US Global Investors Inc (GROW) 2017 Q4 法說會逐字稿

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Good afternoon. Thank you for joining us today for our webcast announcing U.S. Global Investors results for the fiscal year 2017. I'm Lisa Aston. If you have any questions during the webcast, you can enter them in the questions area of the control panel sidebar, which is normally to the right of your screen. Also, you may download a PDF of today's slides by clicking on the red handout button.

The presenters for today's program are Frank Holmes, U.S. Global Investors CEO and Chief Investment Officer; Susan McGee, President, General Counsel and Chief Compliance Officer; and Lisa Callicotte, Chief Financial Officer.

During this webcast, we may make forward-looking statements about our relative business outlook. Any forward-looking statements and all other statements made during this webcast that don't pertain to historical facts are subject to risks and uncertainties that may materially affect actual results.

Please refer to our press release and corresponding Form 10-K filing for more detail on factors that could cause actual results to differ materially from any described today in forward-looking statements. Any such statements are made as of today, and U.S. Global Investors accepts no obligation to update them in the future.

Now let's go to Frank Holmes, CEO and CIO, for an overview of the period. Frank?

Hi, Lisa. Thank you. Thank you, everyone, for participating. As you know, we've -- this is sort of our good marketing boilerplate that who we are and what we are. For those who are new listeners, we're an innovative investment manager with vast experience in global markets and specialized sectors.

We've been around -- this originally started as an investment adviser in military, and U.S. Global is known for its expertise in gold and precious metals, natural resources and emerging markets.

We strive, on Slide #5, is to be a go-to stock for exposure in emerging markets and resources. We're debt-free, we have a strong balance sheet and a reflexive cost structure. We'll go into more details with regard to that when Lisa Callicotte speaks as the CFO.

And then our monthly dividend and return on equity discipline maintains itself. And I'd like to point out that in this past year, we've received awards for the best of mining. We've won them for -- on a global basis for best performing, and then we were recipients of the Lipper awards for basically, a very strong return on an adjusted risk basis, because they like to put you against the x and y-axis for return versus volatility and so, our gold funds have the best overall risk-adjusted rates of return.

And the sad part is that it doesn't really matter right now in this space in mutual funds. Cheaper is better in the mindset, and even if you outperform, performance doesn't seem to dominate the thought process still, and it's all ETFs. And even ETFs, where is ever the cheapest is where the funds are going.

So the capital markets are very morphed and it's interesting to witness how fast it's moving. It's happening in Canada, it's happening in Europe. And this idea of formation of capital to create jobs, like it used to, has really changed. I've written about it and we could talk a little bit more, but what's really important is to recognize that, and that's a reason for us coming out with our gold equity ETF, our smart beta, which I'll highlight a bit more on.

But let's go on to the next, is the top institutional holders. And I'd like to thank those loyal groups, we have the Financial & Investment Management Group, the Royce Fund, the Vanguard, which is basically indexed, the Newberg Family Trust. And the new is the Koshinski Asset Management company, welcome to being shareholders.

What you'll find interesting is that we used to always be a play on gold. We still move with gold but even last year, with the great fund performance we'd put on, most of the gold fund flows went into the GDX and GDXJ, in particular the J. And I'm going to comment on some of the instability created in the capital markets.

But even through all of those challenges, we continue to pay the dividend. It's small but it's the idea of being consistent while we fine tune to try to get higher assets, more assets. And Lisa has got a black belt in cost-cutting and so, watching where we can generate and squeeze additional revenue.

As we go through this sort of creation of new products in the ETF space, at the same time, reinventing how we're active managers.

Throughout this and in Slide #9, we've maintained the share purchase program; it's in motion. The Board approved a repurchase of up to $2.75 million of its outstanding common stock in the open market as dollars. And during the fourth quarter, the company purchased 12,205 Class A shares, using cash was $17,000. We may suspend this or continue it at any time. And by regulatory filing basis [where I've been buying] stock along with GROW buying it and pursuant Rule 10b-18 plan.

So it's basically on down days, I like to be a buyer, just the contrarian thought process I've always had.

The next is a visual, which is so important to look at when you're looking at a microcap, its balance sheet and its income statements. So our balance sheet remains basically in a sideways motion as we've been going through this transition period of launching new products.

The earnings, as you can see, the earnings last year were -- we'll comment more on them, what took place and then again, this year with that transition was what was better and what we took write-downs on in investments and -- but I think when I look at the numbers from an operating point of view, this comment I'm going to make in a sec is this GDXJ has been extremely disruptive to the gold space, and it's had a collateral impact on our holdings and investments, and that's greatly impacted this past quarter. And going into this quarter also, you've had gold rise and the gold stocks, especially the smaller cap, not participate with that rise because the GDXJ had to unwind big share positions. I've written about it extensively on the Investor Alert. If you're not a subscriber, contact us. We'll make sure we'll give those specific articles to explain in more detail.

But you can see the quarterly assets, where they are. You would have normally think that with the balance in goal, we'd have higher assets but that's not taking place because of this GDXJ. And hopefully, in the next 12 months, we can get our fair share with our own GOAU launch.

Next visual is the asset breakdown of U.S. Global funds. As you can see, we're 33% domestic and fixed income, 67% emerging markets and natural resources. And by distribution, 78% is retail. It's basically following Pareto's law, and most of that retail is directed at this, which is very important for maintaining relationships.

The next visual, we're very, very happy and thrilled with finally getting our Gold -- GO GOLD ETF launch in the New York Stock Exchange. We're thrilled about it. When we look at the factors, we have our fundamental analysis that we've had award-winning funds. And we apply this new approach to this. I highly recommend that you go to the website to see how we've looked at and built this type of unique model. It uses a quant approach and doing back testing. If you look at the index going back 10 years, the factors that went in to create that index, it far outperforms the GDXJ. And I think it's over 90% on a rolling 12-month period when you compare those 2 indices.

And I'm very comfortable to say this because in looking at the factors that went into JETS that built that index, it's done exactly what it said it would do. It's been just a stellar performer as just basically, a new index that's out there. We had to compete with previous global airlines indexes that were out there, and we created ours based on smart beta. And I'm really thrilled that going in the second year, almost 2.2, 2.5, it is performing as the factors would highlight. And they also attracted great investors. We said it would happen. One of the big headwinds of launching JETS was Warren Buffett doesn't like the airline industry. And this time last year, he was stealthily buying airline stocks, especially the 4 big horsemen that represent approximately 48% of JETS' ETF. And this news came out in October and November. And immediately, there was a newfound interest because we wrote about, we spoke about is that the industry has changed dramatically. The captains of the industry are buying back the stock, increasing their dividend. They have high cash flow, returns and invested capital. And there's a mode around the industry because it's very, very hard to build a new airport, let alone launch a new airline company. So that has done exactly in a sort of discipline we parlayed into all our other extensive experience in GO GOLD.

And what's unique about GO GOLD is the royalty companies. I've written about it extensively, and these royalty companies they basically, have a unique position in the capital markets, how they fund junior mines, senior mining companies that they have this high, high revenue per employee. And just to give you an idea, Franco-Nevada is 10% of the ETF and we rebalance that each quarter along with Silver Wheaton and Royal Gold. But Franco-Nevada has royalties in Nevada on the gold miners, the biggest in the S&P 500 Newmont, and it has also royalties on Barrick. They both have sister assets, same geological footprint in Nevada. And you look at the revenue per employee for Newmont, it's about $300,000 per employee. And you look at Barrick, it's about $400,000 per employee. But for Franco-Nevada, it's $17 million. I mean, it's just a massive number higher, and it's something like 17x greater than what Goldman Sachs make on revenue per employee.

So I think that based on all of the research, when you have this high, high efficiency ratio, you have lower volatility. And what we've noticed is that there's lots of quant funds and generalists that own these companies because they have lower volatility in their revenue, they have lower volatility in their cash flow. And so with that, I'm very thrilled about this product because I've always believed in it, in that royalty business.

And so we believe that this particular product has a unique niche. It's done exactly what it said it would do with the factors and since we launched it in June, this has far outperformed the GDXJ, and GDXJ has over $10 billion in it. So gladly, we take $1 billion because it's just a much more intelligent product for investors. And I'm really thrilled [about them,] I'm very proud of the 8,000 hours I calculated, that all the efforts put into over the years of building that to finally launch it.

And we launched it just at a great time because the GDXJ last year garnered something like 95% of all the fund flows for the active gold funds. And they got in a predicament because all of a sudden, they're going to own more than 20% of many companies, and that's a breach of fiduciary -- regulatory laws in Canada, and so they had to unwind those shares. And that unwinding, basically they dumped $3 billion in 6 weeks of junior gold mining stocks, midsized producers. And that had a big, big dent in overall, all the industry.

And so with that, it's impacted our funds because we're also in that space, even though that it's just the sentiment. It's like I like to try to metaphor that: if you get hit by Mike Tyson, you don't heal quickly, it just takes time as when capital markets get beaten up like that in a sector, they just don't rebound, even though gold has been doing spectacularly well, and our ETF product is also doing spectacularly well.

As you can see it in this visual, gold has rebounded nicely. And even though the Fed fund rates are rising, the U.S. dollar has been under pressure, it's been declining, and this is very important for the overall GDP in America. We saw the PMI turn positive again, which is an important indicator for future opportunity and growth. Over the next 6 months, we believe that the fall in the price of oil to under $50 a barrel 2 years ago at first had a big CapEx dent in capital spending. But now, it's showing up as the biggest piece dividend ever in the world. I mean, just think of all those countries in the world all of a sudden, their energy consumption for consumers, their businesses have fallen by 50%. It has a big impact on balance of payments for countries like China, for India, for America because we're net oil importers. And we could all think the frackers for private property rights, what you can't get in these other countries, we have written extensively about that and Texans in particular, that we're innovators of this technology. And basically, the fact that our innovation has led to cheaper energy prices of such a magnitude and the whole world benefits. So we're very thrilled of being in the great state of Texas, to see where this innovation is besides California, which comes out with the software and hardware.

Now this next visual is basically showing the disruption that took place, that even though the price of gold has been rallying and the other interesting part we've published a piece that's interesting, but this century, in the past 17 years, that bullion has far outperformed the S&P 500. And it really shocks a lot of people when you look at that longer context. And that's one of the reasons why we've always advocated 10% weighting and rebalance every quarter, but this is to give you an idea that the shares outstanding, of what's taking place with it. We think that after this quarter is through, that we'll get through the muddling of this and the impact this had on GROW's financials because it has an impact in our fund holdings, it has had an impact on our own investments directly. And so with depressing overall assets, we need -- I think Lisa bought an extra $50 million in the equity funds, and we're operating on a complete different level in a positive note. So it is -- and that dent, when I take a look at it, a lot has to do with the collateral damage from the GDXJ.

I know it's had a big impact in banking in Canada and Australia, that all the financings for the gold and mining space actually dried up for about 4 months now. So that's what drives it.

The next visual is something we like to always come back to for people we ask about regulatory cost and what takes place and how do you get your fund expenses down. Because mutual funds are just so laden with so many layers of expenses, from regulatory guidelines and participate -- which you have to follow through with in the -- so the small retail investor is being harmed by this sort of industry interpretation of fiduciary rule, wire house platforms, focusing on cheap versus better. Everyone is on a sort of risk avoidance. And if you have a small fund family and you have small funds and you are going to -- and if you have net availability like we have, small shareholder accounts, you're just going to have to have higher expense ratios, that's just the fact.

And a classic would be if the average mutual fund customer is $50,000 and we advocate because we believe this is very prudent to be balanced, is to have a 10% weighting in gold, that's only a $5,000 account. So if you have a $5,000 account and the transfer agency costs, all other costs and say $20 a year, all of a sudden, that is a big expense ratio that adds to it. And then you have the same filings of a multibillion-dollar fund as you do for a small equity fund, so these are some of the biggest things that we have to wrestle with when you're a small fund complex in the capital markets.

But we do everything, Susan McGee is always trying as our President and General Counsel and in the compliance sense, trying to do everything to make sure that we're being frugal and it's along with Lisa and [Kathleen Somerville]. So these professionals are very caught up with doing everything to drive down our cost structure.

The next visual slide is all about managing expectations. And as Warren Buffett said, if you want a long-lasting marriage, have low expectations and everything is on the upside. That's a joke, but he did say that.

And so when we look at capital markets, it's a nonevent on a rolling one-year period, over 12-months rolling going back the past 10 years for GROW to jump or decline 50%. It has always been with the gold markets and gold stocks are 40%, bullion's 20%. Interesting enough, bullion is roughly the same as the S&P 500. Oil is very volatile, as you can see.

So it's understanding that when we have these corrections where we pull back like this math suggests that there's a higher probability of a bounce. Anytime we jump over 50% or double in a 12-month period, it's time for a correction. Just the math and Moneyball is probably the best movie for anyone to watch to appreciate the application of this type of statistical math to manage their expectations for picking baseball players. And in our presentation for launching GOAU, we used the metaphor and the concepts of Moneyball applied to picking gold stocks.

So the next visual, I'm extremely excited about. I'm excited because GROW is taking a position that approximates as -- for every share of GROW, there is one share in a company called HIVE. HIVE is a new company that is going to be -- should be listed next week on the Toronto Stock Exchange. HIVE is in a strategic relationship with Genesis Mining.

Genesis Mining is the largest crypto currency mining company in the world. It's a private company, 3 partners. One brilliant young man is 28 years old, finished university math by the time of grade 12. The other one, another partner, the other Marco is a PhD in theoretical physics, and then they have a serial entrepreneur, that these 3 guys have built a phenomenal company, and they've been able to locate where you do this mining of crypto currencies and where you need cheap electricity.

You have to have cheap electricity so they're in Iceland. And Genesis will own 30% of HIVE. We'll own approximately 10% of HIVE, and it works out to approximately -- well, behind each share of GROW will be a share of HIVE. I look at this as our solution that to launching a bitcoin or a crypto currency blockchain ETF. There's been nothing but pushbacks on it and this is another way of doing it, and I'm extremely thrilled about it because we will be mining or creating what they call mint coins, virgin coins. In particular, there'll be Ethereum coins and there's more on the web you can watch and I'm going to give you a little clip here that you can watch, this little video clip that talks about Genesis, our partner.

(presentation)

So what's so exciting about this is that it's our solution to being or have the first mover advantage and having a product out there for investors. This deal has a $60 million market cap, but we'll be buying these basically, 2 massive units and it will -- the valuation is based on a metric that's about 6x EBITDA and so I think it makes it very, very attractive -- sorry, 6x revenue and 10x EBITDA.

And so when you look at the math of this, it's just absolutely massive. Had they just sold their coins immediately, that's basically how the model was for acquiring these assets with them. And had we -- if you kept all the coins from the past year, this entity would have made 3x -- twice its market cap coming out of the box. I mean, the numbers are when you see these coins, what happens, that takes place in the bitcoin, Ethereum space.

Ethereum is the fastest-growing out of the coins. Bitcoin gets most of the publicity but there's been a broader adoption of Ethereum for transactions because it's called a smart contract, and it is a unique way for transactions. And what really thrilled me about this space and why I go a little more on it is that the largest conference in this space is in New York in May, and I attended the conference. And I was just shocked when you find out the CEO of Fidelity is speaking and is the keynote speaker. And Abigail Johnson talked about all the employees using bitcoins and the purchased items, et cetera.

And then just up the street from our office here in San Antonio is USAA. And both the New York Stock Exchange and the USAA invested in Coinbase with other venture capital firms back in 2015. And so today, you can go and open up an account and have Ethereum or have bitcoins in your account at Coinbase, and you could turn around and have it fed into your overall account that you can see it with your funds at Fidelity or USAA. So it's being treated as an asset class with these other groups.

And so to me, that's a very big, big change that you would have, the sort of thought leadership of Fidelity taking a space, but no one's been able to really create a closed-end fund in this space. There's one fund that's out there. It creates a 2x the value of the bitcoins or the Ethereum. And so the success of that is that there is a huge opportunity and I think that HIVE is a pure way because we will only create, they call them, virgin coins, mint coins, new coins, and we will sell between 20% and 40% of them. Otherwise, they'll be bankrolled and built up and put into what they call a safe, a cold storage wallet so they can't be hacked.

So participating with that, going on the board just like I would be on a trust or a fund. And so I'm very excited about this as a product for investors. Lisa?

Thank you, Frank. Good afternoon. Now I will summarize our results of operations for fiscal year 2017.

Beginning on page 21, we recorded total operating revenue of $6.8 million for the year. This is up $1.3 million or 23% from the $5.5 million in fiscal year 2016 and was primarily due to higher assets under management related to market appreciation.

Operating expenses for the year were $7.6 million, a decrease of $2 million or 21%, primarily for the following reasons: one, employee compensation and benefits decreased $1.2 million or 24% as a result of fewer employees and severance costs paid in the prior year related to the reduction of workforce resulting from our outsourcing of certain functions; two, general and administrative expenses decreased $741,000 or 17%, and this was mainly due to lower fund expense reimbursement primarily as a result of higher average net assets, strategic cost-cutting measures and nonrecurring transition costs in the prior year. Our operating loss for fiscal year 2017 was $873,000.

Moving on to Page 22, we see that our other income, which is income related to our investments was $346,000 in fiscal year 2017, which was a decrease from prior year of $139,000 or 29%. The decrease was attributable to lower realized net gains on sales of securities of $479,000, offset somewhat by an increase in dividends and interest income of $278,000 and a positive change in unrealized gains and losses on trading securities of $108,000 compared to prior year.

Net loss attributable to U.S. GI after taxes for the year was $513,000 or a loss of $0.03 per share, which is an 86% improvement over a loss of $3.7 million or a loss of $0.24 per share in fiscal year 2016.

On Page 23, we see that we still have a strong balance sheet, which includes high levels of cash and securities that combine to make up 67% of our total assets.

And on Page 24, we still have no long-term debt. The company has net working capital of $16.3 million and a current ratio of 15:1.

With that, I'll turn it over to Susan McGee.

Thank you, Lisa. Our sales and marketing efforts have continued to focus on our mutual funds, including those concentrated on the gold, natural resources, emerging markets and also, we have focused on our exchange traded funds.

As Frank mentioned earlier, we launched our latest ETFs, the U.S. Global GO GOLD and Precious Metal Miners ETF in June. This ETF joins our U.S. Global Jets ETF in our offerings of smart beta solutions that we have for investors. We're especially pleased to bring our long-standing experience in gold mining investments to the ETF investors. We think that as Frank mentioned also, that investors will appreciate the expertise that we offer. And we're also pleased that Thomson Reuters Lipper, a trusted financial authority, did recognize us with a Lipper award for 2016. And you can find more information about our funds and our ETFs on our website, usfunds.com.

As the company and our funds also continue to receive an invaluable amount of viral publicity, which is gained through our media interviews, recommendations by influential financial newsletter writers and the sharing and syndication of our award-winning original content by third-party publishers.

The newsletters have very loyal followings and receive millions of visitors each month. Frank Holmes' CEO blog, Frank Talk, also continues to grow in popularity and this commentary is featured by prominent publications, including Forbes, Seeking Alpha, ValueWalk and Business Insider. All of these have millions of monthly visitors.

We do like to call Frank Holmes our global globetrotter because he, along with others in our investment team, still travel around the world to share our thought leadership. We also interact frequently with loyal followers through Facebook, through Twitter, LinkedIn, Instagram and Pinterest. Kitco News, which is the biggest gold website in the world with an audience of roughly 10 million monthly visitors in partnership with The Street continues to feature the Gold Game Film show with Frank Holmes, a weekly gold market analysis. Since we began the show, over 134 video episodes of the Gold Game Film have aired.

We believe all this coverage helps us leverage our brand because we are able to reach millions of readers, viewers, potential investors. Our website, usfunds.com, was visited over 540,000 times during 2016.

(inaudible) investors is well-known for our timely and balanced market insight and thought leadership. The company has been awarded several Star awards by the Mutual Fund Education Alliance, recognizing excellence in investor education. Our awards have included Best Overall Communication to retail and adviser audiences within a small fund category. This weekly free Investor Alert newsletter has been named the Best Electronic Newsletter 6 times and to date, we have earned a total of 80 Star awards.

You can sign up at usfunds.com and you can join over 30,000 subscribers that we have who do receive this award-winning Investor Alert and Advisor Alert e-newsletters; the CEO blog, the Frank Talk.

And now, we'd like to open it up to questions.

Thank you, Susan. (Operator Instructions) And we do have a few questions that have come in already. A couple of questions relating to HIVE. And, Frank, can you address those questions about HIVE's symbol, et cetera?

HIVE should be listed next week. It's expected sometime next week, possibly Monday. And it's all going smoothly, I'm told, so that's all good. They're just going through its process. It's a reverse takeover of an existing vehicle. The ticker is supposed to be HIVE, H-I-V-E. And the reason why it's called HIVE is because when you go to those centers, it sounds like a massive cluster of beehives buzzing. And they have to have it in places like Iceland for 2 reasons: one is cheap electricity is paramount and it's a cooler weather. So you need lots of air conditioning to cool down the process of validating a transaction on cyberspace.

Thank you, Frank. And another question, this one, Lisa, I think you can address this. What does the balance sheet look like after the investment in HIVE?

Well, our U.S. GI Canada subsidiary, which is a 100%-owned subsidiary of U.S. GI, directly purchased 10 million shares in HIVE. Whereas at Galileo, our Galileo entity manages a fund that, that fund directly invests in HIVE. But mainly what we did was reallocate some of our current investments into HIVE. We did use a little bit of our cash but it was mostly again, just reallocating some of our investments. So our balance sheet really didn't change very much related to HIVE.

I think that the question is what are the limitations to growth exist for Genesis Mining, what else is on the board? The 2 members from Genesis on the board, both are lawyers with tremendous experience in the capital markets. I was quite impressed when I went over to Munich for due diligence. And so they're steeped in knowledge of financials, steeped in knowledge of this cutting-edge technology, so they'll be key. And otherwise, there'll be a small board, a handful of people and it's going to be almost a function like a royalty company because we basically outsource a lot of the execution, and we are consumed with the minting of the coins. So I think you'll have, less the head office, 4 people. They'll be hiring for a Chief Technology Officer, but I don't think there's a whole great need for it. And it's a high-margin business for us, so that's a -- and the other part that's really significant for us, it's the first company. There's just no other -- there's no other as of right now, digital mining company, a crypto-currency miner that's out there, and we have partnered with the biggest in the world. And that to me is just a great opportunity for a first mover advantage with highly qualified people.

Great, thank you. And also related to HIVE, can you explain further how you see the one-for-one correlation on the HIVE investment in growth stock?

Well, it just -- it'll be an asset and the biggest part is just disclosed that, as Lisa said, we have 10 million, plus we have a big investment in the fund. So it works out that directly and indirectly, we have 17 million shares and we have 15 million shares outstanding. So I think that if it does what it has the capacity to do, that it will be a great win for our company and it'll position us. And what we're working on in Canada is to be the first for crypto-currency, Galileo to be a crypto-currency fund group. And interestingly enough, Vancouver just announced this week that they're going to allow crypto-currency fund. And they went for funding today, it was announced, so it's -- they're much more cutting edge West Coast regulators versus Ontario who I met back in May. And everyone, this whole space is so paranoid over AML, anti-money laundering laws supersede any product. And so you've heard this debate that they can't track it in the bitcoin, it always gets the negative reviews that bitcoin's associated with hackers and that's how they get paid. But as one speaker said at this conference, well, they also buy cocaine and AK-47s with U.S. dollars, are you going to outlaw U.S. dollars? So you sit back and you think of this argument and how do you get positioned in it and what is this crypto-currency and how is it going to grow. I think the bigger part that thrilled me was that the Blockchain technology is big. The New York Stock Exchange is worried that the technology that basically validates a bitcoin can replace stock trading, that you can trade settlement in 1 hour, 24/7. And if they're not going to be a part of that, they're going to be Uber-ized like mutual funds are being Uber-ized. So with that, being that first company with the premier party that's out there, this is a great way. And I visit -- I highly recommend you go to Genesis Mining on YouTube. There's many different presentations there, and you can visit their website and you can learn much more about them in the process of their technology. And they're really -- what they are is a cloud-based organization with massive capacity of cheap electricity and these cards. So you need to have graphic cards. To process these coins and to be competitive, you need to have 3 -- graphic cards, computer graphic cards work on 3 dimensions, not 2 or 1. And so that requires -- those cards are very, very expensive. I mean, they spend money like $80 million at a time on a CapEx buildout. So I'm -- when you get the dimension, you see where they are, they're so much further advanced and they've done it with no investors, except for their own capital. It's remarkable that this a billion-dollar company with 3 people within 5 years, what they've built and the reputation they've built. So I'm just very excited in the whole space.

Thank you, Frank. Another question on another topic. What are you doing with your headquarters building?

Well, we've restructured so much, and the deal with all these regulatory things we've mentioned over the several years, from AML and transfer agency and outsourcing, and we have a core group of people, under 25 people. We don't have 125 people, and so we have lots of empty space. So we had to go and get it all measured up and put it on a 3-dimensional CAD/CAM. And we'll lease up, they're taking care of getting it leased out. So that we can get at least $0.5 billion leased out and it doesn't cost us anything then. Really, the cost of the space is so attractive but it would be wise now to find tenants, especially 1 or 2 key tenants and lower that overall burn rate that we have. And then the other part is just we've got to get these equity funds rebounding up to $50 million -- another $50 million. That just gives us this breathing room to be able to launch other products. It's expensive. I didn't share with you, this ETF, launching Jets from 2 years ago when we went out to launch GOAU, 50% of the people were gone. It's just shocking and I asked the question, where is everybody? What happened? It's the fastest-growing sector of the asset management business. It's not closed-end funds, it's not mutual funds, it's ETFs. How could they fall by 50% workers? And they all said it's the Volcker Rule impacted the banks and some of the banks like Crédit Suisse just liquidated some of their triple energy ETFs they were making $3 million, $5 million a year on, gone. And so that is a significant factor. So the idea of having sustainable, long-term relationships to launch a product, the marketing, it's much, much more difficult. And so it costs more money and it's just that's the life of it. But for the GOAU, every day, I'm doing a presentation. Today was a national radio show on gold as an asset class and bitcoin was another person speaking on it. And it's just getting that story out with one-on-ones with thought leaders, influencers, newsletter writers. And I just know as long as it's doing exactly what our working -- our test said, it will gather assets, and that's the big key part. It's getting those other assets under our belts.

All right. Thank you, Frank, and thank you, everyone, for the questions. This does conclude the U.S. Global Investors webcast for the fiscal year 2017. The presentation will be available on our website at www.usfunds.com. Thank you all for your participation today.