FRMO Corp. Changes Fiscal Year to May 31; Files 6-Month Financials
Mar 09, 2012
OTC Disclosure News Service
Pleasantville, NY –
FOR IMMEDIATE RELEASE
FRMO CORP. CHANGES FISCAL YEAR TO MAY 31. SIX MONTH
FINANCIAL STATEMENT AT NOVEMBER 30, 2011 FILED
Pleasantville, N. Y. March 9, 2012. FRMO Corp. (FRMO-OTC-PINK) has changed its fiscal year from February 28 to May 31 and will report its twelve months operations as of May 31, 2012. It is filing, with this news release, its financial statements for the six months ended November 30, 2011 This statement and future quarterly and annual reports will be prepared in accordance with generally accepted accounting principles (GAAP) without the departure from GAAP in prior statements owing to an 8.4% interest in Kinetics Advisers, LLC.
In February 2002, FRMO acquired an 8.4% interest in Kinetics Advisers LLC in exchange for 315 shares of FRMO stock. This investment was accounted for on the cost method in accordance with GAAP. Three years later, EITF 03-16 required that all investments in limited liability companies of more than 3 to 5 percent be accounted for using the equity method of accounting. This applied to FRMO for its fiscal year ended February 28, 2006. Kinetics Advisers LLC was a private company using the cash basis of accounting and its financial records were unaudited. Unable to obtain access to the books and records of Kinetics Advisers LLC to audit its financial information, FRMO was unable to account for the investment using the equity method and the investment continued to be reported under the cost method, which was a departure from GAAP. FRMO’s financial reports from February 28, 2006 through February 28, 2011 were prepared in accordance with GAAP except for this departure related to Kinetics Advisers, LLC.
Effective May 1, 2011, Kinetics Advisers LLC contributed all of its business operations to Horizon Kinetics LLC, as a result of which FRMO received a 0.5% interest in Horizon Kinetics LLC in exchange for its former 8.4% interest in Kinetics Advisers LLC. Accordingly, beginning May 1, 2011, GAAP requires that this 0.5% interest be accounted for on the cost method. The change of fiscal year to one beginning on June 1 and ending on May 31 will allow for the reporting of FRMO’s operations in its new fiscal year in accordance with GAAP, without any departure by reason of its investment in a limited liability company.
FRMO Corp. is a financial risk management organization. Its revenues are received from consulting and advisory fees that are derived from managed assets and research. It has 39,138,154 shares of common stock outstanding.
Lester J. Tanner, Esq.
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