Forum Markets, Incorporated Common Stock Micro-Cap Virtual Conference

Thank you. Thanks, and welcome everybody, and thank you for joining our session today.

I am John Kristoff, Head of Corporate Communications and IR, and I will just provide a brief company overview, including our business model, talk a little bit about our competitive moat, and the team behind the company. Then I will turn it over to John to walk through our verticals and wrap up with a summary of our financials. Just a quick reminder, we will be making some forward-looking statements today, and we would refer you to the more detailed information that has been filed with the SEC. Just at a glance and very quickly in terms of Forum's core thesis, our business model is really to own and operate cash flowing assets with the option to fractionalize or tokenize those assets to broaden access, and increase liquidity for these types of real-world assets.

The asset classes that we are focused on have a few things in common. We are looking for assets that have high risk-adjusted returns in markets that are large and scalable, and asset classes that have, let us say, moderate to high complexity, durable demand, and very high-quality counterparties, and we will get into those asset classes here in a few minutes. Our business model is to really acquire these assets, generate the cash flow from these assets, distribute any appropriate returns to token holders or co-investment partners, and then reinvest and expand to grow that asset base.

One thing I want to emphasize that is important to note is that these assets are intended to generate cash flow first, with the option to tokenize on regulated digital infrastructure second, as the market for tokenized real-world assets develops and the regulatory environment becomes a little more clear, and John will touch on that a little bit more in his comments. When thinking about Forum's competitive moat or our advantage, first and foremost, the company has built proprietary, scalable pipelines into high-quality asset classes that are otherwise difficult for investors to access directly. Typically they have high minimums. You have to write a very large check to get into the asset class, and then you are locked up for a multi-year period. We have built the legal and technical infrastructure to bring more liquidity to these assets through fractionalization and tokenization.

We will talk a little bit about that infrastructure and our distribution strategy in John's comments here. I think with any relatively new company, it is important to understand the driving force behind the company, who is running the company. I will not spend a lot of time on this, but I think it is important to highlight that we have our board of directors in particular, has a long tenure in capital markets experience. Actually, all of us, the management team and the board, with a lot of depth across compliance, finance, private credit, and fintech, such as myself. You are talking about deep institutional pedigree on the board. You can see some of the firms listed here, Lazard, Blackstone, Evercore, UBS, Credit Suisse, and so on.

The key takeaway that we are trying to communicate is that this is a veteran team with an established track record, and you are not dealing with a startup that is kind of learning as it goes. Quickly touching on the verticals, and then I will turn it over to John. We are talking about aircraft engines, AI infrastructure, modular home financing, and auto credit. What do these things have in common? As I said earlier, they are all very large markets. Some of them are difficult to access, moderate complexity, and high risk-adjusted yields with excellent counterparties. With that, I will turn it over to John to talk briefly about each one of these verticals and then run through our financials, and then we can jump into the Q&A.

John. Thank you, John. We will talk first about the largest verticals where we expect to put the most assets cash to work.

The place that we have had the most success and deployed most capital so far is in aircraft engines. These engines, specifically the CFM56-7B and 5B engines, are some of the most common engines in use on narrow body jets, commercial jets. These are in extremely high demand currently. We have focused our portfolio specifically on this engine. We have looked at some other engines, but currently we are focused on the CFM56 engines. We believe these engines offer a very good risk-adjusted return. That is because we have control over the acquisition. We do inspection testing on these engines when we acquire them. We bore scope the fan blades and review all the FAA logs and records.

We contract them with one of a handful of the largest U.S. commercial carriers, typically Delta Air Lines, United Airlines, or American Airlines. They fly routes in the domestic United States or in a few cases to the Caribbean. They do not fly into any third world countries. We control the flight routes. They are insured for the entire time, from the acquisition to the date we sell them. They are maintained meticulously to FAA maintenance standards. If anything is wrong with the engine, it is immediately repaired. If there is any impact damage to the engine from a bird strike or anything else, which is very rare, it is insured completely. We have also taken the additional step to negotiate a guaranteed residual purchase price for these engines at the end of the contract.

What we've built is a very nice risk-adjusted return where we know that the duration of time that we'll hold the engine, we know the exit price of the engine, and we're able to get very nice returns over the hold period of that asset. Additionally, we have the optionality of putting debt on these aircraft engines to drive higher returns. As well, something that we're working with to present is tokenized equity within an SPV that holds these engines so that we could get an additional enhancement to investment returns from the tax depreciation on these engines. Most of these engines can take advantage of bonus depreciation in the first year, and we can distribute that depreciation on a K-1 out to investors, and the time value of money of that tax deduction enhances the investment return.

Currently, the net returns after we take a management fee, if we were to tokenize these things, are expected to be in the mid-teens. That's with debt taking into effect some of the depreciation. On a gross IRR, it can be even higher. We're very fond of these engines. We've built a partnership with a couple of companies in Southern Florida that we've worked with to acquire all five of these engines. They refurbish the engines and sell them themselves. Through that partnership and relationship, we get a first look at a number of these engines, and we get a pipeline to acquire a number of those engines. Recently, we've just acquired two additional engines. We've 8K'd that after quarter end. We now have a total of five of these engines that are on our balance sheet.

All five are contracted and earning rent as we speak. AI infrastructure, we believe this is going to be our second-largest or eventually our largest vertical. We've been doing a lot of work in the space, both in terms of bridge financing for acquiring GPU chips, but also in looking at AI compute. We've been working to announce a deal with a partnership in the coming weeks or months, and we are very excited about that. We think that'll showcase the work that we've done in this vertical. For clarity, that will be a compute deal, not a bridge financing deal. What we're looking at there is ways to provide immediate compute to answer the question of demand and as well, look to differentiate that compute, trying to provide inference compute.

Currently, we believe the real issue there is lack of power and ability to immediately plug in GPUs and meet the coming demand. In the future, we believe that demand is going to be more localized and regional. We're really excited about the opportunity to invest into the AI compute space. That also gives us the opportunity after we've been able to announce that transaction and scale that vertical to eventually tokenize fractional ownership within those projects or actually ownership of the compute chips themselves. We're very excited about this project. We can't talk too much more about the details until we finalize the deal, but this is something that we've spent a lot of time on, and we think that there is some very good returns in this space. Another vertical that we've worked to build is the modular home mortgage vertical.