FRMO Corp. Announces Results for Fiscal 2022 and Virtual Annual Meeting

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WHITE PLAINS, N.Y., August 12, 2022--(BUSINESS WIRE)--FRMO Corp. (the "Company" or "FRMO") (OTC Pink: FRMO) today reported its financial results for the fiscal year 2022, ended May 31, 2022.

Financial Highlights

FRMO’s book value as of May 31, 2022 was $314.3 million ($7.14 per share on a fully diluted basis), including $132.9 million of non-controlling interests. This compares with book value at the prior fiscal year ended May 31, 2021 of $298.9 million ($6.78 per share), including $121.0 million of non-controlling interests. Current assets, comprised primarily of cash and equivalents and equity securities, amounted to $223.8 million as of May 31, 2022, and $208.9 million as of May 31, 2021. Total liabilities were $23.9 million as of May 31, 2022, and $29.9 million as of May 31, 2021, comprised primarily of securities sold, not yet purchased and deferred taxes.

Annual net income (loss) attributable to the Company in the fiscal year ended May 31, 2022 was $2,945,877, or $0.07 per share, compared to $60,158,194, or $1.37 per share, a year earlier.

For the three months ended May 31, 2022, the net (loss) income attributable to the Company was $14,343,798 ($0.33 per diluted share) compared to $13,967,651 ($0.32 per diluted share) in 2021.

Net 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, 2022 was $4,014,188 ($0.09 per diluted share) compared to $5,217,832 ($0.12 per diluted share) for the three months ended May 31, 2021.

For the fiscal year ended May 31, 2022, the figure was $(1,621,363) (($0.04) per diluted share) compared to $36,102,670 ($0.82 per share) for the year ended May 31, 2021.

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 May 31, 2022. 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 May 31, 2022 and 2021, the Company held a 21.88% 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 78.12% and 77.98% in HKHA has been eliminated from results of operations for the periods ended May 31, 2022 and 2021.

Further details are available in the Company’s Consolidated Financial Statements for the fiscal year ended May 31, 2022. 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 2022 Annual Meeting of Shareholders ("Meeting") at 3:00 p.m. ET on Thursday, September 8, 2022, which will be held online via webcast only at www.virtualshareholdermeeting.com/FRMO2022.

Admission to the Meeting is limited to stockholders who owned Common Stock as of the close of business on July 25, 2022, 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 7, 2022 (the day before the Meeting).

Condensed Consolidated Balance Sheets

(in thousands)

May 31,

May 31,

2022

2021

Assets

Current Assets:

Cash and cash equivalents

$

33,289

$

34,971

Equity securities, at fair value

187,386

171,733

Other current assets

3,083

2,148

Total Current Assets

223,758

208,852

Investment in limited partnerships and other equity investments, at fair value

82,630

86,854

Investments in securities exchanges

4,815

4,815

Other assets

2,178

1,698

Investment in Horizon Kinetics LLC

14,702

16,366

Participation in Horizon Kinetics LLC revenue stream

10,200

10,200

Total Assets

$

338,282

$

328,785

Liabilities and Stockholders' Equity

Current Liabilities:

Securities sold, not yet purchased

$

2,573

$

6,118

Other current liabilities

212

2,249

Total Current Liabilities

2,785

8,367

Deferred Tax Liability

20,470

20,774

Mortgage payable

700

730

Total Liabilities

23,955

29,871

Stockholders' Equity:

Stockholders' Equity Attributable to the Company

181,409

177,905

Noncontrolling interests

132,919

121,009

Total Stockholders' Equity

314,327

298,914

Total Liabilities and Stockholders' Equity

$

338,282

$

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

Years Ended

May 31,

May 31,

May 31,

May 31,

2022

2021

2022

2021

(Unaudited)

Revenue:

Fees

$

873

$

1,354

$

4,678

$

3,723

Equity earnings from limited partnerships and limited liability companies

625

4,237

653

6,531

Unrealized gains (losses) from investments

3,502

2,483

(5,576

)

44,818

Other

(536

)

35

141

(726

)

Total revenue before unrealized gains from equity securities

4,464

8,109

(104

)

54,346

Unrealized gains from equity securities

41,175

34,201

13,978

96,223

Total Revenue

45,638

42,310

13,874

150,569

Total Expenses

250

298

1,380

1,350

Income from Operations before Provision for Income Taxes

45,388

42,012

12,493

149,219

Provision for (Benefit from) Income Taxes

257

2,999

(774

)

19,890

Net Income

45,131

39,013

13,267

129,329

Less net income attributable to noncontrolling interests

30,787

25,046

10,321

69,171

Net Income Attributable to FRMO Corporation

$

14,344

$

13,967

$

2,946

$

60,158

Diluted Net Income per Common Share

$

0.33

$

0.32

$

0.07

$

1.37

Weighted Average Common Shares Outstanding

Basic

44,017,781

44,032,781

44,016,014

44,020,233

Diluted

44,034,588

44,059,278

44,034,813

44,038,179

(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 May 31, 2022.

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 gains (loss) from equity securities is net income (loss) attributable to the Company exclusive of unrealized gains (loss) 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 gains (loss) from equity securities.

Management uses net income (loss) attributable to the Company excluding the effect of unrealized gains (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 (loss) from equity securities, which may vary significantly between periods. Net income (loss) attributable to the Company excluding the effect of unrealized gains (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 (loss) attributable to the Company excluding the effect of unrealized gains (loss) from equity securities to net income (loss) attributable to the Company for the periods indicated:

Three Months Ended

Three Months Ended

Years Ended

Years Ended

May 31, 2022

May 31, 2021

May 31, 2022

May 31, 2021

(Unaudited)

(Unaudited)

Amount

Diluted

earnings per

common share

Amount

Diluted

earnings per

common share

Amount

Diluted

earnings per

common share

Amount

Diluted

earnings per

common share

(000’s except per common share amounts and percentages)

Net Income Attributable to the Company Excluding the Effect of Unrealized Gain from Equity Securities and Diluted Earnings per Common Share Reconciliation:

Net income attributable to the Company

$

14,344

$

0.33

$

13,967

$

0.32

$

2,946

$

0.07

$

60,158

$

1.37

Unrealized gain from equity securities

41,175

34,201

13,978

96,223

Unrealized gain from equity securities attributable to noncontrolling interests

30,543

24,829

9,397

68,712

Unrealized gain from equity securities attributable to the Company

10,632

9,372

4,581

27,511

Tax benefit on unrealized gain from equity securities attributable to the company

(302

)

(622

)

(13

)

(3,455

)

Unrealized gain from equity securities attributable to the Company, net of taxes

10,330

$

0.24

8,750

$

0.20

4,568

$

0.10

24,056

$

0.55

Net income (loss) attributable to the Company excluding the effect of unrealized gain from equity securities

$

4,014

$

0.09

$

5,217

$

0.12

$

(1,622

)

$

(0.04

)

$

36,102

$

0.82

Weighted average diluted shares outstanding

44,034,588

44,059,278

44,034,813

44,038,179

(Earnings per share components may not sum to totals due to rounding)

View source version on businesswire.com: https://www.businesswire.com/news/home/20220812005347/en/

Contacts

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