Q3 2021 U.S. Global Investors Inc Earnings Call - Pre-Recorded
For those 19900 of shares repurchase back, but as the board has and any time may suspend or discontinue at any time.
And this program, but so far we've kept it on for a long period of time next please.
Okay.
So you can see the share repurchase.
In other visual looking at it.
And it's been a great way to accumulate stock on on the down days and down periods next please.
Grow share prices see steady growth and this is the share price over 12 months ended March 31.
We had of Super search the double of and then pulled off tried to explain to you what's driving some of that volatility but over the past year.
It is up more than seven fold.
Please.
That's right our P/e ratio is extremely low when you compare us and I'd like to US. It's classic example that invesco.
Excellent fund family growth of 40% of their assets are and the QQ Q and nature of it at 15 four times wisdom tree is the 100% our Etfs and they trade at 21, three and grow trades of for four and 80% of our operating revenue comes from the ETF space. So it's.
<unk> of <unk>.
<unk> has the potential for much more upside.
As we continue to show Q over Q and year over year of growth and revenue and cash flow.
And assets ex please.
So growth surge is past us competition.
As you can see here because of the Delta change, we just had faster growth and revenue per share there and and best store wisdom tree and we had.
Foster EBITDA per share growth.
And.
These and particularly because of jets as an asset class than our peers and that's what drives the stock price.
<unk>.
Nice simple, unlike the spinnaker and span and clean.
And just the other day closer to $8 19.
The average assets about $4 billion.
What's important here is that they grew 38% Q over Q and 632% year over year. This translates into revenue of $6 4 million, which is of 23% increase Q over Q and revenue year over year of grew 595%.
So that helps drive the stock price and the income for.
$14 2 million up from a loss of $1 6 billion a year earlier.
And what's really key here is the growth in jets has been the most significant and we had go of yield for the first nine months of last year will goal of the surging and has tapered off of justice can tuned to be tracking with how vaccines are growing.
Total assets under management as of the end of March 31 were $4 6 billion next please.
So grow is growing faster than the money supply and inflation is an important factor.
<unk> factor when you're looking at so how do you grow inflation and there is no way of inflation is only 178%.
And the reason why that CPI number and so understated and.
Because and excludes.
Food and inflation, so inflation, it's probably running more like 9% and money supply is growing at.
A huge number you can see.
25%, so I think that.
<unk> has done a good job, mainly because we've been and attract assets and also some of our key investments have grown and the past year faster than the amount of money being printed ex.
Please.
This is the quarterly average assets under management use you can see a nice climb from March of last year, when the pandemic hit and was the all time low.
And we see of Ryzen June September December and March.
Balance sheet is now reflected also very strong.
We did a strategic investment in hive blockchain.
When we launch of Hive blockchain, which was the first public company ever to be mining.
The currencies starting off of the CRM and then mining bitcoin.
Hi of had a wonderful year last year, we crystallized gains in December we reinvested pipe. So it can grow its asset base and a very rapid rate and to a convertible 8% paid monthly convertible.
And we.
Has the ability to get back are either converted into common stock or debt paid out of every quarter a portion of the principle.
And you can see equities of investments and you can see the cash is growing so our balance sheet remains much stronger than it has in fact, probably going back for like 10 years.
Next please.
Earnings per share quarterly.
Mainly due to the indirect investment and high because you can see back in 2018 during the winter of Crypto 17 was the big launch of Hive.
A boom and and it falls and tracks with the theory of them and bitcoin and.
And then during that period of 2018, the winter for Crypto was also a winter for gold stocks gold stocks really didn't bottom until sort of.
Until us in 2019 and didn't take off until 2020.
But what we had last year was the constellation of the stars looking up.
Perfect for Us, we're blessed with newly we're blessed all of the pavement work, we hit for five years, telling the story of Jets came to fruition going you. After three years of planting of turf during the winter for gold stocks and paid off so we're thrilled so we had witnessed.
Jets and going us taking off and particular jets and then the crypto of investment in Hive blockchain.
It came back.
Last year and generate a return that was far greater than new.
New highs of companies made so it's been a wonderful ride for the shareholders of that the patients expertise.
Operating revenue has been trending upward.
Nice way of looking at our quarterly revenue and millions of dollars as you can see here.
Next please.
And actually.
And what's interesting about the fund business and we are so transparent. It's so easy to we know people that just basically look at our Etfs every day and the total assets and multiply it times of <unk> six and it gives you an idea of what our revenue is going to look like and then what did our key investments like high closeout and that affects our P&L.
And the balance sheet and.
And the income statement. So you can see that as the assets were and the ETF business of $100 million, destroying off $600000 of revenue flow over a year ago.
For the same quarter of March closed and the Jetson go of you and now having $4 billion and assets that says that the.
Those assets are throwing up $24 million of revenue.
And having for $5 billion, we're pushing close to $60 million and and operating revenue from the $30 million from the operating revenue, which is a huge change from the previous year and that has shown up on the per share basis, which is helping drive the stock next please.
Well I love. These two guys and all of the two suite and very rich old men.
But thank you millennial investors.
And their ideas to invest and where and as significant.
As the millennials the came to Robin Hood, and fidelity and <unk> and <unk>.
Came true TD Waterhouse and Schwab.
I've got to think of them because the price auction next visual please it was very significant and I talked about it last year that.
There was a whole forecast 25000, Robin Hood of investors bought jets between 12 and $13.
But if it comes out in June and says the sold all of US Airlines and he is very pessimistic and.
About the options for our vaccine and the growth of turnaround the economy and.
And the airlines started taking off and was.
Basically the.
The bottom and jets win from the $12 range of $28.
And that run so when they say millennial investors on for a smart I disagree I know that of the data was showing at the time 25000 and invested in jets prior to a buffet disclosing that he had failed on the industry and as it took off what's.
Whats important here is that.
A lot of these early investors respect relating that in previous crisis that we're global we airline spell of 67% and then the rebound at $80 to 120%. So theyre very accurate because thats, what its done and doubled more than doubled from its lows.
But a lot of that growth.
The jets price action really took place as vaccines.
And as more and more people got the first vaccine and Thats, what we saw and the first quarter. Many of the airlines have spectacular runs and the first quarter.
92 days until 70% of of the populations vaccine against COVID-19 and and.
Many of the states are.
Doing well and I think what you'll see that as 70% guess of that number and we get a higher number for double vaccines and as the double shots the.
Airline industry will get business travel that is a more profitable part of the business, but in the interim it looks very very strong net by August.
We'll have the 70% of leased having one needle and this is interesting.
Time to herd.
And it comes out and then the regular basis and you can track how many days based on collection of each data that and the <unk>.
Rollout of us taking place.
The country that we look at it was interesting as the small.
Population basis, Israel, Israel, and less than 10 million people.
Has pushed us up like 83% of that people have already received the first vaccine.
But it was Americas over 300 billion is just more work, but those states that have had the biggest pet.
Penetration and getting people Axeda have enjoyed the greatest business boom next please.
Record inflows of the Jets and other way of looking at of by each quarter of varies.
But here you can see the dollar amounts of traded and the 1 billion. The just remarkable to see that we traded 40000 shares of day and it goes to $8 million next please.
Something that really was important last year that came out and March was by the TSA discussing how many people and given the data that they allowed the fly the pre cleared.
Give me the big macro data point prior to COVID-19 the PS.
It was basically improving $2 7 billion people of day 2 million of Americas were flying daily 700000 of our inbound from Asia Europe.
Canada and Latin America.
That collapsed until April of last year to a number of just under 90000 people that they were flying now we're over one 5 million people.
And most of that is tourism not so much business travel to the degree and the business travel as I said the data suggest that when we get 70% of the people vaccinated.
More than 50% of the people double box.
And that business travel will then pick up again.
I remain very bullish on the travel recovery believe that the first big two surgeons, we've had and jets.
And that we're getting ready we collected from the highs of mobile get ready for probably the next third wave for the jets to possibly go back and make new highs as Europe comes back on stream and we are.
The realized is that.
There is so much pent up demand for.
And for people to kind of just fly and travel but for goods and services all over the world.
And friends of mine, where and Vegas recently, and he said everything is sort of the shop shift of basically go in the shop and buy online.
So I think that we're going to be so well surprised when we take a look at the growth and purchasing manufacturers index and strongly suggest a huge boom for the next six months and GDP numbers are being forecast of between six and 9% growth rates. So I think those lots of upsides still and.
And the airlines industry expertise.
Airline recovery optimism another wave of travel is expected.
Next please.
But never forget the DNA of volatility.
I highly recommend you look at this or do you study of the DNA of volatility of this of the gold market Bull units plus of 70% of the time it goes up or down 1% of the day over 10 days of <unk>, 3%. So any kind of jumped 6% and 10 days take profit income of falls more than 6% usually of time to just start accumulating the S&P.
Is two times, our gold over one day and over 10 days of slightly.
And plus or minus 5%. So it's more volatile most people think of the talking heads on CNBC. The gold is more volatile than the S&P 500 would and in fact, it's more stable.
And it's been proven itself to be a good asset class for the largest hedge fund and the world Wade <unk>.
Having a 10% weighting of rebalancing.
And this time last year was on the share on the upside with all of the money printing and 10 year government bonds went from 50 basis points low and surged to one 8% that run basically took the window of the sale for gold and correct. It.
And it doesn't I think it really gives you a great opportunity to be buying gold and gold stocks on the correction because the amount of money printing by COVID-19.
U S, China and India.
Europe is <unk> 17 trillion.
So as that comes through the economic engine is another reason for the Jets and another reason why I think we will have another big run, but that ignited last year, the bitcoin and ethereum and.
And as you can see the volatility there is impacting our stock price.
Because behind every share of growth.
There is almost <unk> seven shares of hive.
So I was down and the day, we are now finding all of a sudden gross down.
But from an operating cash flow and revenue.
And so people have to recognize that the operating cash flow really most of that previous director from Inc.
Basis points fees, we earn for managing the Etfs or mutual funds.
And the investment and high predominantly shows up on and the assets and the balance sheets and is the P&L comes from investments and that's a much more volatile factor that drives it but our new convertible.
Really creates much more stability and that is an investment which we have.
So I think that the opportunity when we sell off the investors are not really capturing and why we're training of flexible multiple the huge embedded value.
<unk> business for it.
And I think that's going for it this is going to be unlocked.
Tesla is more volatile than bitcoin always shocks people, but ethereum is the most volatile a CRM is a very significant investment in hive hybrids, the only crypto company mining ethereum and.
It's a huge assets to them and.
And both on revenue and cash flow and and assets. The huddle, they have a big investment and in theory of myself and <unk>.
So going you index is outperformance of the New York Stock Exchange Arc of Gold index. Since we launched this we are since we looked in the past year as you can see the the quant approach.
Picking gold stocks is just better than just buying on the market cap and that's the big difference we have a smaller portfolio a higher percentage of the royalty companies and this index shows and I just think it's the it's a much smarter way and Thats, what the <unk> ETF tracks. This particular, Inc.
Index and this is just a better way for investors ex please.
And so passing non from go au and want to jump into a high which was a strategic investment we made.
Three years ago over three years ago in fact and.
And it was because we were trying to launch of ETF of Bitcoin and theory moving quickly recognized that the regulatory bodies. Both in kind of in the U S for quite concerned about anti money laundering laws.
And they just want to let that happen and Thats. Some hacker guests the big points and then you sold them into a New York Stock Exchange listed ETF was just bad news. So we had all of those knowledge and friends of mine invited me to explore it and they were noting that crypto mining was for a long term, but I was of much more bullish stance to it and I've put up.
The institutional money put $5 million of the <unk>.
And $30 million round instead of of Garners US chairman just like all of US launching a go au ETF or of launching jets and.
And this was going to be our proxy and thats something that I thought was really cutting edge and there was huge future growth potential for us.
That was the sort of Genesis of us investing.
And in high blockchain. It was the first crypto mining company and ushered in and attracted over $1 billion of other companies emulating what we've done but we've always been the forefront with of the strongest see us ESG footprint only using green energy.
We've also been the first to go out and buy our own data centers.
And also to do share swaps to.
And to build out what we think is very important investment, but let me walk you through the incredible rollercoaster ride of Hive blockchain technology.
The U S global investors and high well.
We recently sold 10 million shares of Hive and December locking in gains, but at the strategic not only locking in gains, but more importantly to build up the cash position to reinvest and high so it could maintain its growth momentum.
And I didnt sell any shares personally and.
And I think that's important for investors to realize the proceeds were reinvested via a private placement of unsecured convertible debentures, which were very attractive for the time for the company and extremely attractive for.
For us global because we maintained our position so behind every share of grow as the Boeing 701 shares of Hive blockchain.
The debentures mature and five years, they have quarterly principal payments.
The interest rate of 8%, but pay monthly.
Now what's also important is in this concept when you look at peripheral mining and went high with such a revenue success is because not only the remaining three and bitcoin, but we hold on hold on for Dear life that is keep what you believe and keep it on your balance sheet. So we keep and of always kept the cerium and then <unk>.
And on our balance sheet and this attracted of huge audience of investors from September of 2017, when we first launched it.
And so what for investors and grow would you recognize the hive is our hurdle is our way to play the crypto phenomenon Thats, taking place globally. It was a 32nd comprehensive but concise sort of introduction to who hive is.
Hi, Blockchain technology. The first publicly listed crypto mining company launched in 2017 high for a proxy for investors wanting exposure to the growing bitcoin and a theory and blockchain ecosystem. The only crypto mining company producing both bitcoin and the theory of high views us only green energy and its advanced facilities and the most liquid techs.
Apologies stock and Canada 2020 trading over one 7 billion shares Hive blockchain technologies, this and hive blockchain dot com.
<unk> invest in these data centers and build some of and I want to make sure you get the seed the next video.
Our minutes longer than 30 seconds, but it really helps you on the sheer size of the magnitude that high but as the largest E series of miner in the world.
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So of Hive blockchain continues the strong performance. The total returned 12 months period through March 31, it was up to 500%.
And the U S global shareholders of benefit from the spectacular growth and hive and hive.
<unk> also because of its investments and bitcoin and ethereum at the end of December was the most profitable of all of the crypto mining companies. I think we also probably will have that by the end of March there's more machines coming on stream with other mining companies and big point mining.
This quarter and June so maybe that will change, but I still think we're the most profitable crypto mining company.
Please.
So not only was it a spectacular performer it attracted the imagination.
Is it through and Bitcoin rallied and we traded one seven big and shares in Canada and over the counter of $1 8 billion and and the US we've traded forms almost 60 million shares.
And in Germany, 20 million shares. So overall it traded $2 4 billion shares of stock as the depreciated almost 2500%.
So I'm often asked what is the difference with bitcoin and ethereum and I hope this one minute.
Information.
Video helps you understand the difference.
And so often I'm asked what is the difference between bitcoin and ethereum, while it is of great question because of the two of the most popular crypto words for bitcoin is the entrance into the crop the world. It was the first initiative of ours.
Applying blockchain technology, it's the most popular and valuable digital token or crypto currency. It's also known as the digital goal think of it as a crypto reserve currency.
<unk> is the worlds computing platform.
Blockchain platform has smart contracts that can be built on top of the ether of crypto currency powering the theory of network.
Which should be worth more corner ether for.
Bitcoin is essentially digital money.
And so the future of how payments should be made on the blockchain and material as the new.
A structure that can do anything such as decentralized social media platform for insurance or the internet of things Bitcoin and signaled the emergence of a radically new form of digital money that operates outside of the control of any government of corporation. The theory complements bitcoin as a way to use blockchain technology to power decentralized.
Applications for coin surged in 2020, Bitcoin ended up the year of mass of 304%, while the theory and was up 475%. It was up even more thank you well hive has the most liquid teas, and us and Canada traded stock trading and one 7 billion shares in 2002.
And and over the counter and the U S. The pink sheets of used to be known named number of fourth.
And invested 50 stocks establish at the market equity program the accelerated its growth during this period and is still and it had.
Run up and more than doubled and all the critical of stocks took off for the first quarter.
And what's interesting about this.
And as that we traded more than great skills Bitcoin Trust ex please.
So here's the numbers you know high far outperformed the competition and I share with you is that when we were trying to launch over four years ago of Bitcoin Etfs did all of US research and realize it just wasn't going to go anywhere due to the concerns of anti money laundering laws by the FCC and <unk>.
The materials Securities Commission and <unk>.
But cristal mining you basically validated transaction and you get paid brand new crypto currency for that so they're untouched you don't have and AML concern that investment was an important investment investor Bruce and $5 million.
And.
It was a heck of a rollercoaster of what up towards the $100 million of fell back towards the $3 million and two.
Today its worth.
Much more than.
$30 million, so it's probably the tune of more of like the boats $45 million. So it's an interesting exercise the crypto mining.
The theory and bitcoin prices rallied was a better investment and the outperform everything else next please.
So last year, everyone talks about bitcoin up 800% what are you hearing and was up 13, 100% and in February of this year, we assume started trading on the futures market for CME for institutions that are able to buy but high it's up 2000, and 500%. So I really think that the mining has been a better investments no debt.
These are the reasons that are driving this price.
And I wanted to share with you as net cash law and it's very simple may of last year. The half the number of bitcoins that you would get every 10 minutes from 12 five down to 625, so supply us restricted. We all noted is capped at 21 million claims, but more and more people are buying and they are now able to buy.
For Paypal and Paypal allows you to buy a fraction you can't buy and ETF on Paypal you can't buy the stock, but you can buy bitcoin and you can turnaround and some of that bitcoin and use the proceeds and go to Amazon and our go to best buy by New television because you bought it of 10, thousands now 57000.
It's remarkable what that does is and what it says is met caps losses that if you have a limited supply and more people adopt bitcoin as an asset class to protect you against the access of money printing.
And then it grows exponentially and that is why it's been driving it supply we all know be through and bitcoin is much more limited and that attracts more buyers Mastercard visa and theyre all jumping in on this space and more and more institutional money. So hive has been benefiting because of the new and.
And the theory and blockchain.
And the video is euro and explain to you of how net cash law works in simple terms debt caps losses net of networks value increases geometrically with the number of users and the network before we get started for share to hit the like button and subscribed. The concept was originally applied the communications networks, such as telephones and fax machines.
And mobile phones, but today it can be applied to a number of other networks, such as social media and crypto currencies to illustrate let's look at the midpoint, we will use the number of active addresses as a proxy for the size of Bitcoin network and as you can see how the cryptos prices has been driven by the growing number of people who are buying it and use.
<unk>. Many places you can buy fractions of bitcoin and therefore, more and more people can participate and buying these fractions I should point out that the number of bitcoin and <unk> doubled in 2020 compared to the previous year. Consequently, it's price jumped more than 300% during the year <unk> has a similar trajectory ether of the fuel for the network.
Types of record price of over 2000 and February 2021, as the number of active addresses on the network hit a new high the implications to all of this is that the prices of bitcoin and Ethereum may continue to appreciate as the two cryptos gained wider adoptions. So far this year, we see large institutional investors and companies.
Including Tesla and square it take positions and checkpoint, Microsoft IBM and others have reportedly bought aether most important last year as the influence of Paypal, allowing people to buy bitcoin and then to sell of consumer goods and services I expect this activity to be a huge tailwind for bitcoin and ethereum and.
And the crypto ecosystem and general for more high blockchain Dot coms of the subscribe for our exclusive E mail updates.
Well. Thank you very much for the patients for Watson and up for a couple of minutes now I want to talk to you listened fab utilization too hard working our CFO.
This is dino might reset callicott.
Thank you Frank.
First I'd like to start with our financial highlights on slide three.
We had another very strong quarter operating revenue have continued to increase.
And we're at approximately 23% compared to the previous quarter and 595% compared to the same quarter a year ago. Our quarterly net income was $14 2 million compared to the previous quarter and loss of $1 6 million.
Average assets under management were 4 billion and.
For the quarter of 38% and the previous quarter, and 632% and the same quarter a year ago.
Now I'll review, Laura and details of our operations for the quarter ended March <unk> 2021 day.
Beginning on slide 44, and recorded total operating revenue of $6 4 million for the quarter, which was an increase of five $4 million and 595% kind of 914000, the same quarter last year the <unk>.
Increase is primarily due to increases and assets under management, especially in our Jackson for yes.
Operating expenses for the quarter for 390 and increase of $1 $1 million of 59% primarily for the following reasons and.
Compensation and benefits increased 667000 of 93% primarily due to increased bonuses and the company and fund performance.
<unk> and administrative expenses increased 437000, or 40%, primarily due to increased ETF and the expenses and that was due to the ETF.
AUM increase.
We see our operating income for the quarter ended March 31, 2021 of $3 4 million for an improvement of $4 3 million compared to the same quarter for fiscal year, 2020, which was the loss of 979 Boston and.
On slide 45, we see that other income for the quarter was $15 5 million and was primarily related to unrealized gains on investments.
I want to remind everybody about high than the new investment we have and we actually have a couple of pieces. One is the warrants which are fair valued and the change and that value our income statement, which would be kind of included and the $15 5 million.
And the debt portion that we have and also fair value.
But the change in net value got us through other comprehensive income. So again, that's not on our income statement, but it is hitting our balance sheet.
Also as you would expect our and our net income and kind of the App our expenses, our tax expense and net debt increased $4 6 million for the quarter.
Net income attributable to USPI after taxes for the quarter was $14 2 million and as you can see and $5. Six this equates to 94 cents per share and this compared to a loss of <unk> <unk> per share and the same quarter last year.
Moving to slide 47, and we see our balance sheet and also improving and includes high levels of cash and debt and equity securities at fair value and they combine to make up over 80% of our total assets.
As you see on page 48, we still have no long term debt and the only long term liabilities, we have of deferred taxes and lease obligations.
The company has the net working capital of $14 1 million and the current ratio of three for it for one.
With that I'll turn it over the Holly.
Thank you Lisa.
And you can see on slide 61, a majority of our mutual fund assets are and emerging markets and natural resources and while 27% are in global equities and fixed income and as for the distribution more than three quarters of assets come from retail investors with 17% coming from institutional investors.
On slide five <unk>, our sales and marketing efforts have continued to focus on our mutual funds, including those concentrated on gold natural resources and emerging markets as well as our exchange traded funds more recently, we have expanded our media presence and the cryptocurrency space as well with Frank being interviewed by client.
Telegraph and coin desk just to name a few of the.
The company and our funds continue to receive the invaluable amount of viral publicity gained through the media interviews and then on slide 53, and see that grow our fund and high continues to be highlighted by influential financial newsletter writers as well along with the sharing and syndication of our award winning.
Original content by third party publishers, the newsletters have loyal followings and receive millions of visitors each month.
And Frank Holmes CEO blog, Frank talk continues to grow and popularity at and by the before and in fact, Frank talk celebrated 14 years of publication of the April commentary is often featured by prominent publications, including Forbes seeking alpha Kitco and equities dot com each one with me.
And the monthly visitors on the slide 55, Kitco news the biggest gold web site in the world with an audience of over 30 million monthly visitors continues to feature of the gold game film show with Frank Holmes Gold market analysis, and now Crypto analysis and in addition, Frank had become frequent guests.
And commentator on both gold and digital currencies on and very research withheld Daniela came down.
Now if we take a look at slide number 56 at quarter and we'd like to look at the most visited Frank talk blog published over the past year and on this slide you'll see the most visited articles were as follows number one and new commodity super cycle can be powering up after a long free.
Number of Q inflation is coming for your well, here's where investors can do about it and number three god still attractive as the bonds and sell outlooks overdone and you can sign up for the Frank talk blog for free and I'll lead on our homepage, which is the U S Fund Dot com.
On slide 57, all of US coverage helps us leverage our brand by reaching millions of readers and viewers and potential investors. Our website use funds dot com was visited over 480000 times for March of 2020 to March of 2021 by curious investors from all over the world.
Global investors and the well known for timely balanced and positive market insights and our thought leadership. So as you can see on slide number 58. The company has been awarded numerous Star Awards by the investment management Education of alliance over the years for its excellent and Investor Education and.
And now our total stands at 90 award.
On slide number 59, our subscriber base continues to grow organically and we currently have over 100000 curious investors following our investment newsletters and social channel and the Frank talk blog and investors can sign up on our website enjoyed and the subscribers who receive the award winning investors.
E newsletter and Buzz Frank talk.
Now on to slide number 16, we also continue to see a large following across all of our social media platforms and I encourage you all to check us out and not only on Facebook and Instagram, but also on Pinterest, Twitter and even Youtube.
And now as we wrap up today's presentation, we will address some questions that were sent in by shareholders and just as a reminder to our audience. This morning. If you have additional questions for US. Please do not hesitate to email of the two ensco at U S Fund Dot com and Frank I'd like to start the Q&A with a question.
And for you which day.
Jeff is a significant source of and for the firm what is the company doing to ensure its continued success and or handle any direct competition that may come up for jet.
Well I think the first part of that Holly as debt.
Or.
The structure of it the unique smart beta two point, though is not just some factors for picking stocks.
It's the overall structure to try to capture the 65% of of the people that fly and the 2 million people that were flying in America, and then how it's expanded globally.
Made adjustments as the fund grew.
To be more dynamic and fluid.
Which we can start to stick of the perspective, so we're very cut up and trying to monitor that we can go beat the original bogey, we set out the B and that was the New York, New York Stock Exchange Global airline.
The index and so I think that we've got to make sure. We're telling the story that's harder to knock it off because it's not just factors of the biggest DOCSIS portfolio. The structure and then it's now getting the story told and different.
Geographic locations around the world and getting it listed so I was thrilled and see we're able to get Mexico and Theres other opportunities in Latin America.
And so we will continue and hopefully to get at and Asia too.
This unique product and we think there is another big wave of opportunity and the airlines industry as the world becomes vaccinated.
Perfect. Thanks, Frank.
The question for you. It says can you. Please explain operating margin changes over the last few quarters.
And yes so.
And I think this is the question that we've had op and often became a quarterly operating margin for September 2020 with 29%.
And then in December it was 10% and then at Mark for March 2021 quarter. It was 54%.
I know a lot of people and I'm curious about why there with the decrease after that December quarter line and I do want to remind people of that that really is related to our bonus that was paid for in that quarter related to our realized gains on investments and <unk>.
About one 8 million and so bonus that sales are part of our compensation expense.
And that's included in operating expenses, but and <unk>.
Realized gains are included in investment income, which is not included in operating income so.
We're seeing that expense and are operating even as the income is not.
Included in operating income.
If we move that bonus from R&D operating expenses, then the operating margin for December would be approximately 45%.
And that is more in line with what people are expecting and is more as a better represented Inc.
And what our operation margin is which would be.
And 29% for September and 45% in December and 54% and for this last March quarter, and so we are seeing that as revenues are rising of our expenses are rising too, but not at the same rate and <unk>.
Causing us to be able to have that increased operating margin.
Thank you Lisa.
Frank This is another question for you and it said what is the long term strategy for high and more specifically how high of relate to U S global and the necessary do you plan to continue overseeing both of the company.
Yes, Simon as executive Chairman.
And that we've looked at.
Ceos.
And the issue there is to get someone who can manage the process.
<unk> capital markets and data centers.
And so far.
We've not been able to do that but it's not hurt us because all of the it's.
We have a great CFO.
Outstanding of the two of us of basic of involved and the turnaround.
We have to buy us.
EBIT from Europe. That's also critical with US and then we've expanded and now that we have the GPU one.
Not only of buying 50 megawatts capacity and new Brunswick, and having their own data center.
Notice that we did that deal for less than 300, thousands of dollars of megawatt and.
The pure and mining peripheral money can be paid $2 million. So we think that we were the on the cutting edge of that and the importance of having a data center.
And we can do that now because I have us.
As the executive chairman of phenomenal team.
Meets every morning, and it takes a lot of stress off of me on where we're growing what we're doing because we have technically of.
<unk> people that have come on with tremendous engineering expertise to accounting expertise and the crypto space and running data centers. So I think of the company is still lean and mean.
And im still not taken a of salary for it because I look at us being one of our trust products.
And trying to manage the going from that and.
So I am thrilled of a war room position for the next leg. The vision is the ticket to a $10 billion company. If all of our equipment that we ordered it was producing today, we'd be doing 300 million and having EBITDA of $200 million, but that equipment has experienced delays and disappointments coming.
Coming back from China, and the whole world is experiencing and complaining about lack of chips from cars and you hear the most of them and even Apple.
And so we've had our own share of <unk>.
Securing a pipeline of.
Upgrading the technical equipment.
But we think that we'll be able to triple.
What we were doing and if you looked at that we're hashing powered today you can easily see that this is a company that's come from doing $50 million of revenue now with the run rate of $160 million going to 180, then go into the $300 million. So I think it's a potential for a $10 billion company.
Thank you Frank we have one more question today and it says what opportunity do you believe lie of hall in terms of making money for grow shareholders. What can we look forward to and the second half of the year for example.
And while we're working on and I think and excellent new product that fits up to our expertise and global.
The natural resources and.
We'd be the only product out there so we're fast tracking the execution of that.
So we can also tell the story and we think that's of great product.
For for investors for many reasons from retail the institutional.
And we can accuse stay lean and mean.
We have less and 25 employees.
And that's really important for us to stay lean and flexible and.
Of note source, we have some sort of some some.
Clint.
And that we have to have but we basically want to stay very nimble and how we're running the business.
Expand the footprint of jets around the world.
I think that that's a huge growth opportunity and I think the jets can be of six big into the $7 billion.
For investors. So that bodes itself is very attractive I think we're going to get another wave with Baltimore and to take off and I think theres going to be a greater appreciation for.
For the way you.
We have found is that it takes about five years and $5 billion to really build a brand name.
And and that's what we did with the some of our funds and then they took off that's what happened with jets to five years go us been around for free but I think on this next leg of gold resurface as the important inflationary hedge asset class.
The gold stocks and sales are much more profitable and than ever that the C shares will explode on the upside and so the opportunities I think that thats a big in Prague.
Product.
It should be more like the three or 4 billion when I compare to how superior as to any other gold ETF. That's out there. So I remain very committed bullish and.
We're going to educate investors why we're undervalued trading at less than five times the earnings.
I think we should be trading closer to 20 times earnings and that means that the grow is a huge on the upside.
Huge potential.
And there are some questions about high of which is one of the most important and exciting portions of this grow earnings webcast.
Frank if you could address a few of the the first one and he addressed at the beginning.
Are the huddling strategy.
You may be go into detail about how much you're hopefully when we look at our holding the share we've been predominantly just mining and banking all of our coins us, but a big win for US we have just close to $100 million and.
And predominantly theory of and bitcoin.
The major portion because we're the biggest is the improvement in the world is ethereum. So and then you add on cash under that.
And that we're close to $140 million and U S dollars liquidity.
Great and another question about half of it is asking what is the strategy right now for listing in the us when we've talked about it before it's a process of of 20-F 40 assets. So we're going with our 40 of filing we.
We originally thought it was going be of 20-F, but we've gone to a 40 F.
We've reached out to the NASDAQ and so we're in the process now and hopefully we can get this locked up very very shortly.
Perfect and one last question debt in terms of time, what is your run rate today and what is the expected revenue growth over the next 12 months of.
But based on the cerium and bitcoin prices day.
And some of the theory and classic also we put a month ago and and 31 classic was $20. Some of our machines that were that had not been upgraded and.
The mining Ethereum classic at $20 and it went to a 150. So we are making a ton of money and ethereum classic, which we've been selling the.
He used to pay the electrical bill and only the rest of our bitcoin and ethereum production.
And so from that and.
And we have of run rate today of about 450000, the day and close to over 160 million a year.
We have been public and that we are.
And going to go out and basically buy a lot of the Quin machines ASIC machines. The mine the coin that would take our total complex up to a vote.
And $3 two extra hash.
That means that our run rate would be over $300 million and 12 months from now and on a pro forma would be making $200 million.
Now she is all it can be bumps and discipline process because of Ives us plan and incredibly volatile first mover bench US everyone is so aggressive and trying to secure equipment net of delivered on time get data centers et cetera. So we're very busy but what's really important for the investors is the acquisition the acquisition.
And of GPU, one brought in the brain for us that I feel I needed to scale this to a $10 billion company.
Perfect. Thanks, so much for Inc.
And thank you everyone for tuning in and this morning. This concludes and U S global investors webcast for the third quarter of 2021.
And again, if you have any remaining questions and those into info and <unk> dot com. Thank you.