Market Overview

FRMO Corp. Announces First Quarter 2020 Financial Results and Conference Call

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FRMO Corp. (the "Company" or "FRMO") (OTC:FRMO) today reported its financial results for the 2020 first quarter, which ended August 31, 2019 (May fiscal year).

Financial Highlights

FRMO's book value as of August 31, 2019 was $172.5 million ($3.92 per share on a fully diluted basis), including $45.2 million of non-controlling interests. The figure from the prior fiscal year-end as of May 31, 2019 was $175.0 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 $115.9 million as of August 31, 2019, and $118.3 million as of May 31, 2019. Total liabilities were $16.7 million as of August 31, 2019, unchanged from $16.7 million as of May 31, 2019, 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 August 31, 2019 was $(218,862) (($0.00) per share basic and diluted) compared to $3,211,123 ($0.07 per share) for the quarter ended August 31, 2018.

For the first quarter of 2020, comprehensive (loss) income attributable to the Company was $(218,862) compared to $3,211,123 in the prior year.

FRMO's net (loss) income attributable to the Company excluding the effect of unrealized gain (loss) from equity securities net of taxes for the three months ended August 31, 2019 was $(45,884) (($0.00) per diluted share) compared to $3,215,997 ($0.07 per share) for the three months ended August 31, 2018. Net (loss) income attributable to the Company excluding the effect of unrealized gains (losses) 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 August 31, 2019 and May 31, 2019, the Company held a 17.34% 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 82.66% and 84.51% in HKHA has been eliminated from results of operations for the periods ended August 31, 2019 and May 31, 2019.

Further details are available in the Company's Condensed Consolidated Financial Statements for the quarter ended August 31, 2019. 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 Thursday, October 17, 2019 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 800-353-6461 (domestic toll free) or +1 334-323-0501 (international toll) and entering the following conference ID: 6101786. A replay will be available from 7:15 p.m. on the day of the teleconference until Saturday, November 16, 2019. To listen to the archived call, dial 888-203-1112 (domestic toll free) or +1 719-457-0820 (international toll), and enter conference ID number 6101786.

 
Condensed Consolidated Balance Sheets
(in thousands)

 

 

 

 

August 31,

2019

 

 

May 31,

2019

(Unaudited)
Assets
Current Assets:
Cash and cash equivalents

$

54,409

$

53,081

Equity securities, at fair value

 

60,313

 

63,565

Other current assets

 

1,168

 

1,639

Total Current Assets

 

115,890

 

118,285

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

 

46,674

 

47,513

Investments in securities exchanges

 

3,682

 

3,641

Other assets

 

569

 

547

Investment in Horizon Kinetics LLC

 

12,204

 

11,488

Participation in Horizon Kinetics LLC revenue stream

 

10,200

 

10,200

Total Assets

$

189,219

$

191,674

 
Liabilities and Stockholders' Equity
Current Liabilities:
Securities sold, not yet purchased

$

7,674

$

8,133

Other current liabilities

 

1,196

 

161

Total Current Liabilities

 

8,870

 

8,294

Deferred Tax Liability

 

7,816

 

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