Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with our consolidated financial statements and the accompanying notes thereto included in this Report 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." In addition to historical financial information, the following discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Some of the numbers included herein have been rounded for the convenience of presentation. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those discussed in the "Special Note Regarding Forward Looking Statements" above.

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, 2025.

Overview

The Marygold Companies, Inc., a Nevada corporation ("Company," "The Marygold Companies," "we," "our," or "us"), is a holding company which operates through its wholly owned subsidiaries on a multinational scale that is focused upon financial services, exchange traded funds management and certain other business activities listed below:

●

U.S. Fund Management - USCF Investments, Inc., a Delaware corporation ("USCF Investments"), with corporate headquarters in Walnut Creek, California and its wholly owned subsidiaries which provide fund management services to exchange traded funds and exchange traded products ("ETFs"):

	○	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. Brigadier was sold to a related party on July 1, 2025 (see Note 6. Sale of Brigadier).
	●	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, and its wholly owned subsidiary, Marygold & Co. Advisory Services, LLC, a Delaware limited liability company, whose principal business offices are located in Walnut Creek, California;
	○	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.

Recent Developments

Refer to "Liquidity and Capital Resources - Recent Equity Financing," below.

Quarter Ended September 30, 2025 Compared with Quarter Ended September 30, 2024

Summary Results of Operations

		Quarters Ended September 30,								Percentage
(in thousands, except percentages)		2025				2024				Change
Revenue		$	6,963			$	7,910				-12	%
Cost of revenue			1,599				2,128				-25	%
Gross profit			5,364				5,782				-7	%
Operating expenses			6,628				7,952				-17	%
Loss from operations			(1,264	)			(2,170	)			-42	%
Other income, net			755				101				648	%
Loss before income taxes			(509	)			(2,069	)			-75	%
Benefit from income taxes			153				483				-68	%
Net loss		$	(356	)		$	(1,586	)			-78	%

Revenue decreased by $0.9 million or 12% for the quarter ended September 30, 2025 due to a decrease in revenue of $0.7 million from our security systems segment as a result of the sale of Brigadier to a related party on July 1, 2025 as well as a decrease of $0.3 million (or 6%) in our U.S. fund management segment. The decrease in U.S. fund management revenue was driven by a decrease in average Assets Under Management ("AUM"). Average AUM for the quarter ended September 30, 2025 was $2.9 billion compared to $3.1 billion for the quarter ended September 30, 2024. The decrease in average AUM in the quarter ended September 30, 2025 was due to commodity price fluctuations, along with geopolitical and economic uncertainty.

Gross profit decreased by $0.4 million or 7%, driven by the reduced revenue from the lower average AUM as described above as well the elimination of gross profit from Brigadier which was sold on July 1, 2025.

Operating expenses decreased by $1.3 million or 17% driven by a reduction of costs associated with our Marygold & Co subsidiary as they paused further development of the Fintech app in the US as well as a reduction of $0.2 million of operating expenses incurred by Brigadier in the quarter ended September 30, 2024 as a result of the sale of Brigadier on July 1, 2025.

Loss from operations decreased by $0.9 million compared to the prior year quarter as a net result of: the decrease in financial services loss by $1.2 million from pausing the Marygold Fintech app in the US; improved profitability of our beauty products segment by $0.3 million; and improved profitability of our food products segment of $0.1 million; offset by reduced profit of $0.6 million in the fund management segment due to lower average AUM and the elimination of $0.1 million profit in our security systems segment as a result of the sale of Brigadier on July 1, 2025.

Total other income, net increased by $0.7 million or 684% for the quarter ended September 30, 2025 compared to the prior year quarter driven by the $0.5 million gain on sale of Brigadier in the quarter ended September 30, 2025.

Net loss decreased by $1.2 million or 78% and was driven by the net effect of the changes discussed above.

Reportable Segments

Quarter Ended September 30, 2025 Compared with Quarter Ended September 30, 2024

SEGMENT RESULTS OF OPERATIONS

		Quarters Ended September 30,								Percentage
(in thousands, except percentages)		2025				2024				Change
Revenue
Fund management - related party		$	4,329			$	4,591				-6	%
Food products			1,755				1,822				-4	%
Beauty products			671				597				12	%
Security systems			-				690				-100	%
Financial services			208				210				-1	%
Total revenue		$	6,963			$	7,910				-12	%
Operating Income (Loss)
Fund management - related party		$	379			$	960				-61	%
Food products			102				(8	)			-1,375	%
Beauty products			123				(173	)			-171	%
Security systems			-				133				-100	%
Financial services			(373	)			(1,582	)			-76	%
Corporate headquarters			(1,495	)			(1,500	)			0	%
Total operating loss		$	(1,264	)		$	(2,170	)			-42	%

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 ETF or ETP that it manages. 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 September 30, 2025 was $2.9 billion compared to $3.1 billion for the quarter ended September 30, 2024. As a result of lower average AUM for the current quarter when compared to the quarter ended September 30, 2024, revenue decreased by $0.3 million or 6%. The decrease in average AUM in the quarter ended September 30, 2025 was due to commodity price fluctuations, along with the impact of geopolitical and economic uncertainty.

Operating income decreased to $0.4 million from $1.0 million for the quarter ended September 30, 2025 compared to the same quarter in 2024 driven by lower revenue and increases in sub-advisor fees (related to growth in newer funds) and new fund development costs, partially offset by variable operating expenses that are tied to lower average AUM from other funds.

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 was basically flat at $1.8 million for the quarter ended September 30, 2025 as compared to 2024.

Operating income increased by $0.1 million as compared to the quarter ended September 30, 2024. The increase in operating income is due to a focus on the sale of higher margin products coupled with a decrease in selling expenses at Gourmet Foods bakery unit coupled with an increase in production at their Printstock Products printing subsidiary.

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 increased by $0.1 million or 12% driven by improved performance by its distribution channels.

Operating income increased to $0.1 million for the quarter ended September 30, 2025, as compared to an operating loss $0.2 million for the quarter ended September 30, 2024, as a result of increased revenues of $0.1 million and the reduction of certain expenses of $0.2 million.

Security Systems - Brigadier

Brigadier was sold to a related party on July 1, 2025 (see Note 6. Sale of Brigadier).

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

Marygold US developed and launched a mobile banking fintech app which earned revenue in the form of management fees based on a percentage of the amount of account holder funds invested in various curated ETF portfolios offered on the app ("Money Pools"), and from transaction fees when account holders used a debit card. The app was soft-launched in June 2023 as a proof of concept. Since that time, the app earned only de minimis revenues. As a result, the offering of the app in the US was paused by Marygold US during the fourth quarter of fiscal year 2025. For the quarter ended September 30, 2025, Marygold US had no revenue and minimal expenses as compared with an operating loss of $1.4 million for the quarter ended September 30, 2024. Losses and negative cash flows from Marygold US are expected to be significantly reduced for the remainder of this fiscal year.

Marygold UK

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 which are registered investment advisors which 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 Financial Services revenue, derived entirely from Marygold UK, for the quarter ended September 30, 2025, remained flat at $0.2 million compared to the quarter ended September 30, 2024. Marygold UK continued development of a scaled down version of its fintech app designed specifically for use in the UK. 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 $0.4 million for the current quarter as compared to a loss of $1.6 million for the quarter ended September 30, 2024.

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 was flat at $1.5 million for the quarter ended September 30, 2025 as compared to the same period in 2024.

Liquidity and Capital Resources

We are a holding company that conducts our individual diversified business operations through our wholly-owned subsidiaries. At the holding-company level, our liquidity needs relate to operational expenses, the funding of additional business acquisitions and new investment opportunities including the investment by our fund management business in the development of new exchange traded fund or products. 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 September 30, 2025, we had $4.9 million of cash and cash equivalents on a consolidated basis as compared to $5.0 million as of June 30, 2025, a decrease of $0.1 million or 3%. Our cash used in operating activities for the quarter ended September 30, 2025 was $0.5 million. For the quarter ended September 30, 2025, the Company made nominal capital contributions to Marygold UK, which in turn were expensed towards the development and marketing of the mobile Fintech app. We have invested a total of $19.3 million overall in the Fintech app since the project was implemented in 2019. As described below, on January 28, 2025, we received $1.8 million in net proceeds from the sale of our shares in a firm commitment underwritten offering. There is a possibility that we will require additional financing if we elect to further fund fintech -based subsidiary 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 $13.4 million as of September 30, 2025.

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"). Maxim did not exercise its Overallotment Option.

The net proceeds of the Offering to us, after deducting underwriting discounts and commissions and estimated offering expenses, were $1.8 million. We used 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.

Equity Distribution Agreement

On March 7, 2025, we entered into an Equity Distribution Agreement ("EDA") with Maxim pursuant to which we may sell from time-to-time shares of our common stock having an aggregate offering price of up to $4.65 million through or to Maxim, as sales agent or principal. We have agreed to pay Maxim a commission equal to three percent (3%) of the aggregate gross proceeds from the sale of any shares through Maxim under the EDA, reimburse Maxim for certain legal fees and disbursements, and have agreed to indemnify Maxim against certain liabilities under the Securities Act. The EDA requires that, until May 25, 2025, the date of the expiration of the standstill period in our Underwriting Agreement with Maxim for the underwritten offering described above, sales of our shares of common stock be made at a minimum price per share of $1.50 unless, at any time, Maxim and the Company mutually agree upon a lower minimum price per share. We have not sold any shares pursuant to the EDA. The offer and sale, if any, of our shares of common stock under the EDA will be made pursuant to our shelf registration statement on Form S-3 which was filed with the SEC on December 18, 2024, and became effective on December 27, 2024, the base prospectus included therein, and a prospectus supplement that was filed by the Company with the SEC on March 7, 2025.

The Company believes that its cash and cash equivalents along with the cash generated from ongoing operations will be sufficient to fund its cash requirements over the next 12 months. However, based on our current operating plan which we expect may include continued additional investments in our mobile Fintech app for the U.K. market, we may need to raise additional funds through one or more debt, equity or equity linked financings to meet our operating and cash needs. There can be no assurance we will be able to raise such additional financing upon terms acceptable to us or at all. In the event we are unable to obtain additional financing in an amount or upon terms acceptable to us, we expect to further 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 $0.9 million as of September 30, 2025. The obligations will reduce over the passage of time through periodic lease payments. See Note 10 for further analysis of this obligation.

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 September 30, 2025, USCF Investments held investment positions in three of its exchange traded funds registered under the Investment Company Act of 1940, as amended, ZSB, USE and ZSC of $0.3 million, $0.9 million, and $1.3 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.