WHITE PLAINS, NY – (COMMERCIAL THREAD) – FRMO Corp. (the “Company” or “FRMO”) (OTC Pink: FRMO) today released its financial results for the first quarter of 2022 ended August 31, 2021.
Financial Highlights
The carrying value of FRMO as at 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 to the carrying value for the prior year ended May 31, 2021 of $ 298.9 million ($ 6.79 per share), including $ 121.0 million of non-controlling interests. Current assets, consisting primarily of cash and cash equivalents and equity securities, were $ 202.1 million as at August 31, 2021 and $ 208.9 million as at May 31, 2021. Total liabilities were of $ 29.6 million as of August 31, 2021 and of $ 29.9 million as of August 31, 2021. of May 31, 2021, composed mainly of securities sold, not yet purchased and deferred taxes.
FRMO’s net income attributable to the Company for the quarter ended August 31, 2021 was $ 960,717, or $ 0.02 per share, compared to $ 182,241 or $ 0.00 per share, a year over early.
FRMO’s net income attributable to the Company excluding the effect of unrealized gain on equity securities net of tax for the quarter 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 on equity securities net of tax is a non-GAAP-based measure and is defined and reconciled with the most directly comparable GAAP measures in “Information concerning measures non-GAAP ”at the end of this outing.
The valuation of securities and cryptocurrencies is subject to change after August 31, 2021. The market value of several securities and cryptocurrencies may have changed significantly since that date. We are eager to find new ways to expand our cryptocurrency mining operations.
As at August 31, 2021 and May 31, 2021, the Company held a 21.98% and 22.02% interest in Horizon Kinetics Hard Assets LLC (“HKHA”), a company formed by Horizon Kinetics LLC and certain senior executives shareholders and directors of FRMO Corp. (” the society “). Due to the common control and ownership between HKHA and the major shareholders and directors of the Company, HKHA has been consolidated in the financial statements of the Company. The non-controlling interest of 78.02% and 77.98% in HKHA has been eliminated from operating results 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 OTC Markets Group Disclosure and News Services, accessible 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 Chief Executive Officer, and Steven Bregman, President and Chief Financial Officer, will host a conference call Thursday, October 21, 2021 at 4:15 p.m. ET. Only questions submitted to [email protected] before 1:00 p.m. on the day of the call will be considered. The call can be accessed by dialing 800-367-2403 (free national number) or + 1-334-777-6978 (international number) and entering the following confirmation code: 8000388. A replay will be available from 7.15 p.m. the day of the conference call until November 20, 2021. To listen to the archived call, dial 888-203-1112 (free national number) or +1 719-457-0820 (international number) and enter the Replay code: 8000388.
| Condensed consolidated balance sheets | ||||||
| (in thousands) | ||||||
|
August, |
|
May 31st |
||||
|
2021 |
|
2021 |
||||
|
(Unaudited) |
|
|
||||
| Assets | ||||||
| Current 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 others | ||||||
| participations, at fair value |
|
89,372 |
|
86 854 |
||
| Investments in stock exchanges |
|
4 815 |
|
4 815 |
||
| other assets |
|
1,747 |
|
1,698 |
||
| Investment in Horizon Kinetics LLC |
|
14 913 |
|
16,366 |
||
| Participation in the income stream of Horizon Kinetics LLC |
|
10,200 |
|
10,200 |
||
| Total assets |
$ |
323,114 |
$ |
328 785 |
||
| Liabilities and equity | ||||||
| Current liabilities: | ||||||
| Titles 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 |
|
722 |
|
730 |
||
| Total responsibilities |
|
29,636 |
|
29,871 |
||
| Equity: | ||||||
| Equity attributable to the company |
|
179,056 |
|
177,905 |
||
| Non-majority interests |
|
114,421 |
|
121,009 |
||
| Total equity for shareholders |
|
293,478 |
|
298 914 |
||
| Total liabilities and equity |
$ |
323,114 |
$ |
328 785 |
||
|
(Sum of components may not add up to totals due to rounding) |
||||||
| Condensed consolidated income statements | ||||||||
| (amounts in thousands, excluding data on shares) | ||||||||
|
Three months ended |
||||||||
|
August 31 |
|
August 31 |
||||||
|
2021 |
|
2020 |
||||||
|
(Unaudited) |
||||||||
| Returned: | ||||||||
| Costs |
$ |
1,117 |
|
$ |
438 |
|
||
| Equity gains (losses) of partnerships and limited liability companies |
|
(963 |
) |
|
651 |
|
||
| Unrealized gains on investments subject to fair value |
|
2,542 |
|
|
2,903 |
|
||
| Other |
|
216 |
|
|
(1,362 |
) |
||
| Total income before unrealized capital gains on equity securities |
|
2 912 |
|
|
2,630 |
|
||
| Unrealized losses on equity securities |
|
(7,078 |
) |
|
(5,858 |
) |
||
| Total income |
|
(4,166 |
) |
|
(3228 |
) |
||
| Total expenses |
|
308 |
|
|
414 |
|
||
| Operating loss before provision for income taxes |
|
(4,475 |
) |
|
(3,642 |
) |
||
| Provision for income taxes |
|
1,819 |
|
|
630 |
|
||
| Net loss |
|
(6,294 |
) |
|
(4,272 |
) |
||
| Less net loss attributable to non-controlling 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 of outstanding common shares | ||||||||
| Basic |
|
44 012 781 |
|
|
44 032 781 |
|
||
| Diluted |
|
44 031 575 |
|
|
44 033 825 |
|
||
| (Sum of components may not add up to totals due to rounding) | ||||||||
About FRMO Corp.
FRMO Corp. invests and receives income based on consulting and advisory interest in the asset management industry.
FRMO had 44,012,781 common shares outstanding as of August 31, 2021.
For more information, visit our website at www.frmocorp.com.
Safe Harbor Declaration under the Private Securities Litigation Reform Act 1995 – With the exception of historical information, the matters discussed in this press release are forward-looking statements which involve a certain number of risks and uncertainties. Words like “believe”, “expect” and “anticipate” mean that these are our best estimates at the time of writing, but that there can be no assurance that the results or expected or anticipated events will actually occur, so our actual future results could differ materially 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 sector, our ability to finance growth, our ability to identify and enter into 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 at www.otcmarkets.com/stock/FRMO/filings.
Information Regarding Non-GAAP Measures
Net income attributable to the Company excluding the effect of unrealized loss on equity securities is the net income attributable to the Company excluding unrealized losses on equity securities, net of tax. Net income attributable to the Company is the most comparable GAAP measure to net income attributable to the Company, excluding the effect of unrealized loss on equity securities.
Management uses net income attributable to the Company excluding the effect of unrealized loss on equity securities, as well as other measures, to assess the performance of the Company and assess the results, which may be biased when this includes the unrealized loss on equity securities, which can vary significantly from period to period. . Net income attributable to the Company excluding the effect of unrealized loss on equity securities is provided for additional information and does not replace the net income attributable to the Company and does not reflect the overall profitability of the Company.
The following table reconciles the net income attributable to the Company excluding the effect of the unrealized loss on equity securities to the net income attributable to the Company for the periods indicated:
|
Three months ended |
|
Three months ended |
||||||||||||||
|
August 31, 2021 |
|
August 31, 2020 |
||||||||||||||
|
(Unaudited) |
|
(Unaudited) |
||||||||||||||
|
|
|
|
|
|
|
|
||||||||||
|
Rising |
|
Diluted |
|
Rising |
|
Diluted |
||||||||||
| (in thousands except amounts and percentages per common share) | ||||||||||||||||
| Net income attributable to the company excluding the effect of unrealized loss on equity securities and the reconciliation of diluted earnings per common share: | ||||||||||||||||
| Net income attributable to the Company |
$ |
961 |
|
$ |
0.02 |
|
$ |
182 |
|
$ |
0.00 |
|
||||
| Unrealized loss on equity securities |
|
(7,078 |
) |
|
(5,858 |
) |
||||||||||
| Unrealized loss on equity securities attributable to non-controlling interests |
|
(7,475 |
) |
|
(3 910 |
) |
||||||||||
| Unrealized gain (loss) on equity securities attributable to the Company |
|
397 |
|
|
(1,948 |
) |
||||||||||
| Tax on unrealized gains (losses) on equity securities attributable to the company |
|
(739 |
) |
|
(99 |
) |
||||||||||
| Unrealized loss on equity securities attributable to the Company, net of tax |
|
(342 |
) |
$ |
(0.01 |
) |
|
(2,047 |
) |
$ |
(0.05 |
) |
||||
| Net income attributable to the Company excluding the effect of unrealized loss on equity securities |
$ |
1,303 |
|
$ |
0.03 |
|
$ |
2,229 |
|
$ |
0.05 |
|
||||
| Weighted average of diluted shares outstanding |
|
44 031 575 |
|
|
44 033 825 |
|
||||||||||
