SMURF - Tokens.com Corp. (SMURF) Q1 2023 Earnings Call Transcript
Tokens.com Corp. (SMURF)
Q1 2023 Earnings Conference Call
February 15, 2023 10:00 AM ET
Company Participants
Jennifer Karkula – Head of Communications
Andrew Kiguel – Co-Founder, Chief Executive Officer
Martin Bui – Chief Financial Officer
Deven Soni – Chief Operating Officer
Conference Call Participants
Kevin Dede – H.C. Wainwright
Presentation
Jennifer Karkula
Hello, and welcome to the Tokens.com Q1 Financial Review Conference Call. My name is Jennifer, and I will be your moderator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. [Operator Instructions] Please note that this conference call is being recorded.
Andrew Kiguel. I will now turn the call over to Andrew Kiguel. Andrew, you may now begin.
Andrew Kiguel
Thanks, Jennifer and welcome everybody. On today's call, it's myself. We have Martin, our CFO; Deven, our COO, and Jennifer, our Head of Communications. With that, I'll just do a quick introduction about the company. We're a public company. We invest in web3 businesses and web3 assets. We primarily focus on three areas. One is crypto staking, which occurs within our Tokens.com. We have a subsidiary named Metaverse Group, which focuses on metaverse and ecomm3 activities. And then we also have a subsidiary called Hulk Labs that focuses on crypto gaming and play-to-earn gaming.
All three of the businesses are tied together by a utilization of blockchain technology. We all work together. All of these areas are linked to high growth areas within web3.
So with that, I'm going to just turn it over to Martin to provide a quick review of Q1. I'll provide some commentary after that, and then we'll open it up to questions.
Martin Bui
Awesome. Great. Thank you, Andrew. Hello everyone. Just want to remind everyone that all the numbers presented here are in U.S. dollars, unless otherwise stated. Also because of the change in our fiscal year last year, the Q1 2023, previous end of three months period ended December 31, 2022. And the comparative period is the three month ended December 31, 2021.
So our revenue for the three months was $152,000 compared to $326,000 for the same periods of last year. Staking revenue is $40,000 compared to $260,000 of last year. Our average staking yield also increased from 6% to 6.9%, but obviously the revenue dollar now was impacted by the crypto price. Metaverse Group has $108,000 in revenue for this quarter, which is more than day across come by fiscal year 2022 revenue of $95,000.
Our operating expenses for three month are $718,000, a 78% decrease from the treatment of last year of $3.3 million. And that is already including all the added costs from Metaverse Group and Hulk and comparing the level of operational cash burn here and how much cash we have right now, which is approximately $5.5 million, not including all the liquid tokens.
We are very well capitalized for the next 16 to 24 month. I won't go over all the non-cash comparison, gain or loss on our crypto or warrants because they're not indicative of our operations, but I'm happy to take any questions after.
And with that, I'm turning the call back to Andrew. Thank you everyone for listening and attending here.
Andrew Kiguel
Thanks, Martin. So just before we go into the questions, I wanted to sort of just lay out some sort of principles in terms of how we're viewing operations. 2022 was by any measure was a tough year, not just for Tokens.com, but for most companies, almost every sector on the planet suffered double-digit growth. I think except energy, the way we sort of look at it is 2022 was the year where we were successful in planting seeds.
And the genesis of the business was in the staking operations, last year was really the year where we planted our seeds in the metaverse area and in the play-to-earn crypto gaming areas. And that takes work to build these businesses. And we appreciate shareholders' patience in that.
What has happened, I guess, since planting those seeds is that they've started to sprout. And you can see that in that Hulk Labs is now revenue positive. Metaverse Group is revenue positive. And you can see that, Metaverse Group revenue this last quarter was, more than its entire revenue all of last year.
And when I look at think about 2023 really as you see describing, it's a time for us to start delivering on growth. And I view that as growth at the revenue line. And so where I think you're going to see we're going to be spending a lot of our time this year is scaling these businesses and continuing to find abilities to generate revenue from them.
I think people have been patient with us and we've had enough time to sort of say, okay, we've built these businesses. I think we've established that they work, we've established that we can generate revenue from them, and now it's time for us to really show that we can scale these businesses and do – continue doing the interesting things we're doing.
In terms of other things, we are always very focused on preserving cash. But one of the things that we've seen is, there hasn't been a great opportunity for any companies in the crypto space to raise cash in what I would say accretive ways over the last 12 months. Certainly when I look at some of our peers, those aren't deals that, we're fortunate that those are deals that we don't necessarily need to enter into. I feel that our cash balance is pretty good and the amount of tokens that we own is also fairly strong, and they've actually increased in value since December 31.
And so if that trend continues, you'll see a gain there at the end of our next quarter. So again, we're always keeping an eye on preserving cash, keeping our corporate overhead low. We continue to look and examine every part of our business, what is absolutely necessary, what is not? And I think you can see it in our numbers, and you'll continue to see that we continue to do a very good job in reducing the corporate overhead.
And so I think over time, what you'll see is there's our revenue going up, corporate overhead declining or becoming stable. And that is sort of the recipe for getting us into profitability. The last piece that I would want to mention is just that we care about the equity. We have not issued a share since 2021. Through my experience in being a banker, I know that in looking at companies, you can't be [indiscernible] or about issuing equity. We want to make sure that we preserve it.
We think that in the long run that creates value for investors. And in a good market, that means that when there's demand, there's not a lot of shares out there. And so that tends to can create outsized appreciation and at times can create outsized drops in your share price when you don't have that – a ton of liquidity. But we're building this company for the long-term, and we feel that being careful with equity and caring about the equity is important and one of the principles that we have here at the business.
So again, we appreciate everyone's patience and being with the company, we continue to feel really confident that we're working on exciting things. As I said, the morale at the business is very good. Within each of the subsidiaries, I think people are excited to come to work. There's more innovative and exciting things that we're continuing to work on that we're excited to share later this year.
So maybe with that, we'll turn it over to a Q&A. Jennifer?
Question-and-Answer Session
A - Jennifer Karkula
[Operator Instructions] So the first question is from Kevin Dede [H.C. Wainwright]. Hello, ahead.
Kevin Dede
Hi, Andrew. Jennifer, I hope you can hear me?
Martin Bui
Yes, we can hear you.
Jennifer Karkula
I can hear you.
Kevin Dede
Great. Andrew, I was hoping you could speak to Hulk. I know that you put a lot of effort into that. We spoke about it a month or two ago, if I remember correctly. I was just hoping you could address how you see growth there and I think the overarching question of sustainability and that pay-to-play scenario,
Andrew Kiguel
Right. So what I'll do is I'm going to turn it over to Deven, who is spearheading that, but leading into it, I think we're still just as excited about that business segment as we've ever been. But I'll turn it over to Deven to provide you sort of some a quick overview.
Deven Soni
Sure. Hi, Kevin. On the Hulk side as Andrew mentioned, the team continues to be really optimistic, excited about what we're seeing in the marketplace. It's definitely changed when play-to-earn came into popularity in early 2022. A lot of the early titles that launched were not optimize for, for, for certain things that we look at as, as kind of people that invest in these games and play these games. And because of that we've taken a very deliberate approach to only focusing on gaming titles and having players, our network player on gaming titles that we think are long-term sustainable.
We, we don't want to get into these situations where we buy assets, they spike in price and kind of fall off the base of the earth like many have. And that has intentionally limited our ability to grow extremely quickly in 2022 because the titles that we've targeted are small. However, our team is analyzing hundreds of games a month, and we've certainly identified a few new titles that are launching this quarter, next quarter. And our team is really gearing up by building tooling, scaling the player network to over, thousands of people so that as these games launch gain popularity, that we can really the turn on the gas so to speak really, really quickly. The burn at that business is extremely low. There's more or less six people all of which are sort of offshore, kind of really young. And as Kevin said, we're extremely excited about what the future holds.
And I think that you'll see that in the P&L, certainly on the revenue side in the next two or three quarters as we scale up our investments. And I think you'll see that as we build new software that's seems to be really high margin to help other people kind of use the same, learnings and tools and things like that, that we've been using for the past six months. And I'm happy to have more color, but that's that.
Andrew Kiguel
We like this business. I mean, we think it's a bit of an asymmetrical risk because as are all of our businesses, and by that I mean they're not capital intensive, but the potential rewards as we continue to execute are quite high. So we've been able to bring them to revenue very quickly, and we've been able to sort of start scaling them and growing them. And I think decently well concerning the market. So there's a lot of other things that we're working on in that business, which we can't disclose quite yet that we're really excited about. But like I would say stay tuned on it.
Kevin Dede
As you look at it going forward, Deven, Andrew, whoever wants to jump in, do you – are you considering adding more people to address more depth or are you trying to add more titles to fill out your portfolio? How should you look at growth from that perspective?
Andrew Kiguel
Absolutely. It's the equation here is really simple. The more assets that we can buy that we find are profitable, the more players we can add to the network. It's an extremely scalable business, and we don't envision adding more than two or three people to the payroll this year. What we really do envision doing is building tooling to remove some of the manual efforts so that things can be a lot more streamlined. But the equation is really the better games that are out there that we think have profit potential for the long-term, the more assets we can deploy and the more revenue we can earn per dollar basis.
Kevin Dede
Okay, thank you. Andrew, one other question for me, just on the regulatory front. Obviously the Paxos SEC battle rages south of the 49th, I'm just wondering how you see that maybe transferring across the 49th and affecting your operations, particularly in staking and maybe anything else you want to add color to?
Andrew Kiguel
Yeah, so obviously we're monitoring that. It hasn't been anything for a concern of us, and I'll tell you why. We're more like a client than we are a, like we don't operate nodes, we have no retail clients, which means we don't have to worry about KYC or AML. And I'll tell you why that that's important. If you look at where the SEC and some of this, the concerns coming in are along the lines of when you're offering these products to retail or even institutional investors, where does the control remain?
And we don't control, we don't do anything for third parties. We stake our own tokens, they're always in our custody. We manage our own wallets for staking, it's in our control. It's not co-mingled with anybody else's. And so I think that the risk of anything sort of impacting our operations on the staking site are quite remote.
And even if – for somehow the staking was to become somehow regulated, our assets remain with us, they're not sitting at clacking or anywhere else. And so I don't see this as affecting us. What I really see is happening, and I put a sentence in this in the MD&A, which is we're in favor of regulation, like clearly last year, a mess when it came to protecting investors in the crypto space and FTX, Celsius, the list goes on and on Genesis.
And so we're in favor of regulations here that protect investors. And clearly I think what the SEC and regulators are looking at is let's not promise people yields where they deposit their assets elsewhere that can be compromised. And that's not an area that we are involved in any way at all.
Kevin Dede
Martin spoke to an increase in yield, and I was wondering if you thought that was the result of portfolio changes that you've made, and what sort of outlook do you hold for staking yields this year?
Andrew Kiguel
So there's a couple of broad questions there. I'll tackle like on the broader staking yield, I think generally what you're seeing is it's a little bit like a dividend, right? So your cost price that you go in matters and what I would say the tokens that are earlier stage or perceived as being riskier are going to have higher yields. What we sort of said is when we were looking at going into – last year going into the towards the end of the year when you had FTX blew up Genesis, and this was on the back of a whole bunch of other things like Terra/LUNA, we made the decision and we said, look, we think we're better off holding a better cash balance and getting rid of some of these tokens that we think could suffer more in this type of environment.
And so if you look, we sold off our Oasis Rose, which we sold off at a great profit. We sold some other things off as well. And largely what we're holding now is ETH and Polkadot are what we're staking. And I think when we're looking at things going forward, you'll see us leaning even more strongly towards what I would say layer one tokens with very high market capitalization.
Martin Bui
Just one thing there which is you're right that the token mix did impact our overall yields. And you look at, Polkadot having a higher yield, and when something like that appreciates, obviously it over represents on our yields. But the other thing to really think about is in many ways, the yield on staking assets is the overall inflation of the network divided by the number of people that are staking.
And as you look at some of these products at being targeted by the SEC and retail consumers being reticent to stake in easy ways that actually reduces the number of total tokens being staked on a network, which then by default increase yields a bit for the stakers, which you can definitely see with yields coming up, from 4% last year to 5.5% this year, Polkadot going from 13% to 14%. I think you'll continue to see that this year as well.
Kevin Dede
Right. So Deven, it's particularly interesting in the ETH case, right. Given some of the upgrades will allow stakers to pull coins off a nodes, and I think the general reports indicate that there, now that it's no longer being mined, there's more being burned than minted. So could you speak to how you see that changing the yield profile?
Deven Soni
Sure. I mean, I think it's really hard to say what's going to happen with this initial, what's called the Shanghai update, which will be the time when people can release tokens. I think there's a lot of factors here and one is people at stake two and a half years ago that maybe didn't want to stay two and a half years ago. And they're being new technology stake, I think will probably be staking pretty quickly and moving to other staking technologies like Lido, which is a liquid staking token. So I think there's that component of it. I certainly, as a company, I think we're extremely bullish on ETH overall.
You see the usage, the network usage going up, tokens being burned, going up a lot more people building on ETH because of the anticipation of faster throughputs. And again, the deflationary aspect like you mentioned. So we're pretty excited about ETH. I think we hold a lot of it, obviously at the Hulk side, we're seeing more and more games being built off of ETH, on the NFT side, you're saying NFT, ETH volume go up more than other NFTs, layer one. So overall I think we're pretty positive about it.
Kevin Dede
Very good. Gentlemen, thank you so much for entertaining my questions. I really appreciate the time.
Andrew Kiguel
No problem. Thanks Kevin.
Jennifer Karkula
The next question will be from Bill.
Unidentified Analyst
Bill, can you hear me?
Jennifer Karkula
Yes.
Unidentified Analyst
Great. Thanks for taking my questions. Andrew, appreciate the color that you've shared on cash preservation and – until the market swings around it's clear that Tokens.com as well as the rest of the space is going to need to focus on cash preservation. In the quarter, we saw you guys substantially decrease your cash operating expenses, which was great by roughly 30% sequentially. Now, I guess the question going forward is how much lower do you believe you'd be able to drive that down and any color you can provide on that is appreciated.
Andrew Kiguel
Yes. So what I would say is, we’re continuing to find ways to cut costs. And for the people that works with me know that I look for costs big and small, including having switched here to Zoom because this is amazing. When you do those conference call things, they charge you like $2,000 but we can do this for about $70 via Zoom, so again, just an example. I continue to believe that from a cash cost perspective for this year we can get our overall corporate overhead in and around the CAD$1.2 million range. And that is, I think a lot lower than we would’ve been in the past, and I think fairly significantly low for any public company to be able to get to that level. So that’s what we’re focusing on and it’s always a topic of conversation on all of our internal meetings as well.
Unidentified Analyst
Great. Thank you. And then just kind of following-up on that, compared to other public entities that are in the NFT space, Tokens.com isn’t paying exorbitant amounts for IP to build out its Metaverse Group platform. Can you share some more color in terms of why Tokens.com may be better positioned than some of its peers on that end?
Andrew Kiguel
So I don’t want to comment on peers, but I can comment on sort of the strategy there and what’s been a little bit different. And sometimes it’s just the way things evolved. When we started originally, I wouldn’t say collecting Metaverse inventory, we had a focus on the Decentraland, and then as that other ones came forward, we started being what I’ll call metaverse agnostic. And the original business plan was to lease out the land, the parcels to advertisers and brands.
And we’ve been successful in that, I believe like almost everything we own in Decentraland is leased out. But where we started to find this really new business model is instead of going out and starting to create NFTs and do that, we found that we’re creating this sort of branding agency business. We’ve termed it ecomm3 where we’ve had a lot of these Fortune 500 type companies that are working with us.
And right now, I think we’ve signed up one of the top four Canadian banks. We’ll be launching soon, I think one of the largest top three accounting firms in the world. We’ve been shortlisted for some massive projects there that if they hit, I mean, we’re not talking about a couple hundred thousand dollars of revenue, but if they hit, it’s like in the millions. And so we’ve been sort of just trying to focus in again, on large B2B clients. We have IP there, but the IP is related to sort of things that we can do with these clients within these spaces remaining metaverse agnostic and really focusing on winning those clients and generating revenue.
Not sure what other guys have – other companies been doing. I think some other companies, what they’ve been doing is, is using their cash to secure, we call it IP, but really what they’re doing is securing brand names. So they’ll go in and I don’t know what example to use, like Harry Potter or something like that. You go in and you pay a few million dollars for the rights to create NFTs for that area.
The issue that we’ve seen with that is not a lot of people want to continue paying for NFTs. I think NFT technology is profound and compelling, but in ways that are beyond just sort of showing NFTs and hoping people buy them and trade them. And now they’re being used as ways of entry points tickets tied to physical goods, tied to sort of tracking information. And these are sort of the areas that are really intriguing to us at Metaverse Group and at Tokens.com as to how we can utilize that as opposed to just trying to pay for the name rights to sell NFTs for something.
Unidentified Analyst
Great. Thank you. And in this quarter we saw a big $85,000 contribution from consulting revenues earned by the Metaverse Group. Can you just share some more color on the composition of that and how sticky will this revenue be looking ahead?
Andrew Kiguel
Yes. Well, we think it could be bigger. It’s called consulting revenue, but the really – so you have your lease revenue, but then we’re also being getting involved in like what does the space look like? So in the actual creation of that space, what is the objective of the client? What is the target audience you’re trying to reach? Which is the best metaverse for you to build in? And so in providing this plan, it’s almost like we’re turning into management consultants for brands in the metaverse. And so that’s where that revenue is coming from. I wouldn’t say necessarily it’s sticky like recurring, like it is on the leasing, but I do feel really optimistic that that team is continuing to grow its reputation and its ability to deliver for – I’d say in fairly large companies.
Unidentified Analyst
Great. And then as we look at kind of the leasing revenue side of the business Metaverse Group if I recall correctly, Metaverse Fashion Week will be taking place at the end of March. Last year we were coming off of bull market, so likely to expect that there might not be as much hype around this event. But I could be wrong. Can you share some more color in terms of some of the customers or the attention that you’re getting as the Metaverse Fashion Week gets planned out and is anticipated to happen at the end of the quarter?
Andrew Kiguel
Yes. And this is obviously me trying to look in and estimate what’s going to happen. So last year the Metaverse Fashion Show, it was the inaugural event, new, attracted 108,000 people and something like 7 billion media impressions around the world. We were featured in GQ Magazine, Vogue everywhere. And that was great, and it was a great way to get started and bring attention to, it had 60 different brands plus musicians and catwalk.
What I think you’re going to see this year is it’s going to be actually maybe not as popular. I don’t know if it’ll attract the same volume of people. I don’t know if it’ll get the same amount of media hits, but what I would say is it’s going to be more profitable for us. And the reason why is last year with it being a new event, we were sort of like trial in the air like, how much can we charge? What are our capabilities? How are we going to monetize this?
We did an okay job last year, but with it being new, I think we’re much more prepared this year to do far more build, sign more what I would call high profile clients and brands. I think we’re going to be doing a lot more work this year so that even if they’re still – again, if you can attract 50,000 to 100,000 people to an event online that presents a lot of advertising, branding opportunities and ways to monetize.
And so we’re feeling really hopeful. We’re excited about the people that we – again, we’re inking contracts daily there. And at some point, I’d say over the next four weeks we’ll be announcing, who some of these partnerships are with. But I think if it makes sense, I think the pie will be smaller this year, but we will have a greater piece of the pie.
Unidentified Analyst
Great. Thank you. And just sorry, last question. When we think about the use of NFT technologies and how it can be leveraged to bringing communities to events such as the Metaverse Fashion Week. What other types of applications are interesting your team, after the first Metaverse Fashion Week that happened last year? I’m wondering if any applications such as having customers being able to purchase real products that could get delivered to their actual door at home through the use of NFTs as an option. I believe last year it was pretty much only related to avatar. But I’m wondering if a customer could potentially go into the Dolce&Gabbana store in the Fashion District, see a nice D&G belt and order that to their house. Is that – how do you see this kind of Fashion Week evolving over the years and kind of stemming into other business segments, whether it be sports or other forms of entertainment?
Andrew Kiguel
Yes. So we’re exploring all those things. The obvious use case is a wearable, an NFT wearable for your avatar. But we are certainly exploring things like digital twins, where you buy the physical, you get the digital as well that you can use. When I think about NFT technology, again, I think we’ve been writing some stuff on this, I think it’s quite profound what the use cases are. And it goes beyond just the representation of graphics or clothing or shoes.
This ability to represent ownership on the internet and the ability for it as it passes hands to build in a royalty, I think has a lot of potential in many ways. I think the use cases in areas like ticketing, right, man I don’t know if we’ve talked about this before, but right now you sell a ticket, it goes to like a scalper vendor that then resells it. None of the profits go back. If you can find a way to link ticketing to the blockchain, I think there’s entry points to events, I think there’s a lot of potential there.
There’s a whole bunch of areas that we’re exploring. Obviously we need to stay focused. I’d love to be able to – if we had another like $20 million to be able to broaden the various areas of developing this, what’s happening here. But what I would say is the alpha generation, which is the generation – the cohort of 25 and under right now by 2025 is going to be the largest generation in the history of mankind larger than the baby boomers.
And this generation is completely comfortable with things like AI, the metaverse and NFTs. And so that’s going to start shaping a whole bunch of the ways, it’s a cultural technology shift that’s happening in terms of like how this technology is going to integrate and get used in ways that we can’t quite imagine yet, Bill, like similar to the early days of the internet. You know you have something really profound and amazing there, but it’s going to be up to the creators and the entrepreneurs here to unfold this and let it develop. And you have a population that’s – the appetite for this is quite strong.
Unidentified Analyst
Great. Thank you for all the color and look forward to the Fashion Week.
Andrew Kiguel
Thanks, Bill.
Jennifer Karkula
Thanks, Bill. The next question is from Joshua.
Unidentified Analyst
Hi. Can you guys hear me?
Jennifer Karkula
Yes.
Andrew Kiguel
Yes.
Unidentified Analyst
Hey thanks for taking my questions. I was taking over for Joe because they’re kind of spearheading to earnings calls this morning. My first question is just basically just regarding Hulk Labs itself. I know last time we talked it was kind of – I just wanted to talk about player count. I know it was like a north of 1,000 players, but like south of 2,000. I kind of just wanted to see where we’re at today. And I know the initial goal was kind of like 10,000 players by the end of the 2023, but I know it was kind of like less of a focus of player acquisition. Is there like a new goal at the end of this year or is that maybe kind of still where we’re at?
Deven Soni
I can take that. So, we’re definitely higher than we were last quarterly call by a few 100 players. I think the reason that we’ve been a little bit more deliberate about scaling the network there’s a few things that have changed. I touched earlier that we’re waiting for a few games that we’re quite excited about that we think have really strong tokenomics. The other thing that’s really changed in the space is because of the use of bots and things like that in a lot of games, many of the games have changed their tokenomics to be heavily, heavily skilled focused, which means you really need to have a 60% or 70% win rate in a specific game, especially the ones that have strong tokenomics in order to really generate the yields that we were expecting.
I think the top 25% or 30% of our players have that win rate. Many are still kind of leveling up. So what we’re sort of doing is investing a bunch of time, not necessarily money, but time in having some players train other players to kind of level up so that we don’t – we scale up more deliberately, but the yields and returns can be higher relative to the rest of the market. I think you’re seeing a lot of guilds and things like this in the space that have a lot of players, slower shrink their player account because of some of these changes.
And I think we’ve been able to grow pretty systematically. I think it’s really hard to comment on, when we look – because the market changes so quickly, we’ll have one game that we think we can scale really quickly and then it changes or for the worst or for the better or the asset type changes. So, pegging a player count is a little tricky because we’re only going to do it in a profitable way. We’re sort of not – obviously it’s a great metric for people to kind of point out to.
But I think the more important metric for us is sort of saying, hey, like what are we actually making per player? Is it profitable? Are we making money on a daily basis? And if we are doing that with the 1,000 plus players we have today and we’d like to sort of triple that at least by the end of the year and maybe if things go our way with these titles that are coming out, I think we can certainly hit that number. The players exist. They’re all like waiting to play games. There’s a long wait list of people that want to play. Our partners are exceedingly absent to kind of scale as quickly as we can, but we’re doing so in a deliberate manner that it’s really going to depend on the game quality and the game tokenomics.
Unidentified Analyst
Thank you. Perfect. And I just wanted to – I kind of wanted to get a broad sense of just Decentraland as a whole. I know I just wanted to know like, but just about retention player count in Decentraland. Also, I kind of noticed just kind of quarter-over-quarter the leasing revenue went down. I just kind of want to see any color behind that. Like can you provide – can you like, quantify anything sort of like renter wise in Decentraland and how that changed?
Andrew Kiguel
Yes. I don’t have handy specific information on Decentraland’s numbers. What I can tell you is that I think all of the land parcels owned by Metaverse Group in Decentraland are leased out. These aren’t necessarily huge numbers right now. But the focus at Metaverse Group is really to be metaverse agnostic. There’s certainly a lot of things that we like about Decentraland, but there is a lot of other metaverse platforms that we also really like using. I know that the guys have been recently very excited about spatial.
And so I don’t have the specific statistics to every single one. But what I would say is go forward you can continue to see revenue coming in from leasing that the consulting revenues related to building and helping these companies brand will be significantly outgrow anything or be much larger than anything you see from leasing. And that a focus on Decentraland land is not – that’s not sort of where we’re moving the company to.
Unidentified Analyst
Okay, perfect. And I just wanted to see just a quick note of like, is there just any – really any update on Genesis besides what we already know?
Andrew Kiguel
No, we don’t have any update. I mean, the value – so back when the accounts were originally halted back in November, it was sort of one of those things, we wanted to have a credit line available to us, not because we needed it, because we thought we might need it, and it might be a good way for us to add some leverage to the business instead of issuing equity. Obviously that backfired with the – them filing bankruptcy. So we owe them $125,000 and back in November that was about $350,000 of tokens that were collateralized against that.
So what’s happened since then is that the crypto market has appreciated a lot, and so the value of that collateral is gone higher. I think it’s closer to $1 million. Obviously we’re not repaying the loan until they release our collateral. It seems to be that there is a managed process underway. I don’t know where it ultimately results. My hope is, is that we get as close to 100% back of our tokens as possible. But I just don’t know. I don’t have a sense of the timing and I don’t have a sense of is it 50%? Is it 95%? I don’t know.
Unidentified Analyst
Okay. Perfect. Yes, that’s all the questions I have. Thank you so much. Thanks for answering them.
Andrew Kiguel
You’re welcome.
Jennifer Karkula
Thank you, Joshua. Again, if anybody has any questions, there is a raise hand icon at the bottom. I’ll give it a minute. Okay, so if there are no questions at this time, this will conclude the question-and-answer period.
Andrew Kiguel
Okay. So I’ll just close off again. Again, thank you to our shareholders and investors for being patient. I know last year from a share price perspective was difficult. I definitely heard a lot of people in my ear talking to me about it. We continue to be excited about our business, the things we’re doing. We’re trying to do our best here to grow these businesses. And certainly, last year they said was the year of planting seeds, those seeds have now started to sprout. And this year is the year for us, I think to deliver on the revenue side. And that’s where our focus is going to be. So with that, thank you very much everyone. And we’ll chat again next quarter. Bye.
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Tokens.com Corp. (SMURF) Q1 2023 Earnings Call Transcript