U S GLOBAL INVESTORS INC

NOTE1. 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 Form10-K for the fiscal year ended* June 30, 2024* ("Form10-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 aretwo 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 isnot 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, including specific funds within U.S. Global Investors Funds (“USGIF” or the “Funds”) and certain U.S Global exchange-traded fund (ETF) clients. However, isnot 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 Notes2 and3. In the ordinary course of business, the Company* maychoose to waive certain fees or assume operating expenses of the funds it advises for competitive, regulatory or contractual reasons (see Note3* for information regarding fee waivers). The Company hasnot 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 isnot deemed to be the primary beneficiary because it doesnot have the obligation to absorb a majority of the expected losses or the right to receive the majority of the residual returns. The Company doesnot consolidate these VIEs because it isnot the primary beneficiary. The Company’s total exposure to unconsolidated VIEs, consisting of the carrying value of investment securities and receivables for fees, was $10.5 million at* December 31, 2024*, and at* June 30, 2024*.

The carrying amount of assets and liabilities recognized in the Consolidated Balance Sheets related to the Company's interests in these non-consolidated VIEs were as follows:

Since the Company isnot 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 than50 percent of the outstanding voting shares over an entity. The Company doesnot have control of any of the above funds it advises; therefore, the Company doesnot consolidate any of these funds.

All significant intercompany balances and transactions have been eliminated in consolidation. Certain amounts have been reclassified for comparative purposes. Due to rounding, the year-to-date amount* may**not* be the exact sum of the quarterly amounts. The results of operations for the interim periods disclosed herein arenot necessarily indicative of the results the Company* mayexpect for the fiscal year ending June 30,*2025 (“fiscal2025”).

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 Form10-K; interim disclosures generally donot repeat those in the annual statements.

Use of Estimates

Preparation of the Consolidated Financial Statements in accordance with GAAP requires management to make estimates and assumptions that affect amounts reported in the Consolidated Financial Statements and accompanying notes. Actual results* may*materially differ from those estimates.

Recent Accounting Pronouncements

In* June 2016,the Financial Accounting Standards Board ("FASB") issued ASU2016*-13, Financial Instruments–* Credit Losses (Topic326): Measurement of Credit Losses on Financial Instruments,and has subsequently issued several amendments (collectively, “ASU2016*-13”). ASU2016-13 adds to U.S. GAAP an impairment model (known as the current expected credit loss model, or "CECL") that is based on expected losses rather than incurred losses for most financial assets and certain other instruments. Under the new guidance, an entity recognizes as an allowance its estimate of expected credit losses. It also modifies the impairment model for available-for-sale debt securities; the concept of "other-than-temporary" impairment was replaced by a determination of whether any impairment is a result of a credit loss or other factors. To adopt the standard, entities are required to make a cumulative-effect adjustment to beginning retained earnings as of the beginning of the fiscal year in which the guidance is effective. The Company adopted the standard using the modified-retrospective approach for all financial assets measured at amortized cost on* July 1, 2023,and recognized an initial allowance for credit losses of $232,000 forone* held-to-maturity debt security. The cumulative-effect adjustment to beginning retained earnings, net of the related tax effect, was a decrease of $183,000.

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In* June 2022,the FASB issued ASU2022*-03, Fair Value Measurement (Topic820*): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions* (“ASU2022-03”) to clarify the guidance in Topic820, Fair Value Measurement, when measuring the fair value of an equity security subject to contractual restrictions that prohibit the sale of an equity security, and to introduce new disclosure requirements for equity securities subject to contractual sale restrictions that are measured at fair value. The standard became effective for the Company on* July 1, 2024.The adoption of the standard didnot* have a material impact on the Company's Consolidated Financial Statements.

In* November 2023,the FASB issued ASU2023*-07, Segment Reporting (Topic280*): Improvements to Reportable Segment Disclosures* (“ASU2023-07”), which enhances the disclosures required for reportable segments in annual and interim consolidated financial statements, including additional, more detailed information about a reportable segment’s expenses. ASU2023-07 is to be applied on a retrospective basis and is effective for the Company's fiscal2025 annual Consolidated Financial Statements and interim periods beginning in fiscal2026. The Company is evaluating the impact ASU2023-07 will have on disclosures in its Consolidated Financial Statements.

In* December 2023,the FASB issued ASU2023*-09, Income Taxes (Topic740*): Improvements to Income Tax Disclosures* (“ASU2023-09”), which enhances the transparency and decision usefulness of income tax disclosures. ASU2023-09 will be effective for fiscal years beginning after* December 15, 2024.Early adoption is permitted for annual financial statements that havenot* yet been issued or made available for issuance. The Company is evaluating the impact ASU2023-09 will have on disclosures in its Consolidated Financial Statements.

In* November 2024,the FASB issued ASU2024*-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic220*-40): Disaggregation of Income Statement Expenses* (“ASU2024-03”), which requires public business entities to disclose specified information about certain costs and expenses. ASU2024-03 will be effective for annual reporting periods beginning after* December 15, 2026,and interim reporting periods beginning after December 15, 2027.Early adoption is permitted. The Company is evaluating the impact ASU2024*-03 will have on disclosures in its Consolidated Financial Statements.

NOTE2. INVESTMENTS

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.

The cost basis of investments is adjusted for amortization of premium or accretion of discount on debt securities held and the recharacterization of distributions from investments in partnerships.

Concentrations of Credit Risk

A significant portion of the Company’s investments carried at fair value on a recurring basis is investments in USGIF, which were $10.5 million as of* December 31, 2024*, and* June 30, 2024*, and investments in HIVE Digital Technologies Ltd. (“HIVE”) convertible debentures, which were $3.0 million and $4.4 million as of* December 31, 2024*, and* June 30, 2024*, respectively. As of* December 31, 2024*, the Consolidated Balance Sheets include a receivable of $750,000 for investment principal repayments and $26,000 in accrued interest, included within accounts and other receivables, related to the HIVE convertible debentures. No receivables associated with the convertible debentures were outstanding as of* June 30, 2024*. Additionally, no allowance for credit losses was recorded for these receivables as of either* December 31, 2024*, or* June 30, 2024*.

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 thethree broad levels listed below:

Level1 – Inputs represent unadjusted quoted prices for identical assets exchanged in active markets.

Level2 – Inputs include directly or indirectly observable inputs (other than Level1 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.

Level3 – 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 arenot 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 isnot 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 thanone 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 arenot 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.

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For common share purchase warrantsnot 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* maychange 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 securitiesnot traded on an exchange are valued by an independentthird party using 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. The model utilizes a number of assumptions in arriving at its results. The effects of changing any of the assumptions or factors utilized in the binomial lattice model, including expected volatility, credit adjusted discount rates, and discounts for lack of marketability,* may*result in a significantly different valuation for the securities.

For other securities included in the fair value hierarchy with unobservable inputs, the Committee considers a number of factors in determining a security’s fair value, including the security’s trading volume, market values of similar class issuances, investment personnel’s judgment regarding the market experience of the issuer, financial status of the issuer, the issuer’s management, and back testing, as appropriate. The fair values* maydiffer from what mayhave 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 donot* have readily determinable fair values are also periodically reviewed by the Committee.

The following tables summarize the major categories of investments with fair values adjusted on a recurring basis as of* December 31, 2024*, and* June 30, 2024*, and other investments with fair values adjusted on a nonrecurring basis, with fair values shown according to the fair value hierarchy.

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The security classified as Level3 and carried at fair value on a recurring basis in the preceding tables is an investment in convertible debentures of HIVE, a company that is headquartered in Canada with cryptocurrency mining facilities in Iceland, Sweden, and Canada. The Company purchased convertible securities for $15.0 million in* January 2021.The convertible securities were comprised of 8.0% interest-bearing unsecured convertible debentures, payable in quarterly installments with a final maturity in January 2026,and 5 million common share purchase warrants in the capital of HIVE. Under the original terms, the principal amount of each debenture was convertible into common shares in the capital of HIVE at a conversion rate of $2.34, and each whole warrant, which expired in January 2024,entitled the Company to acquireone* common share at a price of $3.00 (Canadian). Under the current terms, which reflect a reverse stock split, the principal amount of each debenture is convertible into common shares in the capital of HIVE at a conversion rate of $11.70. Cryptocurrency markets and related securities have been, and are expected to continue to be, volatile. There has been significant volatility in the market price of HIVE, which has materially impacted the value of the investments included on the Consolidated Balance Sheets, unrealized gain (loss) recognized in net investment income (loss), and unrealized gain (loss) recognized in other comprehensive income (loss). The investments didnot represent ownership in HIVE as of* December 31, 2024*, or* June 30, 2024*. The securities are subject to Canadian securities regulations. Frank Holmes serves on the board as executive chairman of HIVE and held shares, options, and restricted stock units at* December 31, 2024*. From* August 2018through January 2023,*Mr. Holmes was Interim CEO of HIVE.

The Company recorded the debentures at the estimated fair value of $16.0 million on purchase date, and an unrealized gain of $6.9 million was recognized in other comprehensive income (loss), which will be realized in net investment income (loss) ratably using the effective interest method until maturity, conversion, or other disposition. The fair value of the debentures was $3.0 million and $4.4 million at* December 31, 2024*, and* June 30, 2024*, respectively. The remaining principal amount was $3.1 million as of* December 31, 2024*.

The Company utilizes an independentthird-party to estimate the fair value of the HIVE convertible debentures and currently considers the fair value measurements to contain Level3 inputs. The following table is a reconciliation of investments recorded at fair value for which unobservable inputs (Level3) were used in determining fair value as of* December 31, 2024*.

Changes in Level3 Assets Measured at Fair Value on a Recurring Basis

The following is quantitative information as of* December 31, 2024*, and* June 30, 2024*, with respect to the securities measured and carried at fair value on a recurring basis with the use of significant unobservable inputs (Level3).

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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 in the current period's earnings. The following details the components of the Company’s trading securities carried at fair value as of* December 31, 2024*, and* June 30, 2024*.

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 isnot related to a credit loss is recognized in other comprehensive income (loss).

Certain derivatives embedded in other financial instruments, such as the conversion option in a convertible bond, are reported at fair value, and changes in fair value are recorded through earnings within net investment income (loss). The host contract continues to be accounted for in accordance with the appropriate accounting standard. The embedded derivative and the related host contract representone legal contract and are combined on the Consolidated Balance Sheets and the tables that follow. The Company heldone financial instrument classified as available-for-sale containing an embedded derivative, which represents an investment in HIVE, at* December 31, 2024*, and* June 30, 2024*. As of* December 31, 2024*, the unrealized loss position in the available-for-sale security was related to changes in the fair value of the embedded derivatives andnot the result of credit losses; therefore, an allowance for credit losses wasnot recorded.

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The following details the components of the Company’s available-for-sale debt investments as of* December 31, 2024*, and* June 30, 2024*.

The following table summarizes the fair values of embedded derivatives on the Consolidated Balance Sheets, categorized by risk exposure, at* December 31, 2024*, and* June 30, 2024*.

The following table presents the effect of embedded derivatives on the Consolidated Statements of Operations, categorized by risk exposure, for thethree andsix months ended* December 31, 2024,and2023*.

At* December 31, 2024*, and* June 30, 2024*, the Company heldone debt security classified as held-to-maturity. The following details the components of the Company’s held-to-maturity debt investments as of* December 31, 2024*, and* June 30, 2024*.

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On* July 1, 2023,the Company adopted ASU2016*-13, which replaced the incurred loss methodology for determining our allowance for credit losses and related provision for credit losses with an expected loss methodology that is referred to as the Current Expected Credit Losses ("CECL") model. CECL is a significant accounting estimate used in the preparation of the Company's Consolidated Financial Statements. Upon adoption of ASU2016-13, the Company replaced the incurred loss impairment model that recognizes losses when it becomes probable that a credit loss will be incurred, with a requirement to recognize lifetime expected credit losses immediately when a financial asset is originated or purchased. CECL is a valuation account that is deducted from the amortized cost basis of held-to-maturity debt securities to present the net amount expected to be collected on the securities. Held-to-maturity debt securities, or portions thereof, are charged against the allowance when they are deemed uncollectible. Arriving at an appropriate level of credit losses involves a high degree of judgment. While management uses available information to recognize losses, changing economic conditions and the economic prospects of the issuers* may*necessitate future additions or reductions to the allowance.

The Company monitors the credit quality of debt securities through credit ratings from various rating agencies. Credit ratings express opinions about the credit quality of a security and are utilized by the Company to make informed decisions. Investment grade securities are rated BBB-/Baa3 or higher and generally considered by the rating agencies and market participants to be of low credit risk. Conversely, securities rated below investment grade are considered to have distinctively higher credit risk than investment grade securities. For securities without credit ratings, the Company utilizes other financial information indicating the financial health of the underlying organization. As of* December 31, 2024*, and* June 30, 2024*, the held-to-maturity debt investment held by the Company didnot have a credit rating.

Since the held-to-maturity debt security doesnot 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 $35,000 and $58,000 for thethree andsix months ended* December 31, 2024*, respectively, and $28,000 and $55,000 for thethree andsix months ended* December 31, 2023*, respectively.

The following table presents the activity in the allowance for credit losses for the held-to-maturity debt investment for thesix months ended* December 31, 2024,and2023*. There wasno allowance at* June 30, 2023.*

The following summarizes the net carrying amount and estimated fair value of available-for-sale and held-to-maturity debt securities at* December 31, 2024*, by contractual maturity dates. Actual maturities* may*differ from final contractual maturities due to principal repayment installments or prepayment rights held by issuers.

As of* December 31, 2024*,none of the Company's investments in debt securities were delinquent or in a non-accrual status, and accrued interest receivable of $51,000 and $13,000 is included in accounts and other receivables on the Consolidated Balance Sheets as of* December 31, 2024*, and* June 30, 2024*, respectively.

Other Investments

Other investments consist of equity investments in entities over which the Company is unable to exercise significant influence and which donot have readily determinable fair values. For these securities, the Company generally elects to value using the measurement alternative, under which such securities are measured at cost, less impairment, if any. If the Company identifies observable price changes for identical or similar securities of the same issuer, the equity security is measured at fair value as of the date the observable transaction occurred, with such changes recorded in net investment income (loss).

The carrying value of equity securities without readily determinable fair values was approximately $1.7 million as of* June 30, 2024*. The following table presents the carrying value of equity securities without readily determinable fair values held as of* December 31, 2024,and2023*, that are measured under the measurement alternative and the related adjustments recorded during the periods presented for those securities with observable price changes or impairments. These securities are included in the nonrecurring fair value hierarchy tables when applicable price changes are observable, or when impairments occur.

The period-end carrying values reflect cumulative purchases and sales in addition to upward and downward carrying value changes. The cumulative amount of upward adjustments to all equity securities without readily determinable fair values total $2.5 million since their respective acquisitions through* December 31, 2024*. The cumulative amount of impairments and other downward adjustments, which include return of capital distributions and observable price changes, to all equity securities without readily determinable fair values total $5.0 million since their respective acquisitions through* December 31, 2024*.

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The Company has an investment in The Sonar Company (“Sonar”), a company headquartered in the United States, at a cost of $175,000. The investment had a carrying value of approximately $362,000 at* December 31, 2024*, and* June 30, 2024*. Roy D. Terracina, Director and Vice Chairman of the Board of Directors for U.S. Global, has served as the CEO of Sonar since* July 2021,and the Company’s ownership of Sonar was approximately 2.8 percent as of December 31, 2024*.

Net Investment Income (Loss)

Net investment income (loss) from the Company’s investments includes:

The following summarizes net investment income (loss) reflected in earnings for the periods presented.

Realized gains on debt securities reclassified from other comprehensive income (loss) related to the Company's investment in HIVE debentures were $170,000 and $373,000 for thethree andsix months ended* December 31, 2024*, respectively, and $303,000 and $639,000 for thethree andsix months ended* December 31, 2023*, respectively.

The following table presents unrealized gains and losses recognized during thethree andsix months ended* December 31, 2024,and2023*, on equity securities and debt securities classified as trading that are still held at each respective date.

Net investment income (loss) can be volatile and vary depending on market fluctuations, the Company’s ability to participate in investment opportunities, and the timing of transactions. The Company expects that gains and losses will continue to fluctuate in the future.

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NOTE3. INVESTMENT MANAGEMENT AND OTHER FEES

The following table presents operating revenues disaggregated by performance obligation.

The Company serves as investment advisor tofour U.S.-based exchange-traded fund (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 U.S. Global Technology and Aerospace & Defense ETF (ticker WAR). The Company receives a unitary management fee of 0.60 percent of average net assets and has agreed to bear all expenses of the U.S.-based ETFs, except the U.S. Global Sea to Sky Cargo ETF ("SEA"). The Company has agreed to contractually limit the expenses of SEA through* April 2025*. The aggregate fees waived, and expenses borne by the Company for SEA were $39,000 and $78,000 for thethree andsix months ended* December 31, 2024*, respectively, and $43,000 and $78,000 for thethree andsix months ended* December 31, 2023*, respectively. The Company also serves as investment advisor toone European-based ETF, The Travel UCITS ETF (ticker TRIP). The U.S. Global Jets UCITS ETF merged into The Travel UCITS ETF in* April 2024.*The Company receives a unitary management fee of 0.69 percent of average net assets and has agreed to bear all expenses of the European-based ETF.

The Company serves as investment adviser to USGIF and receives advisory fees comprised oftwo components: a base management fee and a performance fee. The management fee is based on a specified percentage of net assets under management. The performance fee is a fulcrum fee that is adjusted upwards or downwards by 0.25 percent when there is a performance difference of 5 percent or more between a fund’s performance and that of its designated benchmark index over the prior rolling12 months. This performance adjustment began to be phased out during thefourth quarter of fiscal2024 and will cease during thefourth quarter of fiscal2025. During the phase-out period, the adjustment for the performance fee can only be adjusted downward.

The Company has agreed to contractually limit the expenses of USGIF, except the U.S. Government Securities Ultra-Short Bond Fund, through* April 2025.The Company has voluntarily waived or reduced its fees and/or agreed to pay expenses on the U.S. Government Securities Ultra-Short Bond Fund. This cap will continue on a voluntary basis at the Company’s discretion. The aggregate fees waived and expenses borne by the Company for USGIF were $304,000 and $532,000 for thethree* andsix months ended* December 31, 2024*, respectively, and $192,000 and $445,000 for thethree andsix months ended* December 31, 2023*, respectively. Management cannot predict the impact of future waivers due to the number of variables and the range of potential outcomes.

The Company receives administrative service fees from USGIF based on an annual rate of 0.05 percent on the average daily net assets of each fund.

As of* December 31, 2024*, the Company had $759,000 in receivables from fund clients, of which $642,000 was from the ETFs and $117,000 was from USGIF. As of* June 30, 2024*, the Company had $772,000 in receivables from fund clients, of which $647,000 was from the ETFs and $125,000 was from USGIF. There wasno allowance for credit losses related to receivables as of* December 31, 2024*, or* June 30, 2024*.

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NOTE4. RESTRICTED AND UNRESTRICTED CASH

The Company maintains its cash deposits with established commercial banks. At times, balances* mayexceed federally insured limits. We havenot* experienced any losses in such accounts and donot 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 isnot available for general corporate use.

A reconciliation of cash, cash equivalents, and restricted cash reported from the Consolidated Balance Sheets to the Consolidated Statements of Cash Flows is shown below.

NOTE5. LEASES

The Company has lease agreements for office equipment that expire in the fiscal year2026. Lease expenses included in general and administrative expense on the Consolidated Statements of Operations totaled $16,000 and $50,000 for thethree andsix months ended* December 31, 2024*, respectively, and $33,000 and $65,000 for thethree andsix months ended* December 31, 2023*, respectively.

The following table presents the components of lease cost.

Supplemental information related to the Company's leases follows.

Additional qualitative information concerning the Company’s leases follows.

The following table presents the maturities of lease liabilities as of* December 31, 2024*.

The Company is the lessor of certain areas of its owned office building under operating leases expiring in various months through fiscal year2026. 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 inother income on the Consolidated Statements of Operations was $24,000 and $47,000 for thethree andsix months ended* December 31, 2024*, respectively, and $27,000 and $55,000 for thethree andsix months ended* December 31, 2023*, respectively. The cost of obtaining lessor contracts, which is included in other assets on the Consolidated Balance Sheets, was $1,000 at* December 31, 2024*, and $2,000 at* June 30, 2024*.

The Company is also 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.

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The following is a summary analysis of annual undiscounted cash flows to be received on leases as of* December 31, 2024*.

The Company* mayterminate the building leases withone 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 ofsix months of the base monthly rent or the base monthly rent times the number of months remaining in the initial term.

NOTE6. OTHER ACCRUED EXPENSES

Other accrued expenses consist of the following:

The Company had receivables from HIVE related to reimbursements for certain expenses totaling $149,000 as of* December 31, 2024*, and $207,000 as of* June 30, 2024*. These amounts, reported under accounts and other receivables on the Consolidated Balance Sheets, include reimbursements for expenses listed within vendors payable in the table above, as well as additional amountsnot reflected in the table.

NOTE7. DEBT

The Company has access to a $1.0 million credit facility for working capital purposes. The credit agreement requires the Company to maintain certain covenants; the Company has been in compliance with these covenants during the current fiscal year. The credit agreement expires on* May 31,2026, and the Company intends to renew it biennially. The credit facility is collateralized by approximately $1.0 million at December 31, 2024*, included in restricted cash on the Consolidated Balance Sheets, held in deposit in a money market account at the financial institution that provided the credit facility. As of* December 31, 2024*, the credit facility remains unutilized by the Company.

NOTE8. 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 $0.0075 per month for fiscal year2024 and through* December 2024*.

In* December 2024*, the Board authorized the continuance of the monthly dividend of $0.0075 per share from* January* through* March 2025*, at which time it will be considered for continuation by the Board.

The Company has a share repurchase program, approved by the Board of Directors, authorizing the Company to annually purchase up to $5.0 million of its outstanding common shares, as market and business conditions warrant, on the open market in compliance with Rule10b-18 and Rule10b5-1 of the Securities Exchange Act of1934. The repurchase program has been in place since* December 2012,and the Board of Directors has annually renewed the repurchase program each calendar year. The Company announced on February 25, 2022,that the Board of Directors of the Company approved an increase to the limit of its annual share buyback program from $2.75 million to $5.0 million. The Company announced on September 19, 2024,that the Board of Directors of the Company approved an update authorizing the Company to repurchase up to $5.0 million of its outstanding common shares between September 13, 2024,and December 31, 2024.The total amount of shares that maybe repurchased under the program was $6.5 million in2024* and is $5.0 million in2025. The acquired shares* maybe used for corporate purposes, including shares issued to employees in the Company’s stock-based compensation programs. During thethree* andsix months ended* December 31, 2024*, the Company repurchased 236,731 and 434,618, respectively, of its class A shares using cash of $587,000 and $1.1 million, respectively. During thethree andsix months ended* December 31, 2023*, the Company repurchased 196,295 and 394,508, respectively, of its class A shares using cash of $560,000 and $1.2 million, respectively.

The Inflation Reduction Act of2022, which was enacted in* August 2022,imposed a1%* excise tax on stock buybacks by publicly traded corporations, effective on* January 1, 2023.Any excise tax incurred is recognized as part of the cost basis of the shares acquired in the Consolidated Statements of Shareholders' Equity. The impact of these provisions was $5,000 and $10,000 for thethree* andsix months ended* December 31, 2024*, respectively, and $6,000 and $12,000 for thethree andsix months ended* December 31, 2023*, respectively. All amounts presented in this report related to the Company's share repurchases and the Company's share repurchase authorization exclude such excise taxes, to the extent applicable, unless otherwise indicated.

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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 the1989 Plan, there were 100,100 nonvested stock options outstanding as of* December 31, 2024,with a weighted average exercise of $2.44. Additionally, there were 228,000 and 229,000 stock options outstanding and exercisable as of December 31, 2024,and December 31, 2023*, respectively, with a weighted average exercise price of $6.05.

Under the1997 Plan, there were 2,000 stock options outstanding and exercisable as of both* December 31, 2024,and December 31, 2023*, with a weighted average exercise price of $2.74.

Stock Option Activity

During thethree andsix months ended* December 31, 2024*, the Company granted 100,100 stock options with a weighted average grant date fair value price of $1.08 and a vesting period ofsix months. The fair value of the options was estimated using the Black-Scholes option pricing model. Additionally, during thethree andsix months ended* December 31, 2024*,1,000 stock options were forfeited, andno stock options were exercised. During thethree andsix months ended* December 31, 2023*, no stock options were granted, forfeited, or exercised.

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.

For thethree andsix months ended* December 31, 2024*, the Company recognized share-based compensation expense of $11,000. As of* December 31, 2024,*the total unrecognized share-based compensation cost related to nonvested awards was $97,000, which is expected to be recognized over a weighted average period of 0.48 years.

For thethree andsix months ended* December 31, 2023*, no share-based compensation expense was recognized. As of* December 31, 2023,*there wereno unrecognized share-based compensation costs related to share-based awards under the plans.

NOTE9. EARNINGS PER SHARE

The basic earnings per share (“EPS”) calculation excludes dilution and is computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution of EPS that could occur if options to issue common stock were exercised.

The following table sets forth the computation for basic and diluted EPS.

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 thethree andsix months ended* December 31, 2024*, employee stock options of 230,000 were excluded from diluted EPS. For thethree andsix months ended* December 31, 2023*, employee stock options of 229,000 were excluded from diluted EPS.

During thethree andsix months ended* December 31, 2024*, and2023, 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.

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NOTE10. 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 in the bases of assets and liabilities for financial and tax purposes 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 25.9 percent and 28.4 percent for thethree andsix months ended* December 31, 2024*, respectively, and 26.2 percent and 26.1 percent for thethree andsix months ended* December 31, 2023*, respectively.

A valuation allowance is provided when it is more likely thannot that some portion of the deferred tax amount willnot be realized. There wasno valuation allowance included at* December 31, 2024*, or at* June 30, 2024*.

The Company maintains a reserve for uncertain tax positions for income tax matters. As of* December 31, 2024*, and* June 30, 2024*, the total reserve for uncertain tax positions, including interest and penalties, and net of federal benefits, was $822,000 and $785,000, respectively, which is included within long-term liabilities on the Consolidated Balance Sheets. The Company believes the reserve for uncertain tax positions, including interest and penalties, and net of federal benefits, of $822,000 adequately covers open tax years and uncertain tax positions up to and including* December 31, 2024*, for major taxing jurisdictions. As of* December 31, 2024*, the entire $822,000 of unrecognized tax benefits, if recognized, would impact the Company's effective income tax rate.

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NOTE11. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The following table presents the change in accumulated other comprehensive income (loss) (“AOCI”) by component.

NOTE12. FINANCIAL INFORMATION BY BUSINESS SEGMENT

The Company operates principally intwo business segments: providing investment management services to USGIF and ETF clients; and investing for its own account in an effort to add growth and value to its cash position. The following schedule details gross identifiable assets, total revenues, and income by business segment.

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Operating revenues from investment management services include operating revenues from ETF clients of $1.8 million and $3.6 million for thethree andsix months ended* December 31, 2024*, respectively, and $2.5 million and $5.2 million for thethree andsix months ended* December 31, 2023*, respectively. Operating revenues from investment management services also include operating revenues from USGIF of $402,000 and $795,000 for thethree andsix months ended* December 31, 2024*, respectively, and $356,000 and $780,000 for thethree andsix months ended* December 31, 2023*, respectively.

NOTE13. CONTINGENCIES AND COMMITMENTS

The Company continuously reviews investor, employee and vendor complaints, and pending or threatened litigation. The likelihood that a loss contingency exists is evaluated through consultation with legal counsel, and a loss contingency is recorded if probable and reasonably estimable.

During the normal course of business, the Company* maybe 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 maybe 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 willnot* have a material adverse effect on the Consolidated Financial Statements of the Company. Excluding reserves for uncertain tax positions, the Company recordedno accruals for contingencies as of* December 31, 2024*, or* June 30, 2024*.

The Board has authorized a monthly dividend of $0.0075 per share through* March 2025*, at which time it will be considered for continuation by the Board. 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 total amount of cash dividends expected to be paid to class A and class C shareholders from* January* to* March 2025* is approximately $304,000.

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