UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of report (due of earliest event reported) August 31, 2005
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
or organization) Identification No)
320 Manville Road, Pleasantville, NY 10570
(Address of Principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (914) 632-6730
Item 8.0 Other Events
Proposed Spin-Off
On August 31, 2005, the Board of Directors of FRMO Corp. ("FRMO" or the
"registrant") approved the transfer of FRMO's 8.4% equity interest in Kinetics
Advisers, LLC ("Kinetics") to a newly organized Delaware corporation, Fromex
Equity Corp. ("Fromex") in exchange for 3,600,000 shares of Fromex common stock,
representing all of the issued and outstanding capital stock of Fromex. The
transfer is retroactive to, and effective as of, August 31, 2004 with all the
incidences of ownership and entitlements that have accrued or will accrue to
said equity interest from and after September 1, 2004.
At the same date, the Board of Directors declared a dividend, payable in shares
of Fromex common stock of one (1) share of Fromex common stock for each two
hundred (200) shares of FRMO common stock. There are 36,083,774 shares of FRMO
common stock issued and outstanding which will receive a total of 180,418 shares
of Fromex common stock, representing about five (5%) percent of the outstanding
stock of Fromex. It will be paid on October 21, 2005 to FRMO Shareholders as of
the close of business on September 30, 2005. Cash will be paid to shareholders
owning less than 20 shares of FRMO common stock in lieu of issuing fractional
shares of Fromex common stock to which they would otherwise be entitled. This
amount will be determined by the Board of Directors of FRMO or, if the Board
deems it necessary or appropriate by an independent appraisal, of Fromex common
stock.
As reported in FRMO's 8-K Current Report dated June 16, 2005, the ownership of
the 8.4% equity interest in a private company (Kinetics) over which the
registrant has no control, has prevented FRMO from filing audited financial
statements for the fiscal year ended February 28, 2005. Kinetics reports to its
members as it reports in its federal income tax returns, namely on a cash basis.
The spin-off of five (5%) percent of the Fromex stock retroactive to, and
effective as of August 31, 2004, and a potential future sale or distribution by
FRMO of the Fromex shares, may enable the registrant to complete an audit of its
own financial statements by substantially reducing or excluding the
Kinetics/Fromex investment from and after September 1, 2004, the effective date
of the new accounting rule (RITF 03-16) that changed the accounting policy for
treating this investment from the cost (cash) method to the equity (accrual)
method.
The 180,418 shares of common stock of Fromex to be distributed in the spin-off
will be owned of record by fewer than 300 holders and will not be registered
under the Securities Exchange Act of 1934 ("Exchange Act"). Fromex will not be a
reporting company for purposes of the Exchange Act. Its shares may be traded in
the "pink sheets" or in privately negotiated sales so that the liquidity of the
Fromex shares may be reduced as compared to a listing on the NASDAQ-BB, where
FRMO's shares will continue to be traded once its audited financial statements
and Quarterly Reports are current.
Item 9. Exhibits
9.01 Transfer Agreement dated August 31, 2005 between FRMO Corp. and Fromex
Equity Corp.
9.02 Opinion of Tanner McColgan LLP dated August 31, 2005 relating to the
Transfer Agreement and the shares of Fromex Equity Corp.
SIGNATURES
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 hereunto duly authorized.
FRMO CORP.
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(Registrant)
By /s/ Steven Bregman
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Date: September 1, 2005 Steven Bregman, President