U S GLOBAL INVESTORS INC
For the period ended Dec 31, 2024. Filed Feb 12, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Dec 31, 2024 · Filed Feb 12, 2025
GROW$2.50+1.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-07.
0001437749-24-033940
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2024-12-31; filed 2025-02-12.
0001437749-25-003577
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 38 previous paragraphs and 49 current paragraphs.
22 unchanged; 13 reworded; 13 added; 3 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 7 previous and 8 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (13)
Current report
During the six months ended December 31, 2024, and 2023, USGIF period-end assets under management decreased in both periods. The decline during the six months ended December 31, 2024, was mainly due to dividends and distributions, whereas the decrease during the same period in 2023 was primarily the result of net redemptions, driven largely by equity fund liquidations.
Current report
Total consolidated operating revenues for the three months ended December 31, 2024, decreased $587,000, or 20.8 percent, compared with the three months ended December 31, 2023. This decline was primarily driven by a decrease in advisory fees of $590,000, or 21.1 percent, which resulted from lower average assets under management in the ETFs and a decrease in base management fees earned. Advisory fees consist of two components: base management fees and performance fees. The reduction in base management fees was the key factor contributing to the overall decrease in advisory revenues as detailed below:
Current report
Total consolidated operating expenses for the three months ended December 31, 2024, increased $144,000, or 5.5 percent, compared with the three months ended December 31, 2023. The increase in operating expenses was primarily driven by an increase in employee compensation and benefits of $264,000, or 27.4 percent, mainly due to higher bonuses, and an increase in advertising of $23,000, or 20.5 percent. These were partially offset by a decrease in general and administrative expenses of $97,000, or 6.5 percent, and a reduction in depreciation of $46,000, or 74.2 percent.
Current report
For the three months ended December 31, 2024, total consolidated other income was $423,000, a decrease of approximately $1.1 million compared to $1.5 million for the same period in 2023. The primary cause of this decline was net investment income, which totaled $354,000 for the three months ended December 31, 2024. This represents a decrease of $1.1 million compared to $1.4 million in the corresponding quarter of the previous year. Net unrealized losses on equity securities, along with realized foreign currency losses, were primary factors driving the overall decrease in net investment income, as outlined below:
Current report
RESULTS OF OPERATIONS–** Six months ended December 31, 2024, and 2023**
Current report
The Company recorded net income of $229,000 ($0.02 per share) for the six months ended December 31, 2024, compared to $1.1 million ($0.07 per share) for the six months ended December 31, 2023, a decrease of approximately $824,000. The decline was primarily driven by lower operating revenues in the current period compared to the same period in the prior year, partially offset by higher net investment income, as discussed further below.
Current report
Operating Revenues
Current report
Total consolidated operating revenues for the six months ended December 31, 2024, decreased $1.6 million, or 26.3 percent, compared with the six months ended December 31, 2023. This decline was primarily driven by a decrease in advisory fees of $1.6 million, or 26.6 percent, which resulted from lower average assets under management in the ETFs and a decrease in base management fees earned. Advisory fees consist of two components: base management fees and performance fees. The reduction in base management fees was the key factor contributing to the overall decrease in advisory revenues as detailed below:
Current report
Operating Expenses
Current report
Total consolidated operating expenses for the six months ended December 31, 2024, decreased $59,000, or 1.1 percent, compared with the six months ended December 31, 2023.
Current report
Other Income (Loss)
Current report
For the six months ended December 31, 2024, total consolidated other income was $1.4 million, an increase of approximately $400,000 compared to $1.0 million for the same period in 2023. This primary driver of this increase was net investment income, which totaled $1.3 million for the six months ended December 31, 2024. This represents an increase of $368,000 compared to $903,000 in the corresponding period of the previous year. Impairment losses on equity securities recognized in the comparative period, combined with a reduction in realized gains on debt securities in the current period, were key drivers of the overall increase in net investment income, as outlined below:
Current report
Provision for Income Taxes
Removed paragraphs (3)
Previous report
Total consolidated operating revenues for the three months ended September 30, 2024, decreased $1.0 million, or 31.2 percent, compared with the three months ended September 30, 2023. This decrease was primarily attributable to the following:
Previous report
Total consolidated operating expenses for the three months ended September 30, 2024, decreased $202,000, or 6.9 percent, compared with the three months ended September 30, 2023. The decrease in operating expenses was primarily attributable to a decrease in employee compensation and benefits of $193,000, or 15.1 percent. The decrease in employee compensation and benefits is primarily due to decreases in bonuses, somewhat offset by an increase in salaries for new employees. Higher bonuses in the same period last year were related to company performance and fund performance.
Previous report
Total consolidated other income for the three months ended September 30, 2024, was $995,000, compared to a loss of $456,000 for the three months ended September 30, 2023, a change of approximately $1.5 million. This change was primarily due to the following factors:
Reworded paragraphs (13)
Previous wording
The Company provides advisory services for three U.S.-based exchange-traded fund (“ETF”) clients and receives monthly advisory fees based on the net asset values of the funds. Information on the U.S.-based ETFs can be found at www.usglobaletfs.com, including the prospectus, performance and holdings. The Company also serves as investment advisor to one European-based ETF and receives a monthly advisory fee based on the net asset value of the fund. The European-based ETF is not available to U.S. investors. The ETFs’ authorized participants are not required to give advance notice prior to redemption of shares in the ETFs, and the ETFs do not charge a redemption fee.
Current wording
The Company provides advisory services for four U.S.-based exchange-traded fund (“ETF”) clients and receives monthly advisory fees based on the net asset values of the funds. Information on the U.S.-based ETFs can be found at www.usglobaletfs.com, including the prospectus, performance and holdings. The Company also serves as investment advisor to one European-based ETF and receives a monthly advisory fee based on the net asset value of the fund. The European-based ETF is not available to U.S. investors. The ETFs’ authorized participants are not required to give advance notice prior to redemption of shares in the ETFs, and the ETFs do not charge a redemption fee.
Previous wording
At September 30, 2024, total assets under management, including ETF and USGIF clients, were approximately $1.5 billion compared to $1.8 billion at September 30, 2023, a decrease of $208.9 million. During the three months ended September 30, 2024, average assets under management, including ETF and USGIF clients, were $1.5 billion, compared to $2.1 billion during the three months ended September 30, 2023. At June 30, 2024, the Company’s prior fiscal year end, total assets under management, including ETF and USGIF clients, were approximately $1.6 billion, and decreased $18.6 million during the three months ended September 30, 2024.
Current wording
At December 31, 2024, total assets under management, including ETF and USGIF clients, were approximately $1.5 billion compared to $2.1 billion at December 31, 2023, a decrease of $606.0 million. During the six months ended December 31, 2024, average assets under management, including ETF and USGIF clients, were $1.5 billion, compared to $2.0 billion during the six months ended December 31, 2023. At June 30, 2024, the Company’s prior fiscal year end, total assets under management, including ETF and USGIF clients, were approximately $1.6 billion, and decreased $89.1 million during the six months ended December 31, 2024.
Previous wording
The following tables summarize the changes in assets under management for USGIF for the three months ended September 30, 2024, and 2023.
Current wording
The following tables summarize the changes in assets under management for USGIF for the three and six months ended December 31, 2024, and 2023.
Previous wording
As shown above, USGIF period-end assets under management were higher at September 30, 2024, compared to September 30, 2023, while average net assets were lower during the three months ended September 30, 2024, compared to the three months ended September 30, 2023. The higher average net assets in the comparative period included net assets of equity funds prior to their liquidation during the three months ended September 30, 2023.
Current wording
As shown above, USGIF period-end assets under management at December 31, 2024, were lower compared to December 31, 2023. However, average net assets during the three and six months ended December 31, 2024, were higher compared to the corresponding periods in 2023.
Previous wording
USGIF period-end assets under management increased during the three months ended September 30, 2024, compared to a decrease during the three months ended September 30, 2023. The increase during the three months ended September 30, 2024, was primarily due to market appreciation. The decrease during the three months ended September 30, 2023, was primarily due to market depreciation and net redemptions, primarily driven by equity fund liquidations.
Current wording
During the three months ended December 31, 2024, USGIF period-end assets under management declined, in contrast to an increase during the same period in 2023. The decrease during the three months ended December 31, 2024, was primarily due to market depreciation, while the increase during the same period in 2023 was largely attributed to market appreciation.
Previous wording
The average annualized investment management fee rate (total advisory fees, excluding performance fees, as a percentage of average assets under management) was 62 basis points for the three months ended September 30, 2024, and 64 basis points for the three months ended September 30, 2023. The average investment management fee for the equity funds was 77 basis points for the three months ended September 30, 2024, and 80 basis points for the three months ended September 30, 2023. The Company has agreed to contractually or voluntarily limit the expenses of the Funds. Therefore, the Company waived or reduced its fees and/or agreed to pay expenses of the Funds. Due to fee waivers, the average investment management fee for the fixed income funds was minimal.
Current wording
The average annualized investment management fee rate (total advisory fees, excluding performance fees, as a percentage of average assets under management) was 56 basis points and 59 basis points for the three and six months ended December 31, 2024, respectively, and 65 basis points for both the three and six months ended December 31, 2023. For the equity funds, the average investment management fee was 68 basis points and 72 basis points for the three and six months ended December 31, 2024, respectively, compared to 82 basis points and 81 basis points for the same periods in 2023. The Company has agreed to contractually or voluntarily limit the expenses of the Funds. Therefore, the Company waived or reduced its fees and/or agreed to pay expenses of the Funds. As a result of these fee waivers, the average investment management fee for the fixed income funds was minimal.
Previous wording
As of September 30, 2024, the Company held investments carried at fair value on a recurring basis of $14.9 million and a cost basis of $17.5 million. The fair value of these investments is approximately 29.2 percent of the Company’s total assets at September 30, 2024. In addition, the Company held other investments of approximately $1.7 million and held-to-maturity debt investments, net of allowance for credit losses, of $891,000.
Current wording
As of December 31, 2024, the Company held investments carried at fair value on a recurring basis of $14.0 million and a cost basis of $17.0 million. The fair value of these investments is approximately 27.9 percent of the Company’s total assets at December 31, 2024. In addition, the Company held other investments of approximately $1.7 million and held-to-maturity debt investments, net of allowance for credit losses, of $926,000.
Previous wording
Investments recorded at fair value on a recurring basis were approximately $14.9 million at September 30, 2024, compared to approximately $15.5 million at June 30, 2024, the Company’s prior fiscal year end, which is a decrease of approximately $599,000. See Note 2, Investments, in the Notes to Consolidated Financial Statements of this Quarterly Report on Form 10-Q, for further information regarding investment activities.
Current wording
Investments recorded at fair value on a recurring basis were approximately $14.0 million at December 31, 2024, compared to approximately $15.5 million at June 30, 2024, the Company’s prior fiscal year end, which is a decrease of approximately $1.5 million. 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.
Previous wording
The Company recorded net income of $315,000 ($0.02 per share) for the three months ended September 30, 2024, compared to a net loss of $176,000 ($(0.01) per share) for the three months ended September 30, 2023, a change of approximately $491,000. The change is primarily due to net investment income in the current period versus net investment loss in the comparative period, offset by a decrease in operating revenues in the current period as compared to the same period in the prior year, as discussed further below.
Current wording
The Company recorded a net loss of $86,000 ($(0.01) per share) for the three months ended December 31, 2024, compared to net income of $1.2 million ($0.09 per share) for the three months ended December 31, 2023, a change of approximately $1.3 million. The change is primarily attributed to a decrease in both operating revenues and net investment income during the current period compared to the same period in the prior year, as discussed further below.
Previous wording
A tax expense of $121,000 was recorded for the three months ended September 30, 2024, compared to a tax benefit of $65,000 for the same period in 2023, reflecting a change of $186,000. The change was mainly due to net investment income in the current period versus a net investment loss in the prior year, partially offset by an operating loss in the current period compared to operating income in the prior year.
Current wording
A tax benefit of $30,000 was recorded for the three months ended December 31, 2024, compared to a tax expense of $436,000 for the same period in 2023, reflecting a change of $466,000. The change is primarily driven by an operating loss in the current period compared to operating income in the same period of the prior year, along with a decrease in net investment income during the current period.
Previous wording
At September 30, 2024, the Company had net working capital (current assets minus current liabilities) of approximately $38.2 million, an increase of $73,000, or 0.2 percent, since June 30, 2024, and a current ratio (current assets divided by current liabilities) of 21.0 to 1. With approximately $27.3 million in cash and cash equivalents, a decrease of $63,000, or 0.2 percent since June 30, 2024, and $11.2 million in securities carried at fair value on a recurring basis, excluding convertible securities, which together comprise approximately 75.4 percent of total assets, the Company has adequate liquidity to meet its current obligations.
Current wording
At December 31, 2024, the Company had net working capital (current assets minus current liabilities) of approximately $38.0 million, a decrease of $182,000, or 0.5 percent, since June 30, 2024, and a current ratio (current assets divided by current liabilities) of 20.0 to 1. With approximately $26.0 million in cash and cash equivalents, a decrease of $1.4 million, or 5.0 percent since June 30, 2024, and $11.0 million in securities carried at fair value on a recurring basis, excluding convertible securities, which together comprise approximately 73.8 percent of total assets, the Company has adequate liquidity to meet its current obligations.
Previous wording
The decrease in cash was primarily due to repurchases of the Company's common stock of $530,000 and dividends paid of $308,000; offset by proceeds from principal paydowns of $750,000 and net cash provided by operating activities of $16,000. Consolidated shareholders’ equity at September 30, 2024, was $48.4 million, a decrease of $639,000, or 1.3 percent since June 30, 2024. The decrease was primarily due to repurchases of the Company's common stock of $525,000 including excise tax, dividends declared of $304,000, and other comprehensive loss of $142,000; offset by net income of $315,000, for the three months ended September 30, 2024.
Current wording
The decrease in cash was primarily due to repurchases of the Company's common stock of $1.1 million, dividends paid of $613,000, and net cash used in operating activities of $383,000; offset by proceeds from principal paydowns of $750,000. Consolidated shareholders’ equity at December 31, 2024, was $47.3 million, a decrease of $1.7 million, or 3.5 percent since June 30, 2024. The decrease was primarily driven by $1.1 million in repurchases of the Company's common stock (including excise tax), $603,000 in dividends declared, and $276,000 in other comprehensive loss, partially offset by $229,000 in net income for the six months ended December 31, 2024.
Previous wording
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, 2024, but may be suspended or discontinued. Cash and securities recorded at fair value on a recurring basis, excluding convertible securities, of approximately $38.5 million are available to fund current activities.
Current wording
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, 2025, but may be suspended or discontinued. Cash and securities recorded at fair value on a recurring basis, excluding convertible securities, of approximately $37.0 million, are available to fund current activities.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
A tax expense of $91,000 was recorded for the six months ended December 31, 2024, compared to $371,000 for the same period in 2023, representing a decrease of $280,000. The change is primarily driven by an operating loss in the current period compared to operating income in the same period of the prior year, partially offset by higher net investment income in the current period.