Marygold Companies Inc
For the period ended Sep 30, 2024. Filed Nov 8, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 8, 2024
MGLD$1.97-0.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-13.
0001493152-24-018895
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-08.
0001493152-24-044271
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 72 previous paragraphs and 57 current paragraphs.
9 unchanged; 5 reworded; 43 added; 58 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 5 previous and 7 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (43)
Current report
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:
Current report
Recent Developments
Current report
Refer to*“Liquidity and Capital Resources – Recent Note Financing”* below.
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Summary Results of Operations
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Quarter Ended September 30, 2024 Compared with Quarter Ended September 30, 2023
Current report
Revenue decreased by $0.3 million or 4% for the quarter ended September 30, 2024 driven by a decrease in average Assets Under Management (“AUM”) in our fund management business. Average AUM for the quarter ended September 30, 2024 was $3.1 billion compared to $3.5 billion for the quarter ended September 30, 2023. The decrease in AUM in quarter ended September 30, 2024 was due to commodity price fluctuations and the high-interest rate environment, along with geopolitical and economic uncertainty.
Current report
Gross profit decreased by $0.4 million or 7% for the reasons described above for the reduced revenue plus cost of revenue increased by $0.1 million compared to the quarter ended September 30, 2023.
Current report
Operating expenses increased by $0.7 million or 10% as a result of the following. General and administrative expenses increased by $0.3 million or 14% driven by increased costs associated with our Fintech app development including additional software and security infrastructure in the UK. Salaries and compensation increased by $0.6 million or 22% compared to the quarter ended September 30, 2023 driven by increased stock-based compensation expenses plus increased compensation at USCF. Fund operations increased by $0.1 million or 11% 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 31% 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.
Current report
Other income, net, decreased by $0.1 million or 57% driven by a decrease in gains on investments during the quarter ended September 30, 2024 compared to prior year quarter.
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Benefit from income taxes increased by $0.2 million or 59% driven by the increase in the loss before income taxes for the reasons explained above.
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Net loss increased by $1.1 million or 217% and was driven by decreased profits from our fund management business due to lower average AUM and higher stock-based compensation charges.
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SEGMENT RESULTS OF OPERATIONS
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Reportable Segments
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Quarter Ended September 30, 2024 Compared with Quarter Ended September 30, 2023
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Fund Management – Related Party - USCF Investments
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USCF Investments earns monthly management and advisory fees based on agreements with each Fund as determined by the contractual basis point management fee structure in each agreement multiplied by the average AUM over the given period. Average AUM for the quarter ended September 30, 2024 was $3.1 billion compared to $3.5 billion for the quarter ended September 30, 2023. As a result of lower AUM for the current quarter when compared to the quarter ended September 30, 2023, revenue decreased by $0.5 million or 9%. The decrease in AUM in the quarter ended September 30, 2024 was due to commodity price fluctuations and the high-interest rate environment, along with geopolitical and economic uncertainty.
Current report
Operating income decreased by $0.8 million or 45% driven by the decrease in average AUM as described above and increased fund operations expenses of $0.1 million or 11% as a result of increased license fees, fund accounting and administration costs connected to new fund launches as well as increases in compensation expense of $0.1 million or 15%.
Current report
Food Products - Gourmet Foods
Current report
Gourmet Foods has two distinct operating divisions: 1) a commercial-scale bakery producing iconic Kiwi pies and sausage rolls and 2) a digital printing establishment (Printstock Products Limited) who prints specialty food wrappers. Total food products revenue increased by $0.1 million or 5% for the quarter ended September 30, 2024 as compared to 2023, which was the net result of an increase at our printing business and a decrease at our bakery business.
Current report
Operating (loss) income was nearly break-even for both quarters ended September 30, 2024 and 2023 which was driven by a non-recurring cost of goods sold adjustment coupled with a depreciation charge taken for our solar electricity system and partially offset by increased profits from the sale of higher margin products at our bakery business.
Current report
Beauty Products – Original Sprout
Current report
Original Sprout derives revenues through 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 decreased by $0.2 million or 23% 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.
Current report
Operating loss decreased by $0.1 million or 46% for the quarter ended September 30, 2024 as compared to 2023 as a result of reduced marketing cost and a nominal price increase to domestic distributors.
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Security Systems - Brigadier
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Brigadier earns revenue from recurring alarm monitoring fees charged to residential customers, and from hardware sales and installations of access controls to commercial customers. Revenues from monitoring residual fees remained relatively static while sales and installations of larger commercial installations increased for the quarter ended September 30, 2024 as compared to 2023. Revenue increased by $0.1 million or 25% and operating income increased by $0.1 million or 87% driven by increased sales to commercial customers. 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.
Current report
Financial Services – Marygold US and Marygold UK
Current report
Our Financial Services segment is comprised of Marygold US and Marygold UK, which are distinct operating entities with differing revenue streams.
Current report
Marygold US has developed and recently launched a mobile banking fintech app which earns revenues 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 and since that time 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 September 30, 2024, Marygold US incurred an operating loss of $1.4 million as compared with an operating loss of $1.5 million for the quarter ended September 30, 2023. These losses and negative cash flows are expected to continue for the coming fiscal year.
Current report
Marygold UK is a holding company in the U.K. which operates through its two wholly-owned subsidiaries Tiger Financial and Asset Management and Steb By Step Financial Planners, both of whom are registered investment advisors who earn revenues based on the amount of assets under management or from the sale of financial products, such as insurance, to customers in the U.K.
Current report
Our total Financial Services revenue, which was derived entirely from Marygold UK, for the quarter ended September 30, 2024 increased by $0.1 million or 65% to $0.2 million as compared to $0.1 million for the quarter ended September 30, 2023. The increase was primarily driven by the incremental revenue of $0.1 million from Step-By-Step, which was acquired in April 2024. Operating loss increased by less than $0.1 million or 4% 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 $1.6 million for the current quarter as compared to a loss of $1.5 million for the quarter ended September 30, 2023.
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Corporate Headquarters
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The parent company has no significant revenue, however it does have operating expenses such as, but not limited to, salaries, audit and legal fees, NYSE listing expenses, shareholder reports, insurance, interest expense, and investor relations which produce operating losses. Operating loss for the corporate headquarters increased by $0.5 million, or 49%, for the quarter ended September 30, 2024 as compared to same period in 2023. The increased loss was driven by higher stock-based compensation expenses from a large equity grant awarded in the quarter ended September 30, 2024.
Current report
As of September 30, 2024, we had $6.7 million of cash and cash equivalents on a consolidated basis as compared to $5.5 million as of June 30, 2024, an increase of $1.2 million or 22%. Our cash used in operating activities for the quarter ended September 30, 2024 was $0.9 million. For the quarter ended September 30, 2024, the Company made additional expenditures of $1.5 million with regard to the development of our mobile Fintech app. We have invested a total of $16.5 million in the Fintech app since Marygold’s inception. In September 2024, we entered into a new financing arrangement under which we borrowed $4.4 million and have the potential to borrow an additional $2.2 million. The new 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 $17.1 million as of September 30, 2024.
Current report
Recent Note Financing
Current report
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 exit fee of 6% of the portion of the outstanding balance (including accrued interest) 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.
Current report
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.
Current report
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.
Current report
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.
Current report
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 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.
Current report
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).
Showing the first 40 of 43 passages. Open the source sections for the rest.
Removed paragraphs (58)
Previous report
The Marygold Companies, Inc. (“The Marygold Companies” or the “Company”) conducts business through its wholly owned subsidiaries operating in the US, New Zealand, the United Kingdom and Canada. The operations of the subsidiaries are summarized as follows:
Previous report
Because the Company conducts its businesses through its wholly owned operating subsidiaries, the risks related to our wholly owned subsidiaries are also risks that impact the Company’s financial condition and results of operations. See, “Note 2. Summary of Significant Accounting Policies / Concentration of Credit Risk” in the notes to the financial statements for more information.
Previous report
Results of Operations
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The Marygold Companies, Inc.
Previous report
Consolidated revenue for the three months ended March 31, 2024 was $7.9 million representing a $0.4 million, or 5%, decrease from the three months ended March 31, 2023 revenue of $8.3 million. The decrease in consolidated revenue was primarily attributed to USCF Investments where assets under management (“AUM”) for the three months ended March 31, 2024 was lower than the comparable prior year period which resulted in a revenue decrease of $0.6 million, offset by an increase in revenue of $0.1 million from each of our beauty products and security systems business segments.
Previous report
Operating (Loss) Income
Previous report
The Company’s operating loss for the three months ended March 31, 2024 was ($1.5) million as compared to operating income of $0.2 million for the three months ended March 31, 2023. This represents a decrease in operating income of approximately $1.6 million for the three months ended March 31, 2024 compared to the prior year. The decrease in operating income was attributable to the reduced revenue from the fund management business and an increase in operating expenses related to the roll out of our fintech business at Marygold & Co.
Previous report
Other (Expense) Income, Net
Previous report
For the three months ended March 31, 2024 the Company had other income, net of $0.6 million compared to an other expense, net of less than ($0.1) million for the three months ended March 31, 2023. The $0.6 million increase compared to the prior year period was primarily attributable to unrealized gains on investments.
Previous report
Income Taxes
Previous report
For the three months ended March 31, 2024 we had an income tax benefit of $0.4 million compared to less than $0.1 million for the comparable period of the prior year which was a function of reporting a pre-tax loss in the current year period.
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Net (Loss) Income
Previous report
For the three months ended March 31, 2024, the Company generated a net loss of ($0.5 million) as compared to net income of $0.2 million for the three months ended March 31, 2023. The $0.7 million decrease in net income was attributable to $0.5 million in lower profits at our fund management business and increased losses of $0.4 million in our financial services business as the Company continues to invest capital into our fintech subsidiary, partially offset by reduced corporate costs of $0.2 million.
Previous report
Consolidated revenue for the nine months ended March 31, 2024 was $24.6 million representing a $1.4 million or 6% decrease from the nine months ended March 31, 2023 revenue of $26.0 million. The decrease in consolidated revenue was attributed to lower revenues by $1.3 million from lower AUM at USCF Investments and lower revenue by $0.2 million from our food products segment as we were transitioning to a more favorable product mix and refocused production capacity to higher profit margin customers.
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Operating (Loss) Income
Previous report
The Company’s operating loss for the nine months ended March 31, 2024 was ($3.1) million as compared to operating income of $1.1 million for the nine months ended March 31, 2023. This represents a decrease in operating income of $4.2 million which was attributed to reduced revenue of $1.3 million at USCF Investments from lower AUM and increased losses from our financial services business unit as we ramped up the development of our fintech app.
Previous report
Income Taxes
Previous report
For the nine months ended March 31, 2024 we had an income tax benefit of $0.9 million compared to an income tax provision of ($0.3) million for the comparable period of the prior year which was a function of reporting pre-tax income in the prior year period to reporting a pre-tax loss in the current year period.
Previous report
Net (Loss) Income
Previous report
For the nine months ended March 31, 2024, the Company generated a net loss of ($2.2 million) as compared to net income of $0.8 million for the nine months ended March 31, 2023. The $3.0 million decrease in net income was attributable to lower profits of $1.3 million at our fund management business, increased losses of $2.1 million in our financial services business as the Company continues to invest capital into our fintech app, and increased losses of $0.4 million at our beauty products business as further described below, partially offset by reduced corporate costs of $0.7 million.
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Segment Operations
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Fund Management – USCF Investments (56% and 59% of consolidated revenues for the three and nine months ended March 31, 2024, respectively)
Previous report
USCF currently serves as the General Partner or the Sponsor to the following commodity pools, each of which is currently conducting a public offering of its limited partnership shares pursuant to the Securities Act of 1933, as amended:
Previous report
USCF Advisers, a registered investment adviser, serves as the investment adviser to the funds listed below within the USCF ETF Trust (the “ETF Trust”) and has overall responsibility for the general management and administration for the ETF Trust. Pursuant to the current Investment Advisory Agreements, USCF Advisers provides an investment program for each of series within the ETF Trust and manages the investment of the assets.
Previous report
All commodity pools managed by USCF and each series of the ETF Trust managed by USCF Advisers are collectively referred to as the “Funds” hereafter.
Previous report
USCF Investments’ revenue and expenses are driven by the amount of AUM of the Funds. USCF Investments earns monthly management and advisory fees based on agreements with each Fund as determined by the contractual basis point management fee structure in each agreement multiplied by the average AUM over the given period. Many of the Fund’s expenses are dependent upon the amount of AUM. These variable expenses include Fund administration, custody, accounting, transfer agency, marketing and distribution, and sub-adviser fees and are determined by multiplying contractual fee rates by AUM.
Previous report
Comparison of the Three Months Ended March 31, 2024 and 2023
Previous report
Average AUM for the three months ended March 31, 2024 was $3.0 billion as compared to $3.7 billion from the three months ended March 31, 2023, a decrease of $0.7 billion or 19%, due to a decrease in USO, UNG and BNO AUM, partially offset by an increase in UMI AUM. As a result, the revenues from management and advisory fees decreased by $0.6 million, or 12%, to $4.4 million for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023 where revenues from management and advisory fees totaled $5.0 million.
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Operating Expenses
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USCF Investments total operating expenses for three months ended March 31, 2024 increased $0.5 million to $3.6 million, or 16%, from $3.1 million for the three months ended March 31, 2023. Total variable expenses, as described above, were comparable quarter over quarter, with offsetting changes including a decrease in sub-advisory fees of $0.1 million due to a decrease in USCI and CPER AUM offset by an increase of $0.1 million in fund accounting and administration expenses due to an increase in the number of funds under management. General and administrative (“G&A”) expenses increased $0.1 million to $0.6 million, or 18%, from $0.5 million due to an increase in professional fees. Operations expenses increased by $0.2 million to $1.3 million from $1.1 million compared to the prior year quarter and employee compensation expenses increased $0.2 million due to quarterly bonus accruals in anticipation of year-end bonuses.
Previous report
Operating income and net income
Previous report
Operating income decreased by $1.1 million to $0.8 million for the three months ended March 31, 2024 from $1.9 million for the three months ended March 31, 2023. The decrease was due to lower revenue as a result of lower AUM along with the increase in expenses as described above. Other income (expense) was $0.6 million for the three months ended March 31, 2024 compared to ($0.1) million for the three months ended March 31, 2023 resulting in a $0.6 million increase due to unrealized gains of $0.3 million on equity investments in the current period in addition to $0.2 million in dividend and interest income.
Previous report
Comparison of the Nine Months Ended March 31, 2024 and 2023
Previous report
Average AUM for the nine months ended March 31, 2024 was $3.3 billion as compared to $3.8 billion from the nine months ended March 31, 2023 due to a decrease in USO and USCI AUM, partially offset by an increase in UNG AUM. As a result, the revenues from management and advisory fees decreased by $1.3 million, or 8%, to $14.5 million for the nine months ended March 31, 2024 as compared to the nine months ended March 31, 2023 where revenues from management and advisory fees totaled $15.7 million.
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Operating Expenses
Previous report
USCF Investments total operating expenses for the nine months ended March 31, 2024 increased by $0.4 million to $10.7 million, or 3%, from $10.3 million for the nine months ended March 31, 2023. Total variable expenses, as described above, decreased by $0.3 million due to a decrease in total AUM which included a $0.3 million decrease in variable marketing and distribution expenses, a decrease of $0.1 million in sub-advisory fees related to lower USCI and CPER AUM partially offset by a $0.1 million increase in fund accounting and administration expenses due to an increase in the number of funds under management. G&A expenses remained flat at $1.8 million for each nine-month period. Employee compensation expenses remained consistent at $3.7 million for the nine months ended March 31, 2024 compared to the nine months ended March 31, 2023. Operations expenses increased by $0.4 million due to an increase in license and director fees for new funds.
Previous report
Operating income and net income
Previous report
Operating income decreased $1.6 million to $3.8 million for the nine months ended March 31, 2024 from $5.4 million for the nine months ended March 31, 2023. The decrease was due to lower revenue as a result of lower AUM and a $0.4 million increase in operating expenses. Other income (expense) was $0.4 million for the nine months ended March 31, 2024 compared to $0.1 million for the nine months ended March 31, 2023 due to $0.5 million in dividend, interest and other income in the current year period.
Previous report
Food Products (23% and 22% of consolidated revenue for the three and nine months ended March 31, 2024, respectively)
Previous report
Food products (Gourmet Foods and Printstock) revenues for the three months ended March 31, 2024 and 2023 was flat at $1.8 million; however net income improved by less than $0.1 million from the comparative prior year quarter as result of a more favorable product mix and refocusing production capacity to higher profit margin customers.
Showing the first 40 of 58 passages. Open the source sections for the rest.
Reworded paragraphs (5)
Previous wording
The Marygold Companies is a holding company that conducts its 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 or the subsidiary level. There are no limitations or constraints on the movement of funds between the entities.
Current wording
The Marygold Companies is a 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, registered investment advisor subsidiaries are required to maintain certain minimum capital requirements.
Previous wording
Based on our current operating plan, we believe existing cash resources will be sufficient to meet our working capital requirements for the next twelve months. If sufficient funds are not available to finance our business and operations, including our investment in Marygold, we may need to raise additional financing through one or more debt or an equity financing to meet our operating and cash needs. There can be no assurance we will be able to raise additional financing or obtain terms that are acceptable to us.
Current wording
Based on our current operating plan which includes continued significant investments in the mobile Fintech app, we intend to raise additional capital 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 additional financing 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.
Previous wording
The Company has various operating leases for offices, warehouses and manufacturing facilities. The total amount due under these obligations was $1.1 million and $1.0 million as of March 31, 2024 and June 30, 2023, respectively. The obligations will reduce over the passage of time through periodic lease payments. See Note 11 for further analysis of this obligation.
Current wording
The Company has various leases for offices, warehouses and manufacturing facilities. The total amount due under these obligations was $1.6 million as of September 30, 2024. 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. The obligations will reduce over the passage of time through periodic lease payments. See Note 10 for further analysis of this obligation.
Previous wording
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 March 31, 2024, USCF Investments held investment positions in four of its 40 Act funds, USG (renamed from GLDX in March 2024), ZSB, USE and ZSC of $1.3 million, $0.4 million, $3.2 million, and $2.3 million, respectively. As of June 30, 2023 USCF held positions in USG, ZSB, and USE of $1.3 million, $1.9 million, and $2.6 million, respectively. These investment positions along with other investments, as applicable, are described further in Note 7 to our Financial Statements.
Current wording
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 September 30, 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, $0.4 million, $3.2 million, and $2.3 million, respectively. These investment positions along with other investments, as applicable, are described further in Note 5 to our Financial Statements.
Previous wording
We have historically not paid any dividends on our shares of common stock and we have no current plans to pay dividends.
Current wording
Our strategy on dividends is to declare and pay dividends only from retained earnings and only when our Board of Directors deems it prudent and in the best interests of the Company to declare and pay dividends. We have historically not paid any dividends on our shares of common or preferred stock and we have no current plans to pay dividends.