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

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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

earnings

through

common

to share

Rising

Diluted

earnings

through

common

to share

(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


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