Thank you, Dan. Good afternoon, everyone.

This is Thérèse Byars speaking, and I'm the Corporate Secretary of FRMO Corp. Thank you all for joining us today.

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 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 prove to be profitable or that future investment decisions will be profitable or will equal or exceed the past performance of the investment.

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 key points related to the 2020 second quarter earnings.

A summary transcript of this call will be posted on the FRMO website in the coming week. A replay of this call will be available for one month beginning at 07:15 this evening.

To listen to the replay call, the domestic toll free number is 1-888-203-1112. The international toll number is 1-719-457-0820; when prompted, key-in the passcode 5894204.

These dial-in numbers are noted in the FRMO press release dated January 14 2020, which may be found on the FRMO website by clicking the link called Information Statements and Announcements. The press release can also be viewed on the OTC Markets website by typing in the ticker symbol, FRMO, and clicking on the news link.

And now, I'll turn the discussion over to Mr. Stahl.

Okay, thank you everyone for joining us and thank you, Thérèse. To begin with the formalities, the reason my colleague Mr.

Bregman isn’t here is, he is quite under weather, and we agreed that it's better that he get into a bed, and go to sleep if that’s possible or if its not possible, just to rest. And people who customary listen these calls, you might remember that we both done this call, when we were very much under the weather, we're both sick.

We're hacking and coughing and all the other things that go with having a cold, and today I feel pretty good and he doesn't. So I'm doing it by myself and we probably at some point contribute to each other's illnesses back in the day when we did this.

So that's why it's me and hopefully he'll be back to his former robust health in a couple of days. So that's that, and I guess, and other thing in terms of general remarks about, there's a lot of questions here and either you're all collectively incredibly perceptive and the following will be say very closely or is it that maybe we say some things that piques your curiosity or has resonance with you, but the questions are really good and a question such on many of all of the many of the remarks I would ordinarily make in the prepared remarks section.

So, I'm not going to go into a lot of prepared remarks [ph] see more time for answering questions since you anticipate, what I was going to say anyway or at least you anticipate, you ask, you're prompting me for information I would otherwise give you prepared remarks. So this answer your question directly, hopefully will be specifically pertinent to what you want.

Let me say a few things. This is general informational thing.

There are usually a lot of questions about cryptocurrency. So I'm going to give you some detail right now.

You could write the stuff down or maybe we can just send you a spreadsheet or something, if you don't want to write it down anyway. Most of the cryptocurrency we have is in the form of the Bitcoin Investment Trust, GBTC.

So, as of not long ago, in the Horizon Multi-Strategy Fund, which you can look at the market value, as a valuation date in the notes. We had $9,298,000, I am leading hundreds of that in the Horizon Multi-Strategy Fund.

The Polestar Fund, we had $9,960,000 and CDK Partners $661,000 and Horizon Multi-Disciplinary Fund $894,000. We also have some GBTC shares that we hold directly, we bought back in the day and the market value -- by the way I'm giving you the market values as not long ago.

Based on today's market value that number would be -- these numbers would be about 10% higher, numbers I'm giving you. So, I know the exactly 10% but 10% is close enough for our purposes.

We also own 7,644 shares to GBTC directly, so you can value that. We own 33.59 Bitcoins themselves.

We own 34.12 units of Ethereum. We own 591.66 units of Ethereum Classic.

I would give you a prices but they change every five minutes, you can look them up. We own 22.59 units of Zcash and 210 units of Litecoin.

We also own the Polestar Fund about $82,000 of Ethereum Classic Investment Trust, and about $10,000 of the Zcash Investment Trust. And also in Polestar we own about $15,000 worth Litecoin Investment Trust.

And we own about $454,000 of the Bitcoin Investment -- the Bitcoin Cash Investment Trust. And we own about $62,000, the XRP, otherwise known as Ripple Investment Trust.

All that is in the Polestar Fund, so it's not direct. And we also own in Horizon Multi-Strategy Fund, we own $64,000 of Bitcoin cash directly in that fund.

We own $29,000 roughly Bitcoin SV, and so our own $5500 of Bitcoin Gold and CDK Partners owns about $550 Bitcoin Gold. So add those numbers up and it’s pretty decent sized number and the Horizon Multi-Strategy Fund also owns about $671,000 of XBT.

And I think I've covered the cryptocurrency directly. So, now, when now -- now I'm going to give you those numbers, those are not numbers, those are numbers that those funds owns in their entirety.

So I don't want you to get the idea, even though this is the way it's presented to me, I'm just reading off the sheet. So, for example, what you need to do, if you're going to find out proportionately what FRMO owns, let's take the Polestar for example.

I just told you, Polestar owns $9,160,000 worth of Bitcoin. You need to multiply that number by the percentage ownership.

And that percentage ownership populates on another sheet of paper, which I'm a little bit reluctant to give you, but I will give it to you, because I'm not sure this is the right number. But in any event, the grand total, looking through FRMO, this numbers is right, is about $5 million.

Also, you'll observe items in the line item, Investment Securities exchanges; it's a lot bigger than it was in the prior quarter. And I think we bought something, we sold our pro-rata interest in the Bermuda Stock Exchange to MIAX, Miami International Holding, which is an option to exchange and an equity exchange.

We sold that for stock in MIAX so we're now deep -- have a decent size investments in MIAX. We had a big change.

You'll notice a line in cryptocurrency mining assets, primarily servers. We used to have $101,000 worth of computer equipment.

And now it’s big enough, we have $1,281,000 worth of cryptocurrency mining assets. Another interesting thing is we also bought a building for $1 million, so we actually have some debt now.

And we put $200,000 down roughly and we took a mortgage for the balance. You'll notice on the liability side of the balance sheet, there is $27,000 current portion of mortgage payable.

That's the portion of mortgage, the principal that we have to pay back within the next 12 months. The balance of the principal we borrowed, so let's say $2,000, is over the course of life in a mortgage.

We did because the interest rate was less than 4% and we're using it to enhance cryptocurrency operations. And we're informed hopefully reliably, but I can't be sure, we're informed by a variety of sources that we were -- if we were to move the cryptocurrency equipment as a building and were to develop the property or sell the property, we get a lot higher price, whether it's true or not I don't know but so they say.

So you have the highlight, and I believe, if I'm not mistaken, the shareholders’ equity is an all time high even with what we're doing here on the -- given liquidity of balance sheet, given the lack of leverage and lack of action in various things. And don't forget, cryptocurrency is down from its high, actually substantially even though we'll talk about in the question and answers.

And so I think we're doing reasonably well. So those were the highlights.

So I thought, what I do is, I touch on the questions, which can fill in a lot of things as I said before, I would have said in the prepared remarks. Here's the first question, and I read them as they're presented to me.

The two biggest opportunities presented at Bitcoin TPL, why are they sized so differently with available assets?

Okay, well actually, they're not. What you see on the financial statement is the market appreciation.

We didn't pay anything remotely close to current market values with cryptocurrency. In fact, some of the cryptocurrency, we just created by mining it.

We didn’t pay anything like these prices. So when someone thinks about it, I can see what they say, why the market value is so different.

It's not that we like one briefly more than the other one. What we're doing is we're investing.

We're investing in assets that are, let's say, off the beaten track. The average person doesn't do things like this.

And we're not investing tremendous sums of money. If Bitcoin wouldn’t be a failure, relative to our cost, especially net of taxes, it wouldn't be a huge financial tragedy.

The only way you can take risk is yet to start sizing things small, the size are big when something bad happens. Well then you're impeding your future.

In our case, we're not doing that. More about that later when we talk about balance sheet now, how we fund these investors with good questions that relate to that.

We'll come back to this. Anyway, you get the idea.

It's not that we decided to put X percent into Bitcoin, and Y percent into something else. So you could say okay, we can sell one and put in the other and equalize them if we like them both equally, but there's a very high tech cost of doing that.

So, we'd rather not do that. So, for example, if you thought one was going to go down by X percent, X percent being tax rate in market value and you sold it, prevent that happening, but you pay taxes, then it's going to be a reality, so it doesn't really pay, sell these things at least, given the situation as it exists today.

Okay, next question. I hope that's a little bit informative anyway.

All right, there's some, there's some regulatory stuffed and that I'm going to have to in the name of modesty, not REIT, but I'm very grateful that somebody thought that we deserve some military stuff here, but here's the actual substance of the question. What are some of your thoughts about the feature to rent fund, your close-end fund is very small, has a lot of cash, created a significant with NAB and earnings and be for rising headaches.

We’re seen like a perfect candidate to merge into one bigger, smaller open ended bid, rising connects mutual funds like market opportunities, even the medical fund. Since its merger we had bulk in cash these funds and make the investment funds fee paying to Kinetics limited discount.

Soon such a merger would be done and NAV put Renn holders, is this a possibility with such a merger resulting into the tax benefits capital loss, carry forwards that are inherent to Renn or could Renn grow by buying and merging with another close-end fund or by slowly continuing to do rights offerings and on which are apparent limits and how much can be done in a given year. Thanks for your thoughts on Renn.

Okay, so to begin with we are going to do things in Renn fund, so here's something I'm not going to do. We're not going to merge the Renn Fund with existing mutual funds.

And a lot of reasons for that, but one good one is that we would unquestionably lose tax loss carry forward we purchased. So, there are other reasons for not doing it, but that in itself is enough reason not to do it.

We're going to start doing different things with the Renn fund that you really couldn't do in mutual fund. And I would love to tell you exactly what it is but a couple of days now you'll see 8-K and you'll see some of what's going to happen.

I don't know what day the attorney is going to post the 8-K or I would tell you, but I don't believe it's very many days, it just to cover score this day and they're filing is going to be a couple days, you're going to know we're going to thing. So, we intend to grow the Renn Fund and we have a lot of ideas on how that might happen and the 8-K is going to relate in the small way to one of it, but it breaks in a bigger way to using a tax loss carry forwards.

So, that's all I can tell you right now. I wish I could tell you more, but you'll see in a couple days what we're doing.

And you should expect other things hopefully they'll be creative and they'll be value additive. So, look forward to your comments on that.

Okay. In -- here's some other questions in my opinion, how close are we to maximum performance on cryptocurrency mining servers.

I know you have mentioned in the past we might not be far off?

Okay, so the answer to that question to give you my idea. The electricity consumption per terahash or per server if you want to look at it that way, relative to the prior generation, roughly all be off 1%, roughly is down 63%.

So, it cost you in terms of operational expense since electricity has been overwhelmingly the biggest factor 63% to mine. That has implications; we'll touch on in a second but then the price per terahash.

So, here I'm going to pull my calculator out. Just give me a second, so I can give you a number.

But at the end of 2017 if you are buying an S9 Antminer -- 13.5 terahash S9 Antminer, on a good day. And people at time thought this was a good deal.

You would have been paying per terahash, according to my calculation, $162.96, let’s call it round numbers $163. You can now buy a machine that consumes 63% less power in the former generation.

It will cost you might be a few pennies loss, roughly, $23.50 per terahash. That's a huge increase.

Now, I should tell you, because it's important that when that happens and I think there's a question that relates to this some degree some -- I guess I'm preempting the answer, but for Bitcoin, that's deflationary. It's deflationary for every cryptocurrency, basically the same technology give or take is using all the servers at mine, any cryptocurrency.

So why is deflationary? Well, think of it.

You take commodity like wheat or gold. And let's just say, for the sake of argument, that technology advanced so much, it just costs less money to grow meat.

It's a big saving surfacer. It will be illogical to think that in the competitive world, all of that is going to be kept by the miners.

Not can be kept by the miners. For the simple reason that somebody's was weak let's say, somebody would lower -- some farmer would lower their price to get market share.

And cryptocurrency viewed in that sense is no different. And then, of course, the equipment, so think about as we just talked about the costs of let's say the labor and harvesting the wheat for using that analogy, where the cost of the seeds, plant, the weeds or fertilizer that’s the analogy for electricity costs, so that will be operating costs.

And what about the equipment costs, you need harvesters, the combines, the tractors, the barns, yields sorts of things, maybe grain elevators. What does that sell in the manner, which I described?

Let's say, the cost per, let's say was a tractor with horsepower. Let's say, these aren't actual figures, but just for illustrate purposes.

But terahash was like one horsepower. One horsepower used to be $160 and went to $23.50, obviously, a tractors lot cheaper that’s the analogy Well, that's what's happening typically.

So, the equipment and also the more imponderable, equipment is better, it just goes down less. It produces less heat, which lowers your air conditioning costs.

It just in every respect much, much better equipment. And ultimately first your question is when we get to the point where that's it?

In terms of the chips, I think, they've done everything they can with the algorithm, whatever the yield on the chips, which means when you actually create a wafer and you break it apart. How many -- how much usable circuitry is on the wafer.

That number keeps expanding, that's what drives the price down. We should be able to go to a narrower amount of nanometers and we should be cheaper.

I don't believe that process is complete, even though we made a lot of progress. But I think -- which is another reason why in the mining portfolio, we don't go little in, the cash because we might have to replace equipment.

Now, the quid pro quo is we only have to replace. We don't have to buy as much equipment as we bought formerly because terahash are so much cheaper.

We can get the same processing power for lower price. Anyway, I don't think, we're going to make a radical change in terms of productivity next several months.

But beyond that, there might be productivity to be gained. I hope that answers that question.

Okay, there's a question here about TPL. I wonder if flared gas could be used to power generators to run a mining operation rather being wasted.

Well, theoretically, anything is possible. Various people have thought of that.

And, at the moment, there were some firms, talking to other firms, I don't think it's going to any place that I'm involved in, but they’re talking about buying flared gas. The problem in buying the flared gases, a variety of pipelines have just opened last four months.

You have Cactus 2. You have ECL pipeline.

You have Grey Oak. That's three, taking away a lot of gas to Gulf Coast.

And I believe there are three others that are in there in the planning/execution stages. So, the amount of throughput, in terms of pipelines is only going to go up, it's going to block.

So I don’t know how many companies is going to be willing to just swap flared gas at zero price. When you have a royalty, you have theoretically the right to ask for the gas in kind, you don't take cash.

So being flared, theoretically could ask for the gas in kind, and you could turn it over to a miner that could burn it, and drive a turbine theoretically possible. And I think on a limited basis, there are some people actually doing it.

But then, think about from the point of view a producer, you're betting on how much crypto were, what is mining profitability going to be, and they know gases ex per MCF. I shouldn't speak for all the people who produce natural gas in the State of Texas, but I think a lot of them are just going to want to take the price is that royalty and take the cash rather than do that, but who knows what's going to happen.

It’s very earlier process. Okay.

Is it my opinion that we will continue to see most of the inflation in certain areas like services and healthcare and housing. In my opinion, no.

In my opinion, I suspect there's going to be inflation, deflation in housing. And one of the reasons I suspect that is, because it's become unaffordable.

And after new tax law, the property taxes are no longer deductible on your federal income tax. So you live in the high tax area.

I personally, I live in high tax area. I can tell you where I live to tell you unequivocally where I live, the prices of property are coming down.

And they're not coming down by a small amount. Either, it's coming down by a lot.

In healthcare, if the inflation has to stop, it doesn't stop. The much bigger financial problem then what's going to happen in capital markets.

It’s enormous financial problem. And the technologies that are coming out are just unbelievable.

They’re truly mind boggling. So for example the other day, I learned about a company called IceCure.

I'm not invested in anything. It's a private company with Ice Cure.

IceCure is a company, they actually freezes tumors, actually uses and inject something with a biopsy needle substance basically freezes the tumor. So, it's -- the device I saw was -- looks like a biopsy needle to me.

And it freezes a tumor on contact, which obviously kills it. And then through arthroscopic surgery, which is basically a digging little hole.

They just take out the dead matter. And of course, it is like any cancer removal is a 50% chance that tumor is going to come back.

But you can do the procedure again. So, obviously, if you take that in isolation, that's lot cheaper than the available therapies as an alternative.

So I just see technology is going to solve that problem. On the other hand, you're printing up a lot of money.

They're being the Central Banks are printing up a lot of money. And generally speaking, that's inflationary.

So, I myself think, ultimately, this is going to be a wage-push inflation at the latest expression policies of various government. That's why we have populism world, that's why there's so much unrest.

The migration issue, which some people view as wage suppression issues. I not taking a side, I'm just trying to answer the question.

I'm neither, for or nor against anything. I just think a lot of people are going to be against increasing labor force by a man, but a man necessary to hold their wages.

The unemployment rate is very low. It's likely to me that the inflation will come with a far higher wages and will basically eventually spread to a lot of other things.

So, I hope that answers that question.

Okay. Here we have a specific question.

It is as follows. Note four; page 10, the financial statements refers to a $26 million single equity investment equaling 20% of FRMO shareholders’ equity is The Texas Pacific Land Trust, TPL?

I mean, the short answer is, yes. But let me give you -- I just want to turn to page of the document question, and the answer is yes.

But let me tell you how this number is calculated and let me give you some highlights. The number is calculated by taking all the various places where we have that company.

Let's say, Horizon Kinetics Hard Assets, HK Hard Assets, or Polestar Fund or Multi-Disciplinary Fund or Multi-Strategy Fund, et cetera, et cetera, et cetera, adding up the market values and comparing to our shareholders’ equity. However, there are some things to note about, so that’s the accounting treatment.

That's what required. But what it doesn't tell you is, when it says, that's our investment, it's true, because it has to be mark-to-market.

But in other sense, it's not our investment, because we didn't invest anything remotely close to that amount of money to obtain this market guide. So, we -- in terms of what our capital commitment was, its far, far less.

Secondarily, even if I were to tell you the exact dollar amount of our capital commitment, it still would be misleading. Why would it be misleading?

There, to answer that question, maybe you get -- if you turn to balance sheet. If you turn to the balance sheet, on November 30 and on the liability side, you'll notice securities sold, not yet purchased.

In other words, so its proceeds, 14,942,000 roughly, market value mark-to-market is 7,773 million. And we've covered position before, we -- and one time -- we don't have any auction positions right now, but we used to have, like, big positions and options that expired, so we had to cover for it, end it.

And we had certain ETNs that we were short that reached the end of their life, so the ETN actually matured. And we got the cash proceeds.

Long and short, we made a lot of money and we continue to make a lot of money in shorting. So to fund our investment that's largely where it comes from which is why the cash proceeds are up.

So, if you want to look at and this is certainly not an accounting appropriate way of looking at, but just trying to analyze the way we're thinking, I think, it's entirely appropriate. We are using our cash sell short to the current ETFs.

And when we get the marginal release in taxes, we apply it to various investments. That's where our investments come from.

So that's why the cash, I can say, comes. So, yes, it's a big number.

If you look at notes, but we did -- but I really think it's not accurate to say that we invested that money. We didn't invest that money.

In our way of looking at it, we really -- we just got money for being short something, which we know the outcome is, it’s going to gradually decay. Now, statistically, sometimes it goes against us, but if you take your typical security like that, that 40 weeks out of 52 in a year is going the right direction or the wrong direction.

If it went our way every week, we couldn't sell it anybody short. So, obviously what we're doing is we're taking a certain amount of mark-to-market risk in exchange for a highly likely, I don't want to say certain, but if you read the prospectus to some of these things maybe you've reached a conclusion to a highly likely rate of return, just how we fund these things.

So, I think that's probably a better answer.

Okay. Let's see.

So, we have some questions about cryptocurrency mining, okay. What do you see as the breakeven mining rate?

Now, it's important to understand I'll answer the questions specifically in a second, but the breakeven mining rate is constantly changing, constantly changing for a lot of factors. I'll just touch on a few of them.

The hash rate, which is the aggregate computational rate of the whole system. Let's just say for sake argument, if the hash rate went down because people were turning off their servers, but we weren't turning off our servers and everything is equal just say in Latin [ph] expect for suffers therapists our profitably we will go up.

The other hand, if the hash rate goes up, so -- and we didn't put more hash on, I mean, we didn't buy a more servers in isolation. You could argue they are profitably is going down, but not necessarily so.

Why not necessarily so? Because, we compete with more people, but Bitcoin by the system is being produced faster, because putting up hash power on, the block generation rate is not 10 -- is not 10 minutes, maybe eight minutes.

So, we're getting less Bitcoin proportionally, but being produced it was eight minute 25% faster -- 20% faster in the case eight minutes. You have to weigh those two.

Anyway, at the moment -- and this could change in two seconds. But at the moment, we're producing Bitcoin for $3,500 and I think it’s pretty good.

What do you think one needs to earn a 25% return over three to five years in mining?

There are three variables. The first variable is you need a low electricity rate.

And there are places right now we're getting power at 2.2 cents per kilowatt. You can make it if you do that sort of thing.

There are other arrangements that you can make even at a higher cost the power. You need to be spot on your equipment, and goes down.

You need to have your own repair facility. We have our own repair facility, so we can-- Trouble is our equipment is not our repair facility, so if something goes down and then it can't be fixed easily we have to transport it to our repair facility that sometimes can be cumbersome.

And you also need a state-of-the-art cooling system. A state-of-the-art cooling system, I don't necessarily mean the air conditioning.

State-of-the-art cooling system basically is they run water through vents. The vents have fans in them, they draw in the hot air and what's called the hot isles, made the server -- basically what's done is you take servers, you have the exhaust facing each other.

If you had two engines, two cars running and the exhaust are facing each other. And that creates a chimney effect.

And you have a vent, which would have fan, draws in the hot air. And you basically run it through the warm water.

The warm water absorbs the heat. Same principle is cooling the reactor.

And you don't use it. So you need something like that.

And in the facilities that we personally own, we have our own facilities, we don't have that yet where we can figure out how to do it and do it at a reasonable cost. I don't know yet, I sure would like do it.

We haven't done yet and that's basically what you need. You can do all those things.

You'll have a great rate of return. And like it is, everybody else, we're learning.

We've learned how to buy cheap equipment. We've learned how to parse our purchases in accordance with what the likely life equipment is, so we can replace at lower cost per hash.

And we can husband our cash. We got now know what we're on repairs.

We've come a long way. But we're all learning, everyday we're learning.

And everyday the industry is changing.

And then a question here, do you see yourself coming more resources to mining train, sir?

Yes.

Okay, what is your price per kilowatt?

I mentioned that before, I think I said it before, just want to stress, I think I said it before. But in case I didn't, in different regions, in which we operate we pay different electric rates.

So why wouldn't we always go to the cheapest, because sometimes we're operating facility, sometimes someone else's operating facility. And they have state on our cooling system.

We will have our facility. So it's worth it to pay more for power.

Anyway, I think the highest rate we pay for power, anywhere I think, I may be wrong about this. But I don't believe I am, current variety of places, I believe it’s $5.9 kilowatt is the highest.

We have really great -- it's really great facility. Facility full use are outstanding.

So you save other things, when it gets too hot, your equipment goes down. You can use it effectively.

And you can actually damage your equipment. You don't want that to happen, for sure.

Anyway, you have to weigh all these things.

Okay. What many equipment do you favor and why?

Personally, and there are pros and cons to every piece of equipment. And the prices are changing, so far in my personal experience.

The best performing equipment or the most recent iterations of what's minor equipment, what's minor equipment is a relatively new entry into this space. We bought a few machines to test them.

And they were fabulous. And the ensuing couple of months we bought hundreds of them.

They're really, they're just spot on. They're just fabulous.

And maybe that's what prompted Bitumen to improve the S17. The S17 is a big improvement over what the prior generation was, maybe the competition made it happen.

The moment that you want me to vote for one thing I always vote for what's minor. So, its low cost per operation and very little downtime as far as, I can see.

Yes, just repeat that.

What's minor? I'm not making up a name, that's actually name of the company.

What's minor? Because Thérèse looked at me and she thought, I'm just making up code name.

It's actually name of the company and you look for it this with, what's minor? That's what they called.

Anyway. Okay, what are the mining entities preparing for ahead of the May havening?

Okay, I think the mining entities are very well prepared. You've done a major league, major league equipment turnaround, so basically, unless bitcoin was a lot higher.

Old equipment, prior generation was pretty much going to be obsolete. And if even bitcoin goes up, less it goes up a lot.

I don't see making a lot of money with the old equipment. So what needs to be done was and this created problem in the fourth quarter, it turned out to be not a problem at all, but we were prepared for it.

We had to begin the equipment turnaround, it was a lot of work that had to be done such as buying equipment ordering it if derack the old stuff. You cannibalize it for parts.

You have to install new stuff. There’s certain programs, software you can download on, which actually makes them more profitable than the stated capacities on them.

That's been downloaded, that’s been tested, so a lot of stuff, just a lot of boxes and a lot of wires, and I think the team did an outstanding job. So that's basically, I think we're – I don't want to say we're 100% prepared, I think we're almost 100% prepared.

There may be a few odds and ends that we haven't dealt with yet, but I think we're very well prepared for the havening. Now I think about the havening you know, it’s not address your question, if everything stays the same, let's say, bitcoin stays the same, block reward is actually be half of what it was.

So you're getting half of the revenue that you were getting before. So, in stasis, it's all going to go down, your returns go down.

It's just that right now equipment is so great. And return on invested capital which is not going to last, return on invested capital is so outstanding.

The issue is what's going to be to hash rate after having point in May and beyond.

So, the question is, how much more hash rate can get online between now and late May.

If enough hash gets on that will drive the price of bitcoin up. A lot of hash doesn't get on, the price of bitcoin will go up.

Right now it’s a battle, new equipment is being delivered every day, old equipment is being unplugged, or because we're revamped. I don't see very many people replacing the old generation, at least we're not buying dollar crypto, there was a some point in time, couple years ago we actually did buy use crypto, we’re not buying now.

Okay, there's a couple of questions on TPL. I'm going to read them, and then I'm going to answer them in generalized ways, because some of the news is actually out and some of it I just can't say, but two questions, are you able to work with the present trustees a bit of TPL?

Well, and then secondarily it's related question, will the corporate conversion happen?

Well to the latter, you might have observed the SEC filing on TPL. I believe it was Wednesday.

Yesterday, you can see, so you can read it for yourselves, but the committee recommended the conversion, and you can see what's going on there. And I think that document answers the first question, because I think, I hope you could read that in the document.

I thought everybody was working very well together or at least it strikes me that's what the document should say, because I think it reads very well, but I leave it to you to judge for yourself. Anyway, the information is out there.

You can read it and that's the way it is. Okay, next question?

Bitcoin peaks a little over two years ago, there is a lot of hope to having a surprise. Do you agree with this?

I touched on a little bit. Let's go into more detail.

You can't separate the price of Bitcoin from the economics of producing Bitcoin, largely it's determined by the economics of producing Bitcoin. There are number of factors.

So it's not like a stock, where people say, I'm enthusiastic about the prospects of XYZ Corporation, we buy it, unless we lose the asset. There maybe people who feel that way.

But the price is a commodity, it's just based on the economics, and you can look at the economics number of ways. One way of looking economics is network of that, the network, which is number of people who buy and sell trade pay with Bitcoin.

It's like a telephone. So there's a formula.

And it's called net cash flow. I'll read you the formula.

The formula is N times, N minus one, divided by two. What is N?

N is a number of people or players or participants if you prefer in the marketplace. Let's say, you're Alexander Graham Bell and you invented the telephone.

Now, you made a telephone. What are you going to do with it?

You have one telephone. You can't call anyone, and no one can call you.

The value is zero, so net formula N times N minus one divided by two, you'll actually get zero, because N is one and you have the phone. N minus one, one minus one is zero, zero times one is zero divided by two is still zero, so it’s zero.

So you need somebody to talk to. Now there's two people, you build a second phone, and you gave it to someone.

No is two, two times two minus one or N minus one is one, two times one is two, divide by two is one, any one to value one. And now third person gets a phone, and it's three.

You have three years in, B minus one is two, okay. Three times two is six, divided by two is three.

You've gone from value market cap number of one, market cap number three. Now we'd be here pretty long time if we kept increasing this by an incremental one, and going all the way up to 10.

But if you had pencil and paper or if you prefer, writing a computer programs, you can do this. You can bring it up to 10, 20, 30.

What you're going to see is hyperbola it basically means a hockey stick up. So when you get that graph.

However, how you decide to go and you lay it over the queen chart, you get more or less chart. Now because all the improvement in equipment terms of growth in network, there are a lot of people who bought equipment and they had no idea, preparing for next generation, there equipment will obsolete very, very rapidly.

They basically were injured greatly by what happened and they have no choice, but to shut their equipment down. So you have this vector of the increasing hash rate and the decrease in hash rate comes from people unplug their machines, because they’re not prepared for the future.

You can see very clearly in Litecoin if you look at the graph of Litecoin hashrate. Litecoin hashrate came down after the having or actually slightly before having.

Now it's on the rise again. There's new generation equipment Litecoin.

It's arriving and new equipment is going – the old equipment is going away, new equipment is pacing it. So these things do take time.

Now you may ask me or I'll ask myself in your absence. What -- how these vectors actually translate into the price?

Okay, I guess why that might be true as it translated priced. Okay, think about.

You have -- you want a Bitcoin you can get one of two ways. You can buy it.

You can make it. So it was cheaper to buy it than to make it.

Nobody's going to validate the system. System will operate.

So it costs. $800 to buy a Bitcoin, $8,500 to make a Bitcoin, who in their right minds is going to validate and do that so basically, it's got to be cheaper, but the system doesn't work.

So okay let's say it's true. You make Bitcoin is cheaper than to buy Bitcoin.

You have two choices, even you're making Bitcoin. You can say, I'm making Bitcoin, I'm going to keep the Bitcoin.

You could say I'm making Bitcoin. I'm going to sell the Bitcoin and it so profitable to sell the Bitcoin, I'll sell the Bitcoin, because I make $35 as I sell it at much higher price and I will use that money I'll buy more machines.

By buying more machines, network capacity goes up, the hastrate goes up, and that makes it actually more expensive to produce Bitcoin because of more competition for getting the block reward that drives the price up.

Okay, so what happens is the very profitability, in a way, has the seeds of lowering the profitability. That's why the Bitcoin main profitability waxes and wanes.

Right now we're in the wax but right now it's unbelievably profitable. As I said I expect what they are having its going to be less profitable, but we'll see what happens when it comes.

However, that could be mitigated if enough people looking up from their profits and bought more machines and they got delivered in time, hashrate might go up a lot. So in prior iterations Bitcoin go up the hashrate went up tremendously because a new generations machines that might happen right now.

I personally think its good chance to happen but it's not a guaranteed kind of prediction. Because we can't forecast, how much the production capacity is we don't know exactly, even if the orders are going in.

Why don't we know that is little piece of information, because the equipment chips are made in Taiwan. The assembly was in People’s Republic of China.

So, you make chips. Yes, and then gives it all to China.

What's the problem? The problem is the 25% tariff on electric goods to come to China, and there's no exceptions.

Even if you have the goods delivered to Canada, and they've been sitting there for a year or two, and you even bought them prior to the imposition of tariff, you try to bring them across the border. The United States Customs will put 25% tariff on the value and the value might be a lot less than you paid, because you can claim quick properly on a tax code, you depreciate the asset.

But whatever that number is, there 25% tariff on. So no one like that and no one buy equipment and pay 25% tariff.

It really hurts the profitability. So what happened?

And this is why cryptocurrency had a problem that equipment always burns out, and nobody was able to easily replace it. You'll see your repair to time in hash rate is actually going down.

That's one of the factors. So the production was moved to Malaysia, which has no tariff.

But the new facilities, if new workers have to be trained, what's the defect rate, how productive are they going to be relative to Chinese people, those all of things that are questionable right now. So, anyway, you get the idea.

There's a lot of factors in it. Anyway, I think maybe you have more than you wish to even get on the idea of mining, what drives the price, that sort of thing, but basically that's what it is.

It's the economics.

Okay, so what happens is the very profitability, in a way, has the seeds of lowering the profitability. That's why the Bitcoin main profitability waxes and wanes.

Right now we're in the wax but right now it's unbelievably profitable. As I said I expect what they are having its going to be less profitable, but we'll see what happens when it comes.

However, that could be mitigated if enough people looking up from their profits and bought more machines and they got delivered in time, hashrate might go up a lot. So in prior iterations Bitcoin go up the hashrate went up tremendously because a new generations machines that might happen right now.

I personally think its good chance to happen but it's not a guaranteed kind of prediction. Because we can't forecast, how much the production capacity is we don't know exactly, even if the orders are going in.

Why don't we know that is little piece of information, because the equipment chips are made in Taiwan. The assembly was in People’s Republic of China.

So, you make chips. Yes, and then gives it all to China.

What's the problem? The problem is the 25% tariff on electric goods to come to China, and there's no exceptions.

Even if you have the goods delivered to Canada, and they've been sitting there for a year or two, and you even bought them prior to the imposition of tariff, you try to bring them across the border. The United States Customs will put 25% tariff on the value and the value might be a lot less than you paid, because you can claim quick properly on a tax code, you depreciate the asset.

But whatever that number is, there 25% tariff on. So no one like that and no one buy equipment and pay 25% tariff.

It really hurts the profitability. So what happened?

And this is why cryptocurrency had a problem that equipment always burns out, and nobody was able to easily replace it. You'll see your repair to time in hash rate is actually going down.

That's one of the factors. So the production was moved to Malaysia, which has no tariff.

But the new facilities, if new workers have to be trained, what's the defect rate, how productive are they going to be relative to Chinese people, those all of things that are questionable right now. So, anyway, you get the idea.

There's a lot of factors in it. Anyway, I think maybe you have more than you wish to even get on the idea of mining, what drives the price, that sort of thing, but basically that's what it is.

It's the economics.

Okay. Another question related to crypto is do I see progress in Bitcoin to be use as store value or in transactions.

Yes, they do. There is some minor progress in the form of Bakkt, and which is physical features delivery.

So one of the things you need is, if a merchant is going to take it, they'll necessary want to hold, they need to get rid of it. So somebody has to take it.

There need to be physical delivery mechanism, and we have it. I believe there are more ways to do physical.

That's not the ultimate deterioration. Anyway, but -- so I believe there's going to be improvements that, right now to the Continental exchange, which owns Bakkt.

The next thing is, people in general going to have it, they don't want to deal or lease in my opinion. They don't want to deal with private keys.

The average person, some people maybe do but the average person doesn't want to do it. So you're going to have to have custody.

So custody is being rolled out right now. There are number of custodians you could use to Bakkt warehouse as a custodian fidelity has it.

Queen base I believe has custody now, it’s too short to be custody. So it's coming.

The other thing that people need that’s coming and I think it’s well underway. The other thing we need is, the average person to transact in Bitcoin, or any cryptocurrency for that matter.

They’d be seen in that kind of like your credit card, your debit card, or Google Wallet or Apple Pay or something of that level. We don't have it yet.

However, it's good to bear in mind that Starbucks, Microsoft, are partners in that. We give and understand, who knows if this is accurate or not, but we give and understand that by they’re having or the happening [ph], as they call it -- by the happening in the spring, at that time, there’s going to be an easily – easy use app available through Starbucks, you can walk-in and buy anything Starbucks has to offer.

And from Starbucks point of view, it's not a big risk. It's just a cup of coffee.

But doesn't work -- it doesn't work. Not risking a lot of money.

And I think it has prospects of working, so if you can -- if you make it as ubiquitous, as you walk into Starbucks easily in the same way you use your various payment apps and transact the Bitcoin has enormous advantage for any retailer whatever scope to get people away from credit cards, debit cards, because it costs them a lot of money. So, 2% to 3% depending on the retailer fee.

So, your low margin business, let's say, you’re Amazon, total profit margin is not even 2%. Walmart maybe has a 2% profit margin, could theoretically if Walmart, when I'm not saying Walmart's going to Bitcoin, but if Walmart did.

And these apps were available. You're talking taking 2% margin or 4% margin.

That's serious money, so enormous incentive.

Okay, so, okay. Would it be possible given information on the situation with the SPIKES futures on MGX?

It would be possible if I had the information, so this is what I know. There's a jurisdictional dispute between the CFTC and the SEC regarding spikes, nature of the jurisdictional extrude, it's not obvious from the written materials.

So I'll, try to explain it. It’s a legal question.

So, basically both SPIKES, index, SPIKES index, they are both the volatility indexes -- index, there's an element of law, at least in this country which has to do with your broad-based index, your not broad-based index, and the line of demarcation is 10 securities. So, if you are basing the VIX on the S&P future.

S&P future is considered to be index of 500 securities, on which they might track X number of options on the S&P future. And those options, not the S&P future itself as it goes into creating the VIX.

Now, the SPIKES uses as its base. The S&P SPDR SPY is actually a security.

So, it is possible to take the legal position that well your index, even though it's based on a variety of options, but the underlier is one stock not a feature composed of 500 stocks. 500 it goes to business.

It's just a future. It's actually a single security, and therefore if you're a single security and not broad based index, broad based index.

You are regulated by the SEC basically is best I can explain the legalities of it. The only way around it is.

You got to get somebody to give you permission to operate in a manner slightly different than the common practice. To be fair, no one had ever envisaged that this issue would ever come up.

There you have it. That's legality of it, you have two different agencies, and we have a lot of lawyers, and they're going to have to -- they're all collectively a lot smarter than I am and I hope that they will come to some reasonable meetings in mind, whatever that is I have great respect for all them, and they might be having the conversation right this second for all I know.

I'm not going to be able to shed more light on that, because, they got to figure out how to do this? And you can understand a regulator's concern.

Yeah. That's where it gets regulated, it sounds like such a picayune point, its not a picayune point, to be fair to that, because if you set a precedent, it could affect regulation for all sorts of things that have yet to exist.

So, really, even though, who likes these issues come up? No one, but, you can see it from their point of view.

So there's got to be some resolution and nice to mention there will be. What it is, I don't know yet, because I don't think it's known.

So I wish I could tell you, but I really don't know. And I didn't go to law school, not a member of the bar.

And if I was, this wouldn't probably have been my specialty, securities law. So I'm not the one to figure out what the solution is.

But I'm sure a lot of talented good willed people are going to figure it out. And they have a solution for it.

So I hope that answers the question.

Okay. Does Horizon Kinetics payout a regular dividend?

If so, would dividends you payout on Horizon to show up in the line item, dividends and interest income net on income statements?

Yes. Horizon Kinetics does pay regular dividends.

Generally speaking, Horizon Kinetics pays quarterly, because Horizon Kinetics is partially owned by FROM. That number is in dividends and interest income.

So it's net, that's where that number would be.

Okay. Let's see.

Do I have any opinion on the uranium industry or Cameco Corporation? I know you like to research on your favor indices and this certainly qualifies.

Yes, it does. The basic -- there are two basic problems with Cameco, it's certainly a cheap stock.

I myself have been tempted over the years to buy it. Although, I haven't done it yet, maybe one day I will.

There's a worldwide oversupply of uranium and there's a worldwide oversupply of uranium, because the nuclear power industry is just not expanding, which you could argue, because it's zero CO2 emissions. You could argue that if you're really worried about CO2 emissions and the effect on the climate, you want to expand nuclear power, but a couple things about that.

Number one, it takes a very long time to permit and then construct a nuclear power reactor. And secondly, the people who are worried about climate change, it's worthwhile recalling, with all due respect to them, they spent 40 years trying to shut down nuclear reactors.

Now, they have come to quotient that need more nuclear reactors. Well, there’s 40 years legal precedent and Nuclear Regulatory Commission ruling is all sorts of things that make it very, very difficult to license a reactor.

There are state rules, there's federal rules, there's usually quite variance, and then after 40 years of talking about how dangerous they are. You may remember the movie, The China Syndrome.

The average person thinks a nuclear reactor it just a ticking nuclear bomb that will go off. And actually, from a physics point of view, even if the containment vessel, a nuclear reactor would actually crack.

And the moderator, which nuclear reactor used in Western World, is water. If it leaked out, a lot of people think it would leak out, the reactor will overheat and you get a nuclear explosion.

And you would not -- statistical impossibility, the reasons it's statistical impossibility is, because the water is -- when we say a moderator, we think of the water as a moderator, like in a conventional boiler in an engine, like liquid in the radiator, like, let's say, ethyl glycol in the radiator is a moderator to cool down your engine. But to cool down the engine in a nuclear reactor, what it does is, it slows the pace, it slows the progress of neutrons.

Why do you want to slow it? Because their molecules moving back and forth with Brownian motion, and if you slow the neutrons, and more likely to strike U235 molecule and split.

So to create a chain reaction at the slow neutron free neutrons, so when the water leaks out, water basically impedes the speed when the water leaks out neutron speed up. You don't get a chain reaction reactor automatically shuts down.

That's what actually happens. So you might recall, the Fukushima disaster, as I said water can leak out that's problematic.

But if you go in – after this call, hopefully you won’t do it until the calls actually ended, but if you, if you do it after the call and you look at the articles at the time, they basically were saying that they think there's going be no nuclear bomb going off in Japan, the former Fukushima reactor. The Japanese government tried mightily to convince the various people, interested parties that there was a physical possibility.

And after three to four or five days, enough people who had the scientific acumen to tell the reporter is that there's no possibility of blowing up wherever they’re going to ask leak water getting into a river or creek could be a problem. But it's containable and it’s limited.

Anyway, it’s not going to blow up. So once they realized it wasn't going to blow up, the interest of the story was a lot less.

So anyway, take from it back what you want. And hopefully, if you're interested, you'll look at those articles.

Anyway, maybe it's more about nuclear powered and you want to know.

Okay, can I please give us an update on the state of crypto mining and you have increased your investment for FRMO give me your positive outlook on the cryptocurrency as well?

Yes, we have increased our mining investment. We would have increased it more.

We're not to the fact that until very, very recently, very recently means maybe 10 days ago, if you ordered equipment, we had ordered equipment in September, and we knew we had no chance of getting delivery until Thanksgiving. We didn't get delivery in Thanksgiving.

We got to go -- we start getting delivery and I say started not full delivery couple days before Christmas. And then we get delivery as I said you need to test it, you need to download software, you need to de-rack the old equipment, you need to rack new equipment, you need to arrange it in house, coal house, or there's a lot of work involved in it, obviously have to test it, make sure it actually works.

You can get damaged equipment which does happen sometimes. All it didn't seem to happen in this recent iteration.

So, it takes a number of days to actually start getting production online, so it took us a long time. Now, you get the equipment faster.

I'm going to just sort of fun of it, I'm going internet because I can do things, because I have the thing right here. I'm just going to look it up and see what do we take, take delivery like how if I ordered today, look at something, if I did today, how long will it take me to get delivery.

And just because I say this doesn't mean it's true, but I'm going just look at something here. What is the most recent, you know.

Okay, an S17, right and today is January 23, giving idea, and S17 which I think of the big main equipment is the best you could buy, that's the machine -- for buying that’s the machine I would buy. Date is January 23rd.

It says here, the shipping date is March 1st to March 10th in that range, which really means March 10th. Now it's coming from Malaysia.

So it could take, it's going to be on the ship. It's going to take two weeks to three weeks to get to you.

So it means, if you order equipment today at least the S17, which you want, you might -- it might be online in April, early April. I say might, because these aren't hard and fast numbers.

This will give you an idea that state of mining. Now ultimately, the equipment is fabulous even the S17 is fabulous.

Even after the happening and there is nothing happened, so it improves the Bitcoin price. Even after the happenings, it's still going to be fabulous.

That's how productive the thing is. So the equipment is going to arrive and it's going to get sold.

The question is how fast and when? No pertains that’s what I said earlier about the move in production to Malaysia, in Malaysia, if you think that they were putting on a ship.

It goes from Malaysia to Singapore in a ship, so might be a couple of days a truck in Malaysia. It goes across the causeway to Singapore.

They got loaded on the ship and its containers and it's not the only thing on the ship and now the ship is leaving until the ship is fully late. So they might be shipping other things.

Who knows what? And your server is going nowhere till the ship is fully laden.

And it’s going to sail from I guess it's the Malacca Strait, all the way to Los Angeles Port. They take it then they unload the ship and it gets on a truck.

And it goes somewhere in North America, depending on where it is like. I would tell you where our facilities are considered to be horrible practice to do that because we got lot of expensive stuff there.

And we don't want anybody knowing where it is, we have cognitive security. There are and if you were to see in some of the place we are and what the security arrangements are.

They are very tight. And we're all told; don't tell anybody where it is just say North America, which is a very big place.

So, I say North America. It's a very big place.

And that's where our stuff is someplace North America. And I can be more specific than this.

So I hope that gives you an idea of what's going on crypto mining, we are going to increase our investment and hopefully we do soon. But those are the limiting factors, which is obviously totally out of our control.

But we have to live with that and we do.

So that concludes the questions and that concludes remarks, and it only remains me to thank you so much for the questions. I really thought the questions were just fabulous this time, really fabulous.

I enjoyed answering them. And if I missed anything or you want more information, please don't hesitate to contact us.

We'll give you more information if you so desire it. And, of course, we're going to reprise this in about three months, and look forward to talking to you and hopefully enlightening you.

Thank you so much and good evening.