Good afternoon. Thank you for joining the Horizon Kinetics Second Quarter Results Call. My name is Mark Herndon, Chief Financial Officer, and we're pleased to have you with us to cover our results for the second quarter. First, a reminder that today's presentation may include forward-looking statements. Reliance on forward-looking statements involves certain risks and uncertainties, including but not limited to uncertainty about the future security valuations or our performance. During the course of today's call, words such as expect, anticipate, believe, and intend may be used in our discussion of our goals and events in the future. Management cannot provide any assurance that future results will be as described in our forward-looking statements. Furthermore, the statements made on this call apply as of today. The information on this call should not be construed to be a recommendation to purchase or sell any 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 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 equal or exceed past performance of the investments. We encourage you to read our filings with the SEC on the Form 10-K, as well as our other filings, which describe the risks and uncertainties associated with managing our business. The company does not assume any obligation to update any forward-looking statements made today. These filings can also be found at the OTC Markets website. Our press releases or other information is at our corporate website at www.hkholdingco.com. Today's discussion will be led by Murray Stahl, Horizon Kinetics Chairman and Chief Executive Officer. I will also be available to answer applicable questions and will moderate the questions. If you would like to ask a question today, you will need to be logged into the GoToMeeting platform. For those of you that are on a telephone connection, you will be in listen-only mode. For those of you that are on the GoToMeeting platform, you can submit the questions via the chat function, and you should direct those questions to the presenters, where I will summarize and relay the best as I can so that we can address as many questions as possible. Okay, with that, we wanted to start just as a reminder that our Form 10-Q that we recently filed is an update of our annual filing on 10-K and continues our required GAAP presentation that includes certain proprietary funds as consolidated entities. Our press release continues to present both that GAAP presentation as well as a supplement that presents our financial statements excluding those funds, which is essentially the advisor-only presentation of our results. Consistent with what we have previously reported, this is a presentational matter that does not impact the company's earnings that are available to HKHC or the shareholders' equity of HKHC. The consolidated presentation does result in higher total assets, as we have included the investment assets of those funds we consolidate on our balance sheet, as well as a line item called Redeemable Non-Controlling Interests. That line item essentially represents our clients' account balances that are supported by those assets of those funds, which you'll see identified in the financial statements as consolidated investment products. Another notable difference is the treatment of management fees charged to those consolidated investment products. Under GAAP, those revenues are eliminated for consolidation since that fund is presented within the financial statements. It is akin to an intercompany transaction. However, the economic benefit resulting to the HKHC shareholders remains, and that economic benefit is reflected through a smaller allocation of investment returns of the consolidated investment products to the Redeemable Non-Controlling Interests than they would have otherwise received. You can also see the impact of those items in a table within the NG&A section of our 10-Q filing. Our results for the quarter continue to be favorable for the HKHC shareholders. The company recorded revenues of $19.8 million for the quarter, a meaningful increase from the $11.4 million in the second quarter of 2024. The year-to-date period was similarly higher, with $39.6 million of revenues thus far in 2025. These increases are primarily the result of an overall increase in the AUM across the portfolio of investment products and client accounts as compared to early 2024. At the advisor-only level, as seen in the press release supplement, operating income was $4.5 million for the second quarter, up from $1.5 million in the prior year. The year-to-date period was similar, with $9.1 million of operating income as compared to $3.9 million in the prior year. Overall, our net loss was $0.56 per share for the quarter and net income for the year-to-date period of $0.66 per share. These are comparatively lower than the 2024 second quarter, which was $0.78 per share and $3.05 for the year-to-date period of both net income. Excuse me. During those periods, the company benefited by significantly higher investment returns. We should note for you that you may see or we may see volatility from quarter to quarter as a result of unrealized gains or losses in various holdings held by the company, including digital assets, which is primarily Bitcoin. From a balance sheet perspective, the company continues to have substantial cash and investments, including amounts outside of our consolidated investment products. We have no third-party debt. Our long-term liabilities are limited to various long-term office space leases. I would also like to note just the company's board declared a $0.071 per share dividend in the second quarter, which reflects a 27% increase from Q1's dividend. This dividend will be paid on September 15th for shareholders of record as of August 21st. With that, I'd like to turn it over to Murray Stahl for some opening comments as well. Thank you, and thank you all for attending. Let's begin with a look at the financial statements. I think it's easy to see the difference between the company and the required consolidated. If you look at page 18, page 18 shows you what the eliminations are and shows you what the consolidated investment products are. If you work backwards, you get to something called consolidated company entities. You might recall throughout our history, we never consolidated. We're just required to consolidate. There are really three aspects of Horizon that you may want to think about, and you can see them all on page 18. The first thing is there is the more customary investment management business. There is the returns, or sometimes negative returns, from our proprietary capital. Then there are performance fees. If you want to see in the clearest way possible the disaggregation of them, I would turn my attention to page 18. On page 18, you'll see for the six months, we had over $43 million of total revenue. When you subtract out the expenses, our operating income was slightly over $9 million. I myself would call attention to goodwill. Years ago, when we consolidated all our products into one company, we needed to put some goodwill in the books, and there are various goodwill tests. Sometimes we actually need to lower the goodwill because goodwill doesn't last forever. You'll see a $900,000 goodwill impairment. The heart and soul of the business in that sense is $900,000 of goodwill impairment added to the $9 million of operating income for a total of $9.9 million, almost $10 million, which is historically high for us as a company. We'll do everything we can to improve it. The second thing is the returns on our proprietary capital. In this particular quarter, it happened to be negative. In most quarters, it's positive. You're not going to have a positive quarter in every interval. We should work that way. We should actually work that way. Unfortunately, it doesn't work that way. The last thing which you can see is there are performance fees. The performance fees happen episodically. Generally speaking, we assess those performance fees, with some exceptions. We assess those performance fees at year-end. You really can't tell what's happening with regard to performance fees unless it's year-end or if there are some realizations, which happen from time to time. Subsequent to the quarter, we had a number of really interesting events that's worthwhile mentioning. I'll go through those, and then I'll go to your questions and answers. We have a longstanding investment in some funds related to Miami International Holdings, some private company. You might be aware that about a week ago, the company launched an initial public offering. That's a transformative transaction. It's a, I would say, a seminal event. The company itself, MAYEX, is what we refer to it. That's incidentally its ticker symbol. It's doing splendidly, and it's worth paying attention to. If things go as they continue to go, no guarantee of that, of course, it'll have some very positive implications for our income. Another interesting development is Consensus Mining, which was a private company until, I think, about two weeks ago. It began trading on OTC markets under the symbol CMSG. That's an important event because that's a vehicle by which we are growing our cryptocurrency business. You can see what the value is there. You can't see it in the financial statements right now, but in the future, you'll probably be able to see some things. Another thing which we didn't mention in the first quarter, but we're going to mention now, is we have a new private fund called Global Exchange Holdings, which we created in partnership with a Canadian company known as Urbana. Urbana is actually, we don't talk about it much. It's very worthwhile paying attention to. If you look at their track record for almost, not quite, almost a quarter century, you'll be hard-pressed to find a fund with a better record. It's a really great company. We're delighted to be working with them on this project. Global Exchange Holdings is a money management product. It's going to buy private exchanges as well as publicly traded exchanges. Exchanges are really interesting and really interesting investments in themselves. I don't have time to go into why exchanges are such great investments because we're here to talk about Horizon and not about exchanges. I'll say this. As most of you probably know, I spent decades trying to convince people to be long-term investors. I haven't convinced one person yet. They all want to trade. If you buy an exchange, you're getting the benefit of that. Sorry to be a little facetious about it, but there's a lot of truth in the facetious nature of that comment. Exchanges are just fabulous businesses, high returns in equity, very stable returns in equity, and a lot of free cash flow. I have high hopes for Global Exchange Holdings. There's also an ETF that we launched a couple of years ago called Blockchain Development. That's probably something around 80% exchanges, and that fund is doing reasonably well. Its ticker symbol is BCDF if you care to look at it. Another thing we did during the quarter is we launched in May another ETF. This ETF is known as Japan Owner Operator ETF. I'll describe it a little bit. This fund, incidentally, since May, this is August, we now have well over $11 million in assets under management, which is not bad for an ETF that just started. I have very high hopes for this fund. It turns out that the Japanese market is very unique among markets in the world, not merely because of valuations. There are a lot of low valuations in Japan as a residue of what's deflation that overtook Japan over the course of almost three decades. Another thing that's really interesting about the Japanese market, there is a category of entrepreneurs that manage companies that I refer to as owner-operator. What that means is that the people who manage the company, who govern the company, are also the biggest shareholders. That bit of sociology, if you put the bulk of your net worth into something and you're in control of it within a free enterprise society, that generally has fabulous results. The alternative, which is what happens to most companies in most nations in the world, is called agent operators. The agent operators are compensated very well, but they don't own a lot of the company. They might be granted stock, but the object is to ultimately sell the stock. They don't pass it on to the generations. They don't live with it over decades. In any event, Japan Owner Operator is a very, very different kind of fund. I enjoy talking about it, so I commend that fund to your attention. Its symbol is JAPN. One last thing, I decided, I can't tell you what it is, but I've decided we're going to launch yet another ETF. It's in development at the moment. Can't tell you what it's going to be, but when we launch it, it'll be the seventh ETF that we created in Horizon Kinetics. As you can see, we've been very busy with a lot of different things, and we hope to continue that process in the future. That's a thumbnail sketch of what's happening. Maybe the best thing to do right now is to address the areas that you're interested in. We'll take whatever questions are on your minds. If you could facilitate that, Mark, and just read the questions as they're submitted, I'll be delighted to answer them. All right. That'd be great. Let me reiterate to our attendees on the GoToMeeting platform that if you just go to the, I think there might be a chat button or a questions button, and if you just direct those to the organizers and presenters, I'll get them addressed. We don't have any main questions there yet, but I have had a handful of them submitted via email previously. I'll start with a standard one that you've heard before, asking if we could reiterate our dividend policy. Okay. Dividend policy is we're paying out, generally speaking, well over half of the earnings per quarter to the shareholders. We don't have a target ratio. We probably should have a target ratio. You might recall we thought about having a target ratio when we started. We didn't have a target ratio because at the end of last year, you might recall, we had a very substantial performance fee. We required, as a company in this format, to pay the taxes on that performance fee before we actually realized the performance fee. In other words, the taxes were due on December 15th. We didn't really, or we barely had enough cash to pay the taxes. We never lacked liquidity. We could have sold investments and paid the taxes, but we really don't want to sell investments just to pay taxes. In doing so, we realize another gain, which will invoke even more taxes. We just say we're going to pay out over half the earnings. This is not a company that needs to retain tremendous amounts of cash, but we'd like to retain some. The reason we like to retain some is each of the things which I mentioned in terms of new products, like Global Exchange Holdings and Japan Owner Operator ETF, and whatever ETF we have in development, it's going to require an investment on our part. We could take it from our own capital and just sell something and fund a new venture. If it's a good investment and it's going to grow over time, why sell it and pay a tax just to fund something else? We retain some capital. Other than that, I think you'll find that we're paying out well over 50% of the earnings, normally speaking. Okay. Another question we've had come in via email is, again, it's similar. We've had this question about the relationship with FRMO. I may just lay it out there for those who are not familiar. The entity has a contract or a revenue-sharing arrangement with FRMO where that entity has the right to 4.2% of the revenues of HK. That's been in existence for a number of years. That's discussed in the Form 10-Q. The question was just to clarify the revenue participation arrangement. From my perspective, the answer is you'll see that described in note six. You'll see the expense related to that transaction as a component of our selling, distribution, and marketing expenses. There is no balance sheet impact of that amount other than just the quarterly accrual and settlement process related to that right. Like I said, I've used that as a launch and off point too to see if you would like to comment any further about our relationship with FRMO. Yes. I'll give you a lot more information about that relationship. To begin with, let's talk about how this even came to be. Historically, Horizon and Kinetics were two different firms basically owned by the same group of people. The ownerships were slightly different, but they weren't radically different. Horizon focused on primarily wealthy individual asset management. Kinetics focused on funds and institutions. Horizon had no mutual funds, for example. Kinetics had mutual funds. Horizon, because of its subchapterized status, was taxed at a really high rate. We felt, this is in our private days, that it might be better if some of the revenue went to a C corp rather than stayed in an S corp. We basically took control of a C corp known as FRMO. Essentially, Horizon, this was long before there was a merger with Kinetics, was through various transactions that I won't describe unless you want to know what they are and what motivated them. Some of the revenue in Horizon was going to FRMO. Kinetics was separate. Now you want to merge the companies. People raised the idea that, wouldn't it be better if we took this revenue back? You can take the revenue back, but you got to take it back through some degree. There's got to be some compensation. To make it easier and not have a different revenue share arrangement on each individual product, the idea was we just translate everything into a gross revenue share. This is all in connection with the 2010, I believe it was, merger between Horizon and Kinetics. 100% of the revenue was going to the combined Horizon Kinetics. To compensate FRMO for its seeding, its rights, they got this revenue share, which is a little bit less than 5% of the revenue. That's how it came to be. That's the relationship. It stayed that way. It requires, or it required at the time, a balance sheet entry. In other words, it had to be valued. The trouble with valuing it is, how do you value something that's going to continue for a very prolonged period of time at a rate that is unpredictable at the time we did the merger? We did the best we could to value it as an ongoing royalty based on the revenue stream that existed at the time. This is 15 years later, and we're in a different circumstance. I don't think it makes a lot of sense to reassess it every quarter. It's just going to be confusing to people. As far as I can determine, Mark, you might want to correct me if I err on this, there's no accounting reason to so-called market to market every quarter. That's correct. There's no requirement under GAAP to do that. It was what it was at the time. We made a good faith effort. The world is probably different today. If we were doing the merger today and it didn't exist, we might come up with a different value, but that's entirely speculative. That's the origin of it. Yeah. I'll add that I think the technical term was, and this is related to the FRMO side of the equation. It's an indefinite life intangible asset, right? You'd only change the value to the downside if there was a circumstance where revenues were going down. If they were impaired, there's no reason that we could document or determine. If they go up, and normally intangible assets, we want them to go up as much as possible, but intangible assets are never, correct me if I'm wrong, they're never written up no matter how favorable the circumstances. Correct. Correct. Yeah. That's great. Now, we've had another couple of questions come in on another frequently asked question around TPL. I'm going to put it in a couple of different parts. One is just commenting on the recent performance in terms of the market share price, which has been down a little bit. More specifically, as we comment on the large concentrated position, and if you would otherwise sell some but are leery of triggering capital gains taxes, have we evaluated the new ETF rules, which would allow you to diversify without triggering taxes? Okay. There are a lot of questions here. Let's just do it. Can I comment on the form? I've owned the stock for 40 years, and it might be new to you, but I have to tell you this happens all the time. I've lost track of how many times this has happened to lots of my stocks. You probably don't believe that. I'll just advise you at the time of your leisure, undertake the following exercise. Go to a library. Get The Wall Street Journal for any day in the last 125 years. Pick any day you want. You'll go to the stock tables, and you'll see hundreds, usually thousands of stocks listed. To the left, you'll see a column, 52-week high and low. If you look at that column in any day, in any year, you will see the normal range between the high and low, normal, and nothing extraordinary, is about 100%. I know that's hard to believe, but take a look, and you'll see it. The natural inclination is to think if the stock goes down, there must be something horrifically wrong with it. If it goes up, there must be something very wonderful happening. All I can tell you is it's just normal volatility. I know it's hard to ignore, but I'll just tell you this, the company is doing splendidly. I'm just going to leave it at that because I'm not the spokesperson for TPL. I'll let the company speak for itself. As opposed to diversification, the concept of diversification is a really important one, and it's a good idea for people to be diversified. The question is, who gets to do diversification? Should diversification be done by the client, or should diversification be done by the manager? I could have a big position in Security A, and another manager might have a big position in Security B, and so on and so forth. You could find 10 or 15 or 20 managers, and the client can engage 10 or 15 or 20 managers, and they would be diversified. That's one way of doing it, and I think the sensible way of doing it for reasons I'll explain momentarily. Alternative B, the other way of doing it, is to say when a given security does very well, I'd like to have a diversified portfolio at all times. I will sell it, always being mindful of tax consequences. I'll take advantage of the tax benefits, if there are any, of ETFs or some other type of business modality, to always be diversified. The problem is, and we have to be realistic about this, no one can be an expert in anything. You're putting the burden of diversification on the manager. What you're basically saying is the manager has to be well-versed in all of the economic sectors and all the industries. Speaking only for this manager, I can tell you this manager is not well-versed in each and every industry. As a general observation, I don't think there's any manager that's well-versed in each and every industry. If you want the manager to make use to the best purposes of what information and talent, what little information and talent that that manager has, it seems to me that it's more reasonable to run with an undiversified portfolio, which reflects the strengths and knowledge base of that manager, and put the burden of diversification where I think it should be, on the client, which brings us to longer-term investing, which is what we excel in, I think. I hope that's an adequate and fulsome answer to it. If I missed anything, you can remind me, Mark, and I'll opine further. Okay. Sticking with the investment themes, we got another question about a company called SandboxAQ. For those that are not aware, in April, SandboxAQ raised a preferred equity round with various investors that included Horizon Kinetics, which we participated in via one of our investment products that was made available to our clients. With that as a backdrop, the question was, can you comment about the strategic importance or recent performance of that company? It's not publicly traded. You're talking about performance in terms of stock price. It's a private company, so stock price doesn't change, at least insofar as what we carry. In any event, let's just say this. What it intends to do is it is developing what's called large quantitative models. There are two kinds of approaches to what people refer to as artificial intelligence, which should actually be called AGI, artificial generative intelligence. Anyway, one approach deals with using language. The other approach deals with quantitative models. A good example of such is, why is it—this is a question that an LQM, a large quantitative model, would look to solve—why is it that a given drug is effective in a given person with an illness and is not effective, indeed is counterproductive, in another person with the exact same illness, maybe even the exact same age, and the exact same or as close to exact physical circumstances? The answer, the short answer, is we don't know. Why don't we know? We don't know because we can't, we're not able to study the human physiology at the molecular level. Why can't we study the human physiology at the molecular level? Because we don't have the mathematical skills to take all of the data that we now theoretically could get. We could, in principle, study the human body at the molecular level, but that requires dealing with hundreds of trillions of data points, hundreds of trillions of them per millisecond. A millisecond is a thousandth of a second. You can imagine how complex that would be. That's an example of what Sandbox is trying to do. It's not merely medicine, although you could spend your life just doing medicine and have a tremendous market. It's material science. For example, we don't simply use engineered aluminum in aircraft. Now we use composites. How do the composites behave in different temperatures, at different stress points, etc., etc., etc.? That has to be studied at the molecular level, and that requires similarly large quantitative models. That's basically what the company is trying to do. If successful, it's obviously going to be very rewarding. The company is just starting out, so we'll have to see what happens. We've only been invested for a brief period of time, but for everything I can determine, it looks like it's going very well. Okay. Turning to another topic that's close, Consensus Mining has been brought up in a couple of questions, and you mentioned it earlier. Our investor is interested to hear how you see Consensus growing in the future and its impact on Horizon. Will cryptocurrency mining and adjacent businesses be greater or a greater focus in the future, or will it be complementary to the existing asset management business? I would like to make it a greater focus, especially since it's my personal belief. I can't guarantee this is going to happen. My personal belief in the not-too-distant future, not-too-distant future may be five to six years now, cryptocurrency is going to be the biggest asset class. There it is. If you want to be a manager of assets, I think you're going to have to develop an expertise in cryptocurrency. I think we've done that. It requires a longer-term focus just because of what it is. It requires a longer-term focus. I think as a firm, we have that longer-term focus. Basically, the Consensus Mining was designed to be a corporation. We have equipment. If it was just a question that we had coins, we could always, it could be a fund. We could accommodate client withdrawals or client additions. It's a corporation. We're actually literally creating crypto. How can we accommodate client contributions or client withdrawals? We had to turn it into a business. Therefore, it's a corporation. Nevertheless, we wanted to give clients liquidity, and we accomplished that. It may not be as liquid yet as some would like, but it's now saleable. For those who like it, somebody can purchase it. I personally, I'm biased, of course, but I personally think it's a great product. I'll just say this about it. It's not really a product. It's a company. In the last four years, we've managed to grow a lot. The crypto held per share. Now the company's done that too, but we've done it without raising any capital, i.e., not issuing a single share. Most of the cash we raised in the initial public offering, we still had it. We've been able to replace our mining equipment to new and better generations of equipment, also for our internal cash flow, at the same time grow our crypto. To the best of my knowledge, I don't think anybody else has been able to do that. Hopefully, people will be suitably impressed and do course. I'll just leave it at that. Okay. I don't want to turn this into a Consensus call, but there's another question on that topic. They've sort of addressed it just there, which deals thematically with the amount of cash that's held at Consensus. Can you comment on why is it, quote-unquote, "so high" at Consensus? I have a lot of reasons for that. One reason is there is a genre of company that's out there called the Treasury Company. For reasons that you'll come to understand momentarily, it is the practice of companies to take the bulk of their cash, in some cases more than all of their cash, and buy the crypto. They end up trading at a premium to net asset value. When they trade at a premium to net asset value, the companies turn around and issue yet more crypto, which at least to date has delighted the investors. To me, it doesn't make any sense. Maybe I'm wrong. The reason it doesn't make any sense to yours truly is it may be antidilutive. If you trade at net asset value to existing shareholders, it's quite dilutive to new shareholders. Obviously, you can't do that forever. It's important to show that we can grow our crypto, and by the way, grow it at a higher rate than the Treasury Company is doing. I don't mind the positive comment on our own behalf. It's important to do that by showing that we didn't use the cash. Secondarily, the world of crypto, especially crypto mining, is a new field. We make use of certain types of equipment, and the major risk that we face is that there is some technological breakthrough in crypto mining that we didn't anticipate. If we deploy all our cash and the bulk of our cash, and there happens to be a new and similar development in the equipment used to mine crypto, we'll have no cash left to reorient ourselves. We'll have no alternative but to issue more shares and dilute everybody, and therefore reverse all the progress we've made in building the crypto for share, which, by the way, has happened to the other cryptocurrency mining companies. We don't want it to happen to us. It's there for contingencies that we hope will never happen, but they could happen, and we have to be ready for that. We're able to grow without making use of it. I personally think it's a virtue. If we deployed it all in more crypto, it's not going to help us to the degree one thinks. We grew our crypto at a higher rate than we would have. As a matter of fact, we can't go back. We can't do back. We can't do it here, but we can go back and calculate. Had we deployed all our assets or bulk of our cash in the beginning, we would have faced considerable obsolescence of equipment, and we would have written off a lot of it. It was the right thing to do. This has not been yet to establish that, but I'm pretty confident that can be established with certainty. I'll just leave it at that rather than turn it into a Consensus Mining meeting. Okay. That sounds good. I will note there was a question about the ticker symbol. I'll reiterate that the ticker for Consensus Mining is CMSG. They can be found at the OTC Markets. Moving away from that topic, another email question that had come in previously, and it's a bit mechanical, asking us to explain when we record and make income tax payments. I'll address it. From a cash perspective, we're going to make quarterly estimated payments throughout the year as the various dates that are defined by the IRS. What you may be seeing in the financial statements, and sometimes this causes some confusion, is we'll have meaningful movements in what's called deferred taxes, which relate to future taxes that may or may not be payable on unrealized gains and losses of investments, typically. We have a substantial amount of that. When we have a significant move in the fair value of an investment item of some type, that's usually partially offset by what would be payable in taxes if it was realized during that period. Over a long period of time, your company's effective tax rate, usually any company's effective tax rate, usually filters down to federal and state net of the federal benefit. From any period to period, the deferred taxes are going to go up and down relative to some unrealized gain movement there. That would be a little taxes. Obviously, our approach would be to the extent we can defer a strategy and defer taxes to a later time. That's a normal practice to take. I'll pause here for a second. I don't see any other questions in our broadcast. If you have a question, now is the time to put that in our chat for us. I do not have any other comments that came in via email. I think that may bring us to a close. Murray, if you'd like to have any closing statements. Okay. All I'd like to say then is thanks so much for your support and your attendance at this meeting. Of course, we're going to reprise this in 30 days. What always happens is when you conclude a meeting an hour later, you always think of something you should have asked, but you didn't ask. Don't hesitate to contact us, and we will get you an answer. There's really no questions that are off limits. I look forward to doing this in 30- 90 days. Until then, I'll just sign off and say good afternoon. Okay, thank you. Thanks, everybody. Bye-bye.