Company: MGLD
Filing Date: 2025-09-19
Form Type: 10-K
Source: 0001493152-25-014286
Chunk: 133

Company: Marygold Companies, Inc.
Filing Date: 2025-09-19
Form: 10-K
Item: Item 1
Chunk 133
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 and is reflected as security system revenue
in the Consolidated Statements of Operations. Revenue associated with customer support services is recognized as those services are provided,
and is included as a component of security system revenue in the Consolidated Statements of Operations. None of the other subsidiaries
of the Company generate revenue from long-term contracts.

    F-11

Income
Taxes

Income
taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for future tax consequences
attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective
tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect
of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.
A valuation allowance is provided for deferred tax assets if it is more likely than not that these items will either expire before the
Company is able to realize their benefits or if future deductibility is uncertain.

When
tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities,
while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately
sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available
evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution
of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that
meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely
of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken
that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the balance sheets along
with any associated interest and penalties that would be payable to the taxing authorities upon examination. Applicable interest and
penalties associated with unrecognized tax benefits are classified as additional income taxes in the statements of operations.

Advertising
Costs

The
Company expenses the cost of advertising as incurred. Marketing and advertising costs for the years ended June 30, 2025 and 2024
were $2.5 million