The Marygold Companies Acquires Ownership Stake in Savings and Loan Association Holding Company

Rhea-AI Summary

The Marygold Companies (MGLD) has acquired a 7.95% ownership stake in Midland Capital Holdings (MCHC) for $1.8 million. MCHC's main operating entity, Midland Federal Savings and Loan Association, has $115 million in total assets and operates four branches in the Chicago area. The deal includes 180,044 warrants to purchase additional MCHC shares at $22.25, expiring in 2034. This acquisition aligns with Marygold's focus on financial services and fintech, following recent acquisitions of UK investment firms and the development of a mobile fintech app for spending, investing, and saving.

Positive

• Strategic acquisition expanding financial services presence
• Received 180,044 warrants for additional share purchases
• Target company has $115 million in assets
• Complementary to existing portfolio of financial services

Negative

• Minority stake (7.95%) provides control
• $1.8 million cash expenditure impacts liquidity

Insights

Financial Analyst

The $1.8 million investment for a 7.95% stake in Midland Capital Holdings represents a strategic move into traditional banking for TMC. The deal values MCHC at approximately $22.6 million, with Midland Federal's $115 million in assets providing a solid foundation. The included warrants offer potential for increased ownership at $22.25 per share through 2034, representing significant upside if MCHC grows successfully. This acquisition complements TMC's existing portfolio of financial services, including their $3.2 billion AUM through USCF Investments and recent UK acquisitions. The expansion into traditional banking could provide stable revenue streams and cross-selling opportunities for their fintech initiatives.

Market Research Analyst

TMC's strategic expansion demonstrates a calculated approach to building a comprehensive financial services ecosystem. By combining traditional banking infrastructure through Midland Federal with modern fintech solutions, TMC is positioning itself at the intersection of conventional and digital banking. The century-old presence of Midland Federal in the Chicago market provides a stable customer base and regulatory framework that could accelerate the adoption of TMC's new mobile fintech app. This multi-channel strategy, spanning traditional banking, investment management and digital solutions across both US and UK markets, shows potential for significant synergies and growth opportunities.

-$1.8 Million Investment Affirms Marygold’s Corporate Strategy of Focusing on Financial Services/Fintech Sector-

SAN CLEMENTE, Calif.--(BUSINESS WIRE)-- The Marygold Companies, Inc. ("TMC" or the "Company") (NYSE American: MGLD), a diversified global holding firm, today announced it has acquired a 7.95% ownership position, investing $1.8 million, in Delaware based Midland Capital Holdings Corporation (MCHC), a privately owned holding company whose principal operating entity is Midland Federal Savings and Loan Association (“Midland Federal”), headquartered in Bridgeview, Illinois.

Operating continuously in the greater Chicago area since 1914, Midland Federal has total assets of approximately $115 million, with four full-service branch offices—two in Chicago, and in nearby Bridgeview and Homer Glen, Illinois.

As part of the transaction, TMC also holds 180,044 warrants to purchase 180,044 additional shares of MCHC at an exercise price of $22.25. The warrants expire on February 27, 2034.

“The transaction affirms our corporate strategy and focus on the financial services and fintech sector,” said Nicholas Gerber, CEO of TMC. “It follows our recent acquisitions of UK-based investment advisory firms Tiger Financial & Asset Management and Step By Step Financial Planners, which are now wholly owned TMC indirect subsidiaries, plus our long-established ETF management subsidiary, USCF Investments, with approximately $3.2 billion in assets under management.

“In addition, we recently completed the development and have initiated marketing of an innovative mobile fintech app that enables users to spend, invest and save. The app was soft-launched in the U.S. last year, with plans underway for further market penetration in the U.S. and introduction in the UK later this year,” Gerber added.

Joe Kirkeeng, who serves as Chief Executive Officer of both MCHC and Midland Federal, said, "We are pleased that TMC, with its expertise in financial services, has become a significant investor in our company. With the acquisition of Midland Federal, we look forward to expanding the bank’s offerings and further enhancing technology, while serving our community by offering the same outstanding service and convenience our customers have come to expect.”

About The Marygold Companies, Inc.

The Marygold Companies was founded in 1996 and repositioned as a global holding firm in 2015. The Company currently has operating subsidiaries in financial services, food manufacturing, printing, security systems and beauty products, under the trade names USCF Investments, Marygold & Co., Tiger Financial & Asset Management Limited, Step By Step Financial Planners, Gourmet Foods, Printstock Products, Brigadier Security Systems and Original Sprout, respectively. Offices and manufacturing operations are in the U.S., New Zealand, U.K., and Canada. For more information, visit www.themarygoldcompanies.com.

Forward-Looking Statements

This press release includes “forward-looking statements” within the meaning of U.S. federal securities laws. Words such as “expect,” “estimate,” “project,” “budget,” “forecast,” “anticipate,” “intend,” “plan,” “may” “will,” “could,” “should” “believes,” “predicts,” “potential,” “continue” and similar expressions are intended to identify such forward-looking statements. These forward-looking statements, including, but not limited to, further market penetration of the Company’s fintech app in the U.S. and introducing the Company’s mobile fintech app in the UK later this year, involve significant risks and uncertainties that could cause the actual results to differ materially from the expected results and, consequently, you should not rely on these forward-looking statements as predictions of future events. These forward-looking statements and factors that may cause such differences include, without limitation, satisfaction of customary closing conditions related to the offering, the expected timing of the closing of the offering and the risks disclosed in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission and in the Company’s other filings with the Securities and Exchange Commission. The foregoing list of factors is not exclusive. Readers are cautioned not to place undue reliance upon any forward-looking statements, which speak only as of the date made. Except as required by law, the Company disclaims any obligation to update or publicly announce any revisions to any of the forward-looking statements contained in this press release.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241024030183/en/

Media and investors, for more Information, contact:

Roger S. Pondel

PondelWilkinson Inc.

310-279-5965

rpondel@pondel.com

Contact the Company:

David Neibert, Chief Operations Officer

949-429-5370

dneibert@themarygoldcompanies.com

Source: The Marygold Companies, Inc.

FAQ

How much did Marygold Companies (MGLD) invest in Midland Capital Holdings?

The Marygold Companies (MGLD) invested $1.8 million to acquire a 7.95% ownership stake in Midland Capital Holdings

What are the terms of the warrants received by MGLD in the Midland Capital Holdings deal?

MGLD received 180,044 warrants to purchase additional MCHC shares at an exercise price of $22.25, with an expiration date of February 27, 2034.

How many branches does Midland Federal operate and where are they located?

Midland Federal operates four full-service branch offices - two in Chicago, and one each in Bridgeview and Homer Glen, Illinois.

What is the total asset value of Midland Federal Savings and Loan Association?

Midland Federal Savings and Loan Association has total assets of approximately $115 million.