Marygold Companies, Inc. (MGLD)

The Marygold Companies, Inc. is a Nevada holding company operating through wholly owned subsidiaries on a multinational scale, focused on financial services, exchange traded funds management, and certain other business activities. The company's primary business focus is the financial services industry, including ETF management, with the intention to continue developing these and similar business segments prospectively. The company manages operations on a decentralized basis, with executive management primarily responsible for vision, strategy, capital allocation, and leadership talent selection. The company's business units employed 81 people located in various parts of the world, including New Zealand, the United Kingdom, and the United States, through the fiscal year ended June 30, 2026 ¹.

USCF Investments competes with other commodity fund managers, including larger, better-financed companies and other boutique companies that offer similar ETFs. Many competitors have substantially greater technical and human resources, as well as greater experience in the discovery, research and development of ETFs and their commercialization. USCF Investments believes it has carved out a unique set of ETFs that were first to market and continues to create and launch funds focused on its core business platform in the commodity sector of non-renewable energy while expanding its commodity index funds. The ability to create and launch bespoke funds and series funds allows USCF Investments to compete as a boutique investment management company. Original Sprout distributes only 100% vegan, lab tested as safe and non-toxic, hair and skin care products, which it believes differentiates it significantly from competitors that do not employ such standards. As more entrants in the high-end, vegan, hair care segment come into existence, some may be better financed and have more brand recognition and resources than Original Sprout. Marygold & Co. Limited and Step-By-Step have pursued separate niche markets to differentiate themselves from institutional and larger organizations providing investment advice and wealth management services in the U.K.

The company generates revenue through its operating subsidiaries across several segments. USCF Investments' revenue and expenses are primarily based upon and determined by the amount of AUM of the funds its subsidiaries manage, with subsidiaries earning monthly management and advisory fees based on their agreements with each fund. Marygold UK earns revenues in the form of advisory fees based on a percentage of AUM, plus revenue through commission-based referrals from insurance providers and certain other financial products. Original Sprout is engaged in retail sales and wholesale distribution of hair and skin care products, selling through five distribution channels: direct sales to end users via online shopping carts, sales to an exclusive reseller on Amazon, sales through international wholesale distributors, sales to domestic wholesale distributors of products to professional salons, and to retail stores. The company's primary customer segments include ETF investors, wealth management clients in the U.K., and consumers of vegan hair and skin care products.

USCF Investments, through its subsidiaries USCF LLC and USCF Advisers, provides investment fund management and advisory services to 17 ETFs listed and traded on the NYSE Arca, with a combined total of $5.1 billion in AUM as of June 30, 2026 ². USCF LLC serves as general partner or sponsor of funds including the United States Oil Fund, LP, United States Natural Gas Fund, LP, United States Gasoline Fund, LP, United States 12 Month Oil Fund, LP, United States 12 Month Natural Gas Fund, LP, United States Brent Oil Fund, LP, United States Commodity Index Fund, and United States Copper Index Fund. USCF Advisers is the investment adviser to funds including the USCF SummerHaven Dynamic Commodity Strategy No K-1 Fund, USCF Midstream Energy Income Fund, USCF Gold Strategy Plus Income Fund, USCF Dividend Income Fund, USCF Sustainable Battery Metals Strategy Fund, USCF Energy Commodity Strategy Absolute Return Fund, USCF Sustainable Commodity Strategy Fund, and USCF Oil Plus Bitcoin Strategy Fund, and sub-advises the USCF Daily Target 2X Copper Index ETF. For the year ended June 30, 2026, 47% of USCF Investments' revenue was attributed to its subsidiaries' management of its three largest funds: United States Oil Fund, LP; United States Copper Index Fund; and United States Natural Gas Fund, LP ³. For the year ended June 30, 2025, 70% of USCF Investments' revenue was attributed to its subsidiaries' management of its three largest funds: United States Oil Fund, LP; United States Natural Gas Fund, LP; and USCF Midstream Energy Income Fund ⁴.

Original Sprout formulates and packages various hair and skin care products that are 100% vegan, tested safe and non-toxic, and marketed globally through distribution networks to salons, resorts, grocery stores, health food stores, e-tail sites and on its website. Original Sprout relies on two product formulating and packaging companies to manufacture its products, and endeavors to maintain at least a 90-day supply of all products in stock ⁵. Marygold UK, through its subsidiaries Marygold & Co. Limited and Step-By-Step Financial Planners Limited, provides asset management and financial planning services in the U.K., with $63.1 million in combined AUM as of June 30, 2026 ⁶. The Marygold UK Fintech app was removed from the market in April 2026, and all client funds were refunded effective June 30, 2026. The Food Products segment, consisting of Gourmet Foods, Ltd. and Printstock Products Limited in New Zealand, was classified as held for sale as of March 31, 2026, and is presented as discontinued operations. The Security Systems segment, Brigadier Security Systems (2000) Ltd., was sold to a related party on July 1, 2025.

On March 31, 2026, the Company formally approved a plan to dispose of its Food Products segment, which includes all operations conducted in New Zealand, and expects the transaction to be completed within twelve months of the classification date. On June 19, 2025, the Company entered into a Stock Purchase Agreement with SKCAL LLC, whose president and sole member, Scott Schoenberger, is also a director of Marygold and the beneficial owner of 10.9% of the outstanding voting stock ⁷, to sell 100% of Brigadier Security Systems (2000) Ltd. for total consideration of $2.2 million ⁸, subject to adjustment. The closing took place on July 1, 2025, and as a result of the upward adjustment, the total purchase price consideration was $2.3 million ⁹. During fiscal 2026, a trading error occurred in the execution of oil futures trades on behalf of the United States Oil Fund, LP, resulting in a $2.5 million loss to the fund ¹⁰, which USCF reimbursed in full, reflected as a reduction in revenue. The company recorded total impairment charges of $3.6 million during fiscal 2026, including $2.7 million related to goodwill and other intangible assets in the U.K. financial services unit ¹¹ and $0.9 million related to an investment in a private bank ¹². The company paused further development of the Fintech app in the U.S. effective March 31, 2025, and in the U.K. effective June 30, 2026, after investing $19.5 million in its development since 2019 ¹³.

Total revenue increased by $1.9 million or 8% in fiscal 2026 to $25.313 million ¹⁴, compared to $23.434 million ¹⁵ in fiscal 2025. Gross profit increased by $3.2 million or 16% to $23.449 million ¹⁶ from $20.271 million ¹⁷. Operating expenses increased by $2.4 million or 9% to $29.461 million ¹⁸ from $27.106 million ¹⁹. Loss from continuing operations decreased by $0.8 million or 12% to $6.012 million ²⁰ from $6.835 million ²¹. Net loss from continuing operations was $4.528 million ²² in fiscal 2026, compared to $5.994 million ²³ in fiscal 2025. Net income from discontinued operations was $0.157 million ²⁴ in fiscal 2026 and $0.174 million ²⁵ in fiscal 2025. Net loss was $4.371 million ²⁶ in fiscal 2026, compared to $5.820 million ²⁷ in fiscal 2025, a decrease of 25%. The company had working capital of approximately $12.3 million as of June 30, 2026 ²⁸, compared to $11.6 million as of June 30, 2025 ²⁹, an increase of 6%.

The company expects to complete the disposition of its Food Products segment within twelve months of the classification date of March 31, 2026, though there can be no assurance of success or as to the timing or terms of the final transaction. The company is actively marketing the Food Products segment, which consists of Gourmet Foods, Ltd. and Printstock Products Limited, either collectively or separately through a sale or sales to a third party. The decision to divest was driven by management's strategic initiative to focus on its Fund Management and Financial Services related businesses, and the disposal represents a strategic shift that will have a significant impact on the company's operations and financial results, including the exit from New Zealand.

USCF Investments will continue to develop and consider new fund opportunities identified through its research efforts and review of market needs, with the ability to create and launch bespoke funds and series funds that provide exposure to certain commodity and equity groups. The cost of launching and seeding new funds is dependent upon the availability of existing and new capital resources, and the ability to successfully launch new funds while competing with much larger financial institutions is expected to be challenging. Original Sprout has engaged in new brand representation and secured more reliable sales channels for its new and existing product lines during fiscal 2026, which have afforded improved margins and the expectation of increasing revenue over time. Original Sprout is focused on promoting its own brand name as a recognized pioneer in 100% vegan, safe, effective, hair care products through the recruitment of additional distributors, nationwide retail stores, a continued emphasis on online sales, and an increased social media presence.

The company's gross profit increased by 16% in fiscal 2026, driven by an increase from the fund management segment due to increased average AUM and an increase of $0.5 million from the beauty products segment, offset by a reduction of $1.3 million due to the sale of the security systems segment and a $0.1 million decrease from the food products segment. Operating expenses increased by 9%, primarily due to total impairment charges of $3.6 million and higher variable operating expenses in the fund management business due to higher average AUM, partially offset by decreases of $4.6 million associated with the pause of the U.S. Fintech app and $1.2 million associated with the sale of Brigadier. The company expects that expenses have been curtailed significantly by the closure of the US and UK Fintech apps, though there may be a need to fund ongoing operations for continuing expenses in the US and UK beyond the ability to fund from consolidated operating income.

The company's business units employed 81 people as of June 30, 2026, with USCF Investments' operating subsidiaries having 15 full-time employees, Original Sprout having seven full-time employees, Marygold US having no full-time employees, and Marygold UK having nine employees. The company's decentralized business model requires retaining qualified and competent managers to continue day-to-day operations of its subsidiaries. The company's UK financial advisory business currently depends on a single employee who is qualified and certified to provide investment advice to clients, and if this employee were to become unavailable, the company may be unable to continue providing some or all of its regulated investment advisory services in the UK until a replacement is identified and certified.

The company has paid no cash dividends on its capital stock to date and currently intends to retain future earnings to fund the development and growth of its business, not anticipating paying any cash dividends in the foreseeable future. The company may need to raise additional equity or debt financing to fund ongoing operations, invest in acquisitions, and for working capital purposes, and there can be no assurance it will be able to raise such financing on acceptable terms. As of June 30, 2026, the company had invested $19.5 million in the development of its Fintech app, and although expenses have been curtailed significantly by the closure of the US and UK Fintech apps, there may be a need to fund ongoing operations beyond the ability to fund from consolidated operating income.

The company faces potential headwinds from the outcome of certain class action litigation involving its subsidiary, USCF Investments, Inc., for which the company is currently unable to predict the ultimate timing or outcome or reasonably estimate possible losses. The company's operating results are particularly exposed to investor sentiment toward investing in the ETFs sponsored by USCF and advised by USCF Advisers, as 83% and 73% of revenues were derived from USCF Investments operations for the years ended June 30, 2026 and 2025, respectively ³⁰. If assets under management in these funds were to decline, either because of declining market values or net outflows, revenues would be adversely affected. The company's business may be impacted by political events, new tariffs, war, terrorism, public health issues, natural disasters, and other circumstances not within its control, including the geopolitical conflict in Eastern Europe and the Middle East, which could affect transfer of funds related to repatriation of foreign subsidiary assets, supply chain disruptions, and increased commodity prices.

The company's ability to predict revenue generation from its subsidiaries may not be accurate from time to time, and any effort to restart its Fintech subsidiaries could have a detrimental effect on operations if projections are inaccurate. The company may fail to effectively integrate businesses it acquires, and significant acquisitions may require incurring debt, which could increase interest expense and make it difficult to obtain financing for other significant acquisitions or capital investments. The company could consume resources in researching acquisitions and dispositions, business opportunities, or financings that are not consummated, which could materially adversely affect subsequent attempts to locate and acquire or invest in another business.

Management's message emphasizes a strategic shift to focus on Fund Management and Financial Services related businesses, as evidenced by the decision to divest the Food Products segment and the sale of the Security Systems segment. The company has paused further development of its Fintech app for the U.S. and U.K. markets after investing $19.5 million since 2019 ³⁵, due to limited acceptance, and has removed the apps from the market. Management has reviewed the circumstances of the USO trading error, determined it was an isolated event, and has implemented enhanced controls over its trade execution processes. The company recorded an impairment loss of $2.7 million related to goodwill and other intangible assets in its U.K. financial services business, which had been suffering from increased losses resulting from the departure of a former executive and increased costs of running the business ³⁶. Management's strategic priorities include continuing to develop the fund management and financial services businesses, successfully divesting the Food Products segment, and managing costs, particularly following the pause of the Fintech apps.

Total revenue for fiscal 2026 was $25.313 million ³⁷, compared to $23.434 million ³⁸ in fiscal 2025, an increase of 8%. Net loss from continuing operations was $4.528 million ³⁹ in fiscal 2026, compared to $5.994 million ⁴⁰ in fiscal 2025, a decrease of 24%. Net loss was $4.371 million ⁴¹ in fiscal 2026, compared to $5.820 million ⁴² in fiscal 2025, a decrease of 25%. Gross profit was $23.449 million ⁴³ in fiscal 2026, compared to $20.271 million ⁴⁴ in fiscal 2025, an increase of 16%. Operating expenses were $29.461 million ⁴⁵ in fiscal 2026, compared to $27.106 million ⁴⁶ in fiscal 2025, an increase of 9%. Loss from continuing operations before income taxes was $4.805 million ⁴⁷ in fiscal 2026, compared to $7.556 million ⁴⁸ in fiscal 2025, a decrease of 36%. Benefit from income taxes was $0.277 million ⁴⁹ in fiscal 2026, compared to $1.562 million ⁵⁰ in fiscal 2025, a decrease of 82%. Other income (expense), net was $1.207 million ⁵¹ of net other income in fiscal 2026, compared to $0.721 million ⁵² of net other expense in fiscal 2025, a favorable change of $1.9 million. The company recorded total impairment charges of $3.6 million during fiscal 2026, including $2.7 million related to goodwill and other intangible assets in the U.K. financial services unit ⁵³ and $0.9 million related to an investment in a private bank ⁵⁴, which reduced reported results. The company also recognized a $2.5 million reduction to revenue in the Fund Management segment related to the USO trading-error reimbursement ⁵⁵. Segment performance: Fund management revenue was $21.126 million ⁵⁶ in fiscal 2026, compared to $17.135 million ⁵⁷ in fiscal 2025, an increase of 23%; Beauty products revenue was $3.367 million ⁵⁸ in fiscal 2026, compared to $2.974 million ⁵⁹ in fiscal 2025, an increase of 13%; Security systems revenue was $0 ⁶⁰ in fiscal 2026, compared to $2.471 million ⁶¹ in fiscal 2025; Financial services revenue was $0.820 million ⁶² in fiscal 2026, compared to $0.854 million ⁶³ in fiscal 2025, a decrease of 4%. Fund management income from continuing operations was $2.912 million ⁶⁴ in fiscal 2026, compared to $3.274 million ⁶⁵ in fiscal 2025, a decrease of 11%; Beauty products income was $0.293 million ⁶⁶ in fiscal 2026, compared to a loss of $0.395 million ⁶⁷ in fiscal 2025; Security systems income was $0 ⁶⁸ in fiscal 2026, compared to $0.250 million ⁶⁹ in fiscal 2025; Financial services loss was $4.079 million ⁷⁰ in fiscal 2026, compared to $5.621 million ⁷¹ in fiscal 2025, a decrease of 27%; Corporate headquarters loss was $5.138 million ⁷² in fiscal 2026, compared to $4.343 million ⁷³ in fiscal 2025, an increase of 18%. Net income from discontinued operations was $0.157 million ⁷⁴ in fiscal 2026, compared to $0.174 million ⁷⁵ in fiscal 2025.

The company's business and operations could be negatively affected by material litigation, as USCF LLC is currently the subject of class action litigation, and an adverse outcome could materially adversely affect financial condition, results of operations, or cash flows. The company derives a substantial portion of its revenues from USCF Investments, with 83% and 73% of revenues derived from its operations for the years ended June 30, 2026 and 2025, respectively ³¹, making operating results particularly exposed to investor sentiment toward the ETFs and the ability to maintain assets under management. The company has incurred net losses of $4.4 million and $5.8 million in fiscal 2026 and 2025, respectively ³², and has paused further development of its Fintech app after investing $19.5 million since 2019 ³³, with no assurance of being able to raise additional financing or license the app. The company's UK financial advisory business is dependent on a single employee who is qualified and certified to provide investment advice, and the loss of this employee could disrupt the ability to provide regulated investment advisory services in the UK. The company recorded an impairment loss of $2.7 million related to goodwill and other intangible assets in its U.K. financial services business ³⁴, and as of June 30, 2026, the total recorded value of goodwill and intangible assets was zero excluding amounts classified as held for sale, indicating potential further impairment risk.