Marygold Companies, Inc.

Current report

Risks Related to our Recent Note Financing

Current report

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.

Current report

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.

Current report

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.

Current report

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.

Current report

Risks Related to our Business and Structure

Current report

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

Current report

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.

Previous report

See risk factors discussed in “Risk Factors” in our 2024 Form 10-K. These risk factors should be read in connection with the other information included in this quarterly report on Form 10-Q, including Management’s Discussion and Analysis of Financial Condition and Results of Operations and our financial statements and the related notes, specifically*“Liquidity and Capital Resources – Recent Note Financing.”*

Previous report

In addition to the “Risk Factors” included in our 2024 Form 10-K we are adding the following risk factor in connection with our recent debt financing.