MGLD — FY2026 Annual Report Analysis

A 41% jump in assets under management, most of it given back

The Marygold Companies (NYSE American: MGLD) is a small Nevada-incorporated holding company whose economics are almost entirely driven by one subsidiary: USCF Investments, which sponsors and manages 17 commodity-focused exchange-traded funds. For the fiscal year ended June 30, 2026 (Marygold's fiscal year runs July-to-June, so "fiscal 2026" covers July 2025 through June 2026), revenue from continuing operations rose 8% to $25.3 million and the net loss narrowed 25% to $4.4 million, or $0.10 per share versus $0.14 a year earlier.

Both of those headline numbers understate what actually happened underneath. Average assets under management — the pool of investor money USCF manages, which its fees are calculated as a percentage of — rose 41%, from $2.9 billion to $4.1 billion. That should have driven a far larger revenue increase than 8%. Two things stopped it: the company sold a whole segment out of the prior-year base, and it handed $2.5 million back to one of its own funds after a trading error.

Headline figures

Source: consolidated statements of operations and MD&A, Form 10-K filed September 18, 2026 (accession 0001493152-26-043341). All figures are GAAP and cover continuing operations unless stated; the New Zealand food business is excluded from every line above and reported separately as a discontinued operation.

The $2.5 million trading error

In the quarter ended June 30, 2026, USCF LLC executed oil futures contracts on behalf of the United States Oil Fund (USO) at prices $2.5 million worse than the expected benchmark execution price. Per the filing, "the error was identified on the day of execution and USCF reimbursed USO in full for the $2.5 million loss, resulting in no impact to USO's Net Asset Value." Marygold booked that reimbursement not as an expense but as a reduction of revenue in the Fund Management segment — which is why it suppresses the top line rather than showing up as a visible one-off cost.

The size of that adjustment relative to the business is what matters. Fund management revenue was $21.1 million; add back the reimbursement and it would have been roughly $23.6 million, up 38% year over year instead of 23%. Segment operating income — revenue less the segment's own operating costs — was $2.9 million, down 11%. Add the $2.5 million back and it would have been about $5.4 million, up 65%. In other words, a single day's execution failure converted the segment's best operating year in some time into a reported decline.

The fee-rate math confirms the underlying business was fine. Fund management revenue divided by average AUM came to 0.52% as reported, versus 0.59% in fiscal 2025 — apparent fee compression. Excluding the reimbursement, the rate was 0.58%, essentially unchanged. Nothing structural changed in what USCF charges; a $2.5 million item did.

Management states it "determined it was an isolated event, and has implemented enhanced controls over its trade execution processes." Marygold's disclosure controls were assessed as effective as of June 30, 2026, and the filing reports no change in internal control over financial reporting during the year. For a manager whose entire value proposition is operational reliability on behalf of fund shareholders, a loss of this size relative to $2.9 million of segment profit is worth watching rather than filing away.

Where the AUM growth came from — and why that is not the same as winning

Management is explicit that the AUM increase was price-driven, not flows-driven: the rise was "due to commodity price fluctuations, including energy price volatility associated with geopolitical events in the Middle East and Eastern Europe, as well as other geopolitical and economic uncertainty affecting inventory and demand." When the underlying commodities a fund holds rise in value, the fund's assets rise, and the manager's percentage fee rises with them — without the manager attracting a single new dollar. That kind of growth reverses when prices do.

The fund-level revenue table does show a genuine broadening of the revenue base, though:

USO's share of fund management revenue halved, from 30% to 16% — partly because the $2.5 million reimbursement was charged against fund management revenue in the year USO's own line fell $1.6 million, and partly because copper (CPER, 7% to 16%) and the broader commodity strategies (SDCI, 2% to 11%; BNO, 6% to 11%) grew hard. Less dependence on a single oil fund is a real improvement in durability. But the top seven funds still account for 95% of fund management revenue, and all seven are commodity vehicles, so the diversification is within one macro bet rather than away from it. At June 30, 2026, total AUM across the 17 ETFs stood at $5.1 billion — above the $4.1 billion full-year average, meaning fiscal 2027 starts from a higher fee base if commodity prices hold.

The gross margin jump is a divestiture, not an improvement

Gross margin rose from 86.5% to 92.6% and cost of revenue fell 41%, from $3.2 million to $1.9 million. That is not operational progress. Brigadier Security Systems, the Canadian security-installation business, was sold on July 1, 2025 — the first day of fiscal 2026 — so its $2.5 million of revenue and its associated hardware and installation costs are in the fiscal 2025 base and entirely absent from fiscal 2026. Security-system installation carries real equipment cost; asset management barely has a cost of revenue at all. Removing the low-margin business mechanically raised the blended margin.

The same divestiture distorts the revenue growth rate in the opposite direction. Strip Brigadier out of the prior-year base ($23.4M less $2.5M = $20.9M) and revenue from the continuing businesses grew about 21%, not 8%.

Brigadier was sold to SKCAL LLC, whose sole member is Scott Schoenberger — a Marygold director and, per the filing, a 10.9% shareholder. The company notes the independent directors commissioned an independent valuation before approving it, and the audit committee retained oversight through closing. Total proceeds were $2.3 million against a $1.7 million cost basis, producing a $0.6 million gain recorded in fiscal 2026.

Segment results: one profitable business, three cost centers

Original Sprout, the hair and skin care brand, swung from a $0.4 million operating loss to $0.3 million of operating income on 13% revenue growth. Management attributes the revenue gain to "continued success in controlling its brand and pricing on e-commerce platforms" and expansion of international distribution into more Asian countries, and the profit swing to that revenue plus "the elimination of third-party marketing consultants, and a reduction of unused warehouse space." It is small, but it is the first segment other than fund management to make money in some time, and the margin improvement came from cost discipline that does not reverse automatically.

Financial services is where the money went. The segment produced $0.8 million of revenue — all of it from Marygold UK, which runs two registered investment advisers in England with $63.1 million of combined AUM — against a $4.1 million operating loss. Marygold US, the American mobile banking and investing app, generated no revenue at all in fiscal 2026 after its offering was paused effective March 31, 2025; that pause is the single largest favorable swing in the year, cutting $4.6 million of operating expense and turning a $4.7 million prior-year segment loss into near-nothing. The UK went the other way: the company recorded a $2.7 million impairment charge — writing the carrying value of goodwill and intangibles down to what the business is now judged to be worth — after the UK unit's losses grew from app development and marketing, compounded by "the departure of the former head of one of its operating subsidiaries." The UK app was launched in March 2025, removed from the market in April 2026, and its "offering, development and marketing were paused effective June 30, 2026."

The cumulative figure the filing discloses is the one to sit with: "We have invested a total of $19.5 million in the Fintech app since the project was implemented in 2019." That is more than the company's entire June 30, 2026 stockholders' equity of $19.2 million, spent on two products that are both now switched off.

Corporate headquarters — the holding company itself, with no revenue and costs for salaries, audit and legal fees, NYSE American listing fees, insurance and investor relations — lost $5.1 million, up from $4.3 million, including $0.9 million of impairment on an investment in a private bank "that had been reporting losses." Even excluding that write-down, the roughly $4.2 million of holding-company overhead is comparable to what the one genuinely profitable operating business earns. For a group with $25 million of revenue, that is a heavy corporate layer.

What the loss looks like without the one-offs

Fiscal 2026 contains three items that will not repeat in the same form: the $2.5 million USO reimbursement (against fund management), the $2.7 million UK goodwill and intangible impairment (against financial services), and the $0.9 million private-bank investment impairment (against corporate). Adding all three back to the segment operating lines gives approximately:

• Fund management: +$5.4M
• Beauty products: +$0.3M
• Financial services: -$1.4M
• Corporate headquarters: -$4.2M
• Total: roughly breakeven, about +$0.1M

That is a materially different picture from a reported $6.0 million operating loss, and it is the honest starting point for fiscal 2027 — provided average AUM holds near current levels, the fintech spending stays switched off, and no comparable operational error recurs. It is also a thin result: breakeven, not profit, in a year when the fee base grew 41%.

Reported operating expenses rose 9%, to $29.5 million. Excluding the $3.6 million of total impairments (there were none in fiscal 2025), operating expenses actually fell about 5%, to $25.9 million. Within that, fund operations expense rose $2.6 million to $7.8 million — the genuinely variable cost of running more assets, covering marketing and distribution, fund accounting and administration, and sub-adviser fees — while salaries and compensation fell $1.6 million to $9.2 million and general and administrative expense fell $1.8 million to $6.3 million, both mostly from the fintech shutdown.

Below the operating line, other income and expense swung $1.9 million favorably, from $0.7 million of net expense to $1.2 million of net income. Two things drove it: interest expense collapsed from $1.17 million to $67 thousand after the $4.4 million Streeterville note payable was repaid in full in September 2025, and the $0.6 million Brigadier gain landed in other income. Partly offsetting that, interest and dividend income fell from $1.4 million to $0.4 million.

The tax line tells a less encouraging story than it first appears. The income tax benefit — an accounting credit that reduces a reported loss — fell from $1.6 million to $0.3 million. Because the pre-tax loss narrowed, a smaller benefit follows arithmetically, but it means the after-tax improvement ($1.5 million) is smaller than the pre-tax improvement ($2.8 million).

Takeaway: The reported 8% revenue growth and narrowed loss badly misrepresent the year in both directions. Strip out the divested security business, the $2.5 million reimbursement for a single day's oil-futures execution error, and $3.6 million of impairments, and Marygold ran roughly breakeven at the operating line on a 41% larger fee base — while the holding-company overhead alone still consumes nearly everything USCF earns. The fund management business works; the structure wrapped around it is what has to shrink.

Balance sheet and cash

Cash fell 42%, from $5.0 million to $2.9 million. Operations used $2.3 million (an improvement from $3.3 million used in fiscal 2025), investing provided $1.1 million — mostly the $1.1 million final Brigadier payment — and financing used $1.3 million to retire the Streeterville note. A $0.4 million favorable currency translation effect partly offset the rest.

The cash line alone overstates the strain. Marygold also carries $7.8 million of investments at fair value, which include seed positions USCF holds in three of its own ETFs (ZSB, USE and ZSC, at $0.2 million, $0.5 million and $0.6 million respectively) and are classified as current assets because the intention is to sell them within a year. Total current assets of $16.0 million against $3.7 million of current liabilities give working capital of $12.3 million, which management describes as "strong." Total liabilities are $4.8 million against $24.0 million of assets, and the company now carries no debt.

Two balance-sheet items deserve flagging. Goodwill and intangible assets are now carried at zero (excluding amounts inside the held-for-sale food business) after the UK write-down — which eliminates future impairment risk from that source but also means every remaining asset is cash, investments, receivables, or deferred tax. And the $3.6 million net deferred tax asset is 15% of total assets; deferred tax assets only have value if the company generates future taxable income to use them against, so a company that has now lost money for multiple years is carrying a meaningful asset whose realization depends on a profitability turn.

Retained earnings fell from $8.2 million to $3.8 million — at the current loss rate, the accumulated profits of the group's history are roughly one more bad year from being exhausted. No dividends were paid in either year. The $4.65 million equity distribution agreement with Maxim Group, under which the company could have sold shares into the market, expired on March 7, 2026 with no shares sold — so the fiscal 2026 cash burn was funded entirely from existing resources and asset sales rather than dilution. Shares outstanding actually declined slightly, to 42,712,250 from 42,818,000, on repurchases to satisfy tax withholding on restricted stock.

The New Zealand exit

On March 31, 2026 the board committed to disposing of the Food Products segment — Gourmet Foods Ltd, a New Zealand bakery, and Printstock Products Ltd, which prints food wrappers — and it is now presented as a discontinued operation, meaning it is stripped out of every continuing-operations line above and shown on its own. The stated rationale is "management's strategic initiative to focus on its Fund Management and Financial Services related businesses," and the disposal "represents a strategic shift," including a complete exit from New Zealand.

The economics being sold: $6.7 million of revenue (flat year over year), $5.2 million of cost of revenue, and $0.2 million of net income in each of fiscal 2026 and 2025. Assets held for sale carry at $2.5 million against $0.9 million of associated liabilities, for $1.6 million net. A business broker has been engaged with a success fee of up to 6% of transaction value, and the company expects to close within twelve months of the March 2026 classification date, with the standard caveat that there is "no assurance the Company will be successful in divesting this business upon terms acceptable to the Company."

It is worth stating plainly what this sequence amounts to. Marygold has now sold its profitable security business and is selling its profitable food business, in order to concentrate on fund management (profitable, but commodity-price dependent) and financial services (which has lost $9.7 million over the last two years and whose two products are both discontinued). The focus argument is coherent — a $25 million holding company running a New Zealand bakery, a Canadian alarm installer, an American hair-care brand and a commodity ETF sponsor was carrying more overhead than any of them justified. But the near-term effect on reported profit is to remove the pieces that made money.

Outlook

Marygold gives no revenue or earnings guidance, which is normal for a smaller reporting company. The only forward commitments in the filing are operational: "Over the coming 12 months we currently expect to generate proceeds from the sale of our Food Products segment and plan to further curtail funding for our fintech-based subsidiary operations." Subsequent events were evaluated through the September 18, 2026 filing date with none requiring disclosure, so nothing has been announced since the June 30 year-end.

Our read on the trajectory:

What supports fiscal 2027. Period-end AUM of $5.1 billion sits about 24% above the $4.1 billion fiscal 2026 average, so if commodity prices merely hold flat, fee revenue starts the year on a higher base with no new flows needed. The two largest drags on fiscal 2026 — the $2.5 million reimbursement and $3.6 million of impairments — are non-recurring by nature, and with goodwill and intangibles now at zero, there is nothing left of that kind to write down. The fintech spending that consumed $19.5 million is switched off in both geographies, debt is fully repaid (annual interest expense fell from $1.17 million to $67 thousand), and a food-business sale should add cash without removing much profit.

What does not. The AUM gain is a commodity-price effect management itself attributes to Middle East and Eastern European geopolitics — the same mechanism reverses if those prices fall, and it would take a roughly 30% AUM decline to give back the entire fiscal 2026 fee increase. Corporate overhead of about $4.2 million excluding the write-down has not been addressed in any disclosed way and remains larger than what any operating business except USCF produces. Marygold UK still loses money on $0.8 million of revenue and $63.1 million of AUM with its product withdrawn and a senior departure behind it; nothing in the filing explains what that business becomes now. And $2.9 million of cash against a $2.3 million annual operating burn is a thin buffer, even with $7.8 million of liquid investments behind it and no debt.

The practical question for fiscal 2027 is whether management does to the corporate cost line what it has now done to the fintech spend. The excluding-one-offs breakeven above is the realistic baseline, and closing the gap between that and an actual profit is roughly a $4 million problem — the size of the holding-company overhead — not a revenue problem. USCF, on its own, is a viable asset-management business; the question is how much of it reaches shareholders after the structure above it takes its share.

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Source: The Marygold Companies, Inc. Form 10-K for the fiscal year ended June 30, 2026, filed with the SEC on September 18, 2026 (accession number 0001493152-26-043341). Audited by BPM LLP, San Francisco, CA. All dollar figures are as reported in the filing.