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Item 7. Management’s Discussion and Analysis

2025-09-19 compared with 2024-09-18 · 311 added, 160 removed, 107 unchanged (81% of the section changed)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

following discussion and analysis should be read in conjunction with our

consolidated financial statements and the accompanying notes thereto included in this Form 10-K and is qualified in its entirety by the

foregoing and by more detailed financial information appearing elsewhere in this Form 10-K.

See “Consolidated Financial Statements.”

In addition to historical financial information, the following discussion and analysis contains forward-looking statements that involve

risks, uncertainties and assumptions.

Some of the numbers included herein have been rounded for the convenience of presentation.

results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those

discussed in the “Special Note Regarding Forward Looking Statements” found on page 4 of this Form 10-K.

following discussion and analysis should be read in conjunction with our consolidated financial statements and the accompanying notes

thereto included in this Form 10-K and is qualified in its entirety by the foregoing and by more detailed financial information appearing

elsewhere in this Form 10-K.

See “Consolidated Financial Statements.” In addition to historical financial information, the

following discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions.

numbers included herein have been rounded for the convenience of presentation.

Our actual results may differ materially from those anticipated

in these forward-looking statements as a result of many factors, including those discussed in the “Special Note Regarding Forward

Looking Statements” above.

audited financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted

Accounting Principles.

Marygold Companies, Inc.

(“The Marygold Companies” or the “Company”) conducts business through its wholly-owned

operating subsidiaries operating in the U.S., New Zealand and Canada.

The operations of the Company’s wholly-owned subsidiaries

are more particularly described herein but are summarized as follows:

Management - USCF Investments, Inc., a Delaware corporation (“USCF Investments”), with corporate headquarters in Walnut

Creek, California and its wholly-owned subsidiaries:

United States Commodity

Funds, LLC, a Delaware limited liability company (“USCF LLC”), and

USCF Advisers, LLC, a Delaware

limited liability company (“USCF Advisers”).

The principal place of business for each of USCF LLC and USCF Advisers is

in Walnut Creek, California.

Food Products – Gourmet

Foods, Ltd., a registered New Zealand company located in Tauranga, New Zealand and its wholly-owned subsidiary, Printstock Products

Limited, a registered New Zealand company, with is principal manufacturing facility in Napier, New Zealand.

Security Systems –

Brigadier Security Systems (2000) Ltd., a Canadian registered corporation, with locations in Regina and Saskatoon, Saskatchewan,

Beauty Products - Kahnalytics,

Inc., a California corporation, doing business as “Original Sprout,” located in San Clemente, California.

Marygold Companies, Inc., a Nevada corporation (together with its subsidiaries, “we,” “us,” “our,”

“Company,” or “The Marygold Companies”) is a holding company which operates through its wholly owned subsidiaries

on a multinational scale that is focused upon financial services, exchange traded funds management and certain other business activities

listed below:

Fund Management - USCF Investments, Inc., a Delaware corporation (“USCF Investments”), with corporate headquarters in

Walnut Creek, California and its wholly owned subsidiaries, which provide fund management services to exchange traded fund and exchange traded products (“ETFs”):

States Commodity Funds, LLC, a Delaware limited liability company (“USCF LLC”), and

Advisers, LLC, a Delaware limited liability company (“USCF Advisers”).

The principal place of business for each of USCF

LLC and USCF Advisers is in Walnut Creek, California.

Products – Gourmet Foods, Ltd., a registered New Zealand company located in Tauranga, New Zealand and its wholly owned subsidiary,

Printstock Products Limited, a registered New Zealand company, with is principal manufacturing facility in Napier, New Zealand.

Systems – Brigadier Security Systems (2000) Ltd., a Canadian registered corporation, with locations in Regina and Saskatoon,

Saskatchewan, Canada.

This business was sold in July 2025 as further described below in the Certain Recent Developments – Sale of

Brigadier, and in Note 16.

Subsequent Events to the audited consolidated financial statements included in this Form 10-K.

Products - Kahnalytics, Inc., a California corporation, doing business as “Original Sprout,” located in San Clemente,

Financial Services:

United States and Great Britain:

Marygold & Co., a Delaware

corporation, based in Denver, Colorado, and its wholly-owned subsidiary, Marygold & Co.

Advisory Services, LLC, a Delaware limited

liability company, whose principal business office is in New Albany, Ohio;

Marygold & Co., (UK)

Limited, a private limited company incorporated and registered in England and Wales, whose registered office is in London, England,

and its wholly-owned subsidiaries:

Tiger Financial & Asset

Management Limited, a company incorporated and registered in England and Wales, whose registered office is in Northampton, England;

Step-By-Step Financial

Planners Limited, a company incorporated and registered in England and Wales, whose registered office is in Staffordshire, England.

& Co., a Delaware corporation and its wholly owned subsidiary, Marygold & Co.

Advisory Services, LLC, a Delaware limited liability

company, whose principal business offices are located in Walnut Creek, California;

& Co., (UK) Limited, a private limited company incorporated and registered in England and Wales, whose registered office is in

London, England, and its wholly owned subsidiaries:

Limited f/k/a Tiger Financial & Asset Management Limited, a company incorporated and registered in England and Wales, whose

registered office is in Northampton, England;

Financial Planners Limited, a company incorporated and registered in England and Wales, whose registered office is in Staffordshire,

Certain Recent Developments

Business – Certain Recent Developments”

Accounting Policies

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Combinations - Valuation of Intangible Assets

are a diversified holding company whose activities involve the acquisition of operating companies through stock purchase or asset

purchase transactions.

are a holding company whose activities involve the acquisition of operating companies through stock purchase or asset purchase

transactions.

We account for business combinations using the acquisition method of accounting.

All the assets acquired,

liabilities assumed and amounts attributable to intangible assets, including goodwill, are recorded at their respective fair values

at the date of acquisition.

Determination of fair value involves estimates and assumptions which can be complex, most notably with respect to

intangible assets.

Critical estimates used in the valuation of intangible assets include, but are not limited to, the amount and timing

of projected cash flows, useful lives, and discount rates.

While management’s estimates of fair value are based on assumptions that

are believed to be reasonable, these assumptions are inherently uncertain as they pertain to forward-looking views of our business and

market conditions.

All the assets acquired, liabilities assumed

and amounts attributable to intangible assets, including goodwill, are recorded at their respective fair values at the date of acquisition.

Determination of fair value involves estimates and assumptions which can be complex, most notably with respect to intangible assets.

Critical estimates used in the valuation of intangible assets include, but are not limited to, the amount and timing of projected cash

flows, useful lives, and discount rates.

While management’s estimates of fair value are based on assumptions that are believed

to be reasonable, these assumptions are inherently uncertain as they pertain to forward-looking views of our business and market conditions.

The judgments made in this valuation process could materially impact our consolidated financial statements.

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outcomes of legal proceedings and claims brought against us are subject to significant uncertainty.

We evaluate developments in these matters on a regular basis and a contingency

loss is accrued by a charge to income when we believe it is both probable that a loss has been incurred and the amount can be reasonably

In determining whether a loss should be accrued, we evaluate among other factors, the degree of probability of an unfavorable

outcome and the ability to make a reasonable estimate of the amount of loss.

Changes in these factors could materially impact our consolidated financial statements.

We evaluate developments in these

matters on a regular basis and a contingency loss is accrued by a charge to income when we believe it is both probable that a loss has

been incurred and the amount can be reasonably estimated.

In determining whether a loss should be accrued, we evaluate among other factors

the degree of probability of an unfavorable outcome and the ability to make a reasonable estimate of the amount of loss.

Changes in these

factors could materially impact our consolidated financial statements.

objectives of accounting for income taxes are to recognize the amount of taxes payable or refundable for the current year, and deferred

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income tax disclosures.

Judgment is required in assessing the future tax consequences of events that have been recognized in our consolidated

Judgment is required to assess the future tax consequences of events that have been recognized in our consolidated

financial statements or tax returns.

1 unchanged sentence

financial statements.

SUMMARY RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

(in thousands, except percentages)

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Operating expenses

(Loss) income from operations

Other income, net

(Loss) income before income taxes

Benefit (provision) of income taxes

Net (loss) income

Loss from operations

Other (expense) income, net

Loss before income taxes

Benefit from income taxes

Year 2025 Compared with Fiscal Year 2024

decreased by $2.0 million or 6% for fiscal 2024 driven by reduced average Assets Under Management (“AUM”) in our

fund management business.

Average AUM for fiscal 2024 was $3.3 billion compared to $3.7 billion for fiscal 2023.

The reduction in

AUM in fiscal 2024 was due to commodity price fluctuations, rising interest rate environment as well as geopolitical and

economic uncertainty.

profit decreased by $2.0 million or 8% for the reasons described above for the reduced revenue as cost of revenue was relatively flat

from fiscal 2024 at $8.7 million compared to fiscal 2023 at $8.8 million.

expenses increased by $5.7 million or 23% as a result of the following.

General and administrative expenses, including marketing and

advertising, increased by $2.4 million or 25% driven by increased costs associated with our Fintech app development including additional

software and security infrastructure.

We recorded a $1.4 million impairment charge relating to the goodwill and other intangible assets

in our beauty products unit as a result of increased losses resulting from pandemic-related changes in its distribution channels and

increased costs from the introduction of new product lines.

Salaries and compensation increased by $1.1 million or 11% compared to fiscal

2023 driven by increased hiring for the buildout of our mobile Fintech app.

Fund operations increased by $0.8 million or 17% driven by

increased costs associated with managing more funds.

income, net increased by $0.6 million or 364% driven by unrealized gains on investments.

tax went from a provision of $0.4 million in fiscal 2023 to a tax benefit of $1.4 million in fiscal 2024 as a result of generating pre-tax

income in the prior year to incurring a pre-tax loss in the current year.

loss of $4.1 million generated in fiscal 2024 compared to net income of $1.2 million in fiscal 2023 was driven by the increased costs

associated with the investment in our mobile Fintech app, the increased losses including the impairment charge relating to our beauty

products unit and the decreased profits from our fund management business due to lower AUM.

SEGMENT RESULTS OF OPERATIONS

decreased by $2.7 million or 8% for fiscal 2025 driven by reduced revenue of $1.8 million at our fund management segment, $0.6

million at our food products segment and $0.3 million at our beauty products segment.

Average Assets Under Management

(“AUM”) in our fund management business for fiscal 2025 was $2.9 billion compared to $3.3 billion for fiscal 2024.

reduction in AUM in fiscal 2025 was due to commodity price fluctuations, energy demand as well as geopolitical and economic

The decreased revenue in food products was driven by changing our product mix and refocusing production capacity to

higher profit margin customers.

The decreased revenue in beauty products was driven by the efforts to control the discounted price

of products sold online by unauthorized resellers.

profit decreased by $2.2 million or 9% for the reasons described above for the reduced revenue as the gross profit margin remained consistent from fiscal 2024 to fiscal 2025.

Operating expenses decreased by $1.8 million or 6% as a result of the following.

During fiscal 2024, we recorded

a $1.4 million impairment charge relating to the goodwill and other intangible assets in our beauty products unit as a result of increased

losses resulting from pandemic-related changes in its distribution channels and increased costs from the introduction of new product lines.

Our marketing expenses decreased by $0.7 million during fiscal 2025 by putting our US fintech app on pause and reducing the marketing

costs at our beauty products segment.

Partially offsetting the decreased operating expenses were an increase in stock-based compensation

expenses of $0.4 million.

(expense) income, net went from a $0.8 million of other income in fiscal year 2024 to a $0.7 million other expense in fiscal year 2025.

The $1.5 million or 186% change was driven by the $1.2 million of interest expense incurred on the $4.4 million loan payable that we took out in September 2024.

from income taxes increased by $0.2 million or 13% from fiscal 2024 to fiscal 2025 as a result of the increased loss before income taxes

as described above.

loss of $5.8 million in fiscal 2025 increased by $1.8 million or 43% compared to $4.1 million in fiscal 2024.

The increase in net

loss was driven by the decreased profits from our fund management business due to lower average AUM, decreased other income as

described above and offset by improved net overall profits from our other operating segments.

RESULTS OF OPERATIONS

(in thousands, except percentages)

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Total revenue

Operating (Loss) Income

Operating Income (Loss)

Fund management - related party

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Corporate headquarters

Total operating (loss) income

Reportable Segments

Fiscal Year 2024 Compared with Fiscal Year 2023

Management - USCF Investments

Revenue decreased by $1.9 million or 9% driven

by reduced average Assets Under Management (“AUM”) in our fund management business.

Average AUM for fiscal 2024 was $3.3

billion compared to $3.7 billion for fiscal 2023.

The reduction in AUM in fiscal 2024 was due to commodity price

fluctuations, rising interest rate environment as well as geopolitical and economic uncertainty.

Operating income decreased by $2.7 million or 36% driven by the decrease in average

AUM as described above and increased fund operations expenses of $0.8 million or 17% as a result of increased licenses and fees as well

as fund accounting and administration costs due to an increase in the number of funds managed.

Total operating loss

Year 2025 Compared with Fiscal Year 2024

Fund Management - USCF Investments

decreased by $1.8 million or 10% driven by reduced average Assets Under Management (“AUM”) in our fund management

Average AUM for fiscal 2025 was $2.9 billion compared to $3.3 billion for fiscal 2024, a decrease of $0.4 billion or

The decrease in average AUM in fiscal 2025 was due to commodity price fluctuations, energy demand as well as geopolitical and

economic uncertainty.

income decreased by $1.5 million or 31% driven by the decrease in average AUM as described above and partially offset by decreased

operating expenses of $0.3 million or 2% as a result of lower license fees, and variable fund accounting and administration costs due

to lower AUM for funds overall.

Products - Gourmet Foods

decreased by $0.4 million or 5% and operating income increased slightly driven by changing our product mix and refocusing production

capacity to higher profit margin customers.

decreased from $7.3 million in fiscal 2024 to $6.7 million in fiscal 2025 which was a decrease of $0.6 million or 8%.

in revenue was in our bakery business and was due to a temporary cancellation of certain product categories sold to national

grocery chains during fiscal 2025.

income decreased by $0.2 million or 55% which was driven by a non-recurring cost of goods sold adjustment coupled with a depreciation charge taken for its

solar electricity system and partially offset by increased profits from the sale of higher margin products at our bakery business.

Products – Original Sprout

increased by $0.3 million or 9% and operating loss increased by $1.9 million or 650% driven by a $1.4 million impairment charge relating to the goodwill and other intangible

products revenue decreased by $0.3 million or 10% driven by the efforts to control the discounted price of products sold online by unauthorized

For the past year Original Sprout has been reducing the number of unauthorized Internet sales channels, recovering control over

its price points, and repositioning its products for a larger presence on store shelves.

Operating loss decreased

by $1.7 million or 82% driven by a $1.4 million impairment charge taken in fiscal 2024 relating to the goodwill and other intangible

assets in our beauty products unit as a result of increased losses resulting from pandemic-related changes in its distribution channels

and increased costs from the introduction of new product lines.

After the impairment charge taken in fiscal 2024, Original Sprout no

longer has any amortization charges from the intangible assets that were written down.

Original Sprout also reduced its marketing expense

by $0.3 million from fiscal 2024 to fiscal 2025.

Systems - Brigadier

decreased by $0.2 million or 6% and operating income decreased by $0.3 million or 46% driven by market timing and weather

Services – Marygold US and Marygold UK

Revenue increased by $0.1 million or 26% driven by increased revenues at Tiger and the incremental revenue from Step-By-Step

which was acquired in April 2024.

Operating loss increased by $2.6 million or 77% driven by increased costs incurred in connection

with the launch, marketing and roll-out of our mobile Fintech app in June 2023.

decreased by $0.2 million or 7% and operating income decreased by $0.1 million or 23% driven by market timing and weather patterns.

from monitoring residual fees remained relatively static while sales and installations of larger commercial installations decreased for

fiscal 2025 as compared to 2024.

The larger commercial accounts generate more revenue and profit but take longer to complete, thus may

produce spikes or declines in revenue and profits for specific reporting periods.

Brigadier was sold to a related party on July

1, 2025 (see “Certain Recent Developments – Sale of Brigadier” and Note 16, Subsequent Events to the audited consolidated

financial statements included in this Form 10-K).

Financial Services – Marygold US and Marygold UK

Marygold US incurred an operating loss of $4.7 million

in fiscal 2025 compared to an operating loss of $5.7 million in fiscal 2024.

Since the Marygold US app earned only de minimis revenues

since its launch in June 2023, Marygold US decided to pause operations of the app in the U.S.

effective March 31, 2025.

the losses and negative cash flows from Marygold US are expected to be reduced going forward as the Company assesses whether it will continue further development of the app for the U.S.

discontinue development of the app other

than for the U.K market;

or license or sell the app to a third party, of which there can be no assurance.

In order to further develop

the app for the U.S.

market, the Company anticipates it would need to raise additional debt or equity financing.

There can be no assurance

the Company will be able to raise such additional financing or upon terms acceptable to it.

The overall financial services revenue driven by Marygold

UK increased by $0.2 million or 32% driven by having a full year of revenue in fiscal 2025 from Step-By-Step which was acquired in April

Marygold UK released a narrower version of the mobile Fintech app in the UK during the fourth quarter of fiscal 2025.

The development,

marketing and support of the UK Fintech app negatively impacted the financial performance of Marygold UK during fiscal 2025 but was offset

due to reduced expenses of Marygold US.

The overall financial services operating loss decreased by $0.3 million, or 5%, as a result.

Corporate Headquarters

Operating loss for the corporate headquarters increased by $0.3 million or 10%

driven by higher stock-based compensation expenses as we began granting equity awards in fiscal 2023 and increased

the grants in fiscal 2024.

Operating loss for the corporate headquarters increased

by $0.7 million or 21% driven by higher stock-based compensation expenses of $0.4 million and the transition of certain employees from

the financial services segment to the parent company.

and Capital Resources

Marygold Companies is a holding company that conducts its individual business operations through its subsidiaries.

holding-company level, its liquidity needs relate to operational expenses, the funding of additional business acquisitions and new

investment opportunities.

Our operating subsidiaries’ principal liquidity requirements arise from cash used in operating

activities, debt service, and capital expenditures, including purchases of equipment and services, operating costs and expenses, and

income taxes.

Cash is managed at the holding company and the subsidiary level.

There are no limitations or constraints on the

movement of funds between the entities.

of June 30, 2024, we had $5.5 million of cash and cash equivalents on a consolidated basis as compared

to $8.2 million as of June 30, 2023, a decrease of $2.7 million or 33%.

At the holding-company

level, its liquidity needs relate to operational expenses, the funding of additional business acquisitions and new investment opportunities.

Our operating subsidiaries’ principal liquidity requirements arise from cash used in operating activities, debt service, and capital

expenditures, including purchases of equipment and services, operating costs and expenses, and income taxes.

Cash is managed at the holding

company and the subsidiary level.

There are no limitations or constraints on the movement of funds between the entities.

As of June 30, 2025, we had $5.0

million of cash and cash equivalents on a consolidated basis as compared to $5.5 million as of June 30, 2024, a decrease of $0.5

million or 8%.

Our cash used in operating activities for fiscal 2025 was $3.3 million.

For fiscal 2024, USCF Investments invested $3.0 million by

seeding one new fund and we made additional expenditures of $5.7 million in Marygold for the mobile Fintech app.

We have invested a total

of $15.1 million in the Fintech app since Marygold’s inception.

We expect that Marygold will require additional capital to fund

its losses over the coming 12 months.

As the funding requirements become known, we will decide upon the source of the additional capital

investment to be made as the need arises.

During fiscal 2024, we made a deposit of $1.8 million in connection with the potential acquisition

of a 9.9% equity interest in a domestic financial institution that is currently seeking certain regulatory approval.

Despite these cash

investments and expenses, our working capital position remains strong at $19.0 million as of June 30, 2024.

Based on our current operating plan which includes continued significant investments in the mobile Fintech app, we

intend to raise additional capital through one or more debt and/or equity financing to meet our operating and cash needs.

no assurance we will be able to raise additional financing or obtain terms that are acceptable to us.

In the event we are unable to find additional financing at terms that are acceptable to us, we would slow down the

investment in the development of our Fintech app.

For fiscal 2025, we made additional

expenditures of $3.3 million through Marygold US for the development of the mobile Fintech app in the United States.

invested a total of $19.1 million in the Fintech app through Marygold US since inception.

Despite these cash investments and

expenses, our working capital position remains strong at $12.4 million as of June 30, 2025.

described below, in September 2024 we entered into a financing arrangement under which we borrowed $4.4 million and have the potential

to borrow an additional $2.2 million.

The financing arrangement also gives the lender the right but not the obligation to provide an

additional $10.0 million in financing to us on the same terms as the initial loans.

Also as described below, on January 28, 2025, we received $1.8 million in net proceeds from the sale of our shares in

a firm commitment underwritten offering.

Also, on July 1, 2025, the Company sold Brigadier to a related party.

As of June 30, 2025, $0.7 million had been

received as a deposit, and the Company received the remaining proceeds of $1.6 million in accordance with the schedule described in Note

16, Subsequent Events to the Consolidated Financial Statements included in this Form 10-K.

Equity Financing

January 28, 2025, we closed on the sale of an aggregate of 2,050,000 shares of our common stock, $0.001 par value per share (“Common

Stock”) at a price to the public of $1.10 per share (before deduction of underwriting discounts and commissions) in a firm commitment

underwritten public offering (“Offering”) pursuant to an underwriting agreement, dated January 26, 2025 (“Underwriting

Agreement”), between us and the Maxim Group LLC (“Maxim”), as sole underwriter and book-running manager for the Offering.

Pursuant to the Underwriting Agreement, we granted Maxim a 45-day option to purchase up to an additional 307,500 shares of Common Stock

at the public offering price before deduction of underwriting discounts and commissions (“Overallotment Option”).

not exercise its Overallotment Option.

net proceeds of the Offering to us, after deducting underwriting discounts and commissions and estimated offering expenses, were $1.8

We intend to use the net proceeds from the Offering to retire or reduce debt, make additional investments in our financial services

operations, and for other general working capital and corporate purposes.

At-the-Market

Securities Offering

March 7, 2025, we entered into an Equity Distribution Agreement (“EDA”) with Maxim pursuant to which we may sell from time-to-time

shares of our common stock having an aggregate offering price of up to $4.65 million through or to Maxim, as sales agent or principal.

We have agreed to pay Maxim a commission equal to three percent (3%) of the aggregate gross proceeds from the sale of any shares through

Maxim under the EDA, reimburse Maxim for certain legal fees and disbursements, and have agreed to indemnify Maxim against certain liabilities

under the Securities Act.

The EDA requires that, until May 28, 2025, the date of the expiration of the standstill period in our Underwriting

Agreement with Maxim for the Offering described above, sales of our shares of common stock be made at a minimum price per share of $1.50

unless, at any time, Maxim and the Company mutually agree upon a lower minimum price per share.

During the fiscal year ended June 30, 2025,

we did not sell any shares pursuant to the EDA.

The offer and sale, if any, of our shares of common stock under the EDA will be made

pursuant to our shelf registration statement on Form S-3 which was filed with the SEC on December 18, 2024, and became effective on December

27, 2024, the base prospectus included therein, and a prospectus supplement that was filed by the Company with the SEC on March 7, 2025.

Company believes that its cash and cash equivalents along with the cash generated from ongoing operations will be sufficient to fund

its cash requirements over the next 12 months.

However, based on our current operating plan which we expect may include continued additional

investments in our mobile Fintech app for the U.K.

market, we may need to raise additional funds through one or more debt, equity or

equity linked financings to meet our operating and cash needs.

There can be no assurance we will be able to raise such additional financing

upon terms acceptable to us or at all.

In the event we are unable to obtain additional financing in an amount or upon terms acceptable

to us, we expect to further reduce or curtail our investment in the development of our Fintech app.

Company has various operating leases for offices, warehouses and manufacturing facilities.

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was $1.0 million as of June 30, 2025.

The obligations will reduce over the passage of

time through periodic lease payments.

See Note 14 to our Financial Statements for further analysis of this obligation.

of June 30, 2024, we had $0.4 million of third-party indebtedness on a consolidated basis.

Brigadier owed $0.3 million under a loan

that was secured with the land and building in Canada.

In July 2024, Brigadier repaid the loan in full.

addition, Gourmet Foods has a finance lease liability of $0.1 million related to a solar energy system which is included under Loans

- property and equipment on our consolidated balance sheets.

Investments, from time to time, provides initial investments in the creation of ETP funds that USCF Investments manages.

The obligations will reduce over the passage of time through periodic lease payments.

14 to our Financial Statements for further analysis of this obligation.

addition, Gourmet Foods has a finance lease liability of $0.1 million related to a solar energy system which is included under Lease liabilities on our consolidated balance sheets.

Note Financing

September 19, 2024, we entered into a note purchase agreement (“Purchase Agreement”) with Streeterville Capital, LLC, a Utah

limited liability company (“Holder”), pursuant to which we agreed to issue and sell to Holder a secured promissory note in

an initial principal amount of $4,380,000 (“Initial Note”) payable on or before 24 months from the issuance date (“Maturity

Date”) and, upon the satisfaction of certain conditions in the Purchase Agreement, up to one additional secured promissory note

(“Subsequent Note,” Initial Note and Subsequent Note, “Notes”).

The initial principal amount of the Notes includes

an original issue discount of 9% and expenses the Company agreed to pay to the Holder to cover the Holder’s transaction costs.

The original issue discount of the Initial Note was $360,000.

Interest on the principal amount of the Notes accrues at a rate of 9% per

The Company may pay all or any portion of the amount owed under the Notes earlier than it is due.

All payments made under the

Notes, including any repayments, are subject to an additional amount payable equal to 6% of the portion of the outstanding balance being

The Subsequent Note would have a principal amount of $2,180,000, which will have terms substantially similar to the terms of

the Initial Note.

The original issue discount on the Subsequent Note, if issued, will be $180,000.

Purchase Agreement contains certain covenants and agreements, including that we will not pledge or grant any lien or security interest

in our or our subsidiaries’ assets without the Holder’s prior written consent and that we will file reports under the Securities

Exchange Act timely, and that our shares will continue to be listed or quoted on the NYSE American or Nasdaq.

Also, without the Holder’s

prior written consent, we may not:

issue, incur or guarantee any debt obligations other than trade payables in the ordinary course;

any security that has conversion rights in which the number of shares varies with the market price of our shares;

issue any securities

convertible into our shares with a conversion price that varies with the market price of our shares;

issue any securities that have a

conversion or exercise price subject to a reset due to a change in the market price of our shares or upon the occurrence of certain events

related to our business (but excluding certain standard antidilution protection for any reorganization, recapitalization, noncash dividend,

stock split or similar transaction);

issue and securities pursuant to an equity line of credit, standby equity purchase agreement or

similar arrangement.

The Purchase Agreement also contains a most favored nations provision that provides we will grant to the Holder

the same terms as we offer any subsequent investor in our debt securities and certain arbitration provisions in the event of a claim

arising under the Purchase Agreement and other transaction documents.

Notes contain certain trigger events, including in the event that:

(a) we fail to pay any amount when due;

(b) a receiver or trustee

is appointed with respect to our assets;

(d) we make an assignment for the benefit of creditors;

a petition under bankruptcy, insolvency or similar laws;

(f) an involuntary bankruptcy proceeding is filed against us;

(g) a “fundamental

transaction” occurs without Holder’s prior written consent:

(h) we, USCF Investments or any of the USCF Investments subsidiaries,

fail to observe covenants in our agreements with the Holder;

(i) we default in observing or performing any covenant in the transaction

(j) any representation in the transaction documents is or becomes false or incorrect;

(i) we effect a reverse stock split

without 20 trading days’ prior written notice to the Holder;

(k) any judgment is entered against us for more than $500,000 which

remains unstayed for more than 20 days unless consented to by the Holder;

(m) our shares cease to be DTC (Depositary Trust Company) eligible;

or (n) we breach any covenant or agreement in any other agreement with Holder or in any financing or other agreement that affects our

ongoing business operations.

A “fundamental transaction” occurs if:

we merge with another entity;

we dispose of all or substantially

all of our assets, we allow more than 50% of our voting shares to be acquired by another person;

we enter into a share purchase agreement

with a third party that acquires more than 50% of our shares;

we recapitalize or reclassify our shares;

we transfer a material asset

to a subsidiary;

we pay a dividend to our shareholders;

or any person or group becomes the beneficial owner of 50% of the ordinary voting

power of our shares.

Upon the occurrence of a trigger event, the Holder may increase the amount outstanding under a Note by 10% for an

event described in (a) through (h) above or 5% for an event described in (i) through (n) above (a “default amount”).

Alternatively,

the Holder may treat the trigger event as an event of default and demand repayment of the Note, subject to a five-day cure period, together

with any applicable default amount.

Company’s obligations under the Note are secured by:

(i) a pledge of all the common stock the Company owns in USCF Investments,

and (ii) a security interest in all of the assets of the Company.

Further, the Company’s Chief Executive Officer’s trust,

the Nicholas and Melinda Gerber Living Trust (“Gerber Trust”), provided:

(i) a guaranty of the Company’s obligations

to the Holder under the Note and (ii) a pledge of all of the common stock of the Company owned by the Gerber Trust.

on the date that is six months from the issuance date until the applicable Note is paid in full, each month the Holder has the right

to require the Company to redeem up to an aggregate of $400,000 with respect to the Initial Note and $200,000 with respect to the Subsequent

Note plus any interest accrued thereunder and an additional amount payable equal to 6% of the principal amount and accrued interest redeemed.

The Company has the right to defer such redemption payments that Holder could otherwise elect to make three times by providing advance

written notice to Holder.

If Company exercises its deferral right, the outstanding balance automatically increases by 0.85% for each

instance that the deferral right is exercised by Company, which cannot be exercised more than once every ninety calendar days.

to the terms of the Purchase Agreement, beginning on the date of the issuance and sale of the Note and ending 24 months later, Holder

will have the right, but not the obligation, with Company’s prior written consent, to reinvest up to an additional $10,000,000

in the Company on the same terms and conditions as the Notes (structured as two tranches of $5,000,000 each).

Company engaged Maxim Group LLC to serve as placement agent for the transaction between the Company and Holder in exchange for an aggregate

commission equal to 7% of the gross cash proceeds received from the sale of the Notes.

of June 30, 2025, the note payable balance outstanding, net of the original issue discount and fees paid, was $1.3 million, all of which

is due within 12 months from June 30, 2025 assuming no deferral rights are exercised.

The effective interest rate for this note is 41.3%.

July 2024, Brigadier repaid its mortgage loan of $0.3 million in full that was secured with the land and building in Canada.

Investments, from time to time, provides initial investments in the creation of ETF funds that USCF Investments manages.

Investments classifies these investments as current assets as these investments are generally sold within one year from the balance

As of June 30, 2024, USCF Investments held investment positions totaling $7.5 million in four of its registered

Investment Company Act funds.

These investments along with other investments, as applicable, are described further in “Note 5

– Investments” to our consolidated financial statements included elsewhere in this Annual Report on Form

As of June 30, 2025, USCF Investments held investment positions in four of its exchange traded funds registered under

the Investment Company Act of 1940, as amended, USG (ticker changed from GLDX in March 2024), ZSB, USE and ZSC of $0.5 million, $0.2

million, $0.8 million, and $2.1 million, respectively.

These investment positions along with other investments, as applicable, are

described further in Note 5 to our Consolidated Financial Statements.

strategy on dividends is to declare and pay dividends only from retained earnings and only when our Board of Directors deems it prudent

2 unchanged sentences

Sheet Arrangements

June 30, 2024, and through the date of this Annual Report on Form 10-K, we have not entered into any transaction, agreement or other contractual arrangement with

an entity unconsolidated with us under which we have:

June 30, 2025, and through September 19, 2025, the filing date of this Annual Report on Form 10-K, we have not entered into any

transaction, agreement or other contractual arrangement with an entity unconsolidated with us under which we have:

obligation under a guarantee contract,

7 unchanged sentences

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-K

Item 7. Management’s Discussion and Analysis