Company: MGLD
Filing Date: 2025-02-05
Form Type: 10-Q
Source: 0001493152-25-005002
Chunk: 41

Company: Marygold Companies, Inc.
Filing Date: 2025-02-05
Form: 10-Q
Item: Part I, Item 1
Chunk 41
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 increased loss
was driven by higher stock-based compensation expenses from additional outstanding equity grants during the six months
ended December 31, 2024.

Liquidity
and Capital Resources

The
Marygold Companies is a diversified holding company that conducts its individual business operations through its subsidiaries. At
the holding-company level, its liquidity needs relate to operational expenses, the funding of additional business acquisitions and
new investment opportunities. 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 December 31, 2024, we had $5.7 million of cash and cash equivalents on a consolidated basis as compared to $5.5 million as of June
30, 2024, a increase of $0.2 million or 4%. Our cash used in operating activities for the six months ended December 31, 2024 was $1.7
million. For the six months ended December 31, 2024, the Company made additional expenditures of $2.7 million with regard to the development
of our mobile Fintech app. We have invested a total of $18 million in the Fintech app since Marygold’s inception. In September 2024,
we entered into a  financing arrangement under which we borrowed $4.4 million and have the potential to borrow an additional $2.2
million. The financing arrangement also gives the lender the right but not the obligation to provide an additional $10.0 million
in financing to us on the same terms as the initial loans. We expect that we will require additional financing to fund our fintech 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 $14.4 million as of December 31, 2024.

Recent
Equity Financing

On
January 28, 2025, we closed on the sale of an aggregate of 2,050,000 shares of our common