highest and best use of everything because there's going to be a lot of cash and marketable securities would be valued like a holding company is valued. We get an operating multiplied and that's a great question. Is it better to have the different parts, growing their unique businesses and getting a multiple on earnings? Is that the best use or the best ultimate value realization for shareholders? Or is it just throwing it the one part and having all this cash and marketable securities there and maybe taking a chance we can get the holding company discount in any event, whatever the answer to that question is it could be harder to grow the cryptocurrency business in the context of something that's enormous like that. So we'd have to make a much more radical effort, gigabit prominence. And we don't want to make a radical effort for the reasons I mentioned earlier because you have to go in a steady and deliberate pace because there's always the danger every quarter that your equipment is going to be obsolete. You can't commit a lot of money to equipment in any given quarter because you really don't know what's happened to put it another way. That's not been the philosophy for the other companies have done the same thing. So I leave it to you to see how that policy has worked out. And I don't think it's worked out from the interest shows just my personal opinion, not trying to cast any aspersions on any one. It's just that the pace of technological change is very rapid. We have to be very mindful about. So we don't want to be in a position where we're going to force things and in ways we could not or would not otherwise do. So I hope that explains the logic.

As far as the next question, I have a rather long follow-on kind of explanation well, I was asking Could management give a bit more detail on what would entice them to make dividend distributions to FRMO shareholders?
On the point regarding Mr. Bregman comment and stock dividends for investors to create a whole need and dividend yield as opposed to cash dividends from the company.
And also relating to the gentleman's question on FRMO.'s valuation near the end of the previous meeting. I'd like to say that one, I would like to retain as much relative percent interest as possible in the business of FRMO itself for as long as possible. And to I would like to any gain received from any ownership of the business to be based on the economics of the underlying business rather than the vagaries of MR market and whatever the market price liquidity happens to be on offer in the market at any given time as the gentleman in the previous meeting knows the valuation of FRMO by Mr. market does not always make perfect sense. I'd like to repeat the Warren Buffett quote that closed and never attempt to make money on the stock market. I buy on the assumption that they could close the market the next day and not reopen it for five years and close from this perspective, I completely understand management's continued apparent and deep prioritization, de-prioritized of uplisting FRMO. It has nothing to do with the fundamental operation of the business for the cash dividend, the economics of the business or underlying owned businesses of FRMO and speak for themselves and color in a way reduce or eliminate the need for any kind of uplifting free rating or other form of greater recognition from marginal buyers in order to we board the existing shareholders. In this case, we can warning existing shareholders for inching toward becoming a shareholder. This would also allow existing shareholders who are not DIRECTOR, we'll continue opportunistically accumulated accumulating shares without having to compete with any newer segments of MR market that any roadshow may gain the attention.
So the question was at the beginning. Could you give a bit more detail on what would entice management to make dividend distributions to FRMO shareholders?

I agree with the sentiments in the question. So I'm completely in agreement all that stuff. So we don't have any plans from O. to pay a dividend. I don't know a uplifting as far as that goes, we just been so busy. We just really haven't had time. We've been doing a lot of stuff. We haven't frankly, we are mainline lifetime people think about we're mainly doing in our promo is we are building the crypto currency business. So towards that end, to the extent we can generate cash, a lot of that is going to be deployed in growing the crypto business. So I think we get a lot more value for shareholders in reinvesting in the crypto business in a gradual sort of way than we'd get if we paid a dividend. So we're just going to continue what we're doing at more or less same pace, and we're going to see what happens. So far at some the crypto we have is going to be pretty considerable and we keep buying crypto related assets. So eventually, it's all going to coalesce and something you're going to see regular operating earnings from it when the cryptocurrency business is something that's really much better understood by the public right now. And I think it's very well understood by the public eventually people will get. And meantime, we just can't keep growing it. So I hope that answers the question. We're not going to do things on the fringes. We just got more or less maintain our policy.

We have Horizon Kinetics recently posted third quarter commentary with a large section of the publications dedicated to the merits of scripted Genta's and their exposure to the derivative business. How does management reconcile this with their thesis that the whole past 40 years of market dynamics has been an aberration based in large part on rates falling to zero in the commentaries on graphics derivatives growth only seems to start growing after the historically low rate that came after the 2000 dot-com bubble. What might a higher for longer risk-free rate due to various trading COSTS behaviors and capital allocation decisions that could negatively affect exchanges.

Okay. So let me just take it in parts of it. Last 40 years more or less the aberration?
Let me explain what the aberration was historically. So in the 80s, we started with some inflation and we start with high interest rates and then the miracles happened first medical ones. So the union began to collapse towards the end of decade collapse. The significance of that was so you can have a lot in the way of technology but it's a literal treasure chest. Every conceivable natural resource you can imagine and just meant everything came on, the global average has been every commodity you can possibly think of. So we had a miracle disinflation which had not collapsed, wouldn't have happened miracle number one, medical member to the People's Republic of China. And then People's Bank of China didn't have much in the way in natural resources. So couldn't rival the Soviet Union, but they did have issues and they do have 1.4 billion people and they have a lot of commodities to put in a global market. They put 1.4 billion people on the world markets known as global labor arbitrage. Simple SWITCHER companies may be almost every company in the S&P 500 that move production to China, not just move production to China as big. I don't want to understate that. It will not just move production to China and thereby got higher profit margins, margins that were unimaginable, but then many years previously. But also don't forget the next vertical, which involves we will forgo China, but also involves other people, the previously denied areas to American business. So the Iron Curtain, Poland, Romania, so union in China, Mongolia, et cetera, they were denied areas or certain they're opened. So all the third Medical, all these geographic geographies that were previously closed were now opened, and there were a lot of other countries while they weren't really properly speaking, I and country nations. They were quasi socialist nations like many in South America, but also opened up their markets. So I'm going to put that under a certain Article three huge Merck for 40 years, more or less. That's the story to markets of 40 years now will come to the group, the asymmetry, but those are the three miracles those. So those three miracles together once the Millennia aberration.
Now let's add a fourth. I wouldn't call it a miracle, but I would call it an aberration sometime around late 90s. There were a handful of people on the Internet globally. And by 2023, there were 5.4 billion, maybe 5.5 billion people in it. So you went from a handful to 5.5 billion and that create business opportunities for the likes of Apple and Amazon and Facebook and Google and Microsoft. And I can keep going, but you get the idea now reform miracles so now you can't take almost nobody on Internet and a quarter century later, take 5.5 billion people in net and say that's going to continue because only 8 billion people in the world. It tend to do it has to be an aberration because we won some union, it collapsed dumped or dump their commodities in the marketplace. Now that I could do anymore. China offered 1.4 billion people by the way, such as China, India, Malaysia, Thailand, Vietnam and Philippines. I don't think it's an exaggeration to say 3 billion people actually entered a global labor market fits once Millennium and Linden Millennium and that those are aberrations. Now China take one country. Its companies are rising to challenge the American companies so we get about interest rates. The movie is starting to run in reverse. So China will be a successful. Not China has something called the Kirin 9,000 chip and they have Huawei when they are private companies makes a phone that it looks to me and I'm not an expert looks to me very competitive with Apple and a week or two ago, they created a phone known as the P70, the upgrade of the mid60. It looks like it's even more competitive with Apple. And a third of Apple's business is in China.
Now the Chinese company, what way has an allocation would as a means to keep them satisfied demand, they could cut the prices and keep adding features to Apple's got response and the entire. So you can't expect China to be, which it was for some number of decades, low-cost manufacturing hub, low margin hub of the planet to forever. You have to anticipate that they're going to move into higher margin businesses and higher margin businesses are going to be in direct competition with all the major companies right now.
How do you find the quantitative expression of that?
Well, you all you do is look at the MSCI equity index. These are round numbers, but I think they'll do you can look them up and get the exact numbers in that index. I think the weighting of American stocks is something like 63%, something like that. The weighting of Chinese stock something like 2.7%. There's not that much different distance between Chinese economy, American economy on a purchasing power parity basis, which some would argue is the correct way to manage major economies Chinese economy is bigger than American car. So now the aberrations were in all the other way, that's going to correct, and in my mind, is no doubt about that whatsoever. So people keep behaving as if the last 40 years were not an aberration, which is essentially what everybody is saying is the case, what does that mean? That means that all these great technology companies and keep growing even though they more or less wired the world for the Internet. Does that mean that the Russians will keep dumping commodities in the marketplace? And not going to keep dumping commodities and marketplace. Those commodities are going to go to China and whatever the problem was and sustaining Chinese growth. And again, you have to kind of use a need to really grow. China is moving into higher margin businesses. There's no question about whatsoever, none. So this shows that as one example, just one Chinese company BYD. makes electric cars is now making more electric cars and Tesla. So China Aviation, we only made one plane, but they made a plane an airliner and that can look a bit it looks competitive with Boeing and Airbus and why would we not expect China to do that?
So now as the Chinese companies, if the Chinese companies are, you certainly will if they move into high end margin businesses for low margin businesses, which are occupied themselves for the last 30 or 40 years, and everyone's going to see the last 30, 40 years was an aberration and it's going to wreak havoc in the marketplace. That's the danger to now enter crypto currency, see the answer from the Western countries that have more engineers invest more money in technology. It's a return. The answer unfortunately, is spend more money and meeting the senior living and amines borrowing. It's just unsustainable. Sort of money is being based cryptocurrencies, the answer to the basement CN through centralization. And it has the prospect of becoming biggest asset class, whatever was below where we thought why? Because stocks themselves are an aberration for most of history, the big markets were gold and money claims like letters of credit stock is a relatively new thing. If you were to look at the Wall Street Journal's square library and get a Wall Street Journal from 1923. And that saying, get a paper from ancient times, I'm saying, get a pen newspaper from 1923 and see in the New York Stock Exchange, how many stocks and preferred stocks and how much the LME stocks were common stocks. You will see people are interested in common stocks, preferred stocks because they are interested in income bearing securities. And that's what's going to happen in crypto currency. So cryptocurrency, the next evolution and cryptocurrency, it's going to become interest bearing. So how is it going to come interest bearing because it is there?
I think there are roughly 689 different exchanges that really brokers exchanges, cryptocurrency and their massive differentials and how they trade. So market is developing for what's called the flash loan. What's the flash loan? You borrow, let's say, Bitcoin for 10 minutes, literally 10 minutes. The idea is to sell that between the market that Bitcoin is Merck's most expensive of the six three nine exchanges and buy it back in the least expensive market, thereby reaping a benefit and paying it back for a big claim block actually gets written through blockchain and you only get a handful of basis points, maybe nine basis points for allowance. But you can see if you got nine basis points every 10 minutes, how many tenants in minute intervals are there in a day, you can see how lucrative that is. What that means is that the market rate between the flash Landmark is likely to be much greater than the market rate of Fiat that's set by Central Bank. And then things really get interesting and that explains why so many people want to make a crypto ETF to clip crypto to be blended out in the flash loan market. That's really the name of the game. It's not to raise $10 billion and yet 21 basis points. So we're living in aberrational times and you might regard crypto as an aberration, but that's not the aberration. What happened over 40 years. That's the aberration. Crypto is returned to normalcy from a bulk of history. There wasn't a central bank that told people what rate to lend money yet. We only think it's normalcy because with our lifetimes, that's the way the world works for thousands of years recorded history in most cultures around the world, people figured out what the value of money was in the Central Bank to tell them. So what's really happening is we're going back to normalcy in a world of normalcy, hard assets, not financial assets, true measure well, we're going back. So I hope that's enough of a lecture. I don't want to go I can go a lot longer, but I just gave you a mini lecture on the subject, I guess we'll call it, you know, comments on abberations.

Okay. Well, what is management? This is a question about succession. What is management doing to make themselves more dispenser both of company in as minimal a value disturbing way possible with the death of the great Charlie Munger, the Horizon Kinetics reverse more mergers and the recent court decision on TPL. I think many FRMO shareholders are looking to the future in London, our management, excellent leadership and direct channels. We'll persist in some form beyond the lives of current management and even the lives of existing shareholders who may plan to pass on their FRMO shares to their children in a similar way that Mr. has mentioned, that's been his own intent in the past?

Well, I guess what I'm what we're going to we're in the process of doing is we are looking at people who are obviously younger and ourselves who might take over the reins when unfortunately, we are either not around or we are around or not able to exercise our functions that we're doing. We don't have anything to announce to you right now. But when we do, we'll certainly let you know and I guess nobody is forever asset to the degree it makes you feel better.
I feel great. I don't have anything wrong with me, at least not that I know of and I'm not going anywhere, but you're right, we're going to have to plan for succession. And we're in the process of doing that and we have something tangible to announce. We will certainly announce it and we have publicly traded securities and you can attract it's easier, attract some people than it is to attracting people to a private company.

Around 80% of the U.S. national debt is owned by the U.S. Public is it conceivable that the Fed could raise interest rates to nearly Volcker like levels they wanted to if they wanted to and effectively nullify or greatly reduced the payments, it would have the US public portion of it step by simply raising taxes on U.S. companies and individuals to compensate for their own interest payments to a large degree.

Okay. I don't believe it's conceivable. I think that the interest rate problem is considerable, and I think it's coming to a head. The demand is the interest expense in 36 months or probably less. It's going to be the biggest debt item. A lot of the bonds are owned by tax exempt institutions that doesn't help anyone tax people more. They always have the option of voting with their feet and not owning the bonds. So I don't think that's going to get you anywhere. And I think the interest problem is one of the great problems that is faced by nations periodically when they borrow too much money. Usually the solutions inflation's not a very good solution, but usually that's what direction it goes in. I think it's going to go that way as well. But today we have the complex application of crypto currency. So I personally think cryptocurrency is going to be a tremendous asset class and people two wouldn't dream of owning cryptocurrency who today are very safe and secure and the treasury security in the not-too-distant future when they see the interest they can earn on crypto, you're going to be investing in crypto. My personal belief we'll see if I'm right or wrong.

Is there any effort being made to grow Winland Electronics & Monitoring business growth in that segment appears largely unchanged since 2013 and limits the ability of Winland to accumulate bitcoin and mining assets. I recall that women was initially bought by FRMO for its excess cash flow and high return on equity as to financial do not break out the electronics business assets from the mining assets for the purposes of funding Winland continued bitcoin accumulation. I wonder how the return on assets on the electronics export segment compares to say a high-yield savings account that could similarly similarly and the core operations by liquidating the electronics business at this point, given the segment's stagnant growth overall this year is this not dissimilar from how consensus mining and senior Raj corporation are currently operating without growing the electronic side of the business, what really differentiates Winland from consensus right now beyond the former being publicly traded?

Okay. Well, through the business of electronics is growing, but then again, to make it grow, you have to inject a lot of capital. And the return on capital in the core business is not going to be as good as return on capital in crypto. So without dismantling, the electronics business is fine, this profit falls leave it alone and then it'll do efforts going to do in terms of the crypto business and Framo has participated, participate, many equity offerings in Midland, and we have more than enough capital in there for a moment to provide for all of Winland needs, some bigger screen FRMO and Winland and consensuses in Winland raised. We raised money in really small stages and as we need it and that money has largely come in FRMO in consensus, we actually did a private offering and raised a lot of money. We probably raised more money than we really needed at the time. So the moment we have maybe you could argue we have excess capital spending. We have excess capital in Winland. I think we have adequate capital. What we want to do. We want to grow it. And then I think you get a pretty high return on capital. As you can see, we have to do is look at what happened to Winland stock over the years. And so for most starting investing in it and now it's a meaningful position. We're going to we hope to be able can't guarantee we hope to be able to grow it even more, and we'll see what happens. But you're right. I mean, they're basically both crypto mining businesses and the end of the day following the same gradual policy and measured purchases of stayed the state-of-the-art equipment.

That's what we've been doing lately, what are management's thoughts on GBTC. and other bitcoin ETFs, lack of in-kind redemption options and allowing only the FCC's casual recreational flash redemption policies?

Well, I mean, I can't speak for them. I could see why they don't want in-kind redemptions. And but at the end of the day, you know, when you're an ETF, people don't have to leave money in the fund. So there's a lot of ways to let's just say there are a lot of ways to do the equivalent of in-kind redemption. If you really want to do it, and I'll just leave it at that. And rather than state what the possibilities are, a lot of possibilities that are open and the time will tell what people are going to do so I'm sure you'll see some interesting things next couple of weeks.

Last question without revealing anything that may reduce horizon or FRMO competitive?
Jeff, what is the process by which ideas are generated at Horizon Kinetics of FRMO, for example, how does an idea come to the attention of Mr. Styler, Mr. Brendan, and how's that determine which if any Horizon product to incorporate that idea into, for example, determining to use that promo versus the parent on fund versus the rent bond or some other vehicle to invest in an idea.

Okay. Well, indeed, we can generate ideas and rare though it may be even I have an idea from time to time. And the portfolio manager in question is at liberty to incorporate an idea, assuming it falls within the scope of the charter of the fund person is managing. So some of the funds were general and you have a greater level of action, those funds. And then there's the corporations. And it's basically the corporations like Winland or FRMO or run pricing kicks through corporate capital at Steve and myself that are the allocators, we make the decision.

Okay, Murray, that was our last question. Do you have any closing remarks?

As closing remarks only to say I enjoyed getting the questions I enjoyed answering the questions is anything that we didn't cover or in answering your question, if I was a little opaque and maybe I shouldn't have been opaque or we just didn't get to cover something that you're interested in, please don't hesitate to contact us and we'll get you an answer. And of course, we're going to reprise this in about 90 days and thanks so much for your support than them for a lively discussion, and we're going to see again real soon. So thanks so much. And then I guess I'll sign off.

Okay. This ends our conference call. You may now disconnect, and thank you for joining us.