Form 10-Q/A

Amendment No. 1

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

(Mark one)

x	QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended November 30, 2006

o	TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

For the transition period from__________to_________

Commission file number: 000-52241

FROMEX EQUITY CORP.

(Exact name of small business issuer a specified in its charter)

Delaware	04-3826570
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No)

320 Manville Road

Pleasantville, N. Y. 10570

(Address of principal executive offices)

(Registrant’s telephone number, including area code): (914) 632-6730

Check whether the issuer: (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 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 o Registration Statement (Form 10) filed September 28, 2006

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

Yes o No x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of

the Exchange Act). Yes o No x

As of the close of business on November 30, 2006, there were 14,400,000 shares of the issuer’s common stock, par value $.001 per share outstanding.

Explanatory Note

This Amendment No. 1 on Form 10-Q/A is being filed with respect to the quarterly report filed on Form 10-QSB for the quarterly period ended November 30, 2006. This Amendment No. 1 reflects the restatement of the financial statements for the following reason:

“FRMO, the Company’s parent held a 60% interest in Horizon Advisers, a fund management firm. On December 1, 2005, FRMO transferred and assigned to Fromex a 66 2/3% interest in its share of fees earned by Horizon Advisers, as and when received by FRMO. The fair value of this revenue stream, estimated at $250,000, was initially recognized as a capital contribution by FRMO to Fromex, generating an intangible asset of $250,000. This asset was being amortized over an estimated useful economic life of 10 years.

“Upon subsequent analysis, it was determined that, because no value had been assigned to the Horizon Advisers revenue stream as reported on the accounts of FRMO, the Company’s parent, no value should have been attributed to the 66 2/3% interest upon transfer to Fromex. Accordingly, financial statements have been restated to attribute no value to the assigned interest, and the reversal of amortization recorded on the initial valuation. This restatement did not result in a change to the reported earnings per share.”

The above two quoted paragraphs were included in a revised Form 10 filed with the SEC on May 14, 2007, which included restated financial statements for the nine months ended November 30, 2006.

Originally the Company relied on paragraph 9 of SFAS No 142, Goodwill and Other Intangibles, which requires intangibles to be valued at fair value, and SAB Topic 5G which notes that an asset’s ability to be objectively measurable is a factor in accounting for an asset at fair value. The SEC Accounting Staff commented that the guidance of those accounting statements do not apply where the transferor retains a substantial indirect interest in the assets as a result of stock ownership in the Company. Therefore the Company accepted the Staff’s comment and agreed to restate the financial statements, which it did in the Form 10 filed on May 14, 2007. On June 27, 2007 the SEC requested that the Company file this Amendment No. 1.

The results of the Restatement are noted on pages 9 through 12. While the intangible asset has been restated at zero (page 11), the net income of the Company increased by $9,891 and $280 in the nine months and three months ended November 30, 2006 respectively (page 12).

The officers of the Company have reconsidered the effectiveness of its disclosure controls and procedures as of November 30, 2006 in the light of the restatement described above and has adopted the SEC accounting staff’s position with respect to a transfer of intangible assets by FRMO Corp. to the Company so long as FRMO Corp. retains a substantial indirect interest in the transferred assets as a result of stock ownership in Fromex. Accordingly the officers have concluded that the Company’s disclosure controls and procedures are effective as of November 30, 2006 and as of the date of this report. The officers have addressed this reconsideration and evaluation in their certifications in Exhibits 31.1 and 31.2 at pages 23 and 24 of this Amendment.

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION
Item 1. Financial Statements

Balance Sheets as of November 30, 2006 (Unaudited) (Restated)
and February 28, 2006 (Restated)			2
Statements of Income for the nine months and three months ended November 30,
2006 (Unaudited) (Restated)			3
Statement of Cash Flows for the nine months ended November 30, 2006
(Unaudited) (Restated)			4
Notes to Financial Statements (Unaudited)			5

Item 2. Management’s Discussion and Analysis of Financial Condition and
Results of Operations			17

Item 3. Controls and Procedures			20

PART II - OTHER INFORMATION

Item 6. Exhibits			21

SIGNATURE			22
EXHIBITS

PART 1 - FINANCIAL INFORMATION

Item 1. Financial Statements

Fromex Equity Corp.

Balance Sheets

			November 30,
	February 28,		2006
	2006		(unaudited)
	(Restated)		(Restated)
Assets
Current assets;
Cash and cash equivalents	$	307,535	$	1,078,191
Subscription receivable from parent		844,000		-
Accounts receivable from parent		117,013		73,615
Prepaid income taxes		-		8,500
Total current assets		1,268,548		1,160,306

Total Assets	$	1,268,548	$	1,160,306

Liabilities and Stockholder's Equity
Current liabilities:
Accounts payable and accrued expenses	$	25,251	$	31,000
Income taxes payable		23,000		-
Due to parent		306,219		-
Total current liabilities		354,470		31,000

Total Liabilities		354,470		31,000

Stockholder's Equity:
Common Stock - $.01 par value:
Authorized - 20,000,000 shares
Issued and outstanding - 14,400,000 shares		144,000		144,000
Capital in excess of par value		721,875		776,375
Retained earnings		48,203		208,931
Total stockholder's equity		914,078		1,129,306
Total liabilities and stockholder's equity	$	1,268,548	$	1,160,306

See accompanying notes to financial statements

Fromex Equity Corp.

Statements of Income

Period

Nine Months

August 31, 2005

Ended

(Inception)

Three Months

Period

November 30,

Through

Ended November 30,

September 1, 2005

2006

November 30, 2005

2006

Through

(Unaudited)

(Unaudited)

(Unaudited)

November 2005

(Restated)

Revenues

Consulting Fees

372,697

73,615

Total revenue

372,697

73,615

Costs and Expenses

Accounting

19,000

9,000

Shareholder reporting

10,309

4,000

Non-cash compensation

54,500

17,000

Other expenses

381

130

84,190

30,130

Income from operations

288,507

43,485

Interest Income

13,221

6,090

Income before provision for

income taxes

301,728

49,575

Provision for income taxes

(141,000

)

(26,200

)

Net Income

160,728

23,375

Earnings per share-primary and fully diluted:

Shares of common stock outstanding

14,400,000

Net income per share

0.01

0.00

See accompanying notes to financial statements

Fromex Equity Corp.

Statement of Cash Flows

				Period
	Nine Months			August 31, 2005
	Ended November 30,			(Inception) Through
	2006			November 30,
	(Unaudited)			2005
	(Restated)
Cash flows from operating activities
Net Income	$	160,728			-
Adjustments to reconcile net income
to net cash provided by operating
activities:
Non-cash compensation		54,500			-
Changes in operating assets and liabilities
Account receivable		43,398			-
Accounts payable and accrued expenses		5,749			-
Income taxes payable		(31,500	)		-
Net cash provided by operating activities		232,875			-


Cash flows from financing activities
Issuance of common stock		844,000			-
Repayments to parent		(306,219	)		-

Net cash provided by financing activities		537,781			-

Net increase in cash		770,656			-
Cash and cash equivalents at beginning of period		307,535			-

Cash and cash equivalents at end of period	$	1,078,191			-

Additional cash flow information
Income taxes paid	$	172,500			-

Non-cash investing and financing activities:

During the nine months ended November 30, 2006, the Company received cash proceeds of
$844,000 from the Fiscal 2006 issuance of its common stock.

See accompanying notes to financial statements

Fromex Equity Corp.

Notes To Financial Statements

1. Organization of the Company

Fromex Equity Corp. (the “Company” or “Fromex”) was incorporated in the State of Delaware on August 31, 2005 as a wholly owned subsidiary of FRMO Corp. (“FRMO”). Fromex has a fiscal year ending on the last day of February, as does its parent company FRMO. As of February 28, 2006 Fromex had 14,400,000 shares of common stock, par value $.01 per share, issued and outstanding all of which are owned by FRMO, for which it paid $144,000 and contributed $700,000 to Fromex’s paid in capital.

The Company commenced Operations on December 1, 2005.

Spin-off of Fromex

On August 31, 2005, FRMO filed Form 8-K with the Securities and Exchange Commission disclosing the formation of Fromex and the intended distribution to FRMO shareholders of 5% of the Fromex shares. In subsequent Form 8-K information filings it was announced that the timing and precise form of the spin-off would be postponed until a better procedure was identified for resolving the problem created by the new accounting rule (EITF 03-16). That rule, which was effective from and after September 1, 2004, mandated a change in the accounting policy for reporting revenue from FRMO’s 8.4% interest in Kinetics’ Advisers, LLC (“Kinetics”) from the cost (cash) method to the equity (accrual) method, as reported in FRMO’s Form 8-K dated June 16, 2005. For a variety of reasons, including the Kinetics practice, as a private company, of using the cash-basis method of accounting and the difficulty of securing audited and accrual-basis financial statements suitable for a public reporting company, FRMO could not itself report accrual-basis financial statements.

On December 9, 2005 the Board of Directors of FRMO authorized the preparation of the Form 10 Registration Statement (the “Registration Statement”) for the shares of common stock of Fromex pursuant to Section 12(g) of the Securities Exchange Act of 1934 (the “Exchange Act”). The Registration Statement was filed with the Securities and Exchange Commission on September 28, 2006. FRMO plans to distribute, five weeks after all SEC comments with respect to this Registration Statement has been cleared, to its shareholders as of the close of business on a date which is 21 days prior to the distribution date (the “record date”), one share of Fromex common stock for each 50 shares of FRMO common stock then outstanding. FRMO has 36,137,774 shares of common stock presently outstanding which means that approximately 720,000 shares of Fromex common stock (taking into consideration the payment of cash for fractional shares) will be distributed, representing 5% of the 14,400,000 shares of Fromex issued and outstanding.

Fromex Equity Corp.

Notes To Financial Statements

2. Basis of Presentation

The accompanying unaudited financial statements have been prepared in accordance with Regulation S-B promulgated by the Securities and Exchange Commission. Accordingly they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America 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 November 30, 2006; results of operations for the nine months and three months ended November 30, 2006; and cash flows for the nine months ended November 30, 2006. For further information, refer to the Company’s financial statements and notes thereto included in the Company’s Form 10 for the Period August 31, 2005 (inception) to February 28, 2006. The balance sheet 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.

Effective December 1, 2005, Fromex entered into a contract with FRMO to perform consulting and management services to FRMO for which FRMO has agreed to pay Fromex ten (10%) percent of the cash receipts which FRMO receives from its customers during the term of the agreement (The “Consulting Agreement”). The term of the Consulting Agreement is from December 1, 2005 until February 28, 2010 and for each twelve (12) month period thereafter unless terminated or amended by an instrument in writing signed by both parties on or before January 15 preceding the end of a respective term.

Fromex’s services include the administrative aspect of FRMO’s business activities such as operations, bookkeeping, personnel responsibilities and periodic consulting with the FRMO’s chief financial officer, but do not include the research, business development activities or the services rendered by FRMO itself to its customers, which produce FRMO’s cash receipts. FRMO shall pay to Fromex as its compensation an amount equal to 10% of total cash receipts that FRMO receives from its customers during the term of the Consulting Agreement. The compensation is based only on the money received by FRMO in each three (3) month period beginning December 1, 2005 and shall not include a percentage of any receivable or accrual until the amount is actually received by FRMO. The payment of such compensation shall be made on or before the close of the month following the end of said three month period.

The first accounting period is the three months which commenced December 1, 2005 and ended February 28, 2006, for which Fromex received $117,013 on March 24, 2006 based on the following cash receipts of FRMO in that quarterly period. In addition the FRMO cash receipts in the first nine months of Fromex’s current fiscal year, namely from March 1, 2006 to November 30, 2006 were as set forth below:

FRMO’s Cash Receipts From:		12/1/05 - 2/28/06		3/1/06 - 11/30/06
Kinetics Advisers’ Hedge Funds	$	959,311	$	2,023,445
Kinetics Paradigm Mutual Fund		174,332		1,233,977
Sub - Advisory Fees		0		317,935
Other Fees		36,491		151,617
Total	$	1,170,134	$	3,726,974

10% payable to Fromex	$	117,013	$	372,697

Fromex Equity Corp.

Notes To Financial Statements

FRMO’s cash receipts have been increasing in its last two fiscal years, which are set forth below to illustrate its growth, but past performance is no guaranty of future results:

FRMO’s Cash Receipts From:		3/1/04 - 2/28/05			3/1/05 - 2/28/06
Kinetics Advisers’ Hedge Funds	$	274,728		$	1,978,026
Kinetics Paradigm Mutual Fund		118,394			410,020
Sub-Advisory Fees		(9,335	)		74,770
Other Fees		134,308			142,925

Total	$	518,095		$	2,605,741

Fromex did not receive 10% of the cash receipts in those two fiscal years except for the last quarter of Fiscal February 28, 2006 as shown above.

The business of FRMO, on which Fromex receives its 10% of cash receipts, is as an intellectual capital firm. FRMO’s research and business development activities focus on the analysis of public companies within a framework of identifying investment strategies and techniques that reduce risk. Its business includes the identification of assets, particularly in the early stages of the expression of their ultimate value, and the participation with them in ways that are calculated to increase the value of the interest of FRMO’s shareholders. Such assets include, but are not limited to, those whose value and earnings are based on intellectual capital.

FRMO’s fees derive from assets managed by other parties based on the research of the Horizon Research Group, directed by the same principals who are the officers of FRMO. The three programs significant to FRMO’s fees are:

(i) Kinetics Advisers’ Hedge Funds. FRMO has an 8.4% equity interest, which it acquired for common stock, in Kinetics Advisers’ LLC, which controls and provides investment advice to hedge funds which were small when FRMO acquired its interest but which have been expanding dramatically.

Fromex Equity Corp.

Notes To Financial Statements

(ii) Kinetics Paradigm Mutual Fund. FRMO acquired for its common stock 100% of the research fees to which Horizon Research Group is entitled from the open-end mutual fund Kinetics Paradigm Fund (trading symbol WWNPX). That fund was small when the acquisition was made but it has grown significantly based on its performance. Kinetics Paradigm Fund was assigned a five-star rating by Morningstar, Inc. in May 2003, the first time it became eligible for rating, and has continued to receive that highest Morningstar rating since May 2003 to date.

(iii) Sub-Advisory Fees. On June 1, 2004, FRMO acquired for common stock a one-third interest in the Sub-Advisory Fee Revenue that Horizon Asset Management, Inc. receives in its sub-advisory program for a large investment firm. Under this program, Horizon Asset Management, Inc. provides investment advisory services to certain clients of the investment firm, its fees being calculated on the basis of assets under management.

FRMO’s fees which are received under these three programs, and therefore Fromex’s 10% share of the cash receipts therefrom, are based on the assets under management. The approximate net asset levels for these three programs at specific dates are presented below.

	Asset Levels in Millions (000,000 omitted)
	December 31,		December 31,		December 31,
Program	2004		2005		2006
Kinetics Advisers’ Hedge Funds	$	1,085	$	l,730	$	2,800
Kinetics Paradigm Fund		125		530		2,145
Sub-Advisory Program		115		615		1,630
Total	$	1,325	$	2,875	$	6,575

FRMO also receives other fees from three sources: from a consulting agreement with a hedge fund that pays FRMO about $35,000 per year for access to consultation with FRMO’s officers, from a consulting agreement with a smaller investment firm and from a small interest in the subscription revenues of an investment research publication. These three sources of cash receipts have been small and are not expected to be significant in FRMO’s future revenue stream.

Fromex Equity Corp.

Notes To Financial Statements

Business Activities of the Company.

While the foregoing 10% interest of Fromex in FRMO’s cash receipts constituted all of Fromex’s revenue from inception on August 31, 2005 to November 30, 2006, future revenues are expected to be derived from Fromex’s new business development activities, one of which has already been launched, and one which is in the planning stage.

(i) Horizon Global Advisers, LLC is a registered United States investment adviser organized in Delaware (“Horizon Advisers”) and acts as the investment manager for Horizon Global Advisers Fund, plc (“Horizon Fund”) which has been established as an open-ended variable capital investment company incorporated with limited liability in Ireland. The Horizon Fund is constituted as an umbrella fund insofar as its share capital will be divided into different series of shares with each series of shares representing a separate portfolio of assets, and comprising a separate sub-fund (a “Fund”) of the Horizon Fund. The first of said sub-funds, Horizon Opportunistic Value Fund, has been listed for trading on the Irish Stock Exchange. Horizon Advisers has commenced operations and managed over $116 million in assets as of November 30, 2006. It is anticipated that Horizon Advisers will receive management fees from Horizon Fund based on assets under management. FRMO owns 60% of Horizon Advisers and will receive 60% of the fees distributed by Horizon Advisers. FRMO transferred and assigned to Fromex a 66 2/3% revenue interest in those fees as and when received by FRMO in perpetuity. Since Fromex was a wholly-owned subsidiary of FRMO, the revenue interest is recorded on Fromex’s books at zero dollars and a contribution by FRMO to the capital of Fromex.

(ii) Horizon Multi-Strategy Fund LP (the “Multi-Strategy Fund”) is a hedge fund organized under Delaware Law. Fromex participated in the development of this fund in which Horizon Advisers is the investment manager. Fromex has a 40% revenue interest in the fees to be received by Horizon Advisers from this fund. Credit Suisse Securities (USA) LLC is the Placement Agent for the Multi-Strategy Fund

2A. Restatement of Financial Statements

The financial statements for the period August 31, 2005 (inception) to February 28, 2006 and for the nine months and three months ended November 30, 2006 have been restated as described below.

FRMO, the Company’s parent held a 60% interest in Horizon Advisers, a fund management firm. On December 1, 2005, FRMO transferred and assigned to Fromex a 66 2/3% interest in its share of fees earned by Horizon Advisers, as and when received by FRMO. The fair value of this revenue stream, estimated at $250,000, was initially recognized as a capital contribution by FRMO to Fromex, generating an intangible asset of $250,000. This asset was being amortized over an estimated useful economic life of 10 years.

Fromex Equity Corp.

Notes To Financial Statements

Upon subsequent analysis, it was determined that, because no value had been assigned to the Horizon Advisers revenue stream as reported on the accounts of FRMO, the Company’s parent, no value should have been attributed to the 66 2/3% interest upon transfer to Fromex. Accordingly, financial statements have been restated to attribute no value to the assigned interest, and the reversal of amortization recorded on the initial valuation. This restatement did not result in a change to the reported earnings per share.

The results of the Restatement are noted pages at 11 and 12. While the intangible asset has been restated at zero (page 11), the net income of the Company increased by $9,891 and $280 in the nine months and three months ended November 30, 2006 respectively (page 12).

Fromex Equity Corp.

Notes To Financial Statements

FROMEX EQUITY CORP.
Balance Sheets

	February 28, 2006							November 30, 2006
	Previously							Previously
	Reported		Adjustments			Restated		Reported		Adjustments			Restated
Assets
Current assets:
Cash and cash equivalents	$	307,535		-		$	307,535	$	1,078,191		-		$	,078,191
Subscription receivable from parent		844,000		-			844,000		-		-			-
Accounts receivable from parent		117,013		-			117,013		73,615		-			73,615
Prepaid incomes taxes		-		-					17,359		(8,859	)		8,500
Total current assets		1,268,548		-			1,268,548		1,169,165		(8,829	)		1,160,306

Other assets:
Intangible assets, net of accumulated		244,167		(244,167	)		-		225,417		(225,417	)		-
amortization of $5,833 and $12,083
Total other assets		244,167		(244,167	)		-		225,417		(225,417	)		-

Total Assets	$	1,512,715	$	(244,167	)	$	1,268,548	$	1,394,582	$	(234,276	)	$	1,160,306

Liabilities and Stockholder's Equity
Current liabilities:
Accounts payable and accrued expenses	$	25,251		-		$	25,251	$	31,000		-		$	31,000
Income taxes payable		23,000		-			23,000		-		-			-
Due to parent		306,219		-			306,219		-		-			-
Total current liabilities		354,470		-			354,470		31,000		-			31,000

Total Liabilities		354,470		-			354,470		31,000		-			31,000

Stockholder's Equity:
Common stock - $.01 par value:
Authorized - 20,000,000 shares
Issued and outstanding - 14,400,000 shares		144,000		-			144,000		144,000		-			144,000
Capital in excess of par value		971,875		(250,000	)		721,875		1,026,376		(250,000	)		776,375
Retained earnings		42,370		5,833			48,203		193,206		15,724			208,931
Total stockholder's equity		1,158,245		(244,167	)		914,078		1,363,582		(234,276	)		1,129,306
Total liabilities and stockholder's equity	$	1,512,715	$	(244,167	)	$	1,268,548	$	1,391,582	$	(234,276	)	$	1,160,306

Fromex Equity Corp.

Notes To Financial Statements

FROMEX EQUITY CORP.
Statements of Income

	Nine Months Ended November 30, 2006									Three Months Ended Novmber 30, 2006
	Previously									Previously
	Reported			Adjustments			Restated			Reported			Adjustments			Restated

Revenues
Consulting Fees	$	372,687			-		$	372,697		$	73,615			-		$	73,615
Total Revenue		372,697			-			372,697			73,615			-			73,615

Costs and Expenses
Accounting		19,000			-			19,000			9,000			-			9,000
Shareholder reporting		10,309			-			10,309			4,000			-			4,000
Amortization		18,750			(18,750	)		-			6,250			(6,250	)		-
Compensation (all non-cash)		54,500			-			54,500			17,000			-			17,000
Other expenses		381			-			381			130			-			130
		102,940			(18,750	)		84,190			36,380			(6,250	)		30,130
Income from operations		269,757			18,750			288,507			37,235			6,250			42,485
Interest Income		13,221			-			13,221			6,090			-			6,090
Income before provision for
income taxes		282,978			18,750			301,728			43,325			6,250			49,575


Provision for income taxes		(132,041	)		(8,859	)		(141,000	)		(20,230	)		(5,970	)		(26,200	)
Net Income	$	150,837		$	9,891		$	160,728		$	23,095		$	280		$	23,375


Earnings per share-primary and fully diluted
Shares of common stock outstanding		14,400,000			-			14,400,000			14,400,000						14,400,000
Net income per share		0.01			0.00			0.01			0.00						0.00

Fromex Equity Corp.

Notes To Financial Statements

3. Significant Accounting Policies

Revenue Recognition

Fromex has entered into a contract with FRMO to perform consulting and management services to FRMO for which FRMO has agreed to pay Fromex ten (10%) percent of the cash receipts which FRMO receives from its rights to share in fees generated by its third party customers during the term of the agreement (the “Consulting Agreement”). The term of the Consulting Agreement is from December 1, 2005 until February 28, 2010 (as amended on December 26, 2006) and for each twelve (12) month period thereafter unless terminated or amended by an instrument in writing signed by both parties on or before January 15 preceding the end of a respective term.

Fromex’s services include the administrative aspect of FRMO’s business activities such as operations, bookkeeping, personnel responsibilities and periodic consulting with the FRMO’s chief financial officer, but do not include the research, business development activities or the services rendered by FRMO or its third party customers, which produce FRMO’s cash receipts. FRMO shall pay to Fromex as its fees an amount equal to 10% of total cash receipts that FRMO receives from its customers during the term of the Consulting Agreement. Fees for Fromex’s services are based only on the fees collected by FRMO in each three (3) month period beginning December 1, 2005 and shall not include a percentage of any receivable or accrual until the amount is actually received by FRMO. The payment of such services shall be made on or before the close of the month following the end of said three month period.

Receivables

Accounts receivable and subscriptions receivable are due from FRMO Corp. No allowance was necessary at February 28, 2006 and November 30, 2006.

Income Taxes

Income taxes follow the reported results of the Company’s operations. There were no material differences between the financial reporting and the tax reporting of the Company’s revenue, assets and liabilities. The income tax provisions and liability for income taxes are based on enacted tax laws and statutory tax rates applicable to the respective periods.

Fromex Equity Corp.

Notes To Financial Statements

3. Significant Accounting Policies (continued)

Cash and Cash Equivalents

For purposes of the statements of cash flows, the Company considers all highly liquid, short-term investments with an original maturity of three months or less to be cash equivalents.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash, money market mutual funds, and trade receivables. The Company maintains cash and cash equivalents with major financial institutions, and at times such amounts may exceed the FDIC limits.

Advertising Costs

The Company’s policy is to expense the cost of advertising as incurred. There were no advertising expenses for the nine months ended November 30, 2006.

Fair Value of Financial Instruments

The following disclosure of the estimated fair value of financial instruments is made in accordance with the requirements of Statement of Financial Accounting Standards No. 107. “Disclosures about Fair Value of Financial Instruments”. The estimated fair values of financial

instruments will be determined by the Company using available market information and appropriate valuation methodologies. Considerable judgment is required in interpreting market data to develop the estimates of fair value. Accordingly, the estimates when presented herein are not necessarily indicative of the amounts that the Company could realize in a sale. There were no financial instruments at the balance sheet dates.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Fromex Equity Corp.

Notes To Financial Statements

3. Significant Accounting Policies (continued)

Comprehensive Income

Other comprehensive income refers to revenues, expenses, gains and losses that under generally accepted accounting principles are included in comprehensive income but are excluded from net income, as these amounts are recorded directly as an adjustment to stockholders’ equity. Comprehensive income was equivalent to net income for the period ended February 28, 2006 and the nine months ended November 30, 2006.

Recently Issued Accounting Pronouncements

In June 2006, the FASB Issued Financial Interpretation No. 48, “Accounting for Uncertainty In Income Taxes - an interpretation of FASB Statement No. 109.” (“FIN 48”). This Interpretation clarifies the accounting for uncertainty in income taxes recognized in an entity’s financial statements and prescribes recognition thresholds and measurement attributes for tax positions taken in a tax year. FIN 48 is effective for the Company beginning in fiscal year 2008. The Company will comply with the provisions of FIN 48 but the impact of such adoption is not determinable at this time.

In September 2006, the FASB Issued Statement No. 157, “Fair Value Measurements.” (“FAS 157”). This statement defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles (“GAAP”) and expands disclosures about fair value measurements. FAS 157 does not require any new fair value measurements but simplifies and codifies related guidance. The Company will comply with the provisions of FAS 157 when it becomes effective in fiscal year 2009. Such adoption is not expected to have a material impact on the Company’s financial statements since the Company utilizes fair value measures wherever required by current GAAP.

4. Commitments And Contingencies

As of February 28, 2006 and November 30, 2006, the Company did not enter into any material commitments and management believes that there were no contingencies.

Fromex Equity Corp.

Notes To Financial Statements

5. Subscription Receivable From Parent

The 14,400,000 shares of common stock of Fromex owned by FRMO Corp. as of February 28, 2006 and November 30, 2006 were paid for in the quarter ended May 31, 2006.

6. Net Income Per Common Share And Per Common Share Equivalent

Basic earnings per common share for the three and nine months ended November 30, 2006 are calculated by dividing net income by the weighted average common shares outstanding during the period which were 14,400,000 shares. There were no dilutive potential common shares outstanding.

7. Income Taxes

The provision for income taxes consists of the following:

	Nine		Three
	Months Ended		Months Ended
	November 30,		November 30,
	2006		2006
	(Restated)		(Restated)

Federal	$	110,000	$	19,500
State		31,000		5,700
Total provision	$	141,000	$	26,200

There is no material difference between the statutory federal and state income tax rates and the rates used in computing the provision for income taxes. See Note 3.

Item 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS

OF FINANCIAL CONDITION AND OPERATIONS

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 development 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 the following: changes in the financial markets, and other risk factors described herein and in the Company’s reports to be filed from time to time with the Commission. The discussion and analysis below is based on the Company’s Financial Statements and related Notes thereto included herein and incorporated herein by reference.

RESTATEMENT OF FINANCIAL STATEMENTS

The financial statements for the period August 31, 2005 (inception) to February 28, 2006 and for the nine months ended November 30, 2006 have been restated. FRMO, the Company’s parent held a 60% interest in Horizon Advisers, a fund management firm. On December 1, 2005, FRMO transferred and assigned to Fromex a 66 2/3% interest in its share of fees earned by Horizon Advisers, as and when received by FRMO. The fair value of this revenue stream, estimated at $250,000, was initially recognized as a capital contribution by FRMO to Fromex, generating an intangible asset of $250,000. This asset was being amortized over an estimated useful economic life of 10 years. Upon subsequent analysis, it was determined that, because no value had been assigned to the Horizon Advisers revenue stream as reported in the accounts of FRMO, the Company’s parent, no value should have been attributed to the 66 2/3% interest upon transfer to Fromex. Accordingly, financial statements have been restated to attribute no value to the assigned interest, and the reversal of amortization recorded on the initial valuation. See Note 2A of the Notes to Financial Statements.

OVERVIEW

Fromex presently generates revenues from its Consulting Agreement with FRMO whereby it receives ten percent of the cash receipts which FRMO receives from its customers. FRMO receipts include (i) fees received from Kinetics Advisers Hedge Funds, Kinetics Paradigm Mutual Fund and Sub-Advisory fees from a large investment firm, as described in Item 1 above and (ii) to a lesser extent, from a consulting agreement with Santa Monica Partners, consulting fees from a smaller investment firm and a small interest in the subscription revenues of an investment research publication (FRMO’s “Other Fees”). Revenues of Fromex from the Consulting Agreement may vary substantially from period to period depending on when FRMO actually receives the fees, which are subject to the 10% payment.

On December 6, 2005, FRMO transferred and assigned to Fromex for a 66 2/3% revenue interest in fees, which FRMO will receive from Horizon Global Advisers, LLC (“Horizon Advisers”) in perpetuity. Horizon Advisers is an investment management firm in which FRMO owns a 60% equity interest. As of November 30, 2006, no management fees were received by FRMO from Horizon Advisers but it is anticipated that Horizon Advisers will receive management fees in its fiscal year commencing March 1, 2007 a portion of which will be distributed to FRMO on account of its 60% equity interest, no part of which is also subject to a 10% payment under the Consulting Agreement, but two thirds of which is payable to Fromex on account of its revenue interest.

Fromex will seek to acquire other interests in the management fees of entities that provide investment advice or management to funds of assets under management. One such effort is the Horizon Multi-Strategy Fund LP described at page 9.

Nine Months Ended November 30, 2006

The Company’s revenues from continuing operations in this period were $372,697, all of which were generated from the Consulting Agreement as set forth at page 7 above. Expenses were $19,000 for accounting, $10,309 for shareholder reporting, $54,500 for the non-cash compensation of its officers and $381 for miscellaneous expenses, for a total of $84,190 of expenses, leaving $288,507 as income from operations before interest income and provision for income taxes. Interest income was $13,221 and after a $141,000 provision for income taxes, Fromex earned net income of $160,728 or $0.01 per share on the 14,400,000 shares of common stock issued and outstanding.

Three Months Ended November 30, 2006

The Company’s revenues from continuing operations in this period, derived from its Consulting Agreement described at page 7 above, were $73,615. Expenses were $9,000 for accounting, $4,000 for shareholder reporting, $17,000 for non-cash compensation to its officers, and $130 for miscellaneous expenses, for a total of $30,130 of expenses, leaving $43,485 as income from operations before interest income and provision for income taxes. Interest income was $6,090 and after a $26,200 provision for income taxes, Fromex earned net income of $23,375 or $0.00 per share on the 14,400,000 shares of common stock issued and outstanding.

LIQUIDITY AND CAPITAL RESOURCES

At the close of the first nine months of the current fiscal year, November 30, 2006, the cash on hand has increased by $770,656 to $1,078,191. This increase came from net cash of $232,875 provided from operating activities and $537,781 from financing activities. The Company expects to have continuing net cash provided from its operating activities as the management and advisory fees, which generate Fromex’s revenues, and are derived from assets under management, increase in existing funds and new funds in which Fromex has the revenue interests.

The Company believes that its present cash resources and cash available from operations over the next 12 months will be sufficient to cover its operating expenses and provide for the continued expansion of its business.

Item 3.

CONTROLS AND PROCEDURES

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company’s Securities Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including its chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, as ours are designed to do, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

As of the end of the period covered by this report, an evaluation was performed under the supervision and with the participation of our Company’s management, including the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based upon that evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that our disclosure controls and procedures were effective. Subsequent to that date of this evaluation, there have been no significant changes in the Company’s internal controls or in other factors that could significantly affect these controls, and no corrective actions taken with regard to significant deficiencies or material weaknesses in such controls.

There were no changes in the Company’s internal controls over financial reporting that materially affected, or are reasonably likely to materially affect the Company’s internal control over financial reporting during the nine months ended November 30, 2006.

PART II - OTHER INFORMATION

Item 6. Exhibit

The following exhibits are included following the Signature Page:

Number

Description

31.1	Certification by the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2	Certification by the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1	Pursuant to Section 906 of the Sarbanes Certification by the Chief Executive Officer and Chief Financial Officer Pursuant to Section 18 U. S. C. Section 1350 Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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.


	FROMEX EQUITY CORP.

July 24, 2007	By:	/s/ Steven Bregman
		Steven Bregman, President and Chief Financial Officer (Principal Financial and Accounting Officer)

FROMEX EQUITY CORP 10-Q/A