U.S. Global Investors (NASDAQ: GROW) posts $661K profit in first half
U.S. Global Investors, Inc. reported modest profitability for the six months ended December 31, 2025, with net income of
Operating revenues rose to
Results were volatile quarter to quarter: the December 2025 quarter showed a net loss of
The balance sheet remains conservative, with total assets of
Subsequent to December 31, 2025, the company recognized an additional unrealized gain of approximately
Positive
- None.
Negative
- None.
Insights
Profit improved on investment gains, but core operations and taxes stayed challenging.
For the six months ended December 31, 2025, U.S. Global Investors earned net income of
Results are heavily influenced by markets. Investments carried at fair value totaled
Tax items were material. The company recorded
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
OR
Commission File Number
| U.S. GLOBAL INVESTORS, INC. |
| (Exact name of registrant as specified in its charter) |
| | |
| (State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) |
|
|
|
| | (Zip Code) |
| (Address of principal executive offices) |
|
(
(Registrant’s telephone number, including area code)
Not Applicable
(Former name, former address, and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading symbol(s) | Name of each exchange on which registered |
| Class A common stock, $0.025 par value per share | | |
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer ☐ | Accelerated filer ☐ |
| | Smaller reporting company |
|
| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
On February 12, 2026, there were 13,866,999 shares of Registrant’s class A nonvoting common stock issued and
TABLE OF CONTENTS
| PART I. FINANCIAL INFORMATION |
1 |
|
|
|
| ITEM 1. FINANCIAL STATEMENTS |
1 |
| CONSOLIDATED BALANCE SHEETS (UNAUDITED) |
1 |
| CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) |
2 |
| CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED) |
3 |
| CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (UNAUDITED) |
4 |
| CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) |
5 |
| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) |
6 |
| ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
21 |
| ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
26 |
| ITEM 4. CONTROLS AND PROCEDURES |
27 |
|
|
|
| PART II. OTHER INFORMATION |
28 |
|
|
|
| ITEM 1A. RISK FACTORS |
28 |
| ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
28 |
| ITEM 5. OTHER INFORMATION | 28 |
| ITEM 6. EXHIBITS |
29 |
|
|
|
| SIGNATURES |
30 |
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
U.S. GLOBAL INVESTORS, INC.
CONSOLIDATED BALANCE SHEETS
| December 31, 2025 | June 30, 2025 | |||||||
| (dollars in thousands) | (unaudited) | |||||||
| Assets | ||||||||
| Current Assets | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Restricted cash | ||||||||
| Investments in trading securities at fair value, current | ||||||||
| Investments in held-to-maturity debt securities at amortized cost, current | ||||||||
| Less: Allowance for credit losses | ( | ) | ||||||
| Investments in held-to-maturity debt securities, net of allowance for credit losses, current | ||||||||
| Accounts and other receivables (net of allowance for credit losses of $0, and $0, respectively) | ||||||||
| Receivable for investment principal repayments (net of allowance for credit losses of $0, and $0, respectively) | ||||||||
| Tax receivable | ||||||||
| Prepaid expenses | ||||||||
| Total Current Assets | ||||||||
| Net Property and Equipment | ||||||||
| Other Assets | ||||||||
| Deferred tax asset | ||||||||
| Investments in trading securities at fair value, non-current | ||||||||
| Investments in available-for-sale debt securities at fair value (amortized cost: $0, and $3,993, respectively) (net of allowance for credit losses of $0, and $0, respectively) | ||||||||
| Investments in held-to-maturity debt securities at amortized cost, non-current | ||||||||
| Less: Allowance for credit losses | ( | ) | ||||||
| Investments in held-to-maturity debt securities, net of allowance for credit losses, non-current | ||||||||
| Other investments | ||||||||
| Financing lease, right of use assets | ||||||||
| Other assets, non-current | ||||||||
| Total Other Assets | ||||||||
| Total Assets | $ | $ | ||||||
| Liabilities and Shareholders’ Equity | ||||||||
| Current Liabilities | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued compensation and related costs | ||||||||
| Dividends payable | ||||||||
| Financing lease liability, short-term | ||||||||
| Other accrued expenses | ||||||||
| Total Current Liabilities | ||||||||
| Long-Term Liabilities | ||||||||
| Deferred tax liability | ||||||||
| Reserve for uncertain tax positions | ||||||||
| Notes payable | ||||||||
| Financing lease liability, long-term | ||||||||
| Total Long-Term Liabilities | ||||||||
| Total Liabilities | ||||||||
| Commitments and Contingencies (Note 13) | ||||||||
| Shareholders’ Equity | ||||||||
| Common stock (class A) - $0.025 par value; nonvoting; 28,000,000 shares authorized; 13,866,999 shares issued at December 31, 2025, and June 30, 2025; 10,576,156 and 10,982,687 shares outstanding at December 31, 2025, and June 30, 2025, respectively | ||||||||
| Common stock (class B) - $0.025 par value; nonvoting; 4,500,000 shares authorized; no shares issued | ||||||||
| Convertible common stock (class C) - $0.025 par value; voting; 3,500,000 shares authorized; 2,068,549 shares issued and outstanding at December 31, 2025, and June 30, 2025 | ||||||||
| Additional paid-in-capital | ||||||||
| Treasury stock, class A shares at cost; 3,290,843 and 2,884,312 shares at December 31, 2025, and June 30, 2025, respectively | ( | ) | ( | ) | ||||
| Accumulated other comprehensive income (loss), net of tax | ||||||||
| Retained earnings | ||||||||
| Total Shareholders’ Equity | ||||||||
| Total Liabilities and Shareholders’ Equity | $ | $ | ||||||
The accompanying notes are an integral part of these Consolidated Financial Statements.
U.S. GLOBAL INVESTORS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
| Six Months Ended | Three Months Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| (dollars in thousands, except per share data) | 2025 | 2024 | 2025 | 2024 | ||||||||||||
| Operating Revenues | ||||||||||||||||
| Advisory fees | $ | $ | $ | $ | ||||||||||||
| Administrative services fees | ||||||||||||||||
| Total Operating Revenues | ||||||||||||||||
| Operating Expenses | ||||||||||||||||
| Employee compensation and benefits | ||||||||||||||||
| General and administrative | ||||||||||||||||
| Advertising | ||||||||||||||||
| Depreciation | ||||||||||||||||
| Interest | ||||||||||||||||
| Total Operating Expenses | ||||||||||||||||
| Operating Income (Loss) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other Income (Loss) | ||||||||||||||||
| Net investment income (loss) | ||||||||||||||||
| Other income (loss) | ||||||||||||||||
| Total Other Income (Loss) | ||||||||||||||||
| Income (Loss) Before Income Taxes | ( | ) | ||||||||||||||
| Provision for Income Taxes | ||||||||||||||||
| Tax expense (benefit) | ( | ) | ||||||||||||||
| Net Income (Loss) | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||
| Earnings (Loss) Per Share | ||||||||||||||||
| Basic Net Income (Loss) per share | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||
| Diluted Net Income (Loss) per share | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||
| Basic weighted average number of common shares outstanding | ||||||||||||||||
| Diluted weighted average number of common shares outstanding | ||||||||||||||||
The accompanying notes are an integral part of these Consolidated Financial Statements.
U.S. GLOBAL INVESTORS, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)
| Six Months Ended | Three Months Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| (dollars in thousands) | 2025 | 2024 | 2025 | 2024 | ||||||||||||
| Net Income (Loss) | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||
| Other Comprehensive Income (Loss) | ||||||||||||||||
| Unrealized gains (losses) on available-for-sale securities arising during period, net of tax | ( | ) | ( | ) | ||||||||||||
| Less: reclassification adjustment for gains included in net income (loss), net of tax | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net change from available-for-sale securities | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other Comprehensive Income (Loss) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Total Comprehensive Income (Loss) | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||
The accompanying notes are an integral part of these Consolidated Financial Statements.
U.S. GLOBAL INVESTORS, INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (UNAUDITED)
| Common Stock | Convertible Common Stock | Treasury Stock | Accumulated | |||||||||||||||||||||||||||||||||||||
| (class A) | (class C) | Additional | Other | |||||||||||||||||||||||||||||||||||||
| Paid-in | Comprehensive | Retained | ||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | Shares | Par Value | Shares | Par Value | Capital | Shares | Cost | Income (Loss) | Earnings | Total | ||||||||||||||||||||||||||||||
| Balance at June 30, 2025 | $ | $ | $ | $ | ( | ) | $ | $ | $ | |||||||||||||||||||||||||||||||
| Repurchases of shares of Common Stock (class A), including excise tax | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||
| Issuance of stock under ESPP of shares of Common Stock (class A) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||
| Share-based compensation, net of tax | - | - | - | |||||||||||||||||||||||||||||||||||||
| Dividends declared | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||
| Other comprehensive income (loss), net of tax | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||
| Net income (loss) | - | - | - | |||||||||||||||||||||||||||||||||||||
| Balance at September 30, 2025 | $ | $ | $ | $ | ( | ) | $ | $ | $ | |||||||||||||||||||||||||||||||
| Repurchases of shares of Common Stock (class A), including excise tax | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||
| Issuance of stock under ESPP of shares of Common Stock (class A) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||
| Dividends declared | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||
| Other comprehensive income (loss), net of tax | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||
| Net income (loss) | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||
| Balance at December 31, 2025 | $ | $ | $ | $ | ( | ) | $ | $ | $ | |||||||||||||||||||||||||||||||
| Common Stock | Convertible Common Stock | Treasury Stock | Accumulated | |||||||||||||||||||||||||||||||||||||
| (class A) | (class C) | Additional | Other | |||||||||||||||||||||||||||||||||||||
| Paid-in | Comprehensive | Retained | ||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | Shares | Par Value | Shares | Par Value | Capital | Shares | Cost | Income (Loss) | Earnings | Total | ||||||||||||||||||||||||||||||
| Balance at June 30, 2024 | $ | $ | $ | $ | ( | ) | $ | $ | $ | |||||||||||||||||||||||||||||||
| Repurchases of shares of Common Stock (class A), including excise tax | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||
| Issuance of stock under ESPP of shares of Common Stock (class A) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||
| Dividends declared | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||
| Other comprehensive income (loss), net of tax | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||
| Net income (loss) | - | - | - | |||||||||||||||||||||||||||||||||||||
| Balance at September 30, 2024 | $ | $ | $ | $ | ( | ) | $ | $ | $ | |||||||||||||||||||||||||||||||
| Repurchases of shares of Common Stock (class A), including excise tax | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||
| Issuance of stock under ESPP of shares of Common Stock (class A) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||
| Share-based compensation, net of tax | - | - | - | |||||||||||||||||||||||||||||||||||||
| Share-based compensation, adjustment for forfeitures, net of tax | - | - | ( | ) | - | ( | ) | |||||||||||||||||||||||||||||||||
| Dividends declared | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||
| Other comprehensive income (loss), net of tax | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||
| Net income (loss) | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||
| Balance at December 31, 2024 | $ | $ | $ | $ | ( | ) | $ | $ | $ | |||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these Consolidated Financial Statements.
U.S. GLOBAL INVESTORS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
| Six Months Ended December 31, | ||||||||
| (dollars in thousands) | 2025 | 2024 | ||||||
| Cash Flows from Operating Activities: | ||||||||
| Net income (loss) | $ | $ | ||||||
| Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||||||
| Depreciation, amortization and accretion | ( | ) | ( | ) | ||||
| Net realized (gains) losses on securities | ( | ) | ||||||
| Net unrealized (gains) losses on securities | ( | ) | ||||||
| Provision for deferred taxes | ||||||||
| Reserve for uncertain tax positions | ( | ) | ||||||
| Share-based compensation expense | ||||||||
| Allowance for credit losses | ( | ) | ( | ) | ||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts and other receivables | ( | ) | ||||||
| Prepaid expenses and other assets | ( | ) | ( | ) | ||||
| Accounts payable and other accrued liabilities | ( | ) | ||||||
| Total adjustments | ( | ) | ( | ) | ||||
| Net cash provided by (used in) operating activities | ( | ) | ||||||
| Cash Flows from Investing Activities: | ||||||||
| Purchase of property and equipment | ( | ) | ( | ) | ||||
| Purchase of other investments | ( | ) | ||||||
| Purchase of trading securities at fair value, non-current | ( | ) | ( | ) | ||||
| Proceeds on sale of trading securities at fair value, current | ||||||||
| Proceeds from principal paydowns of available-for-sale debt securities at fair value | ||||||||
| Return of capital on non-current investments | ||||||||
| Net cash provided by (used in) investing activities | ||||||||
| Cash Flows from Financing Activities: | ||||||||
| Principal payments on financing lease | ( | ) | ( | ) | ||||
| Issuance of common stock | ||||||||
| Repurchases of common stock | ( | ) | ( | ) | ||||
| Excise taxes paid on repurchases of common stock | ( | ) | ||||||
| Dividends paid | ( | ) | ( | ) | ||||
| Net cash provided by (used in) financing activities | ( | ) | ( | ) | ||||
| Net increase (decrease) in cash, cash equivalents, and restricted cash | ( | ) | ||||||
| Beginning cash, cash equivalents, and restricted cash | ||||||||
| Ending cash, cash equivalents, and restricted cash | $ | $ | ||||||
| Supplemental Disclosures of Non-Cash Investing and Financing Activities | ||||||||
| Dividends declared but not paid | $ | $ | ||||||
| Excise tax liability accrued on stock repurchases | $ | $ | ||||||
| Lease liabilities obtained from new ROU assets - financing | $ | $ | ||||||
| Unsettled class A common stock repurchases | $ | $ | ||||||
| Supplemental Disclosures of Cash Flow Information | ||||||||
| Cash paid for income taxes | $ | $ | ||||||
| Cash paid for interest | $ | $ | ||||||
The accompanying notes are an integral part of these Consolidated Financial Statements.
U.S. GLOBAL INVESTORS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1. BASIS OF PRESENTATION AND CONSOLIDATION
U.S. Global Investors, Inc. (the “Company” or “U.S. Global”) has prepared the Consolidated Financial Statements in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the rules and regulations of the United States Securities and Exchange Commission (“SEC”) that permit reduced disclosure for interim periods. The financial information included herein reflects all adjustments (consisting solely of normal recurring adjustments), which are, in management’s opinion, necessary for a fair presentation of results for the interim periods presented. The Company has consistently followed the accounting policies set forth in the notes to the Consolidated Financial Statements in the Company’s Form 10-K for the fiscal year ended June 30, 2025 ("Form 10-K").
The Consolidated Financial Statements include the accounts of the Company and its wholly-owned subsidiaries, U.S. Global Investors (Bermuda) Limited, U.S. Global Investors (Canada) Limited (“USCAN”), and U.S. Global Indices, LLC.
There are two primary consolidation models in U.S. GAAP, the variable interest entity (“VIE”) and voting interest entity models. The Company’s evaluation for consolidation includes whether entities in which it has an interest or from which it receives fees are VIEs and whether the Company is the primary beneficiary of any VIEs identified in its analysis. A VIE is an entity in which either (a) the equity investment at risk is not sufficient to permit the entity to finance its own activities without additional financial support or (b) the group of holders of the equity investment at risk lack certain characteristics of a controlling financial interest. The primary beneficiary is the entity that has the obligation to absorb a majority of the expected losses or the right to receive the majority of the residual returns and consolidates the VIE on the basis of having a controlling financial interest.
The Company has variable interests in certain funds it advises, specifically, certain funds within U.S. Global Investors Funds (“USGIF” or the “Funds”) and certain U.S Global exchange-traded fund ("ETF") clients. However, is not deemed to be the primary beneficiary of these funds. The Company’s interests in these VIEs consist of the Company’s direct ownership therein and any fees earned but uncollected. See further information about these funds in Notes 2 and 3. In the ordinary course of business, the Company may choose to waive certain fees or assume operating expenses of the funds it advises for competitive, regulatory or contractual reasons (see Note 3 for information regarding fee waivers). The Company has not provided financial support to any of these entities outside the ordinary course of business. The Company’s risk of loss with respect to these VIEs is limited to the carrying value of its investments in, and fees receivable from, the entities. The Company is not deemed to be the primary beneficiary because it does not have the obligation to absorb a majority of the expected losses or the right to receive the majority of the residual returns. The Company does not consolidate these VIEs because it is not the primary beneficiary. The Company’s total exposure to unconsolidated VIEs, consisting of the Company's investments in these entities (as reflected in the carrying value of investments in securities) and receivables for fees, was $
The carrying amount of assets and liabilities recognized in the Consolidated Balance Sheets related to the Company's interests in these non-consolidated VIEs were as follows:
| Carrying Value and Maximum Exposure to Loss | ||||||||
| (dollars in thousands) | December 31, 2025 | June 30, 2025 | ||||||
| Investments in trading securities at fair value, current | $ | $ | ||||||
| Investments in trading securities at fair value, non-current | ||||||||
| Other receivables | ||||||||
| Total VIE assets, maximum exposure to loss | $ | $ | ||||||
Since the Company is not the primary beneficiary of the above funds it advises, the Company evaluated if it should consolidate under the voting interest entity model. Under the voting interest model, for legal entities other than partnerships, the usual condition for control is ownership, directly or indirectly, of more than 50 percent of the outstanding voting shares over an entity. The Company does not have control of any of the above funds it advises; therefore, the Company does not consolidate any of these funds.
All significant intercompany balances and transactions have been eliminated in consolidation. Certain amounts have been reclassified for comparative purposes. Due to rounding, the year-to-date amount may not be the exact sum of the quarterly amounts. The results of operations for the interim periods disclosed herein are not necessarily indicative of the results the Company may expect for the fiscal year ending June 30, 2026 (“fiscal 2026”).
The unaudited interim financial information in these Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements contained in the Company’s annual report on Form 10-K; interim disclosures generally do not repeat those in the annual statements.
Use of Estimates
Preparation of the Consolidated Financial Statements in accordance with GAAP requires management to make estimates and assumptions that affect amounts reported in the Consolidated Financial Statements and accompanying notes. Actual results may materially differ from those estimates.
Recent Accounting Pronouncements
In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions (“ASU 2022-03”) to clarify the guidance in Topic 820, Fair Value Measurement, when measuring the fair value of an equity security subject to contractual restrictions that prohibit the sale of an equity security, and to introduce new disclosure requirements for equity securities subject to contractual sale restrictions that are measured at fair value. The standard became effective for the Company on July 1, 2024. The adoption of the standard did not have a material impact on the Company's Consolidated Financial Statements.
In November 2023, the FASB issued Accounting Standards Update No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which enhances annual and interim disclosure requirements for reportable segments. The amendments require additional, more detailed disclosures about significant segment expenses and other segment items. The Company adopted ASU 2023-07 retrospectively for its fiscal year 2025 annual Consolidated Financial Statements. While the adoption of ASU 2023-07 did not have a material impact on the Company’s Consolidated Financial Statements, it resulted in enhanced segment disclosures.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”), which enhances the transparency and decision usefulness of annual income tax disclosures. ASU 2023-09 will be effective for fiscal years beginning after December 15, 2024, and will be effective for the Company's fiscal 2026 annual disclosures. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The Company is currently evaluating the impact of ASU 2023-09 on its Consolidated Financial Statement disclosures.
In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”), which requires public business entities to disclose specified information about certain costs and expenses. ASU 2024-03 will be effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods with annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of ASU 2024-03 on its Consolidated Financial Statement disclosures.
In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements (“ASU 2025-11”), which clarifies the applicability, form and content, and required disclosures of interim financial statements. The amendments are not intended to change the fundamental nature of interim reporting, but instead improve the clarity and navigability of the existing guidance. The amendments create a comprehensive list of required interim disclosures and introduce a disclosure principle requiring entities to disclose, in interim periods, any event or change since the previous year-end that has a material effect on the entity. ASU 2025-11 will be effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of ASU 2025-11 on its interim reporting disclosures.
NOTE 2. INVESTMENTS
As of December 31, 2025, the Company held investments carried at fair value on a recurring basis of $
The cost basis of investments is adjusted for amortization of premium or accretion of discount on debt securities held and the recharacterization of distributions from investments in partnerships, if applicable.
Concentrations of Credit Risk
A significant portion of the Company’s investments carried at fair value on a recurring basis included investments in USGIF valued at $
Fair Value Hierarchy
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The valuation techniques described below maximize the use of observable inputs and minimize the use of unobservable inputs in determining fair value.
The inputs used for measuring financial instruments at fair value are summarized in the three broad levels listed below:
Level 1 – Inputs represent unadjusted quoted prices for identical assets exchanged in active markets.
Level 2 – Inputs include directly or indirectly observable inputs (other than Level 1 inputs) such as quoted prices for similar assets exchanged in active or inactive markets; quoted prices for identical assets exchanged in inactive markets; other inputs that may be considered in fair value determinations of the assets, such as interest rates and yield curves; and inputs that are derived principally from or corroborated by observable market data by correlation or other means.
Level 3 – Inputs include unobservable inputs used in the measurement of assets. The Company is required to use its own assumptions regarding unobservable inputs because there is little, if any, market activity in the assets and it may be unable to corroborate the related observable inputs. Unobservable inputs require management to make certain projections and assumptions about the information that would be used by market participants in valuing assets.
The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the financial instrument. The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected may materially differ from the values received upon actual sale of those investments.
The Company has established a Proprietary Valuation Committee (the “Committee”) to administer and oversee the Company’s valuation policies and procedures, which are approved by the Board of Directors, and to perform a periodic review of valuations provided by independent pricing services.
For actively traded securities, the Company values investments using the closing price of the securities on the exchange or market on which the securities principally trade. If the security is not traded on the last business day of the quarter, it is generally valued at the mean between the last bid and ask quotation. The fair value of a security that has a restriction greater than one year is based on the quoted price for an otherwise identical unrestricted instrument that trades in a public market, adjusted for the estimated effect of the restriction. Contractual restrictions on the sale of an equity security are not considered in measuring the security's fair value. Mutual funds, which include open- and closed-end funds and exchange-traded funds, are valued at net asset value or closing price, as applicable.
For common share purchase warrants not traded on an exchange, the estimated fair value is determined using the Black-Scholes option-pricing model. This sophisticated model utilizes a number of assumptions in arriving at its results, including the estimated life, the risk-free interest rate, and historical volatility of the underlying common stock. The Company may change the assumption of the risk-free interest rate and utilize the yield curve for instruments with similar characteristics, such as credit ratings and jurisdiction, or change the expected volatility. The effects of changing any of the assumptions or factors employed by the Black-Scholes model may result in a significantly different valuation.
Certain convertible debt securities not traded on an exchange are valued by an independent third party. The third party may use a binomial lattice model based on factors such as yield, quality, maturity, coupon rate, type of issuance, individual trading characteristics of the underlying common shares and other market data. A binomial lattice model utilizes a number of assumptions in arriving at its results. The effects of changing any of the assumptions or factors utilized in a binomial lattice model, including expected volatility, credit adjusted discount rates, and discounts for lack of marketability, may result in a significantly different valuation for the securities.
For other securities included in the fair value hierarchy with unobservable inputs, the Committee considers a number of factors in determining a security’s fair value, including the security’s trading volume, market values of similar class issuances, investment personnel’s judgment regarding the market experience of the issuer, financial status of the issuer, the issuer’s management, and back testing, as appropriate. The fair values may differ from what may have been used had a broader market for these securities existed. The Committee reviews inputs and assumptions and reports material items to the Board of Directors. Securities which do not have readily determinable fair values are also periodically reviewed by the Committee.
The following tables summarize the major categories of investments with fair values adjusted on a recurring basis as of December 31, 2025, and June 30, 2025, and other investments with fair values adjusted on a nonrecurring basis, with fair values shown according to the fair value hierarchy.
| December 31, 2025 | ||||||||||||||||
| Significant | Significant | |||||||||||||||
| Quoted | Other | Unobservable | ||||||||||||||
| Prices | Inputs | Inputs | ||||||||||||||
| (dollars in thousands) | (Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
| Investments carried at fair value on a recurring basis: | ||||||||||||||||
| Investments in trading securities: | ||||||||||||||||
| Equity securities: | ||||||||||||||||
| Equities - Domestic | $ | $ | $ | $ | ||||||||||||
| Equities - International | ||||||||||||||||
| Exchange Traded Funds - Crypto & digital asset | ||||||||||||||||
| Exchange Traded Funds - Global equity | ||||||||||||||||
| Exchange Traded Funds - Option strategy & income | ||||||||||||||||
| Mutual funds - Fixed income | ||||||||||||||||
| Mutual funds - Global equity | ||||||||||||||||
| Total equity securities | ||||||||||||||||
| Total investments carried at fair value on a recurring basis: | $ | $ | $ | $ | ||||||||||||
| Investments carried at fair value on a nonrecurring basis: | ||||||||||||||||
| Other investments (1) | $ | $ | $ | $ | ||||||||||||
| 1. | Other investments include equity securities without readily determinable fair values that were adjusted under the measurement alternative during the six months ended December 31, 2025. These securities are classified within level 3 due to the infrequency of the observable price changes and, in certain cases, restrictions on the transferability of the shares. |
| June 30, 2025 | ||||||||||||||||
| Significant | Significant | |||||||||||||||
| Quoted | Other | Unobservable | ||||||||||||||
| Prices | Inputs | Inputs | ||||||||||||||
| (dollars in thousands) | (Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
| Investments carried at fair value on a recurring basis: | ||||||||||||||||
| Investments in trading securities: | ||||||||||||||||
| Equity securities: | ||||||||||||||||
| Equities - Domestic | $ | $ | $ | $ | ||||||||||||
| Equities - International | ||||||||||||||||
| Exchange Traded Funds - Crypto & digital asset | ||||||||||||||||
| Exchange Traded Funds - Global equity | ||||||||||||||||
| Exchange Traded Funds - Option strategy & income | ||||||||||||||||
| Mutual funds - Fixed income | ||||||||||||||||
| Mutual funds - Global equity | ||||||||||||||||
| Total equity securities | ||||||||||||||||
| Debt securities: | ||||||||||||||||
| Corporate debt securities | ||||||||||||||||
| Total investments in trading securities: | ||||||||||||||||
| Investments in available-for-sale debt securities: | ||||||||||||||||
| Corporate debt securities - Convertible debentures | ||||||||||||||||
| Total investments carried at fair value on a recurring basis: | $ | $ | $ | $ | ||||||||||||
| Investments carried at fair value on a nonrecurring basis: | ||||||||||||||||
| Other investments (1) | $ | $ | $ | $ | ||||||||||||
| 1. | Other investments include equity securities without readily determinable fair values that were adjusted under the measurement alternative during the fiscal year ended June 30, 2025. These securities are classified within level 3 due to the infrequency of the observable price changes and, in certain cases, restrictions on the transferability of the shares. |
The Company holds
The available-for-sale security carried at fair value on a recurring basis in the preceding table as of June 30, 2025, consisted of an investment in convertible debentures of HIVE. The Company purchased the convertible securities for $
Upon acquisition, the Company recorded the convertible debentures at an estimated fair value of $
At June 30, 2025, the Company utilized an independent third-party valuation specialist to estimate the fair value of the HIVE convertible debentures. The Company determined that the fair value measurements utilized significant unobservable inputs and were therefore classified within Level 3 of the fair value hierarchy. The fair value of the convertible debentures was $
Changes in Level 3 Assets Measured at Fair Value on a Recurring Basis
| Six Months Ended December 31, 2025 | ||||
| Investments in | ||||
| (dollars in thousands) | debt securities | |||
| Beginning Balance | $ | |||
| Principal maturities | ( | ) | ||
| Amortization of day one premium | ( | ) | ||
| Accretion of bifurcation discount | ||||
| Total gains or losses included in: | ||||
| Net Investment Income (Loss) | ||||
| Other Comprehensive Income (Loss) | ( | ) | ||
| Ending Balance | $ | |||
The following is quantitative information with respect to the securities measured and carried at fair value on a recurring basis with the use of significant unobservable inputs (Level 3) as of June 30, 2025.
| June 30, 2025 | |||||||||||
| (dollars in thousands) | Fair Value | Principal Valuation Techniques | Unobservable Inputs | ||||||||
| Investments in available-for-sale debt securities: | |||||||||||
| Corporate debt securities - convertible debentures | $ | Binomial lattice model | Volatility | % | |||||||
| Credit Spread | % | ||||||||||
| Risk-Free Rate | % | ||||||||||
Investments in Trading Securities at Fair Value
Investments in trading securities with readily determinable fair values are carried at fair value, and changes in unrealized gains or losses are reported within net investment income (loss). The following details the components of the Company’s trading securities carried at fair value as of December 31, 2025, and June 30, 2025.
| December 31, 2025 | ||||||||||||
| (dollars in thousands) | Cost | Unrealized Gains (Losses) | Fair Value | |||||||||
| Trading securities at fair value | ||||||||||||
| Equity securities: | ||||||||||||
| Equities - Domestic | $ | $ | ( | ) | $ | |||||||
| Equities - International | ||||||||||||
| Exchange Traded Funds - Crypto & digital asset | ( | ) | ||||||||||
| Exchange Traded Funds - Global equity | ||||||||||||
| Exchange Traded Funds - Option strategy & income | ( | ) | ||||||||||
| Mutual funds - Fixed income | ( | ) | ||||||||||
| Mutual funds - Global equity | ( | ) | ||||||||||
| Total equity securities at fair value | ( | ) | ||||||||||
| Total trading securities at fair value | $ | $ | ( | ) | $ | |||||||
| June 30, 2025 | ||||||||||||
| (dollars in thousands) | Cost | Unrealized Gains (Losses) | Fair Value | |||||||||
| Trading securities at fair value | ||||||||||||
| Equity securities: | ||||||||||||
| Equities - Domestic | $ | $ | ( | ) | $ | |||||||
| Equities - International | ( | ) | ||||||||||
| Exchange Traded Funds - Crypto & digital asset | ||||||||||||
| Exchange Traded Funds - Global equity | ||||||||||||
| Exchange Traded Funds - Option strategy & income | ||||||||||||
| Mutual funds - Fixed income | ( | ) | ||||||||||
| Mutual funds - Global equity | ( | ) | ||||||||||
| Total equity securities at fair value | ( | ) | ||||||||||
| Debt securities: | ||||||||||||
| Corporate debt securities | ( | ) | ||||||||||
| Total trading securities at fair value | $ | $ | ( | ) | $ | |||||||
Debt Investments
Investments in debt securities are classified on the acquisition dates and at each balance sheet date. Securities classified as held-to-maturity are carried at amortized cost, net of allowance for credit losses, reflecting the ability and intent to hold the securities to maturity. Debt securities classified as trading are acquired with the intent to sell in the near term and are carried at fair value with changes reported in earnings. All other debt securities are classified as available-for-sale and are carried at fair value.
Investment gains and losses on available-for-sale debt securities are recorded when the securities are sold, as determined on a specific identification basis, and recognized in current period earnings. Changes in unrealized gains on available-for-sale debt securities are reported net of tax in accumulated other comprehensive income (loss). For debt securities in an unrealized loss position, a loss in earnings is recognized for the excess of amortized cost over fair value if the Company intends to sell before the price recovers. Otherwise, the Company evaluates as of the balance sheet date whether the unrealized losses are attributable to credit losses or other factors. The severity of the decline in value, creditworthiness of the issuer and other relevant factors are considered. The portion of unrealized loss the Company believes is related to a credit loss is recognized in earnings, and the portion of unrealized loss the Company believes is not related to a credit loss is recognized in other comprehensive income (loss).
Certain derivatives embedded in other financial instruments, such as the conversion option in a convertible bond, are reported at fair value, and changes in fair value are recorded through earnings within net investment income (loss). The host contract continues to be accounted for in accordance with the appropriate accounting standard. The embedded derivative and the related host contract represent one legal contract and are combined on the Consolidated Balance Sheets and the table that follows.
The Company held one financial instrument classified as available-for-sale containing an embedded derivative, representing an investment in HIVE, at June 30, 2025. At that date, the fair value of the embedded derivative was zero. During the prior fiscal years, the Company recognized unrealized losses related to this embedded derivative through earnings. In December 2025, the remaining principal amount of the Company’s investment in available-for-sale debt securities containing a conversion option was paid in full, resulting in the realization of a loss of $
The following details the components of the Company’s available-for-sale debt investments as of June 30, 2025. There were
| June 30, 2025 | ||||||||||||||||||||||||
| (dollars in thousands) | Amortized Cost | Unrealized Gains in Other Comprehensive Income (Loss) | Unrealized Losses in Other Comprehensive Income (Loss) | Unrealized Losses in Net Investment Income (Loss) (1) | Fair Value | Allowance for Credit Losses | ||||||||||||||||||
| Available-for-sale debt securities: | ||||||||||||||||||||||||
| Corporate debt securities - Convertible debentures | $ | $ | $ | $ | ( | ) | $ | $ | ||||||||||||||||
| 1. | Represents changes in unrealized gains and losses related to embedded derivatives included within net investment income (loss) on the Consolidated Statements of Operations. |
The following table presents the effect of embedded derivatives on the Consolidated Statements of Operations, categorized by risk exposure, for the three and six months ended December 31, 2025, and 2024.
| Six Months Ended | Three Months Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Other Income (Loss) | Other Income (Loss) | Other Income (Loss) | Other Income (Loss) | |||||||||||||
| (dollars in thousands) | Net Investment Income (Loss) | Net Investment Income (Loss) | Net Investment Income (Loss) | Net Investment Income (Loss) | ||||||||||||
| Embedded Derivatives: | ||||||||||||||||
| Equity price risk exposure | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||
At December 31, 2025, and June 30, 2025, the Company held one debt security classified as held-to-maturity. The following details are the components of the Company’s held-to-maturity debt investments as of December 31, 2025, and June 30, 2025.
| December 31, 2025 | ||||||||||||||||||||||||
| (dollars in thousands) | Amortized Cost | Allowance for Credit Losses | Net Carrying Amount | Gross Unrecognized Holding Gains | Gross Unrecognized Holding Losses | Fair Value | ||||||||||||||||||
| Held-to-maturity debt securities(1): | ||||||||||||||||||||||||
| Corporate debt securities | $ | $ | ( | ) | $ | $ | $ | $ | ||||||||||||||||
| June 30, 2025 | ||||||||||||||||||||||||
| (dollars in thousands) | Amortized Cost | Allowance for Credit Losses | Net Carrying Amount | Gross Unrecognized Holding Gains | Gross Unrecognized Holding Losses | Fair Value | ||||||||||||||||||
| Held-to-maturity debt securities(1): | ||||||||||||||||||||||||
| Corporate debt securities | $ | $ | ( | ) | $ | $ | $ | $ | ||||||||||||||||
| 1. | Held-to-maturity debt investments are carried at amortized cost, net of allowance for credit losses, and the fair value is classified as Level 2 according to the fair value hierarchy. |
The Company applies the Current Expected Credit Losses (“CECL”) model to held-to-maturity debt securities. The allowance, which requires significant judgment, reflects lifetime expected credit losses and is deducted from amortized cost to present the net amount expected to be collected. Securities, or portions thereof, are charged against the allowance when deemed uncollectible, and the balance may change as economic conditions or issuer prospects evolve.
The Company monitors the credit quality of debt securities through credit ratings from various rating agencies. Credit ratings express opinions about the credit quality of a security and are utilized by the Company to make informed decisions. Investment grade securities are rated BBB-/Baa3 or higher and generally considered by the rating agencies and market participants to be of low credit risk. Conversely, securities rated below investment grade are considered to have distinctively higher credit risk than investment grade securities. For securities without credit ratings, the Company utilizes other financial information indicating the financial health of the underlying organization. As of December 31, 2025, and June 30, 2025, the held-to-maturity debt investment held by the Company did not have a credit rating.
Since the held-to-maturity debt security does not have a credit rating, management has determined that the discounted cash flow method provides the best basis for its assessment and determination of expected credit losses. The Company has elected to reflect the change in the allowance solely attributable to the passage of time in interest income. Changes attributable to the passage of time are those solely due to changes in the present value of the expected cash flows as the instrument approaches maturity rather than expectations of cash flow timing or amounts. The change in allowance for credit losses attributable to the passage of time, included as an increase in interest income within net investment income (loss) on the Consolidated Statements of Operations, was $
The following table presents the activity in the allowance for credit losses for the held-to-maturity debt investment for the six months ended December 31, 2025, and 2024.
| Six Months Ended | ||||||||
| December 31, | ||||||||
| (dollars in thousands) | 2025 | 2024 | ||||||
| Beginning Balance | $ | $ | ||||||
| Provision for credit losses - reversal (1) | ( | ) | ( | ) | ||||
| Ending Balance | $ | $ | ||||||
| 1. | Represents the change in present value attributable to the passage of time included in interest income. |
The following summarizes the net carrying amount and estimated fair value of held-to-maturity debt securities at December 31, 2025, by contractual maturity dates.
| December 31, 2025 | ||||
| Held-to-maturity | ||||
| debt securities | ||||
| Due in less than | ||||
| (dollars in thousands) | one year | |||
| Amortized Cost | $ | |||
| Fair Value | $ | |||
As of December 31, 2025, and June 30, 2025, none of the Company’s investments in debt securities classified as held-to-maturity or available-for-sale were delinquent or in a non-accrual status. Accrued interest receivable of $
Other Investments
Other investments consist of equity investments in entities over which the Company does not exercise significant influence and that do not have readily determinable fair values. These investments are accounted for under the measurement alternative in accordance with ASC 321, whereby securities are measured at cost, less impairment, if any, and adjusted for observable price changes in orderly transactions for identical or similar securities of the same issuer. When observable price changes are identified, the carrying value of the related equity security is adjusted to reflect the observable transaction price as of the transaction date, with the resulting gains or losses recognized in net investment income (loss). The Company does not perform recurring fair value remeasurements of these equity securities absent such observable transactions or indicators of impairment.
The carrying value of equity securities without readily determinable fair values was approximately $
| Six Months Ended | Three Months Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| (dollars in thousands) | 2025 | 2024 | 2025 | 2024 | ||||||||||||
| Other Investments | ||||||||||||||||
| Carrying value | $ | $ | $ | $ | ||||||||||||
| Upward carrying value changes | $ | $ | $ | $ | ||||||||||||
| Downward carrying value changes/impairment | $ | $ | $ | $ | ||||||||||||
The period-end carrying values reflect cumulative purchases and sales, as well as upward and downward carrying adjustments resulting from observable price changes and impairment assessments. Through December 31, 2025, the cumulative amount of upward adjustments to all equity securities without readily determinable fair values totaled $
The cumulative amount of impairments and other downward adjustments to all equity securities without readily determinable fair values totaled $
Net Investment Income (Loss)
Net investment income (loss) from the Company’s investments includes:
| ● | realized gains and losses on sales of securities; | |
| ● | realized gains and losses on principal payment proceeds; | |
| ● | unrealized gains and losses on securities at fair value; | |
| ● | impairments and observable price changes on equity investments without readily determinable fair values; | |
| ● | dividend and interest income; and | |
| ● | realized foreign currency gains and losses. |
The following summarizes net investment income (loss) reflected in earnings for the periods presented.
| Six Months Ended | Three Months Ended | |||||||||||||||
| (dollars in thousands) | December 31, | December 31, | ||||||||||||||
| Net Investment Income (Loss) | 2025 | 2024 | 2025 | 2024 | ||||||||||||
| Net realized gains (losses) on equity securities | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||
| Net realized gains (losses) on debt securities | ||||||||||||||||
| Net realized gains (losses) on embedded derivatives | ( | ) | ( | ) | ||||||||||||
| Net unrealized gains (losses) on equity securities | ( | ) | ( | ) | ( | ) | ||||||||||
| Net unrealized gains (losses) on debt securities | ( | ) | ( | ) | ||||||||||||
| Net unrealized gains (losses) on embedded derivatives | ( | ) | ( | ) | ||||||||||||
| Net unrealized gains (losses) on cash equivalents | ( | ) | ( | ) | ||||||||||||
| Dividend and interest income | ||||||||||||||||
| Net realized foreign currency gains (losses) | ( | ) | ( | ) | ( | ) | ||||||||||
| Total Net Investment Income (Loss) | $ | $ | $ | $ | ||||||||||||
Realized gains on debt securities reclassified from other comprehensive income (loss) related to the Company's investment in HIVE debentures were $
The following table presents net unrealized gains (losses) recognized in net investment income (loss) during the three and six months ended December 31, 2025, and 2024, related to equity securities and debt securities classified as trading that were held as of the respective period-end dates.
| Six Months Ended | Three Months Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| (dollars in thousands) | 2025 | 2024 | 2025 | 2024 | ||||||||||||
| Net unrealized gains (losses) for securities held at the reporting date: | ||||||||||||||||
| Equity securities: | ||||||||||||||||
| Net gains (losses) recognized during the period | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||
| Less: Net gains (losses) recognized during the period on securities sold during the period | ( | ) | ( | ) | ||||||||||||
| Net unrealized gains (losses) recognized during the reporting period on securities still held at the reporting date (1) | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||
| Debt securities classified as trading: | ||||||||||||||||
| Net gains (losses) recognized during the period | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||
| Less: Net gains (losses) recognized during the period on securities sold during the period | ||||||||||||||||
| Net unrealized gains (losses) recognized during the reporting period on securities still held at the reporting date (2) | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||
| 1. | Includes net unrealized gains of $ |
| 2. | In December 2025, senior notes were mandatorily exchanged for equity securities of the issuer pursuant to a court-approved restructuring. Accordingly, the investment is presented within equity securities at the reporting date, and prior-period amounts are reflected within debt securities classified as trading. The exchange was a non-cash, nonrecognition transaction. |
Net investment income (loss) can be volatile and vary depending on market fluctuations, the Company’s ability to participate in investment opportunities, and the timing of transactions. The Company expects that gains and losses will continue to fluctuate in the future.
NOTE 3. INVESTMENT MANAGEMENT AND OTHER FEES
The following table presents operating revenues disaggregated by performance obligation.
| Six Months Ended | Three Months Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| (dollars in thousands) | 2025 | 2024 | 2025 | 2024 | ||||||||||||
| ETF advisory fees | $ | $ | $ | $ | ||||||||||||
| USGIF advisory fees | ||||||||||||||||
| USGIF performance fees received (paid) | ( | ) | ( | ) | ||||||||||||
| Total Advisory Fees | ||||||||||||||||
| USGIF administrative services fees | ||||||||||||||||
| Total Operating Revenue | $ | $ | $ | $ | ||||||||||||
The Company serves as investment advisor to four U.S.-based ETF clients: U.S. Global Jets ETF (ticker JETS), U.S. Global GO GOLD and Precious Metal Miners ETF (ticker GOAU), U.S. Global Sea to Sky Cargo ETF (ticker SEA), and the U.S. Global Technology and Aerospace & Defense ETF (ticker WAR). The Company receives a unitary management fee of
The Company serves as investment adviser to USGIF and earns a base management fee calculated as a specified percentage of average net assets under management. During fiscal year 2025, the Company also received performance fees, which were fulcrum fees consisting of a
The Company has agreed to contractually limit the expenses of the Funds except the U.S. Government Securities Ultra-Short Bond Fund through April 2026. The Company has voluntarily waived or reduced its fees and/or agreed to pay expenses on the U.S. Government Securities Ultra-Short Bond Fund. This cap will continue on a voluntary basis at the Company’s discretion. For the three and six months ended December 31, 2025, aggregate fees waived and expenses borne by the Company for USGIF were $
The Company receives administrative service fees from USGIF based on an annual rate of
As of December 31, 2025, the Company had $
NOTE 4. RESTRICTED AND UNRESTRICTED CASH
The Company maintains its cash deposits with established commercial banks. At times, balances may exceed federally insured limits. We have not experienced any losses in such accounts and do not believe that we are exposed to any significant credit risk associated with our cash deposits. Restricted cash represents cash invested in a money market account as collateral for credit facilities that is not available for general corporate use.
A reconciliation of cash, cash equivalents, and restricted cash reported from the Consolidated Balance Sheets to the Consolidated Statements of Cash Flows is shown below.
| (dollars in thousands) | December 31, 2025 | June 30, 2025 | ||||||
| Cash and cash equivalents | $ | $ | ||||||
| Restricted cash | ||||||||
| Total cash, cash equivalents, and restricted cash | $ | $ | ||||||
NOTE 5. LEASES
The Company has lease agreements for office equipment that expire in fiscal year 2029. Lease expenses included in general and administrative expense on the Consolidated Statements of Operations totaled $
The following table presents the components of lease cost.
| Six Months Ended | Three Months Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| (dollars in thousands) | 2025 | 2024 | 2025 | 2024 | ||||||||||||
| Finance lease cost: | ||||||||||||||||
| Amortization of right-of-use assets | $ | $ | $ | $ | ||||||||||||
| Interest on lease liabilities | ||||||||||||||||
| Total finance lease cost | ||||||||||||||||
| Short-term lease cost | ||||||||||||||||
| Total lease cost | $ | $ | $ | $ | ||||||||||||
Supplemental information related to the Company's leases follows.
| Six Months Ended | Three Months Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| (dollars in thousands) | 2025 | 2024 | 2025 | 2024 | ||||||||||||
| Operating cash flows from financing leases included in lease liabilities | $ | $ | $ | $ | ||||||||||||
| Financing cash flows from financing leases included in lease liabilities | $ | $ | $ | $ | ||||||||||||
| Lease liabilities obtained from new ROU assets - financing (1) | $ | $ | $ | $ | ||||||||||||
| 1. | During the six months ended December 31, 2025, non-cash changes in lease liabilities included $ |
Additional qualitative information concerning the Company’s leases follows.
| December 31, 2025 | June 30, 2025 | |||||||
| Weighted-average remaining lease term - financing leases (years) | ||||||||
| Weighted-average discount rate - financing leases | % | % | ||||||
The following table presents the maturities of lease liabilities as of December 31, 2025.
| (dollars in thousands) | ||||
| Fiscal Year | Finance Leases | |||
| 2026 (excluding the six months ended December 31, 2025) | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| Total lease payments | ||||
| Less imputed interest | ( | ) | ||
| Total | $ | |||
The Company is the lessor of certain areas of its owned office building under operating leases expiring in various months through fiscal year 2026. At the commencement of an operating lease, no income is recognized; subsequently, lease payments received are recognized on a straight-line basis. Lease income included in other income on the Consolidated Statements of Operations was $
The following is a summary analysis of annual undiscounted cash flows to be received on leases as of December 31, 2025.
| (dollars in thousands) | ||||
| Fiscal Year | Operating Leases | |||
| 2026 (excluding the six months ended December 31, 2025) | $ | |||
| Total lease payments | $ | |||
The Company may terminate the building leases with one hundred eighty days written notice if it sells the property. If the Company terminates the lease, the Company will pay the tenant a termination fee of the lesser of six months of the base monthly rent or the base monthly rent times the number of months remaining in the initial term.
NOTE 6. OTHER ACCRUED EXPENSES
Other accrued expenses consist of the following:
| (dollars in thousands) | December 31, 2025 | June 30, 2025 | ||||||
| Professional fees | $ | $ | ||||||
| Vendors payable | ||||||||
| ETF operating and distribution expenses | ||||||||
| Other taxes payable | ||||||||
| Other accrued items | ||||||||
| Other accrued expenses | $ | $ | ||||||
Other accrued expenses include out-of-pocket expenses incurred by the Company that will be reimbursed by HIVE. Receivables from HIVE for out-of-pocket expenses in the amounts of $
NOTE 7. DEBT
The Company has access to a $
During fiscal 2025, the Company received loan proceeds of $
NOTE 8. STOCKHOLDERS’ EQUITY
Payment of cash dividends is within the discretion of the Company’s Board of Directors and is dependent on earnings, operations, capital requirements, general financial condition of the Company, and general business conditions. The dividend rate per share was $
In December 2025, the Board authorized the continuance of the monthly dividend of $
The Company has a share repurchase program, approved by the Board of Directors, authorizing the Company to annually purchase up to $
The Inflation Reduction Act of 2022 imposes a 1% excise tax on stock buybacks by publicly traded corporations. Any excise tax incurred is recognized as part of the cost basis of the shares acquired in the Consolidated Statements of Shareholders' Equity. The impact of these provisions was $
Stock Option Plans
The Company’s stock option plans allow for the granting of class A shares as either incentive or non-qualified stock options to employees and non-employee directors. The terms and conditions of these options, including exercise price, vesting schedule, and expiration, are determined by the Compensation Committee of the Board of Directors.
Under the 1989 Plan, there were
Under the 1997 Plan, there were
Stock Option Activity
During the three and six months ended December 31, 2025, there were
Share-Based Compensation Expense
The Company measures share-based compensation expense at the grant date, based on the fair value of the awards. This expense is recognized ratably over the awards’ vesting period.
NOTE 9. EARNINGS PER SHARE
The basic earnings per share (“EPS”) calculation excludes dilution and is computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution of EPS that could occur if options to issue common stock were exercised.
The following table sets forth the computation for basic and diluted EPS.
| Six Months Ended | Three Months Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| (dollars in thousands, except per share data) | 2025 | 2024 | 2025 | 2024 | ||||||||||||
| Net Income (Loss) | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||
| Weighted average number of outstanding shares | ||||||||||||||||
| Basic | ||||||||||||||||
| Effect of dilutive securities | ||||||||||||||||
| Stock options | ||||||||||||||||
| Diluted | ||||||||||||||||
| Earnings (Loss) Per Share | ||||||||||||||||
| Basic Net Income (Loss) per share | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||
| Diluted Net Income (Loss) per share | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||
The diluted EPS calculation excludes the effect of stock options when their exercise prices exceed the average market price for the period, as their inclusion would be anti-dilutive. For the three and six months ended December 31, 2025, employee stock options of
During the three and six months ended December 31, 2025, and 2024, the Company repurchased class A shares on the open market. Upon repurchase, these shares are classified as treasury shares and are deducted from outstanding shares in the earnings per share calculation.
NOTE 10. INCOME TAXES
The Company and its non-Canadian subsidiaries file a consolidated U.S. federal income tax return. USCAN files a separate tax return in Canada. Provisions for income taxes include deferred taxes for temporary differences between the financial reporting and tax basis of assets and liabilities, resulting from the use of the liability method of accounting for income taxes.
Income tax expense for the quarter is based upon the estimated annual ordinary income in each jurisdiction in which the Company operates. The tax effects of discrete items are recognized in the tax provision in the period they occur in accordance with U.S. GAAP. Due to various factors, such as the item’s significance in relation to total ordinary income and the rate of tax, discrete items in any quarter can materially impact the reported effective tax rate ("ETR"). A valuation allowance is provided when it is more likely than not that some portion of a deferred tax asset will not be realized. There was
During the three months ended December 31, 2025, the Company recorded a tax expense of $
Subsequent to December 31, 2025, the Company filed a tax accounting method change request on Form 3115, Application for Change in Accounting Method, with the Internal Revenue Service to change its federal income tax accounting method related to certain HIVE convertible securities. The proposed method change is expected to reduce the capital loss carryforward. However, because the filing occurred after December 31, 2025, the impact of the proposed method change was not reflected in the Company’s interim income tax provision for the three and six months ended December 31, 2025. The method change remains subject to review by the Internal Revenue Service.
The Company maintains a reserve for uncertain tax positions for income tax matters. As of December 31, 2025, and June 30, 2025, the total reserve for uncertain tax positions, including $
On July 4, 2025, President Trump signed into law Public Law 119-21, commonly known as the One Big Beautiful Bill Act (the “Act”), which contained several tax reform proposals. A Company is required to adjust current and deferred tax liabilities and assets for the effects of changes in tax laws or rates in income from continuing operations in the interim period that includes the enactment date. The impact of the Act is reflected in the Company’s interim results for the three and six months ended December 31, 2025, and there was no material impact to income tax expense.
NOTE 11. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
The following table presents the change in accumulated other comprehensive income (loss) (“AOCI”) by component.
| (dollars in thousands) | Unrealized gains (losses) on available-for-sale investments | |||
| Six Months Ended December 31, 2025 | ||||
| Balance at June 30, 2025 | $ | |||
| Other comprehensive income (loss) before reclassifications | ( | ) | ||
| Tax effect | ||||
| Amount reclassified from AOCI | ( | ) | ||
| Tax effect | ||||
| Net other comprehensive income (loss) | ( | ) | ||
| Balance at December 31, 2025 | $ | |||
| Six Months Ended December 31, 2024 | ||||
| Balance at June 30, 2024 | $ | |||
| Other comprehensive income (loss) before reclassifications | ||||
| Tax effect | ( | ) | ||
| Amount reclassified from AOCI | ( | ) | ||
| Tax effect | ||||
| Net other comprehensive income (loss) | ( | ) | ||
| Balance at December 31, 2024 | $ | |||
NOTE 12. FINANCIAL INFORMATION BY BUSINESS SEGMENT
The Company manages the following business segments:
| 1. | Investment management services, by which the Company offers, to USGIF and ETF clients, a range of investment management products and services to meet the needs of individual and institutional investors; and |
| 2. | Corporate investments, through which the Company invests for its own account in an effort to add growth and value to its cash position. |
These segments are managed separately. The Company’s segment information is prepared on the same basis that management uses to review the financial information for operational and investment decision-making purposes. All segment accounting policies are the same as those described in the summary of significant accounting policies.
The Company's Chief Executive Officer, serving as the Chief Operating Decision Maker ("CODM"), evaluates the performance of the Company’s Corporate Investments segment separately from the Investment Management Services segment based on net investment income (loss), and the Corporate Investments segment does not include any allocated company expenses. All significant expenses are disclosed on the Consolidated Statements of Operations. The CODM evaluates the performance of the Company’s Investment Management Services segment based on operating income (loss) before depreciation, interest, and income taxes.
The following schedule details total revenues, income, and gross identifiable assets by business segment:
| (dollars in thousands) | Investment Management Services | Corporate Investments | Consolidated | |||||||||
| Six Months Ended December 31, 2025 | ||||||||||||
| Operating revenues | $ | $ | $ | |||||||||
| Net investment income (loss) | $ | $ | $ | |||||||||
| Other income (loss) | $ | $ | $ | |||||||||
| Income (loss) before income taxes | $ | ( | ) | $ | $ | |||||||
| Operating income (loss) | $ | ( | ) | $ | $ | ( | ) | |||||
| Add back: Depreciation | $ | $ | $ | |||||||||
| Add back: Interest | $ | $ | $ | |||||||||
| Operating income (loss), as adjusted | $ | ( | ) | $ | $ | ( | ) | |||||
| Gross identifiable assets at December 31, 2025 | $ | $ | $ | |||||||||
| Deferred tax asset | $ | |||||||||||
| Consolidated total assets at December 31, 2025 | $ | |||||||||||
| Six Months Ended December 31, 2024 | ||||||||||||
| Operating revenues | $ | $ | $ | |||||||||
| Net investment income (loss) | $ | $ | $ | |||||||||
| Other income (loss) | $ | $ | $ | |||||||||
| Income (loss) before income taxes | $ | ( | ) | $ | $ | |||||||
| Operating income (loss) | $ | ( | ) | $ | $ | ( | ) | |||||
| Add back: Depreciation | $ | $ | $ | |||||||||
| Add back: Interest | $ | $ | $ | |||||||||
| Operating income (loss), as adjusted | $ | ( | ) | $ | $ | ( | ) | |||||
| Gross identifiable assets at December 31, 2024 | $ | $ | $ | |||||||||
| Deferred tax asset | $ | |||||||||||
| Consolidated total assets at December 31, 2024 | $ | |||||||||||
| Three Months Ended December 31, 2025 | ||||||||||||
| Operating revenues | $ | $ | $ | |||||||||
| Net investment income (loss) | $ | $ | $ | |||||||||
| Other income (loss) | $ | $ | $ | |||||||||
| Income (loss) before income taxes | $ | ( | ) | $ | $ | |||||||
| Operating income (loss) | $ | ( | ) | $ | $ | ( | ) | |||||
| Add back: Depreciation | $ | $ | $ | |||||||||
| Add back: Interest | $ | $ | $ | |||||||||
| Operating income (loss), as adjusted | $ | ( | ) | $ | $ | ( | ) | |||||
| Three Months Ended December 31, 2024 | ||||||||||||
| Operating revenues | $ | $ | $ | |||||||||
| Net investment income (loss) | $ | $ | $ | |||||||||
| Other income (loss) | $ | $ | $ | |||||||||
| Income (loss) before income taxes | $ | ( | ) | $ | $ | ( | ) | |||||
| Operating income (loss) | $ | ( | ) | $ | $ | ( | ) | |||||
| Add back: Depreciation | $ | $ | $ | |||||||||
| Add back: Interest | $ | $ | $ | |||||||||
| Operating income (loss), as adjusted | $ | ( | ) | $ | $ | ( | ) | |||||
Operating revenues from investment management services include revenues from ETF clients of $
NOTE 13. CONTINGENCIES AND COMMITMENTS
The Company continuously reviews investor, employee and vendor complaints, and pending or threatened litigation. The likelihood that a loss contingency exists is evaluated through consultation with legal counsel, and a loss contingency is recorded if probable and reasonably estimable.
During the normal course of business, the Company may be subject to various claims, legal proceedings, and other contingencies. These matters are subject to various uncertainties, and it is possible that some of these matters may be resolved unfavorably. The Company establishes accruals for matters for which the outcome is probable and can be reasonably estimated. Management believes that any liability in excess of these accruals upon the ultimate resolution of these matters will not have a material adverse effect on the Consolidated Financial Statements of the Company. Excluding reserves for uncertain tax positions, the Company recorded no accruals for contingencies as of December 31, 2025, or June 30, 2025.
The Board has authorized a monthly dividend of $
Note 14. Subsequent EventS
Subsequent to December 31, 2025, the Company recognized an unrealized gain of approximately $
Subsequent to December 31, 2025, the Company filed a tax accounting method change request on Form 3115, Application for Change in Accounting Method, with the Internal Revenue Service to properly reflect the tax treatment of the convertible securities of HIVE purchased in January 2021. In the period ending December 31, 2025, the Company recorded a tax expense of approximately $
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
U.S. Global Investors, Inc. (the “Company” or “U.S. Global”) has made forward-looking statements concerning the Company’s performance, financial condition, and operations in this report. The Company from time to time may also make forward-looking statements in its public filings and press releases. Such forward-looking statements are subject to various known and unknown risks and uncertainties and do not guarantee future performance. Actual results could differ materially from those anticipated in such forward-looking statements due to a number of factors, some of which are beyond the Company’s control, including: (i) the volatile and competitive nature of the investment management industry, (ii) changes in domestic and foreign economic conditions, including significant economic disruptions from epidemics, pandemics or outbreaks and the actions taken in connection therewith, (iii) the effect of government regulation on the Company’s business, and (iv) market, credit, and liquidity risks associated with the Company’s investment management activities. Due to such risks, uncertainties, and other factors, the Company cautions each person receiving such forward-looking information not to place undue reliance on such statements. All such forward-looking statements are current only as of the date on which such statements were made.
FACTORS AFFECTING OUR BUSINESS
The Company's business activities are affected by many factors, including, without limitation, market volatility, investor sentiment, general economic and business conditions, interest rate movements, taxes, inflation, labor costs, competitive conditions, and industry regulation, many of which are beyond the control of the Company's management. Further, the business and regulatory environments in which the Company operates remain complex, uncertain, and subject to change. We expect that regulatory requirements and developments will cause us to incur additional administrative and compliance costs. For a discussion of risk factors which could affect the Company, please refer to Item 1A, “Risk Factors” in the Annual Report on Form 10-K for the year ended June 30, 2025.
BUSINESS SEGMENTS
The Company, with principal operations located in San Antonio, Texas, manages two business segments: (1) the Company offers a broad range of investment management products and services to meet the needs of individual and institutional investors, and (2) the Company invests for its own account in an effort to add growth and value to its cash position.
The following is a brief discussion of the Company’s business segments.
Investment Management Services
The Company provides advisory services for four U.S.-based exchange-traded fund (“ETF”) clients and receives monthly advisory fees based on the net asset values of the funds. Information on the U.S.-based ETFs can be found at www.usglobaletfs.com, including the prospectus, performance and holdings. The Company also serves as investment advisor to one European-based ETF and receives a monthly advisory fee based on the net asset value of the fund. The European-based ETF is not available to U.S. investors. The ETFs’ authorized participants are not required to give advance notice prior to redemption of shares in the ETFs, and the ETFs do not charge a redemption fee.
The Company also generates operating revenues from managing and servicing U.S. Global Investors Funds (“USGIF” or the “Funds”). These revenues are largely dependent on the total value and composition of assets under its management. Fluctuations in the markets and investor sentiment directly impact the asset levels of the Funds, thereby affecting income and results of operations. Detailed information regarding the Funds managed by the Company within USGIF can be found on the Company’s website, www.usfunds.com, including the prospectus and performance information for each Fund. The mutual fund shareholders in USGIF are not required to give advance notice prior to redemption of shares in the Funds.
At December 31, 2025, total assets under management (“AUM”), including ETF and USGIF clients, were approximately $1.5 billion, compared to approximately $1.5 billion at December 31, 2024, representing an increase of $72.1 million, despite similar rounded amounts. Average AUM for the six months ended December 31, 2025, was approximately $1.4 billion, compared with $1.5 billion for the six months ended December 31, 2024, representing a decrease of $49.3 million. Total AUM was approximately $1.3 billion at June 30, 2025, the Company’s prior fiscal year end, and increased by $221.6 million during the six months ended December 31, 2025.
The following tables summarize the changes in AUM for USGIF for the three and six months ended December 31, 2025, and 2024.
| Changes in Assets Under Management |
||||||||||||||||||||||||
| Three Months Ended December 31, |
||||||||||||||||||||||||
| 2025 |
2024 |
|||||||||||||||||||||||
| (dollars in thousands) |
Equity |
Fixed Income |
Total |
Equity |
Fixed Income |
Total |
||||||||||||||||||
| Beginning Balance |
$ | 408,768 | $ | 51,356 | $ | 460,124 | $ | 256,559 | $ | 54,501 | $ | 311,060 | ||||||||||||
| Market appreciation (depreciation) |
64,754 | 345 | 65,099 | (24,141 | ) | 266 | (23,875 | ) | ||||||||||||||||
| Dividends and distributions |
(16,682 | ) | (390 | ) | (17,072 | ) | (7,591 | ) | (493 | ) | (8,084 | ) | ||||||||||||
| Net shareholder purchases (redemptions) |
12,023 | (556 | ) | 11,467 | 2,019 | (950 | ) | 1,069 | ||||||||||||||||
| Ending Balance |
$ | 468,863 | $ | 50,755 | $ | 519,618 | $ | 226,846 | $ | 53,324 | $ | 280,170 | ||||||||||||
| Average investment management fee |
0.89 | % | 0.00 | % | 0.79 | % | 0.68 | % | 0.00 | % | 0.56 | % | ||||||||||||
| Average net assets |
$ | 422,337 | $ | 50,862 | $ | 473,199 | $ | 248,025 | $ | 54,241 | $ | 302,266 |
||||||||||||
| Changes in Assets Under Management |
||||||||||||||||||||||||
| Six Months Ended December 31, |
||||||||||||||||||||||||
| 2025 |
2024 |
|||||||||||||||||||||||
| (dollars in thousands) |
Equity |
Fixed Income |
Total |
Equity |
Fixed Income |
Total |
||||||||||||||||||
| Beginning Balance |
$ | 296,756 | $ | 53,679 | $ | 350,435 | $ | 233,296 | $ | 55,102 | $ | 288,398 | ||||||||||||
| Market appreciation (depreciation) |
174,510 | 920 | 175,430 | 3,458 | 1,083 | 4,541 | ||||||||||||||||||
| Dividends and distributions |
(16,683 | ) | (800 | ) | (17,483 | ) | (7,591 | ) | (961 | ) | (8,552 | ) | ||||||||||||
| Net shareholder purchases (redemptions) |
14,280 | (3,044 | ) | 11,236 | (2,317 | ) | (1,900 | ) | (4,217 | ) | ||||||||||||||
| Ending Balance |
$ | 468,863 | $ | 50,755 | $ | 519,618 | $ | 226,846 | $ | 53,324 | $ | 280,170 | ||||||||||||
| Average investment management fee |
0.86 | % | 0.00 | % | 0.75 | % | 0.72 | % | 0.00 | % | 0.59 | % | ||||||||||||
| Average net assets |
$ | 376,566 | $ | 51,481 | $ | 428,047 | $ | 244,486 | $ | 54,724 | $ | 299,210 | ||||||||||||
As shown above, USGIF's period-end AUM at December 31, 2025, was higher than at December 31, 2024. Average net assets for both the three and six months ended December 31, 2025, were also higher than the corresponding periods in 2024. The increases in period-end AUM for both periods were primarily driven by market appreciation in the equity funds.
For both the three and six months ended December 31, 2024, USGIF's period-end AUM decreased. The decrease for the three month period was primarily driven by market depreciation in the equity funds, while the decrease for the six month period was primarily driven by dividends and distributions.
The average annualized investment management fee rate (total advisory fees, excluding performance fees, as a percentage of average assets under management) was 79 and 75 basis points for the three and six months ended December 31, 2025, respectively, compared to 56 and 59 basis points for the corresponding periods in 2024.
For equity funds, the average investment management fee was 89 and 86 basis points for the three and six months ended December 31, 2025, respectively, compared to 68 and 72 basis points for the same periods in 2024. The Company has contractually and voluntarily agreed to limit fund expenses, which resulted in fee waivers and expense reimbursements. As a result, the average investment management fee for the fixed income funds was minimal.
Corporate Investments
Management believes it can more effectively manage the Company’s cash position by broadening the types of investments used in cash management and continues to believe that such activities are in the best interest of the Company. The Company’s investment activities are reviewed and monitored by Company compliance personnel, and various reports are provided to certain investment advisory clients. Written procedures are in place to manage compliance with the code of ethics and other policies affecting the Company’s investment practices. This source of revenue does not remain consistent and is dependent on market fluctuations, the Company’s ability to participate in investment opportunities, and timing of transactions.
As of December 31, 2025, the Company held investments carried at fair value on a recurring basis of $12.9 million and a cost basis of $13.1 million. The fair value of these investments is approximately 27.4 percent of the Company’s total assets at December 31, 2025. In addition, the Company held other investments of approximately $2.8 million, and held-to-maturity debt investments, net of allowance for credit losses, of $958,000.
Investments recorded at fair value on a recurring basis were approximately $12.9 million at December 31, 2025, compared to approximately $13.8 million at June 30, 2025, the Company’s prior fiscal year end, which is a decrease of approximately $847,000. See Note 2, Investments, in the Notes to Consolidated Financial Statements of this Quarterly Report on Form 10-Q, for further information regarding investment activities.
RESULTS OF OPERATIONS – Three months ended December 31, 2025, and 2024
The Company recorded net loss of $846,000 ($(0.07) per share) for the three months ended December 31, 2025, compared with net loss of $86,000 ($(0.01) per share) for the three months ended December 31, 2024, representing a change of approximately $760,000. The change was primarily attributable to higher income tax expense in the current period, partially offset by increased operating revenues, higher net investment income, and lower operating expenses, as discussed further below.
Operating Revenues
Total consolidated operating revenues for the three months ended December 31, 2025, increased $279,000, or 12.5 percent, compared with the same period in 2024. The increase was primarily attributable to the following factors:
|
|
• |
There were no performance fee adjustments for USGIF in the current period, compared with fees paid of $56,000 in the prior year period, representing a favorable change. The USGIF performance fee, which applied to the equity funds only, were fulcrum fees consisting of a 0.25 percent upwards or downwards adjustment of the base management fee when there was a 5 percent or more performance difference between a fund’s performance and that of its designated benchmark index over the prior rolling 12 months. This performance adjustment began to be phased out during the fourth quarter of fiscal 2024 and ceased during the fourth quarter of fiscal 2025. During the phase-out period, the adjustment for the performance fee could only be adjusted downward. |
|
|
• |
Administrative service fees for USGIF increased by $22,000, reflecting higher average assets under management, primarily in equity funds. |
|
|
• |
Base management fees increased by $201,000. ETF unitary management fees decreased by $315,000 primarily due to lower average assets under management in the Jets ETF. These decreases were more than offset by a $516,000 increase in USGIF advisory fees, reflecting higher average assets under management, primarily in equity funds. |
Operating Expenses
Total consolidated operating expenses for the three months ended December 31, 2025, decreased by $172,000, or 6.2 percent, compared with the same period in 2024.
The decrease was primarily attributable to a $207,000, or 14.9 percent, reduction in general and administrative expenses, primarily related to lower ETF-related costs, partially offset by a $45,000, or 3.7 percent, increase in employee compensation and benefits, reflecting higher bonus expense.
Other Income (Loss)
Total consolidated other income was $623,000 for the three months ended December 31, 2025, an increase of $200,000 compared with $423,000 in the prior year period. The increase was primarily driven by higher net investment income, reflecting unrealized gains on investment securities and favorable foreign currency movements, partially offset by lower interest and dividend income.
Net investment income totaled $541,000 in the current period, compared with $354,000 in the prior year period. The change was driven by the following factors:
| • | Net unrealized gains on equity securities and debt securities classified as trading totaled $28,000 in the current period, compared with net unrealized losses of $221,000 in the prior year period, reflecting a favorable change of $249,000. | |
| • | Dividend and interest income was $421,000 in the current period, compared with $649,000 in the prior year period, reflecting an unfavorable change of $228,000. The change primarily reflects lower interest income earned on the Company's investment in HIVE convertible debentures due to principal repayments. | |
| • | Realized gains on debt securities were $38,000 in the current period, compared with $170,000 in the prior year period, resulting in an unfavorable change of $132,000. |
| • | Foreign currency gains were $57,000 in the current period, compared with losses of $239,000 in the prior year period, reflecting a favorable change of $296,000. |
Provision for Income Taxes
Income tax expense was $1.4 million for the three months ended December 31, 2025, compared with an income tax benefit of $30,000 for the same period in 2024, representing a change of $1.4 million. The increase in income tax expense was primarily attributable to tax adjustments of $1.3 million related to the federal income tax treatment of certain HIVE convertible securities. In connection with its evaluation of the appropriate tax treatment of these securities, the Company determined that a change in tax accounting method would be required and subsequently filed a tax accounting method change request on Form 3115 with the Internal Revenue Service. As of December 31, 2025, the method change had not yet been filed and, in accordance with U.S. GAAP, the Company’s interim tax provision does not reflect tax accounting method change.
The Company filed the non-automatic Form 3115 subsequent to December 31, 2025. The Company expects to record an offsetting $1.3 million tax benefit in the quarter ending March 31, 2026. As a result, comparability of the Company’s effective tax rate between periods will be affected.
RESULTS OF OPERATIONS – Six months ended December 31, 2025, and 2024
The Company recorded net income of $661,000 ($0.05 per share) for the six months ended December 31, 2025, compared with $229,000 ($0.02 per share) for the same period in 2024, representing an increase of approximately $432,000. The increase was primarily attributable to higher net investment income, increased operating revenues, and lower operating expenses, partially offset by higher income tax expense in the current period, as discussed further below.
Operating Revenues
Total consolidated operating revenues for the six months ended December 31, 2025, increased by $373,000, or 8.5 percent, compared with the same period in 2024. The increase was primarily attributable to the following factors:
|
|
• |
There were no performance fee adjustments for USGIF in the current period, compared with fees paid of $159,000 in the prior year period, representing a favorable change. The USGIF performance fee, which applied to the equity funds only, were fulcrum fees consisting of a 0.25 percent upwards or downwards adjustment of the base management fee when there was a 5 percent or more performance difference between a fund’s performance and that of its designated benchmark index over the prior rolling 12 months. This performance adjustment began to be phased out during the fourth quarter of fiscal 2024 and ceased during the fourth quarter of fiscal 2025. During the phase-out period, the adjustment for the performance fee could only be adjusted downward. |
|
|
• |
Administrative service fees for USGIF increased by $34,000, reflecting higher average assets under management, primarily in equity funds. |
|
|
• |
Base management fees increased by $180,000. ETF unitary management fees decreased by $555,000, primarily due to lower average assets under management in the Jets ETF. These decreases were more than offset by a $735,000 increase in USGIF advisory fees, reflecting higher average assets under management, primarily in equity funds. |
Operating Expenses
Total consolidated operating expenses for the six months ended December 31, 2025, decreased by $122,000, or 2.2 percent, compared with the same period in 2024.
The decrease was primarily attributable to a $298,000, or 10.3 percent, reduction in general and administrative expenses, primarily related to lower ETF-related costs. This decrease was partially offset by a $146,000, or 6.3 percent, increase in employee compensation and benefits, reflecting higher bonus expense, and a $44,000, or 18.0 percent, increase in advertising expenses related to expanded ETF marketing efforts.
Other Income (Loss)
Total consolidated other income was $3.0 million for the six months ended December 31, 2025, an increase of $1.6 million compared with $1.4 million in the prior year period. The increase was primarily driven by higher net investment income, reflecting unrealized gains on investment securities, partially offset by lower interest and dividend income.
Net investment income totaled $2.8 million in the current period, compared with $1.3 million in the prior year period. The change was driven by the following factors:
| • | Net unrealized gains on equity securities and debt securities classified as trading totaled $1.9 million in the current period, compared with unrealized losses of $148,000 in the prior year period, reflecting a favorable change of $2.1 million. The current period includes $1.3 million of unrealized gains recognized under the measurement alternative; no such gains were recognized in the prior year period. The unrealized gains recognized during the period under the measurement alternative resulted from observable price changes in orderly transactions for identical or similar securities and are discussed further in Note 2, Investments, in the Notes to Consolidated Financial Statements of this Quarterly Report on Form 10-Q. |
|
| • | Dividend and interest income was $819,000 in the current period compared with $1.3 million in the prior year period, an unfavorable change of $431,000. The change primarily reflects lower interest income earned on the Company's investment in HIVE convertible debentures due to principal repayments. | |
| • | Realized gains on debt securities were $108,000 in the current period, compared with $373,000 in the prior year period, resulting in an unfavorable change of $265,000. |
| • | Foreign currency losses were $36,000 in the current period, compared with losses of $193,000 in the prior year period, reflecting a favorable change of $157,000. |
Provision for Income Taxes
Income tax expense was $1.7 million for the six months ended December 31, 2025, compared with $91,000 for the same period in 2024, representing a change of $1.6 million. The increase in income tax expense was primarily attributable to $1.3 million tax adjustments related to the federal income tax treatment of certain HIVE convertible securities. In connection with its evaluation of the appropriate tax treatment of these securities, the Company determined that a change in tax accounting method would be required and subsequently filed a non-automatic Form 3115 with the Internal Revenue Service. As of December 31, 2025, the method change had not yet been filed and, accordingly, the Company’s interim tax provision does not reflect the tax accounting method change.
The Company filed the non-automatic Form 3115 subsequent to December 31, 2025. The expects to record an offsetting $1.3 million benefit in the quarter ending March 31, 2026. As a result, comparability of the Company’s effective tax rate between periods will be affected.
LIQUIDITY AND CAPITAL RESOURCES
At December 31, 2025, the Company had net working capital (current assets minus current liabilities) of approximately $36.7 million, a decrease of $580,000, or 1.6 percent, since June 30, 2025, and a current ratio (current assets divided by current liabilities) of 19.4 to 1. With approximately $25.2 million in cash and cash equivalents, an increase of $675,000, or 2.7 percent since June 30, 2025, and $12.9 million in securities carried at fair value on a recurring basis, which together comprise approximately 80.8 percent of total assets, the Company has adequate liquidity to meet its current obligations.
The increase in cash and cash equivalents was primarily due to proceeds from principal paydowns of $2.3 million, proceeds on the sale of corporate investments of $500,000, return of capital distributions of $180,000, and net cash provided by operating activities of $224,000; partially offset by repurchases of the Company's common stock of $1.1 million, purchases of corporate investments of $918,000, and dividends paid of $579,000. Consolidated shareholders’ equity at December 31, 2025, was $44.2 million, a decrease of $1.0 million, or 2.3 percent since June 30, 2025. The decrease was primarily driven by repurchases of the Company's common stock (including excise tax) of $1.1 million, and $571,000 of dividends declared, partially offset by net income of $661,000 during the six months ended December 31, 2025.
The Company also has access to a $1.0 million credit facility, which can be utilized for working capital purposes. The credit agreement requires the Company to maintain certain covenants; the Company has been in compliance with these covenants during the current fiscal year. The credit agreement expires on May 31, 2026, and the Company intends to renew it biennially. The credit facility is collateralized by approximately $1.0 million, included in restricted cash on the Consolidated Balance Sheets, held in deposit in a money market account at the financial institution that provided the credit facility. As of December 31, 2025, this credit facility remained unutilized by the Company.
Investment advisory contracts pursuant to the Investment Company Act of 1940 and related affiliated contracts in the U.S., by law, may not exceed one year in length and, therefore, must be renewed at least annually after an initial two-year term. The investment advisory and related contracts between the Company and USGIF have been renewed through September 2026. The advisory agreement for the U.S.-based ETFs has been renewed through July 2026.
The primary cash requirements are for operating activities. The Company also uses cash to purchase investments, pay dividends and repurchase Company stock. The cash outlays for investments and dividend payments are discretionary and management or the Board may discontinue as deemed necessary. The stock repurchase plan is approved through December 31, 2026, but may be suspended or discontinued. Cash and securities recorded at fair value on a recurring basis of approximately $38.1 million are available to fund current activities.
Management believes current cash reserves, investments, and financing available will be sufficient to meet foreseeable cash needs for operating activities.
CRITICAL ACCOUNTING ESTIMATES
For a discussion of other critical accounting policies that the Company follows, please refer to Item 7 in the Annual Report on Form 10-K for the year ended June 30, 2025.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Macroeconomic declines, including inflation; negative political developments, including volatile market conditions due to investor concerns regarding inflation, and the Russia-Ukraine and Middle East conflicts; adverse market conditions, including cryptocurrency market disruptions; and catastrophic events may cause a decline in the Company’s revenue, an increase in the Company’s costs, negatively affect the Company’s operating results, adversely affect the Company’s cash flow, and could result in a decline in the Company’s stock price.
Additionally, prolonged or intensifying trade wars, including tariffs, trade restrictions, and retaliatory measures, may disrupt global capital flows, heighten market volatility, and depress asset prices. Such uncertainty could lead to shifts in investor sentiment, changes in asset allocation trends, and increased redemption activity, all of which may result in lower assets under management (AUM) and reduced management fees. Market declines may also reduce the valuation of the Company’s corporate investments, further impacting the Company’s balance sheet and overall financial results.
Investment Management and Administrative Services Fees
Revenues are generally based upon a percentage of assets under management in accordance with contractual agreements. Accordingly, fluctuations in the financial markets have a direct effect on the Company’s operating results. A portion of assets under management have exposure to international markets and/or natural resource sectors, which may experience volatility. In addition, fluctuations in interest rates may affect the value of assets under management in fixed income funds.
Corporate Investments
The Company’s Consolidated Balance Sheets include significant amounts of assets whose fair values are subject to market risk. The market risks are primarily associated with equity prices and foreign currency exchange rates. The fair values of corporate investments with exposure to the cryptocurrency industry are subject to considerable volatility.
The Company’s investment activities are reviewed and monitored by Company compliance personnel, and various reports are provided to certain investment advisory clients. Written procedures are in place to manage compliance with the code of ethics and other policies affecting the Company’s investment practices.
Equity price risk
Due to the Company’s investments in securities carried at fair value, equity price fluctuations represent a market risk factor affecting the Company’s consolidated financial position. The carrying values of investments subject to equity price risks are based on quoted market prices or, if not actively traded, management’s estimate of fair value as of the balance sheet date. Market prices fluctuate, and the amount realized in the subsequent sale of an investment may differ significantly from the reported fair value.
The following table summarizes the Company’s equity price risks in securities carried at fair value on a recurring basis as of December 31, 2025, and shows the effects of a hypothetical 25 percent increase and a 25 percent decrease in market prices.
| Estimated Fair Value | Estimated Increase | ||||||||||||
| Fair Value at |
Hypothetical |
After Hypothetical |
(Decrease) in |
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| (dollars in thousands) |
December 31, 2025 |
Percentage Change |
Price Change |
Net Income (Loss)(1) |
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| Trading securities at fair value |
$ | 12,917 | 25% increase |
$ | 16,146 | $ | 2,551 | ||||||
| 25% decrease |
$ | 9,688 | $ | (2,551 | ) | ||||||||
| 1. |
Changes in unrealized gains and losses on trading securities at fair value are included in earnings in the Consolidated Statements of Operations. The estimated increase (decrease) is after income taxes at the statutory rate in effect as of the balance sheet date. |
The selected hypothetical changes do not reflect what could be considered best- or worst-case scenarios. Results could be significantly different due to both the nature of markets and the concentration of the Company’s investment portfolio.
Interest rate risk
Due to the Company’s investments in debt securities, interest rate fluctuations represent a market risk factor affecting the Company’s consolidated financial position. Debt securities may fluctuate in value due to changes in interest rates. Generally, investments subject to interest rate risk will decrease in value when interest rates rise and increase in value when interest rates decline. Fluctuations in interest rates could have a material impact on the Company’s investments in debt securities included on the Consolidated Balance Sheets and interest income recognized in net investment income (loss).
Foreign currency risk
A portion of cash and certain corporate investments are denominated in foreign currencies. Adverse changes in foreign currency exchange rates may reduce the value of those assets. In addition, certain assets under management have exposure to foreign currency fluctuations in various markets, which may adversely impact their valuation and, consequently, the revenue received by the Company.
Additionally, escalating trade tensions and retaliatory measures, such as tariffs, trade restrictions, or capital controls, could contribute to currency volatility, disrupt cross-border transactions, and affect the liquidity and valuation of foreign-denominated assets. These factors may further impact the Company's financial condition and operating results.
Indirect exposure to cryptocurrencies risk
Cryptocurrencies (also referred to as “virtual currencies” and “digital currencies”) are digital assets that are designed to act as a medium of exchange. Although the Company has no current intention of directly investing in cryptocurrencies, the Company has indirect exposure to cryptocurrencies by investing in securities of issuers with operations in the cryptocurrency industry, such as mining companies, as well as in ETFs that hold cryptocurrency-related assets. Cryptocurrencies (some of the most well-known include Bitcoin and Ethereum) are not backed by any government, corporation, or other identified body. Trading markets for cryptocurrencies are subject to an evolving and fragmented regulatory framework. While certain jurisdictions, such as the European Union and the United States, have recently implemented or proposed regulatory regimes, other markets remain less regulated. As a result, cryptocurrency markets may be more exposed to operational or technical issues, as well as the potential for fraud or manipulation, compared with the established, regulated exchanges for securities, derivatives, and traditional currencies.
Cryptocurrencies have been subject to significant fluctuations in value. The value of a cryptocurrency may significantly fluctuate precipitously (including declining to zero) and unpredictably for a variety of reasons, including, but not limited to: investor perceptions and expectations; regulatory changes; general economic conditions; adoption and use in the retail and commercial marketplace; public opinion regarding the environmental impact of the creation (“minting” or “mining”) of cryptocurrency; confidence in, and the maintenance and development of, its network and open-source software protocols such as blockchain for ensuring the integrity of cryptocurrency transactional data; and general risks tied to the use of information technologies, including cybersecurity risks.
ITEM 4. CONTROLS AND PROCEDURES
An evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of December 31, 2025, was conducted under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures were effective as of December 31, 2025.
There has been no change in the Company’s internal control over financial reporting that occurred during the three and six months ended December 31, 2025, that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
PART II. OTHER INFORMATION
ITEM 1A. RISK FACTORS
For a discussion of risk factors which could affect the Company, please refer to Item 1A, “Risk Factors” in the Annual Report on Form 10-K for the year ended June 30, 2025. There have been no material changes since the fiscal year end to the risk factors listed therein.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Issuer Purchases of Equity Securities
| (dollars in thousands, except price data) |
|||||||||||||||||||||
| Total Number |
Total Number of Shares |
Approximate Dollar Value |
|||||||||||||||||||
| of Shares |
Total Amount |
Average Price |
Purchased as Part of |
of Shares that May Yet Be |
|||||||||||||||||
| Period |
Purchased (1) |
Purchased |
Paid Per Share (2) |
Publicly Announced Plan(3) |
Purchased Under the Plan |
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| 10-01-25 to 10-31-25 | 106,024 | $ | 284 | $ | 2.68 | 106,024 | $ | 3,458 | |||||||||||||
| 11-01-25 to 11-30-25 | 75,866 | 184 | $ | 2.42 | 75,866 | $ | 3,274 | ||||||||||||||
| 12-01-25 to 12-31-25 | 80,305 | 197 | $ | 2.45 | 80,305 | $ | 3,077 | ||||||||||||||
| Total |
262,195 | $ | 665 | $ | 2.53 | 262,195 | |||||||||||||||
| 1. |
The Board of Directors of the Company approved on December 7, 2012, and has renewed annually, repurchases of up to $2.75 million in each of calendar years 2013 through 2022 of its outstanding class A common stock from time to time on the open market in accordance with all applicable rules and regulations. On February 25, 2022, the Company announced that the Board of Directors of the Company approved an increase to the limit of its annual share buyback program from $2.75 million to $5.0 million. The Board of Directors of the Company approved and has renewed annually, repurchases of up to $5.0 million in each calendar years 2023 through 2026. |
| 2. |
The average price paid per share of stock repurchased under the stock repurchase program includes the commissions paid to brokers. |
| 3. |
The total amount of shares that may be repurchased in 2025 under the program was $5.0 million. The total amount of shares that may be repurchased in 2026 under the program is $5.0 million. |
ITEM 5. OTHER INFORMATION
During the three months ended December 31, 2025, no director or officer of the Company adopted, terminated, or modified a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement," as each term is defined in Item 408(a) of Regulation S-K.
ITEM 6. EXHIBITS
| 1. Exhibits – |
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| 31.1 |
Rule 13a-14(a) Certifications (under Section 302 of the Sarbanes-Oxley Act of 2002), included herein. |
| 32.1 |
Section 1350 Certifications (under Section 906 of the Sarbanes-Oxley Act Of 2002), included herein. |
| 101.INS |
Inline XBRL Instance Document |
| 101.SCH |
Inline XBRL Taxonomy Extension Schema Document |
| 101.CAL |
Inline XBRL Taxonomy Extension Calculation Linkbase Document |
| 101.DEF |
Inline XBRL Taxonomy Extension Definition Linkbase Document |
| 101.LAB |
Inline XBRL Taxonomy Extension Labels Linkbase Document |
| 101.PRE |
Inline XBRL Taxonomy Extension Presentation Linkbase Document |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
SIGNATURES
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 thereto duly authorized.
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U.S. GLOBAL INVESTORS, INC. |
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| DATED: |
February 20, 2026 |
BY: /s/ Frank E. Holmes |
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Frank E. Holmes |
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Chief Executive Officer |
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| DATED: |
February 20, 2026 | BY: /s/ Lisa C. Callicotte |
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Lisa C. Callicotte |
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Chief Financial Officer |
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FAQ
How did U.S. Global Investors (GROW) perform for the six months ended December 31, 2025?
What drove U.S. Global Investors’ quarterly loss in the December 2025 period?
How significant is U.S. Global Investors’ investment portfolio to its balance sheet?
What capital return actions did U.S. Global Investors (GROW) take during this period?
How has U.S. Global Investors’ exposure to HIVE changed by December 31, 2025?
What is U.S. Global Investors’ liquidity and debt position at December 31, 2025?
What notable subsequent events did U.S. Global Investors disclose after December 31, 2025?
