Business Wire | Aug 13, 2021 07:36PM EDT

FRMO Corp. Announces Results for Fiscal 2021 and Virtual Annual Meeting

Aug. 13, 2021

WHITE PLAINS, N.Y.--(BUSINESS WIRE)--Aug. 13, 2021--FRMO Corp. (the "Company" or "FRMO") (OTC Pink: FRMO) today reported its financial results for the fiscal year 2021, ended May 31, 2021.

Financial Highlights

FRMO's book value as of May 31, 2021 was $298.9 million ($6.78 per share on a fully diluted basis), including $121.0 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 $208.9 million as of May 31, 2021, and $104.8 million as of May 31, 2020. Total liabilities were $29.9 million as of May 31, 2021, and $11.8 million as of May 31, 2020, comprised primarily of securities sold, not yet purchased and deferred taxes.

Annual net income (loss) attributable to the Company in the fiscal year ended May 31, 2021 rose to $60,158,194, or $1.37 per share, compared to $(14,564,472), or $(0.33) per share, a year earlier.

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 May 31, 2021 was $5,217,832 ($0.12 per diluted share) compared to $(7,811,802) (($0.18) per diluted share) for the three months ended May 31, 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 May 31, 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 May 31, 2021 and May 31, 2020, the Company held a 22.02% 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 77.98% and 80.77% in HKHA has been eliminated from results of operations for the periods ended May 31, 2021 and May 31, 2020.

Further details are available in the Company's Consolidated Financial Statements for the year ended May 31, 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.

Annual Meeting

Murray Stahl, Chairman and CEO, and Steven Bregman, President and CFO, will host the 2021 Annual Meeting of Shareholders ("Meeting") at 3:00 p.m. ET on Thursday, September 9, 2021, which will be held online via webcast only at www.virtualshareholdermeeting.com/FRMO2021.

Admission to the FRMO virtual Annual Meeting is limited to stockholders who owned Common Stock as of the close of business on July 26, 2021, the record date, or their duly appointed proxies, or properly registered guests. Guests may register for the webcast by entering their first and last names and a valid email address. Only shareholders with valid control numbers will be able to vote and ask questions at the Annual Meeting. Shareholders and guests may submit questions in advance to info@frmocorp.com by 11:59 P.M. Eastern Time on Wednesday, September 8, 2021 (the day before the Annual Meeting).

Condensed Consolidated Balance Sheets(in thousands) May 31, May 31,

2021 2020

Assets Current Assets: Cash and cash equivalents $ 34,971 $ 38,443

Equity securities, at fair value 171,733 63,836

Other current assets 2,148 2,536

Total Current Assets 208,852 104,815

Investment in limited partnerships and other equity investments, at fair value 86,854 40,898

Investments in securities exchanges 4,815 5,061

Other assets 1,698 1,807

Investment in Horizon Kinetics LLC 16,366 10,876

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

Total Assets $ 328,785 $ 173,657

Liabilities and Stockholders' Equity Current Liabilities: Securities sold, not yet $ 6,118 $ 4,136purchased Other current liabilities 2,249 185

Total Current Liabilities 8,367 4,321

Deferred Tax Liability 20,774 6,701

Mortgage payable 730 751

Total Liabilities 29,871 11,773

Stockholders' Equity: Stockholders' Equity Attributable to the Company 177,905 114,993

Noncontrolling interests 121,009 46,891

Total Stockholders' Equity 298,914 161,884

Total Liabilities and $ 328,785 $ 173,657Stockholders' Equity Condensed Consolidated Statements of Income (Loss) (amounts in thousands, except share data) Three Months EndedYears EndedMay 31,May 31,May 31,May 31,2021

2020

2021

2020

(Unaudited)Revenue:Fees $

1,354

$

567

$

3,723

$

2,264

Equity earnings from partnerships and limited liability companies 4,237

3,649

6,531

5,519

Unrealized gains (losses) from investments subject to fair value 2,483

(10,097

)

44,818

(12,559

)

Other 35

(3,706

)

(726

)

(1,926

)

Total revenue before unrealized gains (losses) from equity securities 8,109

(9,587

)

54,346

(6,702

)

Unrealized gains (losses) from equity securities 34,201

(9,091

)

96,223

(15,440

)

Total Revenue 42,310

(18,678

)

150,569

(22,142

)

Total Expenses298

323

1,350

1,337

Income (loss) from Operations before Provision for Income Taxes 42,012

(19,001

)

149,219

(23,479

)

Provision for (Benefit from) Income Taxes 2,999

(3,420

)

19,890

(152

)

Net Income (Loss)39,013

(15,581

)

129,329

(23,327

)

Less net income (loss) attributable to noncontrolling interests 25,046

(6,249

)

69,171

(8,763

)

Net Income (Loss) Attributable to FRMO Corporation$

13,967

$

(9,332

)

$

60,158

$

(14,564

)

Diluted Net Income (Loss) per Common Share $

0.32

$

(0.21

)

$

1.37

$

(0.33

)

Weighted Average Common Shares Outstanding Basic 44,032,781

44,032,781

44,020,233

44,020,024

Diluted 44,059,278

44,032,781

44,038,179

44,020,024

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 May 31, 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:

CondensedConsolidated Statements ofIncome (Loss) (amounts inthousands, except sharedata) Three Months Ended Years Ended May 31, May 31, May 31, May 31, 2021 2020 2021 2020

(Unaudited) Revenue: $ 1,354 $ $ $ Fees 567 3,723 2,264

Equityearnings from partnerships and limited liability 4,237 3,649 6,531 5,519companies Unrealizedgains (losses) from 2,483 (10,097 ) 44,818 (12,559 )investmentssubject tofair value ) ) )Other 35 (3,706 (726 (1,926

Total revenuebefore unrealized 8,109 (9,587 ) 54,346 (6,702 )gains (losses)from equitysecurities Unrealized gains (losses) 34,201 (9,091 ) 96,223 (15,440 )from equitysecurities 42,310 ) )Total Revenue (18,678 150,569 (22,142

Total Expenses 298 323 1,350 1,337

Income (loss)from Operations 42,012 (19,001 ) 149,219 (23,479 )beforeProvision forIncome Taxes Provision for ) )(Benefit from) 2,999 (3,420 19,890 (152Income Taxes Net Income 39,013 ) )(Loss) (15,581 129,329 (23,327

Less netincome (loss) attributable 25,046 (6,249 ) 69,171 (8,763 )tononcontrollinginterests Net Income(Loss) $ 13,967 $ (9,332 ) $ $ (14,564 )Attributable 60,158 to FRMOCorporation Diluted Net Income (Loss) $ 0.32 $ (0.21 ) $ 1.37 $ (0.33 )per CommonShare WeightedAverage Common SharesOutstanding 44,032,781 44,032,781 Basic 44,020,233 44,020,024

44,059,278 44,032,781 Diluted 44,038,179 44,020,024

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 May 31, 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 Years Ended Years Ended May 31, 2021 May 21, 2020 May 31, 2021 May 31, 2020 (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 amounts andpercentages) Net IncomeAttributable tothe CompanyExcluding theEffect ofUnrealized Gain(Loss) from EquitySecurities andDilutedEarnings perCommon ShareReconciliation: Net income (loss) $ 13,967 $ 0.32 $ (9,332 ) $ (0.21 ) $ 60,158 $ 1.37 $ (14,564 ) $ (0.33 )attributable tothe Company Unrealized gain (loss) from 34,201 (9,091 ) 96,223 (15,440 ) equitysecuritiesUnrealized gain(loss) fromequity ) )securities 24,829 (7,766 68,712 (10,285 attributable tononcontrollinginterestsUnrealized gain(loss) from equity 9,372 (1,325 ) 27,511 (5,155 ) securitiesattributable tothe CompanyTax benefit onunrealized gain(loss) from ) ) ) )equity (622 (194 (3,455 (205 securitiesattributable tothe companyUnrealized gain(loss) fromequity securities 8,750 $ 0.20 (1,519 ) $ (0.03 ) 24,056 $ 0.55 (5,360 ) $ (0.12 )attributable totheCompany, net oftaxes Net income(loss)attributable tothe Company excluding the $ 5,217 $ 0.12 $ (7,813 ) $ (0.18 ) $ 36,102 $ 0.82 $ (9,204 ) $ (0.21 )effect ofunrealized gain(loss) fromequitysecurities Weightedaverage diluted 44,059,278 44,032,781 44,038,179 44,020,024 sharesoutstanding (Earnings per share components may not sum to totals due to rounding) View source version on businesswire.com: https://www.businesswire.com/news/home/20210813005439/en/

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