The Marygold Companies, Inc. intends to list upon the NYSE American stock exchange under the ticker symbol MGLD. The company will release 2,388,060 shares of common stock in the submission at an assumed offering price of $3.35 per share. This makes it an $8m offering. Maxim Group is the lead managing underwriter and sole book-runner on the offering. There is not yet a set date for the Marygold IPO.
What is Marygold Companies?
The Marygold Companies, Inc is to become the new name of holding company Concierge Technologies, Inc. (OTCMKTS: CNCG), a Nevada corporation with various business operations employing 114 people.
While Concierge Technologies is currently listed on the OTC Pink Market under the ticker CNCG. This will change at Marygold’s IPO, so the new company will be listed on the NYSE American stock exchange as MGLD.
This newly listed entity will act as a decentralized holding company for the following business entities:
Marygold & Co
Not to be confused with the overarching company, there are two subsidiaries named Marygold.
Marygold & Co: A US fintech company and Marygold & Co (UK) Ltd, a British fintech.
Marygold is essentially a neobank providing banking services in partnership with LendingClub Bank. The US division is a fee FDIC insured banking service that offers interest generating checking accounts as well as payments and transfers.
Marygold & Co was set up in August last year with an initial $70k funding.
The UK subsidiary then entered into a Share Purchase Agreement to acquire Tiger Financial and Asset Management Limited, a UK limited company, for approximately $2.1m plus acquired cash-on-hand at the time of closing.
Tiger reportedly manages around £42m ($56.7m) in assets and is authorized by the UK Financial Conduct Authority.
Nicholas Gerber, Chief Executive Officer, said:
“We were pleased during the first quarter to have completed the formation of Marygold & Co. (UK) Ltd, which subsequently signed a definitive agreement to acquire Tiger Financial & Asset Management Ltd, an established and certified investment advisor in the UK.”
Marygold UK will pay for this acquisition in three annual payments. The overall holding company (Concierge Technologies/The Marygold Companies, Inc.) is providing the loan facility to purchase Tiger.
Wainwright Holdings
Wainwright is the sole member of two investment companies, United States Commodity Funds LLC and USCF Advisers LLC, dealing with ETFs on the NYSE Arca stock exchange.
Gourmet Foods, Ltd:
Gourmet Foods, Ltd is a New Zealand based meat pie company and specialty food wrapping business.
Brigadier Security Systems
Brigadier is a Canadian commercial and residential alarm monitoring company.
Kahalytics, Inc
Kahalytics is a US hair and skincare company sporting the brand name Original Sprout.
When will Marygold Companies go public?
There is not yet an IPO date for MGLD stock, and it has to receive approval to be listed on the NYSE American as The Marygold Companies, Inc before the offering date is confirmed.
How does MGLD make money?
The Marygold Companies, Inc makes money through its various subsidiaries mentioned above. As it’s a holding company, its only material assets are its cash in hand and equity interests in its operating subsidiaries and other investments.
MGLD’s principal source of cash flow is distributions from its subsidiaries.
Wainwright’s management of ETPs and ETFs amounted to around $4.2bn in assets under management at the end of September 2021.
Wainwright receives revenues due to its ownership of USCF and USCF Advisers, which earn management fees for their involvement in operating these funds. These are oil and gas and commodities funds. This is a highly competitive and volatile arena to operate in. While oil and gas prices are currently high, this does not guarantee positive shareholder returns.
Gourmet Foods brings the company revenues from selling baked goods and from selling its label printing services in the food industry.
Brigadier earns money from selling its security alarm systems. It also makes monthly payments as an authorized SecurTek dealer in Canada.
Original Sprout formulates and packages various hair and skincare products that are 100% vegan. Company revenues fluctuate randomly.
Meanwhile, the Marygold & Co fintech company plans to launch a mobile app this year. This is still in the development phase and, as such, does not yet make money for the company. Unfortunately, this mobile app will be a beta re-launch of its Fintech platform. The company recently had to pull its app from all App Stores on learning of fraudulent activity, which resulted in $300,000 being taken via 80 fraudulent accounts.
Financials:
Approximately 63% of company revenues came from Wainwright’s ETF management operations in the 12 months ended June 30, 2021. This dropped to 58% of its revenues during the following quarter. The volatility in oil, gas and commodity prices will influence the performance of these funds and shows overall company revenues could also fluctuate due to its high dependence on this part of the business.
Revenue and Operating Income:
The company brought in $9.7m during Q3 2021, which was $1m less than the year-over-year period.
At the end of September 2021, Marygold had $17.29m in cash and $8.8m in total liabilities.
The company (Concierge Technologies) currently has a $123m market cap.
P/E: 72.5
P/BV: 5.3
P/S: 3.3
Net Income (Loss)
Overall, the company suffered a $1.9m net loss for the three months to the end of September 2021. This was compared to a net profit of $2.2m the previous year. The loss was primarily due to a $2.5m SEC settlement fee and lower revenues from Wainwright as assets under management decreased, as well as higher costs within Original Sprout.
The development stage fintech subsidiary, Marygold, cost the company $817,000 during Q3 2021.
Growth Potential:
The company has growth potential with its fintech expansion in the US and UK via Marygold. However, this will be costly to get up and running. Moreover, both security and building consumer trust are paramount to its success.
Risks to Investing in MGLD:
There are many risks to investing in this stock. The income fluctuates depending on the success of each subsidiary.
Some of the subsidiaries will be hit with higher operating costs caused by rising inflation.
Wainwright is subject to reduced fees as assets under management fluctuate at its relevant funds.
The company is also subject to gains and losses due to fluctuations in foreign currency exchange rates related to operating in the US, UK, New Zealand and Canada.
Furthermore, there's ongoing litigation with USCF, an indirect wholly-owned subsidiary via Wainwright. This will be expensive and could damage its reputation.
COVID-19 continues to pose a risk to profitability at each subsidiary, and the company is dependent on key personnel and the effective management of each subsidiary.
Should you invest in Marygold?
It seems the MGLD IPO will help the company raise funds to pay off debt, make additional acquisitions and continue with its Marygold fintech development plan.
The litigation is concerning, as is the recent mobile app fraud.
Investment management, baked goods and packaging, security alarm monitoring and vegan hair and skincare products are completely unrelated businesses, each operating in competitive environments.
The amount of revenue the overall business The Marygold Companies will earn collectively from them is dependent on a wide range of factors. Therefore, investing in MGLD securities involves a high degree of risk.