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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: August 31, 2002
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to________
COMMISSION FILE NUMBER: 0-29346
FRMO CORP.
(Exact name of registrant as specified in its charter)
DELAWARE 13-3754422
(State or other jurisdiction of incorporation (I.R.S. Employer Identification No.)
or organization)
271 NORTH AVENUE, NEW ROCHELLE, NY 10801
(Address of principal executive offices) (Zip Code)
(914) 636-3432
(Registrant's telephone number, including area code)
--------------------------------------------------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes /x/ No / /
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Indicate by checkmark whether the registrant has filed all documents and reports
required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act
of 1934 subsequent to the distribution of securities under a plan confirmed by a
court. Yes / / No / /
APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding
of each of the issuer's classes of common stock, at October 11, 2002: 36,083,774
FRMO CORP.
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED AUGUST 31, 2002
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.....................................................................................2
Balance Sheets - August 31, 2002 (Unaudited) and February 28, 2002.......................................2
Statements of Operations (Unaudited) - Six months and three months ended August 31, 2002 and 2001........4
Statement of Stockholders' Equity (Unaudited) - Six months ended August 31, 2002.........................5
Statements of Cash Flows (Unaudited) - Six months ended August 31, 2002 and 2001........................6
Notes to Financial Statements (Unaudited)................................................................7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION...................10
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK..............................................12
ITEM 4. CONTROLS AND PROCEDURES.................................................................................12
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K........................................................................13
1
FRMO CORP.
Balance Sheets - August 31, 2002 (Unaudited) and February 28, 2002
AUGUST 31,
2002 FEBRUARY 28,
(UNAUDITED) 2002
-------- --------
ASSETS
Current assets:
Cash and cash equivalents $ 88,844 $ 83,411
Consulting fees receivable 25,909 1,114
-------- --------
Total current assets 114,753 84,525
-------- --------
Other assets:
Intangible assets, net of accumulated
amortization of $9,207 at August 31, 2002 68,046 71,543
and $9,676 at February 28, 2002
Investments in unconsolidated subsidiaries 18,751 5,000
-------- --------
Total other assets 86,797 76,543
-------- --------
Total assets $201,550 $161,068
======== ========
See notes to interim financial statements.
2
FRMO CORP.
Balance Sheets - August 31, 2002 (Unaudited) and February 28, 2002
(continued)
AUGUST 31,
2002 FEBRUARY 28,
(UNAUDITED) 2002
---------- ----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 21,374 $ 19,607
Income taxes payable 6,338 322
Deferred income 2,885 2,706
---------- ----------
Total current liabilities 30,597 22,635
---------- ----------
Stockholders' equity:
Preferred stock - $.001 par value;
Authorized - 2,000,000 shares;
Issued and outstanding - 50 shares Series R -- --
Common stock - $.001 par value;
Authorized - 90,000,000 shares;
Issued and outstanding - 36,083,774 shares 36,083 36,083
Capital in excess of par value 3,319,136 3,313,136
Retained earnings 34,359 7,839
---------- ----------
3,389,578 3,357,058
Less: Receivables from shareholders for
common stock issuance 3,218,625 3,218,625
---------- ----------
Total stockholders' equity 170,953 138,433
---------- ----------
Total liabilities and stockholders' equity $ 201,550 $ 161,068
========== ==========
See notes to interim financial statements.
3
FRMO CORP.
Statements of Operations (Unaudited) - Six months and
three months ended August 31, 2002 and 2001
THREE MONTHS ENDED SIX MONTHS ENDED
AUGUST 31, AUGUST 31,
-------------------------------- --------------------------------
2002 2001 2002 2001
----------- ----------- ----------- -----------
REVENUES
Consulting $ 23,814 $ 12,909 $ 42,540 $ 25,658
Research fees 3,157 1,924 7,205 2,359
Subscription fees -- -- 3,009 --
Income from investments in
unconsolidated subsidiaries 8,083 -- 13,751 --
----------- ----------- ----------- -----------
Total income 35,054 14,833 66,505 28,017
----------- ----------- ----------- -----------
COSTS AND EXPENSES
Amortization 1,932 2,087 3,497 3,420
Contributed services 3,000 -- 6,000 --
Accounting 4,493 1,600 5,993 2,600
Shareholder reporting 6,474 17,335 12,746 23,551
Office expenses 1,513 1,500 3,013 3,057
Other 203 92 251 295
----------- ----------- ----------- -----------
Total costs and expenses 17,615 22,614 31,500 32,923
----------- ----------- ----------- -----------
Income from operations 17,439 (7,781) 35,005 (4,906)
Dividend income 248 395 514 766
----------- ----------- ----------- -----------
Income from operations before provision
for income taxes 17,687 (7,386) 35,519 (4,140)
Provision for income taxes 6,344 -- 8,999 --
----------- ----------- ----------- -----------
Net income $ 11,343 $ (7,386) $ 26,520 $ (4,140)
=========== =========== =========== ===========
Basic earnings per common share $ 0.00 $ (0.00) $ 0.01 $ (0.00)
=========== =========== =========== ===========
Diluted earnings per common share $ 0.00 $ (0.00) $ 0.01 $ (0.00)
=========== =========== =========== ===========
Average shares of common stock outstanding:
Basic 3,897,524 3,897,209 3,897,524 3,882,366
=========== =========== =========== ===========
Diluted 3,947,524 3,897,209 3,947,524 3,882,366
=========== =========== =========== ===========
See notes to interim financial statements.
4
FRMO CORP.
Statement of Stockholders' Equity (Unaudited) --
Six months ended August 31, 2002
SERIES R
PREFERRED STOCK COMMON STOCK
SHARES AMOUNT SHARES AMOUNT
------------ ----------- ---------- -----------
Balance, February 28, 2002 50 $ -- 36,083,774 $ 36,083
Net income -- -- -- --
Contributed services -- -- -- --
Comprehensive income -- -- -- --
------------ ----------- ---------- -----------
Balance, August 31, 2002 50 $ -- 36,083,774 $ 36,083
============ =========== ========== ===========
RECEIVABLES
FROM TOTAL
ADDITIONAL SHAREHOLDERS STOCK- COMPRE-
PAID-IN RETAINED FOR COMMON HOLDERS' HENSIVE
CAPITAL EARNINGS STOCK ISSUANCE EQUITY INCOME
----------- ----------- ----------- ----------- -----------
Balance, February 28, 2002 $ 3,313,136 $ 7,839 $(3,218,625) $ 138,433
Net income -- 26,520 -- 26,520 $ 26,520
Contributed services 6,000 -- -- 6,000 --
-----------
Comprehensive income -- -- -- -- $ 26,520
----------- ----------- ----------- ----------- ===========
Balance, August 31, 2002 $ 3,319,136 $ 34,359 $(3,218,625) $ 170,953
=========== =========== =========== ===========
See notes to interim financial statements.
5
FRMO CORP.
Statements of Cash Flows (Unaudited) --
Six months ended August 31, 2002 and 2001
SIX MONTHS ENDED
AUGUST 31,
-------------------------------------
2002 2001
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ 26,520 $ (4,140)
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Reinvested income (13,751) --
Amortization 3,497 3,420
Contributed services 6,000 --
Changes in operating assets and liabilities:
Consulting fees receivable (24,795) 1,800
Other current assets -- 1,137
Accounts payable and accrued expenses 7,783 6,940
Deferred income 179 --
------------ ------------
Net cash provided by operating activities 5,433 9,157
------------ ------------
Net increase in cash and cash equivalents 5,433 9,157
Cash and cash equivalents, beginning of period 83,411 44,957
------------ ------------
Cash and cash equivalents, end of period $ 88,844 $ 54,114
============ ============
ADDITIONAL CASH FLOW INFORMATION
Interest paid $ -- $ --
============ ============
Income taxes paid $ 2,983 $ 155
============ ============
NONCASH INVESTING AND FINANCING ACTIVITIES
Common stock issued in consideration for the acquisition
of research agreements $ -- $ 83,459
============ ============
Reinvested income from investments in unconsolidated subsidiaries $ 5,668 $ --
============ ============
See notes to interim financial statements.
6
FRMO CORP.
Notes to Financial Statements (Unaudited)
1. BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared in accordance
with accounting principles generally accepted in the United States for interim
financial information in response to the requirements of Article 10 of
Regulation S-X. Accordingly they do not include all of the information and
footnotes required by accounting principles generally accepted in the United
States for complete financial statements. In the opinion of management, the
accompanying unaudited financial statements contain all adjustments (consisting
only of normal recurring items) necessary to present fairly the financial
position as of August 31, 2002; results of operations for the three months and
six months ended August 31, 2002 and 2001; cash flows for the six months ended
August 31, 2002 and 2001; and changes in stockholders' equity for the six months
ended August 31, 2002. For further information, refer to the Company's financial
statements and notes thereto included in the Company's Form 10-K for the year
ended February 28, 2002. The balance sheet at February 28, 2002 was derived from
the audited financial statements as of that date. Results of operations for
interim periods are not necessarily indicative of annual results of operations.
2. INTANGIBLE ASSETS
Research Agreements
In March 2001, the Company acquired the research service fees that Horizon
Research Group receives from The New Paradigm Fund in exchange for 80,003 shares
of common stock. In May 2001, the Company acquired the research service fees
that Horizon Research Group receives from The Middle East Growth Fund in
exchange for 3,456 shares of common stock. The value of the shares issued in
both of these transactions aggregated $54,969. The Company is amortizing the
cost of these research agreements over ten years using the straight-line method.
Subscription Revenues In October 2001, the Company acquired a 2% interest in the
subscription revenues from subscribers to The Convertible/High Yield Arbitrage
Report that Horizon Research Group and another third party receive.
Consideration for this interest consisted of the issuance of 50 shares of Series
R preferred stock. The value of the shares issued in both of these transactions
aggregated $26,250. The Company will amortize the purchase of these subscription
agreements over ten years using the straight-line method. At the time of these
transactions, a 2% interest in the subscription revenues amounted to $3,018 per
annum.
7
FRMO CORP.
Notes to Financial Statements (Unaudited)
(continued)
2. INTANGIBLE ASSETS (CONTINUED)
Intangible assets consist of the following:
AUGUST 31, FEBRUARY 28,
2002 2002
--------- ---------
Research agreements $ 51,003 $ 54,969
Subscription revenue 26,250 26,250
--------- ---------
77,253 81,219
Less accumulated amortization 9,207 9,676
--------- ---------
Intangible assets, net $ 68,046 $ 71,543
========= =========
For the six months ended August 31 2002 and 2001, amortization of intangible
assets was $3,497 and $3,420.
3. NET INCOME PER COMMON SHARE AND PER COMMON SHARE EQUIVALENT
Basic earnings per common share for the three months and six months ended August
31, 2002 and 2001, are calculated by dividing net income by weighted average
common shares outstanding during the period. Diluted earnings per common share
for the three months and six months ended August 31, 2002 and 2001, are
calculated by dividing net income by weighted average common shares outstanding
during the period plus dilutive potential common shares, which are determined as
follows:
THREE MONTHS ENDED SIX MONTHS ENDED
AUGUST 31, AUGUST 31,
2002 2001 2002 2001
--------- --------- --------- ---------
Weighted average common shares 3,897,524 3,897,209 3,897,524 3,882,366
Effect of dilutive securities:
Conversion of preferred stock 50,000 -- 50,000 --
--------- --------- --------- ---------
Dilutive potential common shares 3,947,524 3,897,209 3,947,524 3,882,366
========= ========= ========= =========
4. COMPENSATION FOR CONTRIBUTED SERVICES
Two officers/shareholders performed services for the Company during the six
months ended August 31, 2002 for which no compensation was paid. The Company
recorded a charge to operations for these contributed services of $6,000 and a
corresponding credit to paid in capital.
8
FRMO CORP.
Notes to Financial Statements (Unaudited)
(continued)
5. INCOME TAXES
The provision for income taxes consist of the following:
THREE MONTHS ENDED SIX MONTHS ENDED
AUGUST 31, AUGUST 31,
2002 2001 2002 2001
------ ------- ------ -------
Current:
Federal $5,018 $ -- $7,382 $ --
State 1,326 -- 1,617 --
------ ------- ------ -------
Total current 6,344 -- 8,999 --
------ ------- ------ -------
Deferred:
Federal -- -- -- --
State -- -- -- --
------ ------- ------ -------
Total deferred -- -- -- --
------ ------- ------ -------
Total $6,344 $ -- $8,999 $ --
====== ======= ====== =======
9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
All statements contained herein that are not historical facts, including but not
limited to, statements regarding future operations, financial condition and
liquidity, capital requirements and the Company's future business plans are
based on current expectations. These statements are forward looking in nature
and involve a number of risks and uncertainties. Actual results may differ
materially. Among the factors that could cause actual results to differ
materially are changes in the financial markets, which affect investment
managers, investors, mutual funds and the Company's consulting clients, and
other risk factors described herein and in the Company's reports filed and to be
filed from time to time with the Commission. The discussion and analysis below
is based on the Company's unaudited Financial Statements for the six months
ended August 31, 2002 and 2001. The following should be read in conjunction with
the Management's Discussion and Analysis of results of operations and financial
condition included in Form 10-K for the year ended February 28, 2002.
OVERVIEW
By reason of the spin-off transaction described in Form 10-K for the year ended
February 28, 2002, the Company had a new start in terms of its continuing
business and its financial statements. After the spin-off, its balance sheet
consisted of $10,000 in assets, no liabilities and 1,800,000 shares of common
stock. On January 23, 2001 the Company issued an additional 34,200,000 shares of
common stock for $3,258,000 to be paid as set forth in Item 1 of Form 10-K for
the year ended February 28, 2001.
Since its new start on January 23, 2001, FRM completed the following
transactions through August 31, 2002:
1. The Company invested $5,000 in FRM NY Capital, LLC, a limited
liability venture capital company whereby the substantial investment
of financial capital will be made by unrelated parties but where FRM
will have a carried interest based on leveraging the creative
services of its personnel (its intellectual capital).
2. A consulting agreement has been signed effective January 1, 2001
whereby FRM is currently receiving $22,860 a year from the manager
of Santa Monica Partners, LP, a director and shareholder of FRM,
for access to consultations with the Company's personnel designated
by Murray Stahl and Steven Bregman. Santa Monica Partners, L.P. is a
private fund, which owns 218,000 shares of common stock of FRM.
3. In March 2001 FRM acquired the research service fees that Horizon
Research Group had received from The New Paradigm Fund in exchange
for 80,003 shares of FRM common stock. Management believes that the
growth of that Fund in the current fiscal year and future years will
increase the current level of research fees for which the stock
consideration was paid. The New Paradigm Fund outperformed the S & P
500 Index by approximately 13 percentage points in its first fiscal
year of operation, Calendar 2000. During 2001, it outperformed the
S&P 500 Index by 14 percentage points and, during 2002, by 20
percentage points through September 30.
4. In October 2001, FRM acquired a 2% interest in the subscription
revenues from The Convertible/High Yield Arbitrage Report that
Horizon Research Group and another
10
third party receive in exchange for 50 shares of Series R preferred
stock. While the subscriptions are minimal at the present time,
management believes that they will grow in future years.
5. In February 2002, FRM acquired a 7.71% interest in Kinetics
Advisors, LLC and the Finder's Fee Share Interest from the Stahl
Bregman Group, in exchange for 315 shares of FRM common stock.
Kinetics Advisors, LLC controls and provides investment advice to
Kinetics New Economy Partners, a hedge fund and to Kinetics New
Economy Fund, an off-shore version of New Economy Partners. While
the fees are minimal at the present time, management believes that
they will grow in future years. During its first year of operation
in 2000, and in 2001, New Economy Partners returned 23.7 and 21.6
percentage points more than the S&P 500 Index. During 2002, through
September 30, it outperformed the S&P 500 Index by 35 percentage
points.
RESULTS OF OPERATIONS
2002 Period Compared to the 2001 Period
The Company's revenues from operations for the three months ended August 31,
2002 ("2002") was $35,000, an increase of $20,000 or 133% as compared to the
three months ended August 31, 2001 ("2001"). The Company's revenues from
operations for the six months ended August 31, 2002 ("2002") was $67,000, an
increase of $39,000 or 139% as compared to the six months ended August 31, 2001
("2001"). The net increases in both of the three and six month periods were due
to additional income being generated from consulting fees, research fees,
subscription fees and income from its investments in unconsolidated
subsidiaries.
Costs and expenses from operations decreased by $5,000 (22%) to $18,000 for the
three months ended in 2002. During the six month period ended in 2002 costs and
expenses from operations decreased by $1,000 (3%) to $32,000. The decrease for
the three months and six months ended in 2002 were due to decreases in
shareholder reporting expenses, offset by increases in contributed services.
In 2002, the Company started recording non-cash compensation of for contributed
services from two of its executives. In 2001 those executives, who are
responsible for all of the Company's operations had agreed not to draw any
salaries during the period of formation. The $6,000 and $9,000 increase in the
provision for income taxes for the three months and six months ended in 2002
was due to the increase in income from operations.
For the reasons noted above, the Company's net income for the three months ended
August 31, 2002 increased by $18,000 to $11,000, as compared to a loss of $7,000
in 2001. For the same reasons, net income for the six months ended August 31,
2002 was $27,000, as compared to a net loss of $4,000 for the same period in
2001.
LIQUIDITY AND CAPITAL RESOURCES
The Company's activities during the six months ended August 31, 2002, resulted
in an increase in cash of $5,000. The $5,000 increase in cash in 2002 was due to
an increase in net income (after adjusting for reinvested income, amortization
and contributed services) of $23,000, offset by fluctuations in operating assets
and liabilities primarily caused by timing differences. There were no cash flows
provided by or used in investing or financing activities
11
during both of the six month periods ended in 2002 and 2001. The Company expects
its business with prospective new clients to develop without the outlay of cash
since the growth will come from the services of its officers who will not
receive cash salaries until the Company's operations and revenues warrant the
payment.
EFFECTS OF NEW ACCOUNTING PRONOUNCEMENTS
None.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
On January 23, 2001 the Company issued 34,200,000 shares of $.001 par value
stock for $3,258,000. Only $39,375 was paid for at the time and the balance of
$3,218,625 will be paid to the Company as set forth in Item 1 of Form 10-K for
the year ended February 28, 2001. The Company's market risk arises principally
from the obligations of the shareholders to pay for the shares of common stock
of the Company based on dividends from outside sources and the income generated
from the management of mutual funds.
ITEM 4. CONTROLS AND PROCEDURES
Under the supervision and with the participation of our management, including
our principal executive officer and principal financial officer, we have
evaluated the effectiveness of the design and operation of our disclosure
controls and procedures within 90 days of the filing date of this quarterly
report, and, based on their evaluation, our principal executive officer and
principal financial officer have concluded that these controls and procedures
are effective. There were no significant changes in our internal controls or in
other factors that could significantly affect these controls subsequent to the
date of their evaluation.
Disclosure controls and procedures are our controls and other procedures that
are designed to ensure that information required to be disclosed by us in the
reports that we file or submit under the Exchange Act is recorded, processed,
summarized and reported, within the time periods specified in the Securities and
Exchange Commission's rules and forms. Disclosure controls and procedures
include, without limitation, controls and procedures designed to ensure that
information required to be disclosed by us in the reports that we file under the
Exchange Act is accumulated and communicated to our management, including our
principal executive officer and principal financial officer, as appropriate to
allow timely decisions regarding required disclosure.
12
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
EXHIBITS
None.
REPORTS ON FORM 8-K
None.
13
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
FRMO CORP.
By: /S/ VICTOR BRODSKY
-------------------
Victor Brodsky
Treasurer and
Chief Financial Officer
(Principal Financial and Accounting Officer)
Dated: October 10, 2002
CERTIFICATION
Each of the undersigned hereby certifies in his capacity as an officer of FRMO
Corp. (the "Company") that the Quarterly Report of the Company on Form 10-Q for
the period ended August 31, 2002 fully complies with the requirements of Section
13(a) of the Securities Exchange Act of 1934 and that the information contained
in such report fairly presents, in all material respects, the financial
condition of the Company at the end of such period and the results of operations
of the Company for such period.
Dated: October 11, 2002
By: /S/ MURRAY STAHL
----------------------
Murray Stahl
Chairman of the Board and Chief Executive Officer
By: /S/ STEVEN BREGMAN
------------------------
Steven Bregman
President and Chief Operating Officer
By: /S/ VICTOR BRODSKY
------------------------
Victor Brodsky
Treasurer and Chief Financial Officer
14
CERTIFICATIONS
I, Murray Stahl, certify that:
1. I have reviewed this quarterly report on Form 10-Q of FRMO Corp;
2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect
to the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented
in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant
and we have:
a) designed such disclosure controls and procedures to ensure
that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us
by others within those entities, particularly during the
period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to
the filing date of this quarterly report (the "Evaluation
Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based
on our evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the
registrant's ability to record, process, summarize and report
financial data and have identified for the registrant's
auditors any material weaknesses in internal controls;
and
b) any fraud, whether or not material, that involves management
or other employees who have a significant role in the
registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and
material weaknesses.
Dated: October 11, 2002
By: /S/ MURRAY STAHL
----------------
Murray Stahl
Chairman of the Board and Chief Executive Officer
15
CERTIFICATIONS
I, Steven Bregman, certify that:
1. I have reviewed this quarterly report on Form 10-Q of FRMO Corp;
2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect
to the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented
in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant
and we have:
a) designed such disclosure controls and procedures to ensure
that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us
by others within those entities, particularly during the
period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to
the filing date of this quarterly report (the "Evaluation
Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based
on our evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrant's auditors
and the audit committee of registrant's board of directors (or
persons performing the equivalent function):
a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the
registrant's ability to record, process, summarize and report
financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management
or other employees who have a significant role in the
registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated in
this quarterly report whether or not there were significant changes
in internal controls or in other factors that could significantly
affect internal controls subsequent to the date of our most recent
evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
Dated: October 11, 2002
By: /S/ STEVEN BREGMAN
------------------
Steven Bregman
President and Chief Operating Officer
16
CERTIFICATIONS
I, Victor Brodsky, certify that:
1. I have reviewed this quarterly report on Form 10-Q of FRMO Corp;
2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect
to the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented
in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant
and we have:
a) designed such disclosure controls and procedures to ensure
that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us
by others within those entities, particularly during the
period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to
the filing date of this quarterly report (the "Evaluation
Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based
on our evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrant's auditors
and the audit committee of registrant's board of directors (or
persons performing the equivalent function):
a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the
registrant's ability to record, process, summarize and report
financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management
or other employees who have a significant role in the
registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated in
this quarterly report whether or not there were significant changes
in internal controls or in other factors that could significantly
affect internal controls subsequent to the date of our most recent
evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
Dated: October 11, 2002
By: /S/ VICTOR BRODSKY
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Victor Brodsky
Treasurer and Chief Financial Officer
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