What changed in this filing

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Item 1. Financial Statements

2024-11-08 compared with 2024-05-09 · 300 added, 445 removed, 1184 unchanged (39% of the section changed)

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Index to the Condensed Consolidated Financial Statements and Notes thereof

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

Condensed Consolidated Balance Sheets as of September 30, 2024 and June 30, 2024

Condensed Consolidated Statements of Income for the Three Months Ended September 30, 2024 and 2023

Condensed Consolidated Statements of Stockholders' Equity for the Three Months Ended September 30, 2024 and 2023

Condensed Consolidated Statements of Cash Flows for the Three Months Ended September 30, 2024 and 2023

Notes to the Condensed Consolidated Financial Statements

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(in thousands, except for share data)

March 31, 2024

September 30, 2024

June 30, 2024

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Precious metals held under financing arrangements

Inventories (1)

Restricted inventories

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Current liabilities

Lines of credit

Liabilities on borrowed metals

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Accrued liabilities

Income tax payable

Notes payable

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issued and outstanding:

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

none as of September 30, 2024 or June 30, 2024

Common stock, par value $ 0.01 ;

40,000,000 shares authorized;

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

24,196,095 and 23,965,427 shares issued and 23,184,059 and 22,953,391 shares outstanding as of September 30, 2024 and June 30, 2024, respectively

Treasury stock, 1,012,036 and 1,012,036 shares at cost as of September 30, 2024 and June 30, 2024, respectively

Additional paid-in capital

Accumulated other comprehensive loss

Accumulated other comprehensive income

Retained earnings

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stockholders’ equity

Noncontrolling interest

Noncontrolling interests

Total stockholders’ equity

Total liabilities, noncontrolling interest and stockholders’ equity

(1) Includes amounts of the consolidated variable interest entity as of June 30, 2023, which are presented separately in the table below.

See accompanying Notes to the Condensed Consolidated Financial Statements

A-MARK PRECIOUS METALS, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands;

In September 2018, AM Capital Funding, LLC (“AMCF”), a wholly-owned subsidiary of Collateral Finance Corporation ("CFC”), completed an issuance of Secured Senior Term Notes, Series 2018-1, Class A in the aggregate principal amount of $ 72.0 million and Secured Subordinated Term Notes, Series 2018-1, Class B in the aggregate principal amount of $ 28.0 million (collectively, the "AMCF Notes").

In December 2023, the AMCF Notes were repaid in full, and AMCF became inactive.

The Company consolidates a variable interest entity ("VIE") if the Company is considered to be the primary beneficiary.

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.

The Company is the primary beneficiary of this VIE because the Company has the right to determine the type of collateral (i.e., cash, secured loans, or precious metals), has the right to receive (and has received) the proceeds from the securitization transaction, earn ongoing interest income from the secured loans (subject to collateral requirements), and has the obligation to absorb losses should AMCF's interest expense and other costs exceed its interest income.

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 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.

Additionally, the liabilities of the VIE included intercompany balances, which were eliminated in consolidation.

(See Note 15 .)

March 31, 2024

June 30, 2023

ASSETS OF THE CONSOLIDATED VIE

Secured loans receivable

Precious metals held under financing arrangements

Prepaid expenses and other assets

Total assets of the consolidated variable interest entity

LIABILITIES OF THE CONSOLIDATED VIE

Deferred payment obligations (1)

Accrued liabilities

Notes payable (2)

Total liabilities of the consolidated variable interest entity

(1) This is an intercompany balance which is eliminated in consolidation and not shown on the condensed consolidated balance sheets.

(2) As of June 30, 2023, $ 5.0 million of the AMCF Notes were held by the Company which were eliminated in consolidation and not shown on the condensed consolidated balance sheets.

Total liabilities and stockholders’ equity

See accompanying Notes to the Condensed Consolidated Financial Statements

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

Three Months Ended March 31,

Nine Months Ended March 31,

Three Months Ended September 30,

Cost of sales

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Interest expense

Earnings (losses) from equity method investments

Earnings from equity method investments

Other income, net

Unrealized gains on foreign exchange

Unrealized gains (losses) on foreign exchange

Net income before provision for income taxes

Income tax expense

Net income attributable to noncontrolling interest

Net (loss) income attributable to noncontrolling interests

Net income attributable to the Company

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Share-based compensation

Earnings distribution paid to noncontrolling interest

Cumulative translation adjustment, net of tax

Common stock issued as employee compensation

Exercise of share-based awards

Net settlement of share-based awards

Dividends declared

Balance, September 30, 2022

Share-based compensation

Cumulative translation adjustment, net of tax

Exercise of share-based awards

Net settlement of share-based awards

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, September 30, 2023

Balance, June 30, 2024

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Exercise of share-based awards

Net settlement of share-based awards

Repurchases of common stock

Dividends declared

Balance, September 30, 2024

Share-based compensation

Cumulative translation adjustment, net of tax

Net settlement of share-based awards

Repurchases of common stock

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;

Nine Months Ended March 31,

Three Months Ended September 30,

Cash flows from operating activities:

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Receivables, net

Secured loans receivable

Secured loans made to affiliates

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Income tax payable

Net cash (used in) provided by operating activities

Net cash used in 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

Purchase of intangible assets

Secured loans receivable, net

Net cash (used in) provided by investing activities

Net cash provided by (used in) investing activities

Cash flows from financing activities:

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Dividends paid

Distributions paid to noncontrolling interest

Net borrowings and repayments under lines of credit

Repayment of notes

Proceeds from notes payable to related party

Borrowings under lines of credit

Repayments under lines of credit

Repayments on notes payable to related party

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

Net cash provided by (used in) financing activities

Net cash provided by financing activities

Net (decrease) increase in cash

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Declared distributions and unpaid dividends

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

Repurchases of common stock on account

See accompanying Notes to the Condensed Consolidated Financial Statements

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Basis of Presentation

The condensed consolidated financial statements comprise those of A-Mark Precious Metals, Inc.

("A-Mark", also referred to as "we", "us", and the "Company"), its wholly-owned consolidated subsidiaries (including a wholly-owned variable interest entity), and its joint venture in which the Company has a controlling interest.

The consolidated financial statements comprise those of A-Mark Precious Metals, Inc.

("A-Mark", also referred to as "we", "us", and the "Company"), its consolidated subsidiaries, and its joint venture in which the Company has a controlling interest.

Business Segments

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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"), 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 Company operates its Wholesale Sales & Ancillary Services segment directly and through its consolidated 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 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 Industrial unit services manufacturers and fabricators of products utilizing or incorporating precious metals.

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.

Our Coin and Bar unit deals in approximately 2,100 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, a numismatics showroom in Hong Kong, and a trading center in El Segundo, California.

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Mint, and it also purchases product from other sovereign mints, for sale to its customers.

Through its wholly-owned subsidiary AMTAG, the Company promotes its products and services to the international market.

Through its wholly-owned subsidiary AMTAG, the Company promotes its products and services to certain international markets.

Through our wholly-owned subsidiary TDS, we offer a variety of managed storage options for precious metals products to financial institutions, dealers, investors, and collectors around the world.

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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.

The Company operates LPM, its Asia headquarters, through its subsidiary AM/LPM Ventures, LLC.

Based in Hong Kong, LPM offers the Company's full-service precious metals products and services in Asia and internationally.

Direct-to- Consumer

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(“JMB”) and Goldline, Inc.

(“Goldline”).

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

(“Goldline”), and through its investment in Silver Gold Bull, Inc.

As of September 30, 2024 , JMB had several wholly-owned subsidiaries, including:

Buy Gold and Silver Corp.

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Goldline, Inc.

owns 100% of AMIP, LLC ("AMIP"), and has a 50 % ownership interest in Precious Metals Purchasing Partners, LLC ("PMPP").

owns 100% of AMIP, LLC ("AMIP").

SGB and Goldline each have a 50 % ownership interest in Precious Metals Purchasing Partners, LLC ("PMPP").

As the context requires, references in these Notes to JMB may include BGASC, BullionMax, GPG, Silver.com, PMC, and CyberMetals, and references to Goldline may include AMIP and PMPP.

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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 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.

JMB owns and operates numerous websites targeting specific niches within the precious metals retail market, including JMBullion.com, ProvidentMetals.com, Silver.com, CyberMetals.com, GoldPrice.org, SilverPrice.org, BGASC.com, BullionMax.com, and Gold.com.

Typically, JMB offers approximately 6,200 different products during a fiscal year, measured by stock keeping units or SKUs, on its websites.

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Goldline’s subsidiary AMIP manages its intellectual property.

PMPP was formed in fiscal 2019 pursuant to terms of a joint venture agreement, for the purpose of purchasing precious metals from the partners' retail customers, and then reselling the acquired products back to affiliates of the partners.

PMPP was formed in fiscal 2019 pursuant to terms of a joint venture agreement with SGB, for the purpose of purchasing precious metals from the partners' retail customers, and then reselling the acquired products back to affiliates of the partners.

PMPP commenced its operations in fiscal 2020.

Silver Gold Bull, Inc.

In 2014, the Company acquired its initial ownership interest in SGB, a leading e-commerce precious metals retailer in Canada.

Through its website, SilverGoldBull.com, SGB offers a variety of products from gold, silver, platinum, and palladium bars, coins and rounds, as well as certified coins from mints around the world.

In 2018 and 2022, the Company made incremental investments to increase its ownership interest in SGB to 47.4 % as of June 2022.

Also in June 2022, the Company acquired an option to purchase an additional 27.6 % of the outstanding equity of SGB to bring the Company's ownership interest up to 75 %.

In June 2024, the Company exercised part of its option and acquired an additional 8 % ownership interest in SGB for $ 9.6 million, increasing its ownership interest to 55.4 %, at which point SGB became a consolidated subsidiary of the Company.

The increased investment in SGB allows the Company to continue its strategy to further expand internationally, particularly in Canada.

In connection with the exercise of its option in June 2024, the Company modified certain terms and conditions of its option to acquire additional ownership interest in SGB, including extending the term of the remaining unexercised option to September 2025 as well as reducing the option to increase its ownership from 75 % to 70 %.

In accordance with ASC 480, Distinguishing Liabilities from Equity, the resulting modified option was not determined to be separately exercisable from the remaining shares of SGB, and therefore the value is embedded within the noncontrolling interest of SGB.

In June 2024, SGB declared a $ 15.9 million dividend to existing shareholders based on certain levels of working capital.

$ 9.2 million of the dividend was paid to certain shareholders in September 2024.

The dividend paid to the Company from SGB in September 2024 was $ 7.5 million.

Secured Lending

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CAI is a holding company that has a 50 %-ownership stake in Collectible Card Partners, LLC ("CCP").

CCP provides capital to fund commercial loans secured by graded sports c ards and sports memorabilia.

(See Note 14 .)

AM Capital Funding, LLC (“AMCF”), a wholly-owned subsidiary of CFC, was formed for the purpose of securitizing eligible secured loans of CFC.

AMCF issued and administered the AMCF Notes;

the AMCF Notes were repaid in full in December 2023.

AMCF is currently inactive.

CCP provides capital to fund commercial loans secured by graded sports c ards.

(See Note 14 .)

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

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

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

Intercompany accounts and transactions are eliminated.

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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 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.

Operating results for the three months ended September 30, 2024 are not necessarily indicative of the results that may be expected for the fiscal year ending June 30, 2025 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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Amounts related to disclosure of June 30, 2024 balances within these interim condensed consolidated financial statements were derived from the audited consolidated financial statements and notes thereto included in the 2024 Annual Report.

Stock Split in the Form of a Dividend

On April 28, 2022, the Company’s board of directors declared a two-for-one split of A-Mark’s common stock in the form of a stock dividend.

Each stockholder of record at the close of business on May 23, 2022 received a dividend of one additional share of common stock for every share held on the record date, which was distributed on June 6, 2022.

All share and per share amounts (except par value) have been retroactively adjusted to reflect the stock split in the form of a stock dividend for all periods presented.

Dividends are recorded if and when they are declared by the board of directors (See Note 17 .)

Fair Value Measurement

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

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 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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Concentration of Credit Risk

Cash is maintained at financial institutions, and, at times, balances may exceed federally insured limits.

Cash is maintained at financial institutions, and, at times, balances exceed federally insured limits.

The Company has not experienced any losses related to these balances.

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The functional currency of the Company is the United States dollar ("USD").

All transactions in foreign currencies are recorded in US dollars at the then-current exchange rate(s).

Upon settlement of the underlying transaction, all amounts are remeasured to US dollars at the current exchange rate on date of settlement.

All unsettled foreign currency transactions that remain in accounts receivable and trade account payables are remeasured to US dollars at the period end exchange rates.

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

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.

All transactions in foreign currencies are recorded in USD at the then-current exchange rate(s).

Upon settlement of the underlying transaction, all amounts are remeasured to USD at the current exchange rate on date of settlement.

All unsettled foreign currency transactions that remain in accounts receivable and trade account payables are remeasured to USD at the period end exchange rates.

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

The Company has three foreign subsidiaries that generate foreign currency remeasurement gains and losses:

AMTAG, LPM and SGB.

Because these entities have a functional currency of USD, foreign currency remeasurement gains and losses from these foreign subsidiaries are recorded in 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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Management regularly reviews and re-evaluates its previous determinations regarding whether it holds a variable interest in potential VIEs, the status of an entity as a VIE, and whether the Company is required to consolidate such VIEs in its condensed consolidated financial statements.

AMCF, a wholly-owned subsidiary of CFC, is a special purpose entity ("SPE") formed as part of a securitization transaction in order to isolate certain assets and distribute the cash flows from those assets to investors.

AMCF was structured to insulate investors from claims on AMCF’s assets by creditors of other entities.

Prior to the repayment of the AMCF Notes in December 2023, the Company had various forms of involvement with AMCF, which included (i) holding senior or subordinated interests in AMCF;

(ii) acting as loan servicer for a portfolio of loans held by AMCF;

and (iii) providing administrative services to AMCF.

AMCF is required to maintain separate books and records.

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.

(See Note 15 .)

Cash and Cash Equivalents

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 March 31, 2024 and June 30, 2023 .

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

Allowance for Credit Losses

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The fair market value of the bullion and bullion coins comprises two components:

(i) published market values attributable to the cost of the raw precious metal, and (ii) the premium paid at acquisition of the metal, which is attributable to the incremental value of the product in its finished goods form.

(i) published market values attributable to the cost of the raw precious metal, and (ii) the market value of the premium, which is attributable to the incremental value of the product in its finished goods form.

The market value attributable solely to such premium is readily determinable by reference to multiple sources.

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both the change in the fair market value of the inventory and the change in the fair market value of these derivative instruments are recorded in cost of sales in the condensed consolidated statements of income.

While the premium component of our bullion coins included in inventory is marked-to-market, our commemorative coin inventory, including its premium component, is held at the lower of cost or net realizable value, because the value of commemorative coins is influenced more by supply and demand determinants than on the underlying spot price of the precious metal content of the commemorative coins.

While the premium component of our bullion coins included in inventory is marked-to-market, our commemorative coin inventory, including its premium component, is held at the lower of cost or net realizable value, because the value of commemorative coins is influenced more by supply and demand determinants than by the underlying spot price of the precious metal content of the commemorative coins.

Unlike our bullion coins, 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.

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Finite-lived Intangible Assets

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

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

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.

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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 March 31, 2024 and June 30, 2023 .

Other Long-Term Assets

On June 27, 2022 , the Company acquired an additional 40 % interest in Silver Gold Bull, Inc.

(See Note 10.

) Also included in this acquisition was an option, which is exercisable between December 2023 and September 2024 , to purchase an add itional 27.6 % o f the outstanding equity of Silver Gold Bull, Inc.

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

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.

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

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.

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

Noncontrolling Interest

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

Noncontrolling I nterests

The Company’s condensed consolidated financial statements include entities in which the Company has a controlling financial interest.

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Orders that have been paid for and shipped, but not yet delivered to the customer are classified as deferred revenue.

Both customer advances and deferred revenue are shown, in the aggregate, as deferred revenue and other advances in the condensed consolidated financial statements.

Both customer advances and deferred revenue are shown, in the aggregate, as deferred revenue and other advances in the consolidated financial statements.

(See Note 11 .)

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The difference between the original contract values and the market values of these contracts are reflected as derivative assets or derivative liabilities in the condensed consolidated balance sheets at fair value, with the corresponding unrealized gains or losses included as a component of cost of sales.

When these contracts are net settled, the unrealized gains and losses are reversed and the realized gains and losses for forward contracts are recorded in revenue and cost of sales, and the net realized gains and losses for futures are recorded in cost of sales.

When these contracts are net settled, the unrealized gains and losses are reversed and the realized gains and losses for forward contracts are recorded in revenue and cost of sales, respectively, and the net realized gains and losses for futures are recorded in cost of sales.

The Company enters into forward and futures contracts solely for the purpose of hedging our inventory holding risk, and not for speculative market purposes.

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Amortization of Debt Issuance Costs

Debt issuance costs incurred in connection with the issuance of the AMCF Notes have been included as a component of the carrying amount of the debt, and Trading Credit Facility debt issuance costs are included in prepaid expenses and other assets in the Company's condensed consolidated balance sheets.

Debt issuance costs incurred in connection with the issuance of the AMCF Notes (see Note 15 ) have been included as a component of the carrying amount of the debt, and Trading Credit Facility debt issuance costs are included in prepaid expenses and other assets in the Company's condensed consolidated balance sheets.

Debt issuance costs are amortized to interest expense over the contractual term of the debt.

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 $ 0.6 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.

Amortization of debt issuance costs included in interest expense was $ 0.7 million and $ 0.5 million for the three months ended September 30, 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 (losses) 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 fro m equity method investments.

Other Income, Net

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.

The Company's other income, net is comprised of royalty and consulting income, which is recognized when earned, gains on other investments, and fair value adjustments to our acquisition-related contingent consideration liability.

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 $ 3.5 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.

Advertising costs totaled $ 4.6 million and $ 4.0 million for the three months ended September 30, 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

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 $ 5.5 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.

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 consolidated statements of income.

Shipping and handling costs totaled $ 6.1 million and $ 5.2 million for the three months ended September 30, 2024 and 2023 , respectively.

Share-Based Compensation

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The Company accounts for equity awards under the provisions of Compensation - Stock Compensation Topic 718 of the ASC ("ASC 718"), which establishes fair value-based accounting requirements for share-based compensation to employees.

ASC 718 requires the Company to recognize the grant-date fair value of stock options and other equity-based compensation issued to employees as expense over the service period in the Company's consolidated financial statements.

The expense is adjusted (excluding awards settleable in cash) for actual forfeitures of unvested awards as they occur.

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(See Note 17 .)

As part of the process of preparing its condensed consolidated financial statements, the Company is required to estimate its provision for income taxes in each of the tax jurisdictions in which it conducts business, in accordance with Income Taxes Topic 740 of the ASC ("ASC 740").

As part of the process of preparing its consolidated financial statements, the Company is required to estimate its provision for income taxes in each of the tax jurisdictions in which it conducts business, in accordance with Income Taxes Topic 740 of the ASC ("ASC 740").

The Company computes its annual tax rate based on the statutory tax rates and tax planning opportunities available to it in the various jurisdictions in which it earns income.

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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 March 31,

Nine Months Ended March 31,

Three Months Ended September 30,

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 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.

The anti-dilutive shares excluded from the table above were 10,000 and 10,000 for the three months ended September 30, 2024 and 2023, respectively.

Actual common shares outstanding totaled 23,184,059 and 23,335,674 as of September 30, 2024 and 2023 , respectively.

Recent Accounting Pronouncements

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Improvements to Reportable Segment Disclosures , which updates the guidance on segment disclosures to require entities to disclose significant segment expenses and other segment items, as well as the title and position of its chief operating decision maker.

This update will be applied retrospectively and is effective for the Company for its fiscal year beginning on July 1, 2024;

early adoption is permitted.

We are currently evaluating the impact of the adoption of this standard on our consolidated financial statements.

This update will be applied retrospectively and is effective for the Company's annual reporting period for its fiscal year which began on July 1, 2024.

We are currently evaluating the impact of the adoption of this standard on our consolidated financial statements, but we expect the adoption of the standard to impact certain of our segment reporting disclosures.

In December 2023, the FASB issued ASU No.

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We are currently evaluating the impact of the adoption of this standard on our consolidated financial statements.

Management does not believe that any other recently issued, but not yet effective, accounting pronouncement if currently adopted would have a material effect on the Company's consolidated financial statements.

Management does not believe that any other recently issued, but not yet effective for the Company, accounting pronouncement, if currently adopted would have a material effect on the Company's condensed consolidated financial statements.

ASSETS AND LIABI LITIES, AT FAIR VALUE

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The fair market value of the bullion and bullion coins comprises two components:

The market value attributable solely to such premium is readily determinable by reference to multiple sources.

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Product financing arrangements are classified in Level 1 of the valuation hierarchy.

Option to Purchase Interests in a Long-term Investment .

The fair value of the option to purchase additional ownership interest in Silver Gold Bull, Inc, which is exercisable between December 2023 and September 2024, was determined by an independent third-party valuation firm and was recorded as a component of other long-term assets on the condensed consolidated balance sheets.

This option is classified in Level 3 of the valuation hierarchy.

The value of the option was determined using a Monte Carlo Simulation model ("MCS model").

The MCS model includes inputs based on significant assumptions related to management’s forecasts of the investee’s earnings before interest, taxes, depreciation, and amortization ("EBITDA") and corresponding future total equity simulations, where an early exercise multiple is calibrated to maximize the fair value of the option during the exercise period.

For each simulation path, option payoffs are calculated based on the contractual terms, and then discounted at the term-matched risk-free rate, where the value of the option is calculated as the average present value over all simulated paths.

We used the historical volatility of comparable companies to make certain assumptions in the MCS model, which resulted in an expected EBITDA volatility of 70.0 % and an equity volatility of 70.0 %, with these two inputs having a correlation factor of 70.0 %.

A 4.1 % risk-free interest rate was used, which was based on U.S.

treasury yields for a time period corresponding to the remaining contractual life of the option.

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.

We may be required to pay contingent consideration up to $ 37.5 million in cash in connection with the acquisition of LPM in February 2024 if certain 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.

As of September 30, 2024, the fair value of the contingent consideration was $ 2.3 million , which was classified as other liabilities on our consolidated balance sheet.

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

Key assumptions used in the MCS model as of September 30, 2024 were an EBITDA risk premium of 10.7 %, an EBITDA volatility of 60.0 %, and a risk-free rate based on the USD yield curve between 3.6 % and 4.8 %.

During the three months ended September 30, 2024, we recorded a $ 0.2 million reduction to our contingent consideration reflected in selling, general, and administrative expenses.

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):

March 31, 2024

September 30, 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

Option to purchase interest in a long-term investment

Total assets, valued at fair value

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Total liabilities, valued at fair value

(1) Commemorative coin inventory totaling $ 3.7 million was held at lower of cost or realizable value, and thus is excluded from the inventories balance shown in this table.

(1) Commemorative coin inventory totaling $ 3.1 million was held at lower of cost or net realizable value, and thus is excluded from the inventories balance shown in this table.

June 30, 2024

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Derivative assets — forward contracts

Option to purchase interest in a long-term investment

Total assets, valued at fair value

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Derivative liabilities — forward contracts

Acquisition-related contingent consideration

Total liabilities, valued at fair value

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

March 31, 2024

September 30, 2024

June 30, 2024

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

March 31, 2024

September 30, 2024

June 30, 2024

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

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.

As of September 30, 2024 and June 30, 2024, our secured loans carried weighted-average effective interest rates of 10.4 % and 10.5 % , 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 credit quality of each loan is generally determined by the collateral value assessment, loan-to-value (“LTV”) ratio (that is, the principal amount of the loan divided by the estimated value of the collateral) and the type (or class) of secured material.

All loans are fully secured by precious metal bullion, numismatic and semi-numismatic collateral, or graded sports cards and sports memorabilia, which remains in the physical custody of the Company for the duration of the loan.

The term of the loans is generally 180 days, however loans are typically renewed prior to maturity and therefore remain outstanding for a longer period of time.

All loans are fully secured by precious metal bullion, numismatic and semi-numismatic collateral, or graded sports cards, which remains in the physical custody of the Company for the duration of the loan.

The term of the loans is generally 180 days;

however loans are typically renewed prior to maturity and therefore remain outstanding for a longer period of time.

Interest earned on a loan is billed monthly and is typically due and payable within 20 days and, if not paid after all applicable grace periods, is added to the outstanding principal balance, and late fees and default interest rates are assessed.

When an account is in default or if a margin call has not been met on a timely basis, the Company has the right to liquidate the borrower's collateral in order to satisfy the unpaid balance of the outstanding loans, including accrued and unpaid interest.

When an account is in default or if a margin call has not been met on a timely basis, the loan is considered non-performing and the Company has the right to liquidate the borrower's collateral in order to satisfy the unpaid balance of the outstanding loans, including accrued and unpaid interest.

Class and Credit Quality of Loans

The three classes of secured loan receivables are defined by collateral type:

(i) bullion, (ii) numismatic and semi-numismatic and (iii) graded sports cards and sports memorabilia.

(i) bullion, (ii) numismatic and semi-numismatic and (iii) graded sports cards.

The Company required LTV ratios vary with the class of loans.

Typically, the Company requires an LTV ratio of approximately 75 % for bullion, 65 % for numismatic and semi-numismatic collateral, and 50 % for graded sports cards and sports memorabilia.

Typically, the Company requires an LTV ratio of approximately 75 % for bullion, 65 % for numismatic and semi-numismatic collateral, and 50 % for graded sports cards.

The LTV ratio for loans collateralized by numismatic and semi-numismatic collateral is typically lower on a percentage basis than bullion collateralized loans because a higher value of the numismatic and semi-numismatic collateral relates to its premium value, rather than its underlying commodity value.

The LTV ratio for loans collateralized by graded sports cards and sports memorabilia is lower because the underlying collateral is not as liquid as bullion and numismatic and semi-numismatic collateral.

The LTV ratio for loans collateralized by graded sports cards is lower because the underlying collateral is not as liquid as bullion and numismatic and semi-numismatic collateral.

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

March 31, 2024

September 30, 2024

June 30, 2024

Numismatic and semi-numismatic

Graded sports cards and sports memorabilia

Due to the nature of market fluctuations of precious metal commodity prices, the Company monitors the bullion collateral value of each loan on a daily basis, based on spot price of precious metals.

Numismatic and graded sports cards and sports memorabilia collateral values are updated by numismatic and graded sports cards and sports memorabilia specialists typically within every 90 days and when loan terms are renewed.

Graded sports cards

Due to the nature of market fluctuations of precious metal commodity prices, we monitor the bullion collateral value of each loan on a daily basis, based on spot price of precious metals.

Numismatic and graded sports cards collateral values are updated by numismatic and graded sports cards specialists typically within every 90 days and when loan terms are renewed.

Generally, we initiate the margin call process when the outstanding loan balance is in excess of 85 % of the current value of the underlying collateral.

In the event that a borrower fails to meet a margin call to reestablish the required LTV ratio, the loan is considered in default.

The collateral material (either bullion, numismatic or graded sports cards and sports memorabilia) underlying such loans is then sold by the Company to satisfy all amounts due under the loan.

The collateral material (either bullion, numismatic or graded sports cards) underlying such loans is then sold by the Company to satisfy all amounts due under the loan.

Loans with LTV ratios of less than 75% are generally considered to be higher quality loans.

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):

March 31, 2024

September 30, 2024

June 30, 2024

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Loan-to-value of 75% or more

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

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

Non-Performing Loans/Impaired Loans

Historically, the Company has not established an allowance for any credit losses because the Company has liquidated the collateral to satisfy the amount due before any loan becomes non-performing or impaired.

Historically, the Company has not established an allowance for any credit losses because the Company maintains sufficient collateral to satisfy amounts due.

Non-performing loans have the highest probability for credit loss.

The allowance for secured loan credit losses attributable to non-performing loans is based on the most probable source of repayment, which is normally the liquidation of collateral.

If needed, an allowance for secured loan credit losses attributable to non-performing loans is recorded based on the most probable source of repayment, which is normally the liquidation of collateral.

Due to the accelerated liquidation terms of the Company's loan portfolio, past due loans are generally liquidated within 90 days of default.

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

In the event a loan were to become non-performing and the collateral is not sufficient to satisfy amounts due, the Company would determine a reserve to reduce the carrying balance to its estimated net realizable value.

As of September 30, 2024 and June 30, 2024, 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.

Customer loans are reviewed for impairment and include loans that are past due or non-performing, or if the customer is in bankruptcy.

Customer loans are reviewed for impairment and include loans that are non-performing, or if the customer is in bankruptcy.

In the event of an impairment, recognition of interest income would be suspended, and the loan would be placed on non-accrual status at the time.

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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 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.

For the three months ended September 30, 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):

March 31, 2024

September 30, 2024

June 30, 2024

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

As of September 30, 2024 and June 30, 2024, inventory held for sale totaled $ 467.9 million and $ 342.2 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 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.

As of September 30, 2024 and June 30, 2024, included within inventories is $ 222.2 million and $ 199.6 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 March 31, 2024 and June 30, 2023 totaled $ 2.6 million and $ 3.8 million , respectively.

Inventory loaned under consignment arrangements to customers as of September 30, 2024 and June 30, 2024 totaled $ 2.8 million and $ 2.4 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.

Commemorative Coins .

Our commemorative coin inventory, including its premium component, is held at the lower of cost or net realizable value, because the value of commemorative coins is influenced more by supply and demand determinants than on the underlying spot price of the precious metal content of the commemorative coins.

Our commemorative coin inventory, including its premium component, is held at the lower of cost or net realizable value, because the value of commemorative coins is influenced more by supply and demand determinants than by the underlying spot price of the precious metal content of the commemorative coins.

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 $ 3.7 million and $ 0.9 million as of March 31, 2024 and June 30, 2023, respectively.

Our commemorative coins are not hedged and totaled $ 3.1 million and $ 3.2 million as of September 30, 2024 and June 30, 2024, 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 $ 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.

The Company's inventory included borrowed precious metals with market values totaling $ 39.5 million and $ 32.0 million as of September 30, 2024 and June 30, 2024, respectively, with a corresponding offsetting obligation reflected as liabilities on borrowed metals on the consolidated balance sheets.

Product Financing Arrangements .

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The obligation is stated at the amount required to repurchase the outstanding inventory.

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

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 consolidated statements of income.

Such obligations totaled $ 541.7 million and $ 517.7 million as of September 30, 2024 and June 30, 2024, respectively.

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

(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.

(See Note 12 .) As of September 30, 2024 and June 30, 2024, the unrealized gains or losses resulting from the difference between market value and cost of physical inventory were gains of $ 115.2 million and gains of $ 55.5 million , respectively.

Premium Component of Inventory

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 March 31,

Nine Months Ended March 31,

The premium component, at market value, included in the inventory as of September 30, 2024 and June 30, 2024 totaled $ 36.7 million and $ 34.2 million , respectively.

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

Three Months Ended September 30,

Operating lease costs

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Short term lease costs

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

Finance lease costs

For the three months ended September 30, 2024, we made cash payments of $ 0.7 million for operating lease obligations.

These payments are included in operating cash flows.

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,

As of September 30, 2024, 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 6.1 % .

The future undiscounted cash flows for each of the next five years and thereafter and reconciliation to the lease liabilities as of September 30, 2024 for our operating leases were as follows (in thousands):

Fiscal Year ending June 30,

Operating Leases

2024 (remainder of year)

2025 (remainder)

Total lease payments

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Operating lease liability - long-term

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

(1) Represents the present value of the operating lease liabilities as of September 30, 2024 .

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

(3) Long-term operating lease liabilities are presented within other liabilities on our condensed consolidated balance sheets.

The Company has one related party lease;

for information on this lease refer to Note 14 .

For information regarding the Company's related party leases, refer to Note 14 .

PROPERTY, PLA NT, AND EQUIPMENT

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

March 31, 2024

September 30, 2024

June 30, 2024

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Computer equipment

Building and other

Total depreciable assets

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Property, plant, and equipment, net

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.

Property, plant and equipment depreciation and amortization expense was $ 0.8 million and $ 0.6 million for the three months ended September 30, 2024 and 2023, respectively.

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

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

• In June 2024, we obtained a controlling interest in SGB, at which point SGB became a consolidated subsidiary of the Company.

We measured the value of identifiable intangible assets and goodwill at $ 28.8 million and $ 78.0 million, respectively.

These values represent their fair values as of the acquisition date.

Carrying Value

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

March 31, 2024

September 30, 2024

June 30, 2024

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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.

Amortization expense related to the Company's intangible assets was $ 3.9 million and $ 2.2 million for the three months ended September 30, 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.

3 unchanged sentences

Fiscal Year Ending June 30,

2024 (remainder of year)

LONG-TERM INVESTMENTS

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):

March 31, 2024

2025 (remainder)

LONG-TERM INVESTME NTS

The following table shows the carrying value and ownership percentage of the Company's investment in privately-held entities accounted for either under the equity or cost method (in thousands):

September 30, 2024

June 30, 2024

3 unchanged sentences

Ownership Percentage

Silver Gold Bull, Inc.

Pinehurst Coin Exchange, Inc.

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

March 31, 2024

September 30, 2024

June 30, 2024

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Deferred revenue and other advances

As of September 30, 2024 and June 30, 2024 , advances from customers included $ 123.0 million and $ 99.6 million, respectively, of advances related to precious metals leases.

DERIVATIVE INSTRUMENT S AND HEDGING TRANSACTIONS

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

March 31, 2024

September 30, 2024

June 30, 2024

11 unchanged sentences

The Company adjusts the derivatives to fair value on a daily basis until the transactions are settled.

When these contracts are net settled, the unrealized gains and losses are reversed, and the realized gains and losses for forward contracts are recorded in revenue and cost of sales, and the net realized gains and losses for futures contracts are recorded in cost of sales.

When these contracts are net settled, the unrealized gains and losses are reversed, and the realized gains and losses for forward contracts are recorded in revenue and cost of sales, respectively, and the net realized gains and losses for futures contracts are recorded in cost of sales.

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

Three Months Ended March 31,

Nine Months Ended March 31,

Three Months Ended September 30,

Gains (losses) on derivative instruments:

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

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

Realized losses 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):

March 31, 2024

September 30, 2024

June 30, 2024

7 unchanged sentences

Open inventory sales commitments

Margin sale commitments

Margin sales commitments

In-transit inventory no longer subject to market risk

11 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 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

T he Company had the following outstanding commitments and open forward and futures contracts (in thousands):

September 30, 2024

June 30, 2024

9 unchanged sentences

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

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.

As of September 30, 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):

March 31, 2024

September 30, 2024

June 30, 2024

3 unchanged sentences

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

Three Months Ended March 31,

Nine Months Ended March 31,

Three Months Ended September 30,

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 March 31,

Nine Months Ended March 31,

Three Months Ended September 30,

State and local

Income tax expense

Effective income tax rate

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

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.

federal statutory income tax rates for the three months ended September 30, 2024 primarily due to the excess tax benefit from share-based compensation, partially offset by state taxes (net of federal tax benefit), foreign tax rate differential, Section 162(m) executive compensation disallowance, and other normal course non-deductible expenditures.

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

federal statutory income tax rates for the three months ended September 30, 2023 primarily due to the excess tax benefit from share-based compensation and the foreign derived intangible income special deduction, partially offset by state taxes (net of federal tax benefit), Section 162(m) executive compensation disallowance, and other normal course non-deductible expenditures.

Income Taxes Receivable and Payable

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.

As of September 30, 2024 and June 30, 2024, we had an income tax receivable of $ 2.3 million and $ 1.6 million , respectively.

Deferred Tax Assets and Liabilities

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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 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.

As of September 30, 2024 and June 30, 2024, 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.

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federal and state deferred tax assets.

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 .

As of September 30, 2024, the consolidated balance sheet reflects the deferred tax items for each tax-paying component (i.e., federal, state and foreign), resulting in a federal deferred tax liability of $ 12.5 million , a state deferred tax liability of $ 1.7 million , and a foreign deferred tax liability of $ 8.1 million .

As of June 30, 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 $ 12.5 million , a state deferred tax liability of $ 1.7 million , and a foreign deferred tax liability of $ 8.1 million.

Unrecognized Tax Benefits

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

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

Tax Examinations

The Company files income tax returns in the United States, and various state, local, and foreign jurisdictions.

The Company is currently subject to a three year statute of limitations for federal income tax purposes and, in general, three to six year statutes of limitations for state and foreign tax purposes.

RELATED PAR TY TRANSACTIONS

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SGI and the Company have a common chief executive officer, and the chief executive officer and the general counsel of the Company are board members of SGI.

2) Solid Crossing Inc.

("Solid Crossing").

SGB's corporate office space is leased from Solid Crossing, whose owners are affiliates of SGB.

3) Equity method investees.

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.

As of September 30, 2024, the Company had six 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, (iv) hedging transactions, and (v) related party lease arrangements.

Below is a summary of our related party transactions.

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

March 31, 2024

September 30, 2024

June 30, 2024

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Equity method investees

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

(1) Balance includes trade r eceivables, secured loans receivables, a nd other receivables, net

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

(3) Balance includes note payables, trade payables, and other payables, net

Secured Loans Receivable

On March 1, 2018, CFC entered into a loan agreement with Stack's Bowers Galleries providing a secured line of credit on the wholesale value (i.e., the excess over the spot value of the metal), of numismatic products bearing interest at a competitive rate per annum, with a maximum borrowing line (subject to temporary increases) of $ 10.0 million.

In addition to the annual rate of interest, the Company is entitled to receive a participation interest (or "royalty income") equal to 10 % of the net profits realized by Stack's Bowers Galleries on the ultimate sale of the products.

The initial term of the loan was 180 days;

thereafter, the line of credit has been extended by additional consecutive 30 -day periods by mutual agreement.

As of September 30, 2024 and June 30, 2024, the outstanding principal balance of this loan was $ 4.8 million and $ 0.0 million, respectively.

On March 4, 2022, CFC entered into a loan agreement with Stack's Bowers Galleries providing a secured line of credit based on the collateral value of Stack's Bowers Galleries' secured customers' notes.

The loan bears interest at a competitive rate per annum, with a maximum borrowing line of $ 3.0 million.

The initial term of the loan was 180 days;

thereafter, the line of credit has been extended by additional consecutive 180 -day periods by mutual agreement.

As of September 30, 2024 and June 30, 2024 , the outstanding principal balance of this loan was $ 0.0 million and $ 0.0 million, respectively.

Operating Lease Right of Use Assets

As of September 30, 2024 and June 30, 2024, our related party right of use assets were $ 1.9 million and $ 2.0 million, respectively.

Long-term Investments

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.

As of September 30, 2024 and June 30, 2024, the aggregate carrying balance of the equity method investments was $ 50.7 million and $ 50.2 million , respectively.

(See Note 10 .)

Other Long-term Assets

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 March 31, 2024, this option remained unexercised.

In June 2022, the Company acquired an option to purchase additional ownership interest in SGB.

This option was partially exercised and modified in June 2024.

The option is exercisable through September 2025.

(See Note 1 .)

Notes Payable

On April 1, 2021, CCP entered into a loan agreement ("CCP Note") with CFC, which provides CFC with up to $ 4.0 million to fund commercial loans secured by graded sports cards and sports memorabilia to its borrowers.

On April 1, 2021, CCP entered into a loan agreement ("CCP Note") with CFC, which provides CFC with up to $ 4.0 million to fund commercial loans secured by graded sports cards to its borrowers.

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

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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.

As of September 30, 2024 and June 30, 2024, the outstanding principal balance of the CCP Note was $ 4.0 million and $ 4.0 million , respectively.

In June 2024, SGB declared a $ 15.9 million dividend to existing shareholders based on certain levels of working capital.

$ 9.2 million of the dividend was paid to certain shareholders in September 2024 .

The dividend paid to the Company from SGB in September 2024 was $ 7.5 million.

The remaining unpaid dividend of $ 6.7 million and $ 8.4 million due to the other shareholders as of September 30, 2024 and June 30, 2024, respectively, was recorded as a note payable by SGB.

Activity with Related Parties

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

Three Months Ended March 31,

Nine Months Ended March 31,

Three Months Ended September 30,

Stack's Bowers Galleries

Equity method investees (1)

(1) Includes sales and purchases activity with SGB prior to the Company acquiring a majority ownership interest in SGB in June 2024.

Interest Income

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

Three Months Ended March 31,

Nine Months Ended March 31,

Three Months Ended September 30,

Interest income from secured loans receivables

1 unchanged sentence

Selling, General, and Administrative

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.

The Company incurred selling, general, and administrative expense related to its leasing agreements with Solid Crossing and Stack's Bowers Galleries and its consulting agreement with Cerberus Limited of $ 0.4 million and $ 12,000 , during the three months ended September 30, 2024 and 2023, respectively.

Interest Expense

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.

The Company incurred interest expense related to its note with CCP of $ 47,000 and $ 2,000 during the three months ended September 30, 2024 and 2023, respectively.

Equity Method Investments — Earnings, Dividends and Distributions Received

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.

The Company's proportional share of our equity method investee's earnings was $ 0.6 million and $ 2.7 million during the three months ended September 30, 2024 and 2023, respectively.

The Company received dividend and distribution payments from our equity method investees that totaled, in the aggregate, $ 0.2 million and $ 0.3 million during the three months ended September 30, 2024 and 2023, respectively.

The Company earned royalty and consulting services income from related parties that totaled $ 0.2 million and $ 0.3 million during the three months ended September 30, 2024 and 2023, respectively.

Foreign Currency Exchange Transactions with Related Person

Benjamin, A-Mark's Chairman of the Board, engaged in foreign currency transactions through A-Mark for an aggregate dollar value of $ 0.1 million and $ 0.1 million during the three months ended September 30, 2024 and 2023 , respectively.

The Company believes that all transactions were on an arms' length basis and on terms and conditions applicable to unaffiliated third parties.

FINANCIN G AGREEMENTS

Lines of Credit - Trading Credit Facility

On December 21, 2021, the Company entered into a three-year committed facility provided by a syndicate of financial institutions (the “Trading Credi t Facility”), with a total current revolving commitment of up to $ 350.0 million and with a termination date of December 21, 2024 .

In Se ptember 2023, this Trading Credit Facility was amended to add a new lender, a new subsidiary loan party and guarantor and modify certain terms and conditions of the Trading Credit Facility, including increasing the incremental facility feature to $ 190 million, eliminating provisions whereby lenders under certain conditions could require repayment of all obligations outstanding under the Trading Credit Facility within 10 days on demand, and updating the maturity date to September 20, 2025 .

As a result, the Trading Credit Facility was reclassified to long-term during the three months ended September 30, 2023.

The Trading Credit Facility is secured by substantially all of the Company’s assets on a first priority basis and is guaranteed by all of the Company's subsidiaries, with the exception of AMCF.

On December 21, 2021, the Company entered into a three-year committed facility provided by a syndicate of financial institutions (the “Trading Credi t Facility”), with a total revolving commitment of up to $ 350.0 million and with a termination date of December 21, 2024 .

The Trading Credit Facility has since been amended to add new lenders and modify certain terms and conditions, including increasing the incremental facility feature to $ 190 million, eliminating provisions whereby lenders under certain conditions could require repayment of all obligations outstanding under the Trading Credit Facility within 10 days on demand, extend the maturity date to September 30, 2026 , and increase the total facility to $ 422.5 million.

The Trading Credit Facility is secured by substantially all of the Company’s assets on a first priority basis and is guaranteed by all of the Company's subsidiaries.

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

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 % .

As of September 30, 2024, the interest rate on our Trading Credit Facility was approximately 7.4 % and t he daily SOFR rate was approximately 5.0 % .

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

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

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

Borrowings totaled $ 337.0 million and $ 245.0 million at September 30, 2024 and June 30, 2024, 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 $ 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.

Based on the month end borrowing bases in effect, the availability under the Trading Credit Facility, after taking into account current borrowings, totaled $ 85.5 million and $ 145.5 million as determined on September 30, 2024 and June 30, 2024, respectively.

As of September 30, 2024 and June 30, 2024, the remaining unamortized balance of loan costs was approximately $ 5.4 million and $ 3.4 million , respectively.

The Trading Credit Facility contains various covenants, all of which the Company was in compliance with as of September 30, 2024.

Interest expense related to the Company’s Trading Credit Facility totaled $ 6.4 million and $ 5.7 million , which represented 63.9 % and 58.2 % of the total interest expense recognized for the three months ended September 30, 2024 and 2023, respectively.

The Trading Credit Facility carried a daily weighted-average effective interest rate of 9.1 % and 8.2 % for the three months ended September 30, 2024 and 2023, respectively.

Notes Payable - AMCF Notes

In September 2018, AM Capital Funding, LLC (“AMCF”), a wholly-owned subsidiary of CFC, completed an issuance of Secured Senior Term Notes (collectively, the "AMCF Notes"):

In September 2018, AM Capital Funding, LLC (“AMCF”), previously a wholly-owned subsidiary of CFC, completed an issuance of Secured Senior Term Notes (collectively, the "AMCF Notes"):

Series 2018-1, Class A (the “Class A Notes”) in the aggregate principal amount of $ 72.0 million and Secured Subordinated Term Notes, Series 2018-1, Class B (the “Class B Notes”) in the aggregate principal amount of $ 28.0 million.

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The AMCF Notes were repaid in full in December 2023;

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.

AMCF was dissolved in June 2024.

Prior to its dissolution in June 2024, AMCF was a VIE because its initial equity investment may have been insufficient to maintain its ongoing collateral requirements without additional financial support from the Company.

The Company was the primary beneficiary of this VIE because the Company had the right to determine the type of collateral (i.e., cash, secured loans, or precious metals), had the right to receive (and had received) the proceeds from the securitization transaction, earn ongoing interest income from the secured loans (subject to collateral requirements), and had the obligation to absorb losses should AMCF's interest expense and other costs have exceeded its interest income.

For the three months ended September 30, 2024 and 2023, interest expense related to the AMCF Notes (including loan amortization costs) totaled $ 0.0 million and $ 1.4 million which represented 0.0 % and 13.9 % of the total interest expense recognized by the Company, respectively.

Prior to repayment, the AMCF Notes' weighted-average effective interest rate was 5.9 % .

Notes Payable — Related Party

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Liabilities on Borrowed Metals

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 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.

The Company recorded liabilities on borrowed metals with market values totaling $ 39.5 million and $ 32.0 million as of September 30, 2024 and June 30, 2024, respectively, which were included in inventories on the consolidated balance sheet.

For the three months ended September 30, 2024 and 2023, the interest expense related to liabilities on borrowed metals totaled $ 0.8 million and $ 0.5 million which represented 7.6 % and 5.6 % of the total interest expense recognized by the Company, respectively.

Advanced Pool Metals

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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 $ 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.

Such obligations totaled $ 541.7 million and $ 517.7 million as of September 30, 2024 and June 30, 2024, respectively.

For the three months ended September 30, 2024 and 2023, the interest expense related to product financing arrangements totaled $ 2.6 million and $ 1.9 million , which represented 26.5 % and 19.7 % 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 2024 Annual Report for information relating to employment contracts and other commitments.

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.

The Company is not aware of any material changes to commitments as summarized in the 2024 Annual Report.

Legal Matters

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STOCKHOL DERS’ EQUITY

Shelf Registration Statement

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 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.

Dividends are recorded if and when they are declared by the board of directors.

On July 5, 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 July 18, 2024 .

The dividend was paid on July 31, 2024 and totaled $ 4.6 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 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.

On August 17, 2023, the Company's board of directors also declared a regular cash dividend of $ 0.20 per share of common stock to stockholders of record at the close of business on October 10, 2023 .

On August 20, 2024 , the Company's board of directors declared a regular cash dividend of $ 0.20 per share of common share to stockholders of record at the close of business on October 8, 2024 .

The dividend was paid on October 22, 2024 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

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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 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 .

As of September 30, 2024, 848,509 shares remain authorized for repurchase under the program.

During the three months ended September 30, 2024 , we did no t repurchase any shares und er the program.

From inception of the program through September 30, 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 March 31, 2024, 1,701,243 shares were available for issuance of new awards under the 2014 Plan.

As of September 30, 2024, 1,692,839 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 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 Company incurred compensation expense related to stock options of $ 0.0 million and $ 0.2 million during the three months ended September 30, 2024 and 2023, respectively.

As of September 30, 2024, there was total remaining compensation expense of $ 0.1 million related to employee stock options, which will be recorded over a weighted-average vesting period of approximately 0.8 years.

The following table summarizes stock option activity:

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Outstanding at June 30, 2023

Outstanding at March 31, 2023

Exercisable at March 31, 2023

Outstanding at September 30, 2023

Exercisable at September 30, 2023

Outstanding at June 30, 2024

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 .

Outstanding at September 30, 2024

Exercisable at September 30, 2024

(1) 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:

The following table summarizes information about stock options as of September 30, 2024:

Exercise Price Ranges

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Nonvested outstanding at June 30, 2024

Nonvested outstanding at March 31, 2024

Nonvested outstanding at September 30, 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 $ 0.3 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 Company incurred compensation expense related to RSUs of $ 0.3 million and $ 0.5 million during the three months ended September 30, 2024 and 2023, respectively.

As of September 30, 2024, there was $ 1.1 million of remaining compensation expense related to RSUs, which will be recorded over a weighted-average vesting period of approximately 2.0 years.

The following table summarizes RSU activity:

1 unchanged sentence

Nonvested outstanding at June 30, 2023

Granted (as deemed reinvestment of cash dividend equivalents)

Vested & delivered

Vested & deferred (2)

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 September 30, 2023

Vested but subject to deferred settlement at September 30, 2023 (2)

Outstanding at September 30, 2023

Nonvested outstanding at June 30, 2024 (3)

Vested & delivered

Granted (as deemed reinvestment of cash dividend equivalents)

Vested & deferred (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)

Nonvested outstanding at September 30, 2024 (3)

Vested but subject to deferred settlement at September 30, 2024 (2)

Outstanding at September 30, 2024 (3)

(1) These shares were granted upon deemed reinvestment of dividend equivalents, in accordance with mandatory terms of the award agreement.

The measured fair value of the original award fully valued the participant’s right to deemed reinvestment of dividend equivalents, and therefore this grant resulted in no incremental compensation expense, which is reflected in the table as zero fair value for the shares.

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

The DSU holder is contractually obligated to defer settlement of the DSUs to a specified date following the holder’s termination of service.

(2) Includes 9,397 RSUs that vest based on continuous employment and achievement of non-market performance goals through June 30, 2024, 2025, and 2026.

(3) Includes 6,265 RSU s that vest based on continuous employment and achievement of non-market performance goals through June 30, 2025, and 2026.

Cash Incentive Bonus Award

5 unchanged sentences

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 March 31, 2024 resulting from the following assumptions:

The fair value of this liability award was $ 6.2 million as of September 30, 2024 resulting from the following assumptions:

a performance bonus estimate of $ 3.3 million to be paid over the four-year term, a risk-free rate of 3.6 %, 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 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.

During the three months ended September 30, 2024 and 2023 , the Company recognized $ 1.1 million and $ 0.2 million, respectively, of compensation expense related to this cash incentive bonus award.

Certain Anti-Takeover Provisions

5 unchanged sentences

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,

Three Months Ended September 30,

Total revenue

Customer concentrations

Morgan Stanley (1)

HSBC Bank (1)

(1) Sales with this trading partner include sales on forward contracts that are entered into for hedging purposes rather than sales characterized with the physical delivery of precious metal product.

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

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

March 31, 2024

June 30, 2023

Total accounts receivable

Customer concentrations

Morgan Stanley (1)

(1) Sales with this trading partner include sales on forward contracts that are entered into for hedging purposes rather than sales characterized with the physical delivery of precious metal product.

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

No single customer provided 10 percent or more of the Company's accounts receivable balances as of September 30, 2024.

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

March 31, 2024

September 30, 2024

June 30, 2024

Total secured loans

Total secured loans receivable

Customer concentrations

7 unchanged sentences

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

Three Months Ended March 31,

Nine Months Ended March 31,

Three Months Ended September 30,

Revenue by segment (1)

8 unchanged sentences

(b) Includes $ 1.6 million of inter-segment sales from the Direct-to-Consumer segment to the Wholesale Sales & Ancillary Services segment.

(c) Includes $ 6.2 million of inter-segment sales from the Direct-to-Consumer segment to the Wholesale Sales & Ancillary Services segment.

(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 March 31,

Nine Months Ended March 31,

Three Months Ended September 30,

Revenue by geographic region

2 unchanged sentences

Gross Profit and Gross Margin Percentage

Three Months Ended March 31,

Nine Months Ended March 31,

Three Months Ended September 30,

Gross profit by segment (1)

11 unchanged sentences

Operating Income and (Expenses)

Three Months Ended March 31,

Nine Months Ended March 31,

Three Months Ended September 30,

Operating income (expenses) by segment

6 unchanged sentences

Interest expense

Earnings (losses) from equity method investments

Earnings from equity method investments

Other income, net

Unrealized gains on foreign exchange

Unrealized losses on foreign exchange

Direct-to-Consumer

1 unchanged sentence

Depreciation and amortization expense

Interest income

Interest expense

Other income (expense), net

Unrealized gains on foreign exchange

Secured Lending

3 unchanged sentences

Interest expense

Earnings from equity method investments

Earnings (losses) from equity method investments

Other income, net

Net Income Before Provision for Income Taxes

Three Months Ended March 31,

Nine Months Ended March 31,

Three Months Ended September 30,

Net income before provision for income taxes by segment

3 unchanged sentences

Advertising Expense

Three Months Ended March 31,

Nine Months Ended March 31,

Three Months Ended September 30,

Advertising expense by segment

2 unchanged sentences

Secured Lending

Capital Expenditures for Property, Plant, and Equipment

Three Months Ended March 31,

Nine Months Ended March 31,

Capital expenditures for property, plant, and equipment by segment

Capital Expenditures for Long-Lived Assets

Three Months Ended September 30,

Capital expenditures for long-lived assets by segment

Wholesale Sales & Ancillary Services

Direct-to-Consumer

Precious Metals Held Under Financing Arrangements

March 31, 2024

June 30, 2023

Precious metals held under financing arrangements by segment

Wholesale Sales & Ancillary Services

Secured Lending

March 31, 2024

September 30, 2024

June 30, 2024

2 unchanged sentences

Direct-to-Consumer

Secured Lending

March 31, 2024

September 30, 2024

June 30, 2024

2 unchanged sentences

North America, excluding United States

March 31, 2024

September 30, 2024

June 30, 2024

4 unchanged sentences

Secured Lending

March 31, 2024

(1) Our equity method investments and precious metals held under financing arrangements are primarily recorded within our Wholesale Sales & Ancillary Services segment.

September 30, 2024

June 30, 2024

3 unchanged sentences

Long-term Assets

March 31, 2024

September 30, 2024

June 30, 2024

3 unchanged sentences

Secured Lending

March 31, 2024

September 30, 2024

June 30, 2024

1 unchanged sentence

United States

March 31, 2024

North America, excluding United States

September 30, 2024

June 30, 2024

4 unchanged sentences

Intangible assets

March 31, 2024

September 30, 2024

June 30, 2024

4 unchanged sentences

SUBSEQU ENT EVENTS

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 .

On October 22, 2024 , the Company paid a regular cash dividend of $ 0.20 per share to stockholders of record as of October 8, 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