U.S. Global Investors quarterly net income falls to $171K
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
U.S. Global Investors, Inc. (GROW) reported operating revenue of $2.657 million for the quarter ended September 30, 2026, up 18.0% from a year earlier; operating expenses were $2.602 million, down 5.9%. Net income was $171,000, or $0.01 per share, compared with $1.507 million, or $0.12 per share, in the prior-year quarter. The decline primarily reflected net investment income of $112,000, versus $2.277 million a year earlier, including $185,000 of net unrealized losses on trading securities compared with $1.9 million in net unrealized gains.
Total assets under management were approximately $1.6 billion at September 30, down $64.2 million from June 30, but up $231.2 million from a year earlier. Net operating cash was $528,000. GROW repurchased 105,457 Class A shares for approximately $319,000 and authorized a monthly dividend of $0.0075 per share from October through December 2026.
Management concluded disclosure controls were not effective as of September 30, 2026, because the material weakness reported at June 30 persisted. It said the statements fairly present its financial position, results and cash flows in all material respects, and that cash reserves, investments and available financing would be sufficient to meet foreseeable operating needs.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate pointOperating revenue rose 18.0% to $2.657 million.
Negative
- Major pointDisclosure controls were not effective as of September 30, 2026.
- Moderate pointNet income fell to $171,000 from $1.507 million.
Filing Explained
As of
Key Figures
Key Terms
variable interest entity financial
Current Expected Credit Losses financial
measurement alternative financial
held-to-maturity financial
assets under management financial
material weakness technical
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What were GROW's revenue and net income for the September 2026 quarter?
Why did GROW's net income fall in the September 2026 quarter?
How much dividend did GROW expect to pay from October to December 2026?
AI-generated analysis. How Rhea-AI works. Not financial advice.
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).
Table of Contents
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 November 5, 2026, there were 13,867,059 shares of Registrant’s class A nonvoting common stock issued and
Table of Contents
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 |
23 |
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
27 |
ITEM 4. CONTROLS AND PROCEDURES |
28 |
|
|
PART II. OTHER INFORMATION |
29 |
|
|
ITEM 1A. RISK FACTORS |
29 |
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
29 |
ITEM 5. OTHER INFORMATION |
29 |
ITEM 6. EXHIBITS |
30 |
|
|
SIGNATURES |
31 |
Table of Contents
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
U.S. GLOBAL INVESTORS, INC.
CONSOLIDATED BALANCE SHEETS
|
| September 30, 2026 |
|
| June 30, 2026 |
| ||
(dollars in thousands) |
| (unaudited) |
|
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| |
Assets |
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Current Assets |
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Cash and cash equivalents |
| $ |
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| $ |
| ||
Restricted cash |
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| ||
Investments in trading securities at fair value, current |
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| ||
Investments in held-to-maturity debt securities at amortized cost, current |
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| ||
Less: Allowance for credit losses |
|
| ( | ) |
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| ( | ) |
Investments in held-to-maturity debt securities, net of allowance for credit losses, current |
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| ||
Accounts and other receivables (net of allowance for credit losses of $0, and $0, respectively) |
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Tax receivable |
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Prepaid expenses |
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Total Current Assets |
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Net Property and Equipment |
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Other Assets |
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Deferred tax asset |
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Investments in trading securities at fair value, non-current |
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Other investments |
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| ||
Finance lease, right of use assets |
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Other assets, non-current |
|
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| ||
Total Other Assets |
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| ||
Total Assets |
| $ |
|
| $ |
| ||
Liabilities and Shareholders’ Equity |
|
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Current Liabilities |
|
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Accounts payable |
| $ |
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| $ |
| ||
Accrued compensation and related costs |
|
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| ||
Dividends payable |
|
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| ||
Finance lease liability, short-term |
|
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| ||
Other accrued expenses |
|
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| ||
Total Current Liabilities |
|
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| ||
Long-Term Liabilities |
|
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|
Deferred tax liability |
|
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| ||
Reserve for uncertain tax positions |
|
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| ||
Notes payable |
|
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| ||
Finance lease liability, long-term |
|
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| ||
Total Long-Term Liabilities |
|
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| ||
Total Liabilities |
|
|
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| ||
|
|
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|
Commitments and Contingencies (Note 13) |
|
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Shareholders’ Equity |
|
|
|
|
|
|
|
|
Common stock (class A) - $0.025 par value; nonvoting; 28,000,000 shares authorized; 13,866,999 shares issued at September 30, 2026, and June 30, 2026; 10,176,329 and 10,275,982 shares outstanding at September 30, 2026, and June 30, 2026, respectively |
|
|
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|
|
| ||
Common stock (class B) - $0.025 par value; nonvoting; 4,500,000 shares authorized; no shares issued |
|
|
|
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|
| ||
Convertible common stock (class C) - $0.025 par value; voting; 3,500,000 shares authorized; 2,068,549 shares issued and outstanding at September 30, 2026, and June 30, 2026 |
|
|
|
|
|
| ||
Additional paid-in-capital |
|
|
|
|
|
| ||
Treasury stock, class A shares at cost; 3,690,670 and 3,591,017 shares at September 30, 2026, and June 30, 2026, 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.
Page 1
Table of Contents
U.S. GLOBAL INVESTORS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
|
| Three Months Ended |
| |||||
|
| September 30, |
| |||||
(dollars in thousands, except per share data) |
| 2026 |
|
| 2025 |
| ||
Operating Revenues |
|
|
|
|
|
|
|
|
Advisory fees |
| $ |
|
| $ |
| ||
Administrative services fees |
|
|
|
|
|
| ||
Total Operating Revenues |
|
|
|
|
|
| ||
Operating Expenses |
|
|
|
|
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|
|
|
Employee compensation and benefits |
|
|
|
|
|
| ||
General and administrative |
|
|
|
|
|
| ||
Advertising |
|
|
|
|
|
| ||
Depreciation |
|
|
|
|
|
| ||
Interest |
|
|
|
|
|
| ||
Total Operating Expenses |
|
|
|
|
|
| ||
Operating Income (Loss) |
|
|
|
|
| ( | ) | |
Other Income (Loss) |
|
|
|
|
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|
|
Net investment income (loss) |
|
|
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| ||
Other income (loss) |
|
|
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|
|
| ||
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.
Page 2
Table of Contents
U.S. GLOBAL INVESTORS, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)
|
| Three Months Ended |
| |||||
|
| September 30, |
| |||||
(dollars in thousands) |
| 2026 |
|
| 2025 |
| ||
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) |
|
|
|
|
| ( | ) | |
Comprehensive Income (Loss) |
| $ |
|
| $ |
| ||
The accompanying notes are an integral part of these Consolidated Financial Statements.
Page 3
Table of Contents
U.S. GLOBAL INVESTORS, INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (UNAUDITED)
|
| Common Stock |
|
| Convertible Common Stock |
|
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| Treasury Stock |
|
| Accumulated |
|
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| ||||||||||||||||
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| (class A) |
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| (class C) |
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| Additional |
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| Other |
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| Paid-in |
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| Comprehensive |
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| Retained |
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| |||
(dollars in thousands) |
| Shares |
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| Par Value |
|
| Shares |
|
| Par Value |
|
| Capital |
|
| Shares |
|
| Cost |
|
| Income (Loss) |
|
| Earnings |
|
| Total |
| ||||||||||
Balance at June 30, 2026 |
|
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| $ |
|
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| $ |
|
| $ |
|
|
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|
| $ | ( | ) |
| $ |
|
| $ |
|
| $ |
| |||||||||
Repurchases of Common stock (class A), including excise tax |
|
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| ( | ) |
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| ( | ) | ||||||||
Issuance of Common stock (class A) under ESPP |
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| ( | ) |
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| |||||||||
Dividends declared |
|
| - |
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| - |
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| - |
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| ( | ) |
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| ( | ) | |||||
Net income (loss) |
|
| - |
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| - |
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| - |
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| |||||||
Balance at September 30, 2026 |
|
|
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| $ |
|
|
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| $ |
|
| $ |
|
|
|
|
| $ | ( | ) |
| $ |
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| $ |
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| $ |
| |||||||||
|
| Common Stock |
|
| Convertible Common Stock |
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| Treasury Stock |
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| Accumulated |
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| ||||||||||||||||
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| (class A) |
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| (class C) |
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| Additional |
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| Other |
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| Paid-in |
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| Comprehensive |
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| Retained |
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(dollars in thousands) |
| Shares |
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| Par Value |
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| Shares |
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| Par Value |
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| Capital |
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| Shares |
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| Cost |
|
| Income (Loss) |
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| Earnings |
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| Total |
| ||||||||||
Balance at June 30, 2025 |
|
|
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| $ |
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| $ |
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| $ |
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|
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| $ | ( | ) |
| $ |
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| $ |
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| $ |
| |||||||||
Repurchases of Common stock (class A), including excise tax |
|
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| ( | ) |
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| ( | ) | ||||||||
Issuance of Common stock (class A) under ESPP |
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| ( | ) |
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| ( | ) |
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| ||||||||
Share-based compensation, net of tax |
|
| - |
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| - |
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| - |
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| |||||||
Dividends declared |
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| - |
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| - |
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| - |
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| ( | ) |
|
| ( | ) | |||||
Other comprehensive income (loss), net of tax |
|
| - |
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| - |
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|
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| - |
|
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| ( | ) |
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| ( | ) | |||||
Net income (loss) |
|
| - |
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| - |
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| - |
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| |||||||
Balance at September 30, 2025 |
|
|
|
| $ |
|
|
|
|
| $ |
|
| $ |
|
|
|
|
| $ | ( | ) |
| $ |
|
| $ |
|
| $ |
| |||||||||
The accompanying notes are an integral part of these Consolidated Financial Statements.
Page 4
Table of Contents
U.S. GLOBAL INVESTORS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
|
| Three Months Ended September 30, |
| |||||
(dollars in thousands) |
| 2026 |
|
| 2025 |
| ||
Cash Flows from Operating Activities: |
|
|
|
|
|
|
|
|
Net income (loss) |
| $ |
|
| $ |
| ||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |
|
|
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|
|
Depreciation, amortization and accretion |
|
|
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| ( | ) | |
Net realized (gains) losses on securities |
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| ( | ) | |
Net unrealized (gains) losses on securities |
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| ( | ) | |
Provision for deferred taxes |
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| ||
Reserve for uncertain tax positions |
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| ( | ) | |
Share-based compensation expense |
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| ||
Allowance for credit losses |
|
| ( | ) |
|
| ( | ) |
Changes in operating assets and liabilities: |
|
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|
|
Accounts and other receivables |
|
|
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| ( | ) | |
Prepaid expenses and other assets |
|
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| ||
Accounts payable and other accrued liabilities |
|
| ( | ) |
|
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| |
Total adjustments |
|
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| ( | ) | |
Net cash provided by (used in) operating activities |
|
|
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| ( | ) | |
Cash Flows from Investing Activities: |
|
|
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Purchase of property and equipment |
|
| ( | ) |
|
|
| |
Purchase of trading securities at fair value, non-current |
|
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| ( | ) | |
Proceeds from principal paydowns of available-for-sale debt securities at fair value |
|
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| ||
Return of capital on non-current investments |
|
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| ||
Net cash provided by (used in) investing activities |
|
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| ||
Cash Flows from Financing Activities: |
|
|
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|
Principal payments on finance lease |
|
| ( | ) |
|
| ( | ) |
Issuance of common stock |
|
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| ||
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 |
|
|
|
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|
| ||
Ending cash, cash equivalents, and restricted cash |
| $ |
|
| $ |
| ||
|
|
|
|
|
|
|
|
|
Supplemental Disclosures of Non-Cash Investing and Financing Activities |
|
|
|
|
|
|
|
|
Dividends declared but not paid |
| $ |
|
| $ |
| ||
Excise tax accrued on stock repurchases |
| $ |
|
| $ |
| ||
Lease liabilities obtained from new ROU assets - finance |
| $ |
|
| $ |
| ||
Unsettled class A common stock repurchases |
| $ |
|
| $ |
| ||
|
|
|
|
|
|
|
|
|
Supplemental Disclosures of Cash Flow Information |
|
|
|
|
|
|
|
|
Cash paid for income taxes, net of refunds |
| $ |
|
| $ |
| ||
Cash paid for interest |
| $ |
|
| $ |
| ||
The accompanying notes are an integral part of these Consolidated Financial Statements.
Page 5
Table of Contents
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, 2026 ("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, it 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 amounts of assets 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) |
| September 30, 2026 |
|
| June 30, 2026 |
| ||
Investments in trading securities at fair value, current |
| $ |
|
| $ |
| ||
Investments in trading securities at fair value, non-current |
|
|
|
|
|
| ||
Accounts and 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.
Page 6
Table of Contents
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, 2027 (“fiscal 2027”).
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 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. The Company adopted ASU 2023-09 retrospectively for the fiscal year ended June 30, 2026. The adoption resulted in enhanced income tax disclosures and did not have a material impact on the Company's consolidated financial position, results of operations or net cash flows.
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.
Page 7
Table of Contents
NOTE 2. INVESTMENTS
Concentrations of Credit Risk
A significant portion of the Company’s investments measured at fair value on a recurring basis consists of investments in USGIF, with fair values of approximately $
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.
Page 8
Table of Contents
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 summarizes the major categories of investments with fair values adjusted on a recurring basis as of September 30, 2026, and June 30, 2026, and other investments adjusted to fair value on a nonrecurring basis during the periods presented, with fair values shown according to the fair value hierarchy.
|
| September 30, 2026 |
| |||||||||||||
|
|
|
|
|
| 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 investments carried at fair value on a recurring basis: |
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||
|
| June 30, 2026 |
| |||||||||||||
|
|
|
|
|
| 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 investments carried at fair value on a recurring basis: |
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||
Investments carried at fair value on a nonrecurring basis: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other investments 1 |
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||
1. | The fair value measurements presented occurred during the fiscal year ended June 30, 2026, and do not represent fair values as of June 30, 2026. Other investments include equity securities without readily determinable fair values that were adjusted under the measurement alternative. These securities are classified within Level 3 of the fair value hierarchy due to the limited availability of observable market data and the infrequency of observable price changes. |
Page 9
Table of Contents
The Company holds
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 September 30, 2026, and June 30, 2026.
|
| September 30, 2026 |
| |||||||||
(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 trading securities at fair value |
| $ |
|
| $ | ( | ) |
| $ |
| ||
|
| June 30, 2026 |
| |||||||||
(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 trading securities at fair value |
| $ |
|
| $ | ( | ) |
| $ |
| ||
Page 10
Table of Contents
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).
At September 30, 2026, and June 30, 2026, 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 investment as of September 30, 2026, and June 30, 2026.
|
| September 30, 2026 |
| |||||||||||||||||||||
(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, 2026 |
| |||||||||||||||||||||
(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. |
Page 11
Table of Contents
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 September 30, 2026, and June 30, 2026, 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 three months ended September 30, 2026, and 2025.
|
| Three Months Ended |
| |||||
|
| September 30, |
| |||||
(dollars in thousands) |
| 2026 |
|
| 2025 |
| ||
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 presents the net carrying amount and estimated fair value of the held-to-maturity debt security at September 30, 2026, based on its contractual maturity date.
|
| September 30, 2026 |
| |
|
| Held-to-maturity |
| |
|
| debt securities |
| |
|
| Due in less than |
| |
(dollars in thousands) |
| one year |
| |
Amortized Cost |
| $ |
| |
Fair Value |
| $ |
| |
As of September 30, 2026, and June 30, 2026, the held-to-maturity debt investment was not delinquent or in a non-accrual status. Accrued interest receivable of $
Page 12
Table of Contents
Other Investments
Other investments consist of equity securities that do not have readily determinable fair values and for which the Company does not exercise significant influence. These investments are accounted for under the measurement alternative in accordance with ASC 321 and are carried at cost, less impairment, if any, adjusted for observable price changes in orderly transactions for identical or similar securities of the same issuer. Resulting gains and losses are recognized in net investment income (loss). These investments are not subject to recurring fair value measurements.
The carrying value of equity securities without readily determinable fair values was approximately $
|
| Three Months Ended |
| |||||
|
| September 30, |
| |||||
(dollars in thousands) |
| 2026 |
|
| 2025 |
| ||
Other Investments |
|
|
|
|
|
|
|
|
Carrying value |
| $ |
|
| $ |
| ||
Upward carrying value changes |
| $ |
|
| $ |
| ||
Downward carrying value changes/impairment |
| $ |
|
| $ |
| ||
Period-end carrying values reflect cumulative purchases, sales, return of capital distributions, and adjustments recognized under the measurement alternative. Through September 30, 2026, cumulative upward adjustments totaled $
Net Investment Income (Loss)
Net investment income (loss) from the Company’s investments includes:
| ● | realized gains and losses on sales of securities; |
| ● | 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 |
| ● | foreign currency gains and losses. |
Page 13
Table of Contents
The following summarizes net investment income (loss) reflected in earnings for the periods presented.
|
| Three Months Ended |
| |||||
(dollars in thousands) |
| September 30, |
| |||||
Net Investment Income (Loss) |
| 2026 |
|
| 2025 |
| ||
Net realized gains (losses) on debt securities |
| $ |
|
| $ |
| ||
Net unrealized gains (losses) on equity securities |
|
| ( | ) |
|
|
| |
Net unrealized gains (losses) on debt securities |
|
|
|
|
| ( | ) | |
Net unrealized gains (losses) on cash equivalents |
|
| ( | ) |
|
|
| |
Dividend and interest income |
|
|
|
|
|
| ||
Net realized foreign currency gains (losses) |
|
| ( | ) |
|
| ( | ) |
Total Net Investment Income (Loss) |
| $ |
|
| $ |
| ||
During the three months ended September 30, 2025, the Company reclassified $
The following table presents gains and losses recognized in net investment income (loss) during the three months ended September 30, 2026, and 2025, related to equity and debt securities classified as trading. For equity securities, amounts include gains and losses recognized under the measurement alternative for securities without readily determinable fair values.
|
| Three Months Ended |
| |||||
|
| September 30, |
| |||||
(dollars in thousands) |
| 2026 |
|
| 2025 |
| ||
Equity securities: |
|
|
|
|
|
|
|
|
Net gains and losses recognized during the period |
| $ | ( | ) |
| $ |
| |
Less: Net gains and losses recognized during the period on securities sold during the period |
|
|
|
|
|
| ||
Net gains and losses recognized during the period that relate to securities still held at the reporting date 1 |
| $ | ( | ) |
| $ |
| |
Debt securities classified as trading: |
|
|
|
|
|
|
|
|
Net gains and losses recognized during the period |
| $ |
|
| $ | ( | ) | |
Less: Net gains and losses recognized during the period on securities sold during the period |
|
|
|
|
|
| ||
Net gains and losses recognized during the period that relate to securities still held at the reporting date 2 |
| $ |
|
| $ | ( | ) | |
1. | Includes a net unrealized gain 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 varies depending on market fluctuations.
Page 14
Table of Contents
NOTE 3. INVESTMENT MANAGEMENT AND OTHER FEES
The following table presents operating revenues disaggregated by performance obligation.
|
| Three Months Ended |
| |||||
|
| September 30, |
| |||||
(dollars in thousands) |
| 2026 |
|
| 2025 |
| ||
ETF advisory fees |
| $ |
|
| $ |
| ||
USGIF advisory fees |
|
|
|
|
|
| ||
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 receives advisory fees based on a specified percentage of average net assets under management. The Company has contractually agreed to limit fund expenses through April 2027, except for the U.S. Government Securities Ultra-Short Bond Fund, for which fee waivers and expense reimbursements are voluntary and may be discontinued at the Company’s discretion. For the three months ended September 30, 2026, total fee waivers 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 September 30, 2026, the Company had $
Page 15
Table of Contents
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.
The following table reconciles cash, cash equivalents, and restricted cash reported on the Consolidated Balance Sheets to the amounts presented in the Consolidated Statements of Cash Flows.
(dollars in thousands) |
| September 30, 2026 |
|
| June 30, 2026 |
| ||
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 expense included in general and administrative expense on the Consolidated Statements of Operations totaled $
The following table presents the components of lease cost.
|
| Three Months Ended |
| |||||
|
| September 30, |
| |||||
(dollars in thousands) |
| 2026 |
|
| 2025 |
| ||
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.
| | Three Months Ended | | |||||
| | September 30, | | |||||
(dollars in thousands) | | 2026 | | | 2025 | | ||
Operating cash flows from finance leases included in lease liabilities | | $ | | | $ | | ||
Financing cash flows from finance leases included in lease liabilities | | $ | | | $ | | ||
Lease liabilities obtained from new ROU assets - finance 1 | | $ | | | $ | | ||
1. | During the three months ended September 30, 2025, non-cash changes in lease liabilities included the recognition of $ |
Additional qualitative information concerning the Company’s leases follows.
|
| September 30, 2026 |
|
| June 30, 2026 |
| ||
Weighted-average remaining lease term - finance leases (years) |
|
|
|
|
|
| ||
Weighted-average discount rate - finance leases |
|
| % |
|
| % | ||
Page 16
Table of Contents
The following table presents the maturities of lease liabilities as of September 30, 2026.
(dollars in thousands) |
|
|
|
|
Fiscal Year |
| Finance Leases |
| |
2027 (excluding the three months ended September 30, 2026) |
| $ |
| |
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 2028. 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 is as follows:
| | Three Months Ended | | |||||
| | September 30, | | |||||
(dollars in thousands) | | 2026 | | | 2025 | | ||
Operating lease income | | $ | | | $ | | ||
The Company is party to a lease agreement with HIVE, a related party, for certain areas of the Company’s office building. The terms of the lease were determined to be consistent with market rates.
A summary analysis of annual undiscounted cash flows to be received on leases as of September 30, 2026, is as follows:
(dollars in thousands) |
|
|
|
|
Fiscal Year |
| Operating Leases |
| |
2027 (excluding the three months ended September 30, 2026) |
| $ |
| |
2028 |
|
|
| |
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) |
| September 30, 2026 |
|
| June 30, 2026 |
| ||
Professional fees |
| $ |
|
| $ |
| ||
Vendors payable |
|
|
|
|
|
| ||
ETF operating and distribution expenses |
|
|
|
|
|
| ||
Other taxes payable |
|
|
|
|
|
| ||
Other accrued items |
|
|
|
|
|
| ||
Other accrued expenses |
| $ |
|
| $ |
| ||
Certain accrued expenses are reimbursable by HIVE; the related receivable is recorded separately within accounts and other receivables. Amounts due from HIVE related to these reimbursable expenses were $
Page 17
Table of Contents
NOTE 7. DEBT
The Company has access to a $
During fiscal year 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 September 2026, the Board authorized the continuance of the monthly dividend of $
The Company has a share repurchase program, approved by the Company's Board of Directors, authorizing the Company to annually purchase up to $
The Inflation Reduction Act of 2022 imposes a 1% excise tax on certain repurchases of stock by publicly traded corporations. The Company recognizes any excise tax incurred as part of the cost basis of the shares acquired in the Consolidated Statements of Shareholders' Equity. Excise taxes recognized under these provisions were $
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,
Under the 1997 Plan,
Stock Option Activity
There were
Page 18
Table of Contents
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 (loss) 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.
|
| Three Months Ended |
| |||||
|
| September 30, |
| |||||
(dollars in thousands, except per share data) |
| 2026 |
|
| 2025 |
| ||
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 months ended September 30, 2026, and 2025, employee stock options of
During the three months ended September 30, 2026, and 2025, 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"). The effective tax rate was
Page 19
Table of Contents
A valuation allowance is provided when it is more-likely-than-not that a portion of the deferred tax assets will not be realized. During the three months ended September 30, 2026, the Company removed the partial valuation allowance previously recorded against U.S. capital loss deferred tax asset and recorded a full-valuation allowance against the net deferred tax assets in Canada.
The Company is subject to income tax in the U.S., certain U.S. state jurisdictions, and Canada. The Company maintains a reserve for uncertain tax positions. As of September 30, 2026, and June 30, 2026, the total reserve for uncertain tax positions was $
Management believes the reserve for uncertain tax positions, including related interest and penalties and net of federal benefits, is adequate to cover exposures related to open tax years in the Company's significant taxing jurisdictions. If recognized, the entire balance of unrecognized tax benefits as of September 30, 2026, would affect the Company's effective income tax rate.
The One Big Beautiful Bill Act (Public Law 119-21) (the “Act”), enacted on July 4, 2025, included various tax law changes. The Company reflected the effects of the Act in its income tax provision for the three months ended September 30, 2026, and 2025. The impact of the Act was immaterial for both periods.
NOTE 11. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
The Company had
(dollars in thousands) |
| Unrealized gains (losses) on available-for-sale investments |
| |
Three Months Ended September 30, 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 September 30, 2025 |
| $ |
| |
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.
Page 20
Table of Contents
The Company's Chief Executive Officer, serving as the Chief Operating Decision Maker ("CODM"), evaluates the performance of the Investment Management Services segment based on segment profit (loss), which is calculated as operating revenues less other operating expenses. Other operating expenses used in the calculation include employee compensation and benefits, general and administrative expenses, and sales and marketing costs, which includes advertising, sales and promotion expenses, and prospectus and fulfillment expenses. Segment profit (loss) is considered by the CODM in evaluating resource allocation decisions together with the Company's overall capital needs and strategic objectives. Resource allocation decisions are not based solely on segment results for any particular reporting period and reflect the facts and circumstances existing at the time.
The CODM evaluates the performance of the Company’s Corporate Investments segment separately from the Investment Management Services segment based on net investment income (loss). The Corporate Investments segment does not include any allocated company expenses. In allocating capital to the segment, the CODM considers liquidity needs, market conditions, capital preservation objectives, and expected returns on available investment opportunities. The relative weight assigned to these considerations may vary based on the facts and circumstances existing at the time.
The following schedule details total revenues, income, and gross identifiable assets by business segment:
(dollars in thousands) |
| Investment Management Services |
|
| Corporate Investments |
|
| Total |
| |||
Three Months Ended September 30, 2026 |
|
|
|
|
|
|
|
|
|
|
|
|
Operating revenues |
| $ |
|
| $ |
|
| $ |
| |||
Net investment income (loss) |
|
|
|
|
|
|
|
|
| |||
|
|
| 2,657 |
|
|
| 112 |
|
|
| 2,769 |
|
Other operating expenses |
|
|
|
|
|
|
|
|
| |||
Segment profit (loss) |
| $ |
|
| $ |
|
| $ |
| |||
Reconciliation of segment profit (loss) |
|
|
|
|
|
|
|
|
|
|
|
|
Other income (loss) |
|
|
|
|
|
|
|
|
| $ |
| |
Depreciation |
|
|
|
|
|
|
|
|
|
| ( | ) |
Interest |
|
|
|
|
|
|
|
|
|
| ( | ) |
Income (loss) before income taxes |
|
|
|
|
|
|
|
|
| $ |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross identifiable assets at September 30, 2026 |
| $ |
|
| $ |
|
| $ |
| |||
Deferred tax asset |
|
|
|
|
|
|
|
|
| $ |
| |
Consolidated total assets at September 30, 2026 |
|
|
|
|
|
|
|
|
| $ |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, 2025 |
|
|
|
|
|
|
|
|
|
|
|
|
Operating revenues |
| $ |
|
| $ |
|
| $ |
| |||
Net investment income (loss) |
|
|
|
|
|
|
|
|
| |||
|
|
| 2,251 |
|
|
| 2,277 |
|
|
| 4,528 |
|
Other operating expenses |
|
|
|
|
|
|
|
|
| |||
Segment profit (loss) |
| $ | ( | ) |
| $ |
|
| $ |
| ||
Reconciliation of segment profit (loss) |
|
|
|
|
|
|
|
|
|
|
|
|
Other income (loss) |
|
|
|
|
|
|
|
|
| $ |
| |
Depreciation |
|
|
|
|
|
|
|
|
|
| ( | ) |
Interest |
|
|
|
|
|
|
|
|
|
| ( | ) |
Income (loss) before income taxes |
|
|
|
|
|
|
|
|
| $ |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross identifiable assets at September 30, 2025 |
| $ |
|
| $ |
|
| $ |
| |||
Deferred tax asset |
|
|
|
|
|
|
|
|
| $ |
| |
Consolidated total assets at September 30, 2025 |
|
|
|
|
|
|
|
|
| $ |
| |
Operating revenues from investment management services included revenues from ETF clients of $
Page 21
Table of Contents
NOTE 13. CONTINGENCIES AND COMMITMENTS
The Company continuously reviews investor, employee and vendor complaints, tax claims, 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 September 30, 2026, or June 30, 2026.
The Board has authorized a monthly dividend of $
Page 22
Table of Contents
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, and geopolitical developments, many of which are beyond the control of management. Further, the business and regulatory environments in which the Company operates remain complex, uncertain, and subject to change. The Company expects that regulatory requirements and developments may result in additional administrative and compliance costs. For a discussion of risk factors that could materially affect the Company, refer to Item 1A, “Risk Factors” in the Annual Report on Form 10-K for the year ended June 30, 2026.
BUSINESS SEGMENTS
The Company, with principal operations located in San Antonio, Texas, manages two business segments: (1) Investment management services, through which the Company offers U.S. Global Investors Funds (“USGIF” or the “Fund(s)”) and exchange-traded fund (“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.
The following is a brief discussion of the Company’s business segments.
Investment Management Services
The Company generates operating revenues from providing investment management and related services to USGIF and ETF clients. These revenues are largely dependent on the value and composition of assets under management (“AUM”). As a result, fluctuations in financial markets, investor sentiment and net cash flows directly affect AUM and, consequently, the Company’s revenues and operating results.
At September 30, 2026, total AUM, including ETF and USGIF clients, was approximately $1.6 billion, a decrease of $64.2 million from approximately $1.7 billion at June 30, 2026, the Company’s prior fiscal year end. Compared to approximately $1.4 billion at September 30, 2025, total AUM increased by $231.2 million. Average AUM for the three months ended September 30, 2026, was approximately $1.6 billion, compared with approximately $1.4 billion for the corresponding prior year period, representing an increase of $196.0 million.
Information regarding the mutual funds within USGIF, including prospectuses and performance information, is available on the Company’s website, www.usfunds.com. Information regarding the Company’s U.S.-based ETFs, including prospectuses, performance and holdings, is available at www.usglobaletfs.com. Shareholders in USGIF are generally not required to provide advance notice prior to redeeming fund shares, and USGIF does not currently charge redemption fees. Similarly, the U.S.-based ETFs’ authorized participants are generally not required to provide advance notice of share redemptions, and the U.S.-based ETFs do not charge redemption fees.
Page 23
Table of Contents
The following table summarizes the changes in AUM for USGIF equity funds, USGIF fixed income funds and the Company’s U.S.-based ETFs for the three months ended September 30, 2026, and 2025. The table excludes TRIP, the Company’s European-based ETF, which is not available to U.S. investors.
|
|
Three Months Ended September 30, |
|
|||||||||||||||||||||||||||||
|
|
2026 |
|
|
2025 |
|
||||||||||||||||||||||||||
(dollars in thousands) |
|
USGIF Equity |
|
|
USGIF Fixed Income |
|
|
Total USGIF |
|
|
U.S.-Based ETFs |
|
|
USGIF Equity |
|
|
USGIF Fixed Income |
|
|
Total USGIF |
|
|
U.S.-Based ETFs |
|
||||||||
Beginning Balance |
|
$ | 415,836 |
|
|
$ | 51,638 |
|
|
$ | 467,474 |
|
|
$ | 1,182,721 |
|
|
$ | 296,756 |
|
|
$ | 53,679 |
|
|
$ | 350,435 |
|
|
$ | 952,959 |
|
Market appreciation (depreciation) |
|
|
46,097 |
|
|
|
(281 |
) |
|
|
45,816 |
|
|
|
(120,348 |
) |
|
|
109,755 |
|
|
|
576 |
|
|
|
110,331 |
|
|
|
114,766 |
|
Dividends and distributions |
|
|
- |
|
|
|
(393 |
) |
|
|
(393 |
) |
|
|
- |
|
|
|
- |
|
|
|
(411 |
) |
|
|
(411 |
) |
|
|
- |
|
Net shareholder purchases (redemptions) |
|
|
(4,693 |
) |
|
|
(2,534 |
) |
|
|
(7,227 |
) |
|
|
21,100 |
|
|
|
2,257 |
|
|
|
(2,488 |
) |
|
|
(231 |
) |
|
|
(161,647 |
) |
Ending Balance |
|
$ | 457,240 |
|
|
$ | 48,430 |
|
|
$ | 505,670 |
|
|
$ | 1,083,473 |
|
|
$ | 408,768 |
|
|
$ | 51,356 |
|
|
$ | 460,124 |
|
|
$ | 906,078 |
|
Average investment management fee |
|
|
0.85 |
% |
|
|
0.00 |
% |
|
|
0.76 |
% |
|
|
0.59 |
% |
|
|
0.82 |
% |
|
|
0.00 |
% |
|
|
0.71 |
% |
|
|
0.59 |
% |
Average net assets |
|
$ | 460,089 |
|
|
$ | 50,183 |
|
|
$ | 510,272 |
|
|
$ | 1,058,086 |
|
|
$ | 330,796 |
|
|
$ | 52,101 |
|
|
$ | 382,897 |
|
|
$ | 990,729 |
|
As of September 30, 2026, USGIF AUM was $505.7 million compared to $460.1 million as of September 30, 2025, an increase of $45.5 million, or 9.9 percent. Average net assets for USGIF were $510.3 million during the three months ended September 30, 2026, compared to $382.9 million during the corresponding prior-year period, an increase of 33.3 percent. The increase in USGIF AUM during the three months ended September 30, 2026, was primarily attributable to market appreciation in equity funds focused on the gold and natural resources sector.
As of September 30, 2026, AUM in the Company’s U.S.-based ETFs was $1.1 billion compared to $906.1 million as of September 30, 2025, an increase of $177.4 million, or 19.6 percent. Average net assets for the Company’s U.S.-based ETFs were $1.1 billion during the three months ended September 30, 2026, compared to $990.7 million during the corresponding prior-year period, an increase of 6.8 percent. The decrease in U.S.-based ETF AUM during the three months ended September 30, 2026, was primarily attributable to market depreciation, particularly in the Jets ETF, which invests in airline-related stocks, including global airline carriers, airport operators, and aircraft manufacturers. The Company also serves as investment adviser to TRIP, a European-based ETF that is not included in the table above. Average net assets for TRIP were $23.8 million and $22.6 million during the three months ended September 30, 2026, and 2025, respectively.
The average annualized investment management fee rate for USGIF (total advisory fees as a percentage of average net assets) was 76 basis points during the three months ended September 30, 2026, compared to 71 basis points during the corresponding prior-year period. The average investment management fee for USGIF equity funds was 85 basis points during the three months ended September 30, 2026, compared to 82 basis points during the corresponding prior-year period. The average investment management fee for the fixed income funds was nil for both periods due to fee waivers and expense reimbursements.
The average management fee rate for the Company’s U.S.-based ETFs was 59 basis points during the three months ended September 30, 2026, and 2025.
Corporate Investments
Management believes it can more effectively manage the Company’s cash position by maintaining certain types of investments utilized 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 September 30, 2026, the Company held investments carried at fair value on a recurring basis of $11.5 million and a cost basis of $12.9 million. These investments represented approximately 24.3 percent of the Company’s total assets at September 30, 2026. The Company also held other investments of approximately $4.7 million and a held-to-maturity debt investment, net of allowance for credit losses, of $989,000.
At June 30, 2026, the Company’s prior fiscal year end, investments carried at fair value on a recurring basis totaled approximately $11.7 million, and has decreased approximately $258,000 since that date. 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.
Page 24
Table of Contents
RESULTS OF OPERATIONS – Three months ended September 30, 2026, and 2025
The Company recorded net income of $171,000, or $0.01 per share, for the three months ended September 30, 2026, compared with net income of $1.5 million, or $0.12 per share, for the three months ended September 30, 2025, representing a decrease of approximately $1.3 million. The change was primarily attributable to lower net investment income, partially offset by higher operating revenues, lower operating expenses, and a favorable change in income tax expense, as discussed below.
Operating Revenues
Total consolidated operating revenues were $2.7 million for the three months ended September 30, 2026, compared to $2.3 million for the corresponding period of the prior fiscal year, an increase of $406,000, or 18.0 percent. The increase was primarily attributable to the following factors:
|
• |
ETF management fees increased by $93,000 due to higher average assets under management, primarily in the gold and natural resources ETF. |
|
• |
USGIF advisory fees increased by $297,000 due to higher average assets under management, primarily in the gold and natural resources funds. |
|
• |
Administrative service fees for USGIF increased by $16,000 due to higher average assets under management, primarily in the gold and natural resources funds. |
Operating Expenses
Total consolidated operating expenses were $2.6 million for the three months ended September 30, 2026, compared to $2.8 million for the corresponding period of the prior fiscal year, a decrease of $164,000, or 5.9 percent.
The decrease was primarily attributable to a reduction in general and administrative expenses of $117,000, or 8.3 percent, primarily due to lower ETF-related costs; and a decrease in advertising expenses of $37,000, or 23.0 percent, primarily attributable to expanded ETF marketing efforts in the prior-year period.
Other Income (Loss)
Total consolidated other income was $193,000 for the three months ended September 30, 2026, compared with $2.4 million for the corresponding period of the prior fiscal year, a decrease of $2.2 million. The decrease was primarily attributable to lower net investment income, which totaled $112,000 in the current period compared to $2.3 million for the corresponding period of the prior fiscal year, and was driven by the following factors:
|
• | Net unrealized losses on equity securities and debt securities classified as trading totaled $185,000 in the current period, compared with $1.9 million net unrealized gains for the corresponding period of the prior fiscal year, reflecting an unfavorable change of $2.1 million. The prior period included $1.3 million of unrealized gains recognized under the measurement alternative; no such gains were recognized in the current-year period. |
|
• | Dividend and interest income totaled $309,000 in the current period, compared with $397,000 for the corresponding period of the prior fiscal year, reflecting an unfavorable change of $88,000. The decrease was primarily attributable to the absence of interest income from the Company's investment in HIVE convertible debentures following their repayment in full in December 2025. |
|
• | There were no realized gains on debt securities in the current period, compared with $71,000 for the corresponding period of the prior fiscal year, reflecting an unfavorable change of $71,000. The decrease was attributable to the absence of realized gains on debt securities reclassified from accumulated other comprehensive income (loss) related to the Company's investment in HIVE debentures following their repayment in full in December 2025. |
|
• | Foreign currency losses totaled $10,000 in the current period, compared with $93,000 for the corresponding period of the prior fiscal year, reflecting a favorable change of $83,000. |
Provision for Income Taxes
Income tax expense was $77,000 for the three months ended September 30, 2026, compared with $337,000 for the corresponding period of the prior fiscal year, representing a decrease of approximately $260,000. The change was primarily attributable to lower net investment income during the current period.
Page 25
Table of Contents
LIQUIDITY AND CAPITAL RESOURCES
At September 30, 2026, the Company had net working capital (current assets less current liabilities) of approximately $35.4 million, a decrease of $230,000, or 0.6 percent, from June 30, 2026, and a current ratio (current assets divided by current liabilities) of 23.1 to 1. Cash and cash equivalents of approximately $24.3 million and investments carried at fair value on a recurring basis of $11.5 million represented approximately 75.6 percent of total assets. Based on these resources, management believes the Company has adequate liquidity to meet its current obligations. Total shareholders’ equity was approximately $44.7 million at September 30, 2026.
Cash and cash equivalents decreased by $31,000, or 0.1 percent, from June 30, 2026, primarily due to $320,000 of repurchases of the Company's common stock, $277,000 of dividends paid, and $45,000 of property and equipment purchases, partially offset by $528,000 of net cash provided by operating activities and $73,000 of return of capital distributions received.
Total shareholders’ equity decreased by $409,000, or 0.9 percent, from June 30, 2026, primarily due to $322,000 of repurchases of the Company's common stock, including excise tax, and $275,000 of dividends declared, partially offset by $171,000 of net income during the three months ended September 30, 2026.
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, 2028, 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 September 30, 2026, 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 2027. The advisory agreement for the U.S.-based ETFs has been renewed through July 2027.
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 $35.8 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, 2026.
Page 26
Table of Contents
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Macroeconomic conditions, including inflation and changes in interest rates; geopolitical uncertainty and related market volatility; adverse market conditions, including disruptions in cryptocurrency markets; and natural disasters, public health events, or other catastrophic occurrences may adversely affect the Company’s revenue, operating results, cash flows, and its stock price.
Additionally, prolonged or intensifying trade tensions, including tariffs, trade restrictions, and retaliatory measures, may exacerbate market uncertainty, disrupt global capital flows, and depress asset prices. These conditions may result in shifts in investor behavior and asset allocation preferences and increased redemption activity, which could reduce the Company's assets under management and related management fees. Market declines could also adversely affect the value of the Company’s corporate investments, further affecting its financial position and results of operations.
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. Certain assets under management also have exposure to international markets and 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 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 September 30, 2026, 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 |
|
|||
(dollars in thousands) |
|
September 30, 2026 |
|
Percentage Change |
|
Price Change |
|
|
Net Income (Loss) 1 |
|
|||
Equity securities at fair value |
|
$ | 11,486 |
|
25% increase |
|
$ | 14,358 |
|
|
$ | 2,268 |
|
|
|
|
|
|
25% decrease |
|
$ | 8,615 |
|
|
$ | (2,268 | ) |
1. |
Realized gains and losses and changes in unrealized gains and losses on equity 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.
Page 27
Table of Contents
Interest rate risk
The Company is exposed to interest rate risk through its cash equivalents and investment portfolio. Changes in interest rates may affect both the fair value of certain investments and the interest income earned on cash, cash equivalents, and other interest-bearing investments. As a result, fluctuations in interest rates could impact the Company's consolidated financial position and results of operations.
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.
Indirect exposure to cryptocurrencies risk
Cryptocurrencies (also referred to as “virtual currencies” and “digital currencies”) are digital assets designed to function as a medium of exchange. While the Company does not have any current intention of directly investing in cryptocurrencies, it has indirect exposure to cryptocurrency-related market risk through investments in securities of issuers with operations in the cryptocurrency industry, such as mining companies, as well as exchange-traded funds that hold cryptocurrency-related assets.
Cryptocurrency markets are subject to significant price volatility and evolving regulatory oversight, which may heighten investor concerns and contribute to broader market uncertainty. Cryptocurrencies are not backed by any government or central authority, and their trading markets are subject to a fragmented and developing regulatory framework across jurisdictions. As a result, these markets may be more susceptible to operational disruptions, technical issues, and market integrity risks, including fraud or manipulation, when compared to established and regulated securities markets.
The value of cryptocurrency-related assets may fluctuate significantly and unpredictably due to a variety of factors, including changes in investor sentiment, regulatory developments, macroeconomic conditions, technological developments, cybersecurity risks, and public perceptions regarding adoption, use, and environmental impact. Adverse developments in cryptocurrency markets may negatively affect the value of the Company's indirect cryptocurrency-related investments and contribute to increased volatility in the Company's results of operations and financial condition.
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 September 30, 2026, 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 not effective as of September 30, 2026, due to the existence of the material weakness in internal control over financial reporting described below (which we view as an integral part of our disclosure controls and procedures).
The material weakness in internal controls over financial reporting that was disclosed in our annual report on Form 10-K as of and for the year ended June 30, 2026, was also present as of September 30, 2026. Notwithstanding the material weakness, we believe that the Consolidated Financial Statements included in this quarterly report on Form 10-Q fairly present, in all material respects, our financial position, results of operations and cash flows as of the date, and for the period, presented, in conformity with U.S. GAAP.
Other than as described above, there has been no change in the Company’s internal control over financial reporting that occurred during the three months ended September 30, 2026, that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
Page 28
Table of Contents
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, 2026. 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 |
|
|||||
07-01-26 to 07-31-26 |
|
|
|
36,121 |
|
|
$ |
108 |
|
|
$ |
2.99 |
|
|
|
36,121 |
|
|
$ |
3,994 |
|
08-01-26 to 08-31-26 |
|
|
|
18,588 |
|
|
|
60 |
|
|
$ |
3.23 |
|
|
|
18,588 |
|
|
$ |
3,934 |
|
09-01-26 to 09-30-26 |
|
|
|
50,748 |
|
|
|
151 |
|
|
$ |
2.97 |
|
|
|
50,748 |
|
|
$ |
3,783 |
|
Total |
|
|
|
105,457 |
|
|
$ |
319 |
|
|
$ |
3.02 |
|
|
|
105,457 |
|
|
|
|
|
1. |
The Board of Directors approved, on December 7, 2012, and renewed annually, a program to repurchase up to $2.75 million of the Company's outstanding class A common stock in each calendar year from 2013 through 2022. Repurchases may be made from time to time on the open market in accordance with applicable rules and regulations. On February 25, 2022, the Company announced that its Board of Directors had approved an increase in the annual share repurchase authorization from $2.75 million to $5.0 million. The Board of Directors subsequently approved annual share repurchase authorizations of $5.0 million for each calendar year from 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 calendar year 2026 under the program is $5.0 million. |
ITEM 5. OTHER INFORMATION
During the three months ended September 30, 2026, 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.
Page 29
Table of Contents
ITEM 6. EXHIBITS
1. Exhibits – |
|
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) |
Page 30
Table of Contents
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.
|
|
U.S. GLOBAL INVESTORS, INC. |
|
|
|
|
|
DATED: |
November 12, 2026 |
BY: /s/ Frank E. Holmes |
|
|
|
Frank E. Holmes |
|
|
|
Chief Executive Officer |
|
|
|
|
|
DATED: |
November 12, 2026 | BY: /s/ Lisa C. Callicotte |
|
|
|
Lisa C. Callicotte |
|
|
|
Chief Financial Officer |
|
Page 31