In this webinar, Josh Phair presents a vaulting operation based in Casper, Wyoming.

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Webinar Highlights

• Attractive features of Wyoming as an investment destination.
• How the combination of tax advantages, precious metals, and the vaulting business can combine to manage investor risk.
• The unique holding period requirements and opportunities with this deal.
• Utilization of the QSBS structure in conjunction with OZ incentives.
• Overview of the vaulting operation in Casper.
• Method for creating yield on gold and silver holdings.
• Fundraising timelines and minimums.
• Live Q&A with OZ Pitch Day attendees.

Industry Spotlight: The Wyoming Reserve

The Wyoming Reserve is a high-security, fully insured, precious metals focused vault facility for international and U.S. domestic commercial and industrial clients.

Learn More About The Wyoming Reserve

• Visit TheWyomingReserve.com

Webinar Transcript

Jimmy: We are at our final presenter of the day. It’s Josh Phair, with The Wyoming Reserve. Josh, there you are. You’ve got a 15-minute slot here at the end of the day. Really appreciate your support of OZ Pitch Day. So, without further ado, Josh, how you doing? Feel free to dive in when you’re ready.

Josh: Doing good. Yeah, doing good. Good to see you again. And yeah, glad to be here. So, yeah. Josh Phair. I’m the last guy up, I guess, for this event. And I’m probably the only one that’s not real estate. So, I think there’s a lot of good options that we’ve heard, and we’re a little bit different, and would love to just kind of run through the deck briefly with you guys. So, The Wyoming Reserve Opportunity Zone Fund Corporation. We are based out of Casper, Wyoming, which is basically in the center of the state, and we’ll run through this.

Some disclaimers. Let’s go ahead. So, why’d we select Wyoming? It is the least densely-populated state. But more importantly, it is the number one state for sound money. It has some of the best tax incentives, the lowest tax, in, really, most buckets. It’s one of the safest states, which I’ll get into why. And because it doesn’t have any corporate state income tax, no inventory tax, no franchise tax, no occupation tax, and no personal state income tax, when you combine that with an OZ, we’ve set this up as a pretty interesting scenario that we’ll continue on.

Here, a lot of people aren’t even maybe sure where is Wyoming. Here we are. Kind of highlighted some of the states we border. Casper’s about four hours north of Denver, if you were to drive. It’s, most people probably have been to Jackson Hole, maybe Yellowstone. Casper’s a big community focused on energy, a lot of oil, gas, and uranium mining.

This is the building that The Wyoming Reserve is co-located in. So, this building is owned by another company of mine, the Scottsdale Mint. It’s currently in construction, but we’re occupying roughly around 20,000 square feet right now. The building will end up being about 70,000 square feet, but this OZ has nothing to do with the building itself. This building is, or this opportunity, is all about, basically, three major things I want to leave you with. Tax-advantaged, it’s about precious metals, and it’s about vaulting business.

So, what we seek to do. Reduce your tax liabilities. We want to manage the overall portfolio risk. Most people here probably listening, you’re in real estate, you’re in probably the stock market, you’re in a lot of things. Most people have, they don’t have a lot of options in terms of what happens if we have a bad economy. We also wanna provide near-term liquidity. Our function in here is a lot different than others. We have a two-year minimum that you have to hold, and then we provide liquidity each and every year, which is a much different principle from most standard OZs. That near-term liquidity, you might not wanna take it, because of the OZ rules, after 10 years, but we’re also, for the first $50 million, we’re also a QSBS. So, we’re a hybrid, which means, instead of waiting 10 years to get your tax-free appreciation, it’s only, it’s reduced to 5. We also want to provide long-term real rates of return. And we’ll kind of walk through what is a historic look of gold and silver, and how do we think we can grow and do well during this tough decade?

Here is the vault. It’s in operation. This picture was taken last fall. The vault went into full commission in December. This is some of my team. Obviously, I’m there. And there’s a bunch of other people here. We’ve got people on the team that have taken… Ron, Ron Baldwin, on the far, far left, he took, he personally raised $350 million, and took a bank called CrossFirst Bank, and took them public on the NASDAQ. I think they’re roughly an $8 billion bank. And the rest of the team that we have to execute this.

How we add alpha. So, the tax advantages, obviously, most people listening know all the benefits of the QOZ, so I won’t go into too much. But like I mentioned earlier, the QSBS also provides a pretty interesting opportunity for those that get in on this first $50 million round. Precious metals. What does that mean? So, we’re a vault operation, and so, but we hold all our, the, 90-plus percent of our assets are gonna be in physical gold and silver, that’s stored in the vault in Casper, Wyoming. So, if gold and silver goes up or down, you know, that’s our balance sheet. So, we’re gonna essentially ride or die based on where the metals trend over this decade. As you can see here, here’s the scenario of the various tax scenarios, if you’re able to defer. Again, I’ll kind of move through this. We’ll go on to the next page.

Historically, a lot of people say, “Gold’s not really that great of investment. Tell me more about it.” 1971 was the last year the U.S. government had some sort of connection, the currency had some sort of backing of the U.S. dollar with gold. Richard Nixon took us off that. At that moment, we were actually allowed, American citizens were not allowed to own gold, prior to that, this time. Since then, you can kind of look and say, “Hey, we’ve averaged right around 7% a year, which isn’t actually that bad when you take in, you know, some consideration.

We are holding 90-plus percent of The Wyoming Reserve, so, as we raise money, it’s going into physical assets that are held in this vault, gold and silver. But, instead of just putting gold and silver on a shelf, and hoping it goes up, we also have a way to create yield upon it. So, we mentioned that we are always net long. And our goal is to stay long, but we will also operate a vault, which would be more similar to a very sophisticated storage facility. So, we’re providing storage for what could be hundreds of millions, potentially billions of dollars of insured physical assets for third parties as well. So, our vault is 15 feet tall. We’ve got special racking in place to be able to hold, if a central bank or a government, of which my other company, Scottsdale Mint, we meant for 25 foreign governments and central banks, private banks, large private banks like TD Bank. If those types of people want to store vast sums of gold and silver in our vault, we would charge them a fee, which provides a little bit extra yield.

What is that strategic partnership? This really, while it’s a new start, we just started up last year, our goal is to be profitable by the end of this year. How are we doing this? Well, Scottsdale Mint already manufacturers for so many governments, banks, and then also, the majority of the world’s bullion dealers, all across the world, buy something from Scottsdale Mint. So, instead of Scottsdale Mint sending its business off to other vaults, we’re able to refer it to a vault that’s co-located in the same facility.

Some of those other benefits, too, also are in relation to the financing side. So, oftentimes, bullion dealers, or other companies, such as jewelry, they will finance their inventory. So, we could do secure lending out of our own vault, just like we could, just like a bank would. JPMorgan owns their own vaults, and then other banks, like BMO, and TD Bank, Wells Fargo, they’re also in the precious metals business. They use a Brinks vault, for example, and they’re able to finance. So, we’re able to utilize our own balance sheets, The Wyoming Reserve can utilize its own balance sheets to hold its metal. But we’re able to hold it in the form of various shapes, sizes, brand names. We’re able to do things for other people, and charge a fee while it’s under our care, custody, and control.

We are in the midst of closing our first $50 million. We’re roughly, over, roughly 20% already there, I think. Here, this is a $43 million. The majority of people in it are all insiders, I believe over $8 million. So, myself and some others on the board have gone in. It’s a $50,000 minimum. And, essentially, what we’ve got here is, is a pretty interesting scenario, where each year, we calculate a new stock price. So, it’s based on the value of our assets. So, if we go up or down, each year, we’re calculating an audited, and then we calculate a new stock price, each and every year. So, that’s how investors are able to come in and out.

So, that liquidity provision, much different than real estate. So, if you’re trying to develop a property, right, the only way you can get your money out is selling out, or finding someone to take your position as an investor. So, the beautiful thing about precious metals, it’s one of the most liquid items in the world. It’s in the trillions of dollars around the world. It’s the only asset that’s on the balance sheets of central banks to this day, and we’re able to easily sell down or add to our inventory, based on investors coming or going. So, let me run through, and we have a little bit more time as well. I know I’ve gone a little quickly. But, we’re able to create yield on that precious metal that’s there. So, our hope is that you’ve got the historical potential of gold and silver going up. And then we’re adding business alpha, that hopefully, as we stack that up, we can do a pretty nice return. Instead of us coming in and saying, “Hey, the founders are gonna take 20%, 30%, 50% of the company, really, the way we’ve done it is a traditional 2% and 20%. So, we charge, the founders charge a 2% management fee each year, and if we beat a hard hurdle of 7%, we also, we share in an 80/20 up above that.

So, we’ve really set it up pretty nicely, to where we want our investors to win. This is a tough decade. It’s been a tough decade, and we’ve got some serious headwinds coming ahead. I don’t know if you’ve been paying attention. Bitcoin is all in the news, that it’s hitting new highs. Gold is also hitting all-time highs, but there’s not a lot of fanfare right now. But it’s not wild highs. It’s just, we’re punching through, just this week, new highs. And so, there’s a really interesting scenario here that’s going on in our markets, where, you know, people are looking at banks, you know, you’re hearing problems all over again from last March. It’s March 2024. We’ve got bank issues approaching us. We’ve got government, who’s just out-of-control spending and diluting our base. This provides an opportunity where precious metals can do very well this decade. So, I don’t know how much time I’ve got left, Jimmy. I kind of ran through a little quicker. There’s probably some Q&A.

Jimmy: No, that’s great. That’s great, because it gives us time for questions, and you’re the last show of the day, Josh, so I don’t have, nobody else is waiting on us. Let’s spend a few minutes going through some questions. We did get a couple of questions in. One I got, private chat. One’s in the Q&A here. Let’s go to this one in the Q&A tool first, from an anonymous attendee. This person says, “Sorry to be dense, but what is the QOZB exactly? Is it the vaulting business? When you become an LP in this investment opportunity, what is it that you’re investing in exactly?”

Josh: You own a vault operation. And so, the vault operation is six-sided. So, you got a floor, four sides, and a roof. So, you own the vault and everything that’s inside, that’s on the balance sheets of the company. So, it wouldn’t be third-party metal, but it would be the balance sheet. So, essentially, think of this as it’s something between a hybrid between an ETF, of just buying gold and silver, but it’s a company. It’s a company that’s operating. So, we’re adding a lot of business activity. Trading. Trading. We’re obviously doing third-party vaulting. And like I mentioned, there’s the yield opportunity, which is what banks do with precious metals. So, JPMorgan, for example, will finance, or BMO will finance bullion dealers all across the world, they’ll finance them. But they’ll put them in their vault, and then after they’re… And they sit on the balance sheets of the bank, the exact same thing Wyoming Reserve is doing.

So, we’re able to sell, we’re able to offer custom manufacturing through other mints, such as Scottsdale Mint, and it comes into Wyoming Reserve, and it sits on the balance sheets of the Wyoming Reserve. And when, if, let’s say Jimmy over here wanted to put together Jimmy’s Coin Shop, and he said, “Josh I need $10 million with my logo on it,” well, that’s a lot of money to come up with, so a scenario would be, is, Jimmy’s Coin Shop’s products are all produced, and put in the vault, ready to be purchased and shipped out, very similar to an Amazon drop ship facility. And as Jimmy tells his sales team, and says, “Hey, let’s go sell this product,” and each week, he’s selling that product, once Jimmy pays for it, The Wyoming Reserve then ships it, drops ships it, either white label, directly to his customers, or to his own shop. That type of business is very common. This is how car dealerships are floorplanned, their vehicles on their lots. This is how a lot of industries work. As you know, interest rates are a problem in a lot of sectors. Beautiful thing is, our industry doesn’t really work off of interest rates. As our investment, we’re really interest rate, we’re not sensitive to it. So, our project we don’t need to worry about are rates high or low. Frankly, the higher rates, the more we can charge on the metal that we maybe are holding on behalf of other companies.

Jimmy: Good answer there. Yeah, I guess it’s correlated with the risk-free rate, which is highly correlated with interest rates. Jay asks, “You said the vault is up and running. So, are you having cash flow now? If so, when are you cash flow positive?”

Josh: Yeah. Yeah, that’s great. Yeah. So, we started last year, like I said, myself and a few insiders. We got this thing running last year. Our goal is, we got a shot at being profitable by the end of 2024. So, I believe we’ve already done… Don’t hold me to it. I think we’ve already done roughly $14 million in sales, just this, in 2024 already. So, the goal is, we’re gonna keep growing this. So, as we raise more and more assets, we really are shooting for this first $50 million. We’re hoping to close that pretty soon. We’re also going through the broker-dealer network, which is just turning on. So, this product’s gonna be syndicated out to what will be hundreds and then potentially thousands of wealth offices, being sold through RIA dealers and whatnot. So, this is kind of a direct opportunity, before a lot of those guys get ahold of it.

We’ve gone through all the due diligence, eight law firms. We’ve got Deloitte, FORVIS. We’re audited. We also even do…most vaults in the world don’t do third-party audits of third-party metal. We’re doing that on a quarterly basis. So, we’re very transparent. Our hope is to really bring this to market. We go, hopefully, raise the $50 million here soon, we close it, we strike a new stock price after we’re audited, and we’re gonna do a $100 million round. So, this thing is really more of an evergreen fund, and it will continue to be an OZ, and hopefully, we’re crossing our fingers that we get some potential extension from the government here before long. But really, we’re an evergreen fund, where we’re not diluting our investors in a traditional format, you know, so, because we’re really more of an asset-backed company, and based on the more and more we do, we’re able to basically just continue to raise more…we issue more stock, based on our net asset value. And so we do what’s called an SRV, a stock redemption value. So, each year, if every single investor wanted their money out, it’d go right down to a zero price. We’d be able to pay it out. So, we’re marked to market every single day. We’re not doing anything too, too silly here. It seems complex, but it’s also very simple.

Jimmy: Good. We got time for a couple more questions. We got two more questions in here. Jay asks another question. “Why only common shares? Is there an option to buy voting shares, preferred shares as well?”

Josh: Yeah, we started off this way, you know, possibly different rounds. It’ll be a little bit different. You know, what’s a lot different is, I started the company, and even though I have founder shares, I’ve gone in as an investor, but I’m no different than anyone else. So, really, what we’ve done is create a vehicle where everyone can do quite well. If we were to sell, we do have a provision. If we were to get bought out, let’s say a large fund, maybe a large bank, would like to buy us one day. Basically, that would be split half between the founders and half to the stockholders. So, there is the potential for an opportunity, you know, above and beyond just our traditional, “Hey, how did we perform this year?” So, and my personal take is, with everything going on in the world, the government, you know, all this inflation, all this stuff, is, you know, holding hard assets like this is, this is the time to be in it. And most of us live here, we work here, in America. You know, we can’t control what’s going on with the U.S. dollar, but clearly, clearly everything is costing so much money because of the money printing that’s going on, which, in turn, should benefit this OZ.

Jimmy: Good points there. The questions keep on coming. I’m gonna keep firing them away. This one’s from an anonymous attendee. Wants to know, “What is the law firm who wrote your opinion letter that gold is inventory for QOZ purposes?”

Josh: Yeah. So, Haynes and Boone, their particular office is out of Dallas, Texas. We have one of the top securities attorneys in the nation, handles some of the biggest, Fortune 500 and up companies. I won’t say his name publicly. If you guys are interested, or go to our investment portal, we are willing to share that opinion letter. So, that is something… We’ve spent a lot of money bringing this online. I don’t wanna say that I’m not willing to just give everything away. We’ve spent a lot of time and effort, probably, it’s been two and a half years that we took to put this together, to make sure that we were compliant. So, we originally got an opinion…we first got a memo, a legal memo, and then we have an opinion letter. We’ve also gone through due diligence, through other firms, like Mick Law Group and others, that are more into the lane for the broker-dealer world.

Jimmy: Good. Josh, if you don’t mind, we got a couple more questions coming in. I can keep them coming toward you. Jason wants to know, “What, if any, is your leverage strategy?”

Josh: Leverage strategy is, in a normal market, we don’t need leverage. So, we are actively managing it. So, in some situation, let’s say we raise, a million dollars comes in. The question is, is do we go 50/50 gold/silver in that exact day, or do we say, “Hey, we wanna hold cash, we wanna just work a treasury bill for a few days, a week or two, and we dollar cost average in.” And then the question is is what percentage are we gold to silver? Now, there will be times where we will use, let’s say, a futures product. We wanna be a little bit more net long, or, frankly, to manage it, and maybe we’re hedging a small position. So, the goal is we’re always net long. Our investors want us to be net long, but we are managing it. I call it managing the margins. That’s how we wanna beat the averages.

Jimmy: Good. Another question from Jay. Jay, thanks for all your questions today. “Your stated payout target is 7% per year. I assume that can go up or down, depending on revenue?”

Josh: No. So, that’s not. That’s a historical rate of return of gold and silver. So, if we just follow history of gold, my lawyers would kill me if we gave an exact, guarantee rate. Our goal is we wanna beat that, though. So, I show that just because if you put gold on the shelf and silver on the shelf for the last 50 years, that’s been your average. And our goal is, we’re adding the active management of the metals, the vaulting business, and also the…and part of that vaulting business is also the active management, the metal availability fees, the other things that we can store. So, as we bring all that alpha in, we’re wanting to stack those layers on top. I mean, you know, my lawyers would want me to always say, “All investments have risk, and you must be accredited investor to invest,” and then, really, everything that I’m saying today is qualified by our PPM. And I would recommend everyone go to thewyomingreserve.com, in the top right corner, it’s a stock offering. And there, you’re able to read our PPM. It reads quite well. It’s pretty big, lengthy. It’s done quite well. So, this is a really fast, fast and hard 15 minutes here, so I know it’s kind of a water hose.

Jimmy: Just meant to be a quick introduction. By the way, I’m impressed with the amount of engagement we’re getting here at the end of the day. We don’t usually have this much engagement in the last session of the day, so this is pretty cool. We’ve got two more questions that came in, Josh, if you don’t mind. Alan wants to know, “Do you hold gemstones, and provide a market for them, or is this just purely precious metals, gold and silver?”

Josh: Yeah. So, gemstones are not considered for what we’re doing, just because it’s not an active market. It’s not… So, we’re marked to market every day. Gemstones don’t trade. There’s no price. So, we deal in metals, that there’s a price every single minute, every single day. While gold and silver is our primary, we will, longer-term, have some what I would call the green tech metals as well, such as iridium and ruthenium. If the people listening don’t know about those metals, you’re gonna be in for a ride. That’s gonna be part of the hydrogen economy that’s coming. There’s not enough of those metals. Most people have no way to invest in it. Wyoming Reserve will have those assets as an option to be on our balance sheets for our investors.

Jimmy: Okay. Last question just came in, from Philippe. Philippe wants to know, “What’s the difference between this and just holding physical gold at home? Over 10 years, what would your total return be compared to just holding physical gold at home?”

Josh: Hey. That’s a great question. My other company, that’s what we do. We provide physical gold, gold opportunity. So, you gotta remember, we’re putting this in an OZ. So you’re getting some serious tax advantages that you wouldn’t get. And oh, by the way, if you own the ETFs or the physical metal, federal government, the taxation rate is considered a collectible. Even the ETF. So, you’re taxed at 29%. Well, we’re C Corp. We’re taxed at a much lower rate. But, as, being in an OZ, you’re getting the deferral, but you’re also getting the potential for tax-free appreciation. So there’s a lot of alpha beyond this. And so, again, you can hold metal at home. I’m a big proponent of that. That’s what my other company offers. But you don’t get those tax incentives. And then you also don’t get the added yield that a business that’s operating in the industry… You know, think like, you know, during the gold rush days, there were guys that were out there panning. Some guys, you know, held their nuggets and they made money, but sometimes the people that made the most were the ones that sold the picks and axes.

Jimmy: “But even after the 2% and 20%?” Philippe chimes in.

Josh: Oh. Hundred percent. That’s the goal. So, really, I can tell you, I run, it’s, we’re one of the largest, Scottsdale Mint’s one of the largest mints in the world, already. I didn’t do this for 2%. My goal here is to create something that is, one, long-term, but there’s huge alpha potential beyond that. So, I wanna share, when we hit and beat those numbers, and we perform really, really well, my hope is that I’m sharing in it, and you guys are, we’re all high-fiving. That’s the intention of this product, and why I created it.

Jimmy: Fantastic. Well, Josh, we’re over time, and we’ve run out of questions. We got a ton of questions there at the end. Thanks for putting up with the rapid-fire Q&A. I really appreciate you being here with us today, Josh, and really different type of opportunity, The Wyoming Reserve. Head to thewyomingreserve.com to learn more. I’ve also posted that link in the chat. Josh Phair, thank you so much.

Josh: Thank you. Thanks, all.