# Marygold Companies, Inc.: Form 10-Q for the period ended Dec 31, 2024

- Company: [Marygold Companies, Inc.](/companies/mgld.md) (CIK 1005101)
- Form: 10-Q
- Filed: 2025-02-05
- Accepted by EDGAR: Feb 5, 2025, 16:01 ET
- Period: 2024-12-31
- Accession: 0001493152-25-005002
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1005101/000149315225005002/form10-q.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1005101/000149315225005002/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2024-12-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2024-10-01 to 2024-12-31 | $8.0m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Revenue | 6 months, 2024-07-01 to 2024-12-31 | $15.9m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Cost of revenue | 3 months, 2024-10-01 to 2024-12-31 | $2.1m | us-gaap:CostOfRevenue |
| Cost of revenue | 6 months, 2024-07-01 to 2024-12-31 | $4.2m | us-gaap:CostOfRevenue |
| Gross profit | 3 months, 2024-10-01 to 2024-12-31 | $5.9m | us-gaap:GrossProfit |
| Gross profit | 6 months, 2024-07-01 to 2024-12-31 | $11.7m | us-gaap:GrossProfit |
| Operating income | 3 months, 2024-10-01 to 2024-12-31 | −$1.8m | us-gaap:OperatingIncomeLoss |
| Operating income | 6 months, 2024-07-01 to 2024-12-31 | −$4.0m | us-gaap:OperatingIncomeLoss |
| Interest expense | 3 months, 2024-10-01 to 2024-12-31 | $362.0k | us-gaap:InterestExpenseNonoperating |
| Interest expense | 6 months, 2024-07-01 to 2024-12-31 | $393.0k | us-gaap:InterestExpenseNonoperating |
| Income tax | 3 months, 2024-10-01 to 2024-12-31 | −$482.0k | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 6 months, 2024-07-01 to 2024-12-31 | −$966.0k | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2024-10-01 to 2024-12-31 | −$1.7m | us-gaap:NetIncomeLoss |
| Net income | 6 months, 2024-07-01 to 2024-12-31 | −$3.3m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2024-10-01 to 2024-12-31 | −$0.04 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 6 months, 2024-07-01 to 2024-12-31 | −$0.08 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2024-10-01 to 2024-12-31 | −$0.04 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 6 months, 2024-07-01 to 2024-12-31 | −$0.08 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2024-10-01 to 2024-12-31 | 40,863,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 6 months, 2024-07-01 to 2024-12-31 | 40,855,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 6 months, 2024-07-01 to 2024-12-31 | −$1.7m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 6 months, 2024-07-01 to 2024-12-31 | $53.0k | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Cash and equivalents | at 2024-12-31 | $5.7m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2024-12-31 | $22.6m | us-gaap:AssetsCurrent |
| Total assets | at 2024-12-31 | $33.0m | us-gaap:Assets |
| Current liabilities | at 2024-12-31 | $8.2m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2024-12-31 | $9.6m | us-gaap:Liabilities |
| Shareholders' equity | at 2024-12-31 | $23.4m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 36,806 characters.

This Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended June 30, 2024, and the unaudited consolidated financial statements and the accompanying notes thereto included in this Report for the relevant period and is qualified in its entirety by the foregoing and by more detailed financial information appearing elsewhere in this Report. See “Item 1 - Financial Statements (Unaudited).”

### Forward-Looking Statements

In addition to historical financial information, the following MD&A contains forward-looking statements that involve certain risks, uncertainties and assumptions. See “Special Note Regarding Forward-Looking Statements.” Our results of operations and the timing of selected events may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those discussed under “Item 1A. Risk Factors” in Part II of this Report and “Item 1A. Risk Factors” in our Form 10-K for the year ended June 30, 2024.

### Overview

The Marygold Companies, Inc., a Nevada corporation (together with its subsidiaries, “we,” “us,” “our,” “Company,” or “The Marygold Companies”), is a holding company which operates through its wholly owned subsidiaries engaged in certain diverse business activities listed below but with a primary focus on the fund management and financial services industries in the U.S. and U.K.:

- U.S. Fund Management - USCF Investments, Inc., a Delaware corporation (“USCF Investments”), with corporate headquarters in Walnut Creek, California and its wholly-owned subsidiaries:
- United States Commodity Funds, LLC, a Delaware limited liability company (“USCF LLC”), and
- USCF Advisers, LLC, a Delaware limited liability company (“USCF Advisers”). The principal place of business for each of USCF LLC and USCF Advisers is in Walnut Creek, California.
- Food Products – Gourmet Foods, Ltd., a registered New Zealand company located in Tauranga, New Zealand and its wholly-owned subsidiary, Printstock Products Limited, a registered New Zealand company, with its principal manufacturing facility in Napier, New Zealand.
- Security Systems – Brigadier Security Systems (2000) Ltd., a Canadian registered corporation, with locations in Regina and Saskatoon, Saskatchewan, Canada.
- Beauty Products - Kahnalytics, Inc., a California corporation, doing business as “Original Sprout,” located in San Clemente, California.
- U.S. and U.K. Financial Services:
- Marygold & Co., a Delaware corporation, based in Denver, Colorado, and its wholly-owned subsidiary, Marygold & Co. Advisory Services, LLC, a Delaware limited liability company, whose principal business office is in New Albany, Ohio;
- Marygold & Co., (UK) Limited, a private limited company incorporated and registered in England and Wales, whose registered office is in London, England, and its wholly-owned subsidiaries:
- Marygold & Co. Limited f/k/a Tiger Financial & Asset Management Limited, a company incorporated and registered in England and Wales, whose registered office is in Northampton, England; and
- Step-By-Step Financial Planners Limited, a company incorporated and registered in England and Wales, whose registered office is in Staffordshire, England.

21

### Recent Developments

Refer to “*Liquidity and Capital Resources – Recent Note Financing”* and “—Recent Equity Financing,” below.

### Summary Results of Operations

*(in thousands, except percentages)*

|  | Three Months Ended December 31, 2024 | 2023 | Percentage Change |
| --- | ---: | ---: | ---: |
| Revenue | $8,004 | $8,457 | -5% |
| Cost of revenue | 2,076 | 2,091 | -1% |
| Gross profit | 5,928 | 6,366 | -7% |
| Operating expenses | 7,754 | 7,363 | 5% |
| Loss from operations | (1,826) | (997) | 83% |
| Other expense, net | (403) | (368) | 10% |
| Loss before income taxes | (2,229) | (1,365) | 63% |
| Benefit from income taxes | (482) | 182 | 165% |
| Net loss | $(1,747) | $(1,183) | 48% |

#### Three Months Ended December 31, 2024 Compared with Three Months Ended December 31, 2023

Revenue decreased by $0.5 million or 5% for the quarter ended December 31, 2024 as a result of lower revenue in our fund management segment of $0.3 million and in our food products segment of $0.2 million. The decrease in fund management revenue was driven by a decrease in average Assets Under Management (“AUM”). Average AUM for the quarter ended December 31, 2024 was $3.1 billion compared to $3.5 billion for the quarter ended December 31, 2023. The decrease in average AUM in the quarter ended December 31, 2024 was due to commodity price fluctuations and the high-interest rate environment, along with geopolitical and economic uncertainty. The decrease in food products revenue was due to was due to a temporary cancellation of certain product categories sold to national grocery chains pending price increase acceptance.

Gross profit decreased by $0.4 million or 7%, driven by the reduced revenue from the lower average AUM as described above.

Operating expenses increased by $0.4 million or 5% driven by an increase in fund operations due to an increase in sub-advisory and license fees.

Loss from operations increased by $0.8 million or 83% driven by reduced profits of $0.4 million from the U.S. fund management segment and $0.1 million from food products as described above and increased losses of $0.2 million from financial services due to the increased build out of our Fintech app.

Total other income (expense), net was relatively flat for the quarter ended December 31, 2024 compared to the prior year quarter; however, the interest and dividend income increased by $0.9 million and other expense, net increased by $0.6 million. Included in the interest and dividend income for the quarter ended December 31, 2024 was $1.0 million of dividend income from related party investments and offset by $1.0 million in unrealized losses on related party investments included in other expense, net as a result of the reduction in the net asset values of the related party investments from the payment of the dividends.

Benefit from income taxes increased by $0.3 million or 165% driven by the increase in the loss before income taxes for the reasons explained above.

Net loss increased by $0.6 million or 48% and was driven by decreased profits from our fund management business due to lower average AUM and increased losses from our financial services business as we continue to develop our Fintech app.

### SEGMENT RESULTS OF OPERATIONS

*(in thousands, except percentages)*

| Revenue | Three Months Ended December 31, 2024 | 2023 | Percentage Change |
| --- | ---: | ---: | ---: |
| Fund management - related party | $4,685 | $4,997 | -6% |
| Food products | 1,688 | 1,920 | -12% |
| Beauty products | 832 | 842 | -1% |
| Security systems | 585 | 570 | 3% |
| Financial services | 214 | 128 | 67% |
| Total revenue | $8,004 | $8,457 | -5% |
| **Operating Income (Loss)** |  |  |  |
| Fund management - related party | $832 | $1,241 | -33% |
| Food products | 58 | 205 | -72% |
| Beauty products | (61) | (117) | -48% |
| Security systems | 58 | 72 | -19% |
| Financial services | (1,703) | (1,480) | 15% |
| Corporate headquarters | (1,010) | (918) | 10% |
| Total operating loss | $(1,826) | $(997) | 83% |

### Reportable Segments

#### Quarter Ended December 31, 2024 Compared with Quarter Ended December 31, 2023

### U.S. Fund Management – Related Party - USCF Investments

USCF Investments earns monthly management and advisory fees based on an investment management or advisory agreement with each Fund. The management fees are determined on the basis of a contractual basis point management fee multiplied by the average AUM over the given period. Average AUM for the quarter ended December 31, 2024 was $3.1 billion compared to $3.5 billion for the quarter ended December 31, 2023. As a result of lower average AUM for the current quarter when compared to the quarter ended December 31, 2023, revenue decreased by $0.3 million or 6%. The decrease in average AUM in the quarter ended December 31, 2024 was due to commodity price fluctuations and the high-interest rate environment, along with the impact of geopolitical and economic uncertainty.

Operating income decreased by $0.4 million or 33% driven by the decrease in average AUM as described above and a net increase in total operating expenses relating to sub-advisory and license fees.

### Food Products - Gourmet Foods

Gourmet Foods has two distinct operating divisions: 1) a commercial-scale bakery producing iconic Kiwi pies and sausage rolls and 2) a digital printing business (Printstock Products Limited) which prints specialty food wrappers. Total food products revenue decreased by $0.2 million or 12% for the quarter ended December 31, 2024 as compared to 2023, the result of decreases at both our printing business and our bakery business. The decrease of $0.1 million or 8% in our printing business was due to the timing of job completion and invoicing. The decrease of $0.2 million or 15% in our bakery business was due to a temporary cancellation of certain product categories sold to national grocery chains pending price increase acceptance.

Operating income decreased by $0.1 million or 72% for the quarter ended December 31, 2024 compared to the prior year quarter which was driven by the decrease in revenue for both the printing and bakery businesses.

### Beauty Products – Original Sprout

Original Sprout derives its revenues from the sale of proprietary hair and skin care products marketed to domestic and international distributors, grocery stores, hair salons and direct-to-consumers via online platforms. Revenue was consistent at $0.8 million for both quarters ended December 31, 2024 and 2023.

Operating loss decreased by less than $0.1 million or 48% for the quarter ended December 31, 2024 as compared to 2023 as a result of the elimination of amortization expense associated with the impairment of intangible assets at the end of the prior fiscal year.

### Security Systems - Brigadier

Brigadier earns revenue from recurring alarm monitoring fees charged to residential customers, and from hardware sales and installations of access controls for commercial customers. Revenues from monitoring residual fees remained relatively static while sales and installations of larger commercial installations increased for the quarter ended December 31, 2024 as compared to 2023. Revenue increased but was offset by an increase in cost of goods sold, producing a relatively flat operating income. The larger commercial accounts generate more revenue and profits but take longer to complete, thus may produce spikes or declines in revenue and profits for specific reporting periods. As the residential consumer segment of the industry becomes more complex due to the bundling of services, including alarm monitoring, offered by larger telecom companies, we expect to focus even more heavily on the commercial and public facilities customers in the coming years.

### U.S. and U.K. Financial Services – Marygold US and Marygold UK

Our Financial Services segment is comprised of Marygold US and Marygold UK, which are distinct operating entities with differing revenue streams.

Marygold US has developed and launched a mobile banking fintech app which is expected to earn revenue in the form of management fees based on a percentage of the amount of account holder funds are invested in various curated ETF portfolios offered on the app (“Money Pools”), and from transaction fees when account holders use our debit card. The app was soft-launched in June 2023 as a proof of concept. Since that time, the app has earned only de minimis revenues. Operating costs are comprised of development team salaries and expenses, fees paid to third party vendors, fees paid to our sponsoring bank, marketing costs and staff salaries. For the quarter ended December 31, 2024, Marygold US incurred an operating loss of $1.5 million as compared with an operating loss of $1.4 million for the quarter ended December 31, 2023. These losses and negative cash flows are expected to continue for the coming fiscal year.

Marygold UK is a U.K. holding company which operates through its two wholly-owned subsidiaries Marygold & Co. Limited f/k/a Tiger Financial and Asset Management Limited and Step By Step Financial Planners, both of whom are registered investment advisors who earn revenues based on the amount of AUM and from the sale of financial products, including insurance, to customers in the U.K.

Our total U.K. Financial Services revenue, derived entirely from Marygold UK, for the quarter ended December 31, 2024, increased by $0.1 million or 67% to $0.2 million as compared to $0.1 million for the quarter ended December 31, 2023. The increase was driven by the incremental revenue of $0.1 million from Step-By-Step, which was acquired in April 2024. Operating loss increased by $0.2 million due to increased costs incurred in connection with the adoption and implementation of the Marygold mobile Fintech app for the U.K. market. The consolidated operating loss for financial services was $1.7 million for the current quarter as compared to a loss of $1.5 million for the quarter ended December 31, 2023.

### Corporate Headquarters

The Marygold Companies as a holding company has no significant revenue, however, it does have operating expenses such as, but not limited to, salaries, audit and legal fees, NYSE American listing fees and expenses, expenses related to compliance with its SEC periodic reporting requirements, insurance, interest expense, and investor relations which produce operating losses. Operating loss for the corporate headquarters increased by $0.1 million, or 10%, for the quarter ended December 31, 2024 as compared to same period in 2023. The increased loss was driven by higher stock-based compensation expenses from additional equity grants during the quarter ended December 31, 2024.

### Summary Results of Operations

*(in thousands, except percentages)*

|  | Six Months Ended December 31, 2024 | 2023 | Percentage Change |
| --- | ---: | ---: | ---: |
| Revenue | $15,913 | $16,692 | -5% |
| Cost of revenue | 4,203 | 4,128 | 2% |
| Gross profit | 11,710 | 12,564 | -7% |
| Operating expenses | 15,706 | 14,598 | 8% |
| Loss from operations | (3,996) | (2,034) | 96% |
| Other expense, net | (302) | (134) | 125% |
| Loss before income taxes | (4,298) | (2,168) | 98% |
| Benefit from income taxes | 966 | 484 | 100% |
| Net loss | $(3,332) | $(1,684) | 98% |

#### Six Months Ended December 31, 2024 Compared with Six Months Ended December 31, 2023

Revenue decreased by $0.8 million or 5% for the six months ended December 31, 2024 driven by a decrease in average Assets Under Management (“AUM”) in our U.S. fund management business. Average AUM for the six months ended December 31, 2024 was $3.1 billion compared to $3.5 billion for the six months ended December 31, 2023, a decrease of $0.4 billion or 11%. The decrease in AUM in the six months ended December 31, 2024 was due to commodity price fluctuations and the high-interest rate environment, along with geopolitical and economic uncertainty.

Gross profit decreased by $0.9 million or 7% for the reasons described above for the reduced revenue plus cost of revenue increased by $0.1 million compared to the six months ended December 31, 2023.

Operating expenses increased by $1.1 million or 8% as a result of the following. General and administrative expenses increased by $0.4 million or 8% driven by increased costs associated with our Fintech app development including additional software and security infrastructure in the UK. Salaries and compensation increased by $0.5 million or 9% compared to the six months ended December 31, 2023 driven by increased stock-based compensation expenses plus increased compensation at USCF. Fund operations increased by $0.5 million or 21% driven by increased costs associated with managing more funds. Partially offsetting these increased operating expenses was a decrease in marketing and advertising of $0.3 million or 17% as a result of prior year increased spending for new products at Original Sprout as well as from the Fintech app and new fund launches.

Total other income (expense), net decreased by $0.2 million or 125% for the six months ended December 31, 2024 compared to the same period in the prior year; however, the interest and dividend income line item increased by $0.9 million and other expense, net increased by $0.7 million. Included in the interest and dividend income for the six months ended December 31, 2024 was $1.1 million of dividend income from related party investments and offsetting that was $1.0 million in unrealized losses on related party investments included in other expense, net as a result of the reduction in the net asset values of the related party investments from the payment of the dividends.

Benefit from income taxes increased by $0.5 million or 100% driven by the increase in the loss before income taxes for the reasons explained above.

Net loss increased by $1.6 million or 98% and was driven by decreased profits from our fund management business due to lower average AUM, increased losses in our financial services segment as we continue to develop our Fintech app and higher stock-based compensation charges.

### SEGMENT RESULTS OF OPERATIONS

*(in thousands, except percentages)*

| Revenue | Six Months Ended December 31, 2024 | 2023 | Percentage Change |
| --- | ---: | ---: | ---: |
| Fund management - related party | $9,276 | $10,047 | -8% |
| Food products | 3,510 | 3,649 | -4% |
| Beauty products | 1,430 | 1,617 | -12% |
| Security systems | 1,274 | 1,123 | 13% |
| Financial services | 423 | 256 | 65% |
| Total revenue | $15,913 | $16,692 | -5% |
| **Operating Income (Loss)** |  |  |  |
| Fund management - related party | $1,793 | $2,975 | -40% |
| Food products | 50 | 215 | -77% |
| Beauty products | (234) | (436) | -46% |
| Security systems | 191 | 143 | 33% |
| Financial services | (3,286) | (3,004) | 9% |
| Corporate headquarters | (2,510) | (1,927) | 30% |
| Total operating loss | $(3,996) | $(2,034) | 96% |

### Reportable Segments

#### Six months Ended December 31, 2024 Compared with Six months Ended December 31, 2023

### U.S. Fund Management – Related Party - USCF Investments

Average AUM for the six months ended December 31, 2024 was $3.1 billion compared to $3.5 billion for the six months ended December 31, 2023. As a result of lower average AUM for the current six months when compared to the six months ended December 31, 2023, revenue decreased by $0.8 million or 8%. The decrease in average AUM in the six months ended December 31, 2024 was due to commodity price fluctuations and the high-interest rate environment, along with the impact of geopolitical and economic uncertainty.

Operating income decreased by $1.2 million or 40% driven by the decrease in average AUM as described above and increased fund operations expenses of $0.5 million or 21% as a result of increased sub-advisory and license fees, fund accounting and administration costs connected to new funds.

### Food Products - Gourmet Foods

Total food products revenue decreased by $0.1 million or 4% for the six months ended December 31, 2024 as compared to 2023, which was the net result of an increase at our printing business of $0.1 million and a decrease at our bakery business of $0.3 million. The increase of $0.1 million or 9% in our printing business was due to the timing of job completion and invoicing as opposed to changes in the business climate. The decrease of $0.3 million or 12% at our bakery business was due to a temporary cancellation of certain product categories sold to national grocery chains that commenced in the current fiscal year.

Operating income decreased by $0.2 million or 77% for the six months ended December 31, 2024 compared to the prior year period which was driven by a non-recurring cost of goods sold adjustment coupled with a depreciation charge taken for its solar electricity system and partially offset by increased profits from the sale of higher margin products at our bakery business.

### Beauty Products – Original Sprout

Revenue decreased by $0.2 million or 12% driven by the efforts to control the discounted price of products sold online by authorized resellers. This trend is expected to continue for the remainder of the current fiscal year as Original Sprout reduces the number of authorized Internet sales channels and repositions its products for a larger presence on store shelves.

Operating loss decreased by $0.2 million or 46% for the six months ended December 31, 2024 as compared to 2023 as a result of reduced marketing costs and a nominal price increase to domestic distributors.

### Security Systems - Brigadier

Revenues from monitoring residual fees remained relatively static while sales and installations of larger commercial installations increased for the six months ended December 31, 2024 as compared to 2023. Revenue increased by $0.2 million or 13% and operating income increased by less than $0.1 million or 33% driven by increased sales to commercial customers. The larger commercial accounts generate more revenue and profit but take longer to complete, thus may produce spikes or declines in revenue and profits for specific reporting periods. As the residential consumer segment of the industry becomes more complex due to the bundling of services, including alarm monitoring, offered by larger telecom companies, we expect to focus even more heavily on the commercial and public facilities customers in the coming years.

### U.S. and U.K. Financial Services – Marygold US and Marygold UK

Marygold US incurred an operating loss of $3.0 million for both the six months ended December 31, 2024 and 2023. These losses and negative cash flows are expected to continue for the coming fiscal year.

Our total Financial Services revenue, derived entirely from Marygold UK, for the six months ended December 31, 2024 increased by $0.2 million or 65% as compared to the six months ended December 31, 2023. The increase was primarily driven by the incremental revenue from Step-By-Step, which was acquired in April 2024. Operating loss increased by less than $0.3 million due to increased costs incurred in connection with the adoption and implementation of the Marygold mobile Fintech app for the U.K. market. The consolidated operating loss for financial services was $3.3 million for the current six months as compared to a loss of $3.0 million for the six months ended December 31, 2023.

### Corporate Headquarters

The Marygold Companies as a holding company has no significant revenue, however, it does have operating expenses such as, but not limited to, salaries, audit and legal fees, NYSE American listing fees and expenses, expenses related to compliance with its SEC periodic reporting requirements, insurance, interest expense, and investor relations which produce operating losses. Operating loss for the corporate headquarters increased by $0.6 million, or 30%, for the six months ended December 31, 2024 as compared to same period in 2023. The increased loss was driven by higher stock-based compensation expenses from additional outstanding equity grants during the six months ended December 31, 2024.

### Liquidity and Capital Resources

The Marygold Companies is a diversified holding company that conducts its individual business operations through its subsidiaries. At the holding-company level, its liquidity needs relate to operational expenses, the funding of additional business acquisitions and new investment opportunities. Our operating subsidiaries’ principal liquidity requirements arise from cash used in operating activities, debt service, and capital expenditures, including purchases of equipment and services, operating costs and expenses, and income taxes. Cash is managed at the holding company and the subsidiary level. There are generally no legal limitations or constraints on the movement of funds between the entities, however there are potential tax consequences for funds moved from foreign subsidiaries to the parent company. Additionally, our registered investment advisor subsidiaries are required to maintain certain minimum capital requirements.

As of December 31, 2024, we had $5.7 million of cash and cash equivalents on a consolidated basis as compared to $5.5 million as of June 30, 2024, a increase of $0.2 million or 4%. Our cash used in operating activities for the six months ended December 31, 2024 was $1.7 million. For the six months ended December 31, 2024, the Company made additional expenditures of $2.7 million with regard to the development of our mobile Fintech app. We have invested a total of $18 million in the Fintech app since Marygold’s inception. In September 2024, we entered into a financing arrangement under which we borrowed $4.4 million and have the potential to borrow an additional $2.2 million. The financing arrangement also gives the lender the right but not the obligation to provide an additional $10.0 million in financing to us on the same terms as the initial loans. We expect that we will require additional financing to fund our fintech operations over the coming 12 months. As the funding requirements become known, we will decide upon the source of the additional capital. Despite these cash investments and expenses, our working capital position remains strong at $14.4 million as of December 31, 2024.

#### Recent Equity Financing

On January 28, 2025, we closed on the sale of an aggregate of 2,050,000 shares of our common stock, $0.001 par value per share (“Common Stock”) at a price to the public of $1.10 per share (before deduction of underwriting discounts and commissions) in a firm commitment underwritten public offering (“Offering”) pursuant to an underwriting agreement, dated January 26, 2025 (“Underwriting Agreement”), between us and the Maxim Group LLC (“Maxim”), as sole underwriter and book-running manager for the Offering. Pursuant to the Underwriting Agreement, we granted Maxim a 45-day option to purchase up to an additional 307,500 shares of Common Stock at the public offering price before deduction of underwriting discounts and commissions (“Overallotment Option”). As of the date of this Report, Maxim has not exercised its Overallotment Option and there can be no assurance that it will do so.

The net proceeds of the Offering to us, after deducting underwriting discounts and commissions and estimated offering expenses, were approximately $1,850,000. We intend to use the net proceeds from the Offering to retire or reduce debt, make additional investments in our financial services operations, and for other general working capital and corporate purposes.

Based on our current operating plan which we expect may include continued additional investments in our mobile Fintech app, we may need to raise additional funds through one or more debt and/or equity financing to meet our operating and cash needs. There can be no assurance we will be able to raise such additional financing or upon terms acceptable to us. In the event we are unable to obtain additional financing in an amount or upon terms acceptable to us, we expect to reduce or curtail our investment in the development of our Fintech app.

#### Lease Liability

The Company has various leases for offices, warehouses and manufacturing facilities. The total amount due under these obligations was $1.4 million as of December 31, 2024. During the six months ended December 31, 2024, the Company renewed leases in New Zealand and the US which increased the right-of-use assets and lease liabilities by $0.7 million. The obligations will reduce over the passage of time through periodic lease payments. See Note 10 for further analysis of this obligation.

#### Recent Note Financing

On September 19, 2024, we entered into a note purchase agreement (“Purchase Agreement”) with Streeterville Capital, LLC, a Utah limited liability company (“Holder”), pursuant to which we agreed to issue and sell to Holder a secured promissory note in an initial principal amount of $4,380,000 (“Initial Note”) payable on or before 24 months from the issuance date (“Maturity Date”) and, upon the satisfaction of certain conditions in the Purchase Agreement, up to one additional secured promissory note (“Subsequent Note,” Initial Note and Subsequent Note, “Notes”). The initial principal amount of the Notes includes an original issue discount of 9% and expenses the Company agreed to pay to the Holder to cover the Holder’s transaction costs. The original issue discount of the Initial Note was $360,000. Interest on the principal amount of the Notes accrues at a rate of 9% per annum. The Company may pay all or any portion of the amount owed under the Notes earlier than it is due. All payments made under the Notes, including any repayments, are subject to an additional amount payable equal to 6% of the portion of the outstanding balance being repaid. The Subsequent Note would have a principal amount of $2,180,000, which will have terms substantially similar to the terms of the Initial Note. The original issue discount on the Subsequent Note, if issued, will be $180,000.

The Purchase Agreement contains certain covenants and agreements, including that we will not pledge or grant any lien or security interest in our or our subsidiaries’ assets without the Holder’s prior written consent and that we will file reports under the Securities Exchange Act timely, and that our shares will continue to be listed or quoted on the NYSE American or Nasdaq. Also, without the Holder’s prior written consent, we may not: issue, incur or guarantee any debt obligations other than trade payables in the ordinary course; issue any security that has conversion rights in which the number of shares varies with the market price of our shares; issue any securities convertible into our shares with a conversion price that varies with the market price of our shares; issue any securities that have a conversion or exercise price subject to a reset due to a change in the market price of our shares or upon the occurrence of certain events related to our business (but excluding certain standard antidilution protection for any reorganization, recapitalization, noncash dividend, stock split or similar transaction); issue and securities pursuant to an equity line of credit, standby equity purchase agreement or similar arrangement. The Purchase Agreement also contains a most favored nations provision that provides we will grant to the Holder the same terms as we offer any subsequent investor in our debt securities and certain arbitration provisions in the event of a claim arising under the Purchase Agreement and other transaction documents.

The Notes contain certain trigger events, including in the event that: (a) we fail to pay any amount when due; (b) a receiver or trustee is appointed with respect to our assets; (c) we become insolvent; (d) we make an assignment for the benefit of creditors; (e) we file a petition under bankruptcy, insolvency or similar laws; (f) an involuntary bankruptcy proceeding is filed against us; (g) a “fundamental transaction” occurs without Holder’s prior written consent: (h) we, USCF Investments or any of the USCF Investments subsidiaries, fail to observe covenants in our agreements with the Holder; (i) we default in observing or performing any covenant in the transaction documents; (j) any representation in the transaction documents is or becomes false or incorrect; (i) we effect a reverse stock split without 20 trading days’ prior written notice to the Holder; (k) any judgment is entered against us for more than $500,000 which remains unstayed for more than 20 days unless consented to by the Holder; (m) our shares cease to be DTC (Depositary Trust Company) eligible; or (n) we breach any covenant or agreement in any other agreement with Holder or in any financing or other agreement that affects our ongoing business operations. A “fundamental transaction” occurs if: we merge with another entity; we dispose of all or substantially all of our assets, we allow more than 50% of our voting shares to be acquired by another person; we enter into a share purchase agreement with a third party that acquires more than 50% of our shares; we recapitalize or reclassify our shares; we transfer a material asset to a subsidiary; we pay a dividend to our shareholders; or any person or group becomes the beneficial owner of 50% of the ordinary voting power of our shares. Upon the occurrence of a trigger event, the Holder may increase the amount outstanding under a Note by 10% for an event described in (a) through (h) above or 5% for an event described in (i) through (n) above (a “default amount”). Alternatively, the Holder may treat the trigger event as an event of default and demand repayment of the Note, subject to a five-day cure period, together with any applicable default amount.

The Company’s obligations under the Note are secured by: (i) a pledge of all the common stock the Company owns in USCF Investments, Inc. and (ii) a security interest in all of the assets of the Company. Further, the Company’s Chief Executive Officer’s trust, the Nicholas and Melinda Gerber Living Trust (“Gerber Trust”), provided: (i) a guaranty of the Company’s obligations to the Holder under the Note and (ii) a pledge of all of the common stock of the Company owned by the Gerber Trust.

Beginning on the date that is six months from the issuance date until the applicable Note is paid in full, each month the Holder has the right to require the Company to redeem up to an aggregate of $400,000 with respect to the Initial Note and $200,000 with respect to the Subsequent Note plus any interest accrued thereunder and an additional amount payable equal to 6% of the principal amount and accrued interest redeemed. The Company has the right to defer such redemption payments that Holder could otherwise elect to make three times by providing advance written notice to Holder. If Company exercises its deferral right, the outstanding balance automatically increases by 0.85% for each instance that the deferral right is exercised by Company, which cannot be exercised more than once every ninety calendar days.

Pursuant to the terms of the Purchase Agreement, beginning on the date of the issuance and sale of the Note and ending 24 months later, Holder will have the right, but not the obligation, with Company’s prior written consent, to reinvest up to an additional $10,000,000 in the Company on the same terms and conditions as the Notes (structured as two tranches of $5,000,000 each).

The Company engaged Maxim Group LLC to serve as placement agent for the transaction between the Company and Holder in exchange for an aggregate commission equal to 7% of the gross cash proceeds received from the sale of the Notes.

As of December 31, 2024, the note payable balance outstanding, net of the original issue discount and fees paid, was $3.9 million, of which $3.5 million is due within 12 months from December 31, 2024 and the remaining balance of $0.4 million is due prior to September 30, 2026. The effective interest rate for this note is 41.3%.

In July 2024, Brigadier repaid its mortgage loan of $0.3 million in full that was secured with the land and building in Canada.

#### Investments

USCF Investments, from time to time, provides initial investments in the creation of ETP funds that USCF Investments manages. USCF Investments classifies these investments as current assets as these investments are generally sold within one year from the balance sheet date. As of December 31, 2024, USCF Investments held investment positions in four of its 40 Act funds, USG (ticker changed from GLDX in March 2024), ZSB, USE and ZSC of $1.5 million, $0.2 million, $2.4 million, and $2.1 million, respectively. These investment positions along with other investments, as applicable, are described further in Note 5 to our Financial Statements.

#### Dividends

We have never declared or paid any cash dividends on our capital stock. We intend to retain future earnings, if any, to finance the operation and expansion of our businesses and do not anticipate paying any cash dividends in the foreseeable future. Any future determination related to our dividend policy will be made at the discretion of our board of directors after considering our financial condition, results of operations, capital requirements, business prospects and other factors our board of directors deems relevant, and subject to the restrictions contained in any future financing instruments or under Nevada corporations’ law.

## Controls and procedures

As filed, 2,075 characters.

### (a) Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this Report, our Chief Executive Officer and Chief Accounting Officer conducted evaluations of our disclosure controls and procedures. We maintain disclosure controls and procedures that are designed to provide reasonable assurances that the information required to be disclosed in the periodic reports we file or submit under Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Securities Exchange Act”), is recorded, processed, summarized and reported within the time period specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Securities Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that there are inherent limitations to the effectiveness of any system of disclosure controls and procedures and any controls and procedures, no matter how well designed and operated, can only provide reasonable assurance of achieving their control objectives.

Our management, including our Chief Executive Officer and Chief Accounting Officer, after evaluating the effectiveness of our disclosure controls and procedures, concluded that our disclosure controls and procedures were effective as of the end of the period covered by this Report.

### (b) Changes in Internal Control Over Financial Reporting

There were no changes in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) or 15d-15(f) under the Exchange Act) during the quarterly period covered by this report that have materially affected or are reasonably likely to materially affect our internal controls over financial reporting.

## Risk factors

As filed, 9,071 characters.

*We are subject to certain risks and uncertainties in our business operations. In addition to the risks described below, you should carefully consider the factors discussed under “Item 1A -Risk Factors” in our Annual Report on Form 10-K for our fiscal year ended June 30, 2024 (“2024 Form 10-K”). The risks discussed in our 2024 Form 10-K and the risks discussed below could materially affect our business, financial condition, results of operations and the market for our shares. The risks described in our 2024 Form 10-K and below are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially and adversely affect our business, financial condition or operating results.*

### Risks Related to our Recent Note Financing

***We may be unable to generate sufficient cash flows from operations to repay amounts due under our recent debt financing or other obligations we have incurred which could adversely affect our business, including our ability to further develop and market our Fintech app, as well as our financial condition, results of operations, and our stock price.***

In September 2024, we entered into a significant debt financing transaction, which has increased our debt obligations. See “Liquidity and Capital Resources” in our MD&A. This indebtedness could limit our ability to operate effectively and may expose us to various risks, including:

- An inability to repay debt when due: Our cash flow may not be sufficient to meet our debt service obligations, especially if our revenues and/or cash flows from operations decline or if we encounter unforeseen operational or other challenges. Failure to repay this debt when due could lead to a default under the terms of our debt agreements.
- Event of default consequences: The occurrence of an event of default under our debt agreements could result in the acceleration of our indebtedness, requiring immediate repayment of outstanding amounts, an increase in the amount due, and a requirement to pay an increased (or default) rate of interest on the outstanding amount due. Our obligations under the debt agreements are secured by a pledge of our shares in USCF Investments and a security interest in all our assets enabling the lender to foreclose on our assets upon the occurrence of an event of default. Further, the performance of our obligations under the debt agreements is guaranteed by the Gerber Trust and our obligations under the note are secured by a pledge of all the shares of Marygold owned by the Gerber Trust, of which our CEO is a trustee. An event of a default under the debt agreements could force us to liquidate assets, seek additional financing, or restructure our obligations, all of which may adversely affect our liquidity, financial condition, results of operations, and stock price. There can be no assurance we will be able to liquidate our assets, restructure our indebtedness, or obtain additional financing upon terms acceptable to us, or at all.
- Restrictive covenants: Our debt agreements contain certain covenants that restrict our operational flexibility, including limitations on mergers and acquisitions, sales of assets, and our ability to engage in certain equity linked financing transactions in which the conversion or exercise price of any debt or other equity linked securities we issue in the transaction varies with the market price of our shares or upon the occurrence of certain trigger events, and other strategic initiatives. Our non-compliance with these covenants could lead to an event of default and further exacerbate our financial position.

Failure to manage these risks effectively or repay our debt when due could result in severe financial and operational consequences, including a potential reduction in the market price of our securities and a negative impact on our shareholders.

***In addition to the net proceeds we received from our recent equity and debt financings, we may need to raise additional equity or debt financing to continue the development and marketing of our Fintech app, to fund ongoing operations, invest in acquisitions, and for working capital purposes. Our inability to raise such additional financing may limit our ability to continue the development of our Fintech app.***

In 2019, through our wholly owned subsidiary, Marygold & Co., we began development of our peer-to-peer Fintech digital money app. As of December 31, 2024, we have invested approximately $18 million in the development of our Fintech app and we have continued to invest in its development. However, our Fintech app is not a mature business and has generated minimal revenue to date. The financial technology industry is occupied by certain well-financed competitors with capital resources to fund marketing campaigns and the continued development and enhancement of such services. We received approximately $1.9 million in net proceeds from our recent equity financing which closed on January 28, 2024, and intend to use such net proceeds to retire or repay outstanding indebtedness, make further capital contributions to our Marygold & Co. subsidiaries in the U.S. and U.K., and for general working capital and corporate purposes. In addition to the net proceeds we received from our recent equity financing and in view of our commitment to pay down indebtedness, we may need to raise additional equity or debt financing to continue supporting the continued development and marketing of our financial technology business, our ongoing operations, and in order to make any future acquisitions. If a decision is made to continue to make capital investments in our financial technology division there can be no assurance our Fintech business will be successful or generate sufficient or any significant revenues, although our ability to predict revenue generation from our subsidiaries may not be accurate from time to time. Continued investment in our Fintech app could have a material adverse effect on our operations, our financial condition, and results of operations, and the market for our shares, including if our revenues from operations, financial condition, and market for our shares are negatively impacted by events outside of our control. Further, negative economic events could hinder the ability of our businesses to effectively compete in the various industries in which we operate which may create a need to raise additional financing in the future. There can be no assurance we will be able to raise such additional financing or upon terms that are acceptable to us. Any failure to raise additional financing as and when needed could have a negative impact on our financial condition and on our ability to further support our current and future business plans and strategies and on our ability to continue further development of our Fintech app and may require us to suspend, temporarily or otherwise, its future development.

Also, if we issue additional shares in a financing, any such issuance could be dilutive to our existing shareholders. *See “Liquidity and Capital Resources – Recent Note Financing”* and “*- Recent Equity Financing.”*

***We may decide to promote our Fintech app to third party financial institutions or other payment providers as a license, fee-based service, or otherwise, in the event, in addition to the net proceeds we received from our recent equity financing, financing is not available on terms acceptable to us or at all, and in sufficient amounts to continue to fund our Fintech app development.***

In the event we are unable to raise additional financing to further develop our Fintech app business discussed above, management may, as an alternative, seek to enter arrangements to license or otherwise offer our Fintech app to third parties, including financial institutions and other payment providers in the U.S. and abroad. Although management believes there are several financial institutions and other payment providers in the U.S. and abroad who may be interested in a consumer faced mobile app such as ours, there can be no assurance we will be successful in monetizing our app in its current state of development to these third parties through license, fee-based user, or other arrangement.

### Risks Related to our Business and Structure

***We may face double taxation on certain income earned by our non-U.S. subsidiaries.***

Under the Internal Revenue Code (“*Code”)* provisions governing the taxation of income earned by “controlled foreign corporations,” most or all of the income earned by our non-U.S. subsidiaries will be subject to U.S. federal income tax in the year earned, even if not distributed to Marygold and even if fully taxed in the foreign countries in which those subsidiaries are organized or operate. Although the Code provides for foreign tax credit relief with respect to the foreign income taxes imposed on such income, that relief is limited in several respects that could have the effect of subjecting the same income to both U.S. and foreign income taxation.

Filed Feb 5, 2025.
Source: SEC EDGAR, the filing index for accession 0001493152-25-005002. Last ingested by Listed: Nov 6, 2026, 16:44 ET. No prices; not investment advice.