Business Wire | Oct 14, 2021 07:52PM EDT

FRMO Corp. Announces Fiscal 2022 First Quarter Results and Conference Call

Oct. 14, 2021

WHITE PLAINS, N.Y.--(BUSINESS WIRE)--Oct. 14, 2021--FRMO Corp. (the "Company" or "FRMO") (OTC Pink: FRMO) today reported its financial results for the 2022 first quarter ended August 31, 2021.

Financial Highlights

FRMO's book value as of August 31, 2021 was $293.5 million ($6.67 per share on a fully diluted basis), including $114.4 million of non-controlling interests. This compares with book value at the prior fiscal year ended May 31, 2021 of $298.9 million ($6.79 per share), including $121.0 million of non-controlling interests. Current assets, comprised primarily of cash and equivalents and equity securities, amounted to $202.1 million as of August 31, 2021, and $208.9 million as of May 31, 2021. Total liabilities were $29.6 million as of August 31, 2021, and $29.9 million as of May 31, 2021, comprised primarily of securities sold, not yet purchased and deferred taxes.

FRMO's net income attributable to the Company for the quarter ended August 31, 2021 rose to $960,717, or $0.02 per share, compared to $182,241, or $0.00 per share, a year earlier.

FRMO's net income attributable to the Company excluding the effect of unrealized gain from equity securities net of taxes for the three months ended August 31, 2021 was $1,303,002 ($0.03 per diluted share) compared to $2,229,447 (0.05 per diluted share) for the three months ended August 31, 2020.

Net income attributable to the Company excluding the effect of unrealized loss 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 August 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 August 31, 2021 and May 31, 2021, the Company held a 21.98% and 22.02% 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 78.02% and 77.98% in HKHA has been eliminated from results of operations for the periods ended August 31, 2021 and May 31, 2021.

Further details are available in the Company's Consolidated Financial Statements for the quarter ended August 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.

Conference Call

Murray Stahl, Chairman and CEO, and Steven Bregman, President and CFO, will host a conference call on Thursday, October 21, 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 800-367-2403 (domestic toll free), or +1-334-777-6978 (international toll) and entering the following Confirmation Code: 8000388. A replay will be available from 7:15 P.M. on the day of the teleconference until November 20, 2021. To listen to the archived call, dial 888-203-1112 (domestic toll free) or +1 719-457-0820 (international toll), and enter the Replay Passcode: 8000388.

Condensed Consolidated Balance Sheets(in thousands)August,

May 31,

2021

2021

(Unaudited)

AssetsCurrent Assets:Cash and cash equivalents$

35,329

$

34,971

Equity securities, at fair value164,893

171,733

Other current assets1,845

2,148

Total Current Assets202,067

208,852

Investment in limited partnerships and otherequity investments, at fair value89,372

86,854

Investments in securities exchanges4,815

4,815

Other assets1,747

1,698

Investment in Horizon Kinetics LLC14,913

16,366

Participation in Horizon Kinetics LLC revenue stream10,200

10,200

Total Assets$

323,114

$

328,785

Liabilities and Stockholders' EquityCurrent Liabilities:Securities sold, not yet purchased$

4,173

$

6,118

Other current liabilities3,389

2,249

Total Current Liabilities7,562

8,367

Deferred Tax Liability21,352

20,774

Mortgage payable722

730

Total Liabilities29,636

29,871

Stockholders' Equity:Stockholders' Equity Attributable to the Company179,056

177,905

Noncontrolling interests114,421

121,009

Total Stockholders' Equity293,478

298,914

Total Liabilities and Stockholders' Equity$

323,114

$

328,785

(Components may not sum to totals due to rounding)

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

2021 2021

(Unaudited)

AssetsCurrent Assets:Cash and cash equivalents $ 35,329 $ 34,971

Equity securities, at fair value 164,893 171,733

Other current assets 1,845 2,148

Total Current Assets 202,067 208,852

Investment in limited partnerships and otherequity investments, at fair value 89,372 86,854

Investments in securities exchanges 4,815 4,815

Other assets 1,747 1,698

Investment in Horizon Kinetics LLC 14,913 16,366

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

Total Assets $ 323,114 $ 328,785

Liabilities and Stockholders' EquityCurrent Liabilities:Securities sold, not yet purchased $ 4,173 $ 6,118

Other current liabilities 3,389 2,249

Total Current Liabilities 7,562 8,367

Deferred Tax Liability 21,352 20,774

Mortgage payable 722 730

Total Liabilities 29,636 29,871

Stockholders' Equity:Stockholders' Equity Attributable to the Company 179,056 177,905

Noncontrolling interests 114,421 121,009

Total Stockholders' Equity 293,478 298,914

Total Liabilities and Stockholders' Equity $ 323,114 $ 328,785

(Components may not sum to totals due to rounding)

Condensed Consolidated Statements of Income(amounts in thousands, except share data)Three Months Ended

August 31,

August 31,

2021

2020

(Unaudited)

Revenue:Fees$

1,117

$

438

Equity (loss) earnings from partnerships and limited liability companies(963

)

651

Unrealized gains from investments subject to fair value2,542

2,903

Other216

(1,362

)

Total revenue before unrealized gains from equity securities2,912

2,630

Unrealized losses from equity securities(7,078

)

(5,858

)

Total Revenue(4,166

)

(3,228

)

Total Expenses308

414

Loss from Operations before Provision for Income Taxes(4,475

)

(3,642

)

Provision for Income Taxes1,819

630

Net Loss(6,294

)

(4,272

)

Less net loss attributable to noncontrolling interests(7,255

)

(4,454

)

Net Income Attributable to FRMO Corporation$

961

$

182

Diluted Net Earnings per Common Share$

0.02

$

0.00

Weighted Average Common Shares OutstandingBasic44,012,781

44,032,781

Diluted44,031,575

44,033,825

(Components may not sum to totals due to rounding) 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 August 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.

Condensed Consolidated Statements of Income(amounts in thousands, except share data) Three Months Ended

August 31, August 31,

2021 2020

(Unaudited)

Revenue: Fees $ 1,117 $ 438

Equity (loss) earnings from partnerships and (963 ) 651 limited liability companiesUnrealized gains from investments subject to 2,542 2,903 fair valueOther 216 (1,362 )

Total revenue before unrealized gains from 2,912 2,630 equity securitiesUnrealized losses from equity securities (7,078 ) (5,858 )

Total Revenue (4,166 ) (3,228 )

Total Expenses 308 414

Loss from Operations before Provision for (4,475 ) (3,642 )Income TaxesProvision for Income Taxes 1,819 630

Net Loss (6,294 ) (4,272 )

Less net loss attributable to noncontrolling (7,255 ) (4,454 )interestsNet Income Attributable to FRMO Corporation $ 961 $ 182

Diluted Net Earnings per Common Share $ 0.02 $ 0.00

Weighted Average Common Shares Outstanding Basic 44,012,781 44,032,781

Diluted 44,031,575 44,033,825

(Components may not sum to totals due to rounding) 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 August 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 attributable to the Company excluding the effect of unrealized loss from equity securities is net income attributable to the Company exclusive of unrealized losses from equity securities, net of tax. Net income attributable to the Company is the GAAP measure most closely comparable to net income attributable to the Company excluding the effect of unrealized loss from equity securities.

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

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

Three Months Ended Three Months Ended

August 31, 2021 August 31, 2020

(Unaudited) (Unaudited)



Diluted Diluted earnings earnings Amount per Amount per common common share share

(000's except percommon share amounts and percentages) Net IncomeAttributable to theCompany Excluding theEffect of UnrealizedLoss from Equity Securities andDiluted Earnings perCommon ShareReconciliation: Net income $ 961 $ 0.02 $ 182 $ 0.00 attributable to the Company Unrealized loss from (7,078 ) (5,858 )equity securitiesUnrealized loss fromequity securities (7,475 ) (3,910 )attributable to noncontrollinginterestsUnrealized gain(loss) from equity 397 (1,948 )securities attributable to theCompanyTax on unrealizedgain (loss) from (739 ) (99 )equity securities attributable to thecompanyUnrealized loss fromequity securities (342 ) $ (0.01 ) (2,047 ) $ (0.05 )attributable to theCompany, net of taxes Net incomeattributable to theCompany excluding the $ 1,303 $ 0.03 $ 2,229 $ 0.05 effect of unrealizedloss from equitysecurities Weighted average 44,031,575 44,033,825 diluted shares outstanding View source version on businesswire.com: https://www.businesswire.com/news/home/20211014006158/en/

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