Forum Markets Incorporated (FRMM) investor relations material

Business model and asset strategy

• Focuses on acquiring and tokenizing real-world assets in large verticals, generating yield and cash flow by holding these assets and distributing returns to token holders via a regulated platform.

• Assets are tokenized on Liquidity.io, a regulated financial institution with multiple SEC licenses, enabling secure and compliant trading of digital assets.

• Revenue streams include asset yield, origination fees, asset management fees, and transaction fees from token trading, with most revenue currently from holding and cash flowing assets.

• Capital allocation is accelerating, with a significant portion of assets moving into cash-flowing assets and US dollars over the next quarters.

• Plans to expand into commercial real estate and other cash flow-generating assets, leveraging a low fixed cost structure to maximize capital deployment.

Tokenization process and technology

• Utilizes Ethereum Layer 2 solutions (e.g., Arbitrum) for token creation due to network liquidity and uptime, ensuring efficient and scalable asset distribution.

• Tokenization follows strict US securities regulations, with offerings under Reg D and plans for Reg CF and Reg A to broaden investor access.

• The first tokenized asset was a pair of CFM56 jet engines leased to a major US airline, providing direct collateral and monthly cash flow to token holders.

• Tokens are structured to provide direct access to asset cash flows and collateral, with future plans to enhance tax benefits for investors.

• Marketplace for tokenized assets is in early stages, with plans to cross-list tokens as regulatory-compliant exchanges emerge.

Vertical integration and partnerships

• Built pipelines in auto loans (Karus AI), modular mortgages (Zippy), and aerospace (Aero Engine Solutions), with each vertical leveraging AI and blockchain for origination and analysis.

• Car loan vertical taps into a multi-billion-dollar monthly market, using AI to optimize origination and blockchain to expedite payments and tokenization.

• Modular home loans offer higher yields and lower default rates, with a forward purchase agreement to acquire $5 million in loans monthly.

• Aerospace vertical features a growing pipeline of CFM56 engines, with monthly additions and interest from major US and European airlines.

• Commercial real estate and other heavy equipment assets are targeted for future tokenization, with institutional partnerships under development.