What changed in this filing

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Item 1. Financial Statements

2024-05-09 compared with 2024-02-08 · 302 added, 223 removed, 1327 unchanged (28% of the section changed)

1 unchanged sentence

Index to the Condensed Consolidated Financial Statements and Notes thereof

Condensed Consolidated Balance Sheets as of December 31, 2023 and June 30, 2023

Condensed Consolidated Statements of Income for the Three and Six Months Ended December 31, 2023 and 2022

Condensed Consolidated Statements of Stockholders' Equity for the Three and Six Months Ended December 31, 2023 and 2022

Condensed Consolidated Statements of Cash Flows for the Six Months Ended December 31, 2023 and 2022

Condensed Consolidated Balance Sheets as of March 31, 2024 and June 30, 2023

Condensed Consolidated Statements of Income for the Three and Nine Months Ended March 31, 2024 and 2023

Condensed Consolidated Statements of Stockholders' Equity for the Three and Nine Months Ended March 31, 2024 and 2023

Condensed Consolidated Statements of Cash Flows for the Nine Months Ended March 31, 2024 and 2023

Notes to the Condensed Consolidated Financial Statements

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(in thousands, except for share data)

December 31, 2023

March 31, 2024

June 30, 2023

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Lines of credit

Notes payable

Deferred tax liabilities

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issued and outstanding:

none as of December 31, 2023 or June 30, 2023

none as of March 31, 2024 or June 30, 2023

Common stock, par value $ 0.01 ;

40,000,000 shares authorized;

23,848,248 and 23,672,122 shares issued and 22,901,153 and 23,336,387 shares outstanding as of December 31, 2023 and June 30, 2023, respectively

Treasury stock, 947,095 and 335,735 shares at cost as of December 31, 2023 and June 30, 2023, respectively

23,893,516 and 23,672,122 shares issued and 22,881,480 and 23,336,387 shares outstanding as of March 31, 2024 and June 30, 2023, respectively

Treasury stock, 1,012,036 and 335,735 shares at cost as of March 31, 2024 and June 30, 2023, respectively

Additional paid-in capital

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The following table presents the assets and liabilities of this VIE, which are included in the condensed consolidated balance sheets above.

Due to the repayment of the AMCF Notes in December 2023, the VIE did not have assets or liabilities as of December 31, 2023.

Due to the repayment of the AMCF Notes in December 2023, the VIE did not have assets or liabilities as of March 31, 2024.

When outstanding, the holders of the AMCF Notes had a first priority security interest in the assets as shown in the table below, which were in excess of the AMCF Notes' aggregate principal amount.

1 unchanged sentence

(See Note 15 .)

December 31, 2023

March 31, 2024

June 30, 2023

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(in thousands, except for share and per share data;

Three Months Ended December 31,

Six Months Ended December 31,

Three Months Ended March 31,

Nine Months Ended March 31,

Cost of sales

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Interest expense

Earnings from equity method investments

Earnings (losses) from equity method investments

Other income, net

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Net settlement of share-based awards

Dividends declared ($ 1.00 per common share)

Dividends declared ($ 0.20 per common share)

Dividends declared

Balance, September 30, 2022

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Balance, December 31, 2022

Share-based compensation

Cumulative translation adjustment, net of tax

Exercise of share-based awards

Repurchases of common stock

Dividends declared

Balance, March 31, 2023

Balance, June 30, 2023

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Repurchases of common stock

Dividends declared ($ 1.00 per common share)

Dividends declared ($ 0.20 per common share)

Dividends declared

Balance, September 30, 2023

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Balance, December 31, 2023

Share-based compensation

Common stock issued for acquisition

Noncontrolling ownership interest contribution

Cumulative translation adjustment, net of tax

Net settlement of share-based awards

Repurchases of common stock

Dividends declared

Balance, March 31, 2024

See accompanying Notes to the Condensed Consolidated Financial Statements

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(in thousands;

Six Months Ended December 31,

Nine Months Ended March 31,

Cash flows from operating activities:

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Secured loans receivable

Secured loans made to affiliates

Derivative assets

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Income tax payable

Net cash used in operating activities

Net cash (used in) provided by operating activities

Cash flows from investing activities:

Capital expenditures for property, plant, and equipment

Acquisition of a business, net of cash acquired

Purchase of long-term investments

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Payments for tax withholding related to net settlement of share-based awards

Net cash provided by financing activities

Net cash provided by (used in) financing activities

Net (decrease) increase in cash

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Declared distributions and unpaid dividends

Property, plant, and equipment acquired on account

Interest added to principal of secured loans

Common stock issued for acquisitions

Loss on reissuance of treasury stock

Addition of right of use assets under lease obligations

Consideration payable for acquisition of business

See accompanying Notes to the Condensed Consolidated Financial Statements

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Wholesale Sales & Ancillary Services

The Company operates its Wholesale Sales & Ancillary Services segment directly and through its wholly-owned subsidiaries, A-Mark Trading AG (“AMTAG”), Transcontinental Depository Services, LLC ("TDS" or “Storage”), A-M Global Logistics, LLC (“AMGL” or "Logistics"), and AM&ST Associates, LLC ("AMST" or the "Silver Towne Mint").

The Company operates its Wholesale Sales & Ancillary Services segment directly and through its wholly-owned subsidiaries, A-Mark Trading AG (“AMTAG”), Transcontinental Depository Services, LLC ("TDS" or “Storage”), A-M Global Logistics, LLC (“AMGL” or "Logistics"), AM&ST Associates, LLC ("AMST" or the "Silver Towne Mint"), and AM/LPM Ventures, LLC, which we formed in February 2024 to acquire LPM Group Limited ("LPM").

The Wholesale Sales & Ancillary Services segment operates as a full-service precious metals company.

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Our Coin and Bar unit deals in over 1,800 coin and bar products in a variety of weights, shapes, and sizes for distribution to dealers and other qualified purchasers.

We have a marketing support office in Vienna, Austria, and a trading center in El Segundo, California.

We have a marketing support office in Vienna, Austria, a numismatics showroom in Hong Kong, and a trading center in El Segundo, California.

The trading center, for buying and selling precious metals, is available to receive orders 24 hours every day, even when many major world commodity markets are closed.

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Our Silver Towne Mint operations allow us to provide greater product selection to our customers as well as to gain increased access to silver during volatile market environments, which have historically created higher demand for precious metals products.

On February 26, 2024 (the "Acquisition Date"), through our wholly-owned subsidiary AM/LPM Ventures, LLC, we acquired 100 % of the issued and outstanding equity interests of LPM, a precious metals dealer with primary operations in Asia, for total upfront consideration of $ 41.4 million, consisting of $ 37.9 million in cash and 139,455 shares of A-Mark common stock that had a fair value of $ 3.5 million on the date of transfer.

On the Acquisition Date, we entered into a number of related agreements, including (i) a consulting agreement with Cerberus Limited to provide consulting services to LPM through 2028, subject to earlier termination under certain circumstances, and (ii) a lock-up agreement with the selling stockholder of LPM that restricts the sale or transfer of the A-Mark common stock for 270 days after the Acquisition Date, subject to customary exceptions.

Effective as of the Acquisition Date, Aquila Holding LLC, a company affiliated with Cerberus Limited, purchased a 5 % interest in AM/LPM Ventures, LLC for $ 2.1 million.

We incurred $ 2.8 million of transaction costs related to the acquisition of LPM, which are shown as a component of selling, general, and administrative expenses in our condensed consolidated statements of income.

The financial results of LPM were included in our consolidated financial statements as of the Acquisition Date;

these amounts were not material to our consolidated financial statements.

We may be required to pay contingent consideration up to $ 37.5 million in cash in connection with the acquisition of LPM if certain earnings before interest, taxes, depreciation, and amortization ("EBITDA") targets are met for 2024, 2025, and 2026.

As of the Acquisition Date, the fair value of this contingent consideration was $ 2.8 million.

The material factors that may impact the fair value of the contingent consideration, and therefore, this liability, are the probabilities and timing of achieving the related targets, which are estimated at each reporting date with changes reflected as selling, general, and administrative expense.

As of March 31, 2024 , the fair value of the contingent consideration remained at $ 2.8 million, $ 0.4 million of which was classified as accrued liabilities and the remainder as other liabilities on our consolidated balance sheet.

Assets acquired and liabilities assumed were recorded based on valuations derived from estimated fair value assessment and assumptions used by us.

While we believe that our estimates and assumptions underlying the valuations are reasonable, different estimates or assumptions could result in different valuations assigned to the individual assets acquired and liabilities assumed, and the resulting amount of goodwill.

The following table summarizes the purchase price recorded and fair values of assets acquired and liabilities assumed through our acquisition of LPM as of the Acquisition Date (in thousands):

Contingent consideration

Total purchase price

Receivables, net

Other current assets

Property, plant, and equipment, net

Existing customer relationships

Other long-term assets

Total identifiable assets acquired

Accounts payable and other payables

Deferred revenue and other advances

Accrued liabilities

Other liabilities

Net identifiable assets acquired

Total purchase price

Based on the guidance provided in Accounting Standards Codification ("ASC") 805, Business Combinations, we accounted for the acquisition of LPM as a business combination and determined that (i) LPM was a business which combines inputs and processes to create outputs, and (ii) substantially all of the fair value of gross assets acquired was not concentrated in a single identifiable asset or group of similar identifiable assets.

Our purchase price allocation for the acquisition of LPM is preliminary and subject to revision as additional information about fair value of assets and liabilities becomes available, primarily related to information pertaining to working capital and tax balances.

Additional information that existed as of the acquisition date but at the time was unknown to us may become known to us during the remainder of the remeasurement period, a period not to exceed 12 months from the Acquisition Date.

Pro forma financial information has not been provided for our acquisition of LPM as it was not deemed to be material to these consolidated financial statements.

We measured the identifiable assets and liabilities assumed at their acquisition date fair values separately from goodwill.

Through the acquisition of LPM, we acquired intangible assets representing existing customer relationships and trade names.

The existing customer relationships acquired were determined to have a weig hted-average useful life of 7.2 years.

The fair value of the customer relationships was estimated using an attrition methodology which considers the estimated future discounted cash flows to be derived from the existing customers as of the Acquisition Date.

The fair value of the trade names was estimated using a relief-from-royalty approach.

Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired.

The acquisition of LPM resulted in the recognition of $ 20.0 million of goodwill, which we believe relates primarily to the resulting synergies of utilizing A-Mark's established integrated precious metals platform with LPM's underlying customer base and our ability to expand operations within the region.

The goodwill created as a result of the acquisition of LPM is deductible for tax purposes.

The following unaudited pro forma consolidated results of operations for the three and nine months ended March 31, 2024 and 2023 assumes that the acquisition of LPM occurred as of July 1, 2022 (in thousands):

Three Months Ended March 31,

Nine Months Ended March 31,

The above pro forma supplemental information does not purport to be indicative of what the Company's operations would have been had these transactions occurred on July 1, 2022, and should not be considered indicative of future operating results.

The Company believes the assumptions used provide a reasonable basis for reflecting the significant pro forma effects directly attributable to the acquisition of LPM.

The unaudited pro forma information accounts for:

(i) the elimination of transactions between the Company and LPM, and (ii) adjustments to the amortization expense resulting from the estimated fair value of the acquired finite-lived intangible assets, acquisition costs, consulting fees, share-based compensation expense, and the resulting impact to the income tax provision.

Direct-to- Consumer

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(“Goldline”).

As of December 31, 2023 , JMB had six wholly-owned subsidiaries:

As of March 31, 2024 , JMB had six wholly-owned subsidiaries:

Buy Gold and Silver Corp.

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JMB is a leading e-commerce retailer providing access to a broad array of gold, silver, copper, platinum, and palladium products through its websites.

As of December 31, 2023, JMB operated eight separately branded, company-owned websites targeting specific niches within the precious metals retail market, including JMBullion.com, ProvidentMetals.com, Silver.com, BGASC.com, CyberMetals.com, BullionMax.com, GoldPrice.org, and SilverPrice.org.

As of March 31, 2024, JMB operated nine separately branded, company-owned websites targeting specific niches within the precious metals retail market, including JMBullion.com, ProvidentMetals.com, Silver.com, BGASC.com, CyberMetals.com, BullionMax.com, Gold.com, GoldPrice.org, and SilverPrice.org.

Typically, JMB offers approximately 4,900 different products during a fiscal year, measured by stock keeping units or SKUs, on its websites.

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In addition to A-Mark, our consolidated financial statements include the accounts of:

AMTAG, TDS, AMGL, AMST, JMB, Goldline, and CFC.

AMTAG, TDS, AMGL, AMST, AM/LPM Ventures, JMB, Goldline, and CFC.

Intercompany accounts and transactions are eliminated.

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GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the condensed consolidated financial statements, and the reported amounts of revenue and expenses during the reporting periods.

These estimates include, among others, determination of fair value (primarily, with respect to precious metal inventory, derivatives, certain financial instruments, and certain investments), impairment assessments of property, plant and equipment and intangible assets, valuation allowance determination on deferred tax assets, determining the incremental borrowing rate for calculating right of use assets and lease liabilities, and revenue recognition judgments.

These estimates include, among others, determination of fair value (primarily, with respect to precious metal inventory, derivatives, assets and liabilities acquired in business combinations, certain financial instruments, and certain investments);

impairment assessments of property, plant and equipment, long-term investments, and intangible assets;

valuation allowance determination on deferred tax assets;

determining the incremental borrowing rate for calculating right of use assets and lease liabilities;

and revenue recognition judgments.

Actual results could materially differ from these estimates.

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These interim condensed consolidated financial statements are unaudited and, in the opinion of management, include all adjustments (consisting of normal recurring adjustments and accruals) necessary to present fairly the condensed consolidated balance sheets, condensed consolidated statements of income, condensed consolidated statements of stockholders’ equity, and condensed consolidated statements of cash flows for the periods presented in accordance with U.S.

Operating results for the three and six months ended December 31, 2023 are not necessarily indicative of the results that may be expected for the fiscal year ending June 30, 2024 or for any other interim period during such fiscal year.

Operating results for the three and nine months ended March 31, 2024 are not necessarily indicative of the results that may be expected for the fiscal year ending June 30, 2024 or for any other interim period during such fiscal year.

Certain information and footnote disclosures normally included in annual consolidated financial statements prepared in accordance with U.S.

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Fair Value Measurement

The Accounting Standards Codification ("ASC") Fair Value Measurements and Disclosures Topic 820 ("ASC 820") creates a single definition of fair value for financial reporting.

The Fair Value Measurements and Disclosures Topic 820 of the ASC ("ASC 820") creates a single definition of fair value for financial reporting.

The rules associated with ASC 820 state that valuation techniques consistent with the market approach, income approach, and/or cost approach should be used to estimate fair value.

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All remeasurement gains and losses are recorded in the current period net income.

The Company's wholly-owned foreign subsidiary, AMTAG, also generates remeasurement gains and losses.

AMTAG functions as the Company’s international sales and marketing support and has a functional currency of USD, but maintains its books of record in the European Union Euro.

The Company has two wholly-owned foreign subsidiaries that generate remeasurement gains and losses:

AMTAG and LPM.

AMTAG functions as the Company’s international sales and marketing support and LPM functions as the Company's Asia headquarters.

Because both entities have a functional currency of USD, remeasurement gains and losses from these foreign subsidiaries are recorded in the current period net income.

For the Company’s foreign-based equity method investments, the proportionate share of the investee’s income is translated into USD at the average exchange rate for the period and the investment is translated using the exchange rate as of the end of the reporting period.

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Net cash paid to acquire a business is classified as investing activities on the accompanying condensed consolidated statements of cash flows.

In circumstances where an acquisition involves a contingent consideration arrangement that meets the definition of a liability under ASC Topic 480, Distinguishing Liabilities from Equity , we recognize a liability equal to the fair value of the expected contingent payments as of the acquisition date.

We remeasure this liability each reporting period, with the resulting changes recorded as selling, general, and administrative expenses.

The assumptions used in estimating fair value of contingent consideration liabilities require significant judgment;

the use of different assumptions and judgments could result in a materially different estimate of fair value which may have a material impact on our results from operations and financial position.

Variable Interest Entity

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AMCF is required to maintain separate books and records.

The assets and liabilities of this VIE as of December 31, 2023 and June 30, 2023 are indicated on the table that follows the condensed consolidated balance sheets.

AMCF had no assets or liabilities as of December 31, 2023, and is currently inactive.

The assets and liabilities of this VIE as of March 31, 2024 and June 30, 2023 are indicated on the table that follows the condensed consolidated balance sheets.

AMCF had no assets or liabilities as of March 31, 2024, and is currently inactive.

AMCF is a VIE because its initial equity investment may be insufficient to maintain its ongoing collateral requirements without additional financial support from the Company.

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The Company considers all highly liquid investments with original maturities of three months or less, when purchased, to be cash equivalents.

The Company did not have any cash equivalents as of December 31, 2023 and June 30, 2023 .

The Company did not have any cash equivalents as of March 31, 2024 and June 30, 2023 .

Allowance for Credit Losses

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Finite-lived intangible assets consist primarily of customer relationships, non-compete agreements, and employment contracts.

Existing customer relationships intangible assets are amortized in a manner reflecting the pattern in which the economic benefits of the assets are consumed.

Certain existing customer relationships intangible assets are amortized in a non-linear manner which best reflects our estimate of the pattern in which the economic benefits of the assets are consumed.

All other intangible assets subject to amortization are amortized using the straight-line method over their useful lives, which are estimated to be one year to fifteen years .

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Goodwill is recorded when the purchase price paid for an acquisition exceeds the estimated fair value of the net identified tangible and intangible assets acquired.

Goodwill and other indefinite-lived intangibles (such as trade names and trademarks) are not subject to amortization, but are evaluated for impairment at least annually.

However, for tax purposes, goodwill acquired in connection with a taxable asset acquisition is generally deductible.

Goodwill and other indefinite-lived intangibles (such as trade names, trademarks, and domain names) are not subject to amortization, but are evaluated for impairment at least annually.

For tax purposes, goodwill acquired in connection with a taxable asset acquisition is generally deductible.

The Company evaluates its goodwill and other indefinite-lived intangibles for impairment in the fourth quarter of the fiscal year (or more frequently if indicators of potential impairment exist) in accordance with ASC 350.

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Evaluation of indefinite-lived intangible assets for impairment

The Company evaluates its indefinite-lived intangible assets (i.e., trade names and trademarks) for impairment.

The Company evaluates its indefinite-lived intangible assets (i.e., trade names, trademarks, and domain names) for impairment.

In assessing its indefinite-lived intangible assets for impairment, the Company has the option to first perform a qualitative assessment to determine whether events or circumstances exist that lead to a determination that it is unlikely that the fair value of the indefinite-lived intangible asset is less than its carrying amount.

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Additionally, the Company performs an ongoing evaluation of the investments with which the Company has variable interests to determine if any of these entities are VIEs that are required to be consolidated.

None of the Company’s long-term investments were VIEs as of December 31, 2023 and June 30, 2023 .

None of the Company’s long-term investments were VIEs as of March 31, 2024 and June 30, 2023 .

Other Long-Term Assets

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to bring the Company's ownership interest up to 75.0 %.

As of December 31, 2023 and June 30, 2023, the fair value of the option was $ 5.3 million and $ 5.3 million, respectively.

As of December 31, 2023 , this option remained unexercised.

As of March 31, 2024 and June 30, 2023, the fair value of the option was $ 5.3 million and $ 5.3 million, respectively.

As of March 31, 2024 , this option remained unexercised.

Accumulated Other Comprehensive Income

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The direct costs incurred to acquire treasury stock are treated like stock issue costs and added to the cost of the treasury stock, which includes applicable fees and taxes.

There have been no reissuances of treasury stock.

Other than the shares issued to acquire LPM in February 2024 (see Note 1 ), there have been no reissuances of treasury stock.

Noncontrolling Interest

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Debt issuance costs of the Trading Credit Facility are amortized on a straight-line basis, while all other debt issuance costs are amortized using the effective interest method.

Amortization of debt issuance costs included in interest expense was $ 0.7 million and $ 0.6 million for the three months ended December 31, 2023 and 2022, respectively, and $ 1.2 million and $ 1.1 million for the six months ended December 31, 2023 and 2022, respectiv ely.

Amortization of debt issuance costs included in interest expense was $ 0.6 million and $ 0.5 million for the three months ended March 31, 2024 and 2023, respectively, and $ 1.8 million and $ 1.6 million for the nine months ended March 31, 2024 and 2023, respectiv ely.

Earnings from Equity Method Investments

The Company's proportional interest in the reported earnings from equity method investments is shown on the condensed consolidated statements of income as earnings from equity method investments.

The Company's proportional interest in the reported earnings from equity method investments is shown on the condensed consolidated statements of income as earnings (losses) from equity method investments.

Other Income, Net

The Company's other income, net is comprised of royalty and consulting income, which is recognized when earned.

The Company's other income, net is comprised of royalty and consulting income, which is recognized when earned, as well as gains on other investments.

Advertising and marketing costs consist primarily of internet advertising, online marketing, direct mail, print media, and television commercials and are expensed when incurred.

Advertising costs totaled $ 3.8 million and $ 4.2 million for the three months ended December 31, 2023 and 2022, respectively, and $ 7.8 million and $ 7.8 million for the six months ended December 31, 2023 and 2022, respectively.

Advertising costs totaled $ 3.5 million and $ 3.9 million for the three months ended March 31, 2024 and 2023, respectively, and $ 11.3 million and $ 11.6 million for the nine months ended March 31, 2024 and 2023, respectively.

Costs associated with the marketing and promotion of the Company's products are included within selling, general, and administrative expenses.

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Shipping and handling costs represent costs associated with shipping product to customers and receiving product from vendors and are included in cost of sales in the condensed consolidated statements of income.

Shipping and handling costs totaled $ 5.6 million and $ 7.0 million for the three months ended December 31, 2023 and 2022, respectively, and $ 10.8 million and $ 13.8 million for the six months ended December 31, 2023 and 2022 , respectively.

Shipping and handling costs totaled $ 5.5 million and $ 6.8 million for the three months ended March 31, 2024 and 2023, respectively, and $ 16.2 million and $ 20.6 million for the nine months ended March 31, 2024 and 2023 , respectively.

Share-Based Compensation

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A reconciliation of shares used in calculating basic and diluted earnings per common share is presented bel ow (in thousands):

Three Months Ended December 31,

Six Months Ended December 31,

Three Months Ended March 31,

Nine Months Ended March 31,

Basic weighted-average shares of common stock outstanding

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Diluted weighted-average shares outstanding

The anti-dilutive shares excluded from the table above were 41,082 and 16,168 for the three months ended December 31, 2023 and 2022 , respectively, and 25,541 and 29,538 for the six months ended December 31, 2023 and 2022, respectively.

Actual common shares outstanding totaled 22,901,153 and 23,529,971 as of December 31, 2023 and 2022 , respectively.

Recent Accounting Pronouncements and Auditing Standards

The anti-dilutive shares excluded from the table above were 30,220 and 10,000 for the three months ended March 31, 2024 and 2023 , respectively, and 27,101 and 23,025 for the nine months ended March 31, 2024 and 2023, respectively.

Actual common shares outstanding totaled 22,881,480 and 23,260,606 as of March 31, 2024 and 2023 , respectively.

Recent Accounting Pronouncements

From time to time, the Financial Accounting Standards Board ("FASB") or other standards setting bodies issue new accounting pronouncements.

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Lastly, the MCS model assumed an EBITDA risk premium of 12.4 %.

Acquisition-related Contingent Consideration .

The contingent consideration liability related to our acquisition of LPM is measured at fair value at each reporting period using a MCS model with Level 3 unobservable inputs including estimated future cash flows generated by LPM, discount rates, and earnings volatility.

See Note 1 for more further information regarding our contingent consideration.

The following tables present information about the Company's assets and liabilities measured at fair value on a recurring basis, aggregated by each fair value hierarchy level (in thousands):

December 31, 2023

March 31, 2024

Quoted Price in Active Markets for Identical Instruments

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Derivative assets — open sale and purchase commitments, net

Derivative assets — futures contracts

Derivative assets — forward contracts

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Derivative liabilities — forward contracts

Acquisition-related contingent consideration

Total liabilities, valued at fair value

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These assets are not measured at fair value on an ongoing basis, but are subject to fair value adjustments only under certain circumstances.

These include (i) investments in private companies when there are identifiable events or changes in circumstances that may have a significant adverse impact on the fair value of these assets, (ii) equity method investments that are remeasured to the acquisition-date fair value upon the Company obtaining a controlling interest in the investee during a step acquisition, (iii) property, plant, and equipment and definite-lived intangibles, (iv) digital assets, (v) goodwill, and (vi) indefinite-lived intangibles, all of which are written down to fair value when they are held for sale or determined to be impaired.

These include (i) investments in private companies when there are identifiable events or changes in circumstances that may have a significant adverse impact on the fair value of these assets, (ii) equity method investments that are remeasured to the acquisition-date fair value upon the Company obtaining a controlling interest in the investee during a step acquisition, (iii) property, plant, and equipment and definite-lived intangibles, (iv) goodwill, and (v) indefinite-lived intangibles, all of which are written down to fair value when they are held for sale or determined to be impaired.

Our non-recurring valuations use significant unobservable inputs and significant judgments and therefore fall under Level 3 of the fair value hierarchy.

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Receivables, net consisted of the following (in thousands):

December 31, 2023

March 31, 2024

June 30, 2023

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Below is a summary of the carrying value of our secured loans (in thousands):

December 31, 2023

March 31, 2024

June 30, 2023

Secured loans originated

Secured loans originated - with a related party

Secured loans acquired

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These loans are fully secured by the customer's assets, which predominantly include bullion, numismatic, and semi-numismatic material, and are typically held in safekeeping by the Company.

See Note 14 for further information regarding our secured loans made to related parties.

Secured Loans - Acquired :

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The seller of the loan portfolio generally retains the responsibility for the servicing and administration of the loans.

As of December 31, 2023 and June 30, 2023, our secured loans carried weighted-average effective interest rates of 10.4 % and 10.4 % , respectively, and mature in periods ranging typically from on-demand to one year.

As of March 31, 2024 and June 30, 2023, our secured loans carried weighted-average effective interest rates of 10.4 % and 10.4 % , respectively, and mature in periods ranging typically from on-demand to one year.

The secured loans that the Company generates with its active customers are reflected as an operating activity on the condensed consolidated statements of cash flows.

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The Company's secured loans by portfolio class, which align with internal management reporting, were as follows (in thousands):

December 31, 2023

March 31, 2024

June 30, 2023

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Below is summary of aggregate outstanding secured loan balances bifurcated into (i) loans with an LTV ratio of less than 75% and (ii) loans with an LTV ratio of 75% or more (in thousands):

December 31, 2023

March 31, 2024

June 30, 2023

1 unchanged sentence

Loan-to-value of 75% or more

The Company had no loans with an LTV ratio in excess of 100% as of December 31, 2023 and June 30, 2023.

The Company had no loans with an LTV ratio in excess of 100% as of March 31, 2024 and June 30, 2023.

Non-Performing Loans/Impaired Loans

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In the event a loan were to become non-performing, the Company would determine a reserve to reduce the carrying balance to its estimated net realizable value.

As of December 31, 2023 and June 30, 2023, the Company had no allowance for secured loan losses or loans classified as non-performing.

As of March 31, 2024 and June 30, 2023, the Company had no allowance for secured loan losses or loans classified as non-performing.

A loan is considered impaired if it is probable, based on current information and events, that the Company will be unable to collect all amounts due according to the contractual terms of the loan.

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Cash receipts on impaired loans are recorded first against the principal and then to any unrecognized interest income.

For the three and six months ended December 31, 2023 and 2022, the Company incurred no loan impairment costs and no loans were placed on a non-accrual status.

For the three and nine months ended March 31, 2024 and 2023, the Company incurred no loan impairment costs and no loans were placed on a non-accrual status.

Our inventory consists of the precious metals that the Company has physically received, and inventory held by third-parties, which, at the Company's option, it may or may not receive.

The following table summarizes the components of our inventory (in thousands):

December 31, 2023

March 31, 2024

June 30, 2023

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Inventory held for sale represents precious metals, excluding commemorative coin inventory, that have been received by the Company and are not subject to repurchase by or consignment arrangements with third parties, borrowed precious metals, or product financing arrangements.

As of December 31, 2023 and June 30, 2023, inventory held for sale totaled $ 343.5 million and $ 437.7 million , respectively.

As of March 31, 2024 and June 30, 2023, inventory held for sale totaled $ 337.3 million and $ 437.7 million , respectively.

Repurchase Arrangements with Customers .

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Upon termination, the customer’s rights to repurchase any remaining inventory is forfeited.

As of December 31, 2023 and June 30, 2023, included within inventories is $ 220.4 million and $ 181.8 million , respectively, of precious metals products subject to repurchase arrangements with customers.

As of March 31, 2024 and June 30, 2023, included within inventories is $ 209.6 million and $ 181.8 million , respectively, of precious metals products subject to repurchase arrangements with customers.

Consignment Arrangements with Customers .

The Company periodically loans metals to customers on a short-term consignment basis.

Inventory loaned under consignment arrangements to customers as of December 31, 2023 and June 30, 2023 totaled $ 2.9 million and $ 3.8 million , respectively.

Inventory loaned under consignment arrangements to customers as of March 31, 2024 and June 30, 2023 totaled $ 2.6 million and $ 3.8 million , respectively.

Such transactions are recorded as sales and are removed from the Company's inventory at the time the customer elects to price and purchase the precious metals.

2 unchanged sentences

The value of commemorative coins is not subject to the same level of volatility as bullion coins because our commemorative coins typically carry a substantially higher premium over the spot metal price than bullion coins.

Our commemorative coins are not hedged and totaled $ 0.7 million and $ 0.9 million as of December 31, 2023 and June 30, 2023, respectively.

Our commemorative coins are not hedged and totaled $ 3.7 million and $ 0.9 million as of March 31, 2024 and June 30, 2023, respectively.

Borrowed Precious Metals .

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Amounts due under these arrangements require delivery either in the form of precious metals or cash.

The Company's inventory included borrowed precious metals with market values totaling $ 24.2 million and $ 21.6 million as of December 31, 2023 and June 30, 2023, respectively, with a corresponding offsetting obligation reflected as liabilities on borrowed metals on the condensed consolidated balance sheets.

The Company's inventory included borrowed precious metals with market values totaling $ 26.2 million and $ 21.6 million as of March 31, 2024 and June 30, 2023, respectively, with a corresponding offsetting obligation reflected as liabilities on borrowed metals on the condensed consolidated balance sheets.

Product Financing Arrangements .

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Both the product financing arrangements and the underlying inventory are carried at fair value, with changes in fair value included in cost of sales in the condensed consolidated statements of income.

Such obligations totaled $ 518.6 million and $ 335.8 million as of December 31, 2023 and June 30, 2023, respectively.

Such obligations totaled $ 510.2 million and $ 335.8 million as of March 31, 2024 and June 30, 2023, respectively.

The Company mitigates market risk of its physical inventory and open commitments through commodity hedge transactions.

(See Note 12 .) As of December 31, 2023 and June 30, 2023, the unrealized gains or losses resulting from the difference between market value and cost of physical inventory were gains of $ 30.2 million and losses of $ 4.6 million , respectively.

(See Note 12 .) As of March 31, 2024 and June 30, 2023, the unrealized gains or losses resulting from the difference between market value and cost of physical inventory were gains of $ 54.5 million and losses of $ 4.6 million , respectively.

Premium Component of Inventory

The premium component, at market value, included in the inventory as of December 31, 2023 and June 30, 2023 totaled $ 34.8 million and $ 29.4 million , respectively.

The premium component, at market value, included in the inventory as of March 31, 2024 and June 30, 2023 totaled $ 36.1 million and $ 29.4 million , respectively.

Components of operating lease expense were as follows (in thousands):

Three Months Ended December 31,

Six Months Ended December 31,

Three Months Ended March 31,

Nine Months Ended March 31,

Operating lease costs

1 unchanged sentence

Short term lease costs

For the six months ended December 31, 2023, we made cash payments of $ 0.8 million for operating lease obligations.

For the nine months ended March 31, 2024, we made cash payments of $ 1.2 million for operating lease obligations.

These payments are included in operating cash flows.

As of December 31, 2023, the weighted-average remaining lease term under our capitalized operating leases was 4.3 years, while the weighted-average discount rate for our operating leases was approximately 4.9 % .

The future undiscounted cash flows for each of the next five years and thereafter and reconciliation to the lease liabilities as of December 31, 2023 for our operating leases were as follows (in thousands):

As of March 31, 2024, the weighted-average remaining lease term under our capitalized operating leases was 3.8 years, while the weighted-average discount rate for our operating leases was approximately 4.9 % .

The future undiscounted cash flows for each of the next five years and thereafter and reconciliation to the lease liabilities as of March 31, 2024 for our operating leases were as follows (in thousands):

Year ending June 30,

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Operating lease liability - long-term

(1) Represents the present value of the operating lease liabilities as of December 31, 2023 .

(1) Represents the present value of the operating lease liabilities as of March 31, 2024 .

(2) Current operating lease liabilities are presented within accrued liabilities on our condensed consolidated balance sheets.

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Property, plant, and equipment consisted of the following (in thousands):

December 31, 2023

March 31, 2024

June 30, 2023

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Property, plant, and equipment, net

Property, plant and equipment depreciation and amortization expense was $ 0.6 million and $ 0.5 million for the three months ended December 31, 2023 and 2022, respectively, and $ 1.3 million and $ 1.0 million for the six months ended December 31, 2023 and 2022, respectively.

Property, plant and equipment depreciation and amortization expense was $ 0.8 million and $ 0.6 million for the three months ended March 31, 2024 and 2023, respectively, and $ 2.0 million and $ 1.6 million for the nine months ended March 31, 2024 and 2023, respectively.

For the periods presented, depreciation and amortization expense allocable to cost of sales was not significant.

3 unchanged sentences

Goodwill and intangibles can also be established by push-down accounting.

Below is a summary of the significant transactions that generated goodwill and intangible assets of the Company:

• In connection with the Company's formation of AMST in August 2016, the Company recorded an additional $ 2.5 million and $ 4.3 million of identifiable intangible assets and goodwill, respectively;

Below is a summary of the significant transactions that generated our goodwill and intangible assets:

• In connection with the Company's formation of AMST in August 2016, the Company recorded $ 2.5 million and $ 4.3 million of identifiable intangible assets and goodwill, respectively;

these values were based upon an independent appraisal and represent their fair values at the acquisition date.

The Company’s investment in AMST has resulted in synergies between the acquired minting operation and the Company’s established distribution network by providing a steadier and more reliable source of fabricated silver during times of market volatility.

The Company considers that much of the acquired goodwill relates to the “ready state” of AMST's established minting operation with existing quality processes, procedures, and ability to scale production to meet market needs.

• In connection with the Company's acquisition of Goldline in August 2017, the Company recorded $ 5.0 million and $ 1.4 million of additional identifiable intangible assets and goodwill, respectively;

these values were based upon an independent appraisal and represent their fair values at the acquisition date.

The Company’s investment in Goldline created synergies between Goldline's direct marketing operation and the Company’s established distribution network, secured storage and lending operations that has led to increased product margin spreads, and lower distribution and storage costs for Goldline.

• In March 2021, the Company acquired 100 % ownership of JMB, in which we previously held a 20.5 % equity interest.

At the acquisition date we measured the value of identifiable intangible assets and goodwill at $ 98.0 million and $ 92.1 million, respectively.

These values represent their fair values at the acquisition date.

• In October 2022, JMB acquired $ 4.5 million of intangible assets that included:

BGASC’s website, domain name, trademarks, logos, customer list, and all intellectual property.

• In connection with the Company's acquisition of LPM in February 2024, we recorded $ 10.3 million and $ 20.0 million of identifiable intangible assets and goodwill, respectively.

These values represent their fair values at the acquisition date.

• In March 2024, JMB acquired $ 8.5 million of intangible assets that included Gold.com's domain name.

Carrying Value

The carrying value of goodwill and other purchased intangibles are described below (dollar amounts in thousands):

December 31, 2023

March 31, 2024

June 30, 2023

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Identifiable intangible assets

The Company's intangible assets are subject to amortization except for trade names and trademarks, which have an indefinite life.

Existing customer relationships intangible as sets are amortized in a manner reflecting the pattern in which the economic benefits of the assets are consumed.

All other intangible assets subject to amortization are amortized using the straight-line method over their useful lives, which are estimated to be one to fifteen years .

Amortization expense related to the Company's intangible assets was $ 2.2 million and $ 2.8 million for the three months ended December 31, 2023 and 2022, respectively, and $ 4.3 million and $ 5.5 million for the six months ended December 31, 2023 and 2022, respectively.

The Company's intangible assets are subject to amortization except for trade names, trademarks, and domain names, which have indefinite lives.

Amortization expense related to the Company's intangible assets was $ 2.2 million and $ 2.7 million for the three months ended March 31, 2024 and 2023, respectively, and $ 6.5 million and $ 8.2 million for the nine months ended March 31, 2024 and 2023, respectively.

For the presented periods, amortization expense allocable to cost of sales was not significant.

The changes in the carrying amounts of goodwill were as follows (in thousands):

Balance as of June 30, 2023

Goodwill acquired - LPM

Balance as of March 31, 2024

We recorded a non-recurring impairment charge of $ 2.7 million (goodwill and indefinite-lived intangible assets) in fiscal 2018 related to Goldline.

5 unchanged sentences

LONG-TERM INVESTMENTS

As of December 31, 2023, the Company had seven investments in privately-held entities.

As of March 31, 2024, the Company had eight investments in privately-held entities.

The following table shows the carrying value and ownership percentage of the Company's investment in each entity (in thousands):

December 31, 2023

March 31, 2024

June 30, 2023

8 unchanged sentences

Atkinsons Bullion & Coins

APS Investment, LLC

(1) APS Investment, LLC is a holding company that owns a 10 % equity interest in AMS Holding, LLC.

Pinehurst Coin Exchange, Inc.

and Stack's Bowers Numismatics, LLC also each own a one-third equity interest in APS Investment, LLC.

We consider all of our equity method investees to be related parties.

3 unchanged sentences

Accounts payable and other current liabilities consisted of the following (in thousands):

December 31, 2023

March 31, 2024

June 30, 2023

39 unchanged sentences

The aggregate gross and net derivative receivables and payables balances by contract type and type of hedge, were as follows (in thousands):

December 31, 2023

March 31, 2024

June 30, 2023

13 unchanged sentences

Below is a summary of the net gains (losses) o n derivative instruments (in thousands):

Three Months Ended December 31,

Six Months Ended December 31,

Three Months Ended March 31,

Nine Months Ended March 31,

Gains (losses) on derivative instruments:

Unrealized losses on open futures commodity and forward contracts and open sale and purchase commitments, net

Realized gains (losses) on futures commodity contracts, net

Unrealized (losses) gains on open futures commodity and forward contracts and open sale and purchase commitments, net

Realized (losses) gains on futures commodity contracts, net

The Company’s net gains (losses) on derivative instruments, as shown in the table above, were substantially offset by the changes in the fair market value of the underlying precious metals inventory, which were also recorded in cost of sales in the condensed consolidated statements of income.

2 unchanged sentences

The following table summarizes the results of our hedging activities, which shows the precious metal commodity inventory position, net of open sale and purchase commitments, that was subject to price risk (in thousands):

December 31, 2023

March 31, 2024

June 30, 2023

21 unchanged sentences

The notional balances of the Company's derivative instruments, consisting of contractual metal quantities, are expressed at current spot prices of the underlying precious metal commodity.

As of December 31, 2023 and June 30, 2023, the Company had the following outstanding commitments and open forward and futures contracts (in thousands):

December 31, 2023

As of March 31, 2024 and June 30, 2023, the Company had the following outstanding commitments and open forward and futures contracts (in thousands):

March 31, 2024

June 30, 2023

9 unchanged sentences

The Company regularly reviews the creditworthiness of its major counterparties and monitors its exposure to concentrations.

As of December 31, 2023, the Company believes its risk of counterparty default is mitigated as a result of such evaluation and the short-term duration of these arrangements.

As of March 31, 2024, the Company believes its risk of counterparty default is mitigated as a result of such evaluation and the short-term duration of these arrangements.

Foreign Currency Exchange Rate Management

2 unchanged sentences

The market values (fair values) of the Company’s foreign exchange forward contracts and the net open sale and purchase commitment transactions, denominated in foreign currencies, outstanding were as follows (in thousands):

December 31, 2023

March 31, 2024

June 30, 2023

3 unchanged sentences

Net income from operations before provision for income taxes is shown below (in thousands):

Three Months Ended December 31,

Six Months Ended December 31,

Three Months Ended March 31,

Nine Months Ended March 31,

The Company files a consolidated federal income tax return based on a June 30 tax year end.

The provision for income tax expense by jurisdiction and the effective tax r ate are shown below (in thousands):

Three Months Ended December 31,

Six Months Ended December 31,

Three Months Ended March 31,

Nine Months Ended March 31,

State and local

2 unchanged sentences

Our provision for income taxes varied from the tax computed at the U.S.

federal statutory income tax rates for the three and six months ended December 31, 2023 and 2022 primarily due to the excess tax benefit from share-based compensation and the foreign derived intangible income special deduction, partially offset by Section 162(m) executive compensation disallowance, state taxes (net of federal tax benefit), and other normal course non-deductible expenditures.

federal statutory income tax rates for the three and nine months ended March 31, 2024 and 2023 primarily due to the excess tax benefit from share-based compensation and the foreign derived intangible income special deduction, partially offset by Section 162(m) executive compensation disallowance, state taxes (net of federal tax benefit), and other normal course non-deductible expenditures.

Income Taxes Receivable and Payable

As of December 31, 2023 and June 30, 2023, we had an income tax receivable of $ 1.0 million and payable of $ 1.0 million , respectively.

As of March 31, 2024 and June 30, 2023, we had an income tax receivable of $ 4.3 million and payable of $ 1.0 million , respectively.

Deferred Tax Assets and Liabilities

1 unchanged sentence

The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible.

As of December 31, 2023 and June 30, 2023, management concluded that it was more likely than not that the Company would be able to realize the benefit of the U.S.

As of March 31, 2024 and June 30, 2023, management concluded that it was more likely than not that the Company would be able to realize the benefit of the U.S.

federal and state deferred tax assets.

2 unchanged sentences

federal and state deferred tax assets.

As of December 31, 2023, the condensed consolidated balance sheet reflects the deferred tax items for each tax-paying component (i.e., federal and state), resulting in a federal deferred tax liability of $ 14.4 million and a state deferred tax liability of $ 2.3 million .

As of March 31, 2024, the condensed consolidated balance sheet reflects the deferred tax items for each tax-paying component (i.e., federal and state), resulting in a federal deferred tax liability of $ 14.5 million and a state deferred tax liability of $ 2.3 million .

As of June 30, 2023, the condensed consolidated balance sheet reflects the deferred tax items for each tax-paying component (i.e., federal and state), resulting in a federal deferred tax liability of $ 14.4 million and a state deferred tax liability of $ 2.3 million .

2 unchanged sentences

The Company's measurement of its uncertain tax positions is based on management's assessment of all relevant information, including, but not limited to prior audit experience, audit settlement, or lapse of the applicable statute of limitations.

As of December 31, 2023 , there have been no material changes to our unrecognized tax benefits or any related interest or penalties since June 30, 2023.

As of March 31, 2024 , there have been no material changes to our unrecognized tax benefits or any related interest or penalties since June 30, 2023.

RELATED PAR TY TRANSACTIONS

7 unchanged sentences

2) Equity method investees.

As of December 31, 2023, the Company had six investments in privately-held entities which have been determined to be equity method investees and related parties.

As of March 31, 2024, the Company had seven investments in privately-held entities which have been determined to be equity method investees and related parties.

Our related party transactions primarily include (i) sales and purchases of precious metals, (ii) financing activities, (iii) repurchase arrangements, and (iv) hedging transactions.

4 unchanged sentences

Our related party net receivables and payables balances were as shown below (in thousands):

December 31, 2023

March 31, 2024

June 30, 2023

1 unchanged sentence

Equity method investees

(1) Balance includes trade receivables, secured loans receivables, and other receivables, net

(2) Balance in cludes trade receivables and other receivables, net

1 unchanged sentence

Long-term Investments

As of December 31, 2023 and June 30, 2023, the aggregate carrying balance of the equity method investments was $ 91.6 million and $ 88.3 million , respectively.

As of March 31, 2024 and June 30, 2023, the aggregate carrying balance of the equity method investments was $ 93.5 million and $ 88.3 million , respectively.

(See Note 10 .)

Other Long-term Assets

As of December 31, 2023 and June 30, 2023 , the fair value of the option to purchase an additional 27.6 % ownership interest in Silver Gold Bull, Inc.

As of March 31, 2024 and June 30, 2023 , the fair value of the option to purchase an additional 27.6 % ownership interest in Silver Gold Bull, Inc.

was $ 5.3 million and $ 5.3 million , respectively.

This option was acquired in June 2022 in conjunction with the Company’s acquisition of an additional 40 % ownership interest in Silver Gold Bull, Inc., and is exercisable between December 2023 and September 2024 .

As of December 31, 2023, this option remained unexercised.

As of March 31, 2024, this option remained unexercised.

(See Note 10 .

2 unchanged sentences

All loans to be funded using the proceeds from the CCP Note are subject to CCP’s prior written approval.

The term of the CCP Note expires on April 1, 2024 and may be extended by mutual agreement.

As of December 31, 2023 and June 30, 2023 the outstanding principal balance of the CCP Note was $ 3.2 million and $ 0.5 million , respectively.

In March 2024, the expiration date for the CCP Note was amended to expire on April 1, 2026 ;

the CCP Note may be further extended by mutual agreement.

As of March 31, 2024 and June 30, 2023, the outstanding principal balance of the CCP Note was $ 4.0 million and $ 0.5 million , respectively.

Activity with Related Parties

1 unchanged sentence

Our sales and purchases with companies deemed to be related parties were as follows (in thousands):

Three Months Ended December 31,

Six Months Ended December 31,

Three Months Ended March 31,

Nine Months Ended March 31,

Stack's Bowers Galleries

2 unchanged sentences

We ea rned interest income from related parties as set forth below (in thousands):

Three Months Ended December 31,

Six Months Ended December 31,

Three Months Ended March 31,

Nine Months Ended March 31,

Interest income from secured loans receivables

Interest income from finance products and repurchase arrangements

Selling, General, and Administrative

The Company incurred selling, general, and administrative expense related to its subleasing agreement with Stack's Bower Galleries of $ 12,000 and $ 10,000 during the three months ended December 31, 2023 and 2022, respectively, and $ 24,000 and $ 10,000 during the six months ended December 31, 2023 and 2022, respectively.

The Company incurred selling, general, and administrative expense related to its subleasing agreement with Stack's Bowers Galleries and consulting agreement with Cerberus Limited of $ 66,000 and $ 12,000 during the three months ended March 31, 2024 and 2023, respectively, and $ 90,000 and $ 22,000 during the nine months ended March 31, 2024 and 2023, respectively.

Interest Expense

The Company incurred interest expense related to its note with CCP of $ 10,000 and $ 8,000 during the three months ended December 31, 2023 and 2022, respectively, and $ 12,000 and $ 23,000 during the six months ended December 31, 2023 and 2022, respectively.

The Company incurred interest expense related to its note with CCP of $ 20,000 and $ 9,000 during the three months ended March 31, 2024 and 2023, respectively, and $ 32,000 and $ 32,000 during the nine months ended March 31, 2024 and 2023, respectively.

Equity Method Investments — Earnings, Dividends and Distributions Received

The Company's proportional share of our equity method investee's net income totaled $ 0.8 million and $ 4.7 million during the three months ended December 31, 2023 and 2022, respectively, and $ 3.5 million and $ 7.3 million , during the six months ended December 31, 2023 and 2022, respectively.

The Company received dividend and distribution payments from our equity method investees that totaled, in the aggregate, $ 0.0 million and $ 0.0 million during the three months ended December 31, 2023 and 2022, respectively, and $ 0.3 million and $ 0.6 million during the six months ended December 31, 2023 and 2022, respectively.

The Company earned royalty and consulting services income from related parties that totaled $ 0.4 million and $ 0.8 million during the three months ended December 31, 2023 and 2022, respectively, and $ 0.7 million and $ 1.4 million during the six months ended December 31, 2023 and 2022 , respectively.

The Company's proportional share of our equity method investee's earnings were net losses of $ 0.2 million and $ 0.1 million during the three months ended March 31, 2024 and 2023, respectively, and net income of $ 3.3 million and $ 7.3 million , during the nine months ended March 31, 2024 and 2023, respectively.

The Company received dividend and distribution payments from our equity method investees that totaled, in the aggregate, $ 0.1 million and $ 0.0 million during the three months ended March 31, 2024 and 2023, respectively, and $ 0.4 million and $ 0.6 million during the nine months ended March 31, 2024 and 2023, respectively.

The Company earned royalty and consulting services income from related parties that totaled $ 0.4 million and $ 0.6 million during the three months ended March 31, 2024 and 2023, respectively, and $ 1.0 million and $ 2.0 million during the nine months ended March 31, 2024 and 2023 , respectively.

FINANCIN G AGREEMENTS

5 unchanged sentences

The Trading Credit Facility currently bears interest at the daily SOFR rate plus an applicable margin of 236 basis points.

As of December 31, 2023, the interest rate on our Trading Credit Facility was approximately 7.8 % and t he daily SOFR rate was approximately 5.4 % .

As of March 31, 2024, the interest rate on our Trading Credit Facility was approximately 7.7 % and t he daily SOFR rate was approximately 5.3 % .

The Trading Credit Facility provides the Company with the liquidity to buy and sell billions of dollars of precious metals annually.

1 unchanged sentence

Our CFC subsidiary also uses the funds drawn under the Trading Credit Facility to finance certain of its lending activities.

Borrowings totaled $ 298.0 million and $ 235.0 million at December 31, 2023 and June 30, 2023, respectively.

Borrowings totaled $ 290.0 million and $ 235.0 million at March 31, 2024 and June 30, 2023, respectively.

The amounts available under the respective lines of credit are determined at the end of each week and at each month end following a specified borrowing base formula.

The Company is able to access additional credit as needed to finance operations, subject to the overall limits of the borrowing facilities and lender approval of the borrowing base calculation.

Based on the month end borrowing bases in effect, the availability under the Trading Credit Facility, after taking into account current borrowings, totaled $ 52.0 million and $ 115.0 million as determined on December 31, 2023 and June 30, 2023, respectively.

As of December 31, 2023 and June 30, 2023, the remaining unamortized balance of loan costs was approximately $ 4.3 million and $ 2.4 million , respectively.

The Trading Credit Facility contains various covenants, all of which the Company was in compliance with as of December 31, 2023.

Interest expense related to the Company’s Trading Credit Facility totaled $ 5.9 million and $ 3.5 million which represents 58.3 % and 49.0 % of the total interest expense recognized for the three months ended December 31, 2023 and 2022, respectively.

The Trading Credit Facility carried a daily weighted-average effective interest rate of 8.66 % and 7.27 % for the three months ended December 31, 2023 and 2022, respectively.

Interest expense related to the Company’s Trading Credit Facility totaled $ 11.6 million and $ 6.0 million which represents 58.2 % and 45.0 % of the total interest expense recognized for the six months ended December 31, 2023 and 2022, respectively.

The Trading Credit Facility carried a daily weighted-average effective interest rate of 8.43 % and 6.46 % for the six months ended December 31, 2023 and 2022, respectively.

Based on the month end borrowing bases in effect, the availability under the Trading Credit Facility, after taking into account current borrowings, totaled $ 60.0 million and $ 115.0 million as determined on March 31, 2024 and June 30, 2023, respectively.

As of March 31, 2024 and June 30, 2023, the remaining unamortized balance of loan costs was approximately $ 3.7 million and $ 2.4 million , respectively.

The Trading Credit Facility contains various covenants, all of which the Company was in compliance with as of March 31, 2024.

Interest expense related to the Company’s Trading Credit Facility totaled $ 6.3 million and $ 5.1 million which represents 63.9 % and 54.8 % of the total interest expense recognized for the three months ended March 31, 2024 and 2023, respectively.

The Trading Credit Facility carried a daily weighted-average effective interest rate of 8.56 % and 7.46 % for the three months ended March 31, 2024 and 2023, respectively.

Interest expense related to the Company’s Trading Credit Facility totaled $ 18.0 million and $ 11.1 million which represents 60.1 % and 49.0 % of the total interest expense recognized for the nine months ended March 31, 2024 and 2023, respectively.

The Trading Credit Facility carried a daily weighted-average effective interest rate of 8.48 % and 6.79 % for the nine months ended March 31, 2024 and 2023, respectively.

Notes Payable - AMCF Notes

3 unchanged sentences

The AMCF Notes were repaid in full in December 2023.

For the three months ended December 31, 2023 and 2022, interest expense related to the AMCF Notes (including loan amortization costs) totaled $ 1.1 million and $ 1.5 million , which represents 11.1 % and 20.4 % of the total interest expense recognized by the Company, respectively.

For the three months ended December 31, 2023 and 2022, the AMCF Notes' weighted-average effective interest rate was 5.88 % and 5.88 % , respectively.

For the six months ended December 31, 2023 and 2022, interest expense related to the AMCF Notes (including loan amortization costs) totaled $ 2.5 million and $ 2.9 million , which represents 12.5 % and 22.0 % of the total interest expense recognized by the Company, respectively.

For the six months ended December 31, 2023 and 2022, the AMCF Notes' weighted-average effective interest rate was 5.88 % and 5.88 % , respectively.

For the three months ended March 31, 2024 and 2023, interest expense related to the AMCF Notes (including loan amortization costs) totaled $ 0.0 million and $ 1.4 million , which represents 0.0 % and 14.7 % of the total interest expense recognized by the Company, respectively.

For the three months ended March 31, 2024 and 2023, the AMCF Notes' weighted-average effective interest rate was 5.88 % and 5.88 % , respectively.

For the nine months ended March 31, 2024 and 2023, interest expense related to the AMCF Notes (including loan amortization costs) totaled $ 2.5 million and $ 4.3 million , which represents 8.3 % and 19.0 % of the total interest expense recognized by the Company, respectively.

For the nine months ended March 31, 2024 and 2023, the AMCF Notes' weighted-average effective interest rate was 5.88 % and 5.88 % , respectively.

Notes Payable — Related Party

1 unchanged sentence

Liabilities on Borrowed Metals

The Company recorded liabilities on borrowed metals with market values totaling $ 24.2 million as of December 31, 2023, with corresponding metals totaling $ 0.0 million and $ 24.2 million included in precious metals held under financing arrangements and inventories, respectively, on the condensed consolidated December 31, 2023 balance sheet.

The Company recorded liabilities on borrowed metals with market values totaling $ 26.2 million as of March 31, 2024, with corresponding metals totaling $ 0.0 million and $ 26.2 million included in precious metals held under financing arrangements and inventories, respectively, on the condensed consolidated March 31, 2024 balance sheet.

The Company recorded liabilities on borrowed metals with market values totaling $ 21.6 million as of June 30, 2023 with corresponding metals totaling $ 0.0 million and $ 21.6 million included in precious metals held under financing arrangements and inventories, respectively, on the condensed consolidated June 30, 2023 balance sheet.

For the three months ended December 31, 2023 and 2022, the interest expense related to liabilities on borrowed metals totaled $ 0.4 million and $ 0.5 million , which represents 3.6 % and 6.4 % of the total interest expense recognized by the Company, respectively.

For the six months ended December 31, 2023 and 2022, the interest expense related to liabilities on borrowed metals totaled $ 0.9 million and $ 0.9 million , which represents 4.6 % and 6.5 % of the total interest expense recognized by the Company, respectively.

For the three months ended March 31, 2024 and 2023, the interest expense related to liabilities on borrowed metals totaled $ 0.5 million and $ 0.5 million , which represents 4.9 % and 4.9 % of the total interest expense recognized by the Company, respectively.

For the nine months ended March 31, 2024 and 2023, the interest expense related to liabilities on borrowed metals totaled $ 1.4 million and $ 1.3 million , which represents 4.7 % and 5.9 % of the total interest expense recognized by the Company, respectively.

Advanced Pool Metals

16 unchanged sentences

Both the product financing obligation and the underlying inventory (which is entirely restricted) are carried at fair value, with changes in fair value recorded as a component of cost of sales in the condensed consolidated statements of income.

Such obligations totaled $ 518.6 million and $ 335.8 million as of December 31, 2023 and June 30, 2023, respectively.

For the three months ended December 31, 2023 and 2022, the interest expense related to product financing arrangements totaled $ 2.5 million and $ 1.4 million , which represents 24.9 % and 19.7 % of the total interest expense recognized by the Company, respectively.

For the six months ended December 31, 2023 and 2022, the interest expense related to product financing arrangements totaled $ 4.5 million and $ 2.9 million , which represents 22.3 % and 21.3 % of the total interest expense recognized by the Company, respectively.

Such obligations totaled $ 510.2 million and $ 335.8 million as of March 31, 2024 and June 30, 2023, respectively.

For the three months ended March 31, 2024 and 2023, the interest expense related to product financing arrangements totaled $ 2.9 million and $ 2.0 million , which represents 29.2 % and 22.2 % of the total interest expense recognized by the Company, respectively.

For the nine months ended March 31, 2024 and 2023, the interest expense related to product financing arrangements totaled $ 7.4 million and $ 4.9 million , which represents 24.6 % and 21.7 % of the total interest expense recognized by the Company, respectively.

COMMITMENTS A ND CONTINGENCIES

Refer to Note 16 of the Notes to Consolidated Financial Statements in the 2023 Annual Report for information relating to employment contracts and other commitments.

The Company is not aware of any material changes to commitments as summarized in the 2023 Annual Report.

Other than the contingent consideration liability we recorded upon the acquisition of LPM as detailed in Note 1 , the Company is not aware of any material changes to commitments as summarized in the 2023 Annual Report.

Legal Matters

9 unchanged sentences

On September 25, 2020, the Company filed a universal shelf registration statement on Form S-3, which was declared effective by the Securities and Exchange Commission (the “SEC”) on March 4, 2021, on which the Company registered for sale up to $ 150.0 million of any combination of its debt securities, shares of common stock, shares of preferred stock, rights, warrants, units and/or purchase contracts from time to time and at prices and on terms that the Company may determine.

After a public offering of common stock in March 2021, approximately $ 69.5 million of securities remain available for issuance under this shelf registration statement.

Securities may be offered or sold under this registration statement until March 2024.

After a public offering of common stock in March 2021, approximately $ 69.5 million of securities remained available for issuance, but this shelf registration statement expired in March 2024.

Therefore, no further securities may be offered or sold under this registration statement.

On July 5, 2023 , the Company's board of directors declared a regular dividend of $ 0.20 per share of common stock to stockholders of record at the close of business on July 17, 2023 .

The dividend was paid on July 28, 2023 and totaled $ 4.7 million.

On August 17, 2023 , the Company's board of directors declared a non-recurring specia l dividend of $ 1.00 per share of common stock to sha re to stockholders of record at the close of business on September 12, 2023 .

On August 17, 2023 , the Company's board of directors declared a non-recurring specia l dividend of $ 1.00 per share of common stock to stockholders of record at the close of business on September 12, 2023 .

The dividend was paid on September 26, 2023 and totaled $ 23.4 million.

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The dividend was paid on October 24, 2023 and totaled $ 4.6 million.

On Januar y 4, 2024, the Company's board of directors declared a regular dividend of $ 0.20 per share of common stock to stockholders of record at the close of business on January 16, 2024 .

The dividend was paid on January 29, 2024 and totaled $ 4.6 million.

Share Repurchase Program

In April 2018, the Company's board of directors approved a share repurchase program which authorized the Company to purchase up to 1.0 million shares (as adjusted for the two-for-one split of A-Mark’s common stock in the form of a stock dividend in fiscal 2022) of its common stock.

The share repurchase program was initially announced on May 8, 2018.

Prior to fiscal 2023, no shares were repurchased under our share repurchase program.

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In November 2023, the Company's board of directors further amended the share repurchase program to authorize an additional 1.2 million shares to be repurchased under the program, resulting in a total of 2.0 million shares authorized for repurchase, after taking into account the shares previously purchased at that date.

As of December 31, 2023 , 1,052,905 remain authorized for repurchase under the program.

During the six months ended December 31, 2023 , we repurchased 611,360 shares under the program for $ 16.9 million.

From inception of the program through December 31, 2023 , we repurchased a total of 947,095 shares for $ 26.7 million.

As of March 31, 2024, 848,509 shares remain authorized for repurchase under the program.

During the nine months ended March 31, 2024 , we repurchased 815,756 shares under the program for $ 22.4 million .

From inception of the program through March 31, 2024, we repurchased a total of 1,151,491 shares for $ 32.2 million .

Under the share repurchase program, we may repurchase shares of our common stock from time to time at prevailing market prices, depending on market conditions, through open market or privately negotiated transactions.

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The Company's amended and restated 2014 Stock Award and Incentive Plan (the "2014 Plan") was approved most recently on October 27, 2022 by the Company's stockholders.

As of December 31, 2023, 1,268,132 stock options and 101,367 restricted stock units were outstanding, and 1,709,003 shares were available for issuance of new awards under the 2014 Plan.

As of March 31, 2024, 1,701,243 shares were available for issuance of new awards under the 2014 Plan.

Under the 2014 Plan, the Company may grant options and other equity awards as a means of attracting and retaining officers, employees, non-employee directors and consultants, to provide incentives to such persons, and to align the interests of such persons with the interests of stockholders by providing compensation based on the value of the Company's stock.

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The Company measures the compensation cost of stock options using the Black-Scholes option pricing model, which uses various inputs such as the market price per share of common stock and estimates that include the risk-free interest rate, volatility, expected life and dividend yield.

The Company incurred compensation expense related to stock options of $ 0.2 million and $ 0.3 million during the three months ended December 31, 2023 and 2022, and $ 0.4 million and $ 0.6 million during the six months ended December 31, 2023 and 2022, respectively.

As of December 31, 2023, there was total remaining compensation expense of $ 0.4 million related to employee stock options, which will be recorded over a weighted-average vesting period of approximately 0.6 years.

The Company incurred compensation expense related to stock options of $ 0.2 million and $ 0.3 million during the three months ended March 31, 2024 and 2023, and $ 0.6 million and $ 0.9 million during the nine months ended March 31, 2024 and 2023, respectively.

As of March 31, 2024, there was total remaining compensation expense of $ 0.2 million related to employee stock options, which will be recorded over a weighted-average vesting period of approximately 0.5 years.

The following table summarizes stock option activity:

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Outstanding at June 30, 2022

Outstanding at December 31, 2022

Exercisable at December 31, 2022

Outstanding at March 31, 2023

Exercisable at March 31, 2023

Outstanding at June 30, 2023

Outstanding at December 31, 2023

Exercisable at December 31, 2023

Outstanding at March 31, 2024

Exercisable at March 31, 2024

(1) On September 9, 2022 a required adjustment to the outstanding options was triggered as a result of the non-recurring special divided that lowered the exercise strike price by $ 1.00 .

The following table summarizes information about stock options:

(2) The Company issued the options with an exercise price per share not less than the closing market price of common stock on the grant date.

The following table summarizes information about stock options as of March 31, 2024:

Exercise Price Ranges

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Nonvested outstanding at June 30, 2023

Nonvested outstanding at December 31, 2023

Nonvested outstanding at March 31, 2024

Restricted Stock Units

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The Company measures the compensation cost of RSUs based on the closing price of the underlying shares at the grant date.

The Company incurred compensation expense related to RSUs of $ 0.2 million and $ 0.2 million during the three months ended December 31, 2023 and 2022, and $ 0.7 million and $ 0.5 million during the six months ended December 31, 2023 and 2022, respectively.

As of December 31, 2023, there is $ 1.4 million remaining compensation expense related to RSUs, which will be recorded over a weighted-average vesting period of approximately 1.5 years.

The Company incurred compensation expense related to RSUs of $ 0.3 million and $ 0.2 million during the three months ended March 31, 2024 and 2023, and $ 1.0 million and $ 0.7 million during the nine months ended March 31, 2024 and 2023, respectively.

As of March 31, 2024, there is $ 1.3 million remaining compensation expense related to RSUs, which will be recorded over a weighted-average vesting period of approximately 1.7 years.

The following table summarizes RSU activity:

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Nonvested outstanding at June 30, 2022

Vested & delivered

Vested & deferred (1)

Nonvested outstanding at December 31, 2022

Vested but subject to deferred settlement at December 31, 2022 (1)

Outstanding at December 31, 2022

Nonvested outstanding at March 31, 2023

Vested but subject to deferred settlement at March 31, 2023 (1)

Outstanding at March 31, 2023

Nonvested outstanding at June 30, 2023 (2)

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Vested & deferred (1)

Nonvested outstanding at December 31, 2023 (2)

Vested but subject to deferred settlement at December 31, 2023 (1)

Outstanding at December 31, 2023 (2)

Nonvested outstanding at March 31, 2024 (2)

Vested but subject to deferred settlement at March 31, 2024 (1)

Outstanding at March 31, 2024 (2)

(1) Certain RSU holders elected to defer settlement of the RSUs to a specified date.

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The grant date fair value of this liability award was $ 5.7 million.

The fair value of this liability award was $ 3.1 million as of December 31, 2023 resulting from the following assumptions:

The fair value of this liability award was $ 3.1 million as of March 31, 2024 resulting from the following assumptions:

a performance bonus estimate of $ 4.0 million to be paid over the four-year term, a risk-free rate of 4.4 %, and an equity volatility of 50.0 %.

Compensation expense is recognized on a straight-line basis over the performance period, with the amount recognized fluctuating due to remeasurement of fair value at the end of each reporting period because the award is classified as a liability.

During the three and six months ended December 31, 2023 , the Company recognized $ 0.2 million and $ 0.4 million of compensation expense related to this cash incentive bonus award, respectively.

During the three and nine months ended March 31, 2024 , the Company recognized $ 0.2 million and $ 0.6 million of compensation expense related to this cash incentive bonus award, respectively.

Certain Anti-Takeover Provisions

The Company’s certificate of incorporation and by-laws contain certain anti-takeover provisions that could have the effect of making it more difficult for a third-party to acquire, or of discouraging a third-party from attempting to acquire, control of the Company without negotiating with its board of directors.

Such provisions could limit the price that certain investors might be willing to pay in the future for the Company’s securities.

Such provisions could limit the price that investors might be willing to pay in the future for the Company’s securities.

Certain of such provisions allow the Company to issue preferred stock with rights senior to those of the common stock or impose various procedural and other requirements which could make it more difficult for stockholders to effect certain corporate actions.

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Customer Concentrations

The following customer provided 10 percent or more of the Company's revenues (in thousands):

Three Months Ended December 31,

Six Months Ended December 31,

The following customers provided 10 percent or more of the Company's revenues (in thousands):

Three Months Ended March 31,

Nine Months Ended March 31,

Total revenue

Customer concentrations

Morgan Stanley (1)

HSBC Bank (1)

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This sales activity has been reported within the Wholesale Sales and Ancillary Services segment.

The following customers provided 10 percent or more of the Company's accounts receivable balances (in thousands):

December 31, 2023

The following customer provided 10 percent or more of the Company's accounts receivable balances (in thousands):

March 31, 2024

June 30, 2023

1 unchanged sentence

Customer concentrations

Bank of America

Morgan Stanley

The following customers accounted for 10 percent or more of the Company's secured loans receivable (in thousands):

December 31, 2023

The following customer accounted for 10 percent or more of the Company's secured loans receivable (in thousands):

March 31, 2024

June 30, 2023

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See Note 1 for a description of the types of products and services from which each reportable segment derives its revenues.

Three Months Ended December 31,

Six Months Ended December 31,

Three Months Ended March 31,

Nine Months Ended March 31,

Revenue by segment (1)

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(d) Includes $ 2.7 million of inter-segment sales from the Direct-to-Consumer segment to the Wholesale Sales & Ancillary Services segment.

Three Months Ended December 31,

Six Months Ended December 31,

Three Months Ended March 31,

Nine Months Ended March 31,

Revenue by geographic region

2 unchanged sentences

Gross Profit and Gross Margin Percentage

Three Months Ended December 31,

Six Months Ended December 31,

Three Months Ended March 31,

Nine Months Ended March 31,

Gross profit by segment (1)

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Operating Income and (Expenses)

Three Months Ended December 31,

Six Months Ended December 31,

Three Months Ended March 31,

Nine Months Ended March 31,

Operating income (expenses) by segment

6 unchanged sentences

Interest expense

Earnings from equity method investments

Earnings (losses) from equity method investments

Other income, net

4 unchanged sentences

Interest expense

Other expense, net

Other income (expense), net

Secured Lending

3 unchanged sentences

Interest expense

Earnings (losses) from equity method investments

Earnings from equity method investments

Other income, net

Net Income Before Provision for Income Taxes

Three Months Ended December 31,

Six Months Ended December 31,

Three Months Ended March 31,

Nine Months Ended March 31,

Net income before provision for income taxes by segment

3 unchanged sentences

Advertising Expense

Three Months Ended December 31,

Six Months Ended December 31,

Three Months Ended March 31,

Nine Months Ended March 31,

Advertising expense by segment

3 unchanged sentences

Capital Expenditures for Property, Plant, and Equipment

Three Months Ended December 31,

Six Months Ended December 31,

Three Months Ended March 31,

Nine Months Ended March 31,

Capital expenditures for property, plant, and equipment by segment

2 unchanged sentences

Precious Metals Held Under Financing Arrangements

December 31, 2023

March 31, 2024

June 30, 2023

2 unchanged sentences

Secured Lending

December 31, 2023

March 31, 2024

June 30, 2023

3 unchanged sentences

Secured Lending

December 31, 2023

March 31, 2024

June 30, 2023

2 unchanged sentences

North America, excluding United States

December 31, 2023

March 31, 2024

June 30, 2023

4 unchanged sentences

Secured Lending

December 31, 2023

March 31, 2024

June 30, 2023

3 unchanged sentences

Long-term Assets

December 31, 2023

March 31, 2024

June 30, 2023

3 unchanged sentences

Secured Lending

December 31, 2023

March 31, 2024

June 30, 2023

1 unchanged sentence

United States

December 31, 2023

March 31, 2024

June 30, 2023

4 unchanged sentences

Intangible assets

December 31, 2023

March 31, 2024

June 30, 2023

4 unchanged sentences

SUBSEQU ENT EVENTS

On January 29, 2024 , the Company paid a regular cash dividend of $ 0.20 per share to stockholders of record as of January 16, 2024 .

Proposed Transactions

On February 1, 2024, the Company and its affiliates Pinehurst Coin Exchange, Inc.

("Pinehurst") and Stack's Bowers Numismatics, LLC ("Stack's Bowers") entered into a non-binding letter of intent (the "LOI") with AMS Holding, LLC ("AMS").

Below is a summary of the three transactions contemplated by the LOI:

(i) A-Mark would acquire 100 % of the issued and outstanding equity interests of LPM Group Limited ("LPM"), a precious metals dealer with operations in Asia and wholly-owned subsidiary of AMS, for total upfront consideration of $ 41.5 million, consisting of $ 37.5 million in cash, subject to certain closing adjustments, and $ 4.0 million of A-Mark's common stock.

The LOI also provides AMS the opportunity to earn an additional $ 37.5 million in cash based on achievement of certain EBITDA milestones for 2024, 2025, and 2026.

(ii) Pinehurst, a distributor of certified coins of which A-Mark owns 49 %, would acquire all of the assets of ModernCoinMart ("MCM") from AMS for $ 5.5 million, subject to certain closing adjustments.

Assets to be acquired from MCM will include $ 3.0 million of inventory, along with MCM's customer list, brand name, and related intellectual property.

(iii) A joint venture, consisting of A-Mark, Pinehurst, and Stack's Bowers, would acquire a common equity interest in AMS equivalent to 10 % of the total, fully diluted common equity interest in AMS for approximately $ 6.0 million.

The transactions proposed in the LOI are subject to the negotiation and execution of definitive agreements and customary closing conditions.

Subject to the satisfaction of these conditions, including, in the case of the LPM transaction, the approval of the lenders under A-Mark's Trading Credit Facility, the transactions are expected to close in February 2024.

No assurance can be given that the transactions contemplated by the LOI will be consummated.

On April 29, 2024 , the Company paid a regular cash dividend of $ 0.20 per share to stockholders of record as of April 16, 2024 .

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements