UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
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14C
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THE
MARYGOLD COMPANIES, INC. |
(Name
of Registrant Specified In Its Charter) |
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Date Filed: October 18, 2022 |
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THE
MARYGOLD COMPANIES, INC.
120 Calle
Iglesia, Unit B
San
Clemente, CA 92672
INFORMATION
STATEMENT PURSUANT TO SECTION 14(C) OF THE
SECURITIES
EXCHANGE ACT OF 1934 AND REGULATION 14C THEREUNDER
NOTICE
OF ANNUAL MEETING
To the Stockholders of THE
MARYGOLD COMPANIES, INC.
You
are cordially invited to attend the Annual Meeting of Stockholders of The Marygold Companies, Inc. (the “Company”) on Friday,
November 11, 2022, at 1:00 p.m., Mountain Time Zone, at the Hilton
Denver Inverness, 200 Inverness Drive West, Englewood, Colorado 80112 (the “Annual Meeting”) in order to:
1. |
elect
each of the director nominees named herein to the Company’s board of directors (the “Board”) to serve a one-year
term. |
The
Board has fixed the close of business on October 13, 2022, as the record date (the “Record Date”) for determining stockholders
entitled to notice and to vote at the Annual Meeting, and any postponements or adjournments thereof. Holders of our common stock and
preferred stock as of the Record Date who are present in person or by valid proxy will be entitled to vote at the meeting. WE ARE NOT
ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
The
accompanying Information Statement is being mailed to our stockholders, beginning on October 18, 2022, for informational purposes only,
pursuant to Section 14(c) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and regulations
prescribed thereunder. The Board of Directors (the “Board”) is not soliciting your proxy or consent in connection with any
matters to be discussed at the Annual Meeting.
STOCKHOLDERS
ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING IN PERSON AND THE MANAGEMENT OF THE COMPANY HOPES THAT YOU WILL FIND IT CONVENIENT
TO ATTEND.
If
you plan to attend the meeting, please RSVP by October 31, 2022 to The Marygold Companies, Inc. at 949.429.5370 or by email to info@themarygoldcompanies.com
Date:
October 18, 2022 |
By Order of the Board of Directors, |
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By: |
/s/
Nicholas Gerber |
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Nicholas
Gerber |
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President,
Chief Executive Officer and Chairman of the Board of Directors |
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THE
MARYGOLD COMPANIES, INC.
120 Calle
Iglesia, Unit B
San
Clemente, CA 92672
INFORMATION
STATEMENT PURSUANT TO SECTION 14(C)
OF
THE SECURITIES EXCHANGE ACT OF 1934
WE
ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY
We
are furnishing this Information Statement to stockholders of THE MARYGOLD COMPANIES, INC. (“We” or
“Marygold” or the “Company”) in connection with the Annual Meeting of Stockholders (the “Annual
Meeting”). We will hold the Annual Meeting on Friday, November 11, 2022, at 1:00 p.m., Mountain Time Zone at the Hilton Denver
Inverness, 200 Inverness Drive West, Englewood, Colorado 80112.
The Annual
Meeting is being held for the purposes set forth in the accompanying Notice of Annual Meeting of Stockholders. This Information Statement
(including the Notice of Annual Meeting of Stockholders) (collectively, the “Meeting Materials”), is first being made available
to stockholders beginning on or about October 18, 2022.
Holders
of record of our common stock and our Preferred Stock at the close of business on October 13, 2022 (the “Record Date”) will
be entitled to notice of the Annual Meeting. On the Record Date, we had 39,383,459 outstanding shares of common stock, par value $0.001
per share, of The Marygold Companies, Inc. (the “Company” and such common stock, the “Common Stock”), and 49,360
Series B Convertible, Voting, Preferred Stock, par value $0.001 per share, each entitled to 20 votes, of the Company (“Preferred
Stock” and together with the Company Common Stock, the “Voting Stock”). A quorum of stockholders must be present for
any business to be conducted at the Annual Meeting.
Purpose
of the Meeting
At the
Annual Meeting, our stockholders will be asked to vote on the below:
1. |
elect
each of the director nominees named herein to the Company’s board of directors (the “Board”) to serve a one-year
term. |
Vote
Required
As set
forth in Section 3.1(a) of our Bylaws, directors will be elected by a majority of the voting power of the shares of stock entitled to
vote thereon in person or by proxy at an annual meeting of the stockholders with a quorum present.
Nicholas
and Melinda Gerber Living Trust (the “Gerber Trust”) own 18,250,015 shares of Voting
Stock. Nicholas and Melinda Gerber serve as trustees of the Gerber Trust. The Schoenberger Family Trust (the “Schoenberger Trust”)
own 4,697,993 shares of Voting Stock. Scott Schoenberger serves as trustee of the Schoenberger Trust. Upon acquiring their shares of
Voting Stock, Messrs. Gerber and Schoenberger have voted all shares of Voting Stock concurringly on matters submitted to the Company’s
stockholders. Pursuant to a voting agreement, (the “Voting Agreement”), the Gerber Trust and Schoenberger Trust will continue
to vote all shares of Voting Stock owned by them to elect each of Messrs. Gerber and Schoenberger to the Board along with other designees
mutually agreed upon. By virtue of the Voting Agreement, Messrs. Gerber and Schoenberger will represent 22,948,008, or 56.84% of the
Voting Stock when voting on director nominees.
Stockholders
who own in excess of 50% of the Company’s outstanding Voting Stock have advised us that they intend to vote for the election of
Directors. As a result, each of the director nominees will be elected to serve a one-year term as described in this information statement
at the Annual Meeting.
No
Dissenters Rights
Under
the Nevada Revised Statutes, no dissenters’ rights are applicable since stockholders are not being asked to vote on any proposals
at the Annual Meeting.
PROPOSAL
1: ELECTION OF DIRECTORS
Pursuant
to our Bylaws, each member of our Board of Directors serves until the next annual meeting of stockholders and until his or her respective
successor is duly elected and qualifies. Currently, our Board has eight members, four of whom are “independent directors”
as such term is defined in Section 803 of the NYSE American Company Guide. The NYSE American definition of “Independent Director”
means a person other than an Executive Officer or employee of the Company or any other individual having a relationship which, in the
opinion of the Company’s Board of Directors, would interfere with the exercise of independent judgment in carrying out the responsibilities
of a director.
The term
of office of all directors will expire at this year’s Annual Meeting. On the nomination and recommendation of our Nominating and Corporate
Governance Committee to our Board, Nicholas Gerber, David W. Neibert, Scott Schoenberger, Matt Gonzalez, Derek Mullins, Kathryn D. Rooney,
Erin Grogan, and Joya Delgado Harris will stand for reelection as directors at the Annual Meeting. Each of the individual directors have
consented to serve as director upon his or her election and re-election.
Stockholders
who own in excess of 50% of the Company’s outstanding Voting Stock have advised us that they intend to vote for the election of
Directors. As a result, each of the director nominees will be elected to serve a one-year term, or until his or her respective successor
is duly elected and qualifies. If any nominee should become unable to serve or, for good cause, will not serve as a director, a substitute
nominee as may be proposed by our Board. However, we are not aware of any circumstances that would prevent any of the nominees from serving.
The following nominees for
election as directors to serve until the next annual meeting of stockholders in 2023 and until their successors are duly elected and
qualifies:
Name |
Age |
Principal
Occupation |
Director
Since |
Interested
Director Nominees: |
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Nicholas
D. Gerber |
60 |
President,
CEO and Chairman of The Marygold Companies, Inc. |
2015 |
Scott
Schoenberger |
56 |
Owner
and CEO of KAS Engineering |
2015 |
David
W. Neibert |
67 |
Chief
Operations Officer and Secretary of The Marygold Companies, Inc. |
2002 |
Kathryn
D. Rooney |
50 |
Chief
Marketing Officer of United States Commodities Funds, LLC |
2017 |
Independent
Director Nominees: |
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|
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Matt
Gonzalez |
57 |
Chief
Attorney at the San Francisco Public Defender’s Office, Partner in Gonzalez & Kim |
2013
|
Erin
Grogan |
48 |
Independent
Consultant for Alpine Investors |
2017 |
Joya
Delgado Harris |
49 |
Executive
Director, Gold Standard with the CEO Roundtable on Cancer |
2017 |
Derek
Mullins |
48 |
Co-Founder
and Managing Partner of PINE Advisor Solutions |
2017 |
Biographical
information regarding our Board is set forth below. We have divided the directors into two groups —independent directors and interested
directors. As previously disclosed, we are a “controlled company” as defined in section 801(a) of the NYSE American Company Guide, and
are therefore presently exempt from any requirements regarding independent director composition, relative to our board, compensation committee and nominating and governance committee. Notwithstanding, and pursuant to NYSE guidelines,
our audit committee is and will be comprised of independent directors.
On
September 24, 2022, Kelly J. Anderson tendered her immediately-effective resignation as a director of the Company’s Board of
Directors.
Biographical
Information
Interested
Directors
Nicholas
D. Gerber: Mr. Gerber has been a director and the controlling shareholder of the Company since
2015 and has served as its Chief Executive Officer, President, and Chairman of the Board of Directors of The Marygold Companies,
since 2015.
Additional
Qualifications:
Mr. Gerber
brings to the Board experience and leadership of 22 years as Chairman and Chief Executive Officer of companies he’s founded since
1995. Mr. Gerber has been Chairman and Chief Executive Officer of the Company since January 2015.
Scott
Schoenberger: Mr. Schoenberger has been a director and the controlling shareholder of the Company
since 2015 and has served as its directors, since 2015.
Additional
Qualifications:
Mr. Schoenberger
is the owner and Chief Executive Officer of KAS Engineering, a second-generation plastic injection molding firm based in multiple southern
CA locations. He also is the owner and Chief Executive Officer of Nica Products, another manufacturing company based in Orange County,
CA. Mr. Schoenberger has over 30 years of business experience in manufacturing and technology.
David
W. Neibert: Mr. Neibert has been a director of the Company since June 2002 and has served as its
Chief Financial Officer from 2015 to 2017 as well as Chief Operations Officer since 2017.
Additional
Qualifications:
Mr. Neibert
brings over three decades of combined business experience in mergers and acquisitions, executive experience for publicly traded companies
as well as board membership.
Kathryn
D. Rooney: Ms. Rooney was elected a director of the Company in January 2017.
Additional
Qualifications:
Ms. Rooney
brings to the Board her experience as Chief Marketing Officer of the Company’s subsidiary USCF Investments which is a senior executive
position. Ms. Rooney has over 20 years of experience in marketing and investor relations.
Independent
Directors
Matt
Gonzalez: Mr. Gonzalez has served as a director since 2013.
Additional
Qualifications:
Mr. Gonzalez
is an accomplished attorney with over 30 years of experience handling both civil and criminal matters in both state and federal courts.
He is the Chief Attorney for the City and County of San Francisco Public Defender’s Office where he oversees an office of over 100 trial
lawyers. Mr. Gonzalez was an elected public official as a member of the San Francisco Board of Supervisors from 2001-2005, and served
as the president of the body from 2003-2005. He brings his experience and expertise in legal issues and business enterprise experience
as a co-owner of Flywheel Taxi (formerly DeSoto Taxi) in San Francisco.
Erin
Grogan: Ms. Grogan has served as a director since 2017.
Additional
Qualifications:
Ms. Grogan
has over 20 years of experience in management and finance and currently serves as Chief Financial Officer of the Association for California
School Administrators. Ms. Grogan’s past experiences includes senior executive and management positions of a charitable company
which was acquired by GoFundMe, the University of San Francisco School of Management as well as other positions in the public and private
financial company sector.
Joya
Delgado Harris: Ms. Harris has served as a director since 2017.
Additional
Qualifications:
Ms. Harris
brings over 20 years of executive director and management experience to the Board. She is the Executive Director at Gold Standard with
the CEO Roundtable on Cancer. Ms. Harris was previously the Director of Research Integration for the American Cancer Society. She has
extensive leadership experience in nonprofit management, program development, implementation, and evaluation; resource development, community
outreach, and developing business partnerships.
Derek
Mullins: Mr. Mullins has served as a director since 2017.
Additional
Qualifications:
Mr. Mullins
brings over 25 years financial expertise to the Board as a co-founder, managing partner and owner of an investment fund. Mr. Mullins
has an extensive background in finance and his experience as an executive officer of public companies.
Compensation
of Directors
The following table sets forth
the compensation that we paid during the year ended June 30, 2022 to our directors.
Director
Compensation Table
Name |
Fees
Earned or
Paid in
Cash ($) |
Stock
Awards
($) |
Option
Awards
($) |
Non-Equity
Incentive Plan
Compensation
($) |
Nonqualified
Deferred
Compensation
Earnings
($) |
Change
in Pension
Value and
Nonqualified
Deferred
Compensation
Earnings ($) |
All
Other
Compensation
($) |
Total
($) |
David
W. Neibert |
— |
— |
— |
— |
— |
— |
— |
— |
Nicholas
Gerber |
— |
— |
— |
— |
— |
— |
— |
— |
Scott
Schoenberger |
— |
— |
— |
— |
— |
— |
— |
— |
Kathryn
D. Rooney |
— |
— |
— |
— |
— |
— |
— |
— |
Kelly
J. Anderson* |
11,000 |
— |
— |
— |
— |
— |
— |
10,500 |
Matt
Gonzalez |
11,000 |
— |
— |
— |
— |
— |
— |
11,000 |
Erin
Grogan |
11,000 |
— |
— |
— |
— |
— |
— |
11,000 |
Joya
Delgado Harris |
11,000 |
— |
— |
— |
— |
— |
— |
11,500 |
Derek
Mullins |
11,000 |
— |
— |
— |
— |
— |
— |
11,500 |
* On September 24, 2022, Kelly J. Anderson
tendered her immediately-effective resignation as a director of the Company’s Board of Directors.
Only our
independent directors received compensation for their services as directors during the year ended June 30, 2022. Independent directors
receive an annual retainer, paid quarterly, plus reimbursement for approved Board meeting travel and related out-of-pocket expenses.
In addition, the Company is responsible for paying directors’ and officers’ liability insurance. This expense for the year
ended June 30, 2022 was $253,113.
Executive
Officers
Our executive
officers serve at the discretion of our Board of Directors. The following persons serve as our executive officers or significant employees
in the following capacities:
Name |
Age |
Office |
Nicholas
D. Gerber |
60 |
President
and Chief Executive Officer |
Stuart
Crumbaugh |
59 |
Chief
Financial Officer |
David
Neibert |
67 |
Chief
Operations Officer |
For information
on Mr. Gerber, see his biographical information under “Election of Directors” above.
Stuart
P. Crumbaugh: Stuart Crumbaugh has served as the Chief Financial Officer of The Marygold
Companies, Inc. (“The Marygold Companies”), the parent of USCF Investments, Inc. (“USCF”) since December 2017.
Compensation
of Executive Officers
Summary
Compensation Table
The following
table sets forth the compensation paid to our executive officers for the fiscal year ended June 30, 2021. Unless otherwise specified,
the term of each executive officer is that as set forth under that section entitled, “Directors, Executive Officers, Promoters
and Control Persons -- Term of Office”.
Name
and Principal Position |
|
Year
Ended
June
30, |
|
Salary
($) |
|
|
Bonus($) |
|
|
Stock
Awards
($) |
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|
Option
Awards
($) |
|
Non-Equity
Incentive Plan
Compensation |
|
|
Nonqualified
Deferred
Compensation
Earnings |
|
|
All
Other
Compensation
($) |
|
|
Total
($) |
|
David
W. Neibert |
|
2021 |
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|
256,000 |
|
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|
50,000 |
|
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|
Nil |
|
|
|
Nil |
|
|
Nil |
|
|
|
Nil |
|
|
|
Nil |
|
|
|
306,000 |
|
Chief
Operations Officer(1) |
|
2022 |
|
|
285,345 |
|
|
|
25,000 |
|
|
|
Nil |
|
|
|
Nil |
|
|
Nil |
|
|
|
Nil |
|
|
|
Nil |
|
|
|
310,345 |
|
Nicholas
D. Gerber(2) |
|
2021 |
|
|
400,000 |
|
|
|
Nil |
|
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|
Nil |
|
|
|
Nil |
|
|
Nil |
|
|
|
Nil |
|
|
|
Nil |
|
|
|
400,000 |
|
Chief
Executive Officer |
|
2022 |
|
|
400,000 |
|
|
|
Nil |
|
|
|
Nil |
|
|
|
Nil |
|
|
Nil |
|
|
|
Nil |
|
|
|
Nil |
|
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|
400,000 |
|
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Stuart
P. Crumbaugh (3) |
|
2021 |
|
|
294,580 |
|
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|
91,885 |
|
|
|
Nil |
|
|
|
Nil |
|
|
Nil |
|
|
|
Nil |
|
|
|
Nil |
|
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|
386,465 |
|
Chief
Financial Officer |
|
2022 |
|
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335,212 |
|
|
|
118,173 |
|
|
|
Nil |
|
|
|
Nil |
|
|
Nil |
|
|
|
Nil |
|
|
|
Nil |
|
|
|
453,385 |
|
Carolyn
Yu (4) |
|
— |
|
|
— |
|
|
|
— |
|
|
|
Nil |
|
|
|
Nil |
|
|
Nil |
|
|
|
Nil |
|
|
|
Nil |
|
|
|
— |
|
Chief
Legal Officer |
|
2022 |
|
|
351,950 |
|
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|
81,900 |
|
|
|
Nil |
|
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|
Nil |
|
|
Nil |
|
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|
Nil |
|
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|
Nil |
|
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433,850 |
|
(1) Mr. Neibert’s
salary was increased to $425,000 per year in April 2022.
(2) USCF pays
Mr. Gerber a salary of $400,000.
(3)
Mr. Crumbaugh salary was increased to $425,000 in April 2022.
(4) Ms. Yu became the CLO and
her salary was increased to $425,000 in April 2022.
There
were no unexercised stock options, stock that has not vested, or equity incentive plan awards for any named officer outstanding at the
end of the last fiscal year.
INFORMATION
ABOUT OUR CORPORATE GOVERNANCE
Board
of Directors Meetings and Committees
During
the fiscal year ended June 30, 2022, our Board met at least once per quarter with additional special meetings conducted telephonically
to address issues arising from acquisition transactions and other non-routine events. On August 24, 2021, the Board voted to form three
committees, the Audit, Compensation and Nominating and Corporate Governance Committees. A charter was adopted for each committee. During
fiscal year ended June 30, 2022, each director then serving on the Board attended at least 3 of 5 meetings of the Board, either in person
or telephonically. Each committee met at least once during the fiscal year ended June 30, 2022.
It is
anticipated that most of the current members of the Board will attend the Company’s 2022 Annual Meeting of Stockholders. The Company
does not have a formal policy with respect to directors’ attendance at the Annual Meeting of Stockholders.
Board
Leadership Structure and Role in Risk Oversight
Under
the Company’s Bylaws, the Board elects the Company’s Chairperson and Chief Executive Officer. Each of these positions may
be held by the same person or may be held by different people. Currently, these two offices are held by Mr. Gerber. The Board believes
that the Company and its stockholders are best served by having a policy that provides the Board the ability to select the most qualified
and appropriate individual to lead the Board as Chairperson. The Board also believes it is important to remain flexible when allocating
responsibilities among these two offices in a way that best serves the needs of the Company. The Board believes that having Mr.
Gerber serve as both Chairman and CEO provides an efficient and effective leadership model for the Company. Combining the Chairman and
CEO roles fosters clear accountability, effective decision-making, and alignment on corporate strategy.
The Company
is exposed to a number of risks that are inherent with every business. Such risks include, but are not limited to, financial and economic
risks and legal and regulatory risks. While management is responsible for the day-to-day management of these risks, the Board is responsible
for the oversight of risk management. The Board is responsible for evaluating the adequacy of risk management processes and determining
whether such processes are being implemented by management. The Board will discuss significant risks or exposures and assess the steps
management has taken to minimize such risks to the Company.
Controlled
Company Exemption
Pursuant
to the Voting Agreement, Messrs. Gerber and Schoenberger, through their respective trusts, will represent 22,948,008, or 56.84% of the
Voting Stock with respect to matters that may have a material impact on Company strategy and shareholder rights.
Because
more than 50% of the combined voting power of all of our outstanding common stock is beneficially owned by Messrs. Gerber and Schoenberger,
we are a “controlled company” as defined in section 801(a) of the NYSE American Company Guide. As such, we are exempt from
certain NYSE American rules requiring our Board of Directors to have a majority of independent members, a compensation committee composed
entirely of independent directors and a nominating and governance committee composed entirely of independent directors.
Independent
Directors
The Board
has adopted the standard of independence set forth in the NYSE American Company Guide in order to determine whether members of the Board
are “independent”. Upon consideration of the criteria and requirements regarding director independence set forth in Section
803 of the NYSE American Company Guide, the Board has determined that the following four directors, Matt Gonzalez, Erin Grogan, Joya Delgado
Harris and Derek Mullins, meet the NYSE American’s independence standards, including the criteria for independence set forth in
Rule 10A-3(b)(1) of the Exchange Act.
Due to
our qualification as a “controlled company” under the NYSE American Company Guide. the Board is not subject to NYSE requirements
regarding the amount or composition of “independent” directors of its Board or in respect of its compensation committee or
nominating and corporate governance committee.
Committees
(2023)
Audit
Committee: Derek Mullins, Chair, Erin Grogan, Member
Compensation
Committee: Matt Gonzalez, Chair, Joya Delgado Harris, Member
Nominating
and Corporate Governance Committee: Joya Delgado Harris, Chair, Erin Grogan, Member
Under
the Company’s Amended and Restated Bylaws, Stockholders may recommend any person to be a director of the Company by writing to
the Company’s Secretary not less than 45 days nor more than 75 days prior to the date on which the Company first mailed its proxy
materials for the previous year’s annual stockholders’ meeting. Each submission must include (i) a brief description of the
candidate, (ii) the candidate’s name, age, business address and residence address, (iii) the candidate’s principal occupation
and the number of shares of the Company’s capital stock beneficially owned by the candidate and (iv) any other information that
would be required under the Commission’s rules in a proxy statement listing the candidate as a nominee for director. The Amended
and Restated Bylaws revised and updated the Company’s previous procedures for stockholder submission of director nominations by
adding the requirement for advance notice.
In conducting
a search for director candidates, the Nominating and Corporate Governance Committee along with the Board may use its network of contacts
to compile a list of potential candidates, but it may also engage, if it deems appropriate, a professional search firm. The Nominating
and Corporate Governance Committee generally reviews all recommended candidates at the same time and subjects all candidates to appropriate
review criteria. Members of the Board should be qualified, dedicated, and ethical and have experience relevant to the Company’s
operations and understand the complexities of the Company’s business environment. The Board evaluates candidates upon a recommendation
from the Nominating and Corporate Governance Committee in the context of the current composition of the Board. As part of this assessment,
Board considers diversity of age, skills and such other factors as it deems appropriate, given the current needs of the Board and its
committees.
Stockholder
Communications with the Board
Stockholders
may communicate with the Board by written correspondence. Correspondence from the Company’s stockholders to the Board or any individual
directors or officers should be sent to the Company’s Secretary. The Secretary will screen all communications for product inquiries,
new product suggestions, resumes, job inquiries, surveys, business solicitations and advertisements, as well as hostile, threatening,
illegal, unsuitable, frivolous, patently offensive or otherwise inappropriate material before forwarding the correspondence to the Board.
Correspondence addressed to either the Board as a body, or to any director individually, will be forwarded by the Company’s Secretary
to the Chairman of the Board or to the individual director, as applicable. The Company’s Secretary will regularly provide to the
Board a summary of all stockholder correspondence that the Secretary receives. This process has been approved by the Company’s
Board.
All correspondence
should be sent to The Marygold Companies, Inc., 120 Calle Iglesia, Unit B, San Clemente, CA 92672, Attention: Mr. David W. Neibert, Chief
Operations Officer and Secretary.
Code
of Business Conduct and Ethics
The Board
has adopted a code of ethics (the “Code”) designed, in part, to deter wrongdoing and to promote honest and ethical conduct,
including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships, full, fair,
accurate, timely and understandable disclosure in reports and documents that the Company files with or submits to the Commission and
in the Company’s other public communications, compliance with applicable governmental laws, rules and regulations, the prompt internal
reporting of violations of the code to an appropriate person or persons, as identified in the code, and accountability for adherence
to the code. The Code applies to all directors, executive officers and employees of the Company. The Company will provide a copy of the
Code to any person without charge, upon request to Mr. David W. Neibert, Chief Operations Officer and Secretary by calling 949.429.5370
or by writing to The Marygold Companies, Inc., 120 Calle Iglesia, Unit B, San Clemente, CA 92672, Attention: Mr. David W. Neibert, Chief
Operations Officer and Secretary.
The Company
intends to disclose any amendments to or waivers of its Code as it applies to directors or executive officers by filing them on Form
8-K.
PRINCIPAL
ACCOUNTANT FEES AND SERVICES
The following
aggregate fees by BPM LLP were billed to the Company for work attributable to audit, tax and other services in each of the fiscal years
ended June 30, 2022 and 2021.
Audit
Fees. Our principal independent accountant billed us, for each of the last two fiscal years,
the following aggregate fees for its professional services rendered for the audit of our annual financial statements and review of financial
statements included in our Form 10-Q reports or other services normally provided in connection with statutory and regulatory filings
or engagements for those two fiscal years:
Fiscal
Year ended June 30, 2022 |
|
$ |
309,802 |
|
Fiscal Year ended June 30, 2021 |
|
$ |
369,580 |
|
Audit-Related
Fees. Our principal independent accountant, and those secondary accountants performing audit
reviews of our subsidiaries on our behalf, billed us, for each of the last two fiscal years, the following aggregate fees for assurance
and related services reasonably related to the performance of the audit or review of our financial statements and not reported above
under “Audit Fees”:
Fiscal
Year ended June 30, 2022 |
|
$ |
nil |
|
Fiscal
Year ended June 30, 2021 |
|
$ |
nil |
|
Tax
Fees. Our principal independent accountant billed us, for each of the last two fiscal years,
the following aggregate fees for professional services rendered for tax compliance, tax advice and tax planning:
Fiscal
Year ended June 30, 2022 |
|
$ |
171,753 |
|
Fiscal
Year ended June 30, 2021 |
|
$ |
125,683 |
|
All
Other Fees. Our principal independent accountant billed us, for each of the last two fiscal
years, the following aggregate fees for products and services provided by it, other than the services reported in the above three categories:
Fiscal
Year ended June 30, 2022 |
|
$ |
213,918 |
|
Fiscal
Year ended June 30, 2021 |
|
$ |
nil |
|
Pre-Approval
of Audit and Non-Audit Services. The Audit Committee Charter requires that it pre-approve
all audit, review and attest services and non-audit services before such services are engaged.
REPORT
OF THE AUDIT COMMITTEE OF THE MARYGOLD COMPANIES, INC.
September 26, 2022
To the Board of Directors of
The Marygold Companies, Inc. (the “Company”),
The audit
committee of the Board of Directors (the “Audit Committee”) has reviewed and discussed the consolidated financial statements
of the Company and its subsidiaries as set forth in Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2022
with management of the Company and BPM LLP, independent public accountants for the Company.
We reviewed
and discussed the consolidated financial statements of the Company and its subsidiaries to be set forth in Item 8 of the Company’s
Annual Report on Form 10-K for the fiscal year ended June 30, 2022 with management of the Company and BPM LLP, independent public accountants
for the Company.
We also
discussed with BPM LLP the matters required by the Public Company Accounting Oversight Board (“PCAOB”) to be discussed, as
adopted in Auditing Standard No. 16 (Communications with Audit Committees). We have received the written disclosures and the letter from
BPM LLP required by the applicable PCAOB requirements for independent accountant communications with audit committees with respect to
auditor independence and have discussed with BPM LLP its independence from the Company.
It is
not the duty of the Audit Committee to plan or conduct audits or to determine that the Company’s financial statements are complete
and accurate and in accordance with generally accepted accounting principles; that is the responsibility of management and the Company’s
independent public accountants. In giving its recommendation to the Board of Directors, the Audit Committee has relied on (i) management’s
representation that such financial statements have been prepared with integrity and objectivity and in conformity with generally accepted
accounting principles and (ii) the reports of the Company’s independent public accountants with respect to such financial statements.
Based
on the review and discussions with management of the Company and BPM LLP referred to above, we recommend to the Board of Directors
that the Company publish the consolidated financial statements of the Company and subsidiaries for the year fiscal ended June 30,
2022 in the Company’s Annual Report on Form 10-K. Submitted by the members of the Audit Committee of the Board of
Directors.
Erin
Grogan |
Derek
Mullins |
On September 24, 2022, Kelly
J. Anderson, a former member of the Company’s audit committee resigned from the Board of Directors, with immediate effect.
The
material contained in the foregoing Audit Committee Report is not “soliciting
material,” is not deemed “filed”
with the SEC and is not to be incorporated by reference into any filing of
the Company under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof and irrespective
of any general incorporation language in any such filing.
SECURITY
OWNERSHIP OF BENEFICIAL OWNERS AND MANAGEMENT
The following
table sets forth information as of October 13, 2022, with respect to the beneficial ownership (as defined in Rule 13d-3 of the Exchange
Act) of the Company’s common stock by (1) each director of the Company, (2) the named Executive Officers of the Company, (3) each
person or group of persons known by the Company to be the beneficial owner of greater than 5% of the Company’s outstanding common
stock, and (4) all directors and officers of the Company as a group.
Beneficial
ownership is determined in accordance with the rules of the SEC and includes voting or investment power with respect to the securities.
Shares of common stock subject to options or warrants (or other rights, if any) that are currently exercisable or exercisable within
60 days of October 13, 2022, are deemed to be outstanding and beneficially owned by the person holding such options or warrants. Such
shares, however, are not deemed outstanding for the purposes of computing the percentage ownership of any other person. Percentage of
ownership is based on 39,383,459 shares of common stock, assuming the conversion of all outstanding shares of Preferred Stock, outstanding
as of October 13, 2022.
Unless
otherwise indicated, to our knowledge, each stockholder listed below has sole voting and investment power with respect to the shares
beneficially owned by the stockholder, except to the extent authority is shared by their spouses under applicable law. Unless otherwise
indicated, the address of all executive officers and directors is c/o The Marygold Companies, Inc. 120 Calle Iglesia, Unit B, San Clemente,
CA 92672.
Name
and Address of Beneficial Owner |
Amount
Owned |
|
|
Percent
of Class (7) |
|
Gonzalez
& Kim 120 Calle Iglesia, San Clemente CA 92672 |
|
233,400 |
(1) |
|
|
0.58 |
% |
Nicholas
D. Gerber 120 Calle Iglesia, San Clemente CA 92672 |
|
18,250,015 |
(2) |
|
|
45.21 |
% |
David
W. Neibert 120 Calle Iglesia, San Clemente CA 92672 |
|
44,448 |
(3) |
|
|
0.11 |
% |
Scott
Schoenberger 120 Calle Iglesia, San Clemente CA 92672 |
|
4,697,993 |
(4) |
|
|
11.64 |
% |
Kathryn
D. Rooney 120 Calle Iglesia, San Clemente CA 92672 |
|
2,000 |
(5) |
|
|
* |
|
Derek
Mullins 120 Calle Iglesia, San Clemente CA 92672 |
|
— |
|
|
|
0.00 |
% |
Erin
Grogan 120 Calle Iglesia, San Clemente CA 92672 |
|
— |
|
|
|
0.00 |
% |
Joya
Harris 120 Calle Iglesia, San Clemente CA 92672 |
|
— |
|
|
|
0.00 |
% |
Stuart
P. Crumbaugh 120 Calle Iglesia, San Clemente CA 92672 |
|
— |
|
|
|
0.00 |
% |
Carolyn
M. Yu 120 Calle Iglesia, San Clemente CA 92672 |
|
7,000 |
(6) |
|
|
* |
|
Officers
and Directors as a Group |
|
23,234,856 |
(7) |
|
|
57.55 |
% |
Sheila
Gerber |
|
3,183,929 |
|
|
|
7.89 |
% |
Gerber
Family Trust |
|
5,623,543 |
|
|
|
13.93 |
% |
*Less than 1%.
(1) |
Mr.
Gonzalez is a member of the Board of the Company. Mr. Gonzalez and Mr. Hansu Kim are 50% partners and share voting and dispositive
power in Gonzalez & Kim, a California general partnership, which holds 11,670 shares of Series B Preferred Stock (which after
giving effect to their conversion would total 233,400 shares of Common Stock) constituting 0.58% of the outstanding shares of Common
Stock which percentage is based on 40,370,659 outstanding shares of Common Stock (giving effect to the conversion of all Series
B Preferred Stock). |
|
|
(2) |
Mr.
Gerber is the President and Chief Executive Officer of the Company and Chairman of the Board. Mr. Gerber’s shares are held
by the Nicholas and Melinda Gerber Living Trust (the “Gerber Trust”) and Melinda and Nicholas Gerber serve as trustees of the
Gerber Trust, which owns a total 18,250,015 shares, representing 45.21% of the outstanding shares of Common Stock (giving effect
to the conversion of all Series B Preferred Stock). As such, the Gerber Trust and Mr. Gerber share power to vote or to direct the
vote of the shares and share power to dispose or to direct the disposition of these shares. |
|
|
(3) |
Mr.
Neibert is the Chief Operations Officer of the Company and a member of the Board. Mr. Neibert owns an aggregate 44,448 shares.
Mr. Neibert’s total beneficial ownership constitutes 0.11% of the outstanding shares of Common Stock which percentage is based
on 40,370,659 outstanding shares of Common Stock (giving effect to the conversion of all Series B Preferred Stock). |
|
|
(4) |
Mr.
Schoenberger is a member of the Board of the Company. Mr. Schoenberger’s shares are held by the Schoenberger Family Trust (the
“Schoenberger Trust”) and Mr. Schoenberger serves as sole trustee of the Schoenberger Trust, which holds 36,058 shares
of Series B Preferred Stock and 3,976,833 shares of Common Stock, and total 4,697,993 shares, representing 11.64% of the outstanding
shares of Common Stock which percentage is based on 40,370,659 outstanding shares of Common Stock (giving effect to the conversion
of all Series B Preferred Stock). As such, the Schoenberger Trust and Mr. Schoenberger share power to vote or to direct the vote
of the shares and share power to dispose or to direct the disposition of these shares. |
|
|
(5) |
Ms.
Rooney is a member of the Board of the Company. Ms. Rooney directly owns an aggregate 2,000 shares which is less than 1% of the outstanding
shares of Common Stock which percentage is based on 40,370,659 outstanding shares of Common Stock (giving effect to the conversion
of all Series B Preferred Stock). |
|
|
(6) |
Ms.
Yu is the Chief Legal Officer of the Company. Ms. Yu’s shares are held by her indirectly through her husband. As such, Ms.
Yu and her husband share power to vote or to direct the vote of the shares and share power to dispose or to direct the disposition
of these shares. |
|
|
(7) |
The
percentage of class is calculated pursuant to Rule 13d-3(d) of the Exchange Act which percentages are calculated on the basis of
the amount of outstanding securities, plus securities deemed outstanding pursuant to Rule 13d-3(d)(1). The percentage of common stock
outstanding is as of September 27, 2022, and based upon 39,383,459 shares of common outstanding and 49,360 shares of Series
B Preferred Stock, giving effect to the conversion of all Series B Preferred Stock at a ratio of 20:1, for a total issued and outstanding
amount of 40,370,659 shares. |
Upon
acquiring their shares of Voting Stock, Messrs. Gerber and Schoenberger have voted all shares of Voting Stock concurringly on matters
submitted to the Company’s stockholders. Pursuant to the “Voting Agreement, the Gerber Trust and Schoenberger Trust will
continue to vote all shares of Voting Stock owned by them to elect each of Messrs. Gerber and Schoenberger to the Board along with other
designees mutually agreed upon. By virtue of the Voting Agreement, Messrs. Gerber and Schoenberger will represent 22,948,008, or 56.84%
of the Voting Stock when voting on director nominees.
CERTAIN
RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
During
our last fiscal year, we did not enter into any transactions with related persons, promoters or certain control persons as covered by
Item 404 of Regulation S-K. However, in connection with that certain Securities Purchase Agreement with Nicholas Gerber and Scott Schoenberger,
certain now current executive officers and directors may have formed a “group” under Section 13(d)(3) of the Act which may
result in related party transactions in the future. These affiliations are disclosed herein.
On January
26, 2015, we entered into a securities purchase agreement (the “Securities Purchase Agreement”) with two accredited investors,
Nicholas Gerber and Scott Schoenberger, (the “Purchasers”) pursuant to which we agreed to sell and the Purchasers agreed
to purchase approximately 13,333,333 shares of common stock and approximately 108,172 shares of Series B preferred stock of the Company
(adjusted for the effect of the 1:10 reverse stock split in December 2015 and the 1:30 reverse stock split in December 2017) in exchange
for $3,000,000 USD. Pursuant to the terms of the Securities Purchase Agreement, Purchasers acquired a controlling interest in the Company
pursuant to the issuance of the above shares which constituted approximately 70.0% of the voting control of the Company. Following the
closing of the Securities Purchase Agreement, Mr. Gerber and Schoenberger became officers and directors of the Company.
On April
8, 2016 and May 25, 2016, the Company entered into convertible promissory note agreements (the “Promissory Notes”) with the
Gerber Irrevocable Family Trust, an affiliate of our shareholder and CEO, that resulted in the funding of $350,000 and with the Schoenberger
Family Trust, an affiliate of our shareholder and director, that resulted in the funding of $250,000, respectively. The Promissory Notes
bear interest at four percent (4%) per annum and increases to nineteen percent (19%) in the event of default by the Company. The
Company and the noteholder negotiated the interest rate at arm’s length relying upon the available market rate for long-term deposits
at financial institutions as well as the current rate of return realized by the noteholder for cash deposits currently held. Larger deposits
traditionally fall into a “Jumbo” rate category with marginally higher returns. Interest ranged from annual percentage rates
of 0.01% at the lowest to 1.75% at the highest. Recognizing the unsecured nature of the promissory note, and the historical record of
continued operating losses by the Company, a rate of 4% annual interest was agreed upon in light of the heightened default risk over
traditional investment instruments. There was no beneficial conversion feature identified as of the date of issuance of the Promissory
Notes. Both notes were repaid in full on their respective maturity dates, together with accrued interest totaling $84,000 and $60,000
to the Gerber Irrevocable Family Trust and the Schoenberger Family Trust, respectively.
On September
19, 2016, the Company entered into a conditional Stock Purchase Agreement (the “Agreement”), dated September 19, 2016, with
Wainwright Holdings, Inc., a Delaware corporation (“Wainwright”) and certain shareholders of Wainwright (the “Sellers”),
pursuant to which the Sellers conditionally agreed to sell, and the Company conditionally agreed to purchase, the total issued and outstanding
common stock of Wainwright (the “Wainwright Shares”).
In connection
with the acquisition of Wainwright on December 9, 2016, the Promissory Notes were subsequently amended to remove the conversion feature.
Additionally, as a result of the transaction completed on December 9, 2016, current shareholders of Wainwright became shareholders of
the Company. Prior to the transaction, Mr. Gerber, along with certain family members and certain other Wainwright shareholders, owned
the majority of the common stock in the Company as well as Wainwright. Following the closing of this transaction, he and those shareholders
continue to own the majority of the Company voting shares. Mr. Gerber and Mr. Schoenberger (and the through the control of their respective
trusts which hold stock in the Company) entered into a Voting Agreement reflective of a similar Voting Agreement in place for Wainwright
wherein they have agreed to vote in concert with regard to all matters that come before the shareholders or the board of directors for
a vote. This Voting Agreement establishes them as a control group.
Any future
transactions by and among the parties mentioned above may qualify as related party transactions and will be disclosed accordingly.
We
have adopted a policy that any transactions with directors, officers or entities of which they are also officers or directors or in which
they have a financial interest, will only be on terms consistent with industry standards and approved by a majority of the disinterested
directors of the Board of Directors and based upon a determination that these transactions are on terms no less favorable to us than
those which could be obtained by unaffiliated third parties. This policy could be terminated in the future. In addition, interested directors
may be counted in determining the presence of a quorum at a meeting of the Board of Directors or a committee thereof which approves such
a transaction.
PROPOSALS
BY SECURITY HOLDERS
No
stockholder has requested that we include any proposals in this Information Statement or otherwise requested that any proposals be submitted
to the stockholders at the Annual Meeting.
MEETING
MATERIALS
The expenses
of distributing the Notice and of making the Meeting Materials available to the stockholders will be borne by the Company, including
expenses in connection with the preparation of the Notice. As noted above, the Company is not soliciting proxies for the Annual Meeting
of Stockholders as no proposals are being presented for stockholder vote.
FORWARD
LOOKING STATEMENTS
This Information
Statement and other reports that the Company files with the SEC contain forward-looking statements about the Company’s business
containing the words “believes,” “anticipates,” “expects” and words of similar import. These forward-looking
statements involve known and unknown risks, uncertainties and other factors that may cause actual results or performance to be materially
different from the results or performance anticipated or implied by such forward-looking statements. Given these uncertainties, stockholders
are cautioned not to place undue reliance on forward-looking statements. Except as specified in SEC regulations, the Company has no duty
to publicly release information that updates the forward-looking statements contained in this Information Statement. An investment in
the Company involves numerous risks and uncertainties, including those described elsewhere in this Information Statement. Additional
risks will be disclosed from time-to-time in future SEC filings.
OTHER
MATTERS
As of
the date of this Information Statement, management does not know of any matters that will come before the Annual Meeting.
WHERE
YOU CAN FIND ADDITIONAL INFORMATION
We are
subject to the Exchange Act and are required to file reports, information statements and other information with the SEC regarding our
business, financial condition and other matters pursuant to and in accordance with the Exchange Act. You may read and copy the reports,
information statements and other information filed by us over the internet at http://www.sec.gov, the internet website of the SEC. All
inquiries regarding our Company should be addressed to The Marygold Companies, Inc., attn: David Neibert, Secretary, 120 Calle Iglesia,
Unit B, San Clemente, CA 92672.
DELIVERY
OF DOCUMENTS TO SECURITY HOLDERS SHARING AN ADDRESS
If hard
copies of the materials are requested, we will send only one Information Statement and other corporate mailings to stockholders who share
a single address unless we received contrary instructions from any stockholder at that address. This practice, known as “householding,”
is designed to reduce our printing and postage costs. However, the Company will deliver promptly upon written or oral request a separate
copy of the Information Statement to a stockholder at a shared address to which a single copy of the Information Statement was delivered.
You may make such a written or oral request by (a) sending a written notification stating (i) your name, (ii) your shared address and
(iii) the address to which the Company should direct the additional copy of the Information Statement, to the Company at The Marygold
Companies, Inc., attn: Mr. David W. Neibert, 120 Calle Iglesia, Unit B, San Clemente, CA 92672.
If
multiple stockholders sharing an address have received one copy of this Information Statement or any other corporate mailing and would
prefer the Company to mail each stockholder a separate copy of future mailings, you may send notification to or call the Company’s
principal executive offices. Additionally, if current stockholders with a shared address received multiple copies of this Information
Statement or other corporate mailings and would prefer the Company to mail one copy of future mailings to stockholders at the shared
address, notification of such request may also be made by mail or telephone to the Company’s principal executive offices.
STOCKHOLDER
PROPOSALS
Stockholder
proposals to be presented at the 2023 annual meeting of stockholders must be delivered to, or mailed and received at, the principal executive
offices of the Company not less than one-hundred and twenty (120) days before the one-year anniversary of the date on which the information
statement was released for the prior year’s annual meeting pursuant to Rule 14a-8 under the Exchange Act. For the Company’s
2023 annual meeting of stockholders, the Company must receive such proposals and nominations no later than June 20, 2023. If the date
of the annual meeting has been changed by more than thirty (30) calendar days from the date contemplated at the time of the previous
year’s proxy statement, stockholder proposals or director nominations must be so received not later than the tenth day following
the day on which the date of the 2023 annual meeting of stockholders is first publicly announced or disclosed. Proposals must also comply
with the other requirements contained in the Company’s bylaws, including supporting documentation and other information. Proxies
solicited by the Company will confer discretionary voting authority with respect to these proposals, subject to SEC rules governing the
exercise of this authority.
Pursuant to the Company’s
bylaws, for a director nomination or other business to be considered for the next annual meeting of stockholders, notice must be received
in writing and delivered to the Corporate Secretary of the Company at the Company’s principal executive office, not less than 45
days nor more than 75 days prior to the date on which the Company first mailed its proxy materials for the prior year’s annual
meeting of stockholders or by September 27, 2023, but not before August 27, 2023.
Notices
of intention to present proposals at the annual meeting of stockholders should be addressed to David Neibert, The Marygold Companies,
Inc., 120 Calle Iglesia, Unit B, San Clemente, CA 92672.
We reserve
the right to reject, rule out of order, or take other appropriate action with respect to any proposal that does not comply with these
and other applicable requirements.
Dated:
October 18, 2022
BY
ORDER OF THE COMPANY’S BOARD
OF DIRECTORS
|
By: |
/s/
Nicholas Gerber |
|
|
|
Nicholas
Gerber |
|
|
|
President,
Chief Executive Officer and Chairman of the Board of Directors |
|
Marygold Companies (AMEX:MGLD)
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