DEF: Marygold Companies Sets 2025 Annual Meeting Agenda

The Marygold Companies, Inc. announced its 2025 Annual Meeting of Stockholders to be held on November 7, 2025, focusing on director elections and auditor ratification.

Summary

• The Marygold Companies, Inc. will hold its 2025 Annual Meeting of Stockholders on Friday, November 7, 2025, at 12:00 p.m. Pacific Time, at 1850 Mt. Diablo Blvd., Suite 640, Walnut Creek, California.
• Stockholders will vote on two main proposals: the election of eight (8) directors to the Board of Directors and the ratification of BPM, LLP as the company's independent registered public accounting firm for the fiscal year ending June 30, 2026.
• The Record Date for determining stockholders entitled to vote is September 8, 2025.
• The company is a 'controlled company' as Nicholas D. Gerber and Scott Schoenberger beneficially own approximately 54.3% of the total voting power, exempting it from certain NYSE American corporate governance requirements.
• The company reported a net loss of $(6,213) thousand for fiscal year 2025, compared to a net loss of $(4,069) thousand in 2024 and net income of $1,165 thousand in 2023.
• Total Shareholder Return (TSR) based on an initial $100 investment deteriorated to $38.95 in 2025 from $75.00 in 2024 and $70.00 in 2022.
• Increased losses are attributed to significant investments in the development of its Fintech app, with the US Fintech app now paused, though the UK Fintech app is still being pursued.
• The company completed the sale of its wholly-owned Canadian subsidiary, Brigadier Security Systems (2000) Ltd., to SKCAL LLC, an entity whose president, Scott Schoenberger, is also a director and beneficial owner of the company, for a total consideration of $2.3 million.
• Several legal proceedings, including class action and derivative lawsuits, are ongoing against USCF LLC, USO, and individual defendants, including Nicholas D. Gerber, related to disclosures during extraordinary oil market conditions in 2020.

Sentiment

Score: 3

Explanation: The sentiment is negative due to significant and increasing net losses, a deteriorating Total Shareholder Return over the past four years, and ongoing material legal proceedings. The pause of the US Fintech app, a key strategic investment, further contributes to the negative outlook. While there was a subsidiary sale, the overall financial performance and legal risks outweigh this positive.

Positives

• The Board of Directors recommends voting FOR all director nominees and FOR the ratification of BPM, LLP as the independent registered public accounting firm.
• The Audit Committee determined BPM LLP is well qualified and has served as the independent registered public accounting firm since fiscal year 2017.
• The company successfully sold its Canadian subsidiary, Brigadier Security Systems, for $2.3 million, which was reviewed and approved by the Audit Committee and negotiated on an arm's length basis.
• The company has adopted a compensation recoupment (clawback) policy in accordance with NYSE listing standards.
• Directors and executive officers are prohibited from pledging shares of company stock as collateral or entering into derivative transactions in company shares.

Negatives

• The company reported an increased net loss of $(6,213) thousand for fiscal year 2025, worsening from $(4,069) thousand in 2024 and a profit of $1,165 thousand in 2023.
• Total Shareholder Return (TSR) has deteriorated over the past four years, with an initial $100 investment valued at $38.95 in 2025.
• Increased losses are primarily driven by significant investments in the development of the Fintech app, with the US Fintech app now paused.
• The company is involved in multiple ongoing legal proceedings, including class action and derivative lawsuits, related to its USCF LLC subsidiary and the United States Oil Fund, LP (USO).

Risks

• Forward-looking statements involve risks, uncertainties, and other factors that may cause actual results to be materially different from expressed or implied information.
• The company is a defendant in several legal proceedings, including the 'In re: United States Oil Fund, LP Securities Litigation' class action and two derivative actions ('Mehan Action' and 'In re United States Oil Fund, LP Derivative Litigation'), which allege securities law violations and breaches of fiduciary duty related to USO's disclosures during the 2020 oil market crisis.
• As a 'controlled company,' it is exempt from certain NYSE American rules requiring a majority of independent directors and fully independent compensation and nominating committees, which could impact corporate governance oversight.

Future Outlook

The company is continuing to pursue its Fintech app in the United Kingdom, despite pausing the US Fintech app development. Management anticipates that subsequent events and developments will cause its views to change, but undertakes no obligation to publicly update forward-looking statements except as required by U.S. federal securities laws.

Management Comments

• "We intend to mail the Notice of Internet Availability of Proxy Materials to you beginning on or about September 23, 2025."
• "We do not know of any business to be considered at the Annual Meeting other than the proposals described in this Proxy Statement."
• "We cannot assure you that the forward-looking statements in this proxy statement will prove to be accurate. Furthermore, if the forward-looking statements prove to be inaccurate, the inaccuracy may be material."
• "In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified time frame, or at all."

Industry Context

The company's involvement in the financial services sector, particularly through USCF LLC and its commodity-based exchange-traded funds (like USO), places it within a highly regulated and volatile market. The ongoing litigation against USO and its management highlights the inherent risks in managing such funds, especially during periods of extreme market conditions like the 2020 oil price war and COVID-19 pandemic. The company's strategic shift to pause its US Fintech app development while continuing in the UK suggests a re-evaluation of market opportunities and resource allocation within the competitive fintech landscape.

Comparison to Industry Standards

• As a Smaller Reporting Company, the company is not required to disclose peer group performance or a company-selected performance measure and has elected not to do so for this filing.

Corporate Governance

Legal Proceedings

• In re: United States Oil Fund, LP Securities Litigation (Lucas Class Action): A putative class action filed on June 19, 2020, consolidated with two other actions, alleging claims under the Securities Act of 1933 and Securities Exchange Act of 1934. The amended complaint challenges statements in registration statements and public statements from February to April 2020 concerning extraordinary market conditions (COVID-19 pandemic, Saudi Arabia-Russia oil price war) and attendant risks. It seeks compensatory damages, costs, and attorneys' fees. Defendants include USCF LLC, USO, and several individuals, including Nicholas D. Gerber. The defendants intend to vigorously contest these claims.
• Mehan Action: A derivative action filed on August 10, 2020, on behalf of nominal defendant USO, against USCF and individuals including Nicholas D. Gerber. It alleges breaches of fiduciary duties and failure to act in good faith regarding a March 19, 2020 registration statement and disclosures related to oil market conditions. The complaint seeks compensatory damages, restitution, equitable relief, attorneys' fees, and costs. All proceedings are stayed pending disposition of motions to dismiss in the Lucas Class Action. The defendants intend to vigorously contest these claims.
• In re United States Oil Fund, LP Derivative Litigation (Cantrell and AML Actions): Two separate derivative actions filed on August 27, 2020, on behalf of nominal defendant USO, against USCF and individuals including Nicholas D. Gerber. These actions allege violations of Sections 10(b), 20(a), and 21D of the Securities Exchange Act, Rule 10b-5, and common law claims (breach of fiduciary duties, unjust enrichment, abuse of control, gross mismanagement, waste of corporate assets) stemming from USO's disclosures and defendants' alleged actions during the 2020 oil market conditions. The complaints seek compensatory damages, restitution, equitable relief, attorneys' fees, and costs. These actions are consolidated and stayed pending disposition of motions to dismiss in the Lucas Class Action. The defendants intend to vigorously contest these claims.

Related Party Transactions

• Sale of Brigadier Security Systems (2000) Ltd.: On June 19, 2025, the company sold 100% of its Canadian subsidiary, Brigadier Security Systems (2000) Ltd., to SKCAL LLC for a total consideration of $2.3 million. SKCAL LLC's president, Scott Schoenberger, is a director of the company and a beneficial owner of approximately 10.9% of the company's outstanding voting stock. The transaction was reviewed and approved by the Audit Committee, consisting entirely of independent directors, and negotiated on an arm's length basis.
• Voting Agreement: A voting agreement dated January 27, 2015, between the Gerber Trust and Schoenberger Trust, obligates them to vote all their shares (representing 54.3% of total voting power) to elect Nicholas D. Gerber and Scott Schoenberger or their designees, and five other mutually agreed designees, to the Board.

Stakeholder Impact

• Shareholders: Will vote on key governance matters (director elections, auditor ratification). Are directly impacted by the deteriorating Total Shareholder Return and increasing net losses. The 'controlled company' status may limit the influence of minority shareholders on certain governance aspects. Ongoing litigation poses a risk to shareholder value.
• Management/Executives: Executive compensation remained stable, with a slight increase for the COO due to increased responsibilities. The clawback policy introduces a new layer of accountability for incentive compensation. Nicholas D. Gerber and Scott Schoenberger, as controlling shareholders, maintain significant influence over the company's direction and board composition.
• Auditors (BPM LLP): Their appointment for fiscal year 2026 is subject to shareholder ratification, reinforcing their role in ensuring financial reporting integrity.

Next Steps

• Stockholders are encouraged to vote on the election of directors and the ratification of the independent registered public accounting firm prior to the Annual Meeting on November 7, 2025.
• The company will announce preliminary voting results at the Annual Meeting and report final results in a Current Report on Form 8-K within four business days after the meeting.
• The Audit Committee will consider the results of the auditor ratification vote in connection with its selection of auditors for the balance of fiscal 2026.
• The company will continue to pursue its Fintech app in the United Kingdom.
• Stockholders wishing to submit proposals or director nominations for the 2026 annual meeting must adhere to specific deadlines: May 26, 2026, for proposals and between July 10, 2026, and August 8, 2026, for director nominations.

Key Dates

Recommendation

The recommendation is 'hold' due to a mixed financial and operational outlook. While the company faces significant challenges, including increasing net losses, a deteriorating Total Shareholder Return, and ongoing material litigation related to its USCF LLC subsidiary, there are also mitigating factors. The successful sale of a non-core subsidiary for $2.3 million provides some capital, and the company is continuing to pursue its Fintech app in the UK, indicating ongoing strategic efforts. The established corporate governance framework, including a clawback policy and prohibition on pledging/hedging, suggests a commitment to sound practices. However, the 'controlled company' status and the pause of the US Fintech app raise concerns about future growth and independent oversight. A 'hold' position allows investors to monitor the outcomes of the litigation, the progress of the UK Fintech initiative, and any improvements in financial performance before making a more definitive investment decision.

Keywords

Proxy Statement, Annual Meeting, Director Election, Auditor Ratification, Corporate Governance, SEC Filing, Shareholder Vote, Controlled Company, Legal Proceedings, Fintech, USO, The Marygold Companies, Financial Reporting, Executive Compensation