usglobal20220930

usglobal20220930_10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒ Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended September 30, 2022

☐ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from ____________ to ____________.

Commission File Number 0-13928

U.S. GLOBAL INVESTORS, INC.

(Exact name of registrant as specified in its charter)

Texas	74-1598370
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

7900 Callaghan Road San Antonio, Texas	78229 (Zip Code)
(Address of principal executive offices)

(210) 308-1234

(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

GROW

NASDAQ Capital Market

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. Yes ☒ No ☐

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). Yes ☒ No ☐

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 ☐
Non-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 ☐ No ☒

On October 28, 2022, there were 13,866,999 shares of Registrant’s class A nonvoting common stock issued and 12,836,542 shares of Registrant’s class A nonvoting common stock issued and outstanding; no shares of Registrant’s class B nonvoting common shares outstanding; and 2,068,549 shares of Registrant’s class C voting common stock issued and outstanding.

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 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	20
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	24
ITEM 4. CONTROLS AND PROCEDURES	25

PART II. OTHER INFORMATION	26

ITEM 1A. RISK FACTORS	26
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	26
ITEM 6. EXHIBITS	27

SIGNATURES	28

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

U.S. GLOBAL INVESTORS, INC.

CONSOLIDATED BALANCE SHEETS

	*September 30, 2022*			*June 30, 2022*
(dollars in thousands)	(unaudited)
Assets
Current Assets
Cash and cash equivalents	$	23,287		$	22,314
Restricted cash		1,000			1,000
Investments in securities at fair value, current		11,963			12,138
Accounts and other receivables		1,576			1,796
Tax receivable		96			384
Prepaid expenses		312			400
Total Current Assets		38,234			38,032

Net Property and Equipment		1,320			1,370

Other Assets
Deferred tax asset		751			252
Investments in equity securities at fair value, non-current		4,383			4,290
Investments in available-for-sale debt securities at fair value		10,686			11,449
Investments in held-to-maturity debt securities		1,000			1,000
Other investments		2,630			3,992
Financing lease, right of use assets		86			93
Other assets, non-current		233			216
Total Other Assets		19,769			21,292
Total Assets	$	59,323		$	60,694
Liabilities and Shareholders’ Equity
Current Liabilities
Accounts payable	$	14		$	73
Accrued compensation and related costs		1,925			1,864
Dividends payable		336			337
Financing lease liability, short-term		28			27
Other accrued expenses		1,137			1,831
Taxes payable		157			-
Total Current Liabilities		3,597			4,132

Long-Term Liabilities
Financing lease liability, long-term		59			66
Total Long-Term Liabilities		59			66
Total Liabilities		3,656			4,198

Commitments and Contingencies (Note 12)

Shareholders’ Equity
Common stock (class A) - $0.025 par value; nonvoting; 28,000,000 shares authorized, and 13,866,999 shares issued at September 30, 2022, and June 30, 2022; 12,852,968 and 12,888,950 shares outstanding at September 30, 2022, and June 30, 2022, respectively		347			347
Common stock (class B) - $0.025 par value; nonvoting; 4,500,000 shares authorized; no shares issued		-			-
Convertible common stock (class C) - $0.025 par value; voting; 3,500,000 shares authorized; 2,068,549 shares issued and outstanding at September 30, 2022, and June 30, 2022		52			52
Additional paid-in-capital		16,440			16,438
Treasury stock, class A shares at cost; 1,014,031 shares and 978,049 shares at September 30, 2022, and June 30, 2022, respectively		(2,722	)		(2,599	)
Accumulated comprehensive income, net of tax		3,785			4,276
Retained earnings		37,765			37,982
Total Shareholders’ Equity		55,667			56,496
Total Liabilities and Shareholders’ Equity	$	59,323		$	60,694

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)	*2022*			*2021*
Operating Revenues
Advisory fees	$	4,377		$	6,470
Administrative services fees		35			51
		4,412			6,521
Operating Expenses
Employee compensation and benefits		1,175			1,924
General and administrative		1,504			1,598
Advertising		86			84
Depreciation		61			48
Interest		1			-
		2,827			3,654
Operating Income		1,585			2,867
Other Income (Loss)
Investment loss		(1,447	)		(34	)
Income from equity method investments		-			15
Other income		61			56
		(1,386	)		37
Income Before Income Taxes		199			2,904
Provision for Income Taxes
Tax expense		81			514
Net Income	$	118		$	2,390

Basic Net Income per Share	$	0.01		$	0.16
Diluted Net Income per Share	$	0.01		$	0.16

Basic weighted average number of common shares outstanding		14,948,688			15,030,115
Diluted weighted average number of common shares outstanding		14,949,275			15,031,199

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)	*2022*			*2021*
Net Income	$	118		$	2,390
Other Comprehensive Income (Loss), Net of Tax:
Unrealized losses on available-for-sale securities arising during period		(120	)		(147	)
Less: reclassification adjustment for gains included in net income		(371	)		(476	)
Net change from available-for-sale securities, net of tax		(491	)		(623	)
Foreign currency translation adjustment		-			(12	)
Other Comprehensive Loss		(491	)		(635	)
Comprehensive Income (Loss)	$	(373	)	$	1,755

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*				*Common*													*Accumulated*
	*Stock*		*Common*		*Stock*		*Common*		*Additional*			*Treasury*						*Other*
	*(class A)*		*Stock*		*(class C)*		*Stock*		*Paid-in*			*Stock*			*Treasury*			*Comprehensive*			*Retained*
(dollars in thousands)	*Shares*		*(class A)*		*Shares*		*(class C)*		*Capital*			*Shares*			*Stock*			*Income (Loss)*			*Earnings*			*Total*
Balance at June 30, 2022		13,866,999	$	347		2,068,549	$	52	$	16,438			978,049		$	(2,599	)	$	4,276		$	37,982		$	56,496
Purchases of shares of Common Stock (class A)		-		-		-		-		-			39,965			(133	)		-			-			(133	)
Issuance of stock under ESPP of shares of Common Stock (class A)		-		-		-		-		3			(3,983	)		10			-			-			13
Share-based compensation, adjustment for forfeitures, net of tax		-		-		-		-		(1	)		-			-			-			-			(1	)
Dividends declared		-		-		-		-		-			-			-			-			(335	)		(335	)
Other comprehensive loss, net of tax		-		-		-		-		-			-			-			(491	)		-			(491	)
Net Income		-		-		-		-		-			-			-			-			118			118
Balance at September 30, 2022		13,866,999	$	347		2,068,549	$	52	$	16,440			1,014,031		$	(2,722	)	$	3,785		$	37,765		$	55,667

	*Common*				*Common*											*Accumulated*
	*Stock*		*Common*		*Stock*		*Common*		*Additional*		*Treasury*					*Other*
	*(class A)*		*Stock*		*(class C)*		*Stock*		*Paid-in*		*Stock*		*Treasury*			*Comprehensive*		*Retained*
(dollars in thousands)	*Shares*		*(class A)*		*Shares*		*(class C)*		*Capital*		*Shares*		*Stock*			*Income (Loss)*		*Earnings*		*Total*
Balance at June 30, 2021		13,866,913	$	347		2,068,635	$	52	$	15,677		898,953	$	(2,172	)	$	6,587	$	33,833	$	54,324
Purchases of shares of Common Stock (class A)		-		-		-		-		-		13,647		(82	)		-		-		(82	)
Issuance of stock under ESPP of shares of Common Stock (class A)		-		-		-		-

SEC Form 10-Q filed by U.S. Global Investors Inc.