10q10k10q10k.net

What changed in Gold.com, Inc.'s 10-K — 2023 vs 2024

vs

Paragraph-level year-over-year comparison of Gold.com, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+461 added−420 removedSource: 10-K (2024-09-13) vs 10-K (2023-09-12)

Top changes in Gold.com, Inc.'s 2024 10-K

461 paragraphs added · 420 removed · 336 edited across 5 sections

Item 1. Business

Business — how the company describes what it does

68 edited+13 added−9 removed62 unchanged
Biggest changeSince then, CFC has expanded the value of its aggregate loan portfolio and number of its customers and makes secured loans collateralized by graded sport cards and sports memorabilia. CFC has achieved its growth through both loan origination and acquisitions of loan portfolios from wholesale customers of A-Mark.
Biggest changeIn 2005, the Company launched Collateral Finance Corporation ("CFC"), a wholly-owned subsidiary, for the purpose of making secured loans primarily collateralized by bullion and numismatic material. Since then, CFC has expanded the value of its aggregate loan portfolio and number of its customers and also makes secured loans collateralized by graded sport cards.
Through this website, we make available, free of charge, all of our filings with the Securities and Exchange Commission ("SEC"), including those under the Exchange Act of 1934, as amended ("Exchange Act"). Such reports are made available on the same day that they are electronically filed with, or furnished to, the SEC.
Through this website, we make available, free of charge, all of our filings with the Securities and Exchange Commission ("SEC"), including those under the Securities Exchange Act of 1934, as amended ("Exchange Act"). Such reports are made available on the same day that they are electronically filed with, or furnished to, the SEC.
By consolidating those operations into one central location under our control, we reduced our dependence on third-party service providers while enhancing quality control and reducing operating costs. Logistics also provides turn-key logistics services to our customers engaged in the retail business. We provide these customers inventory handling, packaging, storage, and drop-shipping services. AMTAG.
By consolidating those operations into one central location under our control, we reduced our dependence on third-party service providers while enhancing quality control and reducing operating costs. Logistics also provides turn-key logistics services to our customers engaged in the retail business. We provide these customers inventory handling, packaging, storage, and drop-shipping services. 7 AMTAG.
CFC also offers a variety of custom loan services to its origination clients, including renewal options, options to increase loan size, financing arrangements tailored to facilitate participation in numismatic auctions, and revolving loan arrangements. CFC services the loans that it originates. 9 Acquisition Activity . CFC also acquires portfolios of loans secured by bullion and numismatics coins from third-party originators.
CFC also offers a variety of custom loan services to its origination clients, including renewal options, options to increase loan size, financing arrangements tailored to facilitate participation in numismatic auctions, and revolving loan arrangements. CFC services the loans that it originates. Acquisition Activity . CFC also acquires portfolios of loans secured by bullion and numismatics coins from third-party originators.
We believe factors, including access to capital, secure storage facilities, bullion and numismatic expertise, and other related services and offerings, provide us a competitive advantage in that marketplace. Seasonality and Other Factors Influencing Demand Our business is generally not seasonal, although demand in the retail market tends to be lower in the summer months.
We believe factors, including access to capital, secure storage facilities, bullion and numismatic expertise, and other related services and offerings, provide us a competitive advantage in that marketplace. 11 Seasonality and Other Factors Influencing Demand Our business is generally not seasonal, although demand in the retail market tends to be lower in the summer months.
See Note 19 to the Company’s consolidated financial statements for further information regarding our reportable segments. Wholesale Sales & Ancillary Services A-Mark operates through several business units that comprise the Wholesale Sales & Ancillary Services segment, including Industrial, Coin and Bar, Trading and Finance, Storage, Logistics, and Mint. Industrial.
See Note 19 to the Company’s consolidated financial statements for further information regarding our reportable segments. 6 Wholesale Sales & Ancillary Services A-Mark operates through several business units that comprise the Wholesale Sales & Ancillary Services segment, including Industrial, Coin and Bar, Trading and Finance, Storage, Logistics, and Mint. Industrial.
AMCF Notes are primarily payable from, and secured by, (i) precious metals obtained by AMCF, (ii) a portfolio of bullion loans collateralized by precious metals, which loans were originated by either CFC or acquired by CFC from third parties and conveyed by CFC to AMCF, and (iii) cash.
AMCF Notes were primarily payable from, and secured by, (i) precious metals obtained by AMCF, (ii) a portfolio of bullion loans collateralized by precious metals, which loans were originated by either CFC or acquired by CFC from third parties and conveyed by CFC to AMCF, and (iii) cash.
For the most part, these operating businesses are authorized to establish specific policies and practices concerning the attraction and retention of person in their organizations, addressing, among other things: maintaining a safe work environment for employees, customers and other business partners, offering competitive compensation and benefits to employees, and hiring practices intended to identify qualified candidates and promote diversity and inclusion in the workforce.
For the most part, our operating businesses are authorized to establish specific policies and practices concerning the attraction and retention of person in their organizations, addressing, among other things: maintaining a safe work environment for employees, customers and other business partners, offering competitive compensation and benefits to employees, and hiring practices intended to identify qualified candidates and promote diversity and inclusion in the workforce.
("AMGL" or "Logistics"), a wholly-owned subsidiary, for the purpose of providing our customers a platform of complementary services, including packaging, shipping, handling, receiving, processing, and inventorying of precious metals, custom coins, and sports cards and sports memorabilia on a secure basis. 4 In August 2016, the Company formed a joint venture, AM&ST Associates, LLC.
("AMGL" or "Logistics"), a wholly-owned subsidiary, for the purpose of providing our customers a platform of complementary services, including packaging, shipping, handling, receiving, processing, and inventorying of precious metals, custom coins, and graded sports cards on a secure basis. 4 In August 2016, the Company formed a joint venture, AM&ST Associates, LLC.
CyberMetals’ customers have the option to convert their digital holdings to fabricated precious metals products via an integrated redemption flow with JMB. These products may be designated for storage by the Company or shipped directly to the customer. Customers may order product on each of the JMBullion.com, ProvidentMetals.com and Silver.com websites.
CyberMetals’ customers have the option to convert their digital holdings to fabricated precious metals products via an integrated redemption flow with JMB. These products may be designated for storage by the Company or shipped directly to the customer. Customers may order product on each of the JMBullion.com, BGASC.com, BullionMax.com, ProvidentMetals.com and Silver.com websites.
Product is shipped upon receipt of payment, except where the purchase is financed under credit arrangements between A-Mark and the customer. We have relationships with precious metal depositories around the world to facilitate shipment of product from our inventory to these customers, in many cases for next day delivery.
Product is shipped upon receipt of payment, except where the purchase is financed under credit arrangements between A-Mark and the customer. We have relationships with precious metal depositories around the world to facilitate shipment of product from our inventory to the customer, in many cases for next day delivery.
The dealer network consists of approximately 1,000 independent precious metal and coin companies, with whom we transact on a non-exclusive basis. The arrangements with the dealers vary, but generally the dealers acquire product from us for resale to their customers. In some instances, we deliver bullion to the dealers on a consignment basis.
The dealer network consists of approximately 1,200 independent precious metal and coin companies, with whom we transact on a non-exclusive basis. The arrangements with the dealers vary, but generally the dealers acquire product from us for resale to their customers. In some instances, we deliver bullion to the dealers on a consignment basis.
In April 2021, CFC Alternative Investments, LLC, a wholly-owned subsidiary of CFC, formed a joint venture with a third party known as Collectible Card Partners, LLC, which was established for the purpose of making commercial loans collateralized by graded sports cards and sports memorabilia.
In April 2021, CFC Alternative Investments, LLC, a wholly-owned subsidiary of CFC, formed a joint venture with a third party known as Collectible Card Partners, LLC, which was established for the purpose of making commercial loans collateralized by graded sports cards.
For the companies we have owned and operated for less than five years, the percentage of employees who have continued their employment since the respective acquisition dates was 37%. A-Mark is committed to supporting our employees’ financial, mental, and physical well-being.
For the companies we have owned and operated for less than five years, the percentage of employees who have continued their employment since the respective acquisition dates was 73%. A-Mark is committed to supporting our employees’ financial, mental, and physical well-being.
Our A-Mark Trading AG ("AMTAG") subsidiary promotes the Company's products and services to international markets. Mint.
Our A-Mark Trading AG ("AMTAG") subsidiary promotes the Company's products and services to certain international markets. Mint.
Typically, factors that impact such uncertainty and correlate with a higher level of demand for precious metals include volatility in the equity markets, increases in rates of inflation, and devaluation of the U.S. dollar. 11 Compliance with Government Regulations We are subject to a variety of domestic and foreign laws that relate particularly to our business.
Typically, factors that impact such uncertainty and correlate with a higher level of demand for precious metals include volatility in the equity markets, increases in rates of inflation, and the weakening of the U.S. dollar. Compliance with Government Regulations We are subject to a variety of domestic and foreign laws that relate particularly to our business.
The Company's main distribution facility in Las Vegas, Nevada, together with its ancillary facility in Dallas, Texas, handle the backend logistics for the Company's Direct-to-Consumer Purchase Program and the secured storage for CyberMetals' precious metals. Goldline Goldline, acquired by the Company in August 2017, is a direct retailer of precious metals to the investor community.
The Company's main distribution facility in Las Vegas, Nevada, together with its ancillary facility in Dallas, Texas, handle the back end logistics for the Company's Direct-to-Consumer Purchase Program and the secured storage for CyberMetals' precious metals. Goldline Goldline, acquired by the Company in August 2017, is a direct retailer of precious metals to the investor community.
Customer Concentrations For the year ended June 30, 2023, we had one customer that comprised more than 10% of our revenues. See Note 18 to the Company’s consolidated financial statements.
Customer Concentrations For the year ended June 30, 2024, we had one customer that comprised more than 10% of our revenues. See Note 18 to the Company’s consolidated financial statements.
These include: • integrated operations that span trading, distribution, logistics, minting, storage, hedging, financing, and consignment products and services; • an extensive and varied customer base that includes banks and other financial institutions, coin dealers, collectors, private investors, retail customers, investment advisors, industrial manufacturers, refiners, sovereign and private mints, and mines; • the ability to cost effectively acquire and retain new retail customers, with approximately 456,600 active customers on the JMB platform and approximately 19,700 active Goldline customers; • the ability to offer secured financing to customers; • our expertise in e-commerce and marketing; • secure storage and turn-key logistic services for precious metals products; • long-standing relationships with the United States Mint and other sovereign mints, including a working relationship with the United States Mint of over 35 years; • access to primary market makers, suppliers and refiners that, along with government mints, provide a dependable supply of precious metals and precious metal products; • the ability to obtain more favorable pricing and financing terms due to our size; • minting operations and partnerships which produce silver bullion and custom coins, allowing for a ready response to changing market demands; • the ability to design and fabricate proprietary silver products for customers; • the largest precious metals dealer network in North America; 5 • depository relationships in major financial centers around the world; • our global trading systems, coupled with experienced traders who also effectively manage A-Mark's exposure to commodity price risk; and • a strong management team, with over 100 years of collective industry experience.
These include: • integrated operations that span trading, distribution, logistics, minting, storage, hedging, financing, and consignment products and services; • an extensive and varied customer base that includes banks and other financial institutions, coin dealers, collectors, private investors, retail customers, investment advisors, industrial manufacturers, refiners, sovereign and private mints, and mines; • the ability to cost effectively acquire and retain new retail customers, with approximately 466,300 active customers on the JMB platform and approximately 15,600 active Goldline customers during the year ended June 30, 2024; • the ability to offer secured financing to customers; • our expertise in e-commerce and marketing; • secure storage and turn-key logistic services for precious metals products; • long-standing relationships with the United States Mint and other sovereign mints, including a working relationship with the United States Mint of over 35 years; 5 • access to primary market makers, suppliers and refiners that, along with government mints, provide a dependable supply of precious metals and precious metal products; • the ability to obtain more favorable pricing and financing terms due to our size; • minting operations and partnerships which produce silver bullion and custom coins, allowing for a ready response to changing market demands; • the ability to design and fabricate proprietary silver products for customers; • the largest precious metals dealer network; • depository relationships in major financial centers around the world; • our global trading systems, coupled with experienced traders who also effectively manage A-Mark's exposure to commodity price risk; and • a strong management team, with over 100 years of collective industry experience.
JMB offers nearly 5,000 different products, measured by stock keeping units or SKUs, on its websites during a fiscal year. This number can vary over time, particularly when demand is high.
JMB offers over 6,000 different products, measured by stock keeping units or SKUs, on its websites during a fiscal year. This number can vary over time, particularly when demand is high.
JMB markets its products over the internet through its proprietary websites, using an internally developed search optimization strategy and paid placements with major search engines. Goldline reaches its retail customer base on television, radio, and the internet, as well as through customer service outreach.
JMB and SGB market their products over the internet through their proprietary websites, using an internally developed search optimization strategy and paid placements with major search engines. Goldline reaches its retail customer base on television, radio, and the internet, as well as through customer service outreach.
JMB also owns two websites: GoldPrice.org and SilverPrice.org, which publish data on precious metal and cryptocurrency pricing and generate leads for its other websites. Through the CyberMetals online platform, customers can purchase and sell fractional shares of digital gold, silver, platinum, and palladium bars in a range of denominations.
GoldPrice.org and SilverPrice.org publish data on precious metal and cryptocurrency pricing and generate leads for its other websites. Through the CyberMetals online platform, customers can purchase and sell fractional shares of digital gold, silver, platinum, and palladium bars in a range of denominations.
("TDS"), a wholly-owned subsidiary, for the purpose of providing customers with turn-key global storage solutions for their precious metal products. In July 2015, the Company launched its Las Vegas-based logistics fulfillment center, A-M Global Logistics, LLC.
In 2012, the Company formed Transcontinental Depository Services, LLC. ("TDS"), a wholly-owned subsidiary, for the purpose of providing customers with turn-key global storage solutions for their precious metal products. In July 2015, the Company launched its Las Vegas-based logistics fulfillment center, A-M Global Logistics, LLC.
We also intend to continue to improve our customer interfaces to allow more seamless order processing, better cross-selling of products and services across our business units, to increase our new customer targeting and acquisition strategies, and to further improve our fulfillment and inventorying capabilities. • Pursuing strategic investments and acquisitions—Since our initial investment in JMB in 2014, we have acquired Goldline, made minority investments in four additional consumer facing precious metals retailers, acquired the entire equity interest in JMB, acquired two new brands which we have fully integrated into JMB, acquired the entire equity interest in Silver Towne Mint and acquired a noncontrolling interest in a private mint.
We also intend to continue to improve our customer interfaces to allow more seamless order processing, better cross-selling of products and services across our business units, to increase our new customer targeting and acquisition strategies, and to further improve our fulfillment and inventorying capabilities. • Pursuing strategic investments and acquisitions—Since our initial investment in JMB in 2014, we have acquired Goldline, made minority investments in several additional consumer facing precious metals retailers, acquired the entire equity interest in JMB, acquired new brands which we have fully integrated into JMB, acquired the entire equity interest in Silver Towne Mint, acquired a noncontrolling interest in a private mint, and recently acquired LPM in February 2024 and a controlling interest in SGB in June 2024.
As of June 30, 2023, approximately 35% of our employees identified as female, and 42% of our employees were made up of underrepresented minorities. Corporate Information Our executive offices are located at 2121 Rosecrans Avenue, Suite 6300, El Segundo CA 90245. Our telephone number is (310) 587-1477, and our website is www.amark.com.
As of June 30, 2024, approximately 34% of our employees identified as female, and 46% of our employees were made up of underrepresented minorities. 12 Corporate Information Our executive offices are located at 2121 Rosecrans Avenue, Suite 6300, El Segundo CA 90245. Our telephone number is (310) 587-1477, and our website is www.amark.com.
The Company’s line of credit provides it with the liquidity to buy and sell billions of dollars of precious metals annually, and is used to fund a substantial portion of the operations of the Company. As of June 30, 2023, A-Mark's uncommitted line of credit provided access up to $350.0 million.
The Company’s line of credit provides it with the liquidity to buy and sell billions of dollars of precious metals annually, and is used to fund a substantial portion of the operations of the Company. As of June 30, 2024, A-Mark's uncommitted line of credit provided access up to $422.5 million.
As part of our growth strategy, we are focused on: • Continuing to grow our consumer facing brands—We fully own seven unique direct-to-consumer brands and have minority ownership interests in four additional consumer facing brands.
As part of our growth strategy, we are focused on: • Continuing to grow our consumer facing brands—We own numerous unique direct-to-consumer brands and have partial ownership interests in four additional consumer facing brands.
We plan to continue to invest in the Direct-to-Consumer segment, to facilitate both the acquisition of new customers and the retention of our existing customers. • Cross-selling existing A-Mark products and services to JMB customers—As of June 30, 2023, JMB had approximately 2.2 million total customers and 456,600 active customers.
We plan to continue to invest in the Direct-to-Consumer segment, to facilitate both the acquisition of new customers and the retention of our existing customers. • Cross-selling existing A-Mark products and services to JMB customers—As of June 30, 2024, JMB had approximately 2.4 million total customers and 466,300 active customers.
Our overall employee retention rate for the year ended June 30, 2023 was 74%; excluding the Mint and Logistics operations, which hire largely in response to fluctuating business demands, our retention rate was 90%. For the companies we have owned for more than five years, the percentage of employees who have more than five years of service was 29%.
Our overall employee retention rate for the year ended June 30, 2024 was 83%; excluding the Mint and Logistics operations, which hire largely in response to fluctuating business demands, our retention rate was 93%. For the companies we have owned for more than five years, the percentage of employees who have more than five years of service was 36%.
CFC is a California licensed finance lender that originates and acquires commercial loans secured by bullion, numismatic coins, sports cards and sports memorabilia. CFC's customers include coin and precious metal dealers, investors, and collectors.
CFC is a California licensed finance lender that, directly and through its subsidiaries, originates and acquires commercial loans secured by bullion, numismatic coins, and graded sports cards. CFC's customers include coin and precious metal dealers, investors, and collectors.
Our Coin and Bar unit deals in over 1,800 different products, including gold and silver coins from around the world and gold, silver, platinum and palladium bars and ingots in a variety of weights, shapes, and sizes.
Our Coin and Bar unit deals in approximately 2,100 different products, including gold and silver coins from around the world and gold, silver, platinum and palladium bars and ingots in a variety of weights, shapes, and sizes.
Coins are minted by a sovereign government, are legal currency and have a face value, although the face value is typically less than the value of their precious metal content.
JMB’s products consist primarily of coins, rounds, and bars. Coins are minted by a sovereign government, are legal currency and have a face value, although the face value is typically less than the value of their precious metal content.
Liquidity Our business depends substantially on our ability to obtain financing for our operations. Sources of cash generated from operating activities include receipts upon the sales of precious metals, and cash collected from interest payments on secured loans. Sources of cash provided by financing activities are our uncommitted line of credit, fixed interest rate notes, and other structured financing products.
Sources of cash generated from operating activities include receipts upon the sales of precious metals, and cash collected from interest payments on secured loans. Sources of cash provided by financing activities are our uncommitted line of credit, fixed interest rate notes, and other structured financing products.
As a service to its customers, JMB makes available for sale on its websites protective accessories for precious metal products, including acrylic coin holders and capsules, coin tubes and silver bar tubes. JMB owns and operates six separately branded websites targeting specific segments within the precious metals market: JMBullion.com, ProvidentMetals.com, Silver.com, CyberMetals.com, BGASC.com, and BullionMax.com.
As a service to its customers, JMB makes available for sale on its websites protective accessories for precious metal products, including acrylic coin holders and capsules, coin tubes and silver bar tubes. JMB owns and operates numerous websites targeting specific niches within the precious metals retail market, including JMBullion.com, ProvidentMetals.com, Silver.com, CyberMetals.com, GoldPrice.org, SilverPrice.org, BGASC.com, BullionMax.com, and Gold.com.
Although the majority of our current sales are to customers located in the United States, we believe there is a meaningful opportunity to expand our capabilities in order to offer additional products and services to customers in Canada, Europe, and Asia. • Leveraging technology to deliver new products and increased services to customers—We are dedicating significant time and resources to enhance our technology platform and capabilities across all aspects of our business and the addition of JMB is helping to enhance these efforts.
Although the majority of our current sales are to customers located in the United States, in addition to acquiring LPM in February 2024 and a controlling interest in SGB in June 2024, we believe there is a meaningful opportunity to continue to expand our capabilities in order to offer additional products and services to customers in Canada, Europe, and Asia. • Leveraging technology to deliver new products and increased services to customers—We are dedicating significant time and resources to enhance our technology platform and capabilities across all aspects of our business.
CFC and AMCF have been operating since fiscal years 2005 and 2019, respectively. CFC Alternative Investments, LLC (“CAI”), a subsidiary of CFC, is a party to a joint venture known as Collectible Card Partners, LLC (“CCP”), which was formed for the purpose of making commercial loans collateralized by graded sports cards and sports memorabilia.
CFC has been operating since fiscal year 2005; AMCF was dissolved in June 2024. CFC Alternative Investments, LLC (“CAI”), a subsidiary of CFC, is a party to a joint venture known as Collectible Card Partners, LLC (“CCP”), which was formed for the purpose of making commercial loans collateralized by graded sports cards.
The indenture governing the AMCF Notes requires AMCF to maintain a specified level of collateral. The indenture also provides that AMCF’s assets are not to be commingled with those of CFC or A-Mark (or any affiliate) and that AMCF is to maintain separate books and records.
The indenture governing the AMCF Notes required AMCF to maintain a specified level of collateral. The indenture also provided that AMCF’s assets were not to be commingled with those of CFC or A-Mark (or any affiliate) and that AMCF was to maintain separate books and records. 9 General .
JMB operates eight separately branded, company-owned websites targeting specific niches within the precious metals retail market, including JMBullion.com, ProvidentMetals.com, Silver.com, CyberMetals.com, GoldPrice.org, SilverPrice.org, BGASC.com, and BullionMax.com. JMB had approximately 2.2 million total customers as of June 30, 2023, and approximately 456,600 active customers for the year ended June 30, 2023.
JMB owns and operates numerous websites targeting specific niches within the precious metals retail market, including JMBullion.com, ProvidentMetals.com, Silver.com, CyberMetals.com, GoldPrice.org, SilverPrice.org, BGASC.com, BullionMax.com, and Gold.com. JMB had approximately 2.4 million total customers as of June 30, 2024, and approximately 466,300 active customers for the year ended June 30, 2024.
The Company also generates funds from other finance products that include product financing arrangements with customers, whereby the Company sells its inventory with an option to repurchase, and through precious metal borrowing and leasing arrangements with its suppliers. The Company is in discussions with its Trading Credit Facility lenders to refinance the AMCF Notes under this facility.
The maturity date of the credit facility is September 2025. The Company also generates funds from other finance products that include product financing arrangements with customers, whereby the Company sells its inventory with an option to repurchase, and through precious metal borrowing and leasing arrangements with its suppliers.
As of June 30, 2023, the aggregate balance of CFC's secured loans was approximately $100.6 million which is comprised of approximately 32% of loans acquired from third-parties and approximately 68% of loans originated by CFC.
As of June 30, 2024, the aggregate balance of CFC's secured loans was approximately $113.1 million which is comprised of approximately 15% of loans acquired from third-parties and approximately 85% of loans originated by CFC.
JMB also pays for placement on the major search engines, including Google, Bing, Apple, and Yahoo!, employing internally developed strategies to reach a targeted audience and to optimize the cost effectiveness of paid for searches. JMB's Direct-to-Consumer Purchase Program . JMB also offers to purchase precious metal products through its websites.
JMB utilizes an internally developed search engine optimization strategy to drive traffic to its websites, particularly to JMBullion.com. JMB also pays for placement on the major search engines, including Google, Bing, Apple, and Yahoo!, employing internally developed strategies to reach a targeted audience and to optimize the cost effectiveness of paid for searches. 8 JMB's Direct-to-Consumer Purchase Program .
The acquisition of JMB has provided us with a significantly larger direct-to-consumer customer base, allowing us to increase the number of proprietary products we design, source, and ultimately sell. • Expanding our global footprint—We currently serve customers on four continents.
The growth in our direct-to-consumer customer base allows us to increase the number of proprietary products we design, source, and ultimately sell. • Expanding our global footprint—We currently serve customers on four continents.
As of June 30, 2023, the Company had 429 employees, with 427 located in North America, and 2 located in Europe; all except 16 of these employees were considered full-time employees.
As of June 30, 2024, the Company had 489 employees, with 439 located in North America, 48 located in Asia, and 2 located in Europe; all except 7 of these employees were considered full-time employees.
In addition, copies of our Code of Business Conduct and Ethics for Employees, Code of Business Conduct and Ethics for Senior Financial and Other Officers, and Code of Business Conduct and Ethics for Directors are available through our website, along with other information regarding our corporate governance policies. 12 Geographic Information See Note 19 to the Company’s consolidated financial statements for information about Company's geographic operations. 13
In addition, copies of our Code of Business Conduct and Ethics for Employees, Code of Business Conduct and Ethics for Senior Financial and Other Officers, and Code of Business Conduct and Ethics for Directors are available through our website, along with other information regarding our corporate governance policies.
The Company's Trading, Finance, and Logistics business units provide supporting services such as hedging and order fulfillment. The Secured Lending segment maintains administrative support at its headquarters in El Segundo, California for the processing of its originated loans, including billing, managing margin calls, and tracking of precious metal collateral.
The Secured Lending segment maintains administrative support at its headquarters in El Segundo, California for the processing of its originated loans, including billing, managing margin calls, and tracking of precious metal collateral.
In August 2019, Goldline entered into a joint venture agreement with one of the Company's related parties to form Precious Metals Purchasing Partners, LLC ("PMPP"), a 50% owned subsidiary, primarily for the purpose of purchasing precious metals from the partners' retail customers for resale back into the marketplace. PMPP commenced operations in fiscal 2020.
In August 2019, Goldline entered into a joint venture agreement with a U.S. subsidiary of Silver Gold Bull, Inc. ("SGB") to form Precious Metals Purchasing Partners, LLC ("PMPP"), primarily for the purpose of purchasing precious metals from the partners' retail customers for resale back into the marketplace.
AMCF is a special purpose entity whose sole activity consists of operating, owning, and financing precious metal inventory through the issuance of notes (the “AMCF Notes”).
AMCF was a special purpose entity whose sole activity consisted of operating, owning, and financing precious metal inventory through the issuance of notes (the “AMCF Notes”). In December 2023, the AMCF Notes were repaid and AMCF was dissolved in June 2024.
Our customers include coin and bullion dealers, banks and other financial institutions, commodity brokerage houses, manufacturers, investors, investment advisors, and collectors who qualify as “eligible commercial entities” and “eligible contract participants,” as those terms are defined in the Commodity Exchange Act. 6 We are an authorized distributor (and, in the case of the United States Mint, an authorized purchaser) of gold and silver coins for all of the major sovereign mints and various private mints.
Our customers include coin and bullion dealers, banks and other financial institutions, commodity brokerage houses, manufacturers, investors, investment advisors, and collectors who qualify as “eligible commercial entities” and “eligible contract participants,” as those terms are defined in the Commodity Exchange Act.
All loans are fully secured by bullion, numismatic coins, graded sports memorabilia, or other eligible alternative investment assets. TDS, on behalf of CFC, takes physical custody of the coins or bullion collateralizing the loans. CFC requires loan-to-value ("LTV") ratios of between 50% and 85%.
TDS, on behalf of CFC, takes physical custody of the coins or bullion collateralizing the loans. CFC requires loan-to-value ("LTV") ratios of between 50% and 85%.
The Company opened an overseas office in Vienna, Austria in 2009, for the purpose of marketing A-Mark's goods and services in the international markets. The office operates through A-Mark Trading AG ("AMTAG"), a wholly-owned subsidiary of the Company. In 2012, the Company formed Transcontinental Depository Services, LLC.
CFC has achieved its growth through both loan origination and acquisitions of loan portfolios from wholesale customers of A-Mark. The Company opened an overseas office in Vienna, Austria in 2009, for the purpose of marketing A-Mark's goods and services in the international markets. The office operates through A-Mark Trading AG ("AMTAG"), a wholly-owned subsidiary of the Company.
The Company’s Direct-to-Consumer segment expands the Company’s distribution capabilities with a retail distribution channel and diversifies the products and services offered to the Company’s retail customers by providing them access to the Company’s wider assortment of precious metal coins and bars, as well as TDS’s storage and asset protection services.
It diversifies the products and services offered to the Company’s retail customers by providing them access to the Company’s wider assortment of precious metal coins and bars, as well as TDS’s storage and asset protection services. JMB JMB is a leading internet retailer of precious metal products that it sells through its proprietary websites. Products .
Alternatively, the collector may call a customer representative using the toll-free number on the website and arrange a sale by telephone. The Direct-to-Consumer Purchase Program is a source of inventory for JMB, which enables JMB to acquire product for resale at a discount to dealer prices. Logistics .
The Direct-to-Consumer Purchase Program is a source of inventory for JMB, which enables JMB to acquire product for resale at a discount to dealer prices. Logistics .
Through Precious Metals Purchasing Partners, LLC ("PMPP"), a joint venture between Goldline and one of the Company's related parties, Goldline acquires precious metals from its retail customers in order to diversify its supply of product offerings and provide discounted pricing to its affiliates. This program provides Goldline's customers with a means to monetize their holdings efficiently and at competitive prices.
Goldline's and SGB's Direct-to-Consumer Purchase Program. Through Precious Metals Purchasing Partners, LLC ("PMPP"), a joint venture between Goldline and SGB, Goldline and SGB acquire precious metals from their retail customers in order to diversify their supply of product offerings and provide discounted pricing to their affiliates.
A-Mark seeks to minimize the effect of price changes of the underlying commodity through the use of financial derivative instruments, such as forward and futures contracts. 10 Sales and Marketing We market our products and services to our wholesale customers primarily through our offices in El Segundo, California, and Vienna, Austria, our websites, and our dealer network, which we believe is the largest of its kind in North America.
Sales and Marketing We market our products and services to our wholesale customers primarily through our offices in El Segundo, California, Hong Kong, and Vienna, Austria, our websites, and our dealer network, which we believe is the largest of its kind.
Goldline markets its precious metal products on television, radio, podcasts, and the internet, as well as through customer service outreach, particularly to Goldline’s repeat customers.
Goldline markets its precious metal products on television, radio, podcasts, and the internet, as well as through customer service outreach, particularly to Goldline’s repeat customers. Online orders are taken on an electronic trading platform that can be accessed by qualified retail customers at www.goldline.com.
Repayment of the loans can be made at any time without penalty. Because the loans are of relatively short duration, CFC does not have significant exposure to interest rate fluctuations, even in a rising interest rate environment. Loans carried by CFC range in size up to approximately $14.0 million.
Because the loans are of relatively short duration, CFC does not have significant exposure to interest rate fluctuations, even in a rising interest rate environment. Loans carried by CFC range in size up to approximately $14.0 million. All loans are fully secured by bullion, numismatic coins, graded sports cards, or other eligible alternative investment assets.
Similar arrangements with other sovereign mints followed, so that by the early 1990s, A-Mark had (and continues to have) relationships with all major sovereign mints offering bullion coins and bars internationally. In 2005, the Company launched Collateral Finance Corporation ("CFC"), a wholly-owned subsidiary, for the purpose of making secured loans primarily collateralized by bullion and numismatic material.
Similar arrangements with other sovereign mints followed, so that by the early 1990s, A-Mark had (and continues to have) relationships with all major sovereign mints offering bullion coins and bars internationally. The Company became a publicly traded company in March 2014.
We acquire product for our inventory in the course of our trading activities with our customers, directly from government and private mints, mines, and refiners, and from commodities brokers and dealers, privately and in transactions on established commodity exchanges.
We acquire product for our inventory in the course of our trading activities with our customers, directly from government and private mints, mines, and refiners, and from commodities brokers and dealers, privately and in transactions on established commodity exchanges. 10 A-Mark’s precious metals inventories are subject to market value changes created by change in the underlying commodity price, as well as supply and demand of the individual products the Company trades.
In September 2014, the Company made an initial equity investment in JM Bullion, Inc. (“JMB”), and in October 2016, we made an additional investment in JMB, increasing our equity interest to approximately 20.5%. In March 2021, the Company acquired the 79.5% interest in JMB that we did not previously own.
(“JMB”), and in October 2016, we made an additional investment in JMB, increasing our equity interest to approximately 20.5%. In March 2021, the Company acquired the 79.5% interest in JMB that we did not previously own. JMB is a leading e-commerce retailer providing access to a broad array of gold, silver, copper, platinum, and palladium products through its own websites.
It is expected that AMCF will be liquidated shortly following the repayment of the AMCF Notes, which mature on December 15, 2023. General . The secured loans that CFC issues consist of on-demand loans and loans with a term of three months to 364 days, with a typical term of approximately six months.
The secured loans that CFC issues consist of on-demand loans and loans with a term of three months to 364 days, with a typical term of approximately six months. Repayment of the loans can be made at any time without penalty.
We store our inventories of bullion and numismatics at third-party depositories in major financial centers around the world and at our secured facility in Las Vegas, Nevada. The Direct-to-Consumer segment maintains administrative and operational support at its office in Dallas, Texas and Los Angeles, California, for originating and processing its retail orders.
We believe that our existing administrative and operational support infrastructure has the capacity to scale with our business activities. We store our inventories of bullion and numismatics at third-party depositories in major financial centers around the world and at our secured facility in Las Vegas, Nevada.
A-Mark has leveraged Silver Towne Mint’s fabrication capabilities to introduce new custom products for individual customers. Although the Company and JMB are the Mint’s primary customers, the Mint also markets its products at www.silvertowne.com.
A-Mark has leveraged Silver Towne Mint’s fabrication capabilities to introduce new custom products for individual customers. Although the Company is the Mint’s primary customer, the Mint also markets its products at www.silvertownemint.com. In March 2023, the Mint achieved ISO 9000:2015 certification which allows all products produced by the Mint to be accepted into individual retirement accounts ("IRA"). LPM.
The SilverPrice.org and GoldPrice.org websites provide real time price information on silver, gold, and cryptocurrencies. Although customers cannot order product on these websites, the websites direct visitors to JMBullion.com for placing orders. JMB utilizes an internally developed search engine optimization, or SEO, strategy to drive traffic to its websites, particularly to JMBullion.com.
The SilverPrice.org and GoldPrice.org websites provide real time price information on silver, gold, and cryptocurrencies. We also own the gold.com domain, one of the most recognizable domains in the precious metals industry. Although customers cannot order product on these websites, the websites direct visitors to JMBullion.com for placing orders.
With this program, JMB provides collectors of precious metal products with a means to dispose of their holdings at transparent and competitive prices. Generally, JMB will indicate on its websites the products that it is interested in purchasing, and a collector seeking to sell such products may arrange the sale online.
JMB also offers to purchase precious metal products through its websites. With this program, JMB provides collectors of precious metal products with a means to dispose of their holdings at transparent and competitive prices.
Operational Support The Wholesale Sales & Ancillary Services segment maintains administrative and operational support related to its trading, hedging, and finance product operations at its headquarters in El Segundo, California. We believe that our existing administrative and operational support infrastructure has the capacity to scale with our business activities.
We market our secured loan products and services to customers primarily through our proprietary websites, print advertising, and strategic partnerships. Operational Support The Wholesale Sales & Ancillary Services segment maintains administrative and operational support related to its trading, hedging, and finance product operations at its global headquarters in El Segundo, California and regional headquarters in Hong Kong.
Goldline offers a variety of products from gold, silver, and platinum bullion in the form of bars and coins, as well as rare coins. Goldline's Direct-to-Consumer Purchase Program.
Goldline customers are required to enter into an account agreement that specifies the terms and conditions of purchase and explains the availability of certain programs and services offered by Goldline to its customers. Products. Goldline offers a variety of products from gold, silver, and platinum bullion in the form of bars and coins, as well as rare coins.
CFC has historically financed its loan origination and acquisition activity primarily through A-Mark's demand line of credit with a syndicate of several financial institutions. The AMCF Notes, which mature on December 15, 2023, have provided an additional source of funding for CFC's loan originations and acquisitions of loan portfolios from third parties.
CFC has historically financed its loan origination and acquisition activity primarily through A-Mark's demand line of credit with a syndicate of several financial institutions. Liquidity Our business depends substantially on our ability to obtain financing for our operations.
Intellectual Property . AM IP Assets, LLC ("AMIP"), a wholly-owned subsidiary of Goldline, manages certain intellectual property of Goldline, including customer lists and a sales lead data base. Secured Lending The Company operates its Secured Lending segment through its wholly-owned subsidiary, CFC, which in turn owns AM Capital Funding, LLC (“AMCF”).
This program provides Goldline's and SGB's customers with a means to monetize their holdings efficiently and at competitive prices. Intellectual Property . AM IP Assets, LLC ("AMIP"), a wholly-owned subsidiary of Goldline, manages certain intellectual property of Goldline, including customer lists and a sales lead data base.
Removed
A-Mark became a wholly-owned subsidiary of Spectrum Group International, Inc. ("SGI") in 2005. In March 2014, SGI distributed all of the shares of common stock of A-Mark to its stockholders, effecting a spinoff of A-Mark from SGI. As a result of this distribution, the Company became a publicly traded company independent from SGI.
Added
We currently own a controlling interest in PMPP, both through Goldline's 50% ownership interest and through our majority ownership interest in SGB. PMPP commenced operations in fiscal 2020. In September 2014, the Company made an initial equity investment in JM Bullion, Inc.
Removed
JMB is a leading e-commerce retailer providing access to a broad array of gold, silver, copper, platinum, and palladium products through its own websites.
Added
In February 2024, AM/LPM Ventures, LLC, a consolidated subsidiary of the Company, acquired LPM Group Limited ("LPM"), one of Asia's largest precious metals dealers. AM/LPM Ventures, LLC serves as the Company's Asia headquarters. LPM extends A-Mark's global reach by offering its full-service precious metals products and services in Asia and internationally.
Removed
In March 2023, the Mint achieved ISO 9000:2015 certification which allows all products produced by the Mint to be accepted into individual retirement accounts ("IRA"). 7 Direct-to-Consumer The Company operates its Direct-to-Consumer segment through its wholly-owned subsidiaries JM Bullion, Inc. (“JMB”) and Goldline, Inc. (“Goldline”).
Added
In 2014, the Company acquired its initial ownership interest in SGB. In 2018 and 2022, the Company made incremental investments to increase its ownership interest in SGB to 47.4% as of June 2022. In June 2024, the Company acquired an additional 8% ownership interest in SGB, increasing its ownership interest to 55.4%.
Removed
JMB JMB, which became a wholly-owned subsidiary of the Company in March 2021, is a leading internet retailer of precious metal products that it sells through its proprietary websites. Products . JMB’s products consist primarily of coins, rounds, and bars.
Added
Founded in 2009, SGB is a leading e-commerce precious metals retailer in Canada focused on providing online innovation, high-quality products, competitive pricing, and enhanced customer service. SGB had approximately 523,000 total customers as of June 30, 2024.
Removed
Online orders are taken on an electronic trading platform that can be accessed by qualified retail customers at www.goldline.com. 8 Goldline customers are required to enter into an account agreement that specifies the terms and conditions of purchase and explains the availability of certain programs and services offered by Goldline to its customers. Products.
Added
We are an authorized distributor (and, in the case of the United States Mint, an authorized purchaser) of gold and silver coins for all of the major sovereign mints and various private mints.
Removed
The maturity date of the credit facility is December 21, 2024. The Company issued fixed rate notes in September 2018 with an aggregate principal amount of $100.0 million, having a maturity of December 15, 2023. The proceeds upon issuance of the AMCF Notes were used to fund the acquisition of CFC's secured loans and other operating activities.
Added
Based in Hong Kong, LPM serves as the Company's Asia headquarters, offering the Company's full-service precious metals products and services in Asia and internationally. LPM has a large numismatics showroom in the heart of Hong Kong's Central Financial District. Direct-to-Consumer The Company operates its Direct-to-Consumer segment through its wholly-owned subsidiaries JM Bullion, Inc. (“JMB”) and Goldline, Inc.

… 10 more changes not shown on this page.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

100 edited+67 added−36 removed123 unchanged
Biggest changeFor other risks related to government regulation, see “ Risk Factors of General Applicability — We are subject to other laws and regulations ,” below. Compliance with new data protection/privacy statutes could increase our costs and expose the Company to possible sanctions for violation. By reason of our Direct-to-Consumer business in particular, we collect personal data.
Biggest changeThese changing rules and regulations, and the stakeholder expectations related to ESG described in " Risk Factors of General Applicability – Third-party expectations relating to ESG factors may impose additional costs and expose us to new risks ," have resulted in and are likely to continue to result in, increased general and administrative expenses and increased management time and attention spent complying with or meeting such regulations and expectations. 24 Compliance with new and existing data protection/privacy statutes could increase our costs and expose the Company to possible sanctions for violation.
If significant supply chain constraints were to occur, we might be required to cut back on our minting operations or we might be unable to timely satisfy customer requirements for coin and bullion products. This could lead to a loss of sales or could adversely impact our reputation. We are dependent on our key management personnel and our trading experts.
If significant supply chain constraints were to occur, we might be required to cut back on our minting operations or we might be unable to timely satisfy customer requirements for coin and bullion products. This could lead to a loss of sales and could adversely impact our reputation. We are dependent on our key management personnel and our trading experts.
For example, the CCPA grants consumers privacy rights including the rights of data correction and data portability, the right to limit the Company’s use of a new subset of personal information called “sensitive personal information” that requires heightened protections, and the right to appeal the Company’s response to an individual’s exercise of these new or existing privacy rights.
For example, CCPA grants consumers privacy rights including the rights of data correction and data portability, the right to limit the Company’s use of a subset of Personal Information called “sensitive Personal Information” that requires heightened protections, and the right to appeal the Company’s response to an individual’s exercise of these new or existing privacy rights.
These advances are limited to a portion of the materials received. • The Company makes unsecured, short-term, non-interest bearing advances to wholesale metals dealers and government mints. • The Company periodically extends short-term credit through the issuance of notes receivable to approved customers at interest rates determined on a customer-by-customer basis. • The Company operates a financing business through CFC which makes secured loans at loan-to-value ratios—principal loan amount divided by the liquidation value, as conservatively estimated by management, of the collateral—of, in most cases, 50% to 85%.
These advances are limited to a portion of the materials received. • The Company makes unsecured, short-term, non-interest bearing advances to wholesale metals dealers and government mints. • The Company periodically extends short-term credit through the issuance of notes receivable to approved customers at interest rates determined on a customer-by-customer basis. 15 • The Company operates a financing business through CFC which makes secured loans at loan-to-value ratios—principal loan amount divided by the liquidation value, as conservatively estimated by management, of the collateral—of, in most cases, 50% to 85%.
Nevertheless, given the nature of the retail precious metals business, the possibility that investors in precious metals may lose a substantial portion of their investment as a result of adverse market trends and the vulnerability of certain retail precious metal investors to economic loss, there can be no assurance that claims will not be made regarding business practices of Goldline or JMB or that, if made, such claims will not attract the attention of governmental and private sector consumer advocates.
Nevertheless, given the nature of the retail precious metals business, the possibility that investors in precious metals may lose a substantial portion of their investment as a result of adverse market trends and the vulnerability of certain retail precious metal investors to economic loss, there can be no assurance that claims will not be made regarding business practices of Goldline, JMB or SGB, or that, if made, such claims will not attract the attention of governmental and private sector consumer advocates.
These include risks of general applicability, such as the need to comply with multiple regulatory regimes; trade protection measures and import or export licensing requirements; and fluctuations in equity, revenues and profits due to changes in foreign currency exchange rates. Currently, we do not conduct substantial business with customers in developing countries.
These include risks of general applicability, such as the need to comply with multiple regulatory regimes; trade protection measures and import or export licensing requirements and tariffs; and fluctuations in equity, revenues and profits due to changes in foreign currency exchange rates. Currently, we do not conduct substantial business with customers in developing countries.
If that approval were to be withdrawn for any reason, we would no longer be able to keep inventory at that location, which would substantially limit our ability to conduct business from that facility. Risks Related to our Direct-to Consumer Segment Our Direct-to-Consumer businesses could be subject to accusations of improper sales practices .
If that approval were to be withdrawn for any reason, we would no longer be able to keep inventory at that location, which would substantially limit our ability to conduct business from that facility. 19 Risks Related to our Direct-to Consumer Segment Our Direct-to-Consumer businesses could be subject to accusations of improper sales practices .
All transactions between the Company and Stack’s Bowers are approved by our Audit Committee, and we believe that all such transactions are on terms no less favorable to the Company than would be obtained from an unaffiliated third-party. Nonetheless, these transactions could be perceived as being conflicted.
Transactions between the Company and Stack’s Bowers are approved by our Audit Committee, as appropriate, and we believe that all such transactions are on terms no less favorable to the Company than would be obtained from an unaffiliated third-party. Nonetheless, these transactions could be perceived as being conflicted.
Moreover, because of the sensitivity of our business to macro-economic, social and political circumstances, there may be no effective strategy to insulate us from the adverse effects that these circumstances could have on our business. Risks Relating to our Operations Our business is heavily dependent on our credit facility.
Moreover, because of the sensitivity of our business to macro-economic, social and political circumstances, there may be no effective strategy to insulate us from the adverse effects that these circumstances could have on our business. 14 Risks Relating to our Operations Our business is heavily dependent on our credit facility.
The EU data protection regime expands the scope of the EU data protection law to all foreign companies processing personal data of EU residents, imposes a strict data protection compliance regime with severe penalties of up to the greater of 4% of worldwide turnover or €20 million, and includes new rights such as the “portability” of personal data.
The EU data protection regime expands the scope of the EU data protection law to all foreign companies processing Personal Information of EU residents, imposes a strict data protection compliance regime with severe penalties of up to the greater of 4% of worldwide turnover or €20 million, and includes new rights such as the “portability” of Personal Information.
We believe that this program encourages the purchase of coins and bullion as an investment because it assures customers that their investment in the products offered by JMB and Goldline will be liquid and can be monetized if the customers have a need for cash.
We believe that this program encourages the purchase of coins and bullion as an investment because it assures customers that their investment in the products offered by JMB, Goldline, and SGB will be liquid and can be monetized if the customers have a need for cash.
We have significant operations outside the United States. We derive a significant portion of our revenues from business outside the United States, including from customers in developing countries. Business operations outside the U.S. are subject to political, economic and other risks inherent in operating in foreign countries.
We derive significant revenues from business outside the United States. We derive a significant portion of our revenues from business outside the United States, including from customers in developing countries. Business operations outside the U.S. are subject to political, economic and other risks inherent in operating in foreign countries.
However, while we do not currently anticipate that our business will suffer as a consequence of the current problems in the national and global supply chains, we cannot assure you that this will continue to be the case.
However, while we do not currently anticipate that our business will suffer as a consequence of problems in the national and global supply chains, we cannot assure you that this will continue to be the case.
In a declining market for precious metal products, JMB and Goldline could be burdened with substantial amounts of purchased inventory that they are unable to resell at an economic price, or at all.
In a declining market for precious metal products, JMB, Goldline, and SGB could be burdened with substantial amounts of purchased inventory that they are unable to resell at an economic price, or at all.
JMB and Goldline offer to purchase coins and bullion from their customers at prices designed to reflect current market valuations, but also allows JMB and Goldline to profit on the resale of the products.
JMB, Goldline, and SGB offer to purchase coins and bullion from their customers at prices designed to reflect current market valuations, but also allows JMB, Goldline, and SGB to profit on the resale of the products.
There can be no assurance, however, that JMB or Goldline will in fact be able to resell product that they purchase at a price that will justify the cost of purchase.
There can be no assurance, however, that JMB, Goldline, or SGB will in fact be able to resell product that they purchase at a price that will justify the cost of purchase.
Mint, could have a material adverse effect on our business. We operate in a highly competitive industry. The business of buying and selling precious metals is global and highly competitive.
Mint, could have a material adverse effect on our business. 18 We operate in a highly competitive industry. The business of buying and selling precious metals is global and highly competitive.
Future advances in technology may not be beneficial to, or compatible with, JMB’s or Goldline’s businesses. Furthermore, JMB and Goldline may be unsuccessful in using new technologies effectively or adapting their technology and systems to user requirements or emerging industry standards on a timely basis. Their ability to remain technologically competitive may require substantial expenditures and lead time.
Future advances in technology may not be beneficial to, or compatible with, JMB’s, Goldline’s, or SGB's businesses. Furthermore, JMB, Goldline and SGB may be unsuccessful in using new technologies effectively or adapting their technology and systems to user requirements or emerging industry standards on a timely basis. Their ability to remain technologically competitive may require substantial expenditures and lead time.
JMB and Goldline face competition from other specialty online precious metal and coin sites, as well as from traditional precious metal retail brokers and coin stores.
JMB, Goldline, and SGB face competition from other specialty online precious metal and coin sites, as well as from traditional precious metal retail brokers and coin stores.
Failure to comply with applicable laws and regulations or implement responsible business practices could subject us to damage to our reputation, lawsuits, criminal exposure, or increased cost of regulatory compliance. C hanges i n U.S. tax law could adversely affect our business.
Failure to comply with applicable laws and regulations or to implement responsible business practices could subject us to damage to our reputation, lawsuits, criminal exposure, or increased cost of regulatory compliance. C hanges i n tax law could adversely affect our business.
Were this to occur, the Company could suffer adverse publicity, be subject to governmental enforcements actions or be forced to modify the sales and marketing practices of its direct-to-consumer business. Our Direct-to-Consumer businesses operate in a highly competitive environment.
Were this to occur, the Company could suffer adverse publicity, be subject to governmental enforcement actions or be forced to modify the sales and marketing practices of its direct-to-consumer business. Our Direct-to-Consumer businesses operate in a highly competitive environment.
Competition is based upon the availability of coin and bullion product, price, delivery times, convenience and customer service. There can be no assurance that JMB and Goldline will be able to compete effectively with other retail sources and channels for precious coin and bullion, especially if the demand for these products were to contract from its current record high levels.
Competition is based upon the availability of coin and bullion product, price, delivery times, convenience and customer service. There can be no assurance that we will be able to compete effectively with other retail sources and channels for precious coin and bullion, especially if the demand for these products were to contract from its current record high levels.
In addition, certain general online merchandisers such as eBay also offer collectible coins and bullion for sale, and other major online retailers, with financial and marketing resources, name recognition and a customer base that are far greater than those that are available to JMB and Goldline, may in the future enter this market.
In addition, certain general online merchandisers such as eBay also offer collectible coins and bullion for sale, and other major online retailers, with financial and marketing resources, name recognition and a customer base that are far greater than those that are available to us, may in the future enter this market.
There is a risk that part or all of the gold and other precious metals held by A-Mark, whether on its own behalf or on behalf of its customers, could be lost, damaged or stolen. In addition, access to A-Mark’s precious metals could be restricted by natural events (such as an earthquake) or human actions (such as a terrorist attack).
There is a risk that gold and other precious metals held by A-Mark, whether on its own behalf or on behalf of its customers, could be lost, damaged or stolen. In addition, access to A-Mark’s precious metals could be restricted by natural events (such as an earthquake) or human actions (such as a terrorist attack).
The use of SOFR based rates replaced rates based on the London interbank offered rate (LIBOR), and reflects the cessation of the publication of LIBOR rates previously announced by regulators in the United Kingdom and the discontinuation of the use of LIBOR in the financial markets.
The use of SOFR based rates replaced rates based on the London interbank offered rate (LIBOR), and reflects the cessation of the publication of LIBOR rates by regulators in the United Kingdom and the discontinuation of the use of LIBOR in the financial markets.
Our board and management beneficially own a sizable percentage of our common stock and therefore have the ability to exert substantial influence as stockholders. Members of our board and management beneficially own approximately 24% of our outstanding common stock.
Our board and management beneficially own a sizable percentage of our common stock and therefore have the ability to exert substantial influence as stockholders. Members of our board and management beneficially own approximately 22% of our outstanding common stock.
In addition, the U.S. Congress has considered legislation that would generally limit or prohibit mandatory arbitration agreements in consumer contracts and has enacted legislation with such a prohibition with respect to certain mortgage loan agreements and also certain consumer loan agreements to members of the military on active duty and their dependents.
Congress has considered legislation that would generally limit or prohibit mandatory arbitration agreements in consumer contracts and has enacted legislation with such a prohibition with respect to certain mortgage loan agreements and also certain consumer loan agreements to members of the military on active duty and their dependents.
For example, we have been placing increasing emphasis on our direct-to-consumer business, in anticipation that the economic uncertainties, market volatilities and global challenges that we face will continue to make investment in precious metals and numismatics more attractive to individual consumers.
For example, we have placed increasing emphasis on our direct-to-consumer business, in anticipation that the economic uncertainties, market volatilities and global challenges that we face will continue to make investment in precious metals and numismatics more attractive to individual consumers.
With the growth of e-commerce, the pace of change in product offerings and consumer tastes in the shipping and logistics industries is faster now than in years past. This accelerated pace of change increases uncertainty and places a greater burden on management to anticipate and respond to such changes.
With the growth of e-commerce, the pace of change in product offerings and consumer tastes is faster now than in years past. This accelerated pace of change increases uncertainty and places a greater burden on management to anticipate and respond to such changes.
If JMB or Goldline is unable to adapt in a timely manner and at reasonable cost to changing market conditions or user requirements, it will cease to be competitive with other channels for the purchase of precious coins and bullion.
If JMB, Goldline or SGB is unable to adapt in a timely manner and at reasonable cost to changing market conditions or user requirements, they will cease to be competitive with other channels for the purchase of precious coins and bullion.
Our ability to minimize losses on the credit that we extend to our customers depends on a variety of factors, including: • our loan underwriting and other credit policies and controls designed to assure repayment, which may prove inadequate to prevent losses; • our ability to sell collateral upon customer defaults for amounts sufficient to offset credit losses, which can be affected by a number of factors outside of our control, including (i) changes in economic conditions, (ii) increases in market rates of interest and (iii) changes in the condition or value of the collateral; and • the reserves we establish for loan losses, which may prove insufficient. 15 Liquidity constraints may limit our ability to grow our business.
Our ability to minimize losses on the credit that we extend to our customers depends on a variety of factors, including: • our loan underwriting and other credit policies and controls designed to assure repayment, which may prove inadequate to prevent losses; • our ability to sell collateral upon customer defaults for amounts sufficient to offset credit losses, which can be affected by a number of factors outside of our control, including (i) changes in economic conditions, (ii) increases in market rates of interest and (iii) changes in the condition or value of the collateral; and • the reserves we establish for loan losses, which may prove insufficient.
We have pledged a significant portion of our assets as collateral under the Trading Credit Facility, and if we were unable to repay the amounts outstanding thereunder, the administrative agent under the Trading Credit Facility could proceed against the collateral granted to secure such indebtedness.
We have pledged a significant portion of our assets as collateral under the Trading Credit Facility, and if we were unable to repay the amounts outstanding thereunder, the administrative agent under the Trading Credit Facility could proceed against the collateral securing such indebtedness.
We are dependent on third parties, referred to as lead providers (or lead generators) and marketing affiliates, as a source of new customers for our Direct-to-Consumer segment and new borrowers for our Secured Lending segment. Our marketing affiliates place our advertisements on their websites that direct potential customers to our websites.
We are dependent on third parties, referred to as lead providers (or lead generators) and marketing affiliates, as a source of new customers for our Direct-to-Consumer segment. Our marketing affiliates place our advertisements on their websites that direct potential customers to our websites.
JMB and Goldline expect to profit on precious metals acquired from their customers, but that might not be the case. Through the Direct-to-Consumer Purchase Program, JMB and Goldline (through its affiliate, PMPP) offer to purchase precious coins and bullion owned by their customers.
JMB, Goldline, and SGB expect to profit on precious metals acquired from their customers, but that might not be the case. Through the Direct-to-Consumer Purchase Program, JMB and, through PMPP, Goldline and SGB, offer to purchase precious coins and bullion owned by their customers.
In September 2021 and 2022, the Company paid non-recurring special cash dividends to our stockholders, as a consequence in part of the Company's favorable performance during the preceding periods. There is no assurance that any such non-recurring special dividend will be paid in the future, and if made, the timing or amount of any such dividend.
The Company has paid non-recurring special cash dividends to our stockholders as a consequence in part of the Company's favorable performance during the preceding periods. There is no assurance that any such non-recurring special dividend will be paid in the future, and if made, the timing or amount of any such dividend.
Our advertising and marketing materials and disclosures related to our Direct-to-Consumer and Secured Lending segments have been and continue to be subject to regulatory scrutiny. In the jurisdictions where our Direct-to-Consumer business operates, our advertising and marketing activities and disclosures are subject to regulation under various industry standards, borrower protection laws, and other applicable laws and regulations.
Our advertising and marketing materials and disclosures related to our Direct-to-Consumer and Secured Lending segments have been and continue to be subject to regulatory scrutiny. In the jurisdictions where our Direct-to-Consumer and Secured Lending businesses operate, our advertising and marketing activities and disclosures are subject to regulation under various industry standards, borrower protection laws, and other applicable laws and regulations.
However, there can be no assurance that these hedging activities will be adequate to protect the Company against commodity price risks associated with A-Mark’s business activities. Furthermore, even if we are fully hedged as to any given position, there is the risk of default by our counterparties to the hedge.
However, there can be no assurance that these hedging activities will be adequate to protect the Company against commodity price risks associated with A-Mark’s business activities. 22 Furthermore, even if we are fully hedged as to any given position, there is the risk of default by our counterparties to the financial instruments that we use to hedge our inventory.
Search engine companies change their natural search engine algorithms periodically, and these changes may adversely affect JMB’s product offerings in paid and/or unpaid searches. JMB may also at times be subject to ranking penalties if the operators of search engines believe it is not in compliance with their guidelines.
Search engine companies change their natural search engine algorithms periodically, and these changes may adversely affect our Direct-to-Consumer product offerings in paid and/or unpaid searches. JMB and SGB may also at times be subject to ranking penalties if the operators of search engines believe it is not in compliance with their guidelines.
These changes require companies to investigate all cybersecurity incidents without unreasonable delay, determine their level of materiality, and report specific details about any material cybersecurity incidents in a separate filing within four business days.
The new rules require companies to investigate all cybersecurity incidents without unreasonable delay, determine their level of materiality, and report specific details about any material cybersecurity incidents in a separate filing within four business days.
This could result in an increase in our tax liability or require changes in our business in order to mitigate any adverse effects of changes in tax laws. Third-party expectations relating to Environment, Social and Governance (“ESG”) factors may impose additional costs and expose us to new risks.
This could result in an increase in our tax liability or require changes in our business in order to mitigate any adverse effects of changes in tax laws. 29 Third-party expectations relating to ESG factors may impose additional costs and expose us to new risks.
Additionally, new legislative or regulatory initiatives related to ESG could adversely affect our business. 27 ITEM 1B. UNRESOLVED STAFF COMMENTS None.
Additionally, new legislative or regulatory initiatives related to ESG could adversely affect our business. I TEM 1B. UNRESOLVED STAFF COMMENTS None.
We will require adequate sources of liquidity to fund both our existing business and our strategy for expansion, evidenced by our acquisition of JMB and other acquisition activity.
Liquidity constraints may limit our ability to grow our business. We will require adequate sources of liquidity to fund both our existing business and our strategy for expansion, evidenced by our acquisition of JMB and other acquisition activity.
Our business depends substantially on our ability to obtain financing for our operations. On December 21, 2021, we entered into a new committed facility provided by a syndicate of financial institutions (the “Trading Credit Facility”), with a total current revolving commitment of up to $350.0 million and with a termination date of December 21, 2024.
Our business depends substantially on our ability to obtain financing for our operations. On December 21, 2021, we entered into a committed facility provided by a syndicate of financial institutions (the “Trading Credit Facility”), with a total current revolving commitment of up to $422.5 million and with a termination date of September 20, 2025.
The increased pace of change also means that the window in which a technologically advanced or sophisticated product or service can achieve and maintain partner and consumer interest is shrinking and, to the extent JMB and Goldline fail to timely anticipate or respond to changes in its industry, the effects of such missteps may be amplified.
The increased pace of change also means that the window in which a technologically advanced or sophisticated product or service can achieve and maintain partner and consumer interest is shrinking and, to the extent our Direct-to-Consumer Segment fails to timely anticipate or respond to changes in their industry, the effects of such missteps may be amplified.
More generally, a depressing effect on the global economy as a consequence of the military action in Ukraine could similarly dampen our business activity and reduce the demand for our products and services.
In particular, a depressing effect on the global economy as a consequence of the military action in Ukraine and the Middle East could dampen our business activity and reduce the demand for our products and services.
JMB relies upon paid and unpaid internet search engines to rank its product offerings and drive traffic to its website, and its website traffic may suffer if its rankings decline or its relationship with these services deteriorates. JMB relies on paid and unpaid internet search engines to attract consumer interest in its product offerings.
JMB and SGB rely upon paid and unpaid internet search engines to rank their product offerings and drive traffic to their websites, and their website traffic may suffer if their rankings decline or their relationships with these services deteriorates. JMB and SGB rely on paid and unpaid internet search engines to attract consumer interest in their product offerings.
Any inability to do so could have a material adverse effect on our business. 25 Risks Relating to Our Common Stock We may not continue to pay any dividends in the future. A-Mark’s board of directors has adopted a regular quarterly cash dividend policy of $0.20 per common share ($0.80 per share on an annual basis).
Risks Relating to Our Common Stock We may not continue to pay any dividends in the future. A-Mark’s board of directors has adopted a regular quarterly cash dividend policy of $0.20 per common share ($0.80 per share on an annual basis).
The initial quarterly cash dividend under the policy was paid on October 24, 2022 to stockholders of record as of October 10, 2022. The most recent cash dividend under the policy was paid on July 28, 2023 to stockholders of record as of July 17, 2023.
The initial quarterly cash dividend under the policy was paid on October 24, 2022 to stockholders of record as of October 10, 2022. The most recent cash dividend under the policy was paid on July 31, 2024 to stockholders of record as of July 18, 2024.
If JMB fails to continuously improve its websites (on all relevant platforms, including mobile), it may not attract or retain customers. JMB owns and operates six separately branded websites targeting specific segments within the precious metals market: JMBullion.com, ProvidentMetals.com, Silver.com, BGASC.com, CyberMetals.com, and BullionMax.com.
If JMB fails to continuously improve its websites (on all relevant platforms, including mobile), it may not attract or retain customers. JMB owns and operates numerous websites targeting specific niches within the precious metals retail market, including JMBullion.com, ProvidentMetals.com, Silver.com, CyberMetals.com, GoldPrice.org, SilverPrice.org, BGASC.com, BullionMax.com, and Gold.com.
We also issued stock to the public to finance, in part, the acquisition of JMB. Provisions in our Certificate of Incorporation and Bylaws and of Delaware law may prevent or delay an acquisition of the Company, which could decrease the trading price of our common stock.
Provisions in our Certificate of Incorporation and Bylaws and of Delaware law may prevent or delay an acquisition of the Company, which could decrease the trading price of our common stock.
Although the GDPR applies across the EU without a need for local implementing legislation, EU member states have the ability to interpret the GDPR opening clauses, which permit region-specific data protection legislation and have the potential to create inconsistencies on a country-by-country basis. Our Direct-to-Consumer business currently has limited international operations which would subject it to the GDPR.
Although the GDPR applies across the EU without a need for local implementing legislation, EU member states have the ability to interpret the GDPR opening clauses, which permit region-specific data protection legislation and have the potential to create inconsistencies on a country-by-country basis.
Through our JMB and Goldline subsidiaries, the Company sells precious metals and numismatics directly to the retail investor community. JMB markets its products over the internet. Goldline markets its precious metal products on television, radio, and over the internet, and through customer service outreach.
Through our Direct-to-Consumer segment (JMB, Goldline, and our investment in SGB), the Company sells precious metals and numismatics directly to the retail investor community. JMB and SGB market their products primarily over the internet. Goldline markets its precious metal products on television, radio, and over the internet, and through customer service outreach.
ITEM 1A. RIS K FACTORS Risks Relating to Market Trends and Global Events The demand for our products and our profitability ultimately depends on preferences and perceptions regarding the desirability of owning precious metals, but those preferences and perceptions are subject to change.
Introductory Risks The demand for our products and our profitability ultimately depends on preferences and perceptions regarding the desirability of owning precious metals, but those preferences and perceptions are subject to change.
We have in the past engaged, and continue to engage, in transactions with Stack’s Bowers, an affiliate of the Company, which could be perceived as not being made at arms-length.
If our relationships with these customers deteriorated, or if we were to lose these customers, our business could be materially adversely affected. We have in the past engaged, and continue to engage, in transactions with Stack’s Bowers, an affiliate of the Company, which could be perceived as not being made at arms-length.
Consistent with the lending industry as a whole, our advertising and marketing materials have come under increased scrutiny. There can be no guarantee that we will be able to continue advertising and marketing our business units in a manner we consider effective.
As a whole, our advertising and marketing materials have come under increased scrutiny. There can be no guarantee that we will be able to continue advertising and marketing our business units in a manner we consider effective. Any inability to do so could have a material adverse effect on our business.
For other risks related to taxation, see “ Risk Factors of General Applicability — Changes in U.S. tax law could adversely affect our business ,” below. 24 We use lead providers and marketing affiliates to assist us in obtaining new customers, and if lead providers or marketing affiliates do not comply with an increasing number of applicable laws and regulations, or if our ability to use such lead providers or marketing affiliates is otherwise impaired, it could adversely affect our business.
We use lead providers and marketing affiliates to assist us in obtaining new customers, and if lead providers or marketing affiliates do not comply with an increasing number of applicable laws and regulations, or if our ability to use such lead providers or marketing affiliates is otherwise impaired, it could adversely affect our business.
Currently, our main sources of liquidity are the cash that we generate from operations, our borrowing availability under the Trading Credit Facility, and the proceeds from the issuance of the AMCF Notes, which mature on December 15, 2023.
Currently, our main sources of liquidity are the cash that we generate from operations, and our borrowing availability under the Trading Credit Facility.
Certain of JMB’s websites publish data concerning the precious metal and cryptocurrency markets obtained from third parties, which could be inaccurate. JMB’s GoldPrice.org and SilverPrice.org publish data on precious metal and cryptocurrency pricing which is obtained from third parties.
If such a perception were to gain currency, traffic to JMB’s websites and its revenues would suffer. Certain of JMB’s websites publish data concerning the precious metal and cryptocurrency markets obtained from third parties, which could be inaccurate. JMB’s GoldPrice.org and SilverPrice.org publish data on precious metal and cryptocurrency pricing which is obtained from third parties.
Our Trading Credit Facility bears interest at a variable rate of interest, so that higher interest rates will also increase our cost of borrowing under that facility, and rising interest rates may also increase the costs under our product financing arrangements, and we may be unable to compensate for these increases through higher interest income received from our counterparties.
Our Trading Credit Facility bears interest at a variable rate of interest, so that higher interest rates will also increase our cost of borrowing under that facility, and higher interest rates may also increase the costs under our product financing arrangements.
Going forward, however, the expansion of our international operations could require us to change our business practices and may increase the costs and complexity of compliance.
Going forward, however, the expansion of our international operations could require us to change our business practices and may increase the costs and complexity of compliance. Also, a violation by the Company of these regulations could expose us to penalties and sanctions under the regulations.
Certain of such provisions allow the Company to issue preferred stock with rights senior to those of the common stock, impose various procedural and other requirements which could make it more difficult for stockholders to effect certain corporate actions and set forth rules regarding how stockholders may present proposals or nominate directors for election at stockholder meetings.
Certain of such provisions allow the Company to issue preferred stock with rights senior to those of the common stock, impose various procedural and other requirements which could make it more difficult for stockholders to effect certain corporate actions and set forth rules regarding how stockholders may present proposals or nominate directors for election at stockholder meetings. 28 We believe these provisions protect our stockholders from coercive or otherwise unfair takeover tactics by requiring potential acquirors to negotiate with our board of directors and by providing our board of directors with more time to assess any acquisition proposal.
Although we maintain insurance on terms and conditions that we consider appropriate, we may not have adequate sources of recovery if our precious metals inventory is lost, damaged, stolen or destroyed, and recovery may be limited.
Although we maintain insurance on terms and conditions that we consider appropriate, we may not have adequate sources of recovery if our precious metals inventory is lost, damaged, stolen or destroyed, and recovery may be limited. Among other things, our insurance policies exclude coverage in the event of loss as a result of terrorist attacks or civil unrest.
We take the position that the arbitration provisions in loan and financing agreements, including class action waivers, are valid and enforceable; however, the enforceability of arbitration provisions is often challenged in court. If those challenges are successful, our arbitration and class action waiver provisions could be unenforceable, which could subject us to additional litigation, including class action litigation.
We take the position that the arbitration provisions in loan and financing agreements, including class action waivers, are valid and enforceable; however, the enforceability of arbitration provisions is often challenged in court.
Our Wholesale Sales and Ancillary Services segment maintains an office in Vienna, Austria that provides marketing support services for its international (including EU) customers. We have evaluated GDPR and its requirements, and believe we are currently in compliance with GDPR in all material respects.
Our Direct-to-Consumer business currently has limited international operations which would subject it to these foreign privacy laws. Our Wholesale Sales and Ancillary Services segment maintains an office in Vienna, Austria that provides marketing support services for its international customers. We have evaluated these foreign privacy laws and their requirements, and believe we are currently in compliance in all material respects.
Furthermore, the requirements by state or local governments on out-of-state sellers to collect sales and use taxes could deter futures sales, which could have an adverse impact on our business.
Furthermore, the requirements by state or local governments on out-of-state sellers to collect sales and use taxes could deter futures sales, which could have an adverse impact on our business. For other risks related to taxation, see “ Risk Factors of General Applicability — Changes in tax law could adversely affect our business ,” below.
If we are unable to access funds under the Trading Credit Facility, we may be limited in the manner in which we conduct our business, and we may be unable to engage in favorable business activities or finance future operations or capital needs. 14 We cannot assure you that our assets or cash flow would be sufficient to fully repay borrowings under our outstanding debt instruments, including the Trading Credit Facility, upon demand or acceleration, or at maturity, or that we would be able to refinance or restructure the payments under the Trading Credit Facility.
We cannot assure you that our assets or cash flow would be sufficient to fully repay borrowings under our outstanding debt instruments, including the Trading Credit Facility, upon acceleration or at maturity, or that we would be able to refinance or restructure the payments under the Trading Credit Facility.
There can be no assurance that the regulation of our trading and lending businesses will not increase or that compliance with the applicable regulations will not become more costly or require us to modify our business practices.
There can be no assurance that the regulation of our trading, Direct-to-Consumer, and lending businesses will not increase or that compliance with the applicable regulations will not become more costly or require us to modify our business practices. 26 For other risks related to government regulation, see below this section and see “ Risk Factors of General Applicability — We are subject to other laws and regulations ,” below.
If our relationships with these customers deteriorated, or if we were to lose these customers, our business could be materially adversely affected. The loss of a government purchaser/distributorship arrangement could materially adversely affect our business. A-Mark’s business is heavily dependent on its purchaser/distributorship arrangements with various governmental mints.
Risks Related to our Wholesale Sales & Ancillary Services Segment The loss of a government purchaser/distributorship arrangement could materially adversely affect our business. A-Mark’s business is heavily dependent on its purchaser/distributorship arrangements with various governmental mints.
This law provides California consumers with a high level of transparency and broad rights and choices with respect to their personal information.
California passed amendments to the California Consumer Privacy Act (“CCPA”) that took effect on January 1, 2023. This law provides California consumers with a high level of transparency and broad rights and choices with respect to their Personal Information.
In response, the U.S. and certain other countries imposed significant sanctions and export controls, and could impose further sanctions and controls, against Russia, Belarus and certain individuals and entities connected to Russian or Belarusian political, business, and financial organizations. The conflict has also created uncertainty regarding, and potential shortages of, grain and fossil fuel supplies in Europe and elsewhere.
Russia is continuing to engage in its military action against Ukraine. In response, the U.S. and certain other countries imposed significant sanctions and export controls, and could impose further sanctions and controls, against Russia, Belarus and certain individuals and entities connected to Russian or Belarusian political, business, and financial organizations.
However, there can be no assurance that we will be successful in preventing or identifying this type of fraud, or in obtaining redress in the event such fraud is detected. Risk Related to our Regulatory Environment We are subject to laws and regulations. There are various federal, state, local and foreign laws, ordinances and regulations that affect our trading business.
However, there can be no assurance that we will be successful in preventing or identifying this type of fraud, or in obtaining redress in the event such fraud is detected. Risk Related to our Regulatory Environment The CFTC may seek to assert jurisdiction over the Company’s activities.
For example, because of the nature and value of the products in which deal, we are required to comply with the Foreign Corrupt Practices Act and a variety of anti-money laundering and know-your-customer rules in response to the USA Patriot Act. 22 The SEC has promulgated rules mandated by the Dodd-Frank Act regarding disclosure, on an annual basis, of the use of tin, tantalum, tungsten and gold, known as conflict minerals, in products manufactured by public companies.
For example, because of the nature and value of the products in which deal, we are required to comply with the Foreign Corrupt Practices Act and a variety of anti-money laundering and know-your-customer rules in response to the USA Patriot Act.
Failure to do so may create a perception that the websites of JMB’s competitors are easier to use and navigate or that they are better able to service customer needs for precious metal coins and bullion. If such a perception were to gain currency, traffic to JMB’s websites and its revenues would suffer.
JMB must continually update its websites (on all relevant platforms, including mobile) to improve and enhance its content, accessibility, convenience and ease of use. Failure to do so may create a perception that the websites of JMB’s competitors are easier to use and navigate or that they are better able to service customer needs for precious metal coins and bullion.
The changes introduced by these statutes, and other similar regulations enacted by other jurisdictions, will subject the Company to additional costs and complexity of compliance, by requiring, among other things, changes to the Company’s security systems, policies, procedures and practices. In addition, a violation by the Company of the new regulations could expose us to penalties and sanctions.
Going forward, however, the changes introduced by state privacy laws that will soon take effect, and other similar regulations enacted by other jurisdictions, will subject the Company to additional costs and complexity of compliance, by requiring, among other things, changes to the Company’s security systems, policies, procedures and practices.
Because our business is dependent on the volatility and pricing of precious metals, we are likely to be influenced by world events more than businesses in other economic sectors. 16 Russia is continuing to engage in its military action against Ukraine.
Conversely, during periods of relative international calm precious metal volatility is likely to decrease, along with demand, and the prices of precious metals may retreat. Because our business is dependent on the volatility and pricing of precious metals, we are likely to be influenced by world events more than businesses in other economic sectors.
We require coin and other bullion products, particularly products manufactured by government mints, for resale to our customers, and silver for the productions of bullion bars and rounds by our Silver Towne mint.
As a result of various macro-economic factors, businesses in a variety of industries have experienced difficulty in obtaining the source materials required for their operations. We require coin and other bullion products, particularly products manufactured by government mints, for resale to our customers, and silver for the productions of bullion bars and rounds by our Silver Towne Mint.
This requirement could impair valuable relationships that the Company may otherwise have with its customers whose loans have been securitized. 21 Risks Relating to Commodities A-Mark’s business is heavily influenced by volatility in commodities prices. A primary driver of A-Mark’s profitability is volatility in commodities prices, which leads to wider bid and ask spreads.
Risks Relating to Commodities A-Mark’s business is heavily influenced by volatility in commodities prices. A primary driver of A-Mark’s profitability is volatility in commodities prices, which leads to wider bid and ask spreads.
A default by a counterparty on a substantial hedge could have a material adverse effect on our business. Increased commodity pricing could limit the inventory that we are able to carry. We maintain a large and varied inventory of precious metal products, including bullion and coins, in order to support our trading activities and provide our customers with superior service.
A default by a counterparty on a substantial hedge could have a material adverse effect on our business. Increased commodity pricing could limit the inventory that we are able to carry.
It is not possible to predict the broader consequences of this conflict, which could materially adversely affect global trade, currency exchange rates, regional economies and the global economy, and its impact on us. We could benefit from the resulting uncertainty and instability, as it may encourage investors to seek perceived safety in the ownership of precious metals.
The conflict has also created uncertainty regarding, and potential shortages of, grain and fossil fuel supplies in Europe and elsewhere. It is not possible to predict the broader consequences of this conflict, which could materially adversely affect global trade, currency exchange rates, regional economies and the global economy, and its impact on us.
Failure to comply with these privacy laws can result in civil penalties ranging from $2,500 to $20,000 per violation. In addition, the SEC recently changed its disclosure requirements regarding cybersecurity risk management, strategy, governance and incident reporting.
Failure to comply with these privacy laws can result in civil penalties ranging from $2,500 to $20,000 per violation.

… 123 more changes not shown on this page.

Item 2. Properties

Properties — owned and leased real estate

1 edited+0 added−2 removed0 unchanged
Biggest changePROPERTIES As of June 30, 2023, the Company owned or leased properties as described below: Location General Use of Facility Square Footage Ownership Lease-term Expiration Wholesale Sales and Ancillary Services Segment El Segundo, California (1) Corporate headquarters, trading desk, secured lending, marketing, and back-office operations 9,000 Leased March-2026 Las Vegas, Nevada Storage and fulfillment logistics operations 17,600 Leased April-2025 Winchester, Indiana Minting operations 11,400 Owned not applicable Winchester, Indiana Fabrication facility 17,000 Leased May-2024 Carson City, Nevada Die-cutting and engraving facility 2,000 Leased June-2025 Vienna, Austria International marketing support operations 248 Leased every three months Direct-to-Consumer Segment Los Angeles, California Corporate office and support center 11,468 Leased January-2028 Dallas, Texas Corporate office and support center 3,093 Leased December-2024 Dallas, Texas Corporate office and support center 10,586 Leased November-2028 Irving, Texas Distribution hub 24,640 Leased April-2031 (1) The Secured Lending segment shares office space at this facility.
Biggest changePROPERTIES As of June 30, 2024, the Company owned or leased properties as described below: Location General Use of Facility Square Footage Ownership Lease-term Expiration Wholesale Sales and Ancillary Services Segment El Segundo, California (1) Corporate headquarters, trading desk, secured lending, marketing, and back-office operations 9,000 Leased March-2026 Las Vegas, Nevada Storage and fulfillment logistics operations 24,743 Leased April-2030 Winchester, Indiana Minting operations 17,000 Owned not applicable Winchester, Indiana Minting operations 5,000 Owned not applicable Winchester, Indiana Fabrication facility 17,000 Leased May-2025 Carson City, Nevada Die-cutting and engraving facility 2,000 Leased June-2025 Vienna, Austria International marketing support operations 248 Leased every three months Hong Kong Regional headquarters and back-office operations 4,599 Leased June-2026 Hong Kong Numismatics showroom 3,500 Leased January-2026 Direct-to-Consumer Segment Los Angeles, California Corporate office and support center 11,468 Leased January-2028 Dallas, Texas Corporate office and support center 3,093 Leased December-2024 Dallas, Texas Corporate office and support center 10,586 Leased November-2028 Irving, Texas Distribution hub 24,640 Leased April-2031 Calgary, Canada Corporate office and support center 22,650 Leased August-2028 Calgary, Canada Corporate office and support center 4,176 Leased August-2025 (1) The Secured Lending segment shares office space at this facility.
Removed
ITEM 3. LEGAL PROCEEDINGS We are from time to time involved in legal proceedings, claims, or investigations that are incidental to the conduct of our business.
Removed
Although the ultimate outcome of any legal matter cannot be predicted with certainty, based on current information, including our assessment of the merits of the particular claim, we do not expect that these legal proceedings or claims will have any material adverse impact on our future consolidated financial position, results of operations, or cash flows.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

164 edited+44 added−37 removed108 unchanged
Biggest changeWe are uncertain of the duration of these conditions. 37 RESULTS OF OPERATIONS Overview of Results of Operations for the Years Ended June 30, 2023 and 2022 Consolidated Results of Operations The operating results of our business were as follows (in thousands, except per share and performance metrics data): Year Ended June 30, 2023 2022 Change $ % of revenue $ % of revenue $ % Revenues $ 9,286,561 100.000 % $ 8,159,254 100.000 % $ 1,127,307 13.8 % Gross profit 294,669 3.173 % 261,765 3.208 % $ 32,904 12.6 % Selling, general, and administrative expenses (85,282 ) (0.918 %) (76,618 ) (0.939 %) $ 8,664 11.3 % Depreciation and amortization expense (12,525 ) (0.135 %) (27,300 ) (0.335 %) $ (14,775 ) (54.1 %) Interest income 22,231 0.239 % 21,800 0.267 % $ 431 2.0 % Interest expense (31,528 ) (0.340 %) (21,992 ) (0.270 %) $ 9,536 43.4 % Earnings from equity method investments 12,576 0.135 % 6,907 0.085 % $ 5,669 82.1 % Other income, net 2,663 0.029 % 1,953 0.024 % $ 710 36.4 % Unrealized gains (losses) on foreign exchange 366 0.004 % (98 ) (0.001 %) $ 464 473.5 % Net income before provision for income taxes 203,170 2.188 % 166,417 2.040 % $ 36,753 22.1 % Income tax expense (46,401 ) (0.500 %) (33,338 ) (0.409 %) $ 13,063 39.2 % Net income 156,769 1.688 % 133,079 1.631 % $ 23,690 17.8 % Net income attributable to noncontrolling interest 409 0.004 % 543 0.007 % $ (134 ) (24.7 %) Net income attributable to the Company $ 156,360 1.684 % $ 132,536 1.624 % $ 23,824 18.0 % Basic and diluted net income per share attributable to A-Mark Precious Metals, Inc.: Per Share Data: Basic $ 6.68 $ 5.81 $ 0.87 15.0 % Diluted $ 6.34 $ 5.45 $ 0.89 16.3 % Performance Metrics: (1) Gold ounces sold (2) 2,667,000 2,668,000 (1,000 ) (0.0 %) Silver ounces sold (3) 156,233,000 132,209,000 24,024,000 18.2 % Inventory turnover ratio (4) 10.5 13.2 (2.7 ) (20.5 %) Number of secured loans at period end (5) 882 2,271 (1,389 ) (61.2 %) (1) See "Results of Segments" for a description of additional metrics not listed above.
Biggest changeThe Company cannot predict the periods during which such increased volatility will occur or the level of such increased volatility, the effect of such volatility and macroeconomic uncertainty on the Company, or whether other effects on the Company and its businesses will materialize in the short or long term. 41 RESULTS OF OPERATIONS Overview of Results of Operations Consolidated Results of Operations for the Years Ended June 30, 2024 and 2023 The operating results of our business were as follows (in thousands, except per share and performance metrics data): Year Ended June 30, 2024 2023 Change $ % of revenue $ % of revenue $ % Revenues $ 9,699,039 100.000 % $ 9,286,561 100.000 % $ 412,478 4.4 % Gross profit 173,255 1.786 % 294,669 3.173 % $ (121,414 ) (41.2 %) Selling, general, and administrative expenses (89,800 ) (0.926 %) (85,282 ) (0.918 %) $ 4,518 5.3 % Depreciation and amortization expense (11,397 ) (0.118 %) (12,525 ) (0.135 %) $ (1,128 ) (9.0 %) Interest income 27,168 0.280 % 22,231 0.239 % $ 4,937 22.2 % Interest expense (39,531 ) (0.408 %) (31,528 ) (0.340 %) $ 8,003 25.4 % Earnings from equity method investments 4,044 0.042 % 12,576 0.135 % $ (8,532 ) (67.8 %) Other income, net 2,071 0.021 % 2,663 0.029 % $ (592 ) (22.2 %) Remeasurement gain on pre-existing equity interest 16,669 0.172 % — — % $ 16,669 — % Unrealized gains on foreign exchange 299 0.003 % 366 0.004 % $ (67 ) (18.3 %) Net income before provision for income taxes 82,778 0.853 % 203,170 2.188 % $ (120,392 ) (59.3 %) Income tax expense (13,745 ) (0.142 %) (46,401 ) (0.500 %) $ (32,656 ) (70.4 %) Net income 69,033 0.712 % 156,769 1.688 % $ (87,736 ) (56.0 %) Net income attributable to noncontrolling interests 487 0.005 % 409 0.004 % $ 78 19.1 % Net income attributable to the Company $ 68,546 0.707 % $ 156,360 1.684 % $ (87,814 ) (56.2 %) Basic and diluted net income per share attributable to A-Mark Precious Metals, Inc.: Per Share Data: Basic $ 2.97 $ 6.68 $ (3.71 ) (55.5 %) Diluted $ 2.84 $ 6.34 $ (3.50 ) (55.2 %) Performance Metrics: (1) Gold ounces sold (2) 1,839,000 2,667,000 (828,000 ) (31.0 %) Silver ounces sold (3) 108,096,000 156,233,000 (48,137,000 ) (30.8 %) Inventory turnover ratio (4) 9.2 10.5 (1.3 ) (12.4 %) Number of secured loans at period end (5) 588 882 (294 ) (33.3 %) (1) See "Results of Segments" for a description of additional metrics not listed above.
The Company has based these forward-looking statements largely on its current expectations and projections about future events and financial trends that it believes may affect its financial condition, results of operations, business strategy, and financial needs. The forward-looking statements can be affected by inaccurate assumptions or by known or unknown risks, uncertainties, and assumptions.
The Company has based these forward-looking statements largely on its current expectations and projections about future events and financial trends that it believes may affect its financial condition, results of operations, business strategy, and financial needs. The forward-looking statements can be affected by inaccurate assumptions or by known or unknown risks and uncertainties.
A material changes in any one or more of these factors may result in a significant change in the Company’s revenues. A significant increase or decrease in revenues can occur simply based on changes in the underlying commodity prices and may not be reflective of an increase or decrease in the volume of products sold. Gross Profit .
A material change in any one or more of these factors may result in a significant change in the Company’s revenues. A significant increase or decrease in revenues can occur simply based on changes in the underlying commodity prices and may not be reflective of an increase or decrease in the volume of products sold. Gross Profit .
The Company enters into secured loans and secured financing structures with its customers under which it charges interest. CFC acquires loan portfolios and originates loans that are secured by precious metal bullion and numismatic material owned by the borrowers and held by the Company for the term of the loan.
The Company enters into secured loans and secured financing structures with its customers under which it charges interest. CFC originates loans and acquires loan portfolios that are secured by precious metal bullion and numismatic material owned by the borrowers and held by the Company for the term of the loan.
Ticket volume for the Direct-to-Consumer segment measures the number of product orders processed during the period. In periods of higher volatility, there is generally increased consumer demand for our products, resulting in higher business volume.
Direct-to-Consumer Ticket Volume. Ticket volume for the Direct-to-Consumer segment measures the number of product orders processed during the period. In periods of higher volatility, there is generally increased consumer demand for our products, resulting in higher business volume.
Due to the nature of our hedging strategy, we are not using hedge accounting as defined under Derivatives and Hedging Topic 815 of the ASC ("ASC 815"). Unrealized gains or losses resulting from our futures and forward contracts are reported as cost of sales with the related amounts due from or to counterparties reflected as derivative assets or liabilities.
Due to the nature of our hedging strategy, we are not using hedge accounting as defined under Derivatives and Hedging Topic 815 of the ASC ("ASC 815"). Unrealized gains or losses resulting from our forward and futures contracts are reported as cost of sales with the related amounts due from or to counterparties reflected as derivative assets or liabilities.
In doing so, we seek to leverage off the strengths of our existing integrated operations, which span trading, distribution, logistics, minting, storage, hedging, financing, and consignment products and services: • our expertise in e-commerce and marketing; • the depth of our customer relationships and our ability to acquire and retain new customers; • our long-standing relationships with the United States Mint and other sovereign and private mints; • our access to market makers and suppliers; • our global trading systems; • our network of precious metals dealers; • our depository relationships around the world; • our knowledge of secured lending; • our design and production of minted silver products; • our ability to obtain more favorable pricing and financing terms due to our size; • our ability to manage exposure to commodity price risk through our experienced traders; • our distribution, storage and logistics capabilities; and • the quality and experience of our management team.
In doing so, we seek to leverage off the strengths of our existing integrated operations, which span trading, distribution, logistics, minting, storage, hedging, financing, and consignment products and services, including: • our expertise in e-commerce and marketing; • the depth of our customer relationships and our ability to acquire and retain new customers; • our long-standing relationships with the United States Mint and other sovereign and private mints; • our access to market makers and suppliers; • our global trading systems; • our network of precious metals dealers; • our depository relationships around the world; • our design and production of minted silver products; • our ability to obtain more favorable pricing and financing terms due to our size; • our ability to manage exposure to commodity price risk through our experienced traders; • our distribution, storage and logistics capabilities; • our knowledge of secured lending; and • the quality and experience of our management team.
We enter into these forward and future contracts as part of our hedging strategy to mitigate our price risk of holding inventory; they are not entered into for speculative purposes. Forward sales contracts by their nature are required to be included in revenues, unlike futures contracts which do not impact the Company’s revenue.
We enter into these forward and futures contracts as part of our hedging strategy to mitigate our price risk of holding inventory; they are not entered into for speculative purposes. Forward sales contracts by their nature are required to be included in revenues, unlike futures contracts which do not impact the Company’s revenue.
If the Company concludes that the fair value of the reporting unit is less than its carrying value, a goodwill impairment will be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value. The Company also performs impairment reviews on its indefinite-lived intangible assets (i.e., trade names and trademarks).
If the Company concludes that the fair value of the reporting unit is less than its carrying value, a goodwill impairment will be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value. The Company also performs impairment reviews on its indefinite-lived intangible assets (i.e., trade names, trademarks and domain names).
This section discusses critical accounting policies that are considered both important to our financial condition and results of operations and require management to make significant judgment and estimates. All of our significant accounting policies, including the critical accounting policies, are also summarized in Note 2 to the Company’s consolidated financial statements. • Recent accounting pronouncements .
This section discusses critical accounting policies that are considered both important to our financial condition and results of operations and require management to make significant judgment and estimates. All of our significant accounting policies, including the critical accounting policies, are summarized in Note 2 to the Company’s consolidated financial statements. • Recent accounting pronouncements .
Included in our analysis is a discussion of seven performance metrics: o (i) ounces of gold and silver sold, o (ii) Wholesale Sales ticket volume, o (iii) Direct-to-Consumer ticket volume: • (a) Direct-to-Consumer ticket volume from new customers, • (b) Direct-to-Consumer ticket volume from pre-existing customers, • (c) Direct-to-Consumer total ticket volume, o (iv) Direct-to-Consumer and JMB average order value, o (v) number of Direct-to-Consumer customers: 31 • (a) Direct-to-Consumer number of new customers, • (b) Direct-to-Consumer number of active customers, • (c) Direct-to-Consumer total customers, o (vi) inventory turnover ratio, and o (vii) number of secured loans at period-end. • Segment results of operations .
Included in our analysis is a discussion of seven performance metrics: o (i) ounces of gold and silver sold, o (ii) Wholesale Sales ticket volume, o (iii) Direct-to-Consumer ticket volume: • (a) Direct-to-Consumer ticket volume from new customers, • (b) Direct-to-Consumer ticket volume from pre-existing customers, • (c) Direct-to-Consumer total ticket volume, o (iv) Direct-to-Consumer and JMB average order value, o (v) number of Direct-to-Consumer customers: • (a) Direct-to-Consumer number of new customers, • (b) Direct-to-Consumer number of active customers, • (c) Direct-to-Consumer total customers, o (vi) inventory turnover ratio, and o (vii) number of secured loans at period-end. 35 • Segment results of operations .
Reconciliation We calculate EBITDA by eliminating from net income the following five items: (i) interest income; (ii) interest expense; (iii) amortization expenses related to intangible assets acquired; (iv) depreciation expense; and (v) income tax expense. 48 Management believes the most directly comparable GAAP financial measure is “net cash provided by or used in operating activities” presented in the consolidated statement of cash flows.
Reconciliation We calculate EBITDA by eliminating from net income the following five items: (i) interest income, (ii) interest expense, (iii) amortization expenses related to intangible assets acquired, (iv) depreciation expense, and (v) income tax expense. 53 Management believes the most directly comparable GAAP financial measure is “net cash provided by or used in operating activities” presented in the consolidated statement of cash flows.
For this reason, the Company believes ounces sold (excluding ounces sold on forward sales contracts) is a meaningful metric to assess our top line performance. 34 In addition, the Company earns revenue by providing storage solutions for precious metals and numismatic coins for financial institutions, dealers, investors, and collectors worldwide and by providing storage and order-fulfillment services to our retail customers.
For this reason, the Company believes ounces sold (excluding ounces sold on forward sales contracts) is a meaningful metric to assess our top line performance. 38 In addition, the Company earns revenue by providing storage solutions for precious metals and numismatic coins for financial institutions, dealers, investors, and collectors worldwide and by providing storage and order-fulfillment services to our retail customers.
In April 2021, CCP entered into a loan agreement with CFC, which provides CFC with up to $4.0 million to fund commercial loans secured by graded sports cards and sports memorabilia to its borrowers. All loans to be funded using the proceeds from the CCP Note are subject to CCP’s prior written approval.
In April 2021, CCP entered into a loan agreement ("CCP Note") with CFC, which provides CFC with up to $4.0 million to fund commercial loans secured by graded sports cards to its borrowers. All loans to be funded using the proceeds from the CCP Note are subject to CCP’s prior written approval.
We use the following three metrics indicators when assessing our ticket volume: • Ticket Volume from New Direct-to-Consumer Customers means the number of product orders from new customers (refer to the definition of new customers above) processed by JMB, Goldline, and PMPP during the period. • Ticket Volume from Pre-existing Direct-to-Consumer Customers means the number of product orders from pre-existing customers, processed by JMB, Goldline, and PMPP during the period. • Total Ticket Volume from Direct-to-Consumer Customers means the aggregate number of product orders processed by JMB, Goldline, and PMPP during the period.
We use the following three metrics indicators when assessing our ticket volume: 39 • Ticket Volume from New Direct-to-Consumer Customers means the number of product orders from new customers (refer to the definition of new customers above) processed by JMB, Goldline, SGB, and PMPP during the period. • Ticket Volume from Pre-existing Direct-to-Consumer Customers means the number of product orders from pre-existing customers, processed by JMB, Goldline, SGB, and PMPP during the period. • Total Ticket Volume from Direct-to-Consumer Customers means the aggregate number of product orders processed by JMB, Goldline, SGB, and PMPP during the period.
The fair value of the open derivative contracts are shown as a component of derivative assets or derivative liabilities in the accompanying consolidated balance sheets. The Company enters into the derivative forward and future transactions solely for the purpose of hedging its inventory holding risk, and not for speculative market purposes.
The fair value of the open derivative contracts is shown as a component of derivative assets or derivative liabilities in the accompanying consolidated balance sheets. The Company enters into the derivative forward and future transactions solely for the purpose of hedging its inventory holding risk, and not for speculative market purposes.
We valued intangible assets at their estimated fair values at the acquisition date based upon assumptions related to the future cash flows and discount rates utilizing the then currently available information, and in some cases, valuation results from independent valuation specialists.
We value intangible assets at their estimated fair values at the acquisition date based upon assumptions related to the future cash flows and discount rates utilizing the then currently available information, and in some cases, valuation results from independent valuation specialists.
We have omitted discussion of our fiscal year 2021 results where it would be redundant to the discussion previously included in Item 7 of our fiscal year 2022 Annual Report on Form 10-K. Our discussion is organized as follows: • Executive overview .
We have omitted discussion of our fiscal year 2022 results where it would be redundant to the discussion previously included in Item 7 of our fiscal year 2023 Annual Report on Form 10-K. Our discussion is organized as follows: • Executive overview .
(d) Gross profit percentage before elimination of inter-segment sales to the Direct-to-Consumer segment was 1.482% for the period. (1) Gold ounces sold represents the ounces of gold product sold and delivered to the customer during the period, excluding ounces of gold recorded on forward contracts.
(d) Gross profit percentage before elimination of inter-segment sales to the Direct-to-Consumer segment was 1.449% for the period. (1) Gold ounces sold represents the ounces of gold product sold and delivered to the customer during the period, excluding ounces of gold recorded on forward contracts.
Also, the Wholesale Sales & Ancillary Services segment includes the consolidating eliminations of inter-segment transactions and unallocated segment adjustments.
The Wholesale Sales & Ancillary Services segment includes the consolidating eliminations of inter-segment transactions and unallocated segment adjustments.
Mint-authorized purchaser of gold, silver, platinum, and palladium coins, A-Mark purchases product directly from the U.S. Mint, and it also purchases product from other sovereign mints, for sale to its customers. Through its wholly-owned subsidiary AMTAG, the Company promotes its products and services to the international market.
Mint-authorized purchaser of gold, silver, platinum, and palladium coins, A-Mark purchases product directly from the U.S. Mint, and it also purchases product from other sovereign mints, for sale to its customers. Through its wholly-owned subsidiary AMTAG, the Company promotes its products and services to certain international markets.
This section provides an analysis of our cash flows, as well as a discussion of our outstanding debt as of June 30, 2023, sources of liquidity and the amount of financial capacity available to fund our future commitments and other financing arrangements. • Critical accounting policies .
This section provides an analysis of our cash flows, as well as a discussion of our outstanding debt as of June 30, 2024, sources of liquidity and the amount of financial capacity available to fund our future commitments and other financing arrangements. • Critical accounting policies and estimates .
PMPP was formed in fiscal 2019 pursuant to terms of a joint venture agreement, for the purpose of purchasing precious metals from the partners' retail customers, and then reselling the acquired products back to affiliates of the partners. PMPP commenced operations in fiscal 2020.
PMPP was formed in fiscal 2019 pursuant to terms of a joint venture agreement between Goldline and SGB, for the purpose of purchasing precious metals from the partners' retail customers, and then reselling the acquired products back to affiliates of the partners. PMPP commenced operations in fiscal 2020.
The fair market value of the bullion and bullion coins comprises two components: (i) published market values attributable to the cost of the raw precious metal, and (ii) the premium paid at acquisition of the metal, which is attributable to the incremental value of the product in its finished goods form.
The fair market value of the bullion and bullion coins comprises two components: (i) published market values attributable to the cost of the raw precious metal, and (ii) the market value of the premium, which is attributable to the incremental value of the product in its finished goods form.
Our sources of liquidity principally include cash from operations, Trading Credit Facility (see “Lines of Credit” below), and product financing arrangements. A substantial portion of our assets are liquid. As of June 30, 2023, approximately 81.5% of our assets consisted of cash, receivables, derivative assets, secured loans receivables, precious metals held under financing arrangements, and inventories, measured at fair value.
Our sources of liquidity principally include cash from operations, Trading Credit Facility (see “Lines of Credit” below), and product financing arrangements. A substantial portion of our assets are liquid. As of June 30, 2024, approximately 78.4% of our assets consisted of cash, receivables, derivative assets, secured loans receivables, precious metals held under financing arrangements, and inventories, measured at fair value.
The change was primarily due to: (i) an increase in compensation expense (including performance-based accruals) of $6.4 million, (ii) higher advertising costs of $3.5 million, (iii) an increase in information technology costs of $1.7 million, partially offset by (iv) a decrease in insurance costs of $1.7 million and (v) lower consulting and professional fees of $2.0 million.
The change was primarily due to: (i) an increase in consulting and professional fees of $5.3 million and (ii) an increase in information technology costs of $1.0 million, partially offset by (iii) a decrease in insurance costs of $0.9 million, (iv) a decrease in compensation expense (including performance-based accruals) of $0.7 million, and (v) a decrease in advertising costs of $0.7 million.
This section discusses new accounting pronouncements, dates of implementation, and their expected impact on our accompanying consolidated financial statements. EXECUTIVE OVERVIEW Our Business We conduct our operations in three reportable segments: (i) Wholesale Sales & Ancillary Services, (ii) Direct-to-Consumer, and (iii) Secured Lending.
This section discusses new accounting pronouncements, dates of implementation, and their expected impact on our accompanying consolidated financial statements. EXECUTIVE OVERVIEW Our Business The Company conducts its operations in three reportable segments: (i) Wholesale Sales & Ancillary Services, (ii) Direct-to-Consumer, and (iii) Secured Lending.
The obligation is stated at the amount required to repurchase the outstanding inventory. Both the product financing and the underlying inventory (which is restricted) are carried at fair value, with changes in fair value included in cost of sales in the Company’s consolidated statements of income. The Company periodically loans metals to customers on a short-term consignment basis.
Both the product financing and the underlying inventory (which is restricted) are carried at fair value, with changes in fair value included in cost of sales in the Company’s consolidated statements of income. The Company periodically loans metals to customers on a short-term consignment basis.
This section provides an analysis of our results of operations presented for our three segments: o Wholesale Sales & Ancillary Services, o Direct-to-Consumer , and o Secured Lending for the comparable periods. • Non-GAAP Measures . This section provides an analysis of our non-GAAP measures with a reconciliation to the most directly comparable U.S. Generally Accepted Accounting Principles (“U.S.
This section provides an analysis of our results of operations presented for our three segments: o Wholesale Sales & Ancillary Services, o Direct-to-Consumer , and o Secured Lending comparing results for the periods presented. • Non-GAAP Measures . This section provides an analysis of our non-GAAP measures with a reconciliation to the most directly comparable U.S.
We use the following three metrics as revenue growth indicators when assessing our customer base: • New Direct-to-Consumer Customers means the number of customers that have registered or setup a new account or made a purchase for the first time during the period. • Active Direct-to-Consumer Customers means the number of customers that have made a purchase during any month during the period. • Total Direct-to-Consumer Customers means the aggregate number of customers that have registered or set up an account or have made a purchase in the past. 35 Direct-to-Consumer Ticket Volume.
We use the following three metrics as revenue growth indicators when assessing our customer base: • New Direct-to-Consumer Customers means the number of customers that have registered or set up a new account, made a purchase for the first time during the period, or acquired through investment activity. • Active Direct-to-Consumer Customers means the number of customers that have made a purchase during any month during the period. • Total Direct-to-Consumer Customers means the aggregate number of customers that have registered or set up an account or have made a purchase in the past.
GAAP”) measure reported on the consolidated financial statements. The Company uses the following two non-GAAP measures: o "adjusted net income before provision for income taxes", and o "earnings before interest, taxes, depreciation, and amortization", or "EBITDA". • Liquidity and financial condition .
Generally Accepted Accounting Principles (“U.S. GAAP”) measure reported on the consolidated financial statements. The Company uses the following two non-GAAP measures: o "adjusted net income before provision for income taxes", and o "earnings before interest, taxes, depreciation, and amortization", or "EBITDA". • Liquidity and financial condition .
The change in selling, general, and administrative expenses was not significant.
The change in selling, general, and administrative expense was not significant.
See Note 5 to the Company’s consolidated financial statements. AMCF also purchases and holds secured loans from CFC to meet its collateral requirements related to the AMCF Notes. See Note 15 to Company’s consolidated financial statements. Most of the Company's secured loans are short-term in nature.
See Note 5 to the Company’s consolidated financial statements. Prior to the repayment of the AMCF Notes, AMCF also purchased and held secured loans from CFC to meet its collateral requirements related to the AMCF Notes. See Note 15 to Company’s consolidated financial statements. Most of the Company's secured loans are short-term in nature.
These net gains and losses on derivative instruments were substantially offset by the changes in fair market value of the underlying precious metals inventory and open sale and purchase commitments, which is also recorded in cost of sales in the consolidated statements of income.
These were substantially offset by the changes in fair market value of the underlying precious metals inventory and open sale and purchase commitments, which is also recorded in cost of sales in the consolidated statements of income.
However, the gains and losses on the derivative instruments are substantially offset by the gains and losses on the corresponding changes in the market value of our precious metals inventory. As a result, our results of operations generally are not materially impacted by changes in commodity prices. Volatility also affects our gross profit.
However, the gains and losses on the derivative instruments are substantially offset by the gains and losses on the corresponding changes in the market value of our precious metals inventory. As a result, our results of operations generally are not materially impacted by changes in commodity prices. Interest Income .
For the years ended June 30, 2023 and 2022, our effective tax rate differs from the federal statutory rate primarily due to state taxes (net of federal tax benefit) and other normal course non-deductible expenditures, partially offset by the excess tax benefit from share-based compensation and the foreign derived intangible income special deduction. 40 SEGMENT RESULTS OF OPERATIONS The Company conducts its operations in three reportable segments: (i) Wholesale Sales & Ancillary Services, (ii) Direct-to-Consumer, and (iii) Secured Lending.
For the year ended June 30, 2023, our effective tax rate differed from the federal statutory rate primarily due to the excess tax benefit from share-based compensation, foreign derived intangible income special deduction, offset by state taxes (net of federal tax benefit), Section 162(m) executive compensation disallowance, and other normal course non-deductible expenditures. 45 SEGMENT RESULTS OF OPERATIONS The Company conducts its operations in three reportable segments: (i) Wholesale Sales & Ancillary Services, (ii) Direct-to-Consumer, and (iii) Secured Lending.
This segment’s profit margin percentage decreased by 17.0 basis points to 1.724% from 1.894% in 2022. The decrease in gross margin percentage was mainly attributable to the impact of increased forward sales partially offset by higher trading profits and wider premium spreads.
This segment’s profit margin percentage decreased by 63.0 basis points to 1.094% from 1.724% in 2023. The decrease in gross margin percentage was mainly attributable to the impact of increased forward sales and lower premium spreads, partially offset by higher trading profits.
The Company’s net gains and losses on derivative instruments for the years ended June 30, 2023 and 2022 totaled gains of $97.1 million and gains of $47.8 million, respectively.
The Company’s net gains and losses on derivative instruments totaled gains of $1.7 million and gains of $97.1 million for the years ended June 30, 2024 and 2023, respectively.
Fiscal Year Our fiscal year end is June 30 each year. 36 Macroeconomic Volatility Continued macroeconomic uncertainty and the volatility in the financial markets have positively affected the Company’s trading revenues and gross profit as the volatility of the price of precious metals and numismatics resulted in a material increase in the spread between bid and ask prices on these products.
Fiscal Year Our fiscal year end is June 30 each year. 40 Macroeconomic Volatility Continued macroeconomic uncertainty and the volatility in the financial markets in recent years have positively affected the Company’s trading revenues and gross profit as the volatility of the price of precious metals and numismatics typically results in an increase in the spread between bid and ask prices on these products.
Net Cash Flows From Investing Activities Investing activities provided $6.8 million and used $60.6 million in cash for the years ended June 30, 2023 and 2022, respectively, representing a $67.4 million change in cash provided or used compared to the year ended June 30, 2022.
Net Cash Flows From Investing Activities Investing activities used $63.6 million and provided $6.8 million in cash for the years ended June 30, 2024 and 2023, respectively, representing a $70.4 million change compared to the year ended June 30, 2023.
This segment’s gross sales before eliminations of inter-segment activity totaled $8.754 billion. (b) Revenues are presented net of inter-segment transactions with the Direct-to-Consumer segment that totaled $1.623 billion. This segment’s gross sales before eliminations of inter-segment activity totaled $7.648 billion. (c) Gross profit percentage before elimination of inter-segment sales to the Direct-to-Consumer segment was 1.449% for the period.
This segment’s gross sales before eliminations of inter-segment activity totaled $9.253 billion. (b) Revenues are presented net of inter-segment transactions with the Direct-to-Consumer segment that totaled $1.464 billion. This segment’s gross sales before eliminations of inter-segment activity totaled $8.754 billion. (c) Gross profit percentage before elimination of inter-segment sales to the Direct-to-Consumer segment was 0.916% for the period.
We have access to all of the precious metals markets, allowing us to place hedges. We also maintain relationships with major market makers in every major precious metals dealing center. The Company enters into these derivative transactions solely for the purpose of hedging our inventory holding risk, and not for speculative market purposes.
We also maintain relationships with major market makers in every major precious metals dealing center. The Company enters into these derivative transactions solely for the purpose of hedging our inventory holding risk, and not for speculative market purposes.
Secured Loans Receivable in thousands June 30, 2023 June 30, 2022 Change Secured loans receivable $ 100,620 $ 126,217 $ (25,597 ) CFC is a California licensed finance lender that makes and acquires commercial loans secured by bullion and numismatic coins, and graded sports cards and sports memorabilia that affords our customers a convenient means of financing their inventory or collections.
Secured Loans Receivable in thousands June 30, 2024 June 30, 2023 Change Secured loans receivable $ 113,067 $ 100,620 $ 12,447 CFC is a California licensed finance lender that makes and acquires commercial loans secured by bullion and numismatic coins, and graded sports cards that affords our customers a convenient means of financing their inventory or collections.
The dividend was paid on October 24, 2022 and totaled $4.7 million. On January 4, 2023, the Company's board of directors declared a quarterly regular cash dividend of $0.20 per common share to stockholders of record at the close of business on January 16, 2023. The dividend totaling $4.7 million was paid on January 27, 2023.
The dividend was paid to stockholders on October 24, 2023 and totaled $4.6 million. • On January 4, 2024, the Company's board of directors declared a regular dividend of $0.20 per share of common stock to stockholders of record at the close of business on January 16, 2024.
Excluding an increase of $1.2 billion of forward sales that had a negligible impact to the amount of gross profit, this segment's gross margin percentage for the year ended June 30, 2023 increased by 18.7 basis points to 2.581% from 2.394%. Forward sales increase revenues but are associated with negligible gross profit.
Excluding an increase of $1.561 billion of forward sales that had a negligible impact to the amount of gross profit, this segment's gross margin percentage for the year ended June 30, 2024 decreased by 46.7 basis points to 2.114% from 2.581% in the prior year. Forward sales increase revenues but are associated with negligible gross profit.
Our Coin and Bar unit deals in over 1,800 coin and bar products in a variety of weights, shapes, and sizes for distribution to dealers and other qualified purchasers. We have a marketing support office in Vienna, Austria, and a trading center in El Segundo, California.
Our Coin and Bar unit deals in approximately 2,100 coin and bar products in a variety of weights, shapes, and sizes for distribution to dealers and other qualified purchasers. We have a marketing support office in Vienna, Austria, a numismatics showroom in Hong Kong, and a trading center in El Segundo, California.
Liabilities on Borrowed Metals in thousands June 30, 2023 June 30, 2022 Change Liabilities on borrowed metals $ 21,642 $ 59,417 $ (37,775 ) We borrow precious metals from our suppliers and customers under short-term arrangements using other precious metal from our inventory or precious metals held under financing arrangements as collateral.
Liabilities on Borrowed Metals in thousands June 30, 2024 June 30, 2023 Change Liabilities on borrowed metals $ 31,993 $ 21,642 $ 10,351 We borrow precious metals from our suppliers and customers under short-term arrangements using other precious metal from our inventory or precious metals held under financing arrangements as collateral.
(b) Includes $2.4 million of inter-segment sales from the Direct-to-Consumer segment to the Wholesale Sales & Ancillary Services segment. (c) Gross profit percentage, excluding inter-segment sales from the Direct-to-Consumer segment to the Wholesale Sales & Ancillary Services segment, was 8.468% for the period.
(b) Includes $3.5 million of inter-segment sales from the Direct-to-Consumer segment to the Wholesale Sales & Ancillary Services segment. (c) Gross profit percentage, excluding inter-segment sales from the Direct-to-Consumer segment to the Wholesale Sales & Ancillary Services segment, was 5.758% for the period.
Lines of Credit in thousands June 30, 2023 June 30, 2022 Change Lines of credit $ 235,000 $ 215,000 $ 20,000 Effective December 21, 2021, A-Mark entered into a three-year committed borrowing facility (the "Trading Credit Facility") with CIBC Bank USA, as agent and joint lead arranger, and a syndicate of banks.
Lines of Credit in thousands June 30, 2024 June 30, 2023 Change Lines of credit - short term $ — $ 235,000 $ (235,000 ) Lines of credit - long-term 245,000 — 245,000 $ 245,000 $ 235,000 $ 10,000 Effective December 21, 2021, A-Mark entered into a committed borrowing facility (the "Trading Credit Facility") with CIBC Bank USA, as agent and joint lead arranger, and a syndicate of banks.
This segment’s gross sales before eliminations of inter-segment activity totaled $8.754 billion. (b) Revenues are presented net of inter-segment transactions with the Direct-to-Consumer segment that totaled $1.623 billion. This segment’s gross sales before eliminations of inter-segment activity totaled $7.648 billion.
This segment’s gross sales before eliminations of inter-segment activity totaled $9.253 billion. (b) Revenues are presented net of inter-segment transactions with the Direct-to-Consumer segment that totaled $1.464 billion.
The metals are investment or industrial grade and are sold in a variety of shapes and sizes. The Company also sells and delivers gold, silver, platinum, palladium, and copper products directly to customers and the investor community through its Direct-to Consumer segment. Customers may place orders online at one of the Company's websites or over the phone.
The Company also sells and delivers gold, silver, platinum, palladium, and copper products directly to customers and the investor community through its Direct-to Consumer segment. Customers may place orders online at one of the Company's websites or over the phone.
The change was primarily due to: (i) a decrease in consulting and professional fees of $2.4 million and (ii) a decrease in insurance costs of $1.9 million, partially offset by (iii) an increase in compensation expense (including performance-based accruals) of $1.7 million, (iv) an increase in advertising costs of $0.8 million, and (v) an increase in information technology costs of $0.6 million.
The change was primarily due to: (i) an increase in consulting and professional fees of $5.7 million, (ii) an increase in advertising costs of $0.8 million, and (iii) an increase in information technology costs of $0.4 million, partially offset by (iv) a decrease in insurance costs of $1.0 million.
JMB’s retail market activity represented 48.5% and 46.0%, respectively, of the Company’s consolidated gross profit for the years ended June 30, 2023 and 2022. Our inventory turnover ratio for the year ended June 30, 2023 decreased by 20.5%, to 10.5 from 13.2 in 2022.
JMB’s retail market activity represented 40.6% and 48.5%, respectively, of the Company’s consolidated gross profit for the years ended June 30, 2024 and 2023. Our inventory turnover ratio for the year ended June 30, 2024 decreased by 12.4% to 9.2 from 10.5 in 2023.
The increase is related to JMB’s increased product financing activity with A-Mark and higher interest rates. Results of Operations — Secured Lending Segment The Company operates its Secured Lending segment through its wholly-owned subsidiaries, Collateral Finance Corporation, LLC ("CFC"), AM Capital Funding, LLC (“AMCF”), and CFC Alternative Investments (“CAI”).
The decrease is related to JMB’s reduced product financing activity with A-Mark. Results of Operations — Secured Lending Segment The Company operates its Secured Lending segment through its wholly-owned subsidiaries, Collateral Finance Corporation, LLC ("CFC") and CFC Alternative Investments (“CAI”).
Excluding an increase in forward sales of $1.2 billion, our revenues increased $103.8 million, which was due to an increase in silver ounces sold and higher average selling prices of gold, partially offset by a decrease in gold ounces sold and lower average selling prices of silver. 41 Gold ounces sold for the year ended June 30, 2023 decreased 21,000 ounces, or 1.0%, to 2,038,000 ounces from 2,059,000 ounces in 2022.
Excluding an increase in forward sales of $1.561 billion, our revenues decreased $602.6 million, which was due to a decrease in gold and silver ounces sold, partially offset by higher average selling prices of gold and silver. Gold ounces sold for the year ended June 30, 2024 decreased 653,000 ounces, or 32.0%, to 1,385,000 ounces from 2,038,000 ounces in 2023.
The overall gross profit increase was due to higher gross profits earned from both the Wholesale Sales & Ancillary Services and Direct-to-Consumer segments. The Company’s overall gross margin percentage for the year ended June 30, 2023 decreased by 3.5 basis points to 3.173% from 3.208% in 2022.
The overall gross profit decrease was due to lower gross profits earned from both the Wholesale Sales & Ancillary Services and Direct-to-Consumer segments. The Company’s overall gross margin percentage for the year ended June 30, 2024 decreased by 138.7 basis points to 1.786% from 3.173% in 2023.
On average, the selling prices for gold increased by 1.0% and selling prices for silver decreased by 9.5% during the year ended June 30, 2023 as compared to the prior year. JMB's revenue represented 19.4% and 23.8% of the Company's consolidated revenue for the years ended June 30, 2023 and 2022, respectively.
On average, the selling prices for gold increased by 11.4% and selling prices for silver increased by 11.0% during the year ended June 30, 2024 as compared to the prior year. JMB's revenue represented 13.6% and 19.4% of the Company's consolidated revenue for the years ended June 30, 2024 and 2023, respectively.
Certain of those items are non-recurring, while others are non-cash in nature. Accordingly, this non-GAAP financial performance measure should be considered in addition to, and not as a substitute for or superior to, the comparable measures prepared in accordance with U.S.
Accordingly, this non-GAAP financial performance measure should be considered in addition to, and not as a substitute for or superior to, the comparable measures prepared in accordance with U.S. GAAP.
Excluding an increase of $1.2 billion of forward sales that had a negligible impact to the amount of gross profit, our gross margin percentage for the year ended June 30, 2023 increased by 49.8 basis points to 4.291% from 3.793%, which was primarily due to higher trading profits and wider premium spreads.
Excluding an increase of $1.561 billion of forward sales that had a negligible impact to the amount of gross profit, our gross margin percentage for the year ended June 30, 2024 decreased by 126.2 basis points to 3.029% from 4.291%, which was primarily due to lower premium spreads, partially offset by higher trading profits.
Our effective tax rate was approximately 22.8% and 20.0% for the years ended June 30, 2023 and 2022, respectively.
Our effective tax rate was approximately 16.6% and 22.8% for the years ended June 30, 2024 and 2023, respectively.
Excluding an increase of $1.2 billion of forward sales, our revenues decreased $33.3 million or 0.5%, which was due to a decrease in gold ounces sold and lower average selling prices of silver, partially offset by an increase in silver ounces sold and higher average selling prices of gold.
Excluding an increase of $1.561 billion of forward sales, our revenues decreased $1.148 billion, or 16.7%, which was due to a decrease in gold and silver ounces sold, partially offset by higher average selling prices of gold and silver.
Net Cash Flows From Financing Activities Financing activities provided $25.0 million and provided $86.1 million in cash for the years ended June 30, 2023 and 2022, respectively, representing a $61.1 million decrease in cash provided compared to the year ended June 30, 2022.
Net Cash Flows From Financing Activities Financing activities provided $12.0 million and provided $25.0 million in cash for the years ended June 30, 2024 and 2023, respectively, representing a $13.0 million change compared to the year ended June 30, 2023.
The term of the CCP Note expires on April 1, 2024 and may be extended by mutual agreement. As of June 30, 2023 and June 30, 2022 the outstanding principal balance of the CCP Note was $0.5 million and $0.0 million. See Note 14 to the Company’s consolidated financial statements.
In March 2024, the expiration date for the CCP Note was amended to expire on April 1, 2026 and may be extended by mutual agreement. As of June 30, 2024 and June 30, 2023 the outstanding principal balance of the CCP Note was $4.0 million and $0.5 million. See Note 14 to the Company’s consolidated financial statements.
The increase in interest expense was primarily driven by each of the following components: (i) $7.2 million associated with our Trading Credit Facility (primarily due to an increase in interest rates) and the AMCF Notes (including amortization of debt issuance costs), (ii) $2.6 million related to product financing arrangements, (iii) $0.6 million in interest associated with liabilities on borrowed metals, partially offset by (iv) a decrease of $0.9 million of loan servicing fees.
The increase in interest expense was primarily driven by each of the following components: (i) an increase of $8.4 million associated with our Trading Credit Facility due to an increase in interest rates as well as increased borrowings and (ii) an increase of $3.0 million related to product financing arrangements, partially offset by (iii) a decrease of $3.2 million related to the AMCF Notes (including amortization of debt issuance costs) due to the repayment in December 2023 and (iv) a $0.5 million decrease in loan servicing fees.
Results of Operations — Wholesale Sales & Ancillary Services Segment The Company operates its Wholesale Sales & Ancillary Services segment directly and through its wholly-owned subsidiaries, A-Mark Trading AG (“AMTAG”), Transcontinental Depository Services ("TDS"), A-M Global Logistics, LLC ("Logistics"), and AM&ST Associates, LLC ("AMST" or "Silver Towne" or the "Mint").
Results of Operations — Wholesale Sales & Ancillary Services Segment The Company operates its Wholesale Sales & Ancillary Services segment directly and through its consolidated subsidiaries, A-Mark Trading AG (“AMTAG”), Transcontinental Depository Services ("TDS"), A-M Global Logistics, LLC ("Logistics"), AM&ST Associates, LLC ("AMST" or "Silver Towne" or the "Mint"), and AM/LPM Ventures, LLC, which we formed in February 2024 to acquire LPM Group Limited ("LPM").
Wholesale Sales & Ancillary Services Segment The Company operates its Wholesale Sales & Ancillary Services segment directly and through its wholly-owned subsidiaries, A-Mark Trading AG (“AMTAG”), Transcontinental Depository Services, LLC ("TDS" or “Storage”), A-M Global Logistics, LLC (“AMGL” or "Logistics"), and AM&ST Associates, LLC ("AMST" or the “Silver Towne Mint").
Wholesale Sales & Ancillary Services Segment The Company operates its Wholesale Sales & Ancillary Services segment directly and through its consolidated subsidiaries, A-Mark Trading AG (“AMTAG”), Transcontinental Depository Services, LLC ("TDS" or “Storage”), A-M Global Logistics, LLC (“AMGL” or "Logistics"), AM&ST Associates, LLC ("AMST" or the “Silver Towne Mint"), and AM/LPM Ventures, LLC, which we formed in February 2024 to acquire LPM Group Limited ("LPM").
Amounts under these arrangements require repayment either in the form of precious metals or cash. Liabilities also arise from unallocated metal positions held by customers in our inventory. Typically, these positions are due on demand, in a specified physical form, based on the total ounces of metal held in the position.
Amounts under these arrangements require repayment either in the form of precious metals or cash. Liabilities also arise from unallocated metal positions held by customers in our inventory.
The aggregate increase in interest income was primarily due to an increase in other finance product income of $1.8 million partially offset by lower interest income earned by our Secured Lending segment. The interest income from our Secured Lending segment decreased by $1.4 million or by 12.5% compared with the prior year.
The aggregate increase in interest income was primarily due to an increase in other finance product income of $3.2 million and an increase in interest income earned by our Secured Lending segment of $1.7 million. The interest income from our Secured Lending segment increased by $1.7 million, or 17.8%, compared with the prior year period.
These products may be designated for storage by the Company or shipped directly to the customer. The Company acquired Goldline in August 2017 through an asset purchase transaction with Goldline, LLC, which had been in operation since 1960.
CyberMetals’ customers have the option to convert their digital holdings to fabricated precious metals products via an integrated redemption flow with JMB. These products may be designated for storage by the Company or shipped directly to the customer. The Company acquired Goldline in August 2017 through an asset purchase transaction with Goldline, LLC, which had been in operation since 1960.
Gross Profit — Wholesale Sales & Ancillary Services in thousands Year Ended June 30, 2023 2022 Change $ % of revenue $ % of revenue $ % Gross profit $ 125,678 1.724 % (c) $ 114,093 1.894 % (d) $ 11,585 10.2 % (c) Gross profit percentage before elimination of inter-segment sales to the Direct-to-Consumer segment was 1.449% for the period.
Gross Profit — Wholesale Sales & Ancillary Services in thousands Year Ended June 30, 2024 2023 Change $ % of revenue $ % of revenue $ % Gross profit $ 90,209 1.094 % (c) $ 125,678 1.724 % (d) $ (35,469 ) (28.2 %) (c) Gross profit percentage before elimination of inter-segment sales to the Direct-to-Consumer segment was 0.916% for the period.
Also, the Company recognizes its storage, logistics, licensing, advertising revenue, and other services revenues in accordance with the FASB's release ASU 2014-09 Revenue From Contracts With Customers Topic 606 of the ASC and subsequent related amendments ("ASC 606"), which follows five basic steps to determine whether revenue can be recognized: (i) identify the contract with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) the entity satisfies a performance obligation.
Also, the Company recognizes its storage, logistics, licensing, advertising revenue, and other services revenues in accordance with ASC 606, Revenue from Contracts with Customers , which follows five basic steps to determine whether revenue can be recognized: (i) identify the contract with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) the entity satisfies a performance obligation. 59 Inventories The Company's inventory, which primarily consists of bullion and bullion coins, is acquired and initially recorded at cost and then marked to fair market value.
The dividend was paid on September 26, 2022 and totaled $23.4 million. On August 18, 2022, the Company's board of directors also declared the initial quarterly regular cash dividend under its new dividend policy, of $0.20 per common share to stockholders of record at the close of business on October 10, 2022.
The dividend to stockholders was paid on September 26, 2023 and totaled $23.4 million. On the same date, the Company's board of directors declared a regular dividend of $0.20 per share of common stock to stockholders of record at the close of business on October 10, 2023.
Selling, General and Administrative Expense in thousands Year Ended June 30, 2023 2022 Change $ % of revenue $ % of revenue $ % Selling, general, and administrative expenses $ (85,282 ) (0.918 %) $ (76,618 ) (0.939 %) $ 8,664 11.3 % Selling, general and administrative expenses for the year ended June 30, 2023 increased $8.7 million, or 11.3%, to $85.3 million from $76.6 million in 2022.
Selling, General, and Administrative Expense in thousands Year Ended June 30, 2024 2023 Change $ % of revenue $ % of revenue $ % Selling, general, and administrative expenses $ (89,800 ) (0.926 %) $ (85,282 ) (0.918 %) $ 4,518 5.3 % Selling, general, and administrative expenses for the year ended June 30, 2024 increased $4.5 million, or 5.3%, to $89.8 million from $85.3 million in 2023.
(5) Number of outstanding secured loans to customers that are primarily collateralized by precious metals at the end of the period. 38 Revenues in thousands, except performance metrics Year Ended June 30, 2023 2022 Change $ % of revenue $ % of revenue $ % Revenues $ 9,286,561 100.000 % $ 8,159,254 100.000 % $ 1,127,307 13.8 % Performance Metrics Gold ounces sold 2,667,000 2,668,000 (1,000 ) (0.0 %) Silver ounces sold 156,233,000 132,209,000 24,024,000 18.2 % Revenues for the year ended June 30, 2023 increased $1.1 billion, or 13.8% to $9.287 billion from $8.159 billion in 2022.
(5) Number of outstanding secured loans to customers that are primarily collateralized by precious metals at the end of the period. 42 Revenues in thousands, except performance metrics Year Ended June 30, 2024 2023 Change $ % of revenue $ % of revenue $ % Revenues $ 9,699,039 100.000 % $ 9,286,561 100.000 % $ 412,478 4.4 % Performance Metrics Gold ounces sold 1,839,000 2,667,000 (828,000 ) (31.0 %) Silver ounces sold 108,096,000 156,233,000 (48,137,000 ) (30.8 %) Revenues for the year ended June 30, 2024 increased $412.5 million, or 4.4%, to $9.699 billion from $9.287 billion in 2023.
Silver ounces sold by JMB decreased 3,931,000 ounces for the year ended June 30, 2023 compared to 2022. Silver ounces sold by Goldline and PMPP, in the aggregate, decreased 28,000 ounces compared to 2022.
Gold ounces sold by JMB decreased 159,000 ounces for the year ended June 30, 2024 compared to 2023. Gold ounces sold by Goldline, SGB and PMPP, in the aggregate, decreased 16,000 ounces compared to 2023. Silver ounces sold by JMB decreased 9,586,000 ounces for the year ended June 30, 2024 compared to 2023.
Through its wholly-owned subsidiary AMST, the Company designs and produces minted silver products. Our Silver Towne Mint operations allow us to provide greater product selection to our customers and greater pricing stability within the supply chain, as well as to gain increased access to silver during volatile market environments, which have historically created higher demand for precious metals products.
Our Silver Towne Mint operations allow us to provide greater product selection to our customers and greater pricing stability within the supply chain, as well as to gain increased access to fabricated silver products during volatile market environments, which have historically created higher demand for precious metals products. 36 In February 2024, the Company acquired LPM, one of Asia's largest precious metals dealers.
The use of a discounted cash flow analysis requires significant judgment to estimate the future cash flows derived from the asset and the expected period of time over which those cash flows will occur and to determine an appropriate discount rate.
The use of a discounted cash flow analysis requires significant judgment to estimate the future cash flows derived from the asset and the expected period of time over which those cash flows will occur and to determine an appropriate discount rate. 60 We make certain judgments and estimates when determining the fair value of assets acquired and liabilities assumed in a business combination.
Interest expense — Direct-to-Consumer in thousands Year Ended June 30, 2023 2022 Change $ % of revenue $ % of revenue $ % Interest expense $ (4,098 ) (0.205 %) $ (2,958 ) (0.139 %) $ 1,140 38.5 % Interest expense for the year ended June 30, 2023 increased $1.1 million to $4.1 million from $3.0 million in 2022.
Interest expense — Direct-to-Consumer in thousands Year Ended June 30, 2024 2023 Change $ % of revenue $ % of revenue $ % Interest expense $ (2,838 ) (0.195 %) $ (4,098 ) (0.205 %) $ (1,260 ) (30.7 %) Interest expense for the year ended June 30, 2024 decreased $1.3 million to $2.8 million from $4.1 million in 2023.
AMCF was formed for the purpose of securitizing eligible secured loans of CFC. AMCF issued and administers Secured Senior Term Notes: Series 2018-1, Class A, with an aggregate principal amount of $72.0 million and Secured Subordinated Term Notes, Series 2018-1, Class B in the aggregate principal amount of $28.0 million (collectively referred to as the "AMCF Notes").
AMCF issued and administered Secured Senior Term Notes: Series 2018-1, Class A, with an aggregate principal amount of $72.0 million and Secured Subordinated Term Notes, Series 2018-1, Class B in the aggregate principal amount of $28.0 million (collectively referred to as the "AMCF Notes"). The AMCF Notes were repaid in full in December 2023. AMCF was dissolved in June 2024.
Other Income, Net in thousands Year Ended June 30, 2023 2022 Change $ % of revenue $ % of revenue $ % Other income, net $ 2,663 0.029 % $ 1,953 0.024 % $ 710 36.4 % Other income, net for the year ended June 30, 2023 increased $0.7 million, or 36.4% to $2.7 million from $2.0 million in 2022.
Other Income, Net in thousands Year Ended June 30, 2024 2023 Change $ % of revenue $ % of revenue $ % Other income, net $ 2,071 0.021 % $ 2,663 0.029 % $ (592 ) (22.2 %) Other income, net for the year ended June 30, 2024 decreased $0.6 million, or 22.2%, to $2.1 million from $2.7 million in 2023.

… 165 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

3 edited+1 added−0 removed11 unchanged
Biggest changeThe Company is exposed to market risk related to changes in commodity prices. 56 The Company's precious metals inventory is subject to fluctuations in market value, resulting from changes in the underlying commodity prices. Inventory purchased or borrowed by the Company is subject to price changes.
Biggest changeThe Company's precious metals inventory is subject to fluctuations in market value, resulting from changes in the underlying commodity prices. Inventory purchased or borrowed by the Company is subject to price changes.
While our weighted-average effective interest rates on these products increased during the year, the rate increases only partially mitigated the effect of higher interest rates related to our product financing arrangements and Trading Credit Facility. We do not believe our exposure to interest rate risk is material. 57
While our weighted-average effective interest rates on these products increased during the year, the rate increases only partially mitigated the effect of higher interest rates related to our product financing arrangements and Trading Credit Facility. We do not believe our exposure to interest rate risk is material. 62
ITEM 7A. QUANTITATIVE AND QUALITAT IVE DISCLOSURES ABOUT MARKET RISK Market Risk Market risk is the risk that changes in market conditions may adversely impact the value of assets or liabilities, or otherwise negatively impact earnings.
ITEM 7A. QUANTITATIVE AND QUALITAT IVE DISCLOSURES ABOUT MARKET RISK Market Risk Market risk is the risk that changes in market conditions may adversely impact the value of assets or liabilities, or otherwise negatively impact earnings. The Company is exposed to market risk related to changes in commodity prices.
Added
The functional currencies of our recent acquisitions LPM and SGB are U.S. dollars and therefore, we do not believe our exposure to foreign exchange risk related to these entities is material.

Other GOLD 10-K year-over-year comparisons