Company: MGLD
Filing Date: 2025-02-05
Form Type: 10-Q
Source: 0001493152-25-005002
Chunk: 64

Company: Marygold Companies, Inc.
Filing Date: 2025-02-05
Form: 10-Q
Item: Part I, Item 8
Chunk 64
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 line of credit, standby equity purchase agreement or
similar arrangement. The Purchase Agreement also contains a most favored nations provision that provides we will grant to the Holder
the same terms as we offer any subsequent investor in our debt securities and certain arbitration provisions in the event of a claim
arising under the Purchase Agreement and other transaction documents.

The
Company’s obligations under the Note are secured by: (i) a pledge of all the common stock the Company owns in USCF Investments,
Inc. and (ii) a security interest in all of the assets of the Company. Further, the Company’s Chief Executive Officer’s trust,
the Nicholas and Melinda Gerber Living Trust (“Gerber Trust”), provided: (i) a guaranty of the Company’s obligations
to the Holder under the Note and (ii) a pledge of all of the common stock of the Company owned by the Gerber Trust.

Beginning
on the date that is six months from the issuance date until the applicable Note is paid in full, each month the Holder has the right
to require the Company to redeem up to an aggregate of $400,000 with respect to the Initial Note and $200,000 with respect to the Subsequent
Note plus any interest accrued thereunder and an additional payment amount equal to 6% of the principal amount. The Company has the right to defer such redemption
payments that Holder could otherwise elect to make three times by providing advance written notice to Holder. If the Company exercises
its deferral right, the outstanding balance is automatically increased by 0.85% for each instance that the deferral right is exercised
by Company, which cannot be exercised more than once every ninety calendar days.

Pursuant
to the terms of the Purchase Agreement, beginning on the date of the issuance and sale of the Note and ending 24 months later, Holder
will have the right, but not the obligation, with Company’s prior written consent, to reinvest up to an additional $10,000,000
in the Company on the same terms and conditions as the Notes (structured as two tranches of $5,000,000 each).

The
Company engaged Maxim Group LLC to serve as placement agent for the transaction between the Company and Holder in exchange for an aggregate
commission equal to 7% of the gross cash proceeds received from the sale of the Notes.

As
of December 31, 2024, the note payable balance outstanding, net of the original issue discount and fees paid, was $3.9