Financial Gravity Companies, Inc 8-K, filed Aug 26, 2024
Financial Gravity Companies, Inc. (FGCO)
About this 8-K
Financial Gravity Companies, Inc filed this 8-K on August 26, 2024, reporting on events of August 20, 2024.
Items reported
- Item 1.02: Ended a material agreement
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
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Item 1.02 Termination of a Material Definitive Agreement.
On August 20, 2024, the Company became aware that Marathon Financial Group, LLC ("Marathon") had initiated actions to terminate certain long-term agreements (the "Agreements") between Marathon and the Company's registered investment advisor subsidiaries. Under these Agreements, the Company had previously acquired Marathon's client accounts and earned fees for investment advisory services based upon assets under management ("AUM").
The revenue generated from these services contributed approximately $350,000 annually to the Company's cash flow and operating results. As of August 22, 2024, Marathon began taking steps to reclaim the AUM associated with these client accounts. If Marathon successfully reclaims all of the AUM, the Company's cash flow for this fiscal year will not be affected, but cash flow fiscal year 2025 could potentially decrease by approximately $350,000, which may result in a net loss unless the Company is able to replace this revenue. Company’s plans will include a focus on revenue growth during the next fiscal year.
Marathon claims that it has the right to compete for client AUM despite the Company's previous acquisition of the client accounts. The Company disputes Marathon's position and intends to seek enforcement of the Agreements through appropriate legal channels.
The Company is currently evaluating the potential impact of this event on its financial condition and results of operations. The Company will provide updates in subsequent periodic reports or through the filing of additional current reports as material developments occur.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| FINANCIAL GRAVITY COMPANIES, INC. | |||
| (Registrant) | |||
| By: |
/s/ Scott Winters |
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| Name: | Scott Winters | ||
| Title: | Chief Executive Officer | ||
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