Mongolia Growth : Q1 2024 Letter to Shareholders-MD&A ›

Q1 2024 Letter to Shareholders - MD&A

TO THE SHAREHOLDERS OF MGG

The first quarter of 2024 was quite uneventful. KEDM has reached a stabilized level of revenue and continues to see net attrition to that revenue rate as churn exceeds new customer growth. Meanwhile, our marketable securities showed a gain for the quarter.

We segregate our business lines into three categories: Investment Properties (discontinued), Subscription Business Products, and Corporate Division (which includes our investment portfolio).

Subscription Business Products:

KEDM, our subscription business, which tracks various Event-Driven strategies, continued to produce income for our company. During the first quarter, we recognized $694,071 (Q1 2023- $915,952) of revenue while taking in $384,702 (Q1 2023- $343,267) of gross subscription receipts representing a 12% increase in subscription receipts when compared to the previous year. As noted previously, we believe that KEDM has reached a more mature state and that churn will likely remain above our ability to add new subscribers. We've tried a variety of methods to grow the subscriber base, but a weaker equity market has led many subscribers to cancel their subscriptions. Meanwhile, we've struggled to replace these subscribers. That said, we believe that there is a core base of subscribers that will likely continue to renew their subscriptions as they value the data that we provide. As KEDM shrinks into this core base, we believe that overall churn will stabilize at a lower level that is offset by new subscriber additions and we expect that KEDM will remain a profitable business for us.

As a reminder, since January 1st of 2023, my Registered Investment Advisor, Praetorian PR LLC, is now contracted with MGG to produce KEDM. To learn more about KEDM, go to www.KEDM.COM.

Corporate Division:

Our public securities portfolio produced a $2,335,164 unrealized gain and a $622,011 realized gain. I would like to caution you strongly that returns, as we have recently experienced, are highly unlikely to be repeated in future quarters. At quarter-end, our portfolio was concentrated in investments in oil futures and futures options, energy services companies, uranium equities, and a Florida landowner. Additionally, we own a small position in a cryptocurrency named Monero, which we sold some of during the first quarter of 2024. We view these investments as highly liquid, inflation-protected, alternatives to holding cash, and we intend to liquidate various investments should we find additional businesses to launch or acquire stakes in.

Conclusion

We believe our shares to be undervalued and during the quarter, MGG repurchased 781,300 shares under its Normal Course Issuer Bid. At quarter end, our share count was 26,094,399, or 27% fewer than during our peak share count in 2016. To date, the company has repurchased a total of 9,438,200 shares.

Sincerely,

Harris Kupperman

CEO