Business Wire | Aug 14, 2020 05:02PM EDT

FRMO Corp. Announces Results for Fiscal 2020 and Virtual Annual Meeting

Aug. 14, 2020

WHITE PLAINS, N.Y.--(BUSINESS WIRE)--Aug. 14, 2020--FRMO Corp. (the "Company" or "FRMO") (OTC Pink:FRMO) today reported its financial results for the fiscal year 2020, ended May 31, 2020.

Financial Highlights

FRMO's book value as of May 31, 2020 was $161.9 million ($3.68 per share on a fully diluted basis), including $46.9 million of non-controlling interests. This compares with book value at the prior fiscal year ended May 31, 2019 of $174.9 million ($3.98 per share), including $48.6 million of non-controlling interests. Current assets, comprised primarily of cash and equivalents and equity securities, amounted to $104.8 million as of May 31, 2020, and $118.3 million as of May 31, 2019. Total liabilities were $11.8 million as of May 31, 2020, and $16.7 million as of May 31, 2019, comprised primarily of securities sold, not yet purchased and deferred taxes.

Annual net (loss) income attributable to the Company in the fiscal year ended May 31, 2020 fell to $(14.6) million, or $(0.33) per share, from $4.7 Million, or $0.11 per share, a year earlier.

FRMO's net (loss) income attributable to the Company excluding the effect of unrealized (loss) gain from equity securities net of taxes for the three months ended May 31, 2020 was $(7,811,801) ($(0.18) per diluted share) compared to $3,398,500 ($0.08 per diluted share) for the three months ended May 31, 2019. For the year ended May 31, 2020, the amount was $(9,204,355) ($(0.21) per share) compared to $9,027,157 ($0.21 per share) for the same period in the prior year. Net (loss) income attributable to the Company excluding the effect of unrealized (losses) gains 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.

As of May 31, 2020 and May 31, 2019, the Company held a 19.23% and 15.49% 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 80.77% and 84.51% in HKHA has been eliminated from results of operations for the periods ended May 31, 2020 and May 31, 2019.

Further details are available in the Company's Consolidated Financial Statements for the fiscal year ended May 31, 2020. 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 2020 Annual Meeting of Shareholders ("Meeting") at 3 p.m. EDT on Thursday, September 10, 2020, which will be held online via live webcast only at www.virtualshareholdermeeting.com/FRMO2020.

Admission to the FRMO virtual Annual Meeting is limited to stockholders who owned Common Stock as of the close of business on July 27, 2020, 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 9, 2020 (the day before the Annual Meeting).

Condensed Consolidated Balance Sheets (in thousands) May 31, May 31, 2020 2019

Assets Current Assets: Cash and cash equivalents $ 38,443 $ 53,081

Equity securities, at fair value 63,836 63,565

Other current assets 2,536 1,639

Total Current Assets 104,815 118,285

Investment in limited partnerships and other equity 40,898 47,513investments, at fair valueInvestments in securities exchanges 5,061 3,641

Other assets 1,807 547

Investment in Horizon Kinetics LLC 10,876 11,488

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

Total Assets $ 173,657 $ 191,674

Liabilities and Stockholders' Equity Current Liabilities: Securities sold, not yet purchased $ 4,136 $ 8,133

Other current liabilities 185 161

Total Current Liabilities 4,321 8,294

Deferred Tax Liability 6,701 8,383

Mortgage payable 751 -

Total Liabilities 11,773 16,677

Stockholders' Equity: Stockholders' Equity Attributable to the Company 114,993 126,384

Noncontrolling interests 46,891 48,613

Total Stockholders' Equity 161,884 174,997

Total Liabilities and Stockholders' Equity $ 173,657 $ 191,674

CondensedConsolidated Statements ofIncome (Loss)(amounts inthousands, except sharedata) Three Months Ended Years Ended

May 31, May 31, May 31, May 31,

2020 2019 2020 2019

(Unaudited) Revenue: Consultancy $ 567 $ 522 $ 2,264 $ 2,027and advisory feesEquityearnings(loss) from 3,649 2,360 5,519 2,560partnerships and limitedliabilitycompaniesUnrealized(losses) gainsfrom (10,097 ) 1,283 (12,559 ) 3,839investmentsrecorded atfair valueOther (3,706 ) 863 (1,926 ) 4,414

Total revenuebeforeunrealized (9,587 ) 5,028 (6,702 ) 12,840(losses) gainsfrom equitysecuritiesUnrealized(losses) gainsfrom equity (9,091 ) (3,376 ) (15,440 ) 6,725securitiesrecorded atfair valueTotal Revenue (18,678 ) 1,652 (22,142 ) 19,565

Total Expenses 323 345 1,337 1,332

(Loss) Income (19,001 ) 1,307 (23,479 ) 18,233from Operations(Benefit from) (3,420 ) 661 (152 ) 1,026Provision for Income TaxesNet (Loss) (15,581 ) 646 (23,327 ) 17,207IncomeLess net(loss) incomeattributable (6,249 ) (955 ) (8,763 ) 12,498tononcontrollinginterestsNet (Loss)Income $ (9,332 ) $ 1,601 $ (14,564 ) $ 4,709Attributable to FRMOCorporation Diluted Net(Loss) Income $ (0.21 ) $ 0.04 $ (0.33 ) $ 0.11per CommonShare WeightedAverage Common SharesOutstandingBasic 44,032,781 43,976,781 44,020,024 43,974,940

Diluted 44,032,781 44,015,088 44,020,024 44,016,535

About FRMO Corp.

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

FRMO had 44,032,781 shares of common stock outstanding as of May 31, 2020.

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 Year Ended Year Ended May 31, 2020 May 31, 2019 May 31, 2020 May 31, 2019 (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(Loss) Gain from EquitySecurities andDilutedEarnings perCommon ShareReconciliation: Net (loss)income $ (9,332 ) $ (0.21 ) $ 1,601 $ 0.04 $ (14,564 ) $ (0.33 ) $ 4,709 $ 0.11 attributable tothe Company Unrealized(loss) gain (9,091 ) (3,376 ) (15,440 ) 6,725 from equitysecuritiesUnrealized(loss) gainfrom equity (7,766 ) (1,319 ) (10,285 ) 12,135 securities attributable tononcontrollinginterestsUnrealized(loss) gainfrom equity (1,325 ) (2,057 ) (5,155 ) (5,410 ) securitiesattributable tothe CompanyTax benefit onunrealized(loss) gain (194 ) 260 (205 ) 1,092 from equity securitiesattributable tothe companyUnrealized(loss) fromequity (1,519 ) $ (0.03 ) (1,797 ) $ (0.04 ) (5,360 ) $ (0.12 ) (4,318 ) $ (0.10 )securities attributable tothe Company,net of taxes Net (loss)incomeattributable tothe Companyexcluding the $ (7,813 ) $ (0.18 ) $ 3,398 $ 0.08 $ (9,204 ) $ (0.21 ) $ 9,027 $ 0.21 effect ofunrealized(loss) gainfrom equitysecurities Weightedaverage diluted 44,032,781 44,015,088 44,020,024 44,016,535 sharesoutstanding

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