Fernhill Corp: Optimizing & Automating the Crypto Ecosystem for Web3

0:08 Hello everyone and welcome to Fernhill's live investment summit today hosted by 6. I'm pleased to introduce their president and director, Mark Lasky, their Chairman, Chris Kern, and Ryan Kuchen, founder and CEO of MainBlock, Fernhill's digital asset trading division. The team today is going to walk us through a company presentation and after we're going to be taking some questions live. Remember that you can submit your questions using the Q&A tab found on the right hand side of your screen at any point during today's presentation. And as always, this event is being recorded and is going to be available online on SIX.com in the coming days. Without further ado, Chris, I want to hand things over to you to get us started. Thanks, Cameron. Really appreciate it. And of course, also thanks to everyone attending today. Really appreciate you coming on board and learning more about Fern Hill. And also special thanks to 6 for- being the host here and- supporting this event.

0:58 And so without further ado like to introduce you to Fern Hill We are a publicly traded company on OTC markets under the symbol FERN, F-E-R-N, and we're a digital asset trading company that deals with Web3 metaverse IP related assets and we're building a API based cloud. And so we'll roll right here and get you the overview. Fernhill is a pure play web3 digital asset infrastructure company. We have 3 main legs of our business, main block, DigX and PerfectMine. And basically we're building an enterprise cloud around APIs for digital assets and Web3 and Metaverse. And our main objective is to become one of the leading innovators globally that provides infrastructure for Web3 marketplaces.

1:46 Main block is our digital asset trading platform. DigX NFT is our NFT platform and white label API, and PerfectMine is our crypto mining software optimization platform. Just quick Investment highlights on the company. We have a very accomplished management team. We've had multiple exits. We've built many businesses. We've created millions and millions of dollars in sales. We've come together here to build Fernhill to become an enterprise grade company in the Web3 infrastructure space.

2:19 MainBlock has an established digital asset trading platform. Its technology has been tried, trued, and tested. We do have clients. They are generating revenue, and we have a growing pipeline of business as we speak. Also, we acquired PerfectMine last year as our crypto mining optimization software. We're retooling that now for commercial scale deployment. And that is also a technology that is fully baked, but we really need to just upgrade that for commercial scale availability. Last but not least, of course, is DigX NFT, our highly scalable NFT marketplace. We've built that also to be delivered as a white label platform via API for institutions and brands. And we are currently talking to several multiple clients on that one as well.

3:09 So digging right in, main block is our digital asset trading infrastructure company. We deliver that through an API And we serve institutional clients, mainly hedge funds, banks, prop trading firms, and exchanges. And we do have established technology. We are generating revenue, and we are in our hyper growth stage with a growing pipeline of new clients. So my name is Mark Lasky. I am the president and director of Fernhill Corp. And I wanted to start off by asking a question of Ryan Kuechen who's here on the call as well, who's the CEO and founder of MainBlock, which was the company we acquired last November. Ryan, tell us why you created MainBlock and what problem does it solve? All right.

3:55 So, first of all, for everybody listening, you may have seen us referred to as Candlestick at some point. And that's because when we first started Candlestick, our vision was to create an AI trading platform for everybody, right? So not just retail, but also B2B hedge funds. And we realized through our early conversations that we had already created a piece of technology that didn't yet exist in crypto and that these hedge funds needed. And that tech was called a smart order router. And so really common in the traditional market, but was not yet available in crypto. So right then we decided, you know what, we're going to pivot. We're going to aggregate data from exchanges around the world, offer this data to hedge funds and let them execute at best price all over the world simultaneously and immediately.

4:53 Thanks. That's awesome. Chris, you want to go to the next one? Sure. So, yeah, Just a quick overview on MainBlock's technology. It's pretty encompassed and very deeply integrated with a lot of data across 30, almost 40 exchanges at this point. The main technology behind MainBlock is a smart order router, as Ryan just explained. Also, we offer a range of trading algorithms to systematize trading, to help create alpha and get an edge in your trading activities. It is delivered as a fixed crypto gateway via API. We also have web sockets and REST available as APIs as well. And then there's also things like Risk Analytic Engine and Wallet Rebalancer and things like that as well that are really kind of the core offering of MainBlock, in addition to now also being available as a white-label platform for other large apps and exchanges.

5:53 The product lineup, as I mentioned earlier, we have smart order routing, trading algorithms, and there's a pretty good list there actually of what we offer and there's also some proprietary algorithms we offer. Wallet rebalancer, RiskBridge and of course we also do some consulting and development relative to hedge fund specific needs in crypto trading and proprietary algorithms and things that nature. Yeah and Chris I can just jump in for a second here. So you heard me mention earlier that we have a smart order router. Well, great. There are a couple of people that have smart order routers. It's expected now in the industry if you want to survive in this business. What really sets us apart is the trading algorithms that we offer on top of the smart order router where the SOR is the baseline.

6:43 But you can see right here on the screen on your trading algos, we run a significant number of not only expected algos that hedge funds have used in the traditional market for years, but also custom or proprietary algos that are requested by clients. Yeah, totally with that. Yeah, so as we mentioned before, MainBlock is connected to over 30 global exchanges in OTC trading firms. This is just a sample list of, I'll say the top, what is here, 630 right here. I think we're almost close to 40 at this point. But this is the first 30 or so that got added to the platform. Digix NFT our NFT marketplace.

7:29 Chris can we- Brian can you tell us who are the customers of MainBlock? So banks and hedge funds have always been our target demographic and our bread and butter. But just recently, We signed CryptoWire, which is an enormous super app based in India with over 2 million users and part of their integration is to add a number of more exchanges. And so this number will continue to increase every time you see a presentation. Right now we're at about that 35 number, just the final few going through QA. Once those are done, we'll be closer to 40 by next month, which is really exciting news. Excellent.

8:19 Awesome. Yeah, so DigX NFT is our next generation NFT marketplace. We really focus on highly curated collections with a focus towards entertainment and things of that nature. We also want to focus on quality versus quantity. Then also what we've developed is an API white label platform around that, given that we've had several groups approach us to deliver that as a branded solution under their brand, so they can control the user experience and have it brand-friendly to their likeness. DigX is really, as I mentioned earlier, a creator-centric marketplace. We have a wide range of features and functionality that are considered standard in the industry. We also have done a few other things, like integrate the Ethereum virtual machine, so we can basically use any blockchain that is based upon EVM, the Ethereum virtual machine. Right now we launched on Polygon, but we can literally launch another couple dozen chains on that, which we fully intend to do over the future here. And then we also incorporated the new ERC-2981 royalty standard, which is really designed for creator royalties and managing royalty programs around that. And so we felt being creator friendly and being creator centric, that was just a thing that we had to do there.

9:51 Just again, a little brief on the platform in our tech stack. We're using fairly standard architecture here, Google Cloud and AWS. Polygon is our primary chain that we launched on. We're using a REST API if you want to use our white label platform. And we use things like IPFS for the file storage and Kubernetes Cloud and things of that nature to really deliver the technology on a scalable format. Here's our roadmap. You know, we've published that on our website. It's also in our white paper. Don't need to go over that necessarily here, but, you know, we do have a pretty comprehensive roadmap that we're rolling out. We have a lot of things also in the works that are not listed here, but I'm sure we'll be announcing those in the near future.

10:38 And then PerfectMind was built to democratize and simplify crypto mining for everyone and really We're going for becoming a leader in server management tools and optimizing performance. When we bought PerfectMine, it was really an awesome technology grab that we were able to accomplish, but it was really designed more for the end user, kind of hobbyist market. And so right now we're really focusing on retooling everything for the more commercial scale, you know, large company miners that deal with ASIC mining, which was a functionality we did not have when we acquired it. And so that's really the focus for PerfectMine is really get to that commercial scale deployments. We think that'll be available out in Q1 2023. That is a pretty big lift in terms of retooling the actual code itself and then also upscaling our architecture to support the scale and growth of that on a commercial level.

11:38 Again, here are some basic operating solutions and the value prop that PerfectMind provides. This presentation will actually be available on our website as well as on OTC markets as a file for downloading. You can review that here. Don't think it's appropriate for us to read through every little nuance here on our slides. We just really more meant as an introduction to Fernhill and conversational around the company and what we do. This will be available to you later for download. The Fernhill team, myself, I have 25 years experience doing corporate finance and M&A for tech companies. Did over $700 million in transactions over the past 20 some odd years, and are really kind of helping lead the charge here with Mark and the team to build and grow Fernhill into an enterprise level company.

12:31 We have Mark Lasky, also part of this presentation here as a CEO and president of Fernhill and then Jim DiPrima, Nathaniel Coonrod. We also have Peter Bortis, who's a member of our chairman. He also came on board when we acquired Fernhill. Brian Kuechen, the CEO and founder of MainBlock. Clay Cowdery, our COO of MainBlock. Mark Deveaux, the CTO of MainBlock. And Patrick Egan, who is our Director of Business Development, essentially our CRO. We also have Larry Grant in the UK that we brought on board recently, so props to Larry. He's doing a really great job out there for us and he will be certainly a valued asset going forward for Fernhill and MainBlock.

13:23 Some valuation highlights, I'm sure people know a lot about us. We have a pretty strong social media following. We are publicly traded on OTC markets, have over 6,500 shareholders, as well as a pretty solid trading volume between $50,000 and $300,000 in daily average trading volume. Great social media presence on Twitter and StockTwits and places like that, where we like to communicate and send out little messages here and there. We are a pure play web 3 digital asset infrastructure company. There's not too many of companies of us, that are doing this at this level, at the enterprise level, that actually have core technology that the clients are paying for. And we are aggressive growth opportunity. We're really kind of at that inflection point of our growth curve where we're ramping up clients. We have a growing pipeline of business.

14:15 We have new technology being developed and launched and added to our platform on a regular basis. Really excited about the future and what we got going on here. Glad you guys can be part of this presentation. Get to the last slide here, it's about just a value creation for shareholders and what we're really gunning for to help, you know, increase shareholder value and things of that nature. Essentially, expand a skill main block, whether it's, you know, getting new clients, developing new technology, growing the team to support that growth. Expanding and scaling DigX NFT as our NFT platform. We think there's a really huge opportunity in NFTs, even though the market right now doesn't seem all that great. You know, there are waves, there are ups and downs to any market, as we see now in the stock market in general.

15:04 It's just part of a larger cycle of business, and we think that coming out of this next cycle we'll be very well positioned commercially to really take advantage of what's going on in the marketplace, and we'll have several new interesting collections out there, as well of course as our API. Also, as we have before, we will continue to make acquisitions and develop and launch new technology organically.

15:28 We are looking at and talking to multiple acquisitions now, can't really get into details there of course, but we are always looking for other ways and creative ways to grow the business outside of developing core technology and bring it to market. And then yes, we still are aiming for an uplisting to a national exchange. We still would love to target the end of this year as that goal. However, we have to be practical with the current market situation and being a viable market to do an IPO into. And so we're also extending that to Q1 2023 as well. And so that's still part of our main goal. We think we can get there. We're doing all the steps necessary. We are in the middle of getting audits done.

16:14 We have people that we'll be bringing on board to help assist that further. And so, you know, we know we'll get there and we'll get there pretty soon here. So again, everybody really thank you for taking the time here to hear our story and we'll be opening this up now to questions that will be moderated by Cameron. And Mark or Ryan, if you have anything you want to say here, we should go into the Q&A session. Feel free to jump in. I might just add that, Thanks for that, Chris. That was a really good synopsis of everything we're doing. I just wanted to add, we touched upon this briefly in our recent PR, which was that we're very excited about our rebranding strategy. We can't say too much about it, but it really nails exactly what we are, who we are, and what we're doing. And it's everything's falling in place. And it got us all even more excited than we've been over the last several months.

17:10 Essentially, you know, we believe in Web3 is the future. And We plan on being a big part of that with our enterprise infrastructure platform, providing APIs. That's just the basic touch of what it's going to be and why we're super excited about it. And it all ties together, everything we are, everything we've been doing, and allows us to even get to the next level. So I just wanted to point that out. And now if there's any questions, we're happy to open the floor. No, absolutely. Chris, Mark, thank you, and Ryan as well for coming on today. I'd like to remind everyone in the audience that you can ask questions using the Q&A tab found on the right hand side of your screen. But guys, we're already getting a couple. So audience, I encourage you to keep asking. But guys, David wants to know if MainBlock is going to be open to the retail investor.

17:59 Yeah, so it's certainly something that's been discussed and we take it under advisement. We can't give a specific date on when that will be available, but it is something that our technology is naturally progressing towards. That's about as much as I can say on it, you know, with any level of certainty at this moment. No, fair enough. Absolutely. Rishabh, the audience wants to know, what do you feel is going to be the most important aspect for Fernhill as the crypto space is moving into Web3 further? That's a great question. And I mean, that's exactly where we're positioning ourselves to be a Web3 infrastructure provider, where we're providing core technology to businesses and enterprises to deliver a Web3 solution, whether it's digital asset trading, mining and minting of NFTs, or minting and more mining and staking a token.

19:00 We have core technology with our 3 different business units, main block being our digital asset trading platform, DigX NFT focusing on NFTs, as well as PerfectMine on the mining and staking side. And So we think we'll be very well positioned for Web3 as it emerges and continues to grow and proliferate in the marketplace. And we already have a long list of clients in our pipeline that are with us in that vision. So very much looking forward to what's happening here in Web3. It's a monster opportunity. And we like to kind of parallel things to where the internet was back in 2020. I mean, at 2000, where it was just really taking shape on a commercial level and really starting to roll forward. You know, consider what's happened since then in the Internet.

19:52 It's a basic part of everybody's daily life. Whether you know it or not, everyone's tied to a mobile phone and, you know, web pages and mobile apps and everything else, Web3 is just really an extension of that. That's more connected to people on an individualized level as the next iteration of the internet. And so we really think that being an infrastructure provided there, in a sense, you know, selling picks and shovels in the gold mining days,

20:21 we think that's the best place to be. And also as a software company, software and software as a service is the most profitable, scalable way to approach a market, and we've, you know, planted our stake in the ground with that a long time ago. And so we feel that combined with the growth and prospects of Web3 that we're positioning ourselves to be very successful and we're really excited. And it also really ties together everything that we are doing right now and everything we're becoming. From what we've, from mining, minting, trading, all that stuff is all going to be under our 1 platform, web3 platform. So yeah, we're very, very excited about it. Can't wait to reveal more as we go along. That's awesome, guys. It sounds exciting. Brian in the audience is wondering if you're looking at multiple additional acquisitions, or are you simply just choosing 1 from a pool of multiple candidates?

21:17 So we're gonna, I mean, similar to the acquisitions we made last year with PerfectMine and MainBlock, we're going to take an opportunistic approach to making acquisitions. You know, as the market unfolds here and as things shake out, we want to be very diligent about what we acquire and who the teams are we're bringing on board with that. We also want to acquire companies that have a base of business and are generating revenue and have, you know, established some traction in the marketplace. And so we're gonna be very picky and choosy. It's also gonna have to align very closely to our game plan and growth plan moving forward and be a easy add on to the existing technology we have with main block and DigX NFT and a perfect one. So we're not going to go about it haphazardly and just make an acquisition for the sake of making an acquisition.

22:11 We're going to do it with purpose and with a broader vision in mind. Absolutely. Another question, when do you expect the audits to be completed? So we are in the midst of those right now and you know being that we did acquire Main Block last year the the audits are actually you know we're actually auditing 2 years of Main Block plus 2 years of Fern Hill. So actually in a sense it's like a four-year audit, so it's a lot more involved than we had initially, you know, anticipated, but, you know, the auditors have to roll it out according to gap and do things a certain way. And so we're just accommodating that and doing what we need to do. And our accountants are working on all the books and reconciling numbers and everything.

22:58 And so we're probably a Good couple months out. That's probably the best estimate I can give you now. As we progress forward on that and have a more definitive timeline, we'll make that available. Absolutely. David in the audience just says, great executive team, so congrats guys. But- Thank you, David. Thanks, David. Exactly. Do you have any long-term aspirations to remain with Fernhill or plan on building and moving on? Is that directed to me or for any one of us? I think any one of you free pitch to the field Go ahead Mark. Well, yeah, I would say I'm in for the long haul. You know, I believe in the vision where we're at. I love our team. I love the project. I'm a big supporter of the whole industry, Web3, crypto. So I feel like I'm at home right now, and yeah, I'm not going anywhere.

23:48 That's my answer. Yeah, I can hop on board there too. As part of growing an entity, we have to be committed on so many levels, right? Not just with putting in, you know, An extraordinary amount of hours on a daily basis. But also because we are newer we all own a significant amount of shares in the company. And so those shares are something that you know we want to increase the value of, not only for us, but for our shareholders. And having a long-term vision and sticking to that vision is what will get that done for us along with the greater community. Absolutely, and for myself, to me, this Fernhill to me is the platform I've been looking for for a long time.

24:39 I've been in technology finance and M&A for 25 years and Fernhill literally is the culmination of all those years of experience, building other businesses, doing M&A, raising hundreds of millions of dollars of capital. And for me, this is a long-term play. This is a legacy that we're building here. A big mission is to create generational wealth for all you shareholders and really create a name for ourselves as an infrastructure provider in Web3. And the growth of the Web3 market, literally over the next 789 years is gonna be measured into trillions. And if we can just get a nice small slice of that, I think we'll be doing pretty awesome. And as a team, I think we're all focused on that goal as well.

25:26 Absolutely. Well, it sounds great, guys. Mark wants to know if it's the idea to acquire a business before uplisting or once you are already in the NASDAQ? So that's an interesting question. Like I mentioned earlier, we're gonna be opportunistic about acquisitions. If that's part of the uplisting or something that's done thereafter, we'll optimize that at that time. I think we'll get better economics, of course, making acquisitions once we are uplisted, because we'll have a liquid stock that's on an exchange and now covered and more regularly available from institutions, as well as there'll be, assumably, a lot more liquidity in the stock.

26:16 And so I think that being an uplist will afford us a better currency to make acquisitions with. But that doesn't mean we're not gonna pursue it as part of the uplisting or prior to. I mean, it's possible it could be part of the uplisting too. That's another, It doesn't have to be before or after, it could be part of it as well. So one of those. But we're, you know. And I also want to add to that, you know, any acquisition we make, that that company is going to have to be audited. And so we want to get through our audit first and not compound the audit process with another acquisition, because I know that would actually happen. And so, we're focused on taking care of business now, what's right in front of us, getting the audits done, growing main block, developing DigX NFT, and moving things forward in that respect and positioning ourselves for the uplisting.

27:05 We already qualify for an uplisting through the equity measure. And there's a few other measures that we check the box on as well. And so that's probably the avenue we would take. But with an uplisting, it would certainly come with a financing of sorts, as most IPOs or uplistings do. So that'd be a nice pool of capital to tap into for acquisitions going forward. So I hope that answers your question. I know we kind of went on a few runs on that, but we certainly intend to uplist and we certainly intend to make more acquisitions in the future. No, that's fair enough. Jamie wants to know how many shares does management own? Collectively, I think management owns around 25% of the company, if I'm not mistaken. Mark, does that sound right?

28:01 Yeah, I would say so. We did that list, yeah, about 25% that range, 2025. Yeah, and compared to most other public companies out there, that's pretty substantial. Absolutely. Rashad says, in regards to PerfectMine and staking, will this also be a part of Ethereum's staking system, given the upcoming merge taking place this week? So when it comes to staking, we're going to optimize around the top tokens that are being staked. And assuming Ethereum gets through its merge and people are still supporting that, we'll definitely incorporate Ethereum into a staking platform. Okay, great. Brian's question here is this, uplisting targets still on track, roughly 500X required from here. Are there any new thoughts leaning toward RS to achieve this or are you confident Fern is about to exponentially grow by the end of the year?

29:01 We're at hyper growth phase now for the company. And so I don't know what the 50X mentioned was in that question. But anyway, we are ramping up revenue, we are ramping up clients. And so we do think there will be a substantial sales increase in scaling here in the very near future. And as part of that, that goes into the qualification process for the uplisting. Also, Like I mentioned earlier, we are focusing on the equity standard for uplisting. We're not focused on the revenue standard in that respect. So I think we're good in that area. All right. Kyle wants to know, is there going to be a marketing campaign for DigX NFT?

29:50 Yeah, there will be. We're just starting our relationship here with 6 as our marketing partner. That will also extend to the other facets of Fernhill, including MainBlock and DigX. And then as we grow further and bring on more resources, we will be more deeply marketing DigX. All right. Well, fair enough. And finally, what's the status of PerfectMine? Maybe this will be a trod ground, but maybe just a good reiteration at this point. You want to grab that one, Mark? Well, Chris did mention a little bit earlier about that, that it is, we are upgrading it now, you know, to do ASIC mining and more for enterprise level companies instead of one-off individuals.

30:40 It takes effort and time to do it right, but it is progressing. We're also heavily focused on main block and the DigX marketplace. So it's being developed on the side, but it is progressing and we do believe very much in the future of that. And we're not walking away from it, but it's just, it's gonna take a little time to get it where it needs to be right properly. All right, well gentlemen look that seems to be all the questions we received for today. So I want to thank you for coming on going through a great presentation and fielding such a great Q&A period. I also want to of course thank everyone in the audience that's joined us today, especially those who participated and asked questions. If you wanna find out some more information about Fernhill, you can always go to their website, fernhillcorp.com. But guys, I wanna hand things back to you for some closing remarks before we wrap up for the day.

31:30 Sure, so really thank everyone here for joining us today. It's an honor and a privilege to be able to present to you and thank you to all of our loyal shareholders. We really appreciate you staying on board with us and joining us in our vision and as we go out to make a quest and knock down some serious business here. We have a fantastic team. We have incredible technology. And we're in one of the best industries in the world in terms of innovation, growth, and creating something incredible. And so, really glad you can join us here today and be part of the Fernhill family. Thank you. I'd also like to thank everyone for coming and thanks Cam for hosting. And this is the kind of thing we love to do because we love to be transparent.

32:20 We love to – some people say we don't put out enough information or enough tweets. We're not going to tweet for the sake of tweeting. We want to only put out information when it's really solid information, no fluff pieces. So maybe you don't hear from as much as you like, but that's why we like these type of events because we're always wanting to talk about what we're doing and we're excited about it or passionate about it. So yeah, we will be doing more of these events to keep everybody up to date and I hope you all can attend each time. And so again, thanks for coming. All right, well, gentlemen, with that, I think we're gonna wrap up for the day. Once again, I appreciate it, and I hope you