Company: MGLD
Filing Date: 2025-09-19
Form Type: 10-K
Source: 0001493152-25-014286
Chunk: 17

Company: Marygold Companies, Inc.
Filing Date: 2025-09-19
Form: 10-K
Item: Item 8
Chunk 17
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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 and $3.2 million, respectively.

Segment
Reporting

The
Company defines operating segments as components about which separate financial information is available that is evaluated regularly
by the chief operating decision maker, which is our Chief Executive Officer, in deciding how to allocate resources and in assessing performances.

Stock-Based Compensation

We
use the fair value method of accounting for our stock options and restricted stock awards (“RSAs”) granted to employees and
directors to measure the cost of employee and director services received in exchange for the stock-based awards. The fair value of stock
option awards with only service conditions is estimated on the grant date using the Black-Scholes option-pricing model. The Black-Scholes
option-pricing model requires inputs such as the risk-free interest rate, expected term and expected volatility. These inputs are subjective
and generally require significant judgment. The fair value of RSAs is measured on the grant date based on the closing fair market value
of our common stock. The resulting cost is recognized over the period during which an employee or director is required to provide service
in exchange for the awards, usually the vesting period,