THE MARYGOLD COMPANIES, INC. The following discussion and analysis should be read in conjunction with the
consolidated financial statements and the accompanying notes thereto and is
qualified in its entirety by the foregoing and by more detailed financial
information appearing elsewhere in this quarterly report on Form 10-
OverviewConcierge Technologies, Inc. ("Concierge" or the "Company") conducts business through its wholly owned operating subsidiaries operating in theU.S. ,New Zealand ,Canada and theUnited Kingdom . The operations of the Company's wholly owned subsidiaries are more particularly described herein but are summarized as follows: ?Wainwright Holdings, Inc. ("Wainwright"), aU.S. based company, is the sole member of two investment services limited liability company subsidiaries that manages, operates or is an investment advisor to
exchange traded funds organized as limited partnerships or investment
trusts that issue shares that trade on the
? Gourmet Foods, Ltd. , a New Zealand based company, manufactures and
distributes New Zealand meat pies on a commercial scale and its wholly
owned New Zealand subsidiary company, Printstock Products Limited , prints
specialty wrappers for the food industry in
(collectively "
?
company, sells and installs commercial and residential alarm monitoring
systems.
? Kahnalytics, Inc. dba/Original Sprout ("Original Sprout"), a U.S. based
company, is engaged in the wholesale distribution of hair and skin care
products under the brand name Original Sprout on a global scale.
? Marygold & Co. , a newly formed U.S. based company, together with its
wholly owned limited liability company,
LLC, (collectively "Marygold") was established by Concierge to explore
opportunities in the financial technology ("Fintech") space, still in the
development stage as of September 30, 2021 , and estimated to launch
commercial services in the current fiscal year. Through September 30 ,2021, expenditures have been limited to developing the business model and
the associated application development.
?
("Marygold
acquisitions to be made in the
been no acquisitions completed and no operations. The expenses of
Marygold UK have been combined with those of Concierge.
Because the Company conducts its businesses through its wholly owned operating
subsidiaries, the risks related to our wholly owned subsidiaries are also risks
that impact the Company's financial condition and results of operations. See,
"Note 2. Summary of Significant Accounting Policies / Major Customers and
Suppliers - Concentration of Credit Risk" in the consolidated financial
statements for more information. The emergence of a novel coronavirus on a
global scale, known as COVID-19, and related geopolitical events could lead to
increased market volatility, disruption to U.S. and world economies and markets
and may have significant adverse effects on the Company and its wholly owned
subsidiaries. The financial risk to future operations is largely unknown, (refer
to Part II, Item 1A, for further details.)
27
--------------------------------------------------------------------------------Results of Operations Concierge and Subsidiaries
Financial summary and comparison data for the three month periods ended
The table below summarizes each of Concierges subsidiaries into one of two categories for the three months endedSeptember 30, 2021 andSeptember 30, 2020 . The Wainwright business is included in the Financial Services columns and all other subsidiaries, includingGourmet Foods , Brigadier, and Original Sprout in the Other Operating Units columns. Corporate expenses, including Marygold and MarygoldUK , are included in the Concierge Corporate columns. The table below is calculated using operating results rounded to the nearest thousand. The operating results depicted below may differ slightly compared to the actual results as indicated on our Condensed Consolidated Financial Statements as a result of rounding. Financial Services Other Operating Units Concierge Corporate Consolidated ($'s in thousands) For the Three Months EndedSeptember 30 , For the Three Months EndedSeptember 30 , For the Three Months EndedSeptember 30 ,
For the Three Months Ended
2021 2020 Change 2021 2020 Change 2021 2020 Change 2021 2020 Change
$ % $ % $ % $ %
Revenue $ 5,657 $ 7,036 $ (1,379 ) (20 )% $ 4,074 $ 3,709 $ 365 10 % - - - - $ 9,730 $ 10,745 $ (1,015 ) (9 )%
% of total revenue 58 % 65 % - (7 )% 42 % 35 % - 7 % - - - - - - - -
Cost of revenue - - - - 2,652 2,399 253 11 % - - - - 2,652 2,399 $ 253 11 %
Gross profit $ 5,657 $ 7,036 $ (1,379 ) (20 )% $ 1,422 $ 1,310 $ 112 9 % - - - - $ 7,078 $ 8,346 $ (1,269 ) (15 )%
Operating expenses 6,023 3,805 2,218 58 % 1,123 1,050 73 7 % 1,579 622 957 154 % 8,725 5,477 3,248 59 %
% of total operating expenses 69 % 69 % - 0 % 13 % 19 % - 5 % 18 % 11 % - 7 % - - - -
(Loss) income from operations $ (366 ) $ 3,231
6 4 2 42 % 5 110 (105 ) (96 )% (6 ) 3 (9 ) (288 )% 5 117 (112 ) (96 )%
(Loss) income before income taxes
For the Three Months Ended
Revenue and Operating Income Consolidated revenue for the three months endedSeptember 30, 2021 was$9.7 million representing a$1.0 million decrease from the same prior year period revenue of$10.7 million . Net revenues decreased as a result of lower Fund AUM from our fund management business by approximately$1.4 million , or 20%, for the three months endedSeptember 30, 2021 as compared to the three months endedSeptember 30, 2020 . The Company's revenues derived from its other operating units increased by$0.4 million , or 10%, from the same prior year period, resulting in an overall decrease in consolidated revenue of approximately 9%. Concierge had an operating (loss) for the three months endedSeptember 30, 2021 of($1.6) million as compared to operating income of$2.9 million for the three months endedSeptember 30, 2020 . The decrease in operating income was primarily attributable to the$2.5 million SEC / CFTC Wells Notice settlement in addition to lower fund management revenue from Wainwright due to lower AUM as well as higher costs within Original Sprout. Other Income (Expense) Other income (expense) for the three months endedSeptember 30, 2021 andSeptember 30, 2020 , was$4 thousand and$117 thousand , respectively, resulting in net income (loss) before income taxes of($1.6) million and$3.0 million , respectively. Income Tax Provision for income tax (expense) benefit for the three months endedSeptember 30, 2021 andSeptember 30, 2020 were$239 thousand and$766 thousand , respectively, primarily attributable to ourUnited States operations through our Wainwright subsidiary who recorded a lower income for the period endedSeptember 30, 2021 as compared to the income for the period endedSeptember 30, 2020 . The Company files income taxes as a combined group and records most income taxes at the Concierge level. Net Income (Loss) Overall, the net income for the three months endedSeptember 30, 2021 decreased by$4.1 million to a($1.9) million net loss, as compared to net income of$2.2 million for the three months endedSeptember 30, 2020 . The decrease in profits for the three months endedSeptember 30, 2021 was primarily attributable to the$2.5 million SEC / CFTC Wells Notice settlement recorded as an operating expense in addition to lower fund management fee revenue from Wainwright due to a lower amount of AUM, with only modest offsetting decreases in variable operating expenses, and general and administrative costs resulting in lower net income operating profit margins. All Other Operating Units contributed approximately$302 thousand of net income before tax representing a$99 thousand decrease from the same prior year period primarily as result of higher costs and lower profit margins within Original Sprout. Contributing to the overall decrease in net income were expenses of$817 thousand related to our development stage subsidiary, Marygold. After giving consideration to currency translation loss of($86) thousand our comprehensive (loss) for the three months endedSeptember 30, 2021 was($2.0) million as compared to the three months endedSeptember 30, 2020 where there was a currency translation gain of$73 thousand resulting in comprehensive income of$2.3 million . Comprehensive gains and losses are comprised of fluctuations in foreign currency exchange rates related to the effects in the valuation of our holdings inNew Zealand andCanada . 28
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Wainwright was founded as a holding company inMarch 2004 as aDelaware corporation with one subsidiary,Ameristock Corporation , which was an investment adviser toAmeristock Mutual Fund, Inc. , a registered 1940 Act large cap value equity fund. InJanuary 2010 ,Ameristock Corporation was spun off as a standalone company. InMay 2005 , USCF was formed as a single member limited liability company in the state ofDelaware . InJune 2013 , USCF Advisers was formed as aDelaware limited liability company and inJuly 2014 , was registered as an investment adviser under the Investment Advisers Act of 1940, as amended. InNovember 2013 , the USCF Advisers board of managers formed USCF ETF Trust ("ETF Trust ") and inJuly 2016 , theUSCF Mutual Funds Trust ("Mutual Funds Trust " and together with "ETF Trust " the "Trusts") both as open-end management investment companies registered under the Investment Company Act of 1940, as amended ("the 1940 Act"). The Trusts are authorized to have multiple segregated series or portfolios. Wainwright owns all of the issued and outstanding limited liability company membership interests of its subsidiaries, USCF and USCF Advisers, each aDelaware limited liability company and are affiliated companies. USCF serves as the general partner ("General Partner") for various limited partnerships ("LP") and sponsor ("Sponsor") as noted below. USCF and USCF Advisers are subject to federal, state and local laws and regulations generally applicable to the investment services industry. USCF is a commodity pool operator ("CPO") subject to regulation by theCommodity Futures Trading Commission (the "CFTC") and theNational Futures Association (the "NFA") under the Commodities Exchange Act ("CEA"). USCF Advisers is an investment adviser registered under the Investment Advisers Act of 1940, as amended and has registered as a CPO under the CEA. Exchange traded products ("ETPs") issued or sponsored by USCF are required to be registered with theSecurities and Exchange Commission (the "SEC") in accordance with the Securities Act of 1933. Wainwright operates through USCF and USCF Advisers, which collectively operate ten exchange-traded products ("ETPs") and exchange traded funds ("ETFs"), each of which has its shares listed on theNYSE Arca, Inc. ("NYSE Arca"). The ETPs and ETFs managed by USCF and USCF Advisers have a total of approximately$4 billion assets under management as ofSeptember 30, 2021 . Wainwright and subsidiaries USCF and USCF Advisers are collectively referred to as "Wainwright" hereafter. USCF currently serves as the General Partner or the Sponsor to the following commodity pools, each of which is currently conducting a public offering of its shares pursuant to the Securities Act of 1933, as amended:
USCF as
in May 2005 United States Natural Gas Fund, LP Organized as a
in November 2006
in April 2007 United States 12 Month Oil Fund, LP Organized as a
in June 2007
in June 2007 United States Brent Oil Fund, LP Organized as a
in September 2009
USCF as fund Sponsor - each a series within the United States Commodity Index
Funds Trust ("USCIF Trust ")
United States Commodity Index Fund Series of the USCIF Trust created in April
("USCI") 2010
November 2010 USCF Advisers, a registered investment adviser, serves as the investment adviser to the funds listed below within the USCF ETF Trust (the "ETF Trust ") and has overall responsibility for the general management and administration for theETF Trust . Pursuant to the current Investment Advisory Agreements, USCF Advisers provides an investment program for each of series within theETF Trust and manages the investment of the assets.
USCF Advisers as fund manager for each series within the USCF ETF Trust:
USCF SummerHaven Dynamic Commodity Fund launched
In addition, USCF Advisers previously served as the investment adviser to the
All commodity pools managed by USCF and each series of the
Wainwright's revenue and expenses are primarily driven by the amount of AUM. Wainwright earns monthly management and advisory fees based on agreements with each Fund as determined by the contractual basis point management fee structure in each agreement multiplied by the average AUM over the given period. Many of the company's expenses are dependent upon the amount of AUM. These variable expenses include Fund administration, custody, accounting, transfer agency, marketing and distribution, and sub-adviser fees and are primarily determined by multiplying contractual fee rates by AUM. Total Operating Expenses are grouped into the following financial statement line items: General and Administrative, Marketing, Operations and Salaries and Compensation.
For the Three Months Ended
Revenue Average AUM for the three months endedSeptember 30, 2021 was at$4.2 billion , as compared to approximately$5.6 billion from the three months endedSeptember 30, 2020 primarily due to a decrease inUSO , BNO and USL AUM, partially offset by an increase in CPER AUM. As a result, the revenues from management and advisory fees decreased by approximately$1.3 million , or 20%, to$5.7 million for the three months endedSeptember 30, 2021 as compared to the three months endedSeptember 30, 2020 where revenues from management and advisory fees totaled$7.0 million . 29
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Expenses Wainwright's total operating expenses, after recording the$2.5 million SEC / CFTC Wells Notice settlement, for three months endedSeptember 30, 2021 increased by$2.2 million to$6.0 million , or approximately 58%, from$3.8 million for the three months endedSeptember 30, 2020 . Wainwright's total operating expenses, excluding the settlement expense, for three months endedSeptember 30, 2021 would have decreased by$0.3 million to$3.5 million , or approximately 7%, from$3.8 million for the three months endedSeptember 30, 2020 . Variable expenses, as described above, increased by$0.1 million due to increases of$0.3 million in UMI sub-advisory fees, which did not exist in the prior year quarter, offset by decreases in other variable expenses over the respective three-month period due to overall lower AUM which included variable marketing and distribution expenses, fund accounting and administration expenses, and other variable costs. General and administrative ("G&A") expenses of$0.7 million decreased$0.4 million from$1.1 million for the three months endedSeptember 30, 2021 andSeptember 30, 2020 , respectively. G&A expenses decreased primarily due to lower fund expense waivers as a result of eliminating expense waivers for BNO, UGA and CPER inMay 2021 as well as lower legal expenses for the quarter. Total marketing expenses decreased$0.1 million to$0.6 million for the three months endedSeptember 30, 2021 as compared to the prior year period due to a decrease in variable distribution costs as a result of lower AUM as mentioned above. Employee salaries and benefit compensation expenses were approximately$1.1 million for both three month periods endedSeptember 30, 2021 andSeptember 30, 2020 . Operations expenses increased by$0.2 million to$1.1 million due to sub-advisory fees for UMI offset by other lower operations expenses due to lower AUM. Income Operating income decreased$3.6 million , after recording the$2.5 million SEC / CFTC Wells Notice settlement, to a loss of($0.4) million for the three months endedSeptember 30, 2021 from$3.2 million for the three months endedSeptember 30, 2020 . Operating income, excluding the settlement expense, decreased$1.1 million to$2.1 million for the three months endedSeptember 30, 2021 , or approximately 34%, from$3.2 million for the three months endedSeptember 30, 2020 . Other income (expense) was$6 thousand for the three months endedSeptember 30, 2021 compared to$4 thousand for the three months endedSeptember 30, 2020 . Net (loss) income before income taxes for the three months endedSeptember 30, 2021 decreased$3.6 million to a loss of($0.4) million compared to income of$3.2 million for three months endedSeptember 30, 2020 due to the expense settlement as well as a$1.3 million decrease in revenue as a result of lower AUM, offset by a$0.3 million decrease in total operating expenses.
Food Products -
Gourmet Foods, Ltd. was organized in its current form in 2005 (previously known asPats Pantry Ltd ). Pats Pantry was founded in 1966 to produce and sell wholesale bakery products, meat pies and patisserie cakes and slices, inNew Zealand .Gourmet Foods , located in Tauranga,New Zealand , sells substantially all of its goods to supermarkets and service station chains with stores located throughoutNew Zealand .Gourmet Foods, Ltd. also has a large number of smaller independent lunch bars, cafes and corner dairies among the customer list, however they comprise a relatively insignificant dollar volume in comparison to the primary accounts of large distributors and retailers. OnJuly 1, 2020 ,Gourmet Foods, Ltd. acquired theNew Zealand company,Printstock Products Limited . Located in nearby Napier,New Zealand , Printstock prints wrappers for food products, including those used byGourmet Foods, Ltd. Printstock is a wholly owned subsidiary ofGourmet Foods, Ltd. and its operating results are consolidated with those ofGourmet Foods, Ltd. fromJuly 1, 2020 onwards.Gourmet Foods operates exclusively inNew Zealand and thus theNew Zealand dollar is its functional currency. In order to consolidate Concierge's reporting currency, the US dollar, with that ofGourmet Foods , Concierge records foreign currency translation adjustments and transaction gains and losses in accordance with ASC 830-30. The translation ofNew Zealand currency intoU.S. dollars is performed for balance sheet accounts using the exchange rates in effect at the balance sheet date and for revenue and expense accounts using a weighted average exchange rate during the period. Gains and losses resulting from foreign currency translations are included in foreign currency translation (loss) gain on the Consolidated Statements of Comprehensive Income as well as accumulated other comprehensive (loss) income found on the Consolidated Balance Sheets.
For the Three Months Ended
Revenue Net revenues for the three months endedSeptember 30, 2021 were$2.3 million with cost of goods sold of$1.7 million resulting in a gross profit of$0.6 million , or approximately 27% gross margin, as compared to the three month period endedSeptember 30, 2020 where net revenues were$2.1 million and cost of goods sold were$1.6 million producing a gross profit of$0.5 million , or approximately 24%. 30
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Expenses Operating expenses, including wages and marketing, for the three month periods endedSeptember 30, 2021 andSeptember 30, 2020 were$0.4 million and$0.4 million producing operating income of$0.2 million and$0.1 million , respectively, or approximately 8% net operating profit for the three months endedSeptember 30, 2021 and 5% for the three months endedSeptember 30, 2020 . Other income totaled approximately$851 for three months endedSeptember 30, 2021 as compared to$11,063 for the three months endedSeptember 30, 2020 . Income
Income for the three months ended
Security Systems -
Brigadier, founded in 1985, is a leading electronic security company in the province ofSaskatchewan . Brigadier has offices located in the urban areas ofSaskatchewan ;Brigadier Security Systems inSaskatoon , and operating as Elite Security inRegina . The company has a combined industry experience of over 135 years. Brigadier provides comprehensive security solutions including access control, camera systems, fire alarm monitoring panels, and intrusion alarms to home and business owners as well as government offices, schools, and public buildings. Their experience as the provider of choice on many large notable sites shows a commitment to design, service and support. Brigadier specializes, and is certified, in several major manufacturers' products:Honeywell Security , Panasonic,Avigilon and JCI/DSC/Kantech security products. The company and staff are recognized for dedication to customer service with annual awards from SecurTek including being recipients of the Customer Retention, Service Excellence, and overall best dealer with the President's Award. The company demonstrates a commitment to delivering outstanding quality to customers by the notable facilities, businesses, and homes they secure. Brigadier is an authorized SecurTek dealer. SecurTek is owned by SaskTel which isSaskatchewan's leading Information and Communications Technology (ICT) provider with over 1.4 million customer connections acrossCanada . Under the terms of its authorized dealer contract with the monitoring company, Brigadier earns monthly payments during the term of the monitoring contract in exchange for performance of customer service activities on behalf of the monitoring company. Brigadier operates exclusively inCanada and thus the Canadian dollar is its functional currency. In order to consolidate Concierge's reporting currency, theU.S. dollar, with that of Brigadier, Concierge records foreign currency translation adjustments and transaction gains and losses in accordance with ASC 830, Foreign Currency Matters. The translation of Canadian currency intoU.S. dollars is performed for balance sheet accounts using the exchange rates in effect at the balance sheet date and for revenue and expense accounts using a weighted average exchange rate during the period.
For the Three Months Ended
Revenue Net revenues for the three months endedSeptember 30, 2021 were$0.7 million with cost of goods sold recorded as approximately$0.3 million , resulting in a gross profit of approximately$0.4 million with a gross margin of approximately 52% as compared to the three months endedSeptember 30, 2020 where net revenues were approximately$0.7 million with cost of goods sold of$0.3 million and a gross profit of$0.4 million , or approximately 54%. Expenses Operating expenses for the three months endedSeptember 30, 2021 were$0.3 million producing an operating profit of$0.1 million or approximately 13% as compared to the three months endedSeptember 30, 2020 where operating profits were$0.1 million , or approximately 19%, with operating expenses of$0.2 million . Income Other income comprised of interest income and commission income totaled approximately$7 thousand for the three months endedSeptember 30, 2021 , and provision for income tax expense was($18) thousand , resulting in net income after income taxes of approximately$79 thousand as compared to income after income taxes of approximately$167 thousand for the three months endedSeptember 30, 2020 where government subsidies due to COVID-19 totaled approximately$100 thousand . No government subsidies were received for the three month period endedSeptember 30, 2021 . 31
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Beauty Products - Original Sprout
Kahnalytics was founded in 2015 and adopted the dba/Original Sprout inDecember 2017 . Original Sprout formulates and packages various hair and skin care products that are 100% vegan, tested safe and non-toxic, and marketed globally through distribution networks to salons, resorts, grocery stores, health food stores, e-tail sites and on the company's website. The company operates from warehouse and sales offices located inSan Clemente, CA , USA. As a result of the ongoing COVID-19 pandemic, Original Sprout has made adjustments to its primary channels to market. Prior to the pandemic Original Sprout relied heavily upon its wholesale distribution network to place products at retail locations and generally to make products available to consumers, whereas in the current environment of social distancing and closures of retail businesses the company found a significant drop in sales volumes as consumers avoided traditional sales outlets. In response to this trend, Original Sprout has established new sales channels with online retailers and also encouraged those national retail chains who stock the product to also make it available at online shopping carts. The positive effects of this transition are now being realized while at the same time the negative effects of the pandemic on the wholesale distribution business continues to increase for the U.S. market. The result is that sales overall have been relatively stable during the pandemic, though derived from different sources.
For the Three Months Ended
Revenue Net revenues for the three months endedSeptember 30, 2021 were$1.0 million as compared to$1.0 million for the three months endedSeptember 30, 2020 . Cost of goods sold for the three months endedSeptember 30, 2021 andSeptember 30, 2020 were$0.6 million and$0.5 million , respectively, resulting in a gross profit of approximately$0.4 million and$0.5 million , respectively, or 41% as compared to 46% gross margin. The decrease in profit margin is attributed to difficulties with supply chains and the rising costs of raw materials and inbound freight, which were likely brought about due to the ongoing COVID-19 effects both domestically and internationally. Expenses Operating expenses were approximately$0.4 million resulting in an operating income near breakeven at$4 thousand , as compared to$0.4 million of operating expenses resulting in operating income of$64 thousand for the three months endedSeptember 30, 2020 , or approximately 7%. Income (Loss)
After consideration given to other income, the net income for the three months
ended
Plan of Operation for the Next Twelve Months
Our plan of operation for the next twelve months is to apply necessary resources, which may include experienced personnel, cash, or synergistic acquisitions made with cash, equity or debt, into growing each of our business units to their potential. Original Sprout is in the initial stages of transitioning from a largely boutique offering distributed through specialty wholesalers to a more mainstream product available at traditional outlets and online and as such we anticipate measurable growth in revenues for the coming years, though there may be one-time initial expenses associated with the launch of new sales channels. Additionally, we are expecting moderate growth in Brigadier through focused management initiatives and consolidation within the security industry coupled with expanded product offerings. Similarly, we expectGourmet Foods to be operating more efficiently under current management and continue to increase market share through additional product offerings and channels to market, including the printing and sale of food wrappers by their newly acquired subsidiary, Printstock. Wainwright will continue to develop innovative and new fund products to grow its portfolio. In addition to our long-term mission that is an acquisition strategy based upon identifying and acquiring profitable, mature, companies of a diverse nature and with in-place management that produces increased revenue streams, the Company is also focused upon building expertise and developing Fintech opportunities in the financial services sector through its development stage subsidiaryMarygold and Co. In a more general sense, the Company is characterizing its business in two categories: 1) financial services and 2) other consumer-based operating units. The purpose is to isolate the cyclical, and sometimes volatile, nature of the financial services business from our other industry segments. As revenues from financial services fluctuate over time due to varying performance of the commodities markets, our other operations are expected to be stable and sustainable by comparison. By these initiatives we seek to:
? continue to gain market share for our wholly owned subsidiaries' areas of
operation,
? increase our gross revenues and realize net operating profits,
? lower our operating costs by unburdening certain selling expenses to third
party distributors,
? have sufficient cash reserves to pay down accrued expenses and losses,
? attract parties who have an interest in selling their privately held companies
to us,
? achieve efficiencies in accounting and reporting through adoption of standards
used by all subsidiaries on a consistent basis,
? strategically pursue additional company acquisitions, and
? explore opportunities as may present themselves in the Fintech space,
including the launch of services by Marygold and Marygold Advisory Services,
and the creation of new corporate entities as focused subsidiary holdings.
32
--------------------------------------------------------------------------------Liquidity and Capital Resources
Concierge is a holding company that conducts its operations through its subsidiaries. At the holding-company level, its liquidity needs relate to operational expense, 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 or the subsidiary level. There are no limitations or constraints on the movement of funds between the entities.
As of
During the past five fiscal years combined, Concierge has invested approximately$8.2 million in cash towards purchasing and assimilatingGourmet Foods and its Printstock subsidiary,Brigadier Security Systems and the Original Sprout assets into theConcierge Technologies group of companies as well as the acquisition through a stock-for-stock exchange of Wainwright, which provides a significant revenue stream and value. We have also invested approximately$3.6 million in the development of Fintech applications through our newly organized subsidiary, Marygold. Despite these cash investments, our working capital position remains strong at$17.3 million and our position has strengthened year-to-year. While Concierge intends to maintain and improve its revenue stream from wholly owned subsidiaries, Concierge continues to pursue acquisitions of other profitable companies which meet its target profile. Provided Concierge's subsidiaries continue to operate as they are presently, and are projected to operate, Concierge has sufficient capital to pay its general and administrative expenses for the coming fiscal year and to adequately pursue its long-term business objectives. However, given the significant economic and financial market disruptions associated with the COVID-19 pandemic, the Company's results of operations could be adversely impacted. Borrowings As ofSeptember 30, 2021 , we had$1.0 million of related-party and third-party indebtedness on a consolidated basis as compared to$1.0 million as ofJune 30, 2021 . Approximately$380,678 is owed by Brigadier and secured with the land and building inSaskatoon purchased inJuly 2019 . The initial principal balance was approximately$401,000 (CAD$525,000 translated as of the loan dateJuly 1, 2019 ) with an annual interest rate of 4.14% maturingJune 30, 2024 . The short-term portion of principal for this loan due within 12 months as ofSeptember 30, 2021 is approximatelyUS$14,840 and the long-term principal amount due is approximatelyUS$365,838 . Interest on the loan is expensed or accrued as it becomes due. Interest expense on the loan for the three months endedSeptember 30, 2021 andSeptember 30, 2020 was$4,048 andUS$3,963 , respectively. Concierge, without inclusion of its subsidiary companies, as ofSeptember 30, 2021 andJune 30,2021 , had$0.6 million of related-party indebtedness. We are not required to make interest payments on our related party notes until the maturity date.
Current related party notes payable consist of the following:
September 30 ,June 30, 2021 2021
Notes payable to shareholder, interest rate of 8%,
unsecured and payable on
3,500 3,500
Notes payable to shareholder, interest rate of 4%,
unsecured and payable on
250,000 250,000
Notes payable to shareholder, interest rate of 4%,
unsecured and payable on
350,000 350,000
$ 603,500 $ 603,500
Investments
Wainwright, from time to time, provides initial investments in the creation of
ETP and ETF funds that Wainwright manages. Wainwright classifies these
investments as current assets as these investments are generally sold within one
year from the balance sheet date. As of September 30, 2021 and June 30, 2021 ,
Wainwright did not hold any initial investment positions. These investments, as
applicable, are described further in Note 7 to our Financial Statements.
Dividends
Our strategy on dividends is to declare and pay dividends only from retained
earnings and only when our Board of Directors deems it prudent and in the best
interests of the Company to declare and pay dividends. We have paid no dividends
and we do not expect to pay any dividends over the next fiscal year.
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