Business Wire | Jan 13, 2022 08:58PM EST

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

Jan. 14, 2022

WHITE PLAINS, N.Y.--(BUSINESS WIRE)--Jan. 14, 2022--FRMO Corp. (the "Company" or "FRMO") (OTC Pink: FRMO) today reported its financial results for the 2022 Second quarter ended November 30, 2021.

Financial Highlights

FRMO's book value as of November 30, 2021 was $281.7 million ($6.40 per share on a fully diluted basis), including $102.8 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 $186.6 million as of November 30, 2021, and $208.9 million as of May 31, 2021. Total liabilities were $27.7 million as of November 30, 2021, and $29.9 million as of May 31, 2021, comprised primarily of securities sold, not yet purchased and deferred taxes.

FRMO's net (loss) income attributable to the Company for the three months ended November 30, 2021 was $(350,323), or $(0.01) per share, compared to $11,671,366, or $0.27 per share, a year earlier.

For the six months ended November 30, 2021, the net income was $610,394 ($0.01 per diluted share) compared to $11,853,607 ($0.27 per diluted share) in 2020.

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 November 30, 2021 was $2,911,793 ($0.07 per diluted share) compared to $7,795,670 ($0.18 per diluted share) for the three months ended November 30, 2020.

For the six months ended November 30, 2021, the figure was $4,214,794 ($0.10 per diluted share) compared to $10,025,116 ($0.23 per diluted share) in for the six months ended November 30, 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 November 30, 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 November 30, 2021 and May 31, 2021, the Company held a 21.95% 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 78.05% and 77.98% in HKHA has been eliminated from results of operations for the periods ended November 30, 2021 and May 31, 2021.

Further details are available in the Company's Consolidated Financial Statements for the quarter ended November 30, 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 Tuesday, January 18, 2022 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 888-394-8218 (domestic toll free), or +1-323-794-2588 (international toll) and entering the following Confirmation Code: 6605367. A replay will be available from 7:15 P.M. on the day of the teleconference until Thursday, February 17, 2022. 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: 6605367.

Condensed Consolidated Balance Sheets(in thousands) November May 31, 30,

2021 2021

(Unaudited)

AssetsCurrent Assets:Cash and cash equivalents $ 34,153 $ 34,971

Equity securities, at fair value 150,490 171,733

Other current assets 1,976 2,148

Total Current Assets 186,619 208,852

Investment in limited partnerships and other equity 91,422 86,854investments, at fair value

Investments in securities exchanges 4,815 4,815

Other assets 1,905 1,698

Investment in Horizon Kinetics LLC 14,464 16,366

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

Total Assets $ 309,425 $ 328,785

Liabilities and Stockholders' EquityCurrent Liabilities:Securities sold, not yet purchased $ 3,698 $ 6,118

Other current liabilities 2,196 2,249

Total Current Liabilities 5,894 8,367

Deferred Tax Liability 21,101 20,774

Mortgage payable 715 730

Total Liabilities 27,710 29,871

Stockholders' Equity:Stockholders' Equity Attributable to the Company 178,898 177,905

Noncontrolling interests 102,817 121,009

Total Stockholders' Equity 281,715 298,914

Total Liabilities and Stockholders' Equity $ 309,425 $ 328,785

(Components may not sum to totals due to rounding) Condensed Consolidated Statements of Income (Loss)(amounts in thousands, except share data)Three Months Ended

Six Months Ended

November 30,

November 30,

November 30,

November 30,

2021

2020

2021

2020

(Unaudited)

(Unaudited)

Revenue:Fees$

1,192

$

522

$

2,309

$

960

Equity earnings (losses) from partnerships and limited liability companies47

(147

)

(916

)

505

Unrealized gains from investments subject to fair value1,810

10,436

4,352

13,340

Other216

(342

)

432

(1,706

)

Total revenue before unrealized (losses) gains from equity securities3,265

10,469

6,177

13,099

Unrealized (losses) gains from equity securities(15,100

)

11,536

(22,178

)

5,678

Total Revenue(11,834

)

22,005

(16,001

)

18,777

Total Expenses391

310

699

724

(Loss) income from Operations before Provision for Income Taxes(12,225

)

21,695

(16,700

)

18,053

Provision for Income Taxes64

3,462

1,883

4,092

Net (Loss) Income(12,289

)

18,233

(18,583

)

13,961

Less net (loss) income attributable to noncontrolling interests(11,939

)

6,562

(19,193

)

2,107

Net (Loss) Income Attributable to FRMO Corporation$

(350

)

$

11,671

$

610

$

11,854

Diluted Net Income (Loss) Earnings per Common Share$

(0.01

)

$

0.27

$

0.01

$

0.27

Weighted Average Common Shares OutstandingBasic44,015,748

44,022,451

44,014,256

44,027,644

Diluted44,015,748

44,022,451

44,033,213

44,031,319

(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 44,017,781 shares of common stock outstanding as of November 30, 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:

CondensedConsolidatedStatements ofIncome (Loss)(amounts inthousands,except sharedata) Three Months Ended Six Months Ended

November 30, November 30, November 30, November 30,

2021 2020 2021 2020

(Unaudited) (Unaudited)

Revenue:Fees $ 1,192 $ 522 $ 2,309 $ 960

Equity earnings(losses) frompartnerships 47 (147 ) (916 ) 505 and limitedliabilitycompaniesUnrealizedgains from 1,810 10,436 4,352 13,340 investmentssubject to fairvalueOther 216 (342 ) 432 (1,706 )

Total revenuebeforeunrealized 3,265 10,469 6,177 13,099 (losses) gainsfrom equitysecuritiesUnrealized(losses) gains (15,100 ) 11,536 (22,178 ) 5,678 from equitysecuritiesTotal Revenue (11,834 ) 22,005 (16,001 ) 18,777

Total Expenses 391 310 699 724

(Loss) incomefrom Operations (12,225 ) 21,695 (16,700 ) 18,053 beforeProvision forIncome TaxesProvision for 64 3,462 1,883 4,092 Income TaxesNet (Loss) (12,289 ) 18,233 (18,583 ) 13,961 IncomeLess net (loss)income (11,939 ) 6,562 (19,193 ) 2,107 attributable tononcontrollinginterestsNet (Loss)Income $ (350 ) $ 11,671 $ 610 $ 11,854 Attributable toFRMOCorporation Diluted NetIncome (Loss) $ (0.01 ) $ 0.27 $ 0.01 $ 0.27 Earnings perCommon Share WeightedAverage CommonSharesOutstandingBasic 44,015,748 44,022,451 44,014,256 44,027,644

Diluted 44,015,748 44,022,451 44,033,213 44,031,319

(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 44,017,781 shares of common stock outstanding as of November 30, 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 Six Months Ended Six Months Ended

November 30, 2021 November 30, 2020 November 30, 2021 November 30, 2020

(Unaudited) (Unaudited) (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 amountsandpercentages) Net (Loss)IncomeAttributable tothe CompanyExcluding theEffect ofUnrealized(Loss) Gainfrom EquitySecurities andDilutedEarnings perCommon ShareReconciliation: Net (loss)income $ (350 ) $ (0.01 ) $ 11,671 $ 0.27 $ 610 $ 0.01 $ 11,854 $ 0.27attributable tothe Company Unrealized(loss) gain (15,100 ) 11,536 (22,178 ) 5,678 from equitysecuritiesUnrealized(loss) gainfrom equity (12,168 ) 6,558 (19,643 ) 2,648 securitiesattributable tononcontrollinginterestsUnrealized(loss) gainfrom equity (2,932 ) 4,978 (2,535 ) 3,030 securitiesattributable tothe CompanyTax benefit onunrealized(loss) gain (330 ) (1,102 ) (1,069 ) (1,201 )from equitysecuritiesattributable tothe companyUnrealized(loss) gainfrom equity (3,262 ) $ (0.07 ) 3,876 $ 0.09 (3,604 ) $ (0.08 ) 1,829 $ 0.04securitiesattributable tothe Company,net of taxes Net income(loss)attributable tothe Companyexcluding the $ 2,912 $ 0.07 $ 7,795 $ 0.18 $ 4,214 $ 0.10 $ 10,025 $ 0.23effect ofunrealized(loss) gainfrom equitysecurities Weightedaverage diluted 44,015,748 44,022,451 44,033,213 44,031,319 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/20220113005970/en/

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