UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒	Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended September 30, 2024

☐	Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from to

Commission File Number: 001-41318

THE MARYGOLD COMPANIES, INC.

(Exact name of registrant as specified in its charter)

Nevada		90-1133909
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

120 Calle Iglesia

Unit B

San Clemente, CA 92672

(Address of principal executive offices and zip code)

949-429-5370

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class		Trading Symbol		Name of Each Exchange on Which Registered
Common Stock, $0.001 par value per share		MGLD		NYSE American LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐

Non-accelerated filer	☒	Smaller reporting company	☒

		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

As of November 1, 2024, 40,326,035 shares of the registrant’s Common Stock, $0.001 par value per share, were issued and outstanding. In addition, as of this date 49,360 shares of Series B Preferred Stock were issued and outstanding. Each share of Series B Preferred Stock is convertible into 20 shares of Common Stock and votes pari passu on an as if converted basis on all matters presented to our stockholders for a vote.

THE MARYGOLD COMPANIES, INC.

QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTER ENDED SEPTEMBER 30, 2024

Table of Contents

	Page

PART I. FINANCIAL INFORMATION	4

Item 1. Financial Statements (Unaudited)	4

Condensed Consolidated Balance Sheets	4

Condensed Consolidated Statements of Operations	5

Condensed Consolidated Statements of Comprehensive Loss	6

Condensed Consolidated Statements of Stockholders’ Equity	7

Condensed Consolidated Statements of Cash Flows	8

Notes to Condensed Consolidated Financial Statements	9

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	19

Item 3. Quantitative and Qualitative Disclosures About Market Risk	23

Item 4. Controls and Procedures	23

PART II. OTHER INFORMATION	24

Item 1. Legal Proceedings	24

Item 1A. Risk Factors	24

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	24

Item 3. Defaults Upon Senior Securities	24

Item 4. Mine Safety Disclosures	24

Item 5. Other Information	24

Item 6. Exhibits	24

Signatures	25

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (“Report”) contains forward-looking statements within the meaning of the federal securities laws, which statements involve substantial risks and uncertainties. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “should,” “would,” “shall,” “might,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential,” or “continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategies, plans, or intentions. Forward-looking statements contained in this Report include, but are not limited to, statements about:

	●	the outcome of certain class action litigation involving our subsidiary, USCF Investments Inc.;
	●	our future financial performance, including our revenue, cost of revenue, gross profit, gross margin, operating expenses, ability to generate positive cash flow, and ability to achieve and maintain profitability;
	●	the sufficiency of our cash flows which is primarily dependent upon the performance of our U.S. investment fund management business and its ability to maintain and expand fund assets under management (“AUM”) such that we can meet our working capital, capital expenditure, and liquidity needs;
	●	our continued investments in the development and marketing of our Fintech application (“app”) and the uncertainty of the acceptance thereof and its ability to generate sufficient revenue to meet or cover or exceed development expenditures incurred to date;
	●	the ability of our operating subsidiaries to attract and retain customers to use our products or services, to optimize the pricing for our products or services, to expand sales to our customers, and to convince our existing customers to continue using our services and products;
	●	the evolution of technologies affecting our operating subsidiaries’ products, services and markets;
	●	the ability of our operating subsidiaries to innovate and provide a superior user experience and our intentions and strategies with respect thereto;
	●	the ability of our operating subsidiaries to successfully penetrate enterprise and other markets;
	●	the ability of our operating subsidiaries to successfully expand in our existing markets and into new markets, including international markets;
	●	the attraction and retention of key personnel;
	●	our ability to effectively manage our growth and future expenses;
	●	the incurrence of additional indebtedness and our ability to repay our existing indebtedness when due or at all, including in connection with our recent debt financing transaction;
	●	our ability to raise additional financing in connection with further development of our fintech app and to cover our operating losses;
	●	worldwide economic conditions, including after-effects from the economic disruption imposed by the COVID-19 pandemic, and the conflicts in Ukraine and the Middle East, and their impact on spending;
	●	our operating subsidiaries’ ability to comply with modified or new laws and regulations applying to our businesses, including privacy and data security regulations; and
	●	our ability to acquire new businesses or expand our existing businesses, including the integration and financing of acquisitions or business expansion.

The foregoing list does not contain all of the forward-looking statements made in this Report.

You should not rely upon forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Report primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, operating results, and prospects. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties, and other factors described in the section titled “Risk Factors” in our Annual Report on Form 10-K for the year ended June 30, 2024, and this Report. Moreover, we and our subsidiaries operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Form 10-Q. We cannot assure you that the results, events, and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events, or circumstances could differ materially from those described in the forward-looking statements.

The forward-looking statements made in this Report relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Report to reflect events or circumstances after the date of this Report or to reflect new information or the occurrence of unanticipated events, except as required by law. We and our subsidiaries may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, or investments we may make.

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

THE MARYGOLD COMPANIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except per share data)

(unaudited)


	September 30, 2024			June 30, 2024
ASSETS

CURRENT ASSETS
Cash and cash equivalents	$	6,665		$	5,461
Accounts receivable, net (of which $1,578 and $1,455, respectively, due from related parties)		2,507			2,678
Inventories		2,175			2,191
Prepaid income tax and tax receivable		1,751			1,338
Investments, at fair value		10,807			9,551
Other current assets		1,096			3,034
Total current assets		25,001			24,253

Restricted cash		64			62
Property and equipment, net		1,144			1,166
Operating lease right-of-use assets		1,518			974
Goodwill		2,481			2,481
Intangible assets, net		1,296			1,375
Deferred tax assets, net		1,969			1,969
Other assets		2,402			619
Total assets	$	35,875		$	32,899

LIABILITIES AND STOCKHOLDERS’ EQUITY

CURRENT LIABILITIES
Accounts payable and accrued expenses	$	4,125		$	4,021
Lease liabilities, current portion		698			620
Purchase consideration payable, current portion		251			277
Notes payable, current portion		2,800			315
Total current liabilities		7,874			5,233

Notes payable, net of current portion		910			-
Purchase consideration payable, net of current portion		251			237
Lease liabilities, net of current portion		949			455
Deferred tax liabilities, net		360			360
Total long-term liabilities		2,470			1,052
Total liabilities		10,344			6,285

STOCKHOLDERS’ EQUITY
Preferred stock, par value $0.001; 50,000 shares authorized
Series B: 49 issued and outstanding at September 30, 2024 and June 30, 2024		-			-
Preferred stock, par value $0.001; 50,000 shares authorized Series B: 49 issued and outstanding at September 30, 2024 and June 30, 2024		-			-
Common stock, $0.001 par value; 900,000 shares authorized; 40,326 and 40,096 shares issued and outstanding at September 30, 2024 and June 30, 2024, respectively		40			40
Additional paid-in capital		13,285			12,825
Accumulated other comprehensive loss		(226	)		(269	)
Retained earnings		12,432			14,018
Total stockholders’ equity		25,531			26,614
Total liabilities and stockholders’ equity	$	35,875		$	32,899

The accompanying notes are an integral part of these condensed consolidated financial statements.

THE MARYGOLD COMPANIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(unaudited)


	Quarters Ended September 30,
	2024			2023

Revenue
Fund management - related party	$	4,591		$	5,049
Food products		1,822			1,730
Beauty products		597			775
Security systems		690			554
Financial services		210			127
Revenue		210			127
Revenue		7,910			8,235

Cost of revenue		2,128			2,037

Gross profit		5,782			6,198

Operating expense
Salaries and compensation		3,147			2,590
General and administrative expense		2,565			2,248
Fund operations		1,412			1,270
Marketing and advertising		669			972
Depreciation and amortization		159			154
Total operating expenses		7,952			7,234

Loss from operations		(2,170	)		(1,036	)

Other income (expense):
Interest and dividend income		151			193
Interest expense		(31	)		(4	)
Other (expense) income, net		(19	)		44
Total other income (expense), net		101			233

Loss before income taxes		(2,069	)		(803	)

Benefit from income taxes		483			303

Net loss	$	(1,586	)	$	(500	)

Weighted average shares of common stock
Basic		40,848			40,397
Diluted		40,848			40,397

Net loss per common share
Basic	$	(0.04	)	$	(0.01	)
Diluted	$	(0.04	)	$	(0.01	)

The accompanying notes are an integral part of these condensed consolidated financial statements.

THE MARYGOLD COMPANIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(in thousands)

(unaudited)


	Quarters Ended September 30,
	2024			2023

Net loss	$	(1,586	)	$	(500	)
Foreign currency translation gain (loss)		43			(94	)
Comprehensive loss	$	(1,543	)	$	(594	)

The accompanying notes are an integral part of these condensed consolidated financial statements.

THE MARYGOLD COMPANIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands)

(unaudited)


Quarter Ended September 30, 2024	Preferred Stock (Series B)				Common Stock				Additional		Accumulated Other						Total
	Number of Shares		Amount		Number of Shares		Par Value		Paid-In Capital		Comprehensive Loss			Retained Earnings			Stockholders’ Equity
Balance at July 1, 2024		49	$	-		40,096	$	40	$	12,825	$	(269	)	$	14,018		$	26,614
Issuance of stock awards		-		-		230		-		-		-			-			-
Gain on currency translation		-		-		-		-		-		43			-			43
Stock-based compensation		-		-		-		-		460		-			-			460
Net loss		-		-		-		-		-		-			(1,586	)		(1,586	)
Balance at September 30, 2024		49	$	-		40,326	$	40	$	13,285	$	(226	)	$	12,432		$	25,531

Quarter Ended September 30, 2023	Preferred Stock (Series B)				Common Stock				Additional		Accumulated Other						Total
	Number of Shares		Amount		Number of Shares		Par Value		Paid-In Capital		Comprehensive Loss			Retained Earnings			Stockholders’ Equity
Balance at July 1, 2023		49	$	-		39,383	$	39	$	12,397	$	(144	)	$	18,086		$	30,378
Balance		49	$	-		39,383	$	39	$	12,397	$	(144	)	$	18,086		$	30,378
Loss on currency translation		-		-		-		-		-		(94	)		-			(94	)
Gain (loss) on currency translation		-		-		-		-		-		(94	)		-			(94	)
Stock-based compensation		-		-		-		-		93		-			-			93
Net loss		-		-		-		-		-		-			(500	)		(500	)

Balance at September 30, 2023		49	$	-		39,383	$	39	$	12,490	$	(238	)	$	17,586		$	29,877
Balance		49	$	-		39,383	$	39	$	12,490	$	(238	)	$	17,586		$	29,877

The accompanying notes are an integral part of these condensed consolidated financial statements.

THE MARYGOLD COMPANIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)


	Quarters Ended September 30,
	2024			2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(1,586	)	$	(500	)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization		159			154
Stock-based compensation		460			93
Loss (gain) on investments		22			(269	)
Non-cash interest expense		20			-
Non-cash lease costs		164			128
Changes in operating assets and liabilities:
Accounts receivable		172			482
Prepaid income taxes and tax receivable		(415	)		(359	)
Inventories		47			34
Other assets		155			(70	)
Accounts payable and accrued expenses		73			717
Lease liabilities		(164	)		(119	)
Net cash (used in) provided by operating activities		(893	)		291

CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of investments		298			7,830
Purchase of investments		(1,576	)		(9,341	)
Purchase of property and equipment		(47	)		(25	)
Net cash used in investing activities		(1,325	)		(1,536	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from note payable		3,690			-
Principal repayment of mortgage loan payable		(315	)		(2	)
Net cash provided by (used in) financing activities		3,375			(2	)

Effect of exchange rate change on cash and cash equivalents		49			62

NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH		1,206			(1,185	)

CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING BALANCE		5,523			8,586

CASH, CASH EQUIVALENTS AND RESTRICTED CASH, ENDING BALANCE	$	6,729		$	7,401

Cash and cash equivalents	$	6,665		$	6,987
Restricted cash		64			414
Total cash, cash equivalents and restricted cash	$	6,729		$	7,401

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest	$	-		$	5
Income taxes (net of refunds received)	$	13		$	87
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Original issue discount and loan fee added to note payable balance	$	380		$	-
Acquisition of operating right-of-use assets through operating lease liabilities	$	691		$	-

The accompanying notes are an integral part of these condensed consolidated financial statements.

THE MARYGOLD COMPANIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIALS STATEMENTS

(UNAUDITED)

NOTE 1. ORGANIZATION AND DESCRIPTION OF BUSINESS

The Marygold Companies, Inc., (“Company,” “The Marygold Companies,” “we,” “our,” or “us”), a Nevada corporation, is a global holding company that intends to focus on financial services. The Company is currently directing its investments towards financial services and the emerging Fintech space. The operations of the Company’s wholly-owned subsidiaries are summarized as follows:

●

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.
	●	Financial Services – United States and Great Britain:

	○	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.

The Company manages its operating businesses on a decentralized basis. There are no centralized or integrated operational functions such as marketing, sales, legal or other professional services and there is little involvement by The Marygold Companies’ management in the day-to-day business affairs of its operating subsidiary businesses apart from oversight. Each subsidiary is responsible for its financial reporting to the Company’s corporate management which corporate management maintains controls over the Company’s consolidated regulatory and financial reporting in accordance with Securities and Exchange Commission and other regulatory reporting requirements. The Company’s corporate management is responsible for capital allocation decisions, investment activities and selection and retention of the Chief Executive to head each of the operating subsidiaries. The Company’s corporate management is also responsible for corporate governance practices, monitoring regulatory affairs, including those of its operating businesses and involvement in governance-related issues of its subsidiaries as needed.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and Accounting Principles

The Company has prepared the accompanying unaudited condensed financial statements on a consolidated basis. In the opinion of management, the accompanying unaudited condensed consolidated balance sheets, related statements of operations, comprehensive loss, stockholders’ equity and cash flows include all adjustments, consisting only of normal recurring items, necessary for their fair presentation, prepared on an accrual basis, in conformity with generally accepted accounting principles in the United States of America (“U.S. GAAP”) but does not include all of the information and footnotes required by U.S. GAAP for complete audited financial statements. Operating results for the three months ended September 30, 2024, are not necessarily indicative of the results that may be expected for the year ending June 30, 2025. The condensed consolidated balance sheet as of June 30, 2024, has been derived from the audited consolidated financial statements at that date included in our annual report on Form 10-K for the year ended June 30, 2024, but does not include all of the information and footnotes required by U.S. GAAP for complete audited financial statements. The information included in this Form 10-Q should be read in conjunction with information included in the Company’s Annual Report on Form 10-K for year ended June 30, 2024.

Principles of Consolidation

The accompanying Condensed Consolidated Financial Statements, which are referred herein as the “Financial Statements”, include the accounts of The Marygold Companies and its wholly owned subsidiaries. Intercompany transactions and balances have been eliminated in consolidation.

Use of Estimates

The preparation of the financial statements in conformity with U.S. GAAP 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.

Concentration of Credit Risk

Our subsidiary USCF Investments relies on the revenues generated through the various funds it manages. The concentration of fund management revenue and related receivables were (dollars in thousands):

SCHEDULE OF CONCENTRATION RISK

	Quarters Ended September 30,
	2024					2023					September 30, 2024					June 30, 2024
	Revenue		% of Total			Revenue		% of Total			Accounts Receivable		% of Total			Accounts Receivable		% of Total
Fund
USO	$	1,432		31	%	$	1,684		33	%	$	491		31	%	$	473		33	%
UNG		1,206		26	%		1,689		34	%		432		27	%		370		25	%
UMI		635		14	%		454		9	%		216		14	%		185		13	%
All Others		1,318		29	%		1,222		24	%		439		28	%		427		29	%
Total	$	4,591		100	%	$	5,049		100	%	$	1,578		100	%	$	1,455		100	%

There are no significant concentrations for the other operating subsidiaries on a consolidated basis.

Recently Issued Accounting Pronouncements

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2023-07, Improvements to Reportable Segment Disclosures (Topic 280). The guidance expands the disclosures required for reportable segments in our annual and interim consolidated financial statements, primarily through enhanced disclosures about significant segment expenses. The standard will be effective for us beginning with our annual reporting for fiscal year 2025 and interim periods thereafter, with early adoption permitted. Upon adoption, this standard should be applied retrospectively to all prior periods presented. We will adopt the standard when it becomes effective in our fiscal year 2025 annual reporting. The Company does not anticipate any impact other than changes to disclosures in the segment reporting from the adoption date onwards.

In December 2023, the FASB issued ASU No. 2023-09, Improvements to Income Tax Disclosures (Topic 740). The guidance requires disclosure of disaggregated income taxes paid, prescribes standardized categories for the components of the effective tax rate reconciliation, and modifies other income tax-related disclosures. The standard will be effective for us beginning with our annual reporting for fiscal year 2026, with early adoption permitted. We are currently evaluating the impact of this standard on our income tax disclosures.

NOTE 3. NET INCOME (LOSS) PER SHARE

Basic net (loss) income per share is based upon the weighted average number of common shares outstanding. This calculation includes the weighted average number of Series B Convertible Preferred shares outstanding also as they are deemed to be substantially similar to the common shares and shareholders are entitled to the same liquidation and dividend rights. Diluted net (loss) income per share is based on the assumption that all dilutive convertible shares and stock options were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. For the quarters ended September 30, 2024 and 2023, the Company excluded 1.1 million and 1.3 million common stock equivalents, respectively, from the diluted net loss per share calculation as their effect would be anti-dilutive. Since the Company generated a net loss in the quarter ended September 30, 2024, basic and diluted net (loss) income per share were the same.

Basic and diluted net income per share reflects the effects of shares potentially issuable upon conversion of convertible preferred stock.

The components of basic and diluted earnings per share were as follows (in thousands, except per share data):

	Quarter Ended September 30, 2024								Quarter Ended September 30, 2023
	Net Loss			Shares		Per Share			Net Loss			Shares		Per Share
Basic and diluted net loss per share:
Net loss available to common shareholders	$	(1,548	)		39,861	$	(0.04	)	$	(488	)		39,410	$	(0.01	)
Net loss available to preferred shareholders		(38	)		987	$	(0.04	)		(12	)		987	$	(0.01	)
Basic and diluted net loss per share	$	(1,586	)		40,848	$	(0.04	)	$	(500	)		40,397	$	(0.01	)

NOTE 4. CERTAIN BALANCE SHEET DETAILS

The components of certain balance sheet line items are as follows (in thousands).

	September 30,		June 30,
Restricted cash	2024		2024
Deposit restricted relating to account for Fintech app	$	52	$	50
Deposit for securing a lease bond		12		12
Total restricted cash	$	64	$	62

	September 30,		June 30,
Other current assets	2024		2024
Deposit for potential 9.9% equity interest in financial institution	$	-	$	1,800
Prepaid expenses and other current assets		1,096		1,234
Total other current assets	$	1,096	$	3,034

Included in the other current assets balance as of June 30, 2024 was a deposit of $1.8 million made in connection with the potential acquisition of a less than 10% equity interest in a domestic financial institution that was seeking certain regulatory approval. The regulatory approval was obtained in September 2024 and the deposit was then converted into an equity interest in the financial institution. After the regulatory approval, the $1.8 million was transferred from other current assets to other assets, non-current in the consolidated balance sheet as shown below.

SCHEDULE OF INVENTORY

	September 30,		June 30,
Inventories	2024		2024
Raw materials and supplies	$	1,379	$	1,417
Finished goods		796		774
Total inventories	$	2,175	$	2,191

	September 30,			June 30,
Property and equipment, net	2024			2024
Manufacturing equipment	$	1,935		$	1,935
Land and building		575			575
Other equipment		834			827
Total property and equipment, gross		3,344			3,337
Accumulated depreciation		(2,200	)		(2,171	)
Total property and equipment, net	$	1,144		$	1,166

Depreciation expense for property and equipment was less than $0.1 million for the three months ended September 30, 2024 and 2023, respectively.

SCHEDULE OF GOODWILL

	September 30,		June 30,
Goodwill	2024		2024
Food products – Gourmet Foods	$	275	$	275
Security systems - Brigadier		351		351
Financial Services – Marygold & Co. (UK)		1,855		1,855
Total goodwill	$	2,481	$	2,481
Goodwill	$	2,481	$	2,481

SCHEDULE OF OTHER ASSETS NON-CURRENT

	September 30,		June 30,
Other assets, non-current	2024		2024
Equity investment in a financial institution	$	1,800	$	-
Equity investment in a registered investment advisor		502		502
Deposits and other assets		100		117
Total other assets, non-current	$	2,402	$	619

The $0.5 million investment represents a 10% equity interest in a registered investment advisor accounted for on a cost basis which we believe approximates fair value. The $1.8 million investment represents a less than 10% equity interest in a domestic financial institution accounted for on a cost basis which we believe approximates fair value. These cost basis equity investments are recorded at cost minus impairment.

	September 30,		June 30,
Accounts payable and accrued expenses	2024		2024
Accounts payable	$	1,997	$	1,955
Accrued operating expenses		1,207		1,185
Accrued payroll, vacation and bonus payable		844		736
Taxes payable		77		145
Total	$	4,125	$	4,021

NOTE 5. INVESTMENTS

USCF Investments, from time to time, provides initial seed capital in connection with the creation of ETPs or ETFs that are managed by USCF LLC or USCF Advisers. USCF Investments classifies these investments as current assets as these investments are generally sold within one year of the balance sheet date. Investments in which no controlling financial interest or significant influence exists are recorded at fair value with the change included in earnings in the Company’s condensed Consolidated Statements of Operations. As of September 30, 2024 and June 30, 2024, the Company invested a total of $7.4 million and $7.5 million, respectively, of funds managed by USCF Advisers which are related parties and are included in other equities in the below table. In addition to the holdings in these funds, the Company also invests in marketable securities.

All of the Company’s short-term investments are classified as Level 1 assets and consist of the following (in thousands):

	September 30, 2024
	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Money market funds	$	3,111	$	-	$	-	$	3,111
Other short-term investments		299		2		-		301
Other equities - related parties		7,324		71		-		7,395
Total short-term investments	$	10,734	$	73	$	-	$	10,807

	June 30, 2024
	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Money market funds	$	1,788	$	-	$	-	$	1,788
Other short-term investments		295		1		-		296
Other equities - related parties		7,394		73		-		7,467
Total short-term investments	$	9,477	$	74	$	-	$	9,551

During the three months ended September 30, 2024 and year ended June 30, 2024, respectively, there were no transfers between Level 1 and Level 2.

NOTE 6. BUSINESS COMBINATION

On January 31, 2024, Marygold UK entered into a Share Purchase Agreement (“SPA”) to acquire all the issued and outstanding shares of Step-By-Step Financial Planners Limited (“Step-By-Step”), subject to certain closing conditions and regulatory approval. The transaction closed on April 30, 2024 with an agreed purchase price of $1.2 million, subject to adjustment as provided for in the SPA. Marygold UK paid $0.7 million upon the closing and the remaining $0.5 million owed will be payable in two subsequent payments as provided in the SPA. Step-By-Step is an asset manager and investment advisor based in Staffordshire, England with $80.1 million in assets under management as of September 30, 2024. In addition to growing the business through increasing assets under management, Marygold UK expects to expand the fintech mobile app services offered in the U.S. into the U.K. through the established contacts and certifications held by Step-By-Step.

NOTE 7. INTANGIBLE ASSETS

SCHEDULE OF INTANGIBLE ASSETS

Intangible Assets			Intangible Assets (Gross)		Accumulated Amortization			Intangible Asset (Net)
	September 30, 2024
Intangible Assets	Weighted Average Remaining Life (in years)		Intangible Assets (Gross)		Accumulated Amortization			Intangible Asset (Net)
	(dollars in thousands)
Customer relationships		5.2	$	1,540	$	(673	)	$	867
Brand name		1.4		414		(343	)		71
Brand name – indefinite lived		N/A		231		-			231
Internally developed software		1.7		218		(91	)		127
Total			$	2,403	$	(1,107	)	$	1,296

Intangible Assets			Intangible Assets (Gross)		Accumulated Amortization			Intangible Asset (Net)
	June 30, 2024
Intangible Assets	Weighted Average Remaining Life (in years)		Intangible Assets (Gross)		Accumulated Amortization			Intangible Asset (Net)
	(dollars in thousands)
Customer relationships		5.4	$	1,540	$	(624	)	$	916
Brand name		1.7		414		(332	)		82
Brand name – indefinite lived		N/A		231		-			231
Internally developed software		2.0		218		(72	)		146
Total			$	2,403	$	(1,028	)	$	1,375

Total amortization expense for intangible assets for the three months ended September 30, 2024 and 2023 was $0.1 million.

Estimated remaining amortization expenses of intangible assets for the next five fiscal years and thereafter are as follows (in thousands):

Years Ending June 30,	Expense
2025 (remainder of the fiscal year)	$	240
2026		290
2027		147
2028		147
2029		147
Thereafter		325
Total	$	1,296

NOTE 8. NOTES PAYABLE

On September 19, 2024, we entered into a note purchase agreement the (“Purchase Agreement”) with Streeterville Capital, LLC (“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 that 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 exit fee of 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 of the Subsequent Note, if issued, would 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 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 exit fee of 6% of the principal amount. 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 the Company exercises its deferral right, the outstanding balance is automatically increased 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 September 30, 2024, the note payable balance outstanding, net of the original issue discount and fees paid, was $3.7 million, of which $2.8 million is due within 12 months from September 30, 2024 and the remaining balance of $0.9 million is due prior to September 30, 2026. The effective interest rate for this note is 41.3%.

As of June 30, 2024, Brigadier had an outstanding principal balance of $0.3 million due related to the purchase of its Saskatoon office land and building. The bank loan matured and was paid off in full in July 2024.

NOTE 9. STOCKHOLDERS’ EQUITY

Stock-based Compensation

During the quarter ended September 30, 2024, the following activity occurred under the Company’s Equity Plan.

	Stock Options				Restricted Stock
	Number of Shares		Weighted Average Exercise Price		Number of Shares			Weighted Average Grant Date Fair Value
Balance at June 30, 2024		540,881	$	1.34		681,013		$	1.15
Granted		100,000	$	1.45		229,885		$	1.45
Released		-	$	-		(500,407	)	$	1.26
Outstanding at September 30, 2024		640,881	$	1.35		410,491		$	1.20
Exercisable at September 30, 2024		160,018	$	1.43

The fair value of the options granted during the three months ended September 30, 2024 was $1.34 per share which was estimated using the following assumptions:

	Quarter Ended September 30,
	2024
Expected volatility		137	%
Expected term		6.1 years
Risk-free interest rate		4.5	%
Expected dividend yield		0	%

As of September 30, 2024, there was $0.6 million of unrecognized compensation expense related to outstanding stock options that will be recognized over a remaining weighted average period of 2.9 years. The weighted average remaining contractual life of the outstanding stock options as of September 30, 2024 was 8.8 years. As of September 30, 2024, there was $0.5 million of unrecognized compensation expense related to outstanding RSAs that will be recognized over a remaining weighted average period of 1.8 years. The total stock-based compensation expense recognized during the quarters ended September 30, 2024 and 2023 were $0.5 million and $0.1 million, respectively.

NOTE 10. COMMITMENTS AND CONTINGENCIES

Lease Commitments

For each of the quarters ended September 30, 2024 and 2023, the Company’s combined lease costs were $0.2 million and were recorded under general and administrative expense in the statements of operations. During the quarter ended September 30, 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.

Future minimum lease payments are (in thousands):

Year Ended June 30,	Operating Leases		Finance Lease		Total
Remainder of fiscal 2025	$	607	$	15	$	622
2026		596		20		616
2027		338

SEC Form 10-Q filed by The Marygold Companies Inc.