Business Wire | Apr 14, 2021 08:45PM EDT

FRMO Corp. Announces Third Quarter Results and Conference Call

Apr. 15, 2021

WHITE PLAINS, N.Y.--(BUSINESS WIRE)--Apr. 15, 2021--FRMO Corp. (the "Company" or "FRMO") (OTC Pink: FRMO) today reported its financial results for the 2021 third quarter, ended February 28, 2021 (May fiscal year).

Financial Highlights

FRMO's book value as of February 28, 2021 was $257.9 million ($5.86 per share on a fully diluted basis), including $94.5 million of non-controlling interests. This compares with book value at the prior fiscal year ended May 31, 2020 of $161.9 million ($3.68 per share), including $46.9 million of non-controlling interests. Current assets, comprised primarily of cash and equivalents and equity securities, amounted to $173.1 million as of February 28, 2021, and $104.8 million as of May 31, 2020. Total liabilities were $28.9 million as of February 28, 2021, and $11.8 million as of May 31, 2020, comprised primarily of securities sold, not yet purchased and deferred taxes.

FRMO's net income (loss) attributable to the Company for the three months ended February 28, 2021 was $34,336,936, or $0.78 per share, compared to $(4,532,007), or $(0.10) per share for the three months ended February 29, 2020.

FRMO's net income (loss) attributable to the Company for the nine months ended February 28, 2021 was $46,190,543, or $1.05 per share, compared to $(5,232,587), or $(0.12) per share for the nine months ended February 29, 2020.

FRMO's net income (loss) attributable to the Company excluding the effect of unrealized gain (loss) from equity securities net of taxes for the three months ended February 28, 2021 was $20,859,722 ($0.47 per diluted share) compared to $(1,156,465) (($0.03) per diluted share) for the three months ended February 29, 2020.

For the nine months ended February 28, 2021, the figure was $30,884,839 (0.70 per diluted share) compared to $(1,392,553) ((0.03) per share) for the nine months ended February 29, 2020.

Net income (loss) attributable to the Company excluding the effect of unrealized gains (losses) from equity securities net of taxes is a measure not based on GAAP and is defined and reconciled to the most directly comparable GAAP measures in "Information Regarding Non-GAAP Measures" at the end of this release.

Valuation of securities and cryptocurrencies are subject to change after February 28, 2021. The market value of several securities and cryptocurrencies might have changed substantially since that date. We look forward to finding new ways to expand our cryptocurrency mining operations.

As of February 28, 2021 and May 31, 2020, the Company held a 21.83% and 19.23% equity interest in Horizon Kinetics Hard Assets LLC ("HKHA"), a company formed by Horizon Kinetics LLC and certain officers, principal stockholders and directors of FRMO Corp. ("the Company"). Due to the common control and ownership between HKHA and the Company's principal stockholders and directors, HKHA has been consolidated within the Company's financial statements. The noncontrolling interest of 78.17% and 80.77% in HKHA has been eliminated from results of operations for the periods ended February 28, 2021 and May 31, 2020.

Further details are available in the Company's Condensed Consolidated Financial Statements for the quarter ended February 28, 2021. These statements have been filed on the OTC Markets Group Disclosure and News Services, which may be accessed at www.otcmarkets.com/stock/FRMO/filings. These documents are also available on the FRMO website at www.frmocorp.com.

Conference Call

Murray Stahl, Chairman and CEO, and Steven Bregman, President and CFO, will host a conference call on Thursday, April 22, 2021 at 4:15 p.m. ET. Only questions submitted to info@frmocorp.com before 1:00 p.m. on the day of the call will be considered. The call can be accessed by dialing 800-363-2106 (domestic toll free), or +1 334-323-0505 (international toll) and entering the following conference ID: 7275594. A replay will be available from 7:15 p.m. on the day of the teleconference until May 22, 2021. To listen to the archived call, dial 888-203-1112 (domestic toll free) or +1 719-457-0820 (international toll), and enter conference ID number 7275594.

Condensed Consolidated Balance Sheets(in thousands) February 28, May 31, 2021 2020

(Unaudited)AssetsCurrent Assets:Cash and cash equivalents $ 36,738 $ 38,443

Equity securities, at fair value 134,970 63,836

Other current assets 1,394 2,536

Total Current Assets 173,102 104,815

Investment in limited partnerships and otherequity investments, at fair value 83,685 40,898

Investments in securities exchanges 5,061 5,061

Other assets 1,769 1,807

Investment in Horizon Kinetics LLC 12,965 10,876

Participation in Horizon Kinetics LLC revenue stream 10,200 10,200

Total Assets $ 286,782 $ 173,657

Liabilities and Stockholders' EquityCurrent Liabilities:Securities sold, not yet purchased $ 6,231 $ 4,136

Other current liabilities 3,888 185

Total Current Liabilities 10,119 4,321

Deferred Tax Liability 18,041 6,701

Mortgage payable 737 751

Total Liabilities 28,897 11,773

Stockholders' Equity:Stockholders' Equity Attributable to the Company 163,392 114,993

Noncontrolling interests 94,493 46,891

Total Stockholders' Equity 257,885 161,884

Total Liabilities and Stockholders' Equity $ 286,782 $ 173,657

Condensed Consolidated Statements of Operations(amounts in thousands, except share data)Three Months EndedNine Months EndedFebruary 28,February 29,February 28,February 29,2021

2020

2021

2020

(Unaudited)(Unaudited)Revenue:Consultancy and advisory fees$ 1,409

$ 650

$ 2,369

$ 1,697

Equity earnings from partnershipsand limited liability companies1,789

777

2,294

1,870

Unrealized gains (losses) from investments recorded at fair value28,995

(249)

42,334

#(2,462)

Other944

5

(760)

1,780

Total revenue before unrealized gains (losses) from equity securities33,137

1,183

46,237

#2,885

Unrealized gains (losses) from equity securities recorded at fair value56,344

(2,907)

62,022

(6,349)

Total Revenue89,481

(1,724)

108,259

(3,464)

Total Expenses328

314

1,052

1,014

Income (Loss) from Operations89,153

(2,038)

107,207

(4,478)

Provision for Income Taxes12,799

1,204

16,892

3,267

Net Income (Loss)76,354

(3,242)

90,315

(7,745)

Less net income (loss) attributable to noncontrolling interests42,017

1,290

44,125

(2,513)

Net Income (Loss) Attributable to FRMO Corporation$ 34,337

$ (4,532)

$ 46,190

$ (5,232)

Diluted Net Income (Loss) per Common Share$ 0.78

$ (0.10)

$ 1.05

$ (0.12)

Weighted Average Common Shares OutstandingBasic44,032,781

44,032,781

44,022,744

44,015,741

Diluted44,055,150

44,032,781

44,038,347

44,015,741

About FRMO Corp.

FRMO Corp. invests in and receives revenues based upon consulting and advisory fee interests in the asset management sector.

FRMO had 44,012,781 shares of common stock outstanding as of February 28, 2021.

For more information, visit our website at www.frmocorp.com.

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995 - With the exception of historical information, the matters discussed in this press release are forward-looking statements that involve a number of risks and uncertainties. Words like "believe," "expect" and "anticipate" mean that these are our best estimates as of this writing, but that there can be no assurances that expected or anticipated results or events will actually take place, so our actual future results could differ significantly from those statements. Factors that could cause or contribute to such differences include, but are not limited to: our ability to maintain our competitive advantages, the general economics of the financial industry, our ability to finance growth, our ability to identify and close acquisitions on terms favorable to the Company, and a sustainable market.

Further information on our risk factors is contained in our quarterly and annual reports as filed on our website www.frmocorp.com and on www.otcmarkets.com/stock/FRMO/filings.

Information Regarding Non-GAAP Measures

Net income (loss) attributable to the Company excluding the effect of unrealized gain (loss) from equity securities is net income (loss) attributable to the Company exclusive of unrealized gains or losses from equity securities, net of tax. Net income (loss) attributable to the Company is the GAAP measure most closely comparable to net income (loss) attributable to the Company excluding the effect of unrealized gain (loss) from equity securities.

Management uses net income attributable to the Company excluding the effect of unrealized gain (loss) from equity securities, along with other measures, to gauge the Company's performance and evaluate results, which can be skewed when including unrealized gains (losses) from equity securities, which may vary significantly between periods. Net income (loss) attributable to the Company excluding the effect of unrealized gain (loss) from equity securities are provided as supplemental information, and are not a substitute for net income (loss) attributable to the Company and do not reflect the Company's overall profitability.

The following table reconciles the net income (loss) attributable to the Company excluding the effect of unrealized gain (loss) from equity securities to net income (loss) attributable to the Company for the periods indicated:

Condensed ConsolidatedStatements of Operations(amounts in thousands,except share data) Three Months Ended Nine Months Ended February February February February 28, 29, 28, 29, 2021 2020 2021 2020

(Unaudited) (Unaudited)Revenue:Consultancy and advisory $ 1,409 $ 650 $ 2,369 $ 1,697feesEquity earnings frompartnershipsand limited liability 1,789 777 2,294 1,870companiesUnrealized gains (losses) 28,995 (249) 42,334 (2,462)from investments recorded at #fair valueOther 944 5 (760) 1,780

Total revenue before 33,137 1,183 46,237 2,885unrealized gains (losses) #from equity securitiesUnrealized gains (losses) 56,344 (2,907) 62,022 (6,349)from equity securitiesrecorded at fair valueTotal Revenue 89,481 (1,724) 108,259 (3,464)

Total Expenses 328 314 1,052 1,014

Income (Loss) from 89,153 (2,038) 107,207 (4,478)OperationsProvision for Income Taxes 12,799 1,204 16,892 3,267

Net Income (Loss) 76,354 (3,242) 90,315 (7,745)

Less net income (loss) 42,017 1,290 44,125 (2,513)attributable tononcontrolling interestsNet Income (Loss) $ 34,337 $ (4,532) $ 46,190 $ (5,232)Attributable to FRMOCorporation Diluted Net Income (Loss) $ 0.78 $ (0.10) $ 1.05 $ (0.12)per Common Share Weighted Average CommonShares OutstandingBasic 44,032,781 44,032,781 44,022,744 44,015,741

Diluted 44,055,150 44,032,781 44,038,347 44,015,741

About FRMO Corp.

FRMO Corp. invests in and receives revenues based upon consulting and advisory fee interests in the asset management sector.

FRMO had 44,012,781 shares of common stock outstanding as of February 28, 2021.

For more information, visit our website at www.frmocorp.com.

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995 - With the exception of historical information, the matters discussed in this press release are forward-looking statements that involve a number of risks and uncertainties. Words like "believe," "expect" and "anticipate" mean that these are our best estimates as of this writing, but that there can be no assurances that expected or anticipated results or events will actually take place, so our actual future results could differ significantly from those statements. Factors that could cause or contribute to such differences include, but are not limited to: our ability to maintain our competitive advantages, the general economics of the financial industry, our ability to finance growth, our ability to identify and close acquisitions on terms favorable to the Company, and a sustainable market.

Further information on our risk factors is contained in our quarterly and annual reports as filed on our website www.frmocorp.com and on www.otcmarkets.com/stock/FRMO/filings.

Information Regarding Non-GAAP Measures

Net income (loss) attributable to the Company excluding the effect of unrealized gain (loss) from equity securities is net income (loss) attributable to the Company exclusive of unrealized gains or losses from equity securities, net of tax. Net income (loss) attributable to the Company is the GAAP measure most closely comparable to net income (loss) attributable to the Company excluding the effect of unrealized gain (loss) from equity securities.

Management uses net income attributable to the Company excluding the effect of unrealized gain (loss) from equity securities, along with other measures, to gauge the Company's performance and evaluate results, which can be skewed when including unrealized gains (losses) from equity securities, which may vary significantly between periods. Net income (loss) attributable to the Company excluding the effect of unrealized gain (loss) from equity securities are provided as supplemental information, and are not a substitute for net income (loss) attributable to the Company and do not reflect the Company's overall profitability.

The following table reconciles the net income (loss) attributable to the Company excluding the effect of unrealized gain (loss) from equity securities to net income (loss) attributable to the Company for the periods indicated:

Three Months Ended Three Months Ended Nine Months Ended Nine Months Ended February 28, 2021 February 29, 2020 February 28, 2021 February 29, 2020 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Diluted Diluted Diluted Diluted earnings earnings earnings earnings Amount per Amount per Amount per Amount per common common common common share share share share(000's exceptper commonshare amountsandpercentages)Net Income(Loss)Attributable tothe CompanyExcluding theEffect ofUnrealized Gain(Loss) fromEquitySecurities andDilutedEarnings perCommon ShareReconciliation: Net income(loss) $ 34,337 $ 0.78 $ (4,532) $ (0.10) $ 46,190 $ 1.05 $ (5,232) $ (0.12)attributable tothe Company Unrealized gain(loss) from 56,344 (2,907) 62,022 (6,349)equitysecuritiesUnrealized gain(loss) fromequity 41,235 1,283 43,884 (2,519)securitiesattributable tononcontrollinginterestsUnrealized gain(loss) fromequity 15,109 (4,190) 18,138 (3,830)securitiesattributable tothe CompanyTax benefit(expense) onunrealized gain(loss) from (1,632) 814 (2,833) (11)equitysecuritiesattributable tothe companyUnrealized gain(loss) fromequity 13,477 $ 0.31 (3,376) $ (0.08) 15,305 $ 0.35 (3,841) $ (0.09)securitiesattributable tothe Company,net of taxes Net income(loss)attributable tothe Companyexcluding the $ 20,860 $ 0.47 $ (1,156) $ (0.03) $ 30,885 $ 0.70 $ (1,391) $ (0.03)effect ofunrealized gain(loss) fromequitysecurities Weightedaverage diluted 44,055,150 44,032,781 44,038,347 44,015,741sharesoutstanding (Earnings per share components may not sum to totals due to rounding) View source version on businesswire.com: https://www.businesswire.com/news/home/20210414005978/en/

CONTACT: Thrse Byars Corporate Secretary Email: tbyars@frmocorp.com Telephone: 646-495-7337 www.frmocorp.com