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Other investments include equity securities without readily determinable fair values that were adjusted as a result of the measurement alternative on dates during the nine months ended March 31, 2024. 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Table of Contents

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 March 31, 2024

 

OR

 

☐ 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 May 2, 2024, there were 13,866,999 shares of Registrant’s class A nonvoting common stock issued and 11,844,295 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)

6

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

7

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

22

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

26

ITEM 4. CONTROLS AND PROCEDURES

27

  

  

PART II. OTHER INFORMATION

28

  

  

ITEM 1A. RISK FACTORS

28

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

28

ITEM 6. EXHIBITS

29

  

  

SIGNATURES

30

 

 
Table of Contents

  

 

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

 

U.S. GLOBAL INVESTORS, INC.

CONSOLIDATED BALANCE SHEETS

 

  

March 31, 2024

  

June 30, 2023

 

(dollars in thousands)

 

(unaudited)

     

Assets

        

Current Assets

        

Cash and cash equivalents

 $27,460  $25,401 

Restricted cash

  1,000   1,000 

Investments in trading securities at fair value, current

  10,071   11,642 

Accounts and other receivables (net of allowance for credit losses of $0, and $0, respectively)

  1,027   1,245 

Tax receivable

  749   576 

Prepaid expenses

  635   510 

Total Current Assets

  40,942   40,374 
         

Net Property and Equipment

  1,154   1,138 
         

Other Assets

        

Deferred tax asset

  1,840   1,920 

Investments in trading securities at fair value, non-current

  1,435   1,563 

Investments in available-for-sale debt securities at fair value (amortized cost: $6,651, and $7,729, respectively) (net of allowance for credit losses of $0, and $0, respectively)

  5,190   7,008 

Investments in held-to-maturity debt securities at amortized cost

  1,000   1,000 

Less: Allowance for credit losses

  (157)  - 

Investments in held-to-maturity debt securities, net of allowance for credit losses

  843   1,000 

Other investments

  1,114   2,388 

Financing lease, right of use assets

  45   65 

Other assets, non-current

  209   217 

Total Other Assets

  10,676   14,161 

Total Assets

 $52,772  $55,673 

Liabilities and Shareholders’ Equity

        

Current Liabilities

        

Accounts payable

 $58  $143 

Accrued compensation and related costs

  306   1,165 

Dividends payable

  317   329 

Financing lease liability, short-term

  31   28 

Other accrued expenses

  1,629   1,274 

Total Current Liabilities

  2,341   2,939 
         

Long-Term Liabilities

        

Deferred tax liability

  20   4 

Reserve for uncertain tax positions

  549   496 

Financing lease liability, long-term

  16   38 

Total Long-Term Liabilities

  585   538 

Total Liabilities

  2,926   3,477 
         

Commitments and Contingencies (Note 14)

          
         

Shareholders’ Equity

        

Common stock (class A) - $0.025 par value; nonvoting; 28,000,000 shares authorized; 13,866,999 shares issued at March 31, 2024, and June 30, 2023; 11,908,737 and 12,496,674 shares outstanding at March 31, 2024, and June 30, 2023, 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 March 31, 2024, and June 30, 2023

  52   52 

Additional paid-in-capital

  16,444   16,442 

Treasury stock, class A shares at cost; 1,958,262 and 1,370,325 shares at March 31, 2024, and June 30, 2023, respectively

  (5,456)  (3,740)

Accumulated other comprehensive income, net of tax

  831   1,348 

Retained earnings

  37,628   37,747 

Total Shareholders’ Equity

  49,846   52,196 

Total Liabilities and Shareholders’ Equity

 $52,772  $55,673 

 

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)

 

   

Nine Months Ended

    

Three Months Ended

  
   

March 31,

    

March 31,

  

(dollars in thousands, except per share data)

  

2024

    

2023

    

2024

    

2023

  

Operating Revenues

                                

Advisory fees

   $ 8,458     $ 11,663     $ 2,566     $ 3,591  

Administrative services fees

     86       101       27       33  

Total Operating Revenues

     8,544       11,764       2,593       3,624  

Operating Expenses

                                

Employee compensation and benefits

     3,445       3,569       1,209       1,264  

General and administrative

     4,725       4,489       1,733       1,477  

Advertising

     291       297       97       91  

Depreciation

     163       183       41       61  

Interest

     2       3       1       1  

Total Operating Expenses

     8,626       8,541       3,081       2,894  

Operating Income (Loss)

     (82 )     3,223       (488 )     730  

Other Income (Loss)

                                

Net investment income (loss)

     1,363       (189 )     460       1,155  

Other income (loss)

     183       184       68       61  

Total Other Income (Loss)

     1,546       (5 )     528       1,216  

Income (Loss) Before Income Taxes

     1,464       3,218       40       1,946  

Provision for Income Taxes

                                

Tax expense (benefit)

     446       698       75       326  

Net Income (Loss)

   $ 1,018     $ 2,520     $ (35 )   $ 1,620  
                                 

Earnings (Loss) Per Share

                                

Basic Net Income (Loss) per share

   $ 0.07     $ 0.17     $ (0.00 )   $ 0.11  

Diluted Net Income (Loss) per share

   $ 0.07     $ 0.17     $ (0.00 )   $ 0.11  
                                 

Basic weighted average number of common shares outstanding

     14,278,691       14,862,893       14,077,042       14,747,537  

Diluted weighted average number of common shares outstanding

     14,278,777       14,863,188       14,077,042       14,747,637  

 

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)

 

   

Nine Months Ended

    

Three Months Ended

  
   

March 31,

    

March 31,

  

(dollars in thousands)

  

2024

    

2023

    

2024

    

2023

  

Net Income (Loss)

   $ 1,018     $ 2,520     $ (35 )   $ 1,620  

Other Comprehensive Income (Loss)

                                

Unrealized gains (losses) on available-for-sale securities arising during period, net of tax

     199       (939 )     79       80  

Less: reclassification adjustment for gains included in net income (loss), net of tax

     (716 )     (1,026 )     (211 )     (311 )

Net change from available-for-sale securities

     (517 )     (1,965 )     (132 )     (231 )

Other Comprehensive Income (Loss)

     (517 )     (1,965 )     (132 )     (231 )

Total Comprehensive Income (Loss)

   $ 501     $ 555     $ (167 )   $ 1,389  

 

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

            

Treasury Stock

    

Accumulated

                  
   

(class A)

    

(class C)

    

Additional

                    

Other

                  
                                   

Paid-in

                    

Comprehensive

    

Retained

          

(dollars in thousands)

  

Shares

    

Par Value

    

Shares

    

Par Value

    

Capital

    

Shares

    

Cost

    

Income (Loss)

    

Earnings

    

Total

  

Balance at June 30, 2023

     13,866,999     $ 347       2,068,549     $ 52     $ 16,442       1,370,325     $ (3,740 )   $ 1,348     $ 37,747     $ 52,196  

Impact of ASU 2016-13 adoption, net of tax (Note 2)

     -       -       -       -       -       -       -       -       (183 )     (183 )

Balance at June 30, 2023 (as adjusted for change in accounting principle)

     13,866,999     $ 347       2,068,549     $ 52     $ 16,442       1,370,325     $ (3,740 )   $ 1,348     $ 37,564     $ 52,013  

Repurchases of shares of Common Stock (class A), including excise tax

     -       -       -       -       -       198,213       (617 )     -       -       (617 )

Issuance of stock under ESPP of shares of Common Stock (class A)

     -       -       -       -       2       (5,494 )     15       -       -       17  

Dividends declared

     -       -       -       -       -       -       -       -       (322 )     (322 )

Other comprehensive income (loss), net of tax

     -       -       -       -       -       -       -       (214 )     -       (214 )

Net income (loss)

     -       -       -       -       -       -       -       -       (176 )     (176 )

Balance at September 30, 2023

     13,866,999     $ 347       2,068,549     $ 52     $ 16,444       1,563,044     $ (4,342 )   $ 1,134     $ 37,066     $ 50,701  

Repurchases of shares of Common Stock (class A), including excise tax

     -       -       -       -       -       196,295       (566 )     -       -       (566 )

Issuance of stock under ESPP of shares of Common Stock (class A)

     -       -       -       -       -       (6,100 )     17       -       -       17  

Dividends declared

     -       -       -       -       -       -       -       -       (320 )     (320 )

Other comprehensive income (loss), net of tax

     -       -       -       -       -       -       -       (171 )     -       (171 )

Net income (loss)

     -       -       -       -       -       -       -       -       1,229       1,229  

Balance at December 31, 2023

     13,866,999     $ 347       2,068,549     $ 52     $ 16,444       1,753,239     $ (4,891 )   $ 963     $ 37,975     $ 50,890  

Repurchases of shares of Common Stock (class A), including excise tax

     -       -       -       -       -       211,282       (582 )     -       -       (582 )

Issuance of stock under ESPP of shares of Common Stock (class A)

     -       -       -       -       -       (6,259 )     17       -       -       17  

Dividends declared

     -       -       -       -       -       -       -       -       (312 )     (312 )

Other comprehensive income (loss), net of tax

     -       -       -       -       -       -       -       (132 )     -       (132 )

Net income (loss)

     -       -       -       -       -       -       -       -       (35 )     (35 )

Balance at March 31, 2024

     13,866,999     $ 347       2,068,549     $ 52     $ 16,444       1,958,262     $ (5,456 )   $ 831     $ 37,628     $ 49,846  

 

The accompanying notes are an integral part of these Consolidated Financial Statements.

 

 

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U.S. GLOBAL INVESTORS, INC.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (CONTINUED) (UNAUDITED)

 

   

Common Stock

    

Convertible Common Stock

            

Treasury Stock

    

Accumulated

                  
   

(class A)

    

(class C)

    

Additional

                    

Other

                  
                                   

Paid-in

                    

Comprehensive

    

Retained

          

(dollars in thousands)

  

Shares

    

Par Value

    

Shares

    

Par Value

    

Capital

    

Shares

    

Cost

    

Income (Loss)

    

Earnings

    

Total

  

Balance at June 30, 2022

     13,866,999     $ 347       2,068,549     $ 52     $ 16,438       978,049     $ (2,599 )   $ 3,624     $ 35,923     $ 53,785  

Repurchases 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 income (loss), net of tax

     -       -       -       -       -       -       -       (486 )     -       (486 )

Net income (loss)

     -       -       -       -       -       -       -       -       53       53  

Balance at September 30, 2022

     13,866,999     $ 347       2,068,549     $ 52     $ 16,440       1,014,031     $ (2,722 )   $ 3,138     $ 35,641     $ 52,896  

Repurchases of shares of Common Stock (class A)

     -       -       -       -       -       87,407       (249 )     -       -       (249 )

Issuance of stock under ESPP of shares of Common Stock (class A)

     -       -       -       -       1       (4,898 )     13       -       -       14  

Dividends declared

     -       -       -       -       -       -       -       -       (335 )     (335 )

Other comprehensive income (loss), net of tax

     -       -       -       -       -       -       -       (1,248 )     -       (1,248 )

Net income (loss)

     -       -       -       -       -       -       -       -       847       847  

Balance at December 31, 2022

     13,866,999     $ 347       2,068,549     $ 52     $ 16,441       1,096,540     $ (2,958 )   $ 1,890     $ 36,153     $ 51,925  

Repurchases of shares of Common Stock (class A)

     -       -       -       -       -       193,040       (556 )     -       -       (556 )

Issuance of stock under ESPP of shares of Common Stock (class A)

     -       -       -       -       1       (5,486 )     15       -       -       16  

Dividends declared

     -       -       -       -       -       -       -       -       (329 )     (329 )

Other comprehensive income (loss), net of tax

     -       -       -       -       -       -       -       (231 )     -       (231 )

Net income (loss)

     -       -       -       -       -       -       -       -       1,620       1,620  

Balance at March 31, 2023

     13,866,999     $ 347       2,068,549     $ 52     $ 16,442       1,284,094     $ (3,499 )   $ 1,659     $ 37,444     $ 52,445  

 

The accompanying notes are an integral part of these Consolidated Financial Statements.

 

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U.S. GLOBAL INVESTORS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

 

   

Nine Months Ended March 31,

  

(dollars in thousands)

  

2024

    

2023

  

Cash Flows from Operating Activities:

                

Net income (loss)

   $ 1,018     $ 2,520  

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

                

Depreciation, amortization and accretion

     (103 )     (198 )

Net recognized (gain) loss on disposal of fixed assets

     -       3  

Net realized (gains) losses on securities

     5,928       (1,286 )

Unrealized (gains) losses on securities

     (5,594 )     2,504  

Investment basis adjustment

     -       (5 )

Provision for deferred taxes

     282       (265 )

Allowance for credit losses

     (75 )     -  

Changes in operating assets and liabilities:

                

Accounts and other receivables

     45       754  

Prepaid expenses and other assets

     (97 )     (146 )

Accounts payable and other accrued liabilities

     (551 )     (1,252 )

Total adjustments

     (165 )     109  

Net cash provided by (used in) operating activities

     853       2,629  

Cash Flows from Investing Activities:

                

Purchase of property and equipment

     (179 )     (14 )

Purchase of trading securities at fair value, non-current

     (219 )     -  

Purchase of other investments

     -       (663 )

Proceeds on sale of trading securities at fair value, current

     1,600       350  

Proceeds on sale of trading securities at fair value, non-current

     179       -  

Proceeds from principal paydowns of available-for-sale debt securities at fair value

     2,250       2,250  

Return of capital on other investments

     259       -  

Net cash provided by (used in) investing activities

     3,890       1,923  

Cash Flows from Financing Activities:

                

Principal payments on financing lease

     (22 )     (20 )

Issuance of common stock

     51       43  

Repurchases of common stock

     (1,748 )     (938 )

Dividends paid

     (965 )     (1,004 )

Net cash provided by (used in) financing activities

     (2,684 )     (1,919 )

Net increase (decrease) in cash, cash equivalents, and restricted cash

     2,059       2,633  

Beginning cash, cash equivalents, and restricted cash

     26,401       23,314  

Ending cash, cash equivalents, and restricted cash

   $ 28,460     $ 25,947  
                 

Supplemental Disclosures of Non-Cash Investing and Financing Activities

                

Dividends declared but not paid

   $ 317     $ 332  

Excise tax liability accrued on stock repurchases

   $ 17     $ -  

Unsettled purchases of other investments

   $ -     $ 186  

Unsettled class A common stock repurchases

   $ 11     $ -  
                 

Supplemental Disclosures of Cash Flow Information

                

Cash paid for income taxes

   $ 250     $ 470  

 

The accompanying notes are an integral part of these Consolidated Financial Statements.

 

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U.S. GLOBAL INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 

 

NOTE 1. REVISION OF PREVIOUSLY ISSUED CONSOLIDATED FINANCIAL STATEMENTS

 

In connection with the preparation of its Consolidated Financial Statements for the fiscal year ended June 30, 2023, the Company determined that its previously issued Consolidated Financial Statements as of and for the three and nine months ended March 31, 2023, contained an error. Specifically, the Company did not record certain liabilities as required by FASB Interpretation No. 48 “Accounting for Uncertainty in Income Taxes” (codified under ASC 740-10). Based on management’s evaluation of the accounting error under the SEC Staff’s Accounting Bulletins Nos. 99 and 108 and interpretations thereof, the Company concluded the error is not material, on an individual or aggregate basis, to the Company’s previously reported financial statements. The Company has corrected this accounting error in the accompanying Consolidated Financial Statements as of and for the three and nine months ended March 31, 2023, as a revision to those financial statements.

  

The following table sets forth the impact of correcting this error in the Company’s previously issued Consolidated Financial Statements.

 

 

  

Nine Months Ended March 31, 2023

  

Three Months Ended March 31, 2023

 
  

As

          

As

         
  

Previously

  

Immaterial

  

As

  

Previously

  

Immaterial

  

As

 

(dollars in thousands, except per share data)

 

Reported

  

Revisions

  

Revised

  

Reported

  

Revisions

  

Revised

 

Tax expense (benefit)

 $602  $96  $698  $306  $20  $326 

Net Income (Loss)

 $2,616  $(96) $2,520  $1,640  $(20) $1,620 
                         

Earnings Per Share

                        

Basic Net Income (Loss) per Share

 $0.18  $(0.01) $0.17  $0.11  $(0.00) $0.11 

Diluted Net Income (Loss) per Share

 $0.18  $(0.01) $0.17  $0.11  $(0.00) $0.11 

 

In addition to the changes listed above, the Consolidated Statements of Comprehensive Income, Consolidated Statements of Shareholders' Equity, Consolidated Statements of Cash Flows, and impacted footnote disclosures have also been revised to reflect the error correction.
 

NOTE 2. 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, 2023 ("Form 10-K"), except for the adoption of the new accounting pronouncement discussed below.

 

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 holds variable interests in, but is not deemed to be the primary beneficiary of, certain funds it advises, specifically, certain funds in U.S. Global Investors Funds (“USGIF” or the “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 3 and 4. 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 4 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 carrying value of investment securities and receivables for fees, was $10.9 million at March 31, 2024, and $12.5 million at June 30, 2023.

 

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

 

  

Carrying Value and Maximum Exposure to Loss

 

(dollars in thousands)

 

March 31, 2024

  

June 30, 2023

 

Investments in securities at fair value, current

 $10,071  $11,642 

Investments in equity securities at fair value, non-current

  830   785 

Other receivables

  29   45 

Total VIE assets, maximum exposure to loss

 $10,930  $12,472 

 

Since the Company is not the primary beneficiary of the above funds it advises, the Company evaluated if it should consolidate under the voting interest entity model. Under the voting interest model, for legal entities other than partnerships, the usual condition for control is ownership, directly or indirectly, of more than 50 percent of the outstanding voting shares over an entity. The Company does not have control of any of the above funds it advises; therefore, the Company does not consolidate any of these funds.

 

All significant intercompany balances and transactions have been eliminated in consolidation. Certain amounts have been reclassified for comparative purposes. Due to rounding, the year-to-date amount may not be the exact sum of the quarterly amounts. The results of operations for the interim periods disclosed herein are not necessarily indicative of the results the Company may expect for the fiscal year ending June 30, 2024 (“fiscal 2024”).

 

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.

    

Adoption of New Accounting Standard

 

In June 2016, the Financial Accounting Standards Board ("FASB") issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, and has subsequently issued several amendments (collectively, “ASU 2016-13”). ASU 2016-13 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 for one 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.

 

Recent Accounting Pronouncements

 

In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions (“ASU 2022-03”) to clarify the guidance in Topic 820, Fair Value Measurement, when measuring the fair value of an equity security subject to contractual restrictions that prohibit the sale of an equity security, and to introduce new disclosure requirements for equity securities subject to contractual sale restrictions that are measured at fair value. ASU 2022-03 will be effective for fiscal years beginning after December 15, 2023. Early adoption is permitted for both interim and annual financial statements that have not yet been issued or made available for issuance. The Company has evaluated the guidance and does not expect the adoption of the new standard to have a material impact on its Consolidated Financial Statements.

 

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”), 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. ASU 2023-07 will be effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, on a retrospective basis. Early adoption is permitted. The Company is currently evaluating the impact of the pending adoption of ASU 2023-07 on its Consolidated Financial Statements.

 

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 income tax disclosures. ASU 2023-09 will be effective for fiscal years beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The Company is currently evaluating the impact of the pending adoption of ASU 2023-09 on its Consolidated Financial Statements.

 

Significant Accounting Policies
 
As a result of the adoption of an accounting pronouncement during the current fiscal year, the following accounting policies have been updated. For a complete listing of the Company's significant accounting policies, please refer to the Annual Report on Form 10-K for the year ended June 30, 2023.

 

Investments in Debt Securities. The Company classifies debt investments based on the Company’s intent to sell the security or its intent and ability to hold the debt security 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. Held-to-maturity debt securities are purchased with the intent and ability to hold until maturity and are measured at amortized cost. All other debt securities are classified as available-for-sale and are carried at fair value, and changes in unrealized gains and losses are reported net of tax in accumulated other comprehensive income (loss), except for declines in fair value determined to be a result of credit loss, which are reported in earnings. Upon the disposition of an available-for-sale security, the Company reclassifies the gain or loss on the security from accumulated other comprehensive income (loss) to net investment income (loss). Both available-for-sale and held-to-maturity debt securities are subject to an allowance for credit losses. 

 

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Allowance for Credit Losses (Held-to-Maturity Debt Securities). For held-to-maturity debt securities, the Company is required to utilize the CECL methodology to estimate expected credit losses. Securities are evaluated on an individual basis. The individual assessment and determination of expected credit losses is generally based on the discounted cash flow method. Under the discounted cash flow method, the allowance for credit losses reflects the difference between the amortized cost basis and the present value of the expected cash flows. The Company adjusts the discount rate utilized to determine the present value of the expected cash flows quarterly for subsequent fluctuations in market interest rates. Changes in the present value 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, and are included in interest income within net investment income (loss) on the Consolidated Statements of Operations. Changes in the allowance attributable to expectations of cash flow timing or amounts are recorded as a provision (or release) for credit losses and are included within other income (loss) on the Consolidated Statements of Operations. Held-to-maturity debt securities, or portions thereof, are charged against the allowance when management believes the uncollectible status of a held-to-maturity security is confirmed. Accrued interest receivable is excluded from the allowance for credit losses. For more information about held-to-maturity debt securities, see Note 3, Investments.

 

Allowance for Credit Losses (Available-for-Sale Debt Securities). The impairment model for available-for-sale debt securities differs from the CECL methodology applied for held-to-maturity debt securities because available-for-sale debt securities are measured at fair value rather than amortized cost. For available-for-sale debt securities in an unrealized loss position, the Company first assesses whether it intends to sell, or it is more likely than not that it will be required to sell, the security before recovery of its amortized cost basis. If either criterion is met, the security’s amortized cost basis is written down to fair value through earnings. For available-for-sale debt securities where neither of the criteria is met, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the credit rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss, limited to the amount that the fair value is less than the amortized cost basis. Any remaining discount that has not been recorded through an allowance for credit losses is recognized in other comprehensive income. Changes in the allowance for credit losses are recorded as a provision (or release) for credit losses and are included within other income (loss) on the Consolidated Statements of Operations. Losses are charged against the allowance when management believes the uncollectible status of an available-for-sale security is confirmed or when either of the criteria regarding intent or requirement to sell is met. Accrued interest receivable is excluded from the allowance for credit losses. See Note 3, Investments, for more information about available-for-sale debt securities.

 

Credit Quality Indicators. 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.  

 

Receivables and Allowance for Credit Losses. Receivables consist primarily of advisory and other fees owed to the Company by clients. The Company records an expense based on a forward-looking current expected credit loss model to maintain an allowance for credit losses. When determining the allowance for receivables, the probability of recoverability of the receivable based on past experience, taking into account current collection trends and general economic factors, including bankruptcy rates, is considered. The Company also considers future economic trends to estimate expected credit losses over the lifetime of the asset. Credit risks are assessed based on historical write-offs, net of recoveries, as well as an analysis of the aged accounts receivable balances with allowances generally increasing as the receivable ages. Accounts receivable may be fully reserved for when specific collection issues are known to exist, such as pending bankruptcies. Due to the short-term nature, the Company had no allowance for credit losses related to receivables as of March 31, 2024, or June 30, 2023.

 

Dividends and Interest. Dividends are recorded on the ex-dividend date, and interest income is recorded on an accrual basis. Debt investments are placed on a non-accrual status when they are past due 180 days or more as to contractual obligations or when other circumstances indicate that collection is not probable. When a debt investment is placed on a non-accrual status, any interest accrued but not received is reversed against interest income. Any discount between the cost and the principal amount of debt investments is amortized to interest income using the effective interest method. When the discounted cash flow method is utilized to estimate expected credit losses for held-to-maturity debt securities, any changes in the allowance for credit losses that are attributable to the passage of time are recognized in interest income. Both dividends and interest income are included within net investment income (loss) on the Consolidated Statements of Operations.

 

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NOTE 3. INVESTMENTS

 

As of March 31, 2024, the Company held investments carried at fair value on a recurring basis of $16.7 million and a cost basis of $18.9 million. The fair value of these investments is approximately 31.6 percent of the Company’s total assets at March 31, 2024. In addition, the Company held other investments of approximately $1.1 million and held-to-maturity debt investments, net of allowance for credit losses, of $843,000.

 

The cost basis of investments is adjusted for amortization of premium or accretion of discount on debt securities held or 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 $10.9 million and $12.4 million as of March 31, 2024, and June 30, 2023, respectively, and investments in HIVE Digital Technologies Ltd. (“HIVE”), which were convertible debentures valued at $5.2 million at March 31, 2024, and convertible debentures and common share purchase warrants valued at $7.3 million at June 30, 2023. For these investments, the maximum amount of loss due to credit risk the Company could incur is the fair value of the financial instruments.

 

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 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. 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 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 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.

 

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The following tables summarize the major categories of investments with fair values adjusted on a recurring basis as of March 31, 2024, and June 30, 2023, and other investments with fair values adjusted on a nonrecurring basis, with fair values shown according to the fair value hierarchy.

 

  

March 31, 2024

 
      

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 - International

 $411  $-  $-  $411 

Mutual funds - Fixed income

  10,071   -   -   10,071 

Mutual funds - Global equity

  829   -   -   829 

Total equity securities

  11,311   -   -   11,311 

Debt securities:

                

Corporate debt securities

  195   -   -   195 

Total investments in trading securities:

  11,506   -   -   11,506 

Investments in available-for-sale debt securities:

                

Corporate debt securities - Convertible debentures

  -   -   5,190   5,190 

Total investments carried at fair value on a recurring basis:

 $11,506  $-  $5,190  $16,696 

Investments carried at fair value on a nonrecurring basis:

                

Other investments (1)

 $-  $-  $600  $600 

 

1.

Other investments include equity securities without readily determinable fair values that were adjusted as a result of the measurement alternative on dates during the nine months ended March 31, 2024. These securities are classified as level 3 due to the infrequency of the observable price changes and/or restrictions on the shares.

 

  

June 30, 2023

 
      

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 - International

 $488  $-  $290  $778 

Mutual funds - Fixed income

  11,642   -   -   11,642 

Mutual funds - Global equity

  785   -   -   785 

Total equity securities

  12,915   -   290   13,205 

Debt securities:

                

Corporate debt securities

  -   -   -   - 

Total investments in trading securities:

  12,915   -   290   13,205 

Investments in available-for-sale debt securities:

                

Corporate debt securities - Convertible debentures

  -   -   7,008   7,008 

Total investments carried at fair value on a recurring basis:

 $12,915  $-  $7,298  $20,213 

Investments carried at fair value on a nonrecurring basis:

                

Other investments (1)

 $-  $-  $1,786  $1,786 

 

1.

Other investments include equity securities without readily determinable fair values that were adjusted as a result of the measurement alternative on dates during the fiscal year ended June 30, 2023. These securities are classified as level 3 due to the infrequency of the observable price changes and/or restrictions on the shares.

 

The securities classified as Level 3 and carried at fair value on a recurring basis in the preceding tables are investments in convertible securities 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 acquire one 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, and each five whole warrants entitled the Company to acquire one common share at a price of $15.00 (Canadian). The remaining principal amount was $5.3 million as of March 31, 2024. 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 did not represent ownership in HIVE as of March 31, 2024, or June 30, 2023. The securities are subject to Canadian securities regulations. Frank Holmes serves on the board as executive chairman of HIVE and held shares and options at March 31, 2024. From August 2018 through January 2023, Mr. Holmes was Interim CEO of HIVE.

 

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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 $5.2 million and $7.0 million at March 31, 2024, and June 30, 2023, respectively. The warrants were recorded at the estimated fair value of $5.9 million on the purchase date, and upon expiration in January 2024, a realized loss of $5.9 million was recognized in net investment income (loss). The fair value of the warrants was $290,000 at June 30, 2023.

 

The Company utilizes an independent third-party to estimate the fair values of the HIVE convertible securities and currently considers the fair value measurements to contain Level 3 inputs. The following table is a reconciliation of investments recorded at fair value for which unobservable inputs (Level 3) were used in determining fair value during the nine months ended March 31, 2024.

 

Changes in Level 3 Assets Measured at Fair Value on a Recurring Basis

 

  

Nine Months Ended March 31, 2024

 
  

Investments in

  

Investments in

 

(dollars in thousands)

 

equity securities

  

debt securities

 

Beginning Balance

 $290  $7,008 

Principal repayments

  -   (2,250)

Amortization of day one premium

  -   (137)

Accretion of bifurcation discount

  -   403 

Total gains or losses included in:

        

Net Investment Income (Loss)

  (290)  821 

Other Comprehensive Income (Loss)

  -   (655)

Ending Balance

 $-  $5,190 

 

The following is quantitative information as of March 31, 2024, with respect to the securities measured and carried at fair value on a recurring basis with the use of significant unobservable inputs (Level 3).

 

  

March 31, 2024

 

(dollars in thousands)

 

Fair Value

 

Principal Valuation Techniques

 

Unobservable Inputs

 

Investments in available-for-sale debt securities:

           

Corporate debt securities - Convertible debentures

 $5,190 

Binomial lattice model

 

Volatility

  110.0%
       

Credit Spread

  7.00%
       

Risk-Free Rate

  4.28%

 

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 March 31, 2024, and June 30, 2023.

 

  

March 31, 2024

 

(dollars in thousands)

 

Cost

  

Unrealized Gains (Losses)

  

Fair Value

 

Trading securities at fair value

            

Equity securities:

            

Equities - International

 $746  $(335) $411 

Equities - Domestic

  45   (45)  - 

Mutual funds - Fixed income

  10,280   (209)  10,071 

Mutual funds - Global equity

  929   (100)  829 

Total equity securities

  12,000   (689)  11,311 

Debt securities:

            

Corporate debt securities

  215   (20)  195 

Total trading securities at fair value

 $12,215  $(709) $11,506 

 

  

June 30, 2023

 

(dollars in thousands)

 

Cost

  

Unrealized Gains (Losses)

  

Fair Value

 

Trading securities at fair value

            

Equity securities:

            

Equities - International

 $6,679  $(5,901) $778 

Equities - Domestic

  45   (45)  - 

Mutual funds - Fixed income

  11,947   (305)  11,642 

Mutual funds - Global equity

  930   (145)  785 

Total equity securities

  19,601   (6,396)  13,205 

Debt securities:

            

Corporate debt securities

  -   -   - 

Total trading securities at fair value

 $19,601  $(6,396) $13,205 

 

 

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Debt Investments

 

Investments in debt securities are classified on the acquisition dates and at each balance sheet date. Securities classified as held-to-maturity are carried at amortized cost, net of allowance for credit losses, reflecting the ability and intent to hold the securities to maturity. Debt securities classified as trading are acquired with the intent to sell in the near term and are carried at fair value with changes reported in earnings. All other debt securities are classified as available-for-sale and are carried at fair value.

 

Investment gains and losses on available-for-sale debt securities are recorded when the securities are sold, as determined on a specific identification basis, and recognized in current period earnings. Changes in unrealized gains on available-for-sale debt securities are reported net of tax in accumulated other comprehensive income (loss). For debt securities in an unrealized loss position, a loss in earnings is recognized for the excess of amortized cost over fair value if the Company intends to sell before the price recovers. Otherwise, the Company evaluates as of the balance sheet date whether the unrealized losses are attributable to credit losses or other factors. The severity of the decline in value, creditworthiness of the issuer and other relevant factors are considered. The portion of unrealized loss the Company believes is related to a credit loss is recognized in earnings, and the portion of unrealized loss the Company believes is not related to a credit loss is recognized in other comprehensive income (loss).

 

Certain derivatives embedded in other financial instruments, such as the conversion option in a convertible bond, are reported at fair value, and changes in fair value are recorded through earnings within net investment income (loss). The host contract continues to be accounted for in accordance with the appropriate accounting standard. The embedded derivative and the related host contract represent one legal contract and are combined on the Consolidated Balance Sheets and the tables below. The Company held one financial instrument classified as available-for-sale containing an embedded derivative, which represents an investment in HIVE, at March 31, 2024, and June 30, 2023. As of March 31, 2024, the unrealized loss position in the available-for-sale security was related to changes in the fair value of the embedded derivatives and not the result of credit losses; therefore, an allowance for credit losses was not recorded.

 

The following details the components of the Company’s available-for-sale debt investments as of March 31, 2024, and June 30, 2023.

 

  

March 31, 2024

 

(dollars in thousands)

 

Amortized Cost

  

Gross Unrealized Gains in Other Comprehensive Income (Loss)

  

Gross Unrealized Losses in Other Comprehensive Income (Loss)

  

Gross Unrealized Losses in Net Investment Income (Loss) (1)

  

Fair Value

  

Allowance for Credit Losses

 

Available-for-sale debt securities:

                        

Corporate debt securities - Convertible debentures

 $6,651  $1,052  $-  $(2,513) $5,190  $- 

 

  

June 30, 2023

 

(dollars in thousands)

 

Amortized Cost

  

Gross Unrealized Gains in Other Comprehensive Income (Loss)

  

Gross Unrealized Losses in Other Comprehensive Income (Loss)

  

Gross Unrealized Losses in Net Investment Income (Loss) (1)

  

Fair Value

  

Allowance for Credit Losses

 

Available-for-sale debt securities:

                        

Corporate debt securities - Convertible debentures

 $7,729  $1,707  $-  $(2,428) $7,008  $- 

 

1.

Represents changes in unrealized gains and losses related to embedded derivatives included within net investment income (loss) on the Consolidated Statements of Operations. 

 

The following table summarizes the fair values of embedded derivatives on the Consolidated Balance Sheets, categorized by risk exposure, at March 31, 2024, and June 30, 2023.

 

  

March 31, 2024

  

June 30, 2023

 
  

Other Assets

  

Other Assets

 
  

Investments in

  

Investments in

 
  

available-for-sale

  

available-for-sale

 

(dollars in thousands)

 

debt securities

  

debt securities

 

Embedded Derivatives:

        

Equity price risk exposure

 $29  $114 

 

The following table presents the effect of embedded derivatives on the Consolidated Statements of Operations, categorized by risk exposure, for the three and nine months ended March 31, 2024, and 2023.

 

  

Nine Months Ended

  

Three Months Ended

 
  

March 31,

  

March 31,

 
  

2024

  

2023

  

2024

  

2023

 
  

Other Income (Loss)

  

Other Income (Loss)

  

Other Income (Loss)

  

Other Income (Loss)

 

(dollars in thousands)

 

Net Investment Income (Loss)

  

Net Investment Income (Loss)

  

Net Investment Income (Loss)

  

Net Investment Income (Loss)

 

Embedded Derivatives:

                

Equity price risk exposure

 $(85) $82  $(22) $55 

 

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At March 31, 2024, and June 30, 2023, the Company held one debt security classified as held-to-maturity. The security had an estimated fair value that was lower than the carrying value by $157,000 at March 31, 2024, and $232,000 at  June 30, 2023. The security has been in a continuous unrealized loss position for over twelve months. We have evaluated the unrealized loss on the security at March 31, 2024, and determined it to be of a temporary nature and caused by fluctuations in market interest rates, not by concerns regarding the ability of the issuer to meet their obligations.

 

The following details the components of the Company’s held-to-maturity debt investments as of March 31, 2024, and June 30, 2023.

 

  

March 31, 2024

 

(dollars in thousands)

 

Amortized Cost

  

Gross Unrecognized Holding Gains

  

Gross Unrecognized Holding Losses

  

Fair Value

  

Allowance for Credit Losses

 

Held-to-maturity debt securities(1):

                    

Corporate debt securities

 $1,000  $-  $(157) $843  $157 

 

  

June 30, 2023

 

(dollars in thousands)

 

Amortized Cost

  

Gross Unrecognized Holding Gains

  

Gross Unrecognized Holding Losses

  

Fair Value

  

Allowance for Credit Losses

 

Held-to-maturity debt securities(1):

                    

Corporate debt securities

 $1,000  $-  $(232) $768  $- 

 

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.

 

On July 1, 2023, the Company adopted ASU 2016-13, 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 ASU 2016-13, 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 March 31, 2024, and  June 30, 2023, 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. Since the adoption of ASU 2016-13 on July 1, 2023, and through March 31, 2024, the allowance for credit losses decreased $75,000 which was attributable to the passage of time. For the three and nine months ended March 31, 2024, $20,000 and $75,000, respectively, was included as an increase in interest income within net investment income (loss) on the Consolidated Statements of Operations.

 

The following table presents the activity in the allowance for credit losses for the held-to-maturity debt investment. There was no allowance at  June 30, 2023.

 

(dollars in thousands)

 

March 31, 2024

 

Beginning Balance, prior to adoption of ASU 2016-13

 $- 

Impact of ASU 2016-13 adoption

  232 

Provision for credit losses - reversal (1)

  (75)

Ending Balance

 $157 

 

1.Represents the change in present value attributable to the passage of time included in interest income.

 

The following summarizes the net carrying amount and estimated fair value of debt securities at March 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.

 

  

March 31, 2024

 
  

Available-for-sale

  

Held-to-maturity

 
  

debt securities

  

debt securities

 
  

Convertible

  

Due after one year

 

(dollars in thousands)

 

debentures (1)

  

through five years

 

Amortized Cost

 $6,651  $1,000 

Fair Value

 $5,190  $843 

 

1.

Principal payments of $750,000 are due quarterly with a final maturity date in January 2026.

 

As of March 31, 2024, none of the Company's investments in debt securities were delinquent or in a non-accrual status.

   

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Other Investments

 

Other investments consist of equity investments in entities over which the Company is unable to exercise significant influence and which do not 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 $2.4 million as of June 30, 2023. The following table presents the carrying value of equity securities without readily determinable fair values held as of March 31, 2024, and 2023, 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.

 

  

Nine Months Ended

  

Three Months Ended

 
  

March 31,

  

March 31,

 

(dollars in thousands)

 

2024

  

2023

  

2024

  

2023

 

Other Investments

                

Carrying value

 $1,114  $2,827  $1,114  $2,827 

Upward carrying value changes

 $-  $14  $-  $9 

Downward carrying value changes/impairment

 $(1,274) $(1,841) $(499) $- 

 

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 March 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 March 31, 2024.

 

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 March 31, 2024, and at June 30, 2023. 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 March 31, 2024.

 

Net Investment Income (Loss)

 

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

 

●

realized gains and losses on sales of securities;

 

●

realized gains and losses on principal payment proceeds;

 

●

unrealized gains and losses on securities at fair value;

 

●

impairments and observable price changes on equity investments without readily determinable fair values;

 

●

dividend and interest income; and

 

●

realized foreign currency gains and losses.

 

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

 

  

Nine Months Ended

  

Three Months Ended

 

(dollars in thousands)

 

March 31,

  

March 31,

 

Net Investment Income (Loss)

 

2024

  

2023

  

2024

  

2023

 

Realized gains (losses) on equity securities

 $(6,834) $(13) $(6,094) $(13)

Realized gains (losses) on debt securities

  906   1,299   267   394 

Unrealized gains (losses) on equity securities

  5,699   (2,586)  5,863   283 

Unrealized gains (losses) on debt securities

  (20)  -   (65)  - 

Unrealized gains (losses) on embedded derivatives

  (85)  82   (22)  55 

Unrealized gains (losses) on cash equivalents

  (2)  -   -   - 

Dividend and interest income

  1,781   1,321   595   421 

Realized foreign currency gains (losses)

  (82)  (292)  (84)  15 

Total Net Investment Income (Loss)

 $1,363  $(189) $460  $1,155 

 

Realized gains on debt securities reclassified from other comprehensive income (loss) related to the Company's investment in HIVE debentures were $267,000 and $906,000 for the three and nine months ended March 31, 2024, respectively, and $394,000 and $1.3 million for the three and nine months ended March 31, 2023, respectively.

 

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The following table presents unrealized gains and losses recognized during the three and nine months ended March 31, 2024, and 2023, on equity securities and debt securities classified as trading still held at each respective date. 

 

  

Nine Months Ended

  

Three Months Ended

 
  

March 31,

  

March 31,

 

(dollars in thousands)

 

2024

  

2023

  

2024

  

2023

 

Unrealized gains and losses for securities held at the reporting date:

                

Equity securities:

                

Net gains and losses recognized during the period

 $(1,135)  (2,599) $(231) $270 

Less: Net gains and losses recognized during the period on securities sold during the period

  (256)  (13)  (3)  (13)

Unrealized gains and losses recognized during the reporting period on securities still held at the reporting date (1)

 $(879) $(2,586) $(228) $283 

Debt securities classified as trading:

                

Net gains and losses recognized during the period

 $(20)  -  $(65) $- 

Less: Net gains and losses recognized during the period on securities sold during the period

  -   -   -   - 

Unrealized gains and losses recognized during the reporting period on securities still held at the reporting date

 $(20) $-  $(65) $- 

 

1.

Includes net unrealized and realized losses as a result of the measurement alternative of $240,000 and $1.0 million for the three and nine months ended March 31, 2024, respectively, and $0 and $1.8 million, for the three and nine months ended March 31, 2023, respectively.

 

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

 
 

NOTE 4. INVESTMENT MANAGEMENT AND OTHER FEES

 

The following table presents operating revenues disaggregated by performance obligation.

 

  

Nine Months Ended

  

Three Months Ended

 
  

March 31,

  

March 31,

 

(dollars in thousands)

 

2024

  

2023

  

2024

  

2023

 

ETF advisory fees

 $7,394  $10,360  $2,224  $3,142 

USGIF advisory fees

  1,408   1,693   443   558 

USGIF performance fees received (paid)

  (344)  (390)  (101)  (109)

Total Advisory Fees

  8,458   11,663   2,566   3,591 

USGIF administrative services fees

  86   101   27   33 

Total Operating Revenue

 $8,544  $11,764  $2,593  $3,624 

 

The Company serves as investment advisor to three U.S.-based exchange-traded funds (ETFs): U.S. Global Jets ETF (ticker JETS), U.S. Global GO GOLD and Precious Metal Miners ETF (ticker GOAU), and U.S. Global Sea to Sky Cargo ETF (ticker SEA). The Company receives a unitary management fee of 0.60 percent of average net assets of the ETFs, and has agreed to bear all expenses of the 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 $37,000 and $115,000 for the three and nine months ended March 31, 2024, respectively, and $28,000 and $77,000 and for the three and nine months ended March 31, 2023, respectively. The Company also serves as investment advisor to one European-based ETF, the U.S. Global Jets UCITS ETF. The Company receives a unitary management fee of 0.65 percent of average net assets and has agreed to bear all expenses of the ETF.

 

The Company serves as investment adviser to USGIF and receives a fee based on a specified percentage of average assets under management. The advisory agreement for the equity funds within USGIF provides for a base advisory 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 rolling 12 months.

 

The Company has agreed to contractually limit the expenses of the Near-Term Tax Free Fund and the Global Luxury Goods Fund through April 2025. The Company has voluntarily waived or reduced its fees and/or agreed to pay expenses on the remaining USGIF funds. These caps will continue on a voluntary basis at the Company’s discretion. The aggregate fees waived and expenses borne by the Company for USGIF were $193,000 and $638,000 for the three and nine months ended March 31, 2024, respectively, and $299,000 and $822,000 for the three and nine months ended March 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 March 31, 2024, the Company had receivables from fund clients of $858,000, of which $738,000 was from the ETFs and $120,000 was from USGIF. As of June 30, 2023, the Company had $1.1 million in receivables from fund clients, of which $1.0 million was from ETFs and $126,000 was from USGIF. There was no allowance for credit losses related to receivables as of March 31, 2024, or June 30, 2023.

  

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NOTE 5. RESTRICTED AND UNRESTRICTED CASH

 

The Company maintains its cash deposits with established commercial banks. At times, balances may exceed federally insured limits. We have not experienced any losses in such accounts and do not believe that we are exposed to any significant credit risk associated with our cash deposits. Restricted cash represents cash invested in a money market account as collateral for credit facilities that is not available for general corporate use.

 

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

 

(dollars in thousands)

 

March 31, 2024

  

June 30, 2023

 

Cash and cash equivalents

 $27,460  $25,401 

Restricted cash

  1,000   1,000 

Total cash, cash equivalents, and restricted cash

 $28,460  $26,401 

  
 

NOTE 6. LEASES

 

The Company has lease agreements for office equipment that expire in the fiscal year 2026. Lease expenses included in general and administrative expense on the Consolidated Statements of Operations totaled $33,000 and $99,000 for the three and nine months ended March 31, 2024, respectively, and $32,000 and $86,000 for the three and nine months ended March 31, 2023, respectively.

 

The following table presents the components of lease cost.

 

  

Nine Months Ended

  

Three Months Ended

 
  

March 31,

  

March 31,

 

(dollars in thousands)

 

2024

  

2023

  

2024

  

2023

 

Finance lease cost:

                

Amortization of right-of-use assets

 $23  $22  $7  $7 

Interest on lease liabilities

  2   3   1   1 

Total finance lease cost

  25   25   8   8 

Short-term lease cost

  76   64   26   25 

Total lease cost

 $101  $89  $34  $33 

 

Supplemental information related to the Company's leases follows.

 

  

Nine Months Ended

  

Three Months Ended

 
  

March 31,

  

March 31,

 

(dollars in thousands)

 

2024

  

2023

  

2024

  

2023

 

Operating cash flows from financing leases included in lease liabilities

 $2  $3  $1  $1 

Financing cash flows from financing leases included in lease liabilities

 $22  $20  $7  $7 

 

Additional qualitative information concerning the Company’s leases follows.

 

  

March 31, 2024

  

June 30, 2023

 

Weighted-average remaining lease term - financing leases (years)

  1.50   2.25 

Weighted-average discount rate - financing leases

  4.75%  4.75%

 

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

 

(dollars in thousands)

    

Fiscal Year

 

Finance Leases

 

2024 (excluding the nine months ended March 31, 2024)

 $8 

2025

  33 

2026

  8 

Total lease payments

  49 

Less imputed interest

  (2)

Total

 $47 

 

The Company is the lessor of certain areas of its owned office building under operating leases expiring in various months through fiscal year 2025. At the commencement of an operating lease, no income is recognized; subsequently, lease payments received are recognized on a straight-line basis. Lease income included in other income on the Consolidated Statements of Operations was $23,000 and $78,000 for the three and nine months ended March 31, 2024, respectively, and $31,000 and $96,000 for the three and nine months ended March 31, 2023, respectively. The cost of obtaining lessor contracts, which is included in other assets on the Consolidated Balance Sheets, was $3,000 at March 31, 2024, and $4,000 at June 30, 2023.

 

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

 

(dollars in thousands)

    

Fiscal Year

 

Operating Leases

 

2024 (excluding the nine months ended March 31, 2024)

 $10 

2025

  36 

Total lease payments

 $46 

 

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 7. OTHER ACCRUED EXPENSES

 

Other accrued expenses consist of the following:

      

(dollars in thousands)

 

March 31, 2024

  

June 30, 2023

 

Professional fees

 $538  $697 

Vendors payable

  359   157 

ETF operating and distribution expenses

  548   344 

Other taxes payable

  73   76 

Other

  111   - 

Other accrued expenses

 $1,629  $1,274 

     

The Company had $127,000 and $43,000 of receivables from HIVE included in the Consolidated Balance Sheets within receivables as of March 31, 2024, and June 30, 2023, respectively, related to the reimbursement of certain amounts reflected in the table above.
 

NOTE 8. DEBT

 

The Company has access to a $1 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, 2024, and the Company intends to renew annually. The credit facility is collateralized by approximately $1 million at March 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 March 31, 2024, the credit facility remains unutilized by the Company.

  
 

NOTE 9. 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 year 2023 and through  March 2024.

 

In March 2024, the Board authorized the continuance of the monthly dividend of $0.0075 per share from April through June 2024, 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 Rule 10b-18 and Rule 10b5-1 of the Securities Exchange Act of 1934. 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 acquired shares may be used for corporate purposes, including shares issued to employees in the Company’s stock-based compensation programs. For the three and nine months ended March 31, 2024, the Company repurchased 211,282 and 605,790 class A shares using cash of $577,000 and $1.7 million, respectively. For the three and nine months ended March 31, 2023, the Company repurchased 193,040 and 320,412 class A shares using cash of $556,000 and $938,000, respectively.

 

In August 2022, the Inflation Reduction Act (IRA) was signed into law, which made a number of changes to the Internal Revenue Code, including adding a 1% 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 $17,000 for the three and nine months ended March 31, 2024, respectively.

 

The Company’s stock option plans provide for the granting of class A shares as either incentive or nonqualified stock options to employees and non-employee directors. Options are subject to terms and conditions determined by the Compensation Committee of the Board of Directors. At  March 31, 2024, and 2023, there were 229,000 options outstanding and exercisable under the 1989 Plan at a weighted average exercise price of $6.05, and 2,000 options outstanding and exercisable under the 1997 Plan at a weighted average exercise price of $2.74. There were no options granted or exercised for the three and nine months ended March 31, 2024, or 2023. There were no options forfeited during the three and nine months ended March 31, 2024, no options forfeited during the three months ended March 31, 2023, and 2,000 options forfeited during the nine months ended March 31, 2023.

 

Stock-based compensation expense is measured at the grant date based on the fair value of the award, and the cost is recognized as expense ratably over the award’s vesting period. There was no stock-based compensation expense for the three and nine months ended March 31, 2024, or 2023. As of  March 31, 2024, and 2023, there was no unrecognized share-based compensation cost related to share-based awards granted under the plans.

  

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NOTE 10. 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.

 

  

Nine Months Ended

  

Three Months Ended

 
  

March 31,

  

March 31,

 

(dollars in thousands, except per share data)

 

2024

  

2023

  

2024

  

2023

 

Net Income (Loss)

 $1,018  $2,520  $(35) $1,620 
                 

Weighted average number of outstanding shares

                

Basic

  14,278,691   14,862,893   14,077,042   14,747,537 

Effect of dilutive securities

                

Stock options

  86   295   -   100 

Diluted

  14,278,777   14,863,188   14,077,042   14,747,637 
                 

Earnings (Loss) Per Share

                

Basic Net Income (Loss) per share

 $0.07  $0.17  $(0.00) $0.11 

Diluted Net Income (Loss) per share

 $0.07  $0.17  $(0.00) $0.11 

 

The diluted EPS calculation excludes the effect of stock options when their exercise prices exceed the average market price for the period, as their inclusion would be anti-dilutive. For the three and nine months ended March 31, 2024, employee stock options of 231,000 and 229,000, respectively, were excluded from diluted EPS. For the three and nine months ended March 31, 2023, employee stock options of 229,000 were excluded from diluted EPS. 

 

During the three and nine months ended March 31, 2024, and 2023, 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 11. 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. The effective tax rate was 187.5 percent and 30.5 percent for the three and nine months ended March 31, 2024, respectively; and 16.8 percent and 21.7 percent for the three and nine months ended March 31, 2023, respectively.

 

A valuation allowance is provided when it is more likely than not that some portion of the deferred tax amount will not be realized. A valuation allowance of $26,000 and $24,000 was included to fully reserve for Canadian net operating loss carryovers at March 31, 2024, and June 30, 2023, respectively.

 

The Company maintains a reserve for uncertain tax positions for income tax matters. The Company believes the reserve for uncertain tax positions, including interest and penalties, and net of federal benefits, of $549,000 adequately covers open tax years and uncertain tax positions up to and including March 31, 2024, for major taxing jurisdictions. As of March 31, 2024, the entire $549,000 of unrecognized tax benefits, if recognized, would impact the Company's effective income tax rate. 

  

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NOTE 12. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

 

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

 

(dollars in thousands)

 

Unrealized gains (losses) on available-for-sale investments

 

Nine Months Ended March 31, 2024

    

Balance at June 30, 2023

 $1,348 

Other comprehensive income (loss) before reclassifications

  251 

Tax effect

  (52)

Amount reclassified from AOCI

  (906)

Tax effect

  190 

Net other comprehensive income (loss)

  (517)

Balance at March 31, 2024

 $831 
     

Nine Months Ended March 31, 2023

    

Balance at June 30, 2022

 $3,624 

Other comprehensive income (loss) before reclassifications

  (1,189)

Tax effect

  250 

Amount reclassified from AOCI

  (1,299)

Tax effect

  273 

Net other comprehensive income (loss)

  (1,965)

Balance at March 31, 2023

 $1,659 

 
 

NOTE 13. FINANCIAL INFORMATION BY BUSINESS SEGMENT

 

The Company operates principally in two 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.

 

(dollars in thousands)

 

Investment Management Services

  

Corporate Investments

  

Consolidated

 

Nine Months Ended March 31, 2024

            

Net operating revenues

 $8,544  $-  $8,544 

Net investment income (loss)

 $-  $1,363  $1,363 

Other income (loss)

 $183  $-  $183 

Income (loss) before income taxes

 $164  $1,300  $1,464 

Depreciation

 $163  $-  $163 

Gross identifiable assets at March 31, 2024

 $27,542  $23,390  $50,932 

Deferred tax asset

         $1,840 

Consolidated total assets at March 31, 2024

         $52,772 

Nine Months Ended March 31, 2023

            

Net operating revenues

 $11,764  $-  $11,764 

Net investment income (loss)

 $-  $(189) $(189)

Other income (loss)

 $184  $-  $184 

Income (loss) before income taxes

 $3,461  $(243) $3,218 

Depreciation

 $183  $-  $183 

Gross identifiable assets at March 31, 2023

 $25,056  $29,030  $54,086 

Deferred tax asset

         $1,659 

Consolidated total assets at March 31, 2023

         $55,745 

Three Months Ended March 31, 2024

            

Net operating revenues

 $2,593  $-  $2,593 

Net investment income (loss)

 $-  $460  $460 

Other income (loss)

 $68  $-  $68 

Income (loss) before income taxes

 $(389) $429  $40 

Depreciation

 $41  $-  $41 

Three Months Ended March 31, 2023

            

Net operating revenues

 $3,624  $-  $3,624 

Net investment income (loss)

 $-  $1,155  $1,155 

Other income (loss)

 $61  $-  $61 

Income (loss) before income taxes

 $815  $1,131  $1,946 

Depreciation

 $61  $-  $61 

 

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Net operating revenues from investment management services includes operating revenues from ETF clients of $2.2 million and $7.4 million for the three and nine months ended March 31, 2024, respectively, and $3.1 million and $10.4 million for the three and nine months ended March 31, 2023, respectively. Net operating revenues from investment management services also include operating revenues from USGIF of $369,000 and $1.2 million for the three and nine months ended March 31, 2024, respectively, and $482,000 and $1.4 million for the three and nine months ended March 31, 2023, respectively.

 
 

NOTE 14. CONTINGENCIES AND COMMITMENTS

 

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

 

During the normal course of business, the Company may be subject to various claims, legal proceedings, and other contingencies. These matters are subject to various uncertainties, and it is possible that some of these matters may be resolved unfavorably. The Company establishes accruals for matters for which the outcome is probable and can be reasonably estimated. Management believes that any liability in excess of these accruals upon the ultimate resolution of these matters will not have a material adverse effect on the Consolidated Financial Statements of the Company. Excluding reserves for uncertain tax positions, the Company recorded no accruals for contingencies as of March 31, 2024, or June 30, 2023.

 

The Board has authorized a monthly dividend of $0.0075 per share through June 2024, 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 April to June 2024 is approximately $317,000.

 

The COVID-19 pandemic and the resulting actions to control or slow the spread have affected global and domestic economies and financial markets, and in the future it or other epidemics, pandemics or outbreaks may adversely affect the Company's results of operations, cash flows and financial position. The Company cannot reasonably estimate the future impact of these events, given the uncertainty over the duration and severity of the economic impact.

  
 

NOTE 15. SUBSEQUENT EVENT

 

USGIF advisory fees are comprised of two components: a base management fee and a performance fee. 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 rolling 12 months.


For three of four USGIF equity funds, this performance adjustment began to be phased out on April 1, 2024, and will cease on April 1, 2025. In the phase-out period, performance can only be adjusted downward.

 

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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 COVID-19 or other 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 rapid spread of COVID-19 and actions taken in response had a significant detrimental effect on the global and domestic economies and financial markets. Market declines affect the Company’s assets under management, and thus its revenues and also the valuation of the Company’s corporate investments. If this macro-economic risk persists, it could have an adverse material financial impact on the Company’s business and investments, including a material reduction in its results of operations.

 

COVID-19-related circumstances (e.g., remote work arrangements) did not adversely affect the Company’s ability to maintain operations, including financial reporting systems, internal controls over financial reporting, and disclosure controls and procedures.

 

Market volatility in the prices of digital assets has been elevated due to a variety of factors, including, but not limited to, the macroeconomic environment (high inflation and rising interest rates) as well as the ‘crypto credit crisis of 2022’ brought on by the collapse and bankruptcy of a number of key players in the sector (cryptocurrency Luna collapse, hedge fund Three Arrows Capital default on loans and filing for bankruptcy, crypto-lending platform Celsius freezing all withdraws, cryptocurrency lender Voyager Digital filing for bankruptcy, crypto platform FTX filing for bankruptcy, crypto platform BlockFi filing for bankruptcy among others). The Company did not have direct exposure to any of the foregoing firms affected by the crypto credit crisis of 2022. Although the Company has no current intention of directly investing in cryptocurrencies, the Company has indirect exposure to cryptocurrencies by investing in securities of issuers with exposure to the cryptocurrency industry. There has been significant volatility in the market price of the securities, which has had a material impact, and may continue to have a material impact, on the investment values included on the Consolidated Balance Sheets and unrealized gain (loss) recognized in net investment income.

 

BUSINESS SEGMENTS

 

The Company, with principal operations located in San Antonio, Texas, manages two business segments: (1) the Company offers a broad range of investment management products and services to meet the needs of individual and institutional investors, and (2) the Company invests for its own account in an effort to add growth and value to its cash position.

 

The following is a brief discussion of the Company’s business segments.

 

Investment Management Services         

 

The Company provides advisory services for 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.

 

The Company also generates operating revenues from managing and servicing U.S. Global Investors Funds (“USGIF” or the “Funds”). These revenues are largely dependent on the total value and composition of assets under its management. Fluctuations in the markets and investor sentiment directly impact the asset levels of the Funds, thereby affecting income and results of operations. Detailed information regarding the Funds managed by the Company within USGIF can be found on the Company’s website, www.usfunds.com, including the prospectus and performance information for each Fund. The mutual fund shareholders in USGIF are not required to give advance notice prior to redemption of shares in the Funds.

 

At March 31, 2024, total assets under management, including ETF and USGIF clients, were approximately $1.7 billion versus $2.3 billion at March 31, 2023, a decrease of $0.5 billion. During the nine months ended March 31, 2024, average assets under management, including ETF and USGIF clients, were $1.9 billion, versus $2.6 billion during the nine months ended March 31, 2023. At June 30, 2023, the Company’s prior fiscal year end, total assets under management, including ETF and USGIF clients, were approximately $2.4 billion, and decreased $0.6 billion during the nine months ended March 31, 2024.

 

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The following tables summarize the changes in assets under management for USGIF for the three and nine months ended March 31, 2024, and 2023.

 

   

Changes in Assets Under Management

  
   

Three Months Ended March 31,

  
   

2024

    

2023

  

(dollars in thousands)

  

Equity

    

Fixed Income

    

Total

    

Equity

    

Fixed Income

    

Total

  

Beginning Balance

   $ 233,187     $ 56,722     $ 289,909     $ 278,037     $ 64,995     $ 343,032  

Market appreciation (depreciation)

     6,985       242       7,227       18,763       542       19,305  

Dividends and distributions

     -       (480 )     (480 )     -       (394 )     (394 )

Net shareholder purchases (redemptions)

     (10,728 )     334       (10,394 )     (5,889 )     (3,042 )     (8,931 )

Ending Balance

   $ 229,444     $ 56,818     $ 286,262     $ 290,911     $ 62,101     $ 353,012  
                                                 

Average investment management fee

     0.81 %     0.00 %     0.64 %     0.79 %     0.00 %     0.65 %

Average net assets

   $ 219,813     $ 57,103     $ 276,916     $ 289,682     $ 63,337     $ 353,019  

 

   

Changes in Assets Under Management

  
   

Nine Months Ended March 31,

  
   

2024

    

2023

  

(dollars in thousands)

  

Equity

    

Fixed Income

    

Total

    

Equity

    

Fixed Income

    

Total

  

Beginning Balance

   $ 265,329     $ 63,110     $ 328,439     $ 286,367     $ 71,161     $ 357,528  

Market appreciation (depreciation)

     3,781       1,618       5,399       22,292       323       22,615  

Dividends and distributions

     (2,235 )     (1,517 )     (3,752 )     (11,329 )     (931 )     (12,260 )

Net shareholder purchases (redemptions)

     (37,431 )     (6,393 )     (43,824 )     (6,419 )     (8,452 )     (14,871 )

Ending Balance

   $ 229,444     $ 56,818     $ 286,262     $ 290,911     $ 62,101     $ 353,012  
                                                 

Average investment management fee

     0.81 %     0.00 %     0.64 %     0.81 %     0.00 %     0.65 %

Average net assets

   $ 231,059     $ 58,926     $ 289,985     $ 281,745     $ 65,978     $ 347,723  

 

As shown above, USGIF period-end assets under management were lower at March 31, 2024, compared to March 31, 2023. Average net assets for the three and nine months in the current fiscal year were lower than the same periods in the previous fiscal year.

 

USGIF period-end assets under management decreased during the nine months ended March 31, 2024, and 2023, decreased during the three months ended March 31, 2024, and increased during the three months ended March 31, 2023. During the nine months ended March 31, 2024, the decrease was primarily due to redemptions, primarily driven by equity fund liquidations. The increase during the three months ended March 31, 2023, was primarily due to market appreciation.

 

The average annualized investment management fee rate (total advisory fees, excluding performance fees, as a percentage of average assets under management) was 64 basis points for the three and nine months ended March 31, 2024, and 65 basis points for the three and nine months ended March 31, 2023. The average investment management fee for the equity funds was 81 basis points for the three and nine months ended March 31, 2024, and 79 basis points and 81 basis points for the three and nine months ended March 31, 2023, respectively. 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. Additionally, due to fee waivers, the equity fund liquidations did not have a significant impact of decreasing the average investment management fee rate for the equity funds.

 

Investment Activities

 

Management believes it can more effectively manage the Company’s cash position by broadening the types of investments used in cash management and continues to believe that such activities are in the best interest of the Company. The Company’s investment activities are reviewed and monitored by Company compliance personnel, and various reports are provided to certain investment advisory clients. Written procedures are in place to manage compliance with the code of ethics and other policies affecting the Company’s investment practices. This source of revenue does not remain consistent and is dependent on market fluctuations, the Company’s ability to participate in investment opportunities, and timing of transactions.

 

As of March 31, 2024, the Company held investments carried at fair value of $16.7 million and a cost basis of $18.9 million. The fair value of these investments is approximately 31.6 percent of the Company’s total assets at March 31, 2024. In addition, the Company held other investments of approximately $1.1 million and held-to-maturity debt investments, net of allowance for credit losses, of $843,000.

 

Investments recorded at fair value on a recurring basis were approximately $16.7 million at March 31, 2024, compared to approximately $20.2 million at June 30, 2023, the Company’s prior fiscal year end, which is a decrease of approximately $3.5 million. See Note 3, Investments, in the Notes to Consolidated Financial Statements of this Quarterly Report on Form 10-Q, for further information regarding investment activities.

 

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RESULTS OF OPERATIONS – Three months ended March 31, 2024, and 2023

 

The Company recorded a net loss of $35,000 ($(0) per share) for the three months ended March 31, 2024, compared to net income of $1.6 million ($0.11 per share) for the three months ended March 31, 2023, a change of approximately $1.7 million. The change is primarily due to a decrease in operating revenues and net investment income compared to the same period in the prior year, as discussed further below.

 

Operating Revenues

 

Total consolidated operating revenues for the three months ended March 31, 2024, decreased $1.0 million, or 28.4 percent, compared with the three months ended March 31, 2023. This decrease was primarily attributable to the following:

 

•

Advisory fees decreased by $1.0 million, or 28.5 percent, primarily as a result of lower average assets under management in the ETFs and a decrease in base management fees received. Advisory fees are comprised of two components: base management fees and performance fees.

 

•

Base management fees decreased $1.0 million. The majority of this decrease was from ETF unitary management fees, which decreased $918,000 as the result of a decrease in ETF average assets under management, primarily for the Jets ETF.

 

•

Performance fees for USGIF paid in the current period were $101,000 compared to $109,000 in the corresponding period in the prior year. The performance fee, which applies to the USGIF equity funds only, 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 rolling 12 months.

 

Operating Expenses

 

Total consolidated operating expenses for the three months ended March 31, 2024, increased $187,000, or 6.5 percent, compared with the three months ended March 31, 2023. The increase in operating expenses was primarily attributable to an increase in general and administrative expenses of $256,000, or 17.3 percent, somewhat offset by a decrease in employee compensation of $55,000, or 4.4 percent. The increase in general and administrative expenses are primarily due to increases in USGIF expenses related to a performance fee elimination proxy; and increases in ETF expenses related to merging the European-based ETF, the U.S. Global Jets UCITS ETF, into the Travel UCITS ETF (TRIP).

 

Other Income (Loss)

 

Total consolidated other income for the three months ended March 31, 2024, was $528,000, compared to $1.2 million for the three months ended March 31, 2023, a decrease of approximately $688,000. This decrease was primarily due to the following factors:

 

•

Net investment income was $460,000 for the three months ended March 31, 2024, compared to $1.2 million for the prior period, a decrease of $695,000. This decrease in net investment income is comprised of net realized and unrealized losses on equity securities of $231,000 in the current period compared to net realized and unrealized gains on equity securities of $270,000 in the same quarter in the prior year, an unfavorable change of $501,000; and a decrease in realized gains on debt securities of $127,000 compared to the prior period.

 

Provision for Income Taxes

 

A tax expense of $75,000 was recorded for the three months ended March 31, 2024, compared to $326,000 for the three months ended March 31, 2023, a decrease of $251,000. The decrease was primarily the result of an operating loss in the current period compared to operating income in the same period in the prior year, and lower net investment income (loss) in the current period compared to the same period in the prior year.

 

RESULTS OF OPERATIONS – Nine months ended March 31, 2024, and 2023

 

The Company recorded net income of $1.0 million ($0.07 per share) for the nine months ended March 31, 2024, compared to net income of $2.5 million ($0.17 per share) for the nine months ended March 31, 2023, a decrease of approximately $1.5 million. The decrease is primarily due to a decrease in operating revenues compared to the same period in the prior year, somewhat offset by net investment income in the current period compared to net investment losses in same period in the prior year, as discussed further below.

 

Operating Revenues

 

Total consolidated operating revenues for the nine months ended March 31, 2024, decreased $3.2 million, or 27.4 percent, compared with the nine months ended March 31, 2023. This decrease was primarily attributable to the following:

 

•

Advisory fees decreased by $3.2 million, or 27.5 percent, primarily as a result of lower average assets under management in the ETFs and a decrease in base management fees received. Advisory fees are comprised of two components: base management fees and performance fees.

 

•

Base management fees decreased $3.3 million. The majority of this decrease was from ETF unitary management fees, which decreased $3.0 million as the result of a decrease in ETF average assets under management, primarily for the Jets ETF.

 

•

Performance fees for USGIF paid in the current period were $344,000 compared to $390,000 in the corresponding period in the prior year. The performance fee, which applies to the USGIF equity funds only, 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 rolling 12 months.

 

Operating Expenses

 

Total consolidated operating expenses for the nine months ended March 31, 2024, increased $85,000, or 1.0 percent, compared with the nine months ended March 31, 2023. The increase in operating expenses was primarily attributable to an increase in general and administrative expenses of $236,000, or 5.3 percent, partially offset by a decrease in employee compensation of $124,000, or 3.5 percent. The increase in general and administrative expenses are primarily due to increases in USGIF expenses related to a performance fee elimination proxy; and increases in ETF expenses related to merging the European-based ETF, the U.S. Global Jets UCITS ETF, into the Travel UCITS ETF (TRIP).

 

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Other Income (Loss)

 

Total consolidated other income for the nine months ended March 31, 2024, was $1.5 million, compared to a loss of $5,000 for the nine months ended March 31, 2023, a change of approximately $1.6 million. This change was primarily due to the following factors:

 

•

Net investment income was $1.4 million for the nine months ended March 31, 2024, compared to a loss of $189,000 for the prior period, a change of $1.6 million. This change in net investment income is primarily attributable to net realized and unrealized losses on equity securities of $1.1 million in the current period, compared to $2.6 million in the comparable period, a favorable change of $1.5 million.

 

Provision for Income Taxes

 

A tax expense of $446,000 was recorded for the nine months ended March 31, 2024, compared to $698,000 for the nine months ended March 31, 2023, a decrease of $252,000. The decrease was primarily the result of an operating loss in the current period compared to operating income in the same period in the prior year, partially offset by higher net investment income (loss) in the current period compared to the same period in the prior year.

 

LIQUIDITY AND CAPITAL RESOURCES

 

At March 31, 2024, the Company had net working capital (current assets minus current liabilities) of approximately $38.6 million, an increase of $1.2 million, or 3.1 percent, since June 30, 2023, and a current ratio (current assets divided by current liabilities) of 17.5 to 1. With approximately $27.5 million in cash and cash equivalents, an increase of $2.1 million, or 8.1 percent since June 30, 2023, and $11.5 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.

 

The increase in cash, and accordingly, net working capital, was primarily due to net cash provided by operating activities of $853,000, proceeds from principal paydowns of $2.3 million, and proceeds from sales of corporate investments of $1.8 million; offset by repurchases of the Company's common stock of $1.7 million, and dividends paid of $965,000. Consolidated shareholders’ equity at March 31, 2024, was $49.8 million, a decrease of $2.4 million, or 4.5 percent since June 30, 2023. The decrease was primarily due to repurchases of the Company's common stock of $1.8 million, dividends declared of $954,000, the impact of ASU 2016-13 adoption of $183,000, other comprehensive loss of $517,000, offset by net income of $1.0 million, for the nine months ended March 31, 2024.

 

The Company also has access to a $1 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, 2024, and the Company intends to renew annually. The credit facility is collateralized by approximately $1 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 March 31, 2024, 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 2024. The advisory agreement for the U.S.-based ETFs has been renewed through July 2024.

 

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 at any time. Cash and securities recorded at fair value on a recurring basis, excluding convertible securities, of approximately $39.0 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 the notes to the Consolidated Financial Statements included in the Annual Report on Form 10-K for the year ended June 30, 2023. There have been no material changes to our critical accounting policies, except for the Company's adoption of a new accounting standard as discussed in Item 1, Financial Statements at Note 2, Basis of Presentation and Consolidation, of this Quarterly Report on Form 10-Q.

 

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

COVID-19 had an adverse effect on global and domestic financial markets, which may reoccur and continue for an undetermined period. This may adversely affect assets under management and thus the Company’s revenues and operating results. Market declines also affect the valuation of the Company’s corporate investments, which also adversely affects the Company’s balance sheet and results of operations.
 
Macroeconomic declines, including inflation; negative political developments, including volatile market conditions due to investor concerns regarding inflation, and the Russia-Ukraine and Israel-Palestine conflicts; adverse market conditions, including cryptocurrency market disruptions; and catastrophic events may cause a decline in the Company’s revenue, an increase in the Company’s costs, negatively affect the Company’s operating results, adversely affect the Company’s cash flow, and could result in a decline in the Company’s stock price.

 

Investment Management and Administrative Services Fees

 

Revenues are generally based upon a percentage of assets under management in accordance with contractual agreements. Accordingly, fluctuations in the financial markets have a direct effect on the Company’s operating results. A significant portion of assets under management in equity funds have exposure to international markets and/or natural resource sectors, which may experience volatility. In addition, fluctuations in interest rates may affect the value of assets under management in fixed income funds.

 

Performance Fees

 

USGIF advisory fees are comprised of two components: a base management fee and a performance fee. 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 rolling 12 months.

 

As a result, the Company’s revenues are subject to volatility beyond market-based fluctuations discussed in the investment management and administrative services fees section above. Due to these performance adjustments, the Company realized a decrease in its USGIF base advisory fee of $101,000 and $344,000 for the three and nine months ended March 31, 2024, respectively, and $109,000 and $390,000 for the three and nine months ended March 31, 2023, respectively.

 

Corporate Investments

 

The Company’s Consolidated Balance Sheets include substantial amounts of assets whose fair values are subject to market risk. The market risks are primarily associated with equity prices and foreign currency exchange rates. The fair values of corporate investments with exposure to the cryptocurrency industry are subject to considerable volatility.
 
The Company’s investment activities are reviewed and monitored by Company compliance personnel, and various reports are provided to certain investment advisory clients. Written procedures are in place to manage compliance with the code of ethics and other policies affecting the Company’s investment practices.

 

Equity price risk

 

Due to the Company’s investments in securities carried at fair value, equity price fluctuations represent a market risk factor affecting the Company’s consolidated financial position. The carrying values of investments subject to equity price risks are based on quoted market prices or, if not actively traded, management’s estimate of fair value as of the balance sheet date. Market prices fluctuate, and the amount realized in the subsequent sale of an investment may differ significantly from the reported fair value.

 

The following table summarizes the Company’s equity price risks in securities recorded at fair value on a recurring basis as of March 31, 2024, 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)

  

March 31, 2024

  

Percentage Change

  

Price Change

    

Net Income (Loss)(1)

  

Trading securities at fair value

   $ 11,506  

25% increase

   $ 14,383     $ 2,272  
         

25% decrease

   $ 8,630     $ (2,272 )

Embedded derivatives at fair value (2)

   $ 29  

25% increase

   $ 36     $ 6  
         

25% decrease

   $ 22     $ (6 )

 

1.

Changes in unrealized gains and losses on embedded derivatives and trading securities at fair value are included in earnings in the Consolidated Statements of Operations. The estimated increase (decrease) is after income taxes at the statutory rate in effect as of the balance sheet date.

2.

An embedded derivative and its related host contract represent one legal contract and are combined within the investments in available-for-sale debt securities on the Consolidated Balance Sheets.

 

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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.

 

COVID-19 had an effect on volatility in global and domestic financial markets, which may reoccur and continue for an undetermined period. This may not only adversely affect the Company’s assets under management but also the valuation of the Company’s corporate investments.

 

The embedded derivatives subject to equity price risk shown in the above table are related to investments in convertible debentures of HIVE Digital Technologies Ltd. (“HIVE”). HIVE is discussed in more detail in Note 3, Investments, in the notes to Consolidated Financial Statements of this Quarterly Report on Form 10-Q. HIVE is a company that is headquartered in Canada with cryptocurrency mining facilities in Iceland, Sweden and Canada. Cryptocurrency markets and related stocks have been, and are expected to continue to be, volatile. There is potential for significant volatility in the market price of HIVE, which could materially impact the investment’s value included on the Consolidated Balance Sheets and unrealized gain (loss) recognized in net investment income (loss).

 

Interest rate risk

 

Due to the Company’s investments in debt securities carried at fair value, interest rate fluctuations represent a market risk factor affecting the Company’s consolidated financial position. Debt securities may fluctuate in value due to changes in interest rates. Typically, investments subject to interest rate risk will decrease in value when interest rates rise and increase in value when interest rates decline. Fluctuations in interest rates could have a material impact on the Company’s investments in debt securities included on the Consolidated Balance Sheets, and unrealized gains (losses) and interest income recognized in net investment income (loss).

 

Foreign currency risk

 

A portion of cash and certain corporate investments are held in foreign currencies, primarily Canadian. Adverse changes in foreign currency exchange rates would lower the value of those cash accounts and corporate investments. Certain assets under management also have exposure to foreign currency fluctuations in various markets, which could have an impact on their valuation and thus the revenue received by the Company.

 

Indirect exposure to cryptocurrencies risk

 

Cryptocurrencies (also referred to as “virtual currencies” and “digital currencies”) are digital assets that are designed to act as a medium of exchange. Although the Company has no current intention of directly investing in cryptocurrencies, the Company has indirect exposure to cryptocurrencies by investing in securities of issuers with exposure to the cryptocurrency industry. Cryptocurrencies (some of the most well-known include Bitcoin, Dogecoin and Ethereum) are not backed by any government, corporation, or other identified body. Trading markets for cryptocurrencies are often unregulated and may be more exposed to operational or technical issues as well as the potential for fraud or manipulation than established, regulated exchanges for securities, derivatives and traditional currencies.

 

Cryptocurrencies have been subject to significant fluctuations in value. The value of a cryptocurrency may significantly fluctuate precipitously (including declining to zero) and unpredictably for a variety of reasons, including, but not limited to: investor perceptions and expectations; regulatory changes; general economic conditions; adoption and use in the retail and commercial marketplace; public opinion regarding the environmental impact of the creation (“minting” or “mining”) of cryptocurrency; confidence in, and the maintenance and development of, its network and open-source software protocols such as blockchain for ensuring the integrity of cryptocurrency transactional data; and general risks tied to the use of information technologies, including cybersecurity risks.

 

ITEM 4. CONTROLS AND PROCEDURES

 

An evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of March 31, 2024, 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 March 31, 2024, due to the existence of the material weaknesses in internal control over financial reporting described below (which we view as an integral part of our disclosure controls and procedures).

 

The material weaknesses in internal controls over financial reporting that were disclosed in our annual report on Form 10-K as of and for the year ended June 30, 2023, were also present as of March 31, 2024. Notwithstanding the material weaknesses, 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 and nine months ended March 31, 2024, that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

 

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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, 2023. 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

  
01-01-24 to 01-31-24       51,109     $ 144     $ 2.82       51,109     $ 4,856  
02-01-24 to 02-29-24       102,636       281     $ 2.73       102,636     $ 4,575  
03-01-24 to 03-31-24       57,537       152     $ 2.64       57,537     $ 4,423  

Total

       211,282     $ 577     $ 2.73       211,282          

 

1.

The Board of Directors of the company approved on December 7, 2012, and has renewed annually, repurchases of up to $2.75 million in each of calendar years 2013 through 2022 of its outstanding class A common stock from time to time on the open market in accordance with all applicable rules and regulations. On February 25, 2022, the Company announced that the Board of Directors of the Company approved an increase to the limit of its annual share buyback program from $2.75 million to $5.0 million.

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 2024 under the program is $5.0 million.

 

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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 29
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:

May 9, 2024

BY: /s/ Frank E. Holmes

 

 

 

            Frank E. Holmes

 

 

            Chief Executive Officer

 

 

 

DATED:

 May 9, 2024

BY: /s/ Lisa C. Callicotte

 

 

 

            Lisa C. Callicotte

 

 

            Chief Financial Officer

 

Page 30

 

Exhibit 31.1 - Rule 13a-14(a) Certifications

(under Section 302 of the Sarbanes-Oxley Act of 2002)

 

I, Frank E. Holmes, certify that:

 

1.

I have reviewed this quarterly report on Form 10-Q of U.S. Global Investors, Inc.;

 

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d–15(f)) for the registrant and have:

 

 

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

 

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

 

(c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

 

(d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

 

 

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

 

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: May 9, 2024

 

 

/s/ Frank E. Holmes

Frank E. Holmes

Chief Executive Officer

 

 

 
 

 

Rule 13a-14(a) Certifications

(under Section 302 of the Sarbanes-Oxley Act of 2002

 

I, Lisa C. Callicotte, certify that:

 

1.

I have reviewed this quarterly report on Form 10-Q of U.S. Global Investors, Inc.;

 

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d–15(f)) for the registrant and have:

 

 

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

 

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

 

(c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

 

(d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

 

 

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

 

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: May 9, 2024

 

 

/s/ Lisa C. Callicotte

Lisa C. Callicotte

Chief Financial Officer

 

 

 

 

Exhibit 32.1 — Section 1350 Certifications

(under Section 906 of the Sarbanes-Oxley Act of 2002)

 

In connection with the Quarterly Report of U.S. Global Investors, Inc. (the Company) on Form 10-Q for the quarter ended March 31, 2024, as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Frank E. Holmes, Chief Executive Officer of the Company, hereby certify to my knowledge, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

 

 

1.

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

 

2.

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

 

Date: May 9, 2024

 

/s/ Frank E. Holmes                                                       
Frank E. Holmes
Chief Executive Officer

 

 

A signed original of the written statement required by Section 906 has been provided to U.S. Global Investors, Inc. and will be retained by U.S. Global Investors, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

 

 

 

 
 

 

Section 1350 Certifications

(under Section 906 of the Sarbanes-Oxley Act of 2002)

 

In connection with the Quarterly Report of U.S. Global Investors, Inc. (the Company) on Form 10-Q for the quarter ended March 31, 2024, as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Lisa C. Callicotte, Chief Financial Officer of the Company, hereby certify to my knowledge, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

 

 

1.

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

 

2.

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

 

Date: May 9, 2024

 

/s/ Lisa C. Callicotte                                    
Lisa C. Callicotte
Chief Financial Officer

 

 

A signed original of the written statement required by Section 906 has been provided to U.S. Global Investors, Inc. and will be retained by U.S. Global Investors, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

 

 

 

 
v3.24.1.u1
Document And Entity Information - shares
 9 Months Ended
Mar. 31, 2024
May 02, 2024
Document Information [Line Items]    
Entity Central Index Key 0000754811  
Entity Registrant Name U S GLOBAL INVESTORS INC  
Amendment Flag false  
Current Fiscal Year End Date --06-30  
Document Fiscal Period Focus Q3  
Document Fiscal Year Focus 2024  
Document Type 10-Q  
Document Quarterly Report true  
Document Period End Date Mar. 31, 2024  
Document Transition Report false  
Entity File Number 0-13928  
Entity Incorporation, State or Country Code TX  
Entity Tax Identification Number 74-1598370  
Entity Address, Address Line One 7900 Callaghan Road  
Entity Address, City or Town San Antonio  
Entity Address, State or Province TX  
Entity Address, Postal Zip Code 78229  
City Area Code 210  
Local Phone Number 308-1234  
Title of 12(b) Security Class A common stock, $0.025 par value per share  
Trading Symbol GROW  
Security Exchange Name NASDAQ  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Non-accelerated Filer  
Entity Small Business true  
Entity Emerging Growth Company false  
Entity Shell Company false  
Common Class C [Member]    
Document Information [Line Items]    
Entity Common Stock, Shares Outstanding   2,068,549
Common Class A [Member]    
Document Information [Line Items]    
Entity Common Stock, Shares Outstanding   11,844,295
v3.24.1.u1
Consolidated Balance Sheets (Current Period Unaudited) - USD ($)
$ in Thousands
Mar. 31, 2024
Jun. 30, 2023
Current Assets    
Cash and cash equivalents $ 27,460 $ 25,401
Restricted cash 1,000 1,000
Investments in securities at fair value, current 10,071 11,642
Accounts and other receivables (net of allowance for credit losses of $0, and $0, respectively) 1,027 1,245
Tax receivable 749 576
Prepaid expenses 635 510
Total Current Assets 40,942 40,374
Net Property and Equipment 1,154 1,138
Other Assets    
Deferred tax asset 1,840 1,920
Investments in trading securities at fair value, non-current 1,435 1,563
Investments in available-for-sale debt securities at fair value (amortized cost: $6,651, and $7,729, respectively) (net of allowance for credit losses of $0, and $0, respectively) 5,190 7,008
Investments in held-to-maturity debt securities at amortized cost 1,000 1,000
Less: Allowance for credit losses (157) 0
Investments in held-to-maturity debt securities, net of allowance for credit losses 843 1,000
Other investments 1,114 2,388
Financing lease, right of use assets 45 65
Other assets, non-current 209 217
Total Other Assets 10,676 14,161
Total VIE assets, maximum exposure to loss 52,772 55,673
Current Liabilities    
Accounts payable 58 143
Accrued compensation and related costs 306 1,165
Dividends payable 317 329
Financing lease liability, short-term 31 28
Other accrued expenses 1,629 1,274
Total Current Liabilities 2,341 2,939
Long-Term Liabilities    
Deferred tax liability 20 4
Reserve for uncertain tax positions 549 496
Financing lease liability, long-term 16 38
Total Long-Term Liabilities 585 538
Total Liabilities 2,926 3,477
Commitments and Contingencies (Note 14)
Shareholders’ Equity    
Additional paid-in-capital 16,444 16,442
Treasury stock, class A shares at cost; 1,958,262 and 1,370,325 shares at March 31, 2024, and June 30, 2023, respectively (5,456) (3,740)
Accumulated other comprehensive income, net of tax 831 1,348
Retained earnings 37,628 37,747
Total Shareholders’ Equity 49,846 52,196
Total Liabilities and Shareholders’ Equity 52,772 55,673
Common Class A [Member]    
Shareholders’ Equity    
Common Stock 347 347
Common Class B [Member]    
Shareholders’ Equity    
Common Stock 0 0
Common Class C [Member]    
Shareholders’ Equity    
Common Stock $ 52 $ 52
v3.24.1.u1
Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($)
$ in Thousands
Mar. 31, 2024
Jun. 30, 2023
Accounts and other receivables, allowance for credit loss $ 0 $ 0
Investments in available-for-sale debt securities, amortized cost 6,651 [1] 7,729
Investments in available-for-sale debt securities, allowance for credit loss $ 0 $ 0
Treasury shares (in shares) 1,958,262 1,370,325
Common Class A [Member]    
Common Stock, Par value (in dollars per share) $ 0.025 $ 0.025
Common Stock, Shares Authorized (in shares) 28,000,000 28,000,000
Common Stock, Shares, Issued (in shares) 13,866,999 13,866,999
Common Stock, Shares, Outstanding (in shares) 11,908,737 12,496,674
Common Class B [Member]    
Common Stock, Par value (in dollars per share) $ 0.025 $ 0.025
Common Stock, Shares Authorized (in shares) 4,500,000 4,500,000
Common Stock, Shares, Issued (in shares) 0 0
Common Class C [Member]    
Common Stock, Par value (in dollars per share) $ 0.025 $ 0.025
Common Stock, Shares Authorized (in shares) 3,500,000 3,500,000
Common Stock, Shares, Issued (in shares) 2,068,549 2,068,549
Common Stock, Shares, Outstanding (in shares) 2,068,549 2,068,549
[1] Principal payments of $750,000 are due quarterly with a final maturity date in January 2026.
v3.24.1.u1
Consolidated Statements of Operations (Unaudited) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Mar. 31, 2024
Mar. 31, 2023
Operating Revenues        
Revenues $ 2,593 $ 3,624 $ 8,544 $ 11,764
Operating Expenses        
Employee compensation and benefits 1,209 1,264 3,445 3,569
General and administrative 1,733 1,477 4,725 4,489
Advertising 97 91 291 297
Depreciation 41 61 163 183
Interest 1 1 2 3
Total Operating Expenses 3,081 2,894 8,626 8,541
Operating Income (Loss) (488) 730 (82) 3,223
Other Income (Loss)        
Net investment income (loss) 460 1,155 1,363 (189)
Other income (loss) 68 61 183 184
Total Other Income (Loss) 528 1,216 1,546 (5)
Income (Loss) Before Income Taxes 40 1,946 1,464 3,218
Provision for Income Taxes        
Tax expense (benefit) 75 326 446 698
Net Income (Loss) $ (35) $ 1,620 $ 1,018 $ 2,520
Earnings (Loss) Per Share        
Basic Net Income (Loss) per share (in dollars per share) $ (0) $ 0.11 $ 0.07 $ 0.17
Diluted Net Income (Loss) per share (in dollars per share) $ (0) $ 0.11 $ 0.07 $ 0.17
Basic weighted average number of common shares outstanding (in shares) 14,077,042 14,747,537 14,278,691 14,862,893
Diluted weighted average number of common shares outstanding (in shares) 14,077,042 14,747,637 14,278,777 14,863,188
Investment Advisory Services [Member]        
Operating Revenues        
Revenues $ 2,566 $ 3,591 $ 8,458 $ 11,663
Administrative Service [Member]        
Operating Revenues        
Revenues $ 27 $ 33 $ 86 $ 101
v3.24.1.u1
Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Mar. 31, 2024
Mar. 31, 2023
Net income (loss) $ (35) $ 1,620 $ 1,018 $ 2,520
Other Comprehensive Income (Loss)        
Unrealized gains (losses) on available-for-sale securities arising during period, net of tax 79 80 199 (939)
Less: reclassification adjustment for gains included in net income (loss), net of tax (211) (311) (716) (1,026)
Net change from available-for-sale securities (132) (231) (517) (1,965)
Other Comprehensive Income (Loss) (132) (231) (517) (1,965)
Total Comprehensive Income (Loss) $ (167) $ 1,389 $ 501 $ 555
v3.24.1.u1
Consolidated Statements of Shareholders' Equity (Unaudited) - USD ($)
$ in Thousands
Cumulative Effect, Period of Adoption, Adjustment [Member]
Common Stock [Member]
Common Class A [Member]
Cumulative Effect, Period of Adoption, Adjustment [Member]
Common Stock [Member]
Common Class C [Member]
Cumulative Effect, Period of Adoption, Adjustment [Member]
Additional Paid-in Capital [Member]
Cumulative Effect, Period of Adoption, Adjustment [Member]
Treasury Stock, Common [Member]
Cumulative Effect, Period of Adoption, Adjustment [Member]
AOCI Attributable to Parent [Member]
Cumulative Effect, Period of Adoption, Adjustment [Member]
Retained Earnings [Member]
Cumulative Effect, Period of Adoption, Adjustment [Member]
Cumulative Effect, Period of Adoption, Adjusted Balance [Member]
Common Stock [Member]
Common Class A [Member]
Cumulative Effect, Period of Adoption, Adjusted Balance [Member]
Common Stock [Member]
Common Class C [Member]
Cumulative Effect, Period of Adoption, Adjusted Balance [Member]
Additional Paid-in Capital [Member]
Cumulative Effect, Period of Adoption, Adjusted Balance [Member]
Treasury Stock, Common [Member]
Cumulative Effect, Period of Adoption, Adjusted Balance [Member]
AOCI Attributable to Parent [Member]
Cumulative Effect, Period of Adoption, Adjusted Balance [Member]
Retained Earnings [Member]
Cumulative Effect, Period of Adoption, Adjusted Balance [Member]
Common Stock [Member]
Common Class A [Member]
Common Stock [Member]
Common Class C [Member]
Additional Paid-in Capital [Member]
Treasury Stock, Common [Member]
Common Class A [Member]
Treasury Stock, Common [Member]
AOCI Attributable to Parent [Member]
Retained Earnings [Member]
Total
Balance (in shares) at Jun. 30, 2022                             13,866,999 2,068,549     978,049      
Balance at Jun. 30, 2022                             $ 347 $ 52 $ 16,438   $ (2,599) $ 3,624 $ 35,923 $ 53,785
Repurchases of shares of Common Stock (class A), including excise tax (in shares)                             0 0     39,965      
Repurchases of shares of Common Stock (class A), including excise tax                             $ 0 $ 0 0   $ (133) 0 0 (133)
Issuance of stock under ESPP of shares of Common Stock (class A) (in shares)                             0 0     (3,983)      
Issuance of stock under ESPP of shares of Common Stock (class A)                             $ 0 $ 0 3   $ 10 0 0 13
Dividends declared                             0 0 0   0 0 (335) (335)
Net other comprehensive income (loss)                             0 0 0   0 (486) 0 (486)
Net income (loss)                             $ 0 $ 0 0   $ 0 0 53 53
Balance (in shares) at Sep. 30, 2022                             13,866,999 2,068,549     1,014,031      
Balance at Sep. 30, 2022                             $ 347 $ 52 16,440   $ (2,722) 3,138 35,641 52,896
Share-based compensation, adjustment for forfeitures, net of tax                             $ 0 $ 0 (1)   $ 0 0 0 (1)
Balance (in shares) at Jun. 30, 2022                             13,866,999 2,068,549     978,049      
Balance at Jun. 30, 2022                             $ 347 $ 52 16,438   $ (2,599) 3,624 35,923 53,785
Repurchases of shares of Common Stock (class A), including excise tax (in shares)                                   320,412        
Net other comprehensive income (loss)                                           (1,965)
Net income (loss)                                           2,520
Balance (in shares) at Mar. 31, 2023                             13,866,999 2,068,549     1,284,094      
Balance at Mar. 31, 2023                             $ 347 $ 52 16,442   $ (3,499) 1,659 37,444 52,445
Balance (in shares) at Sep. 30, 2022                             13,866,999 2,068,549     1,014,031      
Balance at Sep. 30, 2022                             $ 347 $ 52 16,440   $ (2,722) 3,138 35,641 52,896
Repurchases of shares of Common Stock (class A), including excise tax (in shares)                             0 0     87,407      
Repurchases of shares of Common Stock (class A), including excise tax                             $ 0 $ 0 0   $ (249) 0 0 (249)
Issuance of stock under ESPP of shares of Common Stock (class A) (in shares)                             0 0     (4,898)      
Issuance of stock under ESPP of shares of Common Stock (class A)                             $ 0 $ 0 1   $ 13 0 0 14
Dividends declared                             0 0 0   0 0 (335) (335)
Net other comprehensive income (loss)                             0 0 0   0 (1,248) 0 (1,248)
Net income (loss)                             $ 0 $ 0 0   $ 0 0 847 847
Balance (in shares) at Dec. 31, 2022                             13,866,999 2,068,549     1,096,540      
Balance at Dec. 31, 2022                             $ 347 $ 52 16,441   $ (2,958) 1,890 36,153 51,925
Repurchases of shares of Common Stock (class A), including excise tax (in shares)                             0 0   193,040 193,040      
Repurchases of shares of Common Stock (class A), including excise tax                             $ 0 $ 0 0   $ (556) 0 0 (556)
Issuance of stock under ESPP of shares of Common Stock (class A) (in shares)                             0 0     (5,486)      
Issuance of stock under ESPP of shares of Common Stock (class A)                             $ 0 $ 0 1   $ 15 0 0 16
Dividends declared                             0 0 0   0 0 (329) (329)
Net other comprehensive income (loss)                             0 0 0   0 (231) 0 (231)
Net income (loss)                             $ 0 $ 0 0   $ 0 0 1,620 1,620
Balance (in shares) at Mar. 31, 2023                             13,866,999 2,068,549     1,284,094      
Balance at Mar. 31, 2023                             $ 347 $ 52 16,442   $ (3,499) 1,659 37,444 52,445
Balance (in shares) (Accounting Standards Update 2016-13 [Member]) at Jun. 30, 2023 0 0   0       13,866,999 2,068,549   1,370,325                      
Balance (in shares) at Jun. 30, 2023                             13,866,999 2,068,549     1,370,325      
Balance (Accounting Standards Update 2016-13 [Member]) at Jun. 30, 2023 $ 0 $ 0 $ 0 $ 0 $ 0 $ (183) $ (183) $ 347 $ 52 $ 16,442 $ (3,740) $ 1,348 $ 37,564 $ 52,013                
Balance at Jun. 30, 2023                             $ 347 $ 52 16,442   $ (3,740) 1,348 37,747 52,196
Repurchases of shares of Common Stock (class A), including excise tax (in shares)                             0 0     198,213      
Repurchases of shares of Common Stock (class A), including excise tax                             $ 0 $ 0 0   $ (617) 0 0 (617)
Issuance of stock under ESPP of shares of Common Stock (class A) (in shares)                             0 0     (5,494)      
Issuance of stock under ESPP of shares of Common Stock (class A)                             $ 0 $ 0 2   $ 15 0 0 17
Dividends declared                             0 0 0   0 0 (322) (322)
Net other comprehensive income (loss)                             0 0 0   0 (214) 0 (214)
Net income (loss)                             $ 0 $ 0 0   $ 0 0 (176) (176)
Balance (in shares) at Sep. 30, 2023                             13,866,999 2,068,549     1,563,044      
Balance at Sep. 30, 2023                             $ 347 $ 52 16,444   $ (4,342) 1,134 37,066 50,701
Balance (in shares) (Accounting Standards Update 2016-13 [Member]) at Jun. 30, 2023 0 0   0       13,866,999 2,068,549   1,370,325                      
Balance (in shares) at Jun. 30, 2023                             13,866,999 2,068,549     1,370,325      
Balance (Accounting Standards Update 2016-13 [Member]) at Jun. 30, 2023 $ 0 $ 0 $ 0 $ 0 $ 0 $ (183) $ (183) $ 347 $ 52 $ 16,442 $ (3,740) $ 1,348 $ 37,564 $ 52,013                
Balance at Jun. 30, 2023                             $ 347 $ 52 16,442   $ (3,740) 1,348 37,747 52,196
Repurchases of shares of Common Stock (class A), including excise tax (in shares)                                   605,790        
Net other comprehensive income (loss)                                           (517)
Net income (loss)                                           1,018
Balance (in shares) at Mar. 31, 2024                             13,866,999 2,068,549     1,958,262      
Balance at Mar. 31, 2024                             $ 347 $ 52 16,444   $ (5,456) 831 37,628 49,846
Balance (in shares) at Sep. 30, 2023                             13,866,999 2,068,549     1,563,044      
Balance at Sep. 30, 2023                             $ 347 $ 52 16,444   $ (4,342) 1,134 37,066 50,701
Repurchases of shares of Common Stock (class A), including excise tax (in shares)                             0 0     196,295      
Repurchases of shares of Common Stock (class A), including excise tax                             $ 0 $ 0 0   $ (566) 0 0 (566)
Issuance of stock under ESPP of shares of Common Stock (class A) (in shares)                             0 0     (6,100)      
Issuance of stock under ESPP of shares of Common Stock (class A)                             $ 0 $ 0 0   $ 17 0 0 17
Dividends declared                             0 0 0   0 0 (320) (320)
Net other comprehensive income (loss)                             0 0 0   0 (171) 0 (171)
Net income (loss)                             $ 0 $ 0 0   $ 0 0 1,229 1,229
Balance (in shares) at Dec. 31, 2023                             13,866,999 2,068,549     1,753,239      
Balance at Dec. 31, 2023                             $ 347 $ 52 16,444   $ (4,891) 963 37,975 50,890
Repurchases of shares of Common Stock (class A), including excise tax (in shares)                             0 0   211,282 211,282      
Repurchases of shares of Common Stock (class A), including excise tax                             $ 0 $ 0 0   $ (582) 0 0 (582)
Issuance of stock under ESPP of shares of Common Stock (class A) (in shares)                             0 0     (6,259)      
Issuance of stock under ESPP of shares of Common Stock (class A)                             $ 0 $ 0 0   $ 17 0 0 17
Dividends declared                             0 0 0   0 0 (312) (312)
Net other comprehensive income (loss)                             0 0 0   0 (132) 0 (132)
Net income (loss)                             $ 0 $ 0 0   $ 0 0 (35) (35)
Balance (in shares) at Mar. 31, 2024                             13,866,999 2,068,549     1,958,262      
Balance at Mar. 31, 2024                             $ 347 $ 52 $ 16,444   $ (5,456) $ 831 $ 37,628 $ 49,846
v3.24.1.u1
Consolidated Statements of Cash Flows (Unaudited) - USD ($)
 9 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Cash Flows from Operating Activities:    
Net income (loss) $ 1,018,000 $ 2,520,000
Adjustments to reconcile net income (loss) to net cash provided by operating activities:    
Depreciation, amortization and accretion (103,000) (198,000)
Net recognized (gain) loss on disposal of fixed assets 0 3,000
Net realized (gains) losses on securities 5,928,000 (1,286,000)
Unrealized (gains) losses on securities (5,594,000) 2,504,000
Investment basis adjustment 0 (5,000)
Provision for deferred taxes 282,000 (265,000)
Allowance for credit losses (75,000) [1] 0
Changes in operating assets and liabilities:    
Accounts and other receivables 45,000 754,000
Prepaid expenses and other assets (97,000) (146,000)
Accounts payable and other accrued liabilities (551,000) (1,252,000)
Total adjustments (165,000) 109,000
Net cash provided by (used in) operating activities 853,000 2,629,000
Cash Flows from Investing Activities:    
Purchase of property and equipment (179,000) (14,000)
Purchase of trading securities at fair value, non-current (219,000) 0
Purchase of other investments 0 (663,000)
Proceeds from principal paydowns of available-for-sale debt securities at fair value 2,250,000 2,250,000
Return of capital on other investments 259,000 0
Net cash provided by (used in) investing activities 3,890,000 1,923,000
Cash Flows from Financing Activities:    
Principal payments on financing lease (22,000) (20,000)
Issuance of common stock 51,000 43,000
Repurchases of common stock (1,748,000) (938,000)
Dividends paid (965,000) (1,004,000)
Net cash provided by (used in) financing activities (2,684,000) (1,919,000)
Net increase (decrease) in cash, cash equivalents, and restricted cash 2,059,000 2,633,000
Beginning cash, cash equivalents, and restricted cash 26,401,000 23,314,000
Ending cash, cash equivalents, and restricted cash 28,460,000 25,947,000
Supplemental Disclosures of Non-Cash Investing and Financing Activities    
Dividends declared but not paid 317,000 332,000
Excise tax liability accrued on stock repurchases 17,000 0
Unsettled purchases of other investments 0 186,000
Unsettled class A common stock repurchases 11,000 0
Supplemental Disclosures of Cash Flow Information    
Cash paid for income taxes 250,000 470,000
Trading Securities, Current [Member]    
Cash Flows from Investing Activities:    
Proceeds on sale of trading securities at fair value, current 1,600,000 350,000
Trading Securities, Non-current [Member]    
Cash Flows from Investing Activities:    
Proceeds on sale of trading securities at fair value, current $ 179,000 $ 0
[1] Represents the change in present value attributable to the passage of time included in interest income.
v3.24.1.u1
Note 1 - Revision of Previously Issued Consolidated Financial Statements
 9 Months Ended
Mar. 31, 2024
Notes to Financial Statements  
Error Correction [Text Block]

NOTE 1. REVISION OF PREVIOUSLY ISSUED CONSOLIDATED FINANCIAL STATEMENTS

 

In connection with the preparation of its Consolidated Financial Statements for the fiscal year ended June 30, 2023, the Company determined that its previously issued Consolidated Financial Statements as of and for the three and nine months ended March 31, 2023, contained an error. Specifically, the Company did not record certain liabilities as required by FASB Interpretation No. 48 “Accounting for Uncertainty in Income Taxes” (codified under ASC 740-10). Based on management’s evaluation of the accounting error under the SEC Staff’s Accounting Bulletins Nos. 99 and 108 and interpretations thereof, the Company concluded the error is not material, on an individual or aggregate basis, to the Company’s previously reported financial statements. The Company has corrected this accounting error in the accompanying Consolidated Financial Statements as of and for the three and nine months ended March 31, 2023, as a revision to those financial statements.

  

The following table sets forth the impact of correcting this error in the Company’s previously issued Consolidated Financial Statements.

 

 

  

Nine Months Ended March 31, 2023

  

Three Months Ended March 31, 2023

 
  

As

          

As

         
  

Previously

  

Immaterial

  

As

  

Previously

  

Immaterial

  

As

 

(dollars in thousands, except per share data)

 

Reported

  

Revisions

  

Revised

  

Reported

  

Revisions

  

Revised

 

Tax expense (benefit)

 $602  $96  $698  $306  $20  $326 

Net Income (Loss)

 $2,616  $(96) $2,520  $1,640  $(20) $1,620 
                         

Earnings Per Share

                        

Basic Net Income (Loss) per Share

 $0.18  $(0.01) $0.17  $0.11  $(0.00) $0.11 

Diluted Net Income (Loss) per Share

 $0.18  $(0.01) $0.17  $0.11  $(0.00) $0.11 

 

In addition to the changes listed above, the Consolidated Statements of Comprehensive Income, Consolidated Statements of Shareholders' Equity, Consolidated Statements of Cash Flows, and impacted footnote disclosures have also been revised to reflect the error correction.
v3.24.1.u1
Note 2 - Basis of Presentation and Consolidation
 9 Months Ended
Mar. 31, 2024
Notes to Financial Statements  
Basis of Accounting [Text Block]

NOTE 2. 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, 2023 ("Form 10-K"), except for the adoption of the new accounting pronouncement discussed below.

 

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 holds variable interests in, but is not deemed to be the primary beneficiary of, certain funds it advises, specifically, certain funds in U.S. Global Investors Funds (“USGIF” or the “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 3 and 4. 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 4 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 carrying value of investment securities and receivables for fees, was $10.9 million at March 31, 2024, and $12.5 million at June 30, 2023.

 

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

 

  

Carrying Value and Maximum Exposure to Loss

 

(dollars in thousands)

 

March 31, 2024

  

June 30, 2023

 

Investments in securities at fair value, current

 $10,071  $11,642 

Investments in equity securities at fair value, non-current

  830   785 

Other receivables

  29   45 

Total VIE assets, maximum exposure to loss

 $10,930  $12,472 

 

Since the Company is not the primary beneficiary of the above funds it advises, the Company evaluated if it should consolidate under the voting interest entity model. Under the voting interest model, for legal entities other than partnerships, the usual condition for control is ownership, directly or indirectly, of more than 50 percent of the outstanding voting shares over an entity. The Company does not have control of any of the above funds it advises; therefore, the Company does not consolidate any of these funds.

 

All significant intercompany balances and transactions have been eliminated in consolidation. Certain amounts have been reclassified for comparative purposes. Due to rounding, the year-to-date amount may not be the exact sum of the quarterly amounts. The results of operations for the interim periods disclosed herein are not necessarily indicative of the results the Company may expect for the fiscal year ending June 30, 2024 (“fiscal 2024”).

 

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.

    

Adoption of New Accounting Standard

 

In June 2016, the Financial Accounting Standards Board ("FASB") issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, and has subsequently issued several amendments (collectively, “ASU 2016-13”). ASU 2016-13 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 for one 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.

 

Recent Accounting Pronouncements

 

In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions (“ASU 2022-03”) to clarify the guidance in Topic 820, Fair Value Measurement, when measuring the fair value of an equity security subject to contractual restrictions that prohibit the sale of an equity security, and to introduce new disclosure requirements for equity securities subject to contractual sale restrictions that are measured at fair value. ASU 2022-03 will be effective for fiscal years beginning after December 15, 2023. Early adoption is permitted for both interim and annual financial statements that have not yet been issued or made available for issuance. The Company has evaluated the guidance and does not expect the adoption of the new standard to have a material impact on its Consolidated Financial Statements.

 

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”), 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. ASU 2023-07 will be effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, on a retrospective basis. Early adoption is permitted. The Company is currently evaluating the impact of the pending adoption of ASU 2023-07 on its Consolidated Financial Statements.

 

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 income tax disclosures. ASU 2023-09 will be effective for fiscal years beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The Company is currently evaluating the impact of the pending adoption of ASU 2023-09 on its Consolidated Financial Statements.

 

Significant Accounting Policies
 
As a result of the adoption of an accounting pronouncement during the current fiscal year, the following accounting policies have been updated. For a complete listing of the Company's significant accounting policies, please refer to the Annual Report on Form 10-K for the year ended June 30, 2023.

 

Investments in Debt Securities. The Company classifies debt investments based on the Company’s intent to sell the security or its intent and ability to hold the debt security 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. Held-to-maturity debt securities are purchased with the intent and ability to hold until maturity and are measured at amortized cost. All other debt securities are classified as available-for-sale and are carried at fair value, and changes in unrealized gains and losses are reported net of tax in accumulated other comprehensive income (loss), except for declines in fair value determined to be a result of credit loss, which are reported in earnings. Upon the disposition of an available-for-sale security, the Company reclassifies the gain or loss on the security from accumulated other comprehensive income (loss) to net investment income (loss). Both available-for-sale and held-to-maturity debt securities are subject to an allowance for credit losses. 

 

Allowance for Credit Losses (Held-to-Maturity Debt Securities). For held-to-maturity debt securities, the Company is required to utilize the CECL methodology to estimate expected credit losses. Securities are evaluated on an individual basis. The individual assessment and determination of expected credit losses is generally based on the discounted cash flow method. Under the discounted cash flow method, the allowance for credit losses reflects the difference between the amortized cost basis and the present value of the expected cash flows. The Company adjusts the discount rate utilized to determine the present value of the expected cash flows quarterly for subsequent fluctuations in market interest rates. Changes in the present value 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, and are included in interest income within net investment income (loss) on the Consolidated Statements of Operations. Changes in the allowance attributable to expectations of cash flow timing or amounts are recorded as a provision (or release) for credit losses and are included within other income (loss) on the Consolidated Statements of Operations. Held-to-maturity debt securities, or portions thereof, are charged against the allowance when management believes the uncollectible status of a held-to-maturity security is confirmed. Accrued interest receivable is excluded from the allowance for credit losses. For more information about held-to-maturity debt securities, see Note 3, Investments.

 

Allowance for Credit Losses (Available-for-Sale Debt Securities). The impairment model for available-for-sale debt securities differs from the CECL methodology applied for held-to-maturity debt securities because available-for-sale debt securities are measured at fair value rather than amortized cost. For available-for-sale debt securities in an unrealized loss position, the Company first assesses whether it intends to sell, or it is more likely than not that it will be required to sell, the security before recovery of its amortized cost basis. If either criterion is met, the security’s amortized cost basis is written down to fair value through earnings. For available-for-sale debt securities where neither of the criteria is met, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the credit rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss, limited to the amount that the fair value is less than the amortized cost basis. Any remaining discount that has not been recorded through an allowance for credit losses is recognized in other comprehensive income. Changes in the allowance for credit losses are recorded as a provision (or release) for credit losses and are included within other income (loss) on the Consolidated Statements of Operations. Losses are charged against the allowance when management believes the uncollectible status of an available-for-sale security is confirmed or when either of the criteria regarding intent or requirement to sell is met. Accrued interest receivable is excluded from the allowance for credit losses. See Note 3, Investments, for more information about available-for-sale debt securities.

 

Credit Quality Indicators. 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.  

 

Receivables and Allowance for Credit Losses. Receivables consist primarily of advisory and other fees owed to the Company by clients. The Company records an expense based on a forward-looking current expected credit loss model to maintain an allowance for credit losses. When determining the allowance for receivables, the probability of recoverability of the receivable based on past experience, taking into account current collection trends and general economic factors, including bankruptcy rates, is considered. The Company also considers future economic trends to estimate expected credit losses over the lifetime of the asset. Credit risks are assessed based on historical write-offs, net of recoveries, as well as an analysis of the aged accounts receivable balances with allowances generally increasing as the receivable ages. Accounts receivable may be fully reserved for when specific collection issues are known to exist, such as pending bankruptcies. Due to the short-term nature, the Company had no allowance for credit losses related to receivables as of March 31, 2024, or June 30, 2023.

 

Dividends and Interest. Dividends are recorded on the ex-dividend date, and interest income is recorded on an accrual basis. Debt investments are placed on a non-accrual status when they are past due 180 days or more as to contractual obligations or when other circumstances indicate that collection is not probable. When a debt investment is placed on a non-accrual status, any interest accrued but not received is reversed against interest income. Any discount between the cost and the principal amount of debt investments is amortized to interest income using the effective interest method. When the discounted cash flow method is utilized to estimate expected credit losses for held-to-maturity debt securities, any changes in the allowance for credit losses that are attributable to the passage of time are recognized in interest income. Both dividends and interest income are included within net investment income (loss) on the Consolidated Statements of Operations.

 
v3.24.1.u1
Note 3 - Investments
 9 Months Ended
Mar. 31, 2024
Notes to Financial Statements  
Investments and Other Noncurrent Assets [Text Block]

NOTE 3. INVESTMENTS

 

As of March 31, 2024, the Company held investments carried at fair value on a recurring basis of $16.7 million and a cost basis of $18.9 million. The fair value of these investments is approximately 31.6 percent of the Company’s total assets at March 31, 2024. In addition, the Company held other investments of approximately $1.1 million and held-to-maturity debt investments, net of allowance for credit losses, of $843,000.

 

The cost basis of investments is adjusted for amortization of premium or accretion of discount on debt securities held or 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 $10.9 million and $12.4 million as of March 31, 2024, and June 30, 2023, respectively, and investments in HIVE Digital Technologies Ltd. (“HIVE”), which were convertible debentures valued at $5.2 million at March 31, 2024, and convertible debentures and common share purchase warrants valued at $7.3 million at June 30, 2023. For these investments, the maximum amount of loss due to credit risk the Company could incur is the fair value of the financial instruments.

 

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 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. 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 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 may differ from what may have been used had a broader market for these securities existed. The Committee reviews inputs and assumptions and reports material items to the Board of Directors. Securities which do not have readily determinable fair values are also periodically reviewed by the Committee.

 

The following tables summarize the major categories of investments with fair values adjusted on a recurring basis as of March 31, 2024, and June 30, 2023, and other investments with fair values adjusted on a nonrecurring basis, with fair values shown according to the fair value hierarchy.

 

  

March 31, 2024

 
      

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 - International

 $411  $-  $-  $411 

Mutual funds - Fixed income

  10,071   -   -   10,071 

Mutual funds - Global equity

  829   -   -   829 

Total equity securities

  11,311   -   -   11,311 

Debt securities:

                

Corporate debt securities

  195   -   -   195 

Total investments in trading securities:

  11,506   -   -   11,506 

Investments in available-for-sale debt securities:

                

Corporate debt securities - Convertible debentures

  -   -   5,190   5,190 

Total investments carried at fair value on a recurring basis:

 $11,506  $-  $5,190  $16,696 

Investments carried at fair value on a nonrecurring basis:

                

Other investments (1)

 $-  $-  $600  $600 

 

1.

Other investments include equity securities without readily determinable fair values that were adjusted as a result of the measurement alternative on dates during the nine months ended March 31, 2024. These securities are classified as level 3 due to the infrequency of the observable price changes and/or restrictions on the shares.

 

  

June 30, 2023

 
      

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 - International

 $488  $-  $290  $778 

Mutual funds - Fixed income

  11,642   -   -   11,642 

Mutual funds - Global equity

  785   -   -   785 

Total equity securities

  12,915   -   290   13,205 

Debt securities:

                

Corporate debt securities

  -   -   -   - 

Total investments in trading securities:

  12,915   -   290   13,205 

Investments in available-for-sale debt securities:

                

Corporate debt securities - Convertible debentures

  -   -   7,008   7,008 

Total investments carried at fair value on a recurring basis:

 $12,915  $-  $7,298  $20,213 

Investments carried at fair value on a nonrecurring basis:

                

Other investments (1)

 $-  $-  $1,786  $1,786 

 

1.

Other investments include equity securities without readily determinable fair values that were adjusted as a result of the measurement alternative on dates during the fiscal year ended June 30, 2023. These securities are classified as level 3 due to the infrequency of the observable price changes and/or restrictions on the shares.

 

The securities classified as Level 3 and carried at fair value on a recurring basis in the preceding tables are investments in convertible securities 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 acquire one 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, and each five whole warrants entitled the Company to acquire one common share at a price of $15.00 (Canadian). The remaining principal amount was $5.3 million as of March 31, 2024. 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 did not represent ownership in HIVE as of March 31, 2024, or June 30, 2023. The securities are subject to Canadian securities regulations. Frank Holmes serves on the board as executive chairman of HIVE and held shares and options at March 31, 2024. From August 2018 through 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 $5.2 million and $7.0 million at March 31, 2024, and June 30, 2023, respectively. The warrants were recorded at the estimated fair value of $5.9 million on the purchase date, and upon expiration in January 2024, a realized loss of $5.9 million was recognized in net investment income (loss). The fair value of the warrants was $290,000 at June 30, 2023.

 

The Company utilizes an independent third-party to estimate the fair values of the HIVE convertible securities and currently considers the fair value measurements to contain Level 3 inputs. The following table is a reconciliation of investments recorded at fair value for which unobservable inputs (Level 3) were used in determining fair value during the nine months ended March 31, 2024.

 

Changes in Level 3 Assets Measured at Fair Value on a Recurring Basis

 

  

Nine Months Ended March 31, 2024

 
  

Investments in

  

Investments in

 

(dollars in thousands)

 

equity securities

  

debt securities

 

Beginning Balance

 $290  $7,008 

Principal repayments

  -   (2,250)

Amortization of day one premium

  -   (137)

Accretion of bifurcation discount

  -   403 

Total gains or losses included in:

        

Net Investment Income (Loss)

  (290)  821 

Other Comprehensive Income (Loss)

  -   (655)

Ending Balance

 $-  $5,190 

 

The following is quantitative information as of March 31, 2024, with respect to the securities measured and carried at fair value on a recurring basis with the use of significant unobservable inputs (Level 3).

 

  

March 31, 2024

 

(dollars in thousands)

 

Fair Value

 

Principal Valuation Techniques

 

Unobservable Inputs

 

Investments in available-for-sale debt securities:

           

Corporate debt securities - Convertible debentures

 $5,190 

Binomial lattice model

 

Volatility

  110.0%
       

Credit Spread

  7.00%
       

Risk-Free Rate

  4.28%

 

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 March 31, 2024, and June 30, 2023.

 

  

March 31, 2024

 

(dollars in thousands)

 

Cost

  

Unrealized Gains (Losses)

  

Fair Value

 

Trading securities at fair value

            

Equity securities:

            

Equities - International

 $746  $(335) $411 

Equities - Domestic

  45   (45)  - 

Mutual funds - Fixed income

  10,280   (209)  10,071 

Mutual funds - Global equity

  929   (100)  829 

Total equity securities

  12,000   (689)  11,311 

Debt securities:

            

Corporate debt securities

  215   (20)  195 

Total trading securities at fair value

 $12,215  $(709) $11,506 

 

  

June 30, 2023

 

(dollars in thousands)

 

Cost

  

Unrealized Gains (Losses)

  

Fair Value

 

Trading securities at fair value

            

Equity securities:

            

Equities - International

 $6,679  $(5,901) $778 

Equities - Domestic

  45   (45)  - 

Mutual funds - Fixed income

  11,947   (305)  11,642 

Mutual funds - Global equity

  930   (145)  785 

Total equity securities

  19,601   (6,396)  13,205 

Debt securities:

            

Corporate debt securities

  -   -   - 

Total trading securities at fair value

 $19,601  $(6,396) $13,205 

 

 

Debt Investments

 

Investments in debt securities are classified on the acquisition dates and at each balance sheet date. Securities classified as held-to-maturity are carried at amortized cost, net of allowance for credit losses, reflecting the ability and intent to hold the securities to maturity. Debt securities classified as trading are acquired with the intent to sell in the near term and are carried at fair value with changes reported in earnings. All other debt securities are classified as available-for-sale and are carried at fair value.

 

Investment gains and losses on available-for-sale debt securities are recorded when the securities are sold, as determined on a specific identification basis, and recognized in current period earnings. Changes in unrealized gains on available-for-sale debt securities are reported net of tax in accumulated other comprehensive income (loss). For debt securities in an unrealized loss position, a loss in earnings is recognized for the excess of amortized cost over fair value if the Company intends to sell before the price recovers. Otherwise, the Company evaluates as of the balance sheet date whether the unrealized losses are attributable to credit losses or other factors. The severity of the decline in value, creditworthiness of the issuer and other relevant factors are considered. The portion of unrealized loss the Company believes is related to a credit loss is recognized in earnings, and the portion of unrealized loss the Company believes is not related to a credit loss is recognized in other comprehensive income (loss).

 

Certain derivatives embedded in other financial instruments, such as the conversion option in a convertible bond, are reported at fair value, and changes in fair value are recorded through earnings within net investment income (loss). The host contract continues to be accounted for in accordance with the appropriate accounting standard. The embedded derivative and the related host contract represent one legal contract and are combined on the Consolidated Balance Sheets and the tables below. The Company held one financial instrument classified as available-for-sale containing an embedded derivative, which represents an investment in HIVE, at March 31, 2024, and June 30, 2023. As of March 31, 2024, the unrealized loss position in the available-for-sale security was related to changes in the fair value of the embedded derivatives and not the result of credit losses; therefore, an allowance for credit losses was not recorded.

 

The following details the components of the Company’s available-for-sale debt investments as of March 31, 2024, and June 30, 2023.

 

  

March 31, 2024

 

(dollars in thousands)

 

Amortized Cost

  

Gross Unrealized Gains in Other Comprehensive Income (Loss)

  

Gross Unrealized Losses in Other Comprehensive Income (Loss)

  

Gross Unrealized Losses in Net Investment Income (Loss) (1)

  

Fair Value

  

Allowance for Credit Losses

 

Available-for-sale debt securities:

                        

Corporate debt securities - Convertible debentures

 $6,651  $1,052  $-  $(2,513) $5,190  $- 

 

  

June 30, 2023

 

(dollars in thousands)

 

Amortized Cost

  

Gross Unrealized Gains in Other Comprehensive Income (Loss)

  

Gross Unrealized Losses in Other Comprehensive Income (Loss)

  

Gross Unrealized Losses in Net Investment Income (Loss) (1)

  

Fair Value

  

Allowance for Credit Losses

 

Available-for-sale debt securities:

                        

Corporate debt securities - Convertible debentures

 $7,729  $1,707  $-  $(2,428) $7,008  $- 

 

1.

Represents changes in unrealized gains and losses related to embedded derivatives included within net investment income (loss) on the Consolidated Statements of Operations. 

 

The following table summarizes the fair values of embedded derivatives on the Consolidated Balance Sheets, categorized by risk exposure, at March 31, 2024, and June 30, 2023.

 

  

March 31, 2024

  

June 30, 2023

 
  

Other Assets

  

Other Assets

 
  

Investments in

  

Investments in

 
  

available-for-sale

  

available-for-sale

 

(dollars in thousands)

 

debt securities

  

debt securities

 

Embedded Derivatives:

        

Equity price risk exposure

 $29  $114 

 

The following table presents the effect of embedded derivatives on the Consolidated Statements of Operations, categorized by risk exposure, for the three and nine months ended March 31, 2024, and 2023.

 

  

Nine Months Ended

  

Three Months Ended

 
  

March 31,

  

March 31,

 
  

2024

  

2023

  

2024

  

2023

 
  

Other Income (Loss)

  

Other Income (Loss)

  

Other Income (Loss)

  

Other Income (Loss)

 

(dollars in thousands)

 

Net Investment Income (Loss)

  

Net Investment Income (Loss)

  

Net Investment Income (Loss)

  

Net Investment Income (Loss)

 

Embedded Derivatives:

                

Equity price risk exposure

 $(85) $82  $(22) $55 

 

At March 31, 2024, and June 30, 2023, the Company held one debt security classified as held-to-maturity. The security had an estimated fair value that was lower than the carrying value by $157,000 at March 31, 2024, and $232,000 at  June 30, 2023. The security has been in a continuous unrealized loss position for over twelve months. We have evaluated the unrealized loss on the security at March 31, 2024, and determined it to be of a temporary nature and caused by fluctuations in market interest rates, not by concerns regarding the ability of the issuer to meet their obligations.

 

The following details the components of the Company’s held-to-maturity debt investments as of March 31, 2024, and June 30, 2023.

 

  

March 31, 2024

 

(dollars in thousands)

 

Amortized Cost

  

Gross Unrecognized Holding Gains

  

Gross Unrecognized Holding Losses

  

Fair Value

  

Allowance for Credit Losses

 

Held-to-maturity debt securities(1):

                    

Corporate debt securities

 $1,000  $-  $(157) $843  $157 

 

  

June 30, 2023

 

(dollars in thousands)

 

Amortized Cost

  

Gross Unrecognized Holding Gains

  

Gross Unrecognized Holding Losses

  

Fair Value

  

Allowance for Credit Losses

 

Held-to-maturity debt securities(1):

                    

Corporate debt securities

 $1,000  $-  $(232) $768  $- 

 

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.

 

On July 1, 2023, the Company adopted ASU 2016-13, 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 ASU 2016-13, 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 March 31, 2024, and  June 30, 2023, 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. Since the adoption of ASU 2016-13 on July 1, 2023, and through March 31, 2024, the allowance for credit losses decreased $75,000 which was attributable to the passage of time. For the three and nine months ended March 31, 2024, $20,000 and $75,000, respectively, was included as an increase in interest income within net investment income (loss) on the Consolidated Statements of Operations.

 

The following table presents the activity in the allowance for credit losses for the held-to-maturity debt investment. There was no allowance at  June 30, 2023.

 

(dollars in thousands)

 

March 31, 2024

 

Beginning Balance, prior to adoption of ASU 2016-13

 $- 

Impact of ASU 2016-13 adoption

  232 

Provision for credit losses - reversal (1)

  (75)

Ending Balance

 $157 

 

1.Represents the change in present value attributable to the passage of time included in interest income.

 

The following summarizes the net carrying amount and estimated fair value of debt securities at March 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.

 

  

March 31, 2024

 
  

Available-for-sale

  

Held-to-maturity

 
  

debt securities

  

debt securities

 
  

Convertible

  

Due after one year

 

(dollars in thousands)

 

debentures (1)

  

through five years

 

Amortized Cost

 $6,651  $1,000 

Fair Value

 $5,190  $843 

 

1.

Principal payments of $750,000 are due quarterly with a final maturity date in January 2026.

 

As of March 31, 2024, none of the Company's investments in debt securities were delinquent or in a non-accrual status.

   

Other Investments

 

Other investments consist of equity investments in entities over which the Company is unable to exercise significant influence and which do not 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 $2.4 million as of June 30, 2023. The following table presents the carrying value of equity securities without readily determinable fair values held as of March 31, 2024, and 2023, 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.

 

  

Nine Months Ended

  

Three Months Ended

 
  

March 31,

  

March 31,

 

(dollars in thousands)

 

2024

  

2023

  

2024

  

2023

 

Other Investments

                

Carrying value

 $1,114  $2,827  $1,114  $2,827 

Upward carrying value changes

 $-  $14  $-  $9 

Downward carrying value changes/impairment

 $(1,274) $(1,841) $(499) $- 

 

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 March 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 March 31, 2024.

 

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 March 31, 2024, and at June 30, 2023. 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 March 31, 2024.

 

Net Investment Income (Loss)

 

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

 

●

realized gains and losses on sales of securities;

 

●

realized gains and losses on principal payment proceeds;

 

●

unrealized gains and losses on securities at fair value;

 

●

impairments and observable price changes on equity investments without readily determinable fair values;

 

●

dividend and interest income; and

 

●

realized foreign currency gains and losses.

 

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

 

  

Nine Months Ended

  

Three Months Ended

 

(dollars in thousands)

 

March 31,

  

March 31,

 

Net Investment Income (Loss)

 

2024

  

2023

  

2024

  

2023

 

Realized gains (losses) on equity securities

 $(6,834) $(13) $(6,094) $(13)

Realized gains (losses) on debt securities

  906   1,299   267   394 

Unrealized gains (losses) on equity securities

  5,699   (2,586)  5,863   283 

Unrealized gains (losses) on debt securities

  (20)  -   (65)  - 

Unrealized gains (losses) on embedded derivatives

  (85)  82   (22)  55 

Unrealized gains (losses) on cash equivalents

  (2)  -   -   - 

Dividend and interest income

  1,781   1,321   595   421 

Realized foreign currency gains (losses)

  (82)  (292)  (84)  15 

Total Net Investment Income (Loss)

 $1,363  $(189) $460  $1,155 

 

Realized gains on debt securities reclassified from other comprehensive income (loss) related to the Company's investment in HIVE debentures were $267,000 and $906,000 for the three and nine months ended March 31, 2024, respectively, and $394,000 and $1.3 million for the three and nine months ended March 31, 2023, respectively.

 

The following table presents unrealized gains and losses recognized during the three and nine months ended March 31, 2024, and 2023, on equity securities and debt securities classified as trading still held at each respective date. 

 

  

Nine Months Ended

  

Three Months Ended

 
  

March 31,

  

March 31,

 

(dollars in thousands)

 

2024

  

2023

  

2024

  

2023

 

Unrealized gains and losses for securities held at the reporting date:

                

Equity securities:

                

Net gains and losses recognized during the period

 $(1,135)  (2,599) $(231) $270 

Less: Net gains and losses recognized during the period on securities sold during the period

  (256)  (13)  (3)  (13)

Unrealized gains and losses recognized during the reporting period on securities still held at the reporting date (1)

 $(879) $(2,586) $(228) $283 

Debt securities classified as trading:

                

Net gains and losses recognized during the period

 $(20)  -  $(65) $- 

Less: Net gains and losses recognized during the period on securities sold during the period

  -   -   -   - 

Unrealized gains and losses recognized during the reporting period on securities still held at the reporting date

 $(20) $-  $(65) $- 

 

1.

Includes net unrealized and realized losses as a result of the measurement alternative of $240,000 and $1.0 million for the three and nine months ended March 31, 2024, respectively, and $0 and $1.8 million, for the three and nine months ended March 31, 2023, respectively.

 

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.

 
v3.24.1.u1
Note 4 - Investment Management and Other Fees
 9 Months Ended
Mar. 31, 2024
Notes to Financial Statements  
Investment Management and Other Fees [Text Block]

NOTE 4. INVESTMENT MANAGEMENT AND OTHER FEES

 

The following table presents operating revenues disaggregated by performance obligation.

 

  

Nine Months Ended

  

Three Months Ended

 
  

March 31,

  

March 31,

 

(dollars in thousands)

 

2024

  

2023

  

2024

  

2023

 

ETF advisory fees

 $7,394  $10,360  $2,224  $3,142 

USGIF advisory fees

  1,408   1,693   443   558 

USGIF performance fees received (paid)

  (344)  (390)  (101)  (109)

Total Advisory Fees

  8,458   11,663   2,566   3,591 

USGIF administrative services fees

  86   101   27   33 

Total Operating Revenue

 $8,544  $11,764  $2,593  $3,624 

 

The Company serves as investment advisor to three U.S.-based exchange-traded funds (ETFs): U.S. Global Jets ETF (ticker JETS), U.S. Global GO GOLD and Precious Metal Miners ETF (ticker GOAU), and U.S. Global Sea to Sky Cargo ETF (ticker SEA). The Company receives a unitary management fee of 0.60 percent of average net assets of the ETFs, and has agreed to bear all expenses of the 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 $37,000 and $115,000 for the three and nine months ended March 31, 2024, respectively, and $28,000 and $77,000 and for the three and nine months ended March 31, 2023, respectively. The Company also serves as investment advisor to one European-based ETF, the U.S. Global Jets UCITS ETF. The Company receives a unitary management fee of 0.65 percent of average net assets and has agreed to bear all expenses of the ETF.

 

The Company serves as investment adviser to USGIF and receives a fee based on a specified percentage of average assets under management. The advisory agreement for the equity funds within USGIF provides for a base advisory 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 rolling 12 months.

 

The Company has agreed to contractually limit the expenses of the Near-Term Tax Free Fund and the Global Luxury Goods Fund through April 2025. The Company has voluntarily waived or reduced its fees and/or agreed to pay expenses on the remaining USGIF funds. These caps will continue on a voluntary basis at the Company’s discretion. The aggregate fees waived and expenses borne by the Company for USGIF were $193,000 and $638,000 for the three and nine months ended March 31, 2024, respectively, and $299,000 and $822,000 for the three and nine months ended March 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 March 31, 2024, the Company had receivables from fund clients of $858,000, of which $738,000 was from the ETFs and $120,000 was from USGIF. As of June 30, 2023, the Company had $1.1 million in receivables from fund clients, of which $1.0 million was from ETFs and $126,000 was from USGIF. There was no allowance for credit losses related to receivables as of March 31, 2024, or June 30, 2023.

  
v3.24.1.u1
Note 5 - Restricted and Unrestricted Cash
 9 Months Ended
Mar. 31, 2024
Notes to Financial Statements  
Cash and Cash Equivalents Disclosure [Text Block]

NOTE 5. RESTRICTED AND UNRESTRICTED CASH

 

The Company maintains its cash deposits with established commercial banks. At times, balances may exceed federally insured limits. We have not experienced any losses in such accounts and do not believe that we are exposed to any significant credit risk associated with our cash deposits. Restricted cash represents cash invested in a money market account as collateral for credit facilities that is not available for general corporate use.

 

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

 

(dollars in thousands)

 

March 31, 2024

  

June 30, 2023

 

Cash and cash equivalents

 $27,460  $25,401 

Restricted cash

  1,000   1,000 

Total cash, cash equivalents, and restricted cash

 $28,460  $26,401 

  
v3.24.1.u1
Note 6 - Leases
 9 Months Ended
Mar. 31, 2024
Notes to Financial Statements  
Operating Leases [Text Block]

NOTE 6. LEASES

 

The Company has lease agreements for office equipment that expire in the fiscal year 2026. Lease expenses included in general and administrative expense on the Consolidated Statements of Operations totaled $33,000 and $99,000 for the three and nine months ended March 31, 2024, respectively, and $32,000 and $86,000 for the three and nine months ended March 31, 2023, respectively.

 

The following table presents the components of lease cost.

 

  

Nine Months Ended

  

Three Months Ended

 
  

March 31,

  

March 31,

 

(dollars in thousands)

 

2024

  

2023

  

2024

  

2023

 

Finance lease cost:

                

Amortization of right-of-use assets

 $23  $22  $7  $7 

Interest on lease liabilities

  2   3   1   1 

Total finance lease cost

  25   25   8   8 

Short-term lease cost

  76   64   26   25 

Total lease cost

 $101  $89  $34  $33 

 

Supplemental information related to the Company's leases follows.

 

  

Nine Months Ended

  

Three Months Ended

 
  

March 31,

  

March 31,

 

(dollars in thousands)

 

2024

  

2023

  

2024

  

2023

 

Operating cash flows from financing leases included in lease liabilities

 $2  $3  $1  $1 

Financing cash flows from financing leases included in lease liabilities

 $22  $20  $7  $7 

 

Additional qualitative information concerning the Company’s leases follows.

 

  

March 31, 2024

  

June 30, 2023

 

Weighted-average remaining lease term - financing leases (years)

  1.50   2.25 

Weighted-average discount rate - financing leases

  4.75%  4.75%

 

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

 

(dollars in thousands)

    

Fiscal Year

 

Finance Leases

 

2024 (excluding the nine months ended March 31, 2024)

 $8 

2025

  33 

2026

  8 

Total lease payments

  49 

Less imputed interest

  (2)

Total

 $47 

 

The Company is the lessor of certain areas of its owned office building under operating leases expiring in various months through fiscal year 2025. At the commencement of an operating lease, no income is recognized; subsequently, lease payments received are recognized on a straight-line basis. Lease income included in other income on the Consolidated Statements of Operations was $23,000 and $78,000 for the three and nine months ended March 31, 2024, respectively, and $31,000 and $96,000 for the three and nine months ended March 31, 2023, respectively. The cost of obtaining lessor contracts, which is included in other assets on the Consolidated Balance Sheets, was $3,000 at March 31, 2024, and $4,000 at June 30, 2023.

 

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

 

(dollars in thousands)

    

Fiscal Year

 

Operating Leases

 

2024 (excluding the nine months ended March 31, 2024)

 $10 

2025

  36 

Total lease payments

 $46 

 

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.

 
v3.24.1.u1
Note 7 - Other Accrued Expenses
 9 Months Ended
Mar. 31, 2024
Notes to Financial Statements  
Accounts Payable and Accrued Liabilities Disclosure [Text Block]

NOTE 7. OTHER ACCRUED EXPENSES

 

Other accrued expenses consist of the following:

      

(dollars in thousands)

 

March 31, 2024

  

June 30, 2023

 

Professional fees

 $538  $697 

Vendors payable

  359   157 

ETF operating and distribution expenses

  548   344 

Other taxes payable

  73   76 

Other

  111   - 

Other accrued expenses

 $1,629  $1,274 

     

The Company had $127,000 and $43,000 of receivables from HIVE included in the Consolidated Balance Sheets within receivables as of March 31, 2024, and June 30, 2023, respectively, related to the reimbursement of certain amounts reflected in the table above.
v3.24.1.u1
Note 8 - Debt
 9 Months Ended
Mar. 31, 2024
Notes to Financial Statements  
Debt Disclosure [Text Block]

NOTE 8. DEBT

 

The Company has access to a $1 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, 2024, and the Company intends to renew annually. The credit facility is collateralized by approximately $1 million at March 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 March 31, 2024, the credit facility remains unutilized by the Company.

  
v3.24.1.u1
Note 9 - Stockholders' Equity
 9 Months Ended
Mar. 31, 2024
Notes to Financial Statements  
Shareholders' Equity and Share-Based Payments [Text Block]

NOTE 9. 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 year 2023 and through  March 2024.

 

In March 2024, the Board authorized the continuance of the monthly dividend of $0.0075 per share from April through June 2024, 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 Rule 10b-18 and Rule 10b5-1 of the Securities Exchange Act of 1934. 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 acquired shares may be used for corporate purposes, including shares issued to employees in the Company’s stock-based compensation programs. For the three and nine months ended March 31, 2024, the Company repurchased 211,282 and 605,790 class A shares using cash of $577,000 and $1.7 million, respectively. For the three and nine months ended March 31, 2023, the Company repurchased 193,040 and 320,412 class A shares using cash of $556,000 and $938,000, respectively.

 

In August 2022, the Inflation Reduction Act (IRA) was signed into law, which made a number of changes to the Internal Revenue Code, including adding a 1% 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 $17,000 for the three and nine months ended March 31, 2024, respectively.

 

The Company’s stock option plans provide for the granting of class A shares as either incentive or nonqualified stock options to employees and non-employee directors. Options are subject to terms and conditions determined by the Compensation Committee of the Board of Directors. At  March 31, 2024, and 2023, there were 229,000 options outstanding and exercisable under the 1989 Plan at a weighted average exercise price of $6.05, and 2,000 options outstanding and exercisable under the 1997 Plan at a weighted average exercise price of $2.74. There were no options granted or exercised for the three and nine months ended March 31, 2024, or 2023. There were no options forfeited during the three and nine months ended March 31, 2024, no options forfeited during the three months ended March 31, 2023, and 2,000 options forfeited during the nine months ended March 31, 2023.

 

Stock-based compensation expense is measured at the grant date based on the fair value of the award, and the cost is recognized as expense ratably over the award’s vesting period. There was no stock-based compensation expense for the three and nine months ended March 31, 2024, or 2023. As of  March 31, 2024, and 2023, there was no unrecognized share-based compensation cost related to share-based awards granted under the plans.

  
v3.24.1.u1
Note 10 - Earnings Per Share
 9 Months Ended
Mar. 31, 2024
Notes to Financial Statements  
Earnings Per Share [Text Block]

NOTE 10. 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.

 

  

Nine Months Ended

  

Three Months Ended

 
  

March 31,

  

March 31,

 

(dollars in thousands, except per share data)

 

2024

  

2023

  

2024

  

2023

 

Net Income (Loss)

 $1,018  $2,520  $(35) $1,620 
                 

Weighted average number of outstanding shares

                

Basic

  14,278,691   14,862,893   14,077,042   14,747,537 

Effect of dilutive securities

                

Stock options

  86   295   -   100 

Diluted

  14,278,777   14,863,188   14,077,042   14,747,637 
                 

Earnings (Loss) Per Share

                

Basic Net Income (Loss) per share

 $0.07  $0.17  $(0.00) $0.11 

Diluted Net Income (Loss) per share

 $0.07  $0.17  $(0.00) $0.11 

 

The diluted EPS calculation excludes the effect of stock options when their exercise prices exceed the average market price for the period, as their inclusion would be anti-dilutive. For the three and nine months ended March 31, 2024, employee stock options of 231,000 and 229,000, respectively, were excluded from diluted EPS. For the three and nine months ended March 31, 2023, employee stock options of 229,000 were excluded from diluted EPS. 

 

During the three and nine months ended March 31, 2024, and 2023, 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.

  
v3.24.1.u1
Note 11 - Income Taxes
 9 Months Ended
Mar. 31, 2024
Notes to Financial Statements  
Income Tax Disclosure [Text Block]

NOTE 11. 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. The effective tax rate was 187.5 percent and 30.5 percent for the three and nine months ended March 31, 2024, respectively; and 16.8 percent and 21.7 percent for the three and nine months ended March 31, 2023, respectively.

 

A valuation allowance is provided when it is more likely than not that some portion of the deferred tax amount will not be realized. A valuation allowance of $26,000 and $24,000 was included to fully reserve for Canadian net operating loss carryovers at March 31, 2024, and June 30, 2023, respectively.

 

The Company maintains a reserve for uncertain tax positions for income tax matters. The Company believes the reserve for uncertain tax positions, including interest and penalties, and net of federal benefits, of $549,000 adequately covers open tax years and uncertain tax positions up to and including March 31, 2024, for major taxing jurisdictions. As of March 31, 2024, the entire $549,000 of unrecognized tax benefits, if recognized, would impact the Company's effective income tax rate. 

  
v3.24.1.u1
Note 12 - Accumulated Other Comprehensive Income (Loss)
 9 Months Ended
Mar. 31, 2024
Notes to Financial Statements  
Comprehensive Income (Loss) Note [Text Block]

NOTE 12. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

 

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

 

(dollars in thousands)

 

Unrealized gains (losses) on available-for-sale investments

 

Nine Months Ended March 31, 2024

    

Balance at June 30, 2023

 $1,348 

Other comprehensive income (loss) before reclassifications

  251 

Tax effect

  (52)

Amount reclassified from AOCI

  (906)

Tax effect

  190 

Net other comprehensive income (loss)

  (517)

Balance at March 31, 2024

 $831 
     

Nine Months Ended March 31, 2023

    

Balance at June 30, 2022

 $3,624 

Other comprehensive income (loss) before reclassifications

  (1,189)

Tax effect

  250 

Amount reclassified from AOCI

  (1,299)

Tax effect

  273 

Net other comprehensive income (loss)

  (1,965)

Balance at March 31, 2023

 $1,659 

 
v3.24.1.u1
Note 13 - Financial Information by Business Segment
 9 Months Ended
Mar. 31, 2024
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]

NOTE 13. FINANCIAL INFORMATION BY BUSINESS SEGMENT

 

The Company operates principally in two 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.

 

(dollars in thousands)

 

Investment Management Services

  

Corporate Investments

  

Consolidated

 

Nine Months Ended March 31, 2024

            

Net operating revenues

 $8,544  $-  $8,544 

Net investment income (loss)

 $-  $1,363  $1,363 

Other income (loss)

 $183  $-  $183 

Income (loss) before income taxes

 $164  $1,300  $1,464 

Depreciation

 $163  $-  $163 

Gross identifiable assets at March 31, 2024

 $27,542  $23,390  $50,932 

Deferred tax asset

         $1,840 

Consolidated total assets at March 31, 2024

         $52,772 

Nine Months Ended March 31, 2023

            

Net operating revenues

 $11,764  $-  $11,764 

Net investment income (loss)

 $-  $(189) $(189)

Other income (loss)

 $184  $-  $184 

Income (loss) before income taxes

 $3,461  $(243) $3,218 

Depreciation

 $183  $-  $183 

Gross identifiable assets at March 31, 2023

 $25,056  $29,030  $54,086 

Deferred tax asset

         $1,659 

Consolidated total assets at March 31, 2023

         $55,745 

Three Months Ended March 31, 2024

            

Net operating revenues

 $2,593  $-  $2,593 

Net investment income (loss)

 $-  $460  $460 

Other income (loss)

 $68  $-  $68 

Income (loss) before income taxes

 $(389) $429  $40 

Depreciation

 $41  $-  $41 

Three Months Ended March 31, 2023

            

Net operating revenues

 $3,624  $-  $3,624 

Net investment income (loss)

 $-  $1,155  $1,155 

Other income (loss)

 $61  $-  $61 

Income (loss) before income taxes

 $815  $1,131  $1,946 

Depreciation

 $61  $-  $61 

 

Net operating revenues from investment management services includes operating revenues from ETF clients of $2.2 million and $7.4 million for the three and nine months ended March 31, 2024, respectively, and $3.1 million and $10.4 million for the three and nine months ended March 31, 2023, respectively. Net operating revenues from investment management services also include operating revenues from USGIF of $369,000 and $1.2 million for the three and nine months ended March 31, 2024, respectively, and $482,000 and $1.4 million for the three and nine months ended March 31, 2023, respectively.

 
v3.24.1.u1
Note 14 - Contingencies and Commitments
 9 Months Ended
Mar. 31, 2024
Notes to Financial Statements  
Commitments and Contingencies Disclosure [Text Block]

NOTE 14. CONTINGENCIES AND COMMITMENTS

 

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

 

During the normal course of business, the Company may be subject to various claims, legal proceedings, and other contingencies. These matters are subject to various uncertainties, and it is possible that some of these matters may be resolved unfavorably. The Company establishes accruals for matters for which the outcome is probable and can be reasonably estimated. Management believes that any liability in excess of these accruals upon the ultimate resolution of these matters will not have a material adverse effect on the Consolidated Financial Statements of the Company. Excluding reserves for uncertain tax positions, the Company recorded no accruals for contingencies as of March 31, 2024, or June 30, 2023.

 

The Board has authorized a monthly dividend of $0.0075 per share through June 2024, 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 April to June 2024 is approximately $317,000.

 

The COVID-19 pandemic and the resulting actions to control or slow the spread have affected global and domestic economies and financial markets, and in the future it or other epidemics, pandemics or outbreaks may adversely affect the Company's results of operations, cash flows and financial position. The Company cannot reasonably estimate the future impact of these events, given the uncertainty over the duration and severity of the economic impact.

  
v3.24.1.u1
Note 15 - Subsequent Event
 9 Months Ended
Mar. 31, 2024
Notes to Financial Statements  
Subsequent Events [Text Block]

NOTE 15. SUBSEQUENT EVENT

 

USGIF advisory fees are comprised of two components: a base management fee and a performance fee. 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 rolling 12 months.


For three of four USGIF equity funds, this performance adjustment began to be phased out on April 1, 2024, and will cease on April 1, 2025. In the phase-out period, performance can only be adjusted downward.

 
v3.24.1.u1
Insider Trading Arrangements
 9 Months Ended
Mar. 31, 2024
Insider Trading Arr Line Items  
Material Terms of Trading Arrangement [Text Block]

PART II. OTHER INFORMATION
Rule 10b5-1 Arrangement Terminated [Flag] false
Rule 10b5-1 Arrangement Adopted [Flag] false
Non-Rule 10b5-1 Arrangement Terminated [Flag] false
Non-Rule 10b5-1 Arrangement Adopted [Flag] false
v3.24.1.u1
Significant Accounting Policies (Policies)
 9 Months Ended
Mar. 31, 2024
Accounting Policies [Abstract]  
Use of Estimates, Policy [Policy Text Block]

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.

    
New Accounting Pronouncements, Policy [Policy Text Block]

Adoption of New Accounting Standard

 

In June 2016, the Financial Accounting Standards Board ("FASB") issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, and has subsequently issued several amendments (collectively, “ASU 2016-13”). ASU 2016-13 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 for one 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.

 

Recent Accounting Pronouncements

 

In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions (“ASU 2022-03”) to clarify the guidance in Topic 820, Fair Value Measurement, when measuring the fair value of an equity security subject to contractual restrictions that prohibit the sale of an equity security, and to introduce new disclosure requirements for equity securities subject to contractual sale restrictions that are measured at fair value. ASU 2022-03 will be effective for fiscal years beginning after December 15, 2023. Early adoption is permitted for both interim and annual financial statements that have not yet been issued or made available for issuance. The Company has evaluated the guidance and does not expect the adoption of the new standard to have a material impact on its Consolidated Financial Statements.

 

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”), 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. ASU 2023-07 will be effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, on a retrospective basis. Early adoption is permitted. The Company is currently evaluating the impact of the pending adoption of ASU 2023-07 on its Consolidated Financial Statements.

 

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 income tax disclosures. ASU 2023-09 will be effective for fiscal years beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The Company is currently evaluating the impact of the pending adoption of ASU 2023-09 on its Consolidated Financial Statements.

 
Investment, Policy [Policy Text Block]

Investments in Debt Securities. The Company classifies debt investments based on the Company’s intent to sell the security or its intent and ability to hold the debt security 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. Held-to-maturity debt securities are purchased with the intent and ability to hold until maturity and are measured at amortized cost. All other debt securities are classified as available-for-sale and are carried at fair value, and changes in unrealized gains and losses are reported net of tax in accumulated other comprehensive income (loss), except for declines in fair value determined to be a result of credit loss, which are reported in earnings. Upon the disposition of an available-for-sale security, the Company reclassifies the gain or loss on the security from accumulated other comprehensive income (loss) to net investment income (loss). Both available-for-sale and held-to-maturity debt securities are subject to an allowance for credit losses. 

 

Allowance for Credit Losses (Held-to-Maturity Debt Securities). For held-to-maturity debt securities, the Company is required to utilize the CECL methodology to estimate expected credit losses. Securities are evaluated on an individual basis. The individual assessment and determination of expected credit losses is generally based on the discounted cash flow method. Under the discounted cash flow method, the allowance for credit losses reflects the difference between the amortized cost basis and the present value of the expected cash flows. The Company adjusts the discount rate utilized to determine the present value of the expected cash flows quarterly for subsequent fluctuations in market interest rates. Changes in the present value 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, and are included in interest income within net investment income (loss) on the Consolidated Statements of Operations. Changes in the allowance attributable to expectations of cash flow timing or amounts are recorded as a provision (or release) for credit losses and are included within other income (loss) on the Consolidated Statements of Operations. Held-to-maturity debt securities, or portions thereof, are charged against the allowance when management believes the uncollectible status of a held-to-maturity security is confirmed. Accrued interest receivable is excluded from the allowance for credit losses. For more information about held-to-maturity debt securities, see Note 3, Investments.

 

Allowance for Credit Losses (Available-for-Sale Debt Securities). The impairment model for available-for-sale debt securities differs from the CECL methodology applied for held-to-maturity debt securities because available-for-sale debt securities are measured at fair value rather than amortized cost. For available-for-sale debt securities in an unrealized loss position, the Company first assesses whether it intends to sell, or it is more likely than not that it will be required to sell, the security before recovery of its amortized cost basis. If either criterion is met, the security’s amortized cost basis is written down to fair value through earnings. For available-for-sale debt securities where neither of the criteria is met, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the credit rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss, limited to the amount that the fair value is less than the amortized cost basis. Any remaining discount that has not been recorded through an allowance for credit losses is recognized in other comprehensive income. Changes in the allowance for credit losses are recorded as a provision (or release) for credit losses and are included within other income (loss) on the Consolidated Statements of Operations. Losses are charged against the allowance when management believes the uncollectible status of an available-for-sale security is confirmed or when either of the criteria regarding intent or requirement to sell is met. Accrued interest receivable is excluded from the allowance for credit losses. See Note 3, Investments, for more information about available-for-sale debt securities.

 

Credit Quality Indicators. 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.  

 
Accounts Receivable [Policy Text Block]

Receivables and Allowance for Credit Losses. Receivables consist primarily of advisory and other fees owed to the Company by clients. The Company records an expense based on a forward-looking current expected credit loss model to maintain an allowance for credit losses. When determining the allowance for receivables, the probability of recoverability of the receivable based on past experience, taking into account current collection trends and general economic factors, including bankruptcy rates, is considered. The Company also considers future economic trends to estimate expected credit losses over the lifetime of the asset. Credit risks are assessed based on historical write-offs, net of recoveries, as well as an analysis of the aged accounts receivable balances with allowances generally increasing as the receivable ages. Accounts receivable may be fully reserved for when specific collection issues are known to exist, such as pending bankruptcies. Due to the short-term nature, the Company had no allowance for credit losses related to receivables as of March 31, 2024, or June 30, 2023.

 
Dividends and Interest [Policy Text Block] Dividends and Interest. Dividends are recorded on the ex-dividend date, and interest income is recorded on an accrual basis. Debt investments are placed on a non-accrual status when they are past due 180 days or more as to contractual obligations or when other circumstances indicate that collection is not probable. When a debt investment is placed on a non-accrual status, any interest accrued but not received is reversed against interest income. Any discount between the cost and the principal amount of debt investments is amortized to interest income using the effective interest method. When the discounted cash flow method is utilized to estimate expected credit losses for held-to-maturity debt securities, any changes in the allowance for credit losses that are attributable to the passage of time are recognized in interest income. Both dividends and interest income are included within net investment income (loss) on the Consolidated Statements of Operations.
v3.24.1.u1
Note 1 - Revision of Previously Issued Consolidated Financial Statements (Tables)
 9 Months Ended
Mar. 31, 2024
Notes Tables  
Schedule of Error Corrections and Prior Period Adjustments [Table Text Block]
  

Nine Months Ended March 31, 2023

  

Three Months Ended March 31, 2023

 
  

As

          

As

         
  

Previously

  

Immaterial

  

As

  

Previously

  

Immaterial

  

As

 

(dollars in thousands, except per share data)

 

Reported

  

Revisions

  

Revised

  

Reported

  

Revisions

  

Revised

 

Tax expense (benefit)

 $602  $96  $698  $306  $20  $326 

Net Income (Loss)

 $2,616  $(96) $2,520  $1,640  $(20) $1,620 
                         

Earnings Per Share

                        

Basic Net Income (Loss) per Share

 $0.18  $(0.01) $0.17  $0.11  $(0.00) $0.11 

Diluted Net Income (Loss) per Share

 $0.18  $(0.01) $0.17  $0.11  $(0.00) $0.11 
v3.24.1.u1
Note 2 - Basis of Presentation and Consolidation (Tables)
 9 Months Ended
Mar. 31, 2024
Notes Tables  
Schedule of Variable Interest Entities [Table Text Block]
  

Carrying Value and Maximum Exposure to Loss

 

(dollars in thousands)

 

March 31, 2024

  

June 30, 2023

 

Investments in securities at fair value, current

 $10,071  $11,642 

Investments in equity securities at fair value, non-current

  830   785 

Other receivables

  29   45 

Total VIE assets, maximum exposure to loss

 $10,930  $12,472 
v3.24.1.u1
Note 3 - Investments (Tables)
 9 Months Ended
Mar. 31, 2024
Notes Tables  
Fair Value, Assets Measured on Recurring Basis [Table Text Block]
  

March 31, 2024

 
      

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 - International

 $411  $-  $-  $411 

Mutual funds - Fixed income

  10,071   -   -   10,071 

Mutual funds - Global equity

  829   -   -   829 

Total equity securities

  11,311   -   -   11,311 

Debt securities:

                

Corporate debt securities

  195   -   -   195 

Total investments in trading securities:

  11,506   -   -   11,506 

Investments in available-for-sale debt securities:

                

Corporate debt securities - Convertible debentures

  -   -   5,190   5,190 

Total investments carried at fair value on a recurring basis:

 $11,506  $-  $5,190  $16,696 

Investments carried at fair value on a nonrecurring basis:

                

Other investments (1)

 $-  $-  $600  $600 
  

June 30, 2023

 
      

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 - International

 $488  $-  $290  $778 

Mutual funds - Fixed income

  11,642   -   -   11,642 

Mutual funds - Global equity

  785   -   -   785 

Total equity securities

  12,915   -   290   13,205 

Debt securities:

                

Corporate debt securities

  -   -   -   - 

Total investments in trading securities:

  12,915   -   290   13,205 

Investments in available-for-sale debt securities:

                

Corporate debt securities - Convertible debentures

  -   -   7,008   7,008 

Total investments carried at fair value on a recurring basis:

 $12,915  $-  $7,298  $20,213 

Investments carried at fair value on a nonrecurring basis:

                

Other investments (1)

 $-  $-  $1,786  $1,786 
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block]
  

Nine Months Ended March 31, 2024

 
  

Investments in

  

Investments in

 

(dollars in thousands)

 

equity securities

  

debt securities

 

Beginning Balance

 $290  $7,008 

Principal repayments

  -   (2,250)

Amortization of day one premium

  -   (137)

Accretion of bifurcation discount

  -   403 

Total gains or losses included in:

        

Net Investment Income (Loss)

  (290)  821 

Other Comprehensive Income (Loss)

  -   (655)

Ending Balance

 $-  $5,190 
Fair Value Measurement Inputs and Valuation Techniques [Table Text Block]
  

March 31, 2024

 

(dollars in thousands)

 

Fair Value

 

Principal Valuation Techniques

 

Unobservable Inputs

 

Investments in available-for-sale debt securities:

           

Corporate debt securities - Convertible debentures

 $5,190 

Binomial lattice model

 

Volatility

  110.0%
       

Credit Spread

  7.00%
       

Risk-Free Rate

  4.28%
Debt Securities, Trading, and Equity Securities, FV-NI [Table Text Block]
  

March 31, 2024

 

(dollars in thousands)

 

Cost

  

Unrealized Gains (Losses)

  

Fair Value

 

Trading securities at fair value

            

Equity securities:

            

Equities - International

 $746  $(335) $411 

Equities - Domestic

  45   (45)  - 

Mutual funds - Fixed income

  10,280   (209)  10,071 

Mutual funds - Global equity

  929   (100)  829 

Total equity securities

  12,000   (689)  11,311 

Debt securities:

            

Corporate debt securities

  215   (20)  195 

Total trading securities at fair value

 $12,215  $(709) $11,506 
  

June 30, 2023

 

(dollars in thousands)

 

Cost

  

Unrealized Gains (Losses)

  

Fair Value

 

Trading securities at fair value

            

Equity securities:

            

Equities - International

 $6,679  $(5,901) $778 

Equities - Domestic

  45   (45)  - 

Mutual funds - Fixed income

  11,947   (305)  11,642 

Mutual funds - Global equity

  930   (145)  785 

Total equity securities

  19,601   (6,396)  13,205 

Debt securities:

            

Corporate debt securities

  -   -   - 

Total trading securities at fair value

 $19,601  $(6,396) $13,205 
  

March 31, 2024

 

(dollars in thousands)

 

Amortized Cost

  

Gross Unrealized Gains in Other Comprehensive Income (Loss)

  

Gross Unrealized Losses in Other Comprehensive Income (Loss)

  

Gross Unrealized Losses in Net Investment Income (Loss) (1)

  

Fair Value

  

Allowance for Credit Losses

 

Available-for-sale debt securities:

                        

Corporate debt securities - Convertible debentures

 $6,651  $1,052  $-  $(2,513) $5,190  $- 
  

June 30, 2023

 

(dollars in thousands)

 

Amortized Cost

  

Gross Unrealized Gains in Other Comprehensive Income (Loss)

  

Gross Unrealized Losses in Other Comprehensive Income (Loss)

  

Gross Unrealized Losses in Net Investment Income (Loss) (1)

  

Fair Value

  

Allowance for Credit Losses

 

Available-for-sale debt securities:

                        

Corporate debt securities - Convertible debentures

 $7,729  $1,707  $-  $(2,428) $7,008  $- 
  

March 31, 2024

 

(dollars in thousands)

 

Amortized Cost

  

Gross Unrecognized Holding Gains

  

Gross Unrecognized Holding Losses

  

Fair Value

  

Allowance for Credit Losses

 

Held-to-maturity debt securities(1):

                    

Corporate debt securities

 $1,000  $-  $(157) $843  $157 
  

June 30, 2023

 

(dollars in thousands)

 

Amortized Cost

  

Gross Unrecognized Holding Gains

  

Gross Unrecognized Holding Losses

  

Fair Value

  

Allowance for Credit Losses

 

Held-to-maturity debt securities(1):

                    

Corporate debt securities

 $1,000  $-  $(232) $768  $- 
Schedule of Derivative Instruments [Table Text Block]
  

March 31, 2024

  

June 30, 2023

 
  

Other Assets

  

Other Assets

 
  

Investments in

  

Investments in

 
  

available-for-sale

  

available-for-sale

 

(dollars in thousands)

 

debt securities

  

debt securities

 

Embedded Derivatives:

        

Equity price risk exposure

 $29  $114 
  

Nine Months Ended

  

Three Months Ended

 
  

March 31,

  

March 31,

 
  

2024

  

2023

  

2024

  

2023

 
  

Other Income (Loss)

  

Other Income (Loss)

  

Other Income (Loss)

  

Other Income (Loss)

 

(dollars in thousands)

 

Net Investment Income (Loss)

  

Net Investment Income (Loss)

  

Net Investment Income (Loss)

  

Net Investment Income (Loss)

 

Embedded Derivatives:

                

Equity price risk exposure

 $(85) $82  $(22) $55 
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Table Text Block]

(dollars in thousands)

 

March 31, 2024

 

Beginning Balance, prior to adoption of ASU 2016-13

 $- 

Impact of ASU 2016-13 adoption

  232 

Provision for credit losses - reversal (1)

  (75)

Ending Balance

 $157 
Investments Classified by Contractual Maturity Date [Table Text Block]
  

March 31, 2024

 
  

Available-for-sale

  

Held-to-maturity

 
  

debt securities

  

debt securities

 
  

Convertible

  

Due after one year

 

(dollars in thousands)

 

debentures (1)

  

through five years

 

Amortized Cost

 $6,651  $1,000 

Fair Value

 $5,190  $843 
Equity Securities without Readily Determinable Fair Value [Table Text Block]
  

Nine Months Ended

  

Three Months Ended

 
  

March 31,

  

March 31,

 

(dollars in thousands)

 

2024

  

2023

  

2024

  

2023

 

Other Investments

                

Carrying value

 $1,114  $2,827  $1,114  $2,827 

Upward carrying value changes

 $-  $14  $-  $9 

Downward carrying value changes/impairment

 $(1,274) $(1,841) $(499) $- 
Investment Income [Table Text Block]
  

Nine Months Ended

  

Three Months Ended

 

(dollars in thousands)

 

March 31,

  

March 31,

 

Net Investment Income (Loss)

 

2024

  

2023

  

2024

  

2023

 

Realized gains (losses) on equity securities

 $(6,834) $(13) $(6,094) $(13)

Realized gains (losses) on debt securities

  906   1,299   267   394 

Unrealized gains (losses) on equity securities

  5,699   (2,586)  5,863   283 

Unrealized gains (losses) on debt securities

  (20)  -   (65)  - 

Unrealized gains (losses) on embedded derivatives

  (85)  82   (22)  55 

Unrealized gains (losses) on cash equivalents

  (2)  -   -   - 

Dividend and interest income

  1,781   1,321   595   421 

Realized foreign currency gains (losses)

  (82)  (292)  (84)  15 

Total Net Investment Income (Loss)

 $1,363  $(189) $460  $1,155 
Unrealized Gain (Loss) on Investments [Table Text Block]
  

Nine Months Ended

  

Three Months Ended

 
  

March 31,

  

March 31,

 

(dollars in thousands)

 

2024

  

2023

  

2024

  

2023

 

Unrealized gains and losses for securities held at the reporting date:

                

Equity securities:

                

Net gains and losses recognized during the period

 $(1,135)  (2,599) $(231) $270 

Less: Net gains and losses recognized during the period on securities sold during the period

  (256)  (13)  (3)  (13)

Unrealized gains and losses recognized during the reporting period on securities still held at the reporting date (1)

 $(879) $(2,586) $(228) $283 

Debt securities classified as trading:

                

Net gains and losses recognized during the period

 $(20)  -  $(65) $- 

Less: Net gains and losses recognized during the period on securities sold during the period

  -   -   -   - 

Unrealized gains and losses recognized during the reporting period on securities still held at the reporting date

 $(20) $-  $(65) $- 
v3.24.1.u1
Note 4 - Investment Management and Other Fees (Tables)
 9 Months Ended
Mar. 31, 2024
Notes Tables  
Disaggregation of Revenue [Table Text Block]
  

Nine Months Ended

  

Three Months Ended

 
  

March 31,

  

March 31,

 

(dollars in thousands)

 

2024

  

2023

  

2024

  

2023

 

ETF advisory fees

 $7,394  $10,360  $2,224  $3,142 

USGIF advisory fees

  1,408   1,693   443   558 

USGIF performance fees received (paid)

  (344)  (390)  (101)  (109)

Total Advisory Fees

  8,458   11,663   2,566   3,591 

USGIF administrative services fees

  86   101   27   33 

Total Operating Revenue

 $8,544  $11,764  $2,593  $3,624 
v3.24.1.u1
Note 5 - Restricted and Unrestricted Cash (Tables)
 9 Months Ended
Mar. 31, 2024
Notes Tables  
Restrictions on Cash and Cash Equivalents [Table Text Block]

(dollars in thousands)

 

March 31, 2024

  

June 30, 2023

 

Cash and cash equivalents

 $27,460  $25,401 

Restricted cash

  1,000   1,000 

Total cash, cash equivalents, and restricted cash

 $28,460  $26,401 
v3.24.1.u1
Note 6 - Leases (Tables)
 9 Months Ended
Mar. 31, 2024
Notes Tables  
Lease, Cost [Table Text Block]
  

Nine Months Ended

  

Three Months Ended

 
  

March 31,

  

March 31,

 

(dollars in thousands)

 

2024

  

2023

  

2024

  

2023

 

Finance lease cost:

                

Amortization of right-of-use assets

 $23  $22  $7  $7 

Interest on lease liabilities

  2   3   1   1 

Total finance lease cost

  25   25   8   8 

Short-term lease cost

  76   64   26   25 

Total lease cost

 $101  $89  $34  $33 
  

Nine Months Ended

  

Three Months Ended

 
  

March 31,

  

March 31,

 

(dollars in thousands)

 

2024

  

2023

  

2024

  

2023

 

Operating cash flows from financing leases included in lease liabilities

 $2  $3  $1  $1 

Financing cash flows from financing leases included in lease liabilities

 $22  $20  $7  $7 
  

March 31, 2024

  

June 30, 2023

 

Weighted-average remaining lease term - financing leases (years)

  1.50   2.25 

Weighted-average discount rate - financing leases

  4.75%  4.75%
Finance Lease, Liability, to be Paid, Maturity [Table Text Block]

(dollars in thousands)

    

Fiscal Year

 

Finance Leases

 

2024 (excluding the nine months ended March 31, 2024)

 $8 

2025

  33 

2026

  8 

Total lease payments

  49 

Less imputed interest

  (2)

Total

 $47 
Lessor, Operating Lease, Payment to be Received, Maturity [Table Text Block]

(dollars in thousands)

    

Fiscal Year

 

Operating Leases

 

2024 (excluding the nine months ended March 31, 2024)

 $10 

2025

  36 

Total lease payments

 $46 
v3.24.1.u1
Note 7 - Other Accrued Expenses (Tables)
 9 Months Ended
Mar. 31, 2024
Notes Tables  
Schedule of Accrued Liabilities [Table Text Block]

(dollars in thousands)

 

March 31, 2024

  

June 30, 2023

 

Professional fees

 $538  $697 

Vendors payable

  359   157 

ETF operating and distribution expenses

  548   344 

Other taxes payable

  73   76 

Other

  111   - 

Other accrued expenses

 $1,629  $1,274 
v3.24.1.u1
Note 10 - Earnings Per Share (Tables)
 9 Months Ended
Mar. 31, 2024
Notes Tables  
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]
  

Nine Months Ended

  

Three Months Ended

 
  

March 31,

  

March 31,

 

(dollars in thousands, except per share data)

 

2024

  

2023

  

2024

  

2023

 

Net Income (Loss)

 $1,018  $2,520  $(35) $1,620 
                 

Weighted average number of outstanding shares

                

Basic

  14,278,691   14,862,893   14,077,042   14,747,537 

Effect of dilutive securities

                

Stock options

  86   295   -   100 

Diluted

  14,278,777   14,863,188   14,077,042   14,747,637 
                 

Earnings (Loss) Per Share

                

Basic Net Income (Loss) per share

 $0.07  $0.17  $(0.00) $0.11 

Diluted Net Income (Loss) per share

 $0.07  $0.17  $(0.00) $0.11 
v3.24.1.u1
Note 12 - Accumulated Other Comprehensive Income (Loss) (Tables)
 9 Months Ended
Mar. 31, 2024
Notes Tables  
Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block]

(dollars in thousands)

 

Unrealized gains (losses) on available-for-sale investments

 

Nine Months Ended March 31, 2024

    

Balance at June 30, 2023

 $1,348 

Other comprehensive income (loss) before reclassifications

  251 

Tax effect

  (52)

Amount reclassified from AOCI

  (906)

Tax effect

  190 

Net other comprehensive income (loss)

  (517)

Balance at March 31, 2024

 $831 
     

Nine Months Ended March 31, 2023

    

Balance at June 30, 2022

 $3,624 

Other comprehensive income (loss) before reclassifications

  (1,189)

Tax effect

  250 

Amount reclassified from AOCI

  (1,299)

Tax effect

  273 

Net other comprehensive income (loss)

  (1,965)

Balance at March 31, 2023

 $1,659 
v3.24.1.u1
Note 13 - Financial Information by Business Segment (Tables)
 9 Months Ended
Mar. 31, 2024
Notes Tables  
Schedule of Segment Reporting Information, by Segment [Table Text Block]

(dollars in thousands)

 

Investment Management Services

  

Corporate Investments

  

Consolidated

 

Nine Months Ended March 31, 2024

            

Net operating revenues

 $8,544  $-  $8,544 

Net investment income (loss)

 $-  $1,363  $1,363 

Other income (loss)

 $183  $-  $183 

Income (loss) before income taxes

 $164  $1,300  $1,464 

Depreciation

 $163  $-  $163 

Gross identifiable assets at March 31, 2024

 $27,542  $23,390  $50,932 

Deferred tax asset

         $1,840 

Consolidated total assets at March 31, 2024

         $52,772 

Nine Months Ended March 31, 2023

            

Net operating revenues

 $11,764  $-  $11,764 

Net investment income (loss)

 $-  $(189) $(189)

Other income (loss)

 $184  $-  $184 

Income (loss) before income taxes

 $3,461  $(243) $3,218 

Depreciation

 $183  $-  $183 

Gross identifiable assets at March 31, 2023

 $25,056  $29,030  $54,086 

Deferred tax asset

         $1,659 

Consolidated total assets at March 31, 2023

         $55,745 

Three Months Ended March 31, 2024

            

Net operating revenues

 $2,593  $-  $2,593 

Net investment income (loss)

 $-  $460  $460 

Other income (loss)

 $68  $-  $68 

Income (loss) before income taxes

 $(389) $429  $40 

Depreciation

 $41  $-  $41 

Three Months Ended March 31, 2023

            

Net operating revenues

 $3,624  $-  $3,624 

Net investment income (loss)

 $-  $1,155  $1,155 

Other income (loss)

 $61  $-  $61 

Income (loss) before income taxes

 $815  $1,131  $1,946 

Depreciation

 $61  $-  $61 
v3.24.1.u1
Note 1 - Revision of Previously Issued Consolidated Financial Statements - Impact of Correcting Errors (Details) - USD ($)
$ / shares in Units, $ in Thousands
 3 Months Ended 9 Months Ended
Mar. 31, 2024
Dec. 31, 2023
Sep. 30, 2023
Mar. 31, 2023
Dec. 31, 2022
Sep. 30, 2022
Mar. 31, 2024
Mar. 31, 2023
Tax expense (benefit) $ 75     $ 326     $ 446 $ 698
Net Income (Loss) $ (35) $ 1,229 $ (176) $ 1,620 $ 847 $ 53 $ 1,018 $ 2,520
Basic Net Income (Loss) per Share (in dollars per share) $ (0)     $ 0.11     $ 0.07 $ 0.17
Diluted Net Income (Loss) per Share (in dollars per share) $ (0)     $ 0.11     $ 0.07 $ 0.17
Previously Reported [Member]                
Tax expense (benefit)       $ 306       $ 602
Net Income (Loss)       $ 1,640       $ 2,616
Basic Net Income (Loss) per Share (in dollars per share)       $ 0.11       $ 0.18
Diluted Net Income (Loss) per Share (in dollars per share)       $ 0.11       $ 0.18
Revision of Prior Period, Adjustment [Member]                
Tax expense (benefit)       $ 20       $ 96
Net Income (Loss)       $ (20)       $ (96)
Basic Net Income (Loss) per Share (in dollars per share)       $ (0)       $ (0.01)
Diluted Net Income (Loss) per Share (in dollars per share)       $ (0)       $ (0.01)
v3.24.1.u1
Note 2 - Basis of Presentation and Consolidation (Details Textual) - USD ($)
Mar. 31, 2024
Jul. 01, 2023
Jun. 30, 2023
Variable Interest Entity, Reporting Entity Involvement, Maximum Loss Exposure, Amount $ 10,900,000   $ 12,500,000
Debt Securities, Held-to-Maturity, Allowance for Credit Loss, Noncurrent 157,000   (0)
Retained Earnings (Accumulated Deficit) 37,628,000   37,747,000
Accounts Receivable, Allowance for Credit Loss $ 0 $ 0 $ 0
Accounting Standards Update 2016-13 [Member]      
Debt Securities, Held-to-Maturity, Allowance for Credit Loss, Noncurrent   232,000  
Accounting Standards Update 2016-13 [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member]      
Retained Earnings (Accumulated Deficit)   $ (183,000)  
v3.24.1.u1
Note 2 - Basis of Presentation - Carrying Amount of Assets and Liabilities associated with VIE's (Details) - USD ($)
$ in Thousands
Mar. 31, 2024
Jun. 30, 2023
Mar. 31, 2023
Investments in securities at fair value, current $ 10,071 $ 11,642  
Total VIE assets, maximum exposure to loss 52,772 55,673 $ 55,745
Variable Interest Entity, Not Primary Beneficiary [Member]      
Investments in securities at fair value, current 10,071 11,642  
Investments in equity securities at fair value, non-current 830 785  
Other receivables 29 45  
Total VIE assets, maximum exposure to loss $ 10,930 $ 12,472  
v3.24.1.u1
Note 3 - Investments (Details Textual)
 1 Months Ended 3 Months Ended 9 Months Ended
Jan. 31, 2024
USD ($)
Mar. 31, 2024
USD ($)
$ / shares
shares
Mar. 31, 2023
USD ($)
Mar. 31, 2024
USD ($)
$ / shares
shares
Mar. 31, 2023
USD ($)
Mar. 31, 2024
$ / shares
Jun. 30, 2023
USD ($)
Mar. 31, 2021
$ / shares
shares
Jan. 31, 2021
USD ($)
$ / shares
Investment Owned, Fair Value   $ 16,700,000   $ 16,700,000          
Investment Owned, Cost   $ 18,900,000   $ 18,900,000          
Value of Fair Value Investments to Company Assets, Percent   31.60%   31.60%          
Equity Securities without Readily Determinable Fair Value, Amount   $ 1,114,000 $ 2,827,000 $ 1,114,000 $ 2,827,000   $ 2,388,000    
Debt Securities, Held-to-Maturity, Amortized Cost, after Allowance for Credit Loss   843,000   843,000          
Debt Securities, Available-for-Sale, Total [1]   5,190,000   5,190,000          
OCI, Debt Securities, Available-for-Sale, Unrealized Holding Gain (Loss), before Adjustment, after Tax   79,000 80,000 199,000 (939,000)        
Equity Securities, FV-NI   11,311,000   11,311,000     13,205,000    
Equity Securities, FV-NI   11,311,000   11,311,000     13,205,000    
Debt Securities, Held-to-Maturity, Accumulated Unrecognized Loss [2]   157,000   157,000     232,000    
Debt Securities, Held-to-Maturity, Allowance for Credit Loss, Period Increase (Decrease)       (75,000)          
Debt Securities, Held-to-Maturity, Credit Loss Expense (Reversal)   (20,000)   (75,000) [3] 0        
Debt Securities, Available-for-Sale, Periodic Principal Payments       750,000          
Equity Securities without Readily Determinable Fair Value, Downward Price Adjustment, Cumulative Amount   5,000,000   5,000,000     2,400,000    
Equity Securities without Readily Determinable Fair Value, Upward Price Adjustment, Cumulative Amount   2,500,000   2,500,000          
Realized Gain (Loss) on Principal Payment Proceeds   267,000 394,000 906,000 1,300,000        
Equity Securities Without Readily Determinable Fair Values, Unrealized Gain (Loss)   (240,000) $ 0 (1,000,000) $ (1,800,000)        
Fair Value, Inputs, Level 3 [Member]                  
Equity Securities, FV-NI   0   0     290,000    
Equity Securities, FV-NI   0   0     290,000    
Warrant [Member]                  
Equity Securities, FV-NI $ 5,900,000           290,000    
Equity Securities, FV-NI 5,900,000           290,000    
Warrant [Member] | Investment Income, Net                  
Equity Securities, FV-NI, Realized Loss $ 5,900,000                
U S Global Investors Funds [Member]                  
Investment Owned, Fair Value   10,900,000   10,900,000     12,400,000    
HIVE Blockchain Technologies Ltd. [Member] | Convertible Securities [Member]                  
Investment Owned, Balance, Principal Amount                 $ 15,000,000
HIVE Blockchain Technologies Ltd. [Member] | Warrants and Convertible Debentures [Member] | Fair Value, Inputs, Level 3 [Member] | Available-for-sale Securities and Equity Securities [Member]                  
Investment Owned, Fair Value   5,200,000   5,200,000     7,300,000    
HIVE Blockchain Technologies Ltd. [Member] | Unsecured Convertible Debentures [Member]                  
Debt Securities, Available-for-Sale, Total   $ 5,200,000   5,200,000     7,000,000    
OCI, Debt Securities, Available-for-Sale, Unrealized Holding Gain (Loss), before Adjustment, after Tax       $ 6,900,000          
HIVE Blockchain Technologies Ltd. [Member] | Unsecured Convertible Debentures [Member] | Convertible Debt Securities [Member]                  
Debt Instrument, Interest Rate, Stated Percentage               8.00%  
Debt Instrument, Convertible, Conversion Price (in dollars per share) | $ / shares   $ 11.7   $ 11.7         $ 2.34
HIVE Blockchain Technologies Ltd. [Member] | Common Shares Purchase Warrants [Member]                  
Investment, Common Share Purchase Warrants (in shares) | shares               5,000,000  
Class of Warrant or Right, Exercise Price of Warrants or Rights (in CAD per share) | $ / shares           $ 15   $ 3  
Class of Warrant or Right, Number of Securities Called by Each Warrant or Right (in shares) | shares   5   5          
HIVE Blockchain Technologies Ltd. [Member] | Common Shares Purchase Warrants [Member] | Estimate of Fair Value Measurement [Member]                  
Debt Securities, Available-for-Sale, Total   $ 16,000,000   $ 16,000,000          
HIVE Blockchain Technologies Ltd. [Member] | Convertible Securities [Member]                  
Investment Owned, Balance, Principal Amount   5,300,000   5,300,000          
The Sonar Company [Member]                  
Equity Securities without Readily Determinable Fair Value, Amount   362,000   362,000     $ 362,000    
Other Investments and Securities, at Cost   $ 175,000   $ 175,000          
Investment Owned, Direct Percentage   2.80%   2.80%          
[1] Principal payments of $750,000 are due quarterly with a final maturity date in January 2026.
[2] Held-to-maturity debt investments are carried at amortized cost, net of allowance for credit losses, and the fair value is classified as Level 2 according to the fair value hierarchy.
[3] Represents the change in present value attributable to the passage of time included in interest income.
v3.24.1.u1
Note 3 - Investments - Investments With Fair Values Adjusted on Recurring Basis (Details) - USD ($)
$ in Thousands
Mar. 31, 2024
Jun. 30, 2023
Equity Securities, FV-NI $ 11,311 $ 13,205
Total investments in trading securities: 11,506 13,205
Investments in debt securities [1] 5,190  
Corporate Debt Securities [Member]    
Corporate debt securities, fair value 195 0
Convertible Debt Securities [Member]    
Investments in debt securities 5,190 7,008
Fair Value, Recurring [Member]    
Total investments carried at fair value 16,696 20,213
Fair Value, Nonrecurring [Member]    
Total investments carried at fair value 600 [2] 1,786 [3]
Equity Securities International [Member]    
Equity Securities, FV-NI 411 778
Equity Securities International [Member] | Fair Value, Recurring [Member]    
Equity Securities, FV-NI 411 778
Mutual Funds Fixed Income [Member]    
Equity Securities, FV-NI 10,071 11,642
Mutual Funds Fixed Income [Member] | Fair Value, Recurring [Member]    
Equity Securities, FV-NI 10,071 11,642
Mutual Funds Global Equity [Member]    
Equity Securities, FV-NI 829 785
Mutual Funds Global Equity [Member] | Fair Value, Recurring [Member]    
Equity Securities, FV-NI 829 785
Fair Value, Inputs, Level 1 [Member]    
Equity Securities, FV-NI 11,311 12,915
Total investments in trading securities: 11,506 12,915
Fair Value, Inputs, Level 1 [Member] | Corporate Debt Securities [Member]    
Corporate debt securities, fair value 195 0
Fair Value, Inputs, Level 1 [Member] | Convertible Debt Securities [Member]    
Investments in debt securities 0 0
Fair Value, Inputs, Level 1 [Member] | Fair Value, Recurring [Member]    
Total investments carried at fair value 11,506 12,915
Fair Value, Inputs, Level 1 [Member] | Fair Value, Nonrecurring [Member]    
Total investments carried at fair value 0 [2] 0 [3]
Fair Value, Inputs, Level 1 [Member] | Equity Securities International [Member] | Fair Value, Recurring [Member]    
Equity Securities, FV-NI 411 488
Fair Value, Inputs, Level 1 [Member] | Mutual Funds Fixed Income [Member] | Fair Value, Recurring [Member]    
Equity Securities, FV-NI 10,071 11,642
Fair Value, Inputs, Level 1 [Member] | Mutual Funds Global Equity [Member] | Fair Value, Recurring [Member]    
Equity Securities, FV-NI 829 785
Fair Value, Inputs, Level 2 [Member]    
Equity Securities, FV-NI 0 0
Total investments in trading securities: 0 0
Fair Value, Inputs, Level 2 [Member] | Corporate Debt Securities [Member]    
Corporate debt securities, fair value 0 0
Fair Value, Inputs, Level 2 [Member] | Convertible Debt Securities [Member]    
Investments in debt securities 0 0
Fair Value, Inputs, Level 2 [Member] | Fair Value, Recurring [Member]    
Total investments carried at fair value 0 0
Fair Value, Inputs, Level 2 [Member] | Fair Value, Nonrecurring [Member]    
Total investments carried at fair value 0 [2] 0 [3]
Fair Value, Inputs, Level 2 [Member] | Equity Securities International [Member] | Fair Value, Recurring [Member]    
Equity Securities, FV-NI 0 0
Fair Value, Inputs, Level 2 [Member] | Mutual Funds Fixed Income [Member] | Fair Value, Recurring [Member]    
Equity Securities, FV-NI 0 0
Fair Value, Inputs, Level 2 [Member] | Mutual Funds Global Equity [Member] | Fair Value, Recurring [Member]    
Equity Securities, FV-NI 0 0
Fair Value, Inputs, Level 3 [Member]    
Equity Securities, FV-NI 0 290
Total investments in trading securities: 0 290
Fair Value, Inputs, Level 3 [Member] | Corporate Debt Securities [Member]    
Corporate debt securities, fair value 0 0
Fair Value, Inputs, Level 3 [Member] | Convertible Debt Securities [Member]    
Investments in debt securities 5,190 7,008
Fair Value, Inputs, Level 3 [Member] | Fair Value, Recurring [Member]    
Total investments carried at fair value 5,190 7,298
Fair Value, Inputs, Level 3 [Member] | Fair Value, Nonrecurring [Member]    
Total investments carried at fair value 600 [2] 1,786 [3]
Fair Value, Inputs, Level 3 [Member] | Equity Securities International [Member] | Fair Value, Recurring [Member]    
Equity Securities, FV-NI 0 290
Fair Value, Inputs, Level 3 [Member] | Mutual Funds Fixed Income [Member] | Fair Value, Recurring [Member]    
Equity Securities, FV-NI 0 0
Fair Value, Inputs, Level 3 [Member] | Mutual Funds Global Equity [Member] | Fair Value, Recurring [Member]    
Equity Securities, FV-NI $ 0 $ 0
[1] Principal payments of $750,000 are due quarterly with a final maturity date in January 2026.
[2] Other investments include equity securities without readily determinable fair values that were adjusted as a result of the measurement alternative on dates during the nine months ended March 31, 2024. These securities are classified as level 3 due to the infrequency of the observable price changes and/or restrictions on the shares.
[3] Other investments include equity securities without readily determinable fair values that were adjusted as a result of the measurement alternative on dates during the fiscal year ended June 30, 2023. These securities are classified as level 3 due to the infrequency of the observable price changes and/or restrictions on the shares.
v3.24.1.u1
Note 3 - Investments - Reconciliation of Investments Recorded at Fair Value (Details)
$ in Thousands
 9 Months Ended
Mar. 31, 2024
USD ($)
Equity Securities [Member]  
Beginning Balance $ 290
Principal repayments 0
Amortization of day one premium 0
Accretion of bifurcation discount 0
Net Investment Income (Loss) (290)
Other Comprehensive Income (Loss) 0
Ending Balance 0
Debt Securities [Member]  
Beginning Balance 7,008
Principal repayments (2,250)
Amortization of day one premium (137)
Accretion of bifurcation discount 403
Net Investment Income (Loss) 821
Other Comprehensive Income (Loss) (655)
Ending Balance $ 5,190
v3.24.1.u1
Note 3 - Investments - Securities Measured and Carried at Fair Value on Recurring Basis With Significant Unobservable Inputs (Details)
$ in Thousands
Mar. 31, 2024
USD ($)
Jun. 30, 2023
USD ($)
Investments in debt securities [1] $ 5,190  
Convertible Debt Securities [Member]    
Investments in debt securities $ 5,190 $ 7,008
Valuation Technique, Binomial Lattice Model [Member] | Measurement Input, Credit Spread [Member]    
Corporate debt securities - Convertible debentures 0.0428  
Valuation Technique, Binomial Lattice Model [Member] | Convertible Debt Securities [Member]    
Investments in debt securities $ 5,190  
Valuation Technique, Binomial Lattice Model [Member] | Convertible Debt Securities [Member] | Measurement Input, Price Volatility [Member]    
Corporate debt securities - Convertible debentures 1.10  
Valuation Technique, Option Pricing Model [Member] | Measurement Input, Risk Free Interest Rate [Member]    
Corporate debt securities - Convertible debentures 0.07  
[1] Principal payments of $750,000 are due quarterly with a final maturity date in January 2026.
v3.24.1.u1
Note 3 - Investments - Components of Investments (Details) - USD ($)
 3 Months Ended 9 Months Ended 12 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Mar. 31, 2024
Mar. 31, 2023
Jun. 30, 2023
Cost $ 12,000,000   $ 12,000,000   $ 19,601,000
Unrealized gains losses (689,000)   (689,000)    
Equity Securities, FV-NI 11,311,000   11,311,000   13,205,000
Corporate debt securities (65,000) $ 0 (20,000) $ 0  
Total trading securities at fair value 12,215,000   12,215,000   19,601,000
Total trading securities at fair value (709,000)   (709,000)   (6,396,000)
Total trading securities at fair value 11,506,000   11,506,000   13,205,000
Unrealized gains (losses) on equity securities 5,863,000 $ 283,000 5,699,000 $ (2,586,000) (6,396,000)
Equity Securities, FV-NI 11,311,000   11,311,000   13,205,000
Amortized cost 6,651,000 [1]   6,651,000 [1]   7,729,000
Debt Securities, Available-for-Sale, Total [1] 5,190,000   5,190,000    
Allowance for credit losses 0   0   0
Corporate debt securities, cost [2] 1,000,000   1,000,000   1,000,000
Corporate debt securities, gains [2] 0   0   0
Corporate debt securities, losses [2] (157,000)   (157,000)   (232,000)
Corporate debt securities, fair value [2] 843,000   843,000   768,000
Corporate debt securities [2] 157,000   157,000   0
Convertible Debt Securities [Member]          
Amortized cost 6,651,000   6,651,000   7,729,000
Gross unrealized gains in other comprehensive income (loss) 1,052,000   1,052,000   1,707,000
Gross unrealized losses in other comprehensive income (loss) 0   0   0
Gross unrealized losses in net investment income (loss) (2,513,000) [3]   (2,513,000) [3]   (2,428,000) [4]
Debt Securities, Available-for-Sale, Total 5,190,000   5,190,000   7,008,000
Allowance for credit losses 0   0   0
Corporate Debt Securities [Member]          
Corporate debt securities, cost 215,000   215,000   0
Corporate debt securities (20,000)        
Corporate debt securities, fair value 195,000   195,000   0
Total trading securities at fair value         0
Equity Securities International [Member]          
Cost 746,000   746,000   6,679,000
Unrealized gains losses (335,000)   (335,000)    
Equity Securities, FV-NI 411,000   411,000   778,000
Unrealized gains (losses) on equity securities         (5,901,000)
Equity Securities, FV-NI 411,000   411,000   778,000
Equity Securities Domestic [Member]          
Cost 45,000   45,000   45,000
Unrealized gains losses (45,000)   (45,000)    
Equity Securities, FV-NI 0   0   0
Unrealized gains (losses) on equity securities         (45,000)
Equity Securities, FV-NI 0   0   0
Mutual Funds Fixed Income [Member]          
Cost 10,280,000   10,280,000   11,947,000
Unrealized gains losses (209,000)   (209,000)    
Equity Securities, FV-NI 10,071,000   10,071,000   11,642,000
Unrealized gains (losses) on equity securities         (305,000)
Equity Securities, FV-NI 10,071,000   10,071,000   11,642,000
Mutual Funds Global Equity [Member]          
Cost 929,000   929,000   930,000
Unrealized gains losses (100,000)   (100,000)    
Equity Securities, FV-NI 829,000   829,000   785,000
Unrealized gains (losses) on equity securities         (145,000)
Equity Securities, FV-NI $ 829,000   $ 829,000   $ 785,000
[1] Principal payments of $750,000 are due quarterly with a final maturity date in January 2026.
[2] Held-to-maturity debt investments are carried at amortized cost, net of allowance for credit losses, and the fair value is classified as Level 2 according to the fair value hierarchy.
[3] Represents changes in unrealized gains and losses related to embedded derivatives included within net investment income (loss) on the Consolidated Statements of Operations.
[4] Represents changes in unrealized gains and losses related to embedded derivatives included within net investment income (loss) on the Consolidated Statements of Operations.
v3.24.1.u1
Note 3 - Investments - Fair Value and Effect of Embedded Derivatives (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Mar. 31, 2024
Mar. 31, 2023
Jun. 30, 2023
Equity price risk exposure, asset     $ 29   $ 114
Equity price risk exposure $ (22) $ 55 $ (85) $ 82  
v3.24.1.u1
Note 3 - Investments - Schedule of Allowance for Credit Loss on Held to Maturity Investments (Details) - USD ($)
 3 Months Ended 9 Months Ended
Mar. 31, 2024
Mar. 31, 2024
Mar. 31, 2023
Balance [1]   $ 0  
Provision for credit losses - reversal (1) $ 20,000 75,000 [2] $ 0
Balance [1] $ 157,000 157,000  
Accounting Standards Update 2016-13 [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member]      
Balance   $ 232,000  
[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.
[2] Represents the change in present value attributable to the passage of time included in interest income.
v3.24.1.u1
Note 3 - Investments - Investments Classified by Contractual Maturity Date (Details) - USD ($)
$ in Thousands
Mar. 31, 2024
Jun. 30, 2023
Amortized Cost $ 6,651 [1] $ 7,729
Amortized Cost 1,000  
Investments in debt securities [1] 5,190  
Fair Value, held to maturity debt securities, due after five years through ten years $ 843  
[1] Principal payments of $750,000 are due quarterly with a final maturity date in January 2026.
v3.24.1.u1
Note 3 - Investments - Carrying Value of Equity Securities Without Readily Determinable Fair Values (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Mar. 31, 2024
Mar. 31, 2023
Jun. 30, 2023
Other investments $ 1,114 $ 2,827 $ 1,114 $ 2,827 $ 2,388
Upward carrying value changes 0 9 0 14  
Downward carrying value changes/impairment $ (499) $ 0 $ (1,274) $ (1,841)  
v3.24.1.u1
Note 3 - Investments - Investment Income or Loss Reflected in Earnings From Continuing Operations (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended 12 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Mar. 31, 2024
Mar. 31, 2023
Jun. 30, 2023
Realized gains (losses) on equity securities $ (6,094) $ (13) $ (6,834) $ (13)  
Realized gains (losses) on debt securities 267 394 906 1,299  
Unrealized gains (losses) on equity securities 5,863 283 5,699 (2,586) $ (6,396)
Unrealized gains (losses) on debt securities (65) 0 (20) 0  
Unrealized gains (losses) on embedded derivatives (22) 55 (85) 82  
Unrealized gains (losses) on cash equivalents 0 0 (2) 0  
Dividend and interest income 595 421 1,781 1,321  
Realized foreign currency gains (losses) (84) 15 (82) (292)  
Total Net Investment Income (Loss) $ 460 $ 1,155 $ 1,363 $ (189)  
v3.24.1.u1
Note 3 - Investments - Unrealized Gains and Losses (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Mar. 31, 2024
Mar. 31, 2023
Net gains and losses recognized during the period $ (231) $ 270 $ (1,135) $ (2,599)
Less: Net gains and losses recognized during the period on securities sold during the period (3) (13) (256) (13)
Unrealized gains and losses recognized during the reporting period on securities still held at the reporting date (1) [1] (228) 283 (879) (2,586)
Net gains and losses recognized during the period (65) 0 (20) 0
Less: Net gains and losses recognized during the period on securities sold during the period 0 0 0 0
Corporate debt securities $ (65) $ 0 $ (20) $ 0
[1] Includes net unrealized and realized losses as a result of the measurement alternative of $240,000 and $1.0 million for the three and nine months ended March 31, 2024, respectively, and $0 and $1.8 million, for the three and nine months ended March 31, 2023, respectively.
v3.24.1.u1
Note 4 - Investment Management and Other Fees (Details Textual) - USD ($)
 3 Months Ended 9 Months Ended
Mar. 31, 2024
Dec. 31, 2023
Mar. 31, 2023
Mar. 31, 2024
Mar. 31, 2023
Jul. 01, 2023
Jun. 30, 2023
Accounts Receivable, Allowance for Credit Loss $ 0     $ 0   $ 0 $ 0
Fund Clients [Member]              
Receivables, Net, Current 858,000     858,000     1,100,000
Accounts Receivable, Allowance for Credit Loss 0     0     0
U S Global E T Fs [Member]              
Unitary Management Fee, Percentage of Average Net Assets   0.60%          
Aggregate Fees Waived and Expenses Borne 37,000   $ 28,000 115,000 $ 77,000    
U S Global E T Fs [Member] | Fund Clients [Member]              
Receivables, Net, Current $ 738,000     738,000     1,000,000
U S Global Jets U C I T S E T F [Member]              
Unitary Management Fee, Percentage of Average Net Assets 0.65%            
U S Global Investors Funds [Member]              
Aggregate Fees Waived and Expenses Borne $ 193,000   $ 299,000 $ 638,000 $ 822,000    
Investment Advisory Fees, Fee Adjustment Base Percentage Adjustment When Fund Performance is Not Within Limits to Benchmark Index 0.25%     0.25%      
Investment Advisory Fees, Fee Adjustment Percent, Minimum Performance to Designed Benchmark Over Prior Rolling 12 Months 5.00%     5.00%      
Annual Administrative Fee Rate 0.05%            
U S Global Investors Funds [Member] | Fund Clients [Member]              
Receivables, Net, Current $ 120,000     $ 120,000     $ 126,000
v3.24.1.u1
Note 4 - Investment Management and Other Fees - Operating Revenues Disaggregated by Performance Obligation (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Mar. 31, 2024
Mar. 31, 2023
Revenue from Contract with Customer, Including Assessed Tax $ 2,593 $ 3,624 $ 8,544 $ 11,764
Investment And Advisory Services [Member]        
Revenue from Contract with Customer, Including Assessed Tax 2,566 3,591 8,458 11,663
Investment And Advisory Services [Member] | U S Global E T Fs [Member]        
Revenue from Contract with Customer, Including Assessed Tax 2,224 3,142 7,394 10,360
Investment And Advisory Services [Member] | U S Global Investors Funds [Member]        
Revenue from Contract with Customer, Including Assessed Tax 443 558 1,408 1,693
Investment Performance [Member] | U S Global Investors Funds [Member]        
Revenue from Contract with Customer, Including Assessed Tax (101) (109) (344) (390)
Administrative Service [Member]        
Revenue from Contract with Customer, Including Assessed Tax 27 33 86 101
Administrative Service [Member] | U S Global Investors Funds [Member]        
Revenue from Contract with Customer, Including Assessed Tax $ 27 $ 33 $ 86 $ 101
v3.24.1.u1
Note 5 - Restricted and Unrestricted Cash - Reconciliation of Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($)
$ in Thousands
Mar. 31, 2024
Jun. 30, 2023
Cash and cash equivalents $ 27,460 $ 25,401
Restricted cash 1,000 1,000
Total cash, cash equivalents, and restricted cash $ 28,460 $ 26,401
v3.24.1.u1
Note 6 - Leases (Details Textual) - USD ($)
 3 Months Ended 9 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Mar. 31, 2024
Mar. 31, 2023
Jun. 30, 2023
Lease, Cost $ 34,000 $ 33,000 $ 101,000 $ 89,000  
Operating Lease, Lease Income 23,000 31,000 78,000 96,000  
Other Assets [Member]          
Lessor, Cost, Contracts Asset 3,000   3,000   $ 4,000
General and Administrative Expense [Member]          
Lease, Cost $ 33,000 $ 32,000 $ 99,000 $ 86,000  
v3.24.1.u1
Note 6 - Leases - Lease Expense (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Mar. 31, 2024
Mar. 31, 2023
Jun. 30, 2023
Amortization of right-of-use assets $ 7 $ 7 $ 23 $ 22  
Interest on lease liabilities 1 1 2 3  
Total finance lease cost 8 8 25 25  
Short-term lease cost 26 25 76 64  
Total lease cost 34 33 101 89  
Operating cash flows from financing leases included in lease liabilities 1 1 2 3  
Financing cash flows from financing leases included in lease liabilities $ 7 $ 7 $ 22 $ 20  
Weighted-average remaining lease term - financing leases (years) (Year) 1 year 6 months   1 year 6 months   2 years 3 months
Weighted-average discount rate - financing leases 4.75%   4.75%   4.75%
v3.24.1.u1
Note 6 - Leases - Maturities of Lease Liabilities (Details)
$ in Thousands
Mar. 31, 2024
USD ($)
2024 (excluding the nine months ended March 31, 2024) $ 8
2025 33
2026 8
Total lease payments 49
Less imputed interest (2)
Total $ 47
v3.24.1.u1
Note 6 - Leases - Summary Analysis of Annual Undiscounted Cash Flows to be Received on Leases (Details)
$ in Thousands
Mar. 31, 2024
USD ($)
2024 (excluding the nine months ended March 31, 2024) $ 10
2025 36
Total lease payments $ 46
v3.24.1.u1
Note 7 - Other Accrued Expenses (Details Textual) - USD ($)
Mar. 31, 2024
Jun. 30, 2023
Accounts and Other Receivables, Net, Current $ 1,027,000 $ 1,245,000
HIVE Blockchain Technologies Ltd. [Member]    
Accounts and Other Receivables, Net, Current $ 127,000 $ 43,000
v3.24.1.u1
Note 7 - Other Accrued Expenses - Other Accrued Expenses (Details) - USD ($)
$ in Thousands
Mar. 31, 2024
Jun. 30, 2023
Professional fees $ 538 $ 697
Vendors payable 359 157
ETF operating and distribution expenses 548 344
Other taxes payable 73 76
Other 111 0
Other accrued expenses $ 1,629 $ 1,274
v3.24.1.u1
Note 8 - Debt (Details Textual)
$ in Millions
Mar. 31, 2024
USD ($)
Line of Credit Facility, Maximum Borrowing Capacity $ 1
Line of Credit [Member] | Money Market Funds [Member]  
Debt Instrument, Collateral Amount $ 1
v3.24.1.u1
Note 9 - Stockholders' Equity (Details Textual) - USD ($)
 1 Months Ended 3 Months Ended 9 Months Ended
Mar. 31, 2024
Mar. 31, 2024
Dec. 31, 2023
Sep. 30, 2023
Mar. 31, 2023
Dec. 31, 2022
Sep. 30, 2022
Mar. 31, 2024
Mar. 31, 2023
Feb. 25, 2022
Feb. 24, 2022
Payments for Repurchase of Common Stock               $ 1,748,000 $ 938,000    
Excise Tax Liability Accrued on Stock Repurchases   $ 5,000           $ 17,000      
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross (in shares)   0     0     0 0    
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Forfeitures in Period (in shares)   0     0     0 2,000    
Share-Based Payment Arrangement, Expense   $ 0     $ 0     $ 0 $ 0    
Share-Based Payment Arrangement, Nonvested Award, Option, Cost Not yet Recognized, Amount $ 0 $ 0     $ 0     $ 0 $ 0    
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercises in Period (in shares)   0     0     0 0    
Plan 1989 [Member]                      
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Number (in shares) 229,000 229,000     229,000     229,000 229,000    
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercisable, Number (in shares) 229,000 229,000     229,000     229,000 229,000    
Common Class A [Member] | Plan 1989 [Member]                      
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Weighted Average Exercise Price, Ending Balance (in dollars per share) $ 6.05 $ 6.05           $ 6.05      
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercisable, Weighted Average Exercise Price (in dollars per share)         $ 6.05       $ 6.05    
Common Class A [Member] | Plan 1997 [Member]                      
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Number (in shares) 2,000 2,000           2,000      
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Weighted Average Exercise Price, Ending Balance (in dollars per share) $ 2.74 $ 2.74           $ 2.74      
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercisable, Number (in shares)         2,000       2,000    
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercisable, Weighted Average Exercise Price (in dollars per share)         $ 2.74       $ 2.74    
Treasury Stock, Common [Member]                      
Treasury Stock, Shares, Acquired (in shares)   211,282 196,295 198,213 193,040 87,407 39,965        
Treasury Stock, Common [Member] | Common Class A [Member]                      
Treasury Stock, Shares, Acquired (in shares)   211,282     193,040     605,790 320,412    
Payments for Repurchase of Common Stock   $ 577,000     $ 556,000     $ 1,700,000 $ 938,000    
Share Repurchase Plan Renewal December2012 December2020 [Member]                      
Stock Repurchase Program, Authorized Amount $ 5,000,000 $ 5,000,000           $ 5,000,000   $ 5,000,000 $ 2,750,000
Monthly Dividends Paid [Member]                      
Common Stock, Dividends, Per Share, Cash Paid (in dollars per share) $ 0.0075             $ 0.0075      
v3.24.1.u1
Note 10 - Earnings Per Share (Details Textual) - shares
 3 Months Ended 9 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Mar. 31, 2024
Mar. 31, 2023
Share-Based Payment Arrangement, Option [Member]        
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in shares) 231,000 229,000 229,000 229,000
v3.24.1.u1
Note 10 - Earnings Per Share - Basic and Diluted Earnings Per Share (Details) - USD ($)
$ / shares in Units, $ in Thousands
 3 Months Ended 9 Months Ended
Mar. 31, 2024
Dec. 31, 2023
Sep. 30, 2023
Mar. 31, 2023
Dec. 31, 2022
Sep. 30, 2022
Mar. 31, 2024
Mar. 31, 2023
Net income (loss) $ (35) $ 1,229 $ (176) $ 1,620 $ 847 $ 53 $ 1,018 $ 2,520
Basic weighted average number of common shares outstanding (in shares) 14,077,042     14,747,537     14,278,691 14,862,893
Stock options (in shares) 0     100     86 295
Diluted (in shares) 14,077,042     14,747,637     14,278,777 14,863,188
Basic Net Income (Loss) per share (in dollars per share) $ (0)     $ 0.11     $ 0.07 $ 0.17
Diluted Net Income (Loss) per share (in dollars per share) $ (0)     $ 0.11     $ 0.07 $ 0.17
v3.24.1.u1
Note 11 - Income Taxes (Details Textual) - USD ($)
 3 Months Ended 9 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Mar. 31, 2024
Mar. 31, 2023
Jun. 30, 2023
Liability for Uncertainty in Income Taxes, Current $ 549,000   $ 549,000    
Unrecognized Tax Benefits $ 549,000   $ 549,000    
Domestic Tax Jurisdiction [Member]          
Effective Income Tax Rate Reconciliation, Percent 187.50% 16.80% 30.50% 21.70%  
Foreign Tax Jurisdiction [Member] | Canada Revenue Agency [Member]          
Deferred Tax Assets, Valuation Allowance $ 26,000   $ 26,000   $ 24,000
v3.24.1.u1
Note 12 - Accumulated Other Comprehensive Income (Loss) - Changes in Accumulated Other Comprehensive Income (Loss) (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Mar. 31, 2024
Dec. 31, 2023
Sep. 30, 2023
Mar. 31, 2023
Dec. 31, 2022
Sep. 30, 2022
Mar. 31, 2024
Mar. 31, 2023
Balance $ 50,890 $ 50,701 $ 52,196 $ 51,925 $ 52,896 $ 53,785 $ 52,196 $ 53,785
Net other comprehensive income (loss) (132) (171) (214) (231) (1,248) (486) (517) (1,965)
Balance 49,846 $ 50,890 50,701 52,445 $ 51,925 52,896 49,846 52,445
AOCI, Accumulated Gain (Loss), Debt Securities, Available-for-Sale, Parent [Member]                
Balance     $ 1,348     $ 3,624 1,348 3,624
Other comprehensive income (loss) before reclassifications             251 (1,189)
Tax effect             (52) 250
Amount reclassified from AOCI             (906) (1,299)
Tax effect             190 273
Net other comprehensive income (loss)             (517) (1,965)
Balance $ 831     $ 1,659     $ 831 $ 1,659
v3.24.1.u1
Note 13 - Financial Information by Business Segment (Details Textual) - USD ($)
 3 Months Ended 9 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Mar. 31, 2024
Mar. 31, 2023
Revenue from Contract with Customer, Including Assessed Tax $ 2,593,000 $ 3,624,000 $ 8,544,000 $ 11,764,000
Investment Management Services [Member]        
Revenue from Contract with Customer, Including Assessed Tax 2,593,000 3,624,000 8,544,000 11,764,000
Investment Management Services [Member] | U S Global E T Fs [Member]        
Revenue from Contract with Customer, Including Assessed Tax 2,200,000 3,100,000 7,400,000 10,400,000
Investment Management Services [Member] | U S Global Investors Funds [Member]        
Revenue from Contract with Customer, Including Assessed Tax $ 369,000 $ 482,000 $ 1,200,000 $ 1,400,000
v3.24.1.u1
Note 13 - Financial Information by Business Segment - Total Revenues and Income by Business Segment (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Mar. 31, 2024
Mar. 31, 2023
Jun. 30, 2023
Revenue from Contract with Customer, Including Assessed Tax $ 2,593 $ 3,624 $ 8,544 $ 11,764  
Net investment income (loss) 460 1,155 1,363 (189)  
Other income (loss) 68 61 183 184  
Income (loss) before income taxes 40 1,946 1,464 3,218  
Depreciation 41 61 163 183  
Gross identifiable assets 50,932 54,086 50,932 54,086  
Deferred tax asset 1,840 1,659 1,840 1,659 $ 1,920
Consolidated total assets 52,772 55,745 52,772 55,745 $ 55,673
Investment Management Services [Member]          
Revenue from Contract with Customer, Including Assessed Tax 2,593 3,624 8,544 11,764  
Net investment income (loss) 0 0 0 0  
Other income (loss) 68 61 183 184  
Income (loss) before income taxes (389) 815 164 3,461  
Depreciation 41 61 163 183  
Gross identifiable assets 27,542 25,056 27,542 25,056  
Corporate Investments [Member]          
Revenue from Contract with Customer, Including Assessed Tax 0 0 0 0  
Net investment income (loss) 460 1,155 1,363 (189)  
Other income (loss) 0 0 0 0  
Income (loss) before income taxes 429 1,131 1,300 (243)  
Depreciation 0 0 0 0  
Gross identifiable assets $ 23,390 $ 29,030 $ 23,390 $ 29,030  
v3.24.1.u1
Note 14 - Contingencies and Commitments (Details Textual) - USD ($)
 3 Months Ended
Jun. 30, 2024
Mar. 31, 2024
Dec. 31, 2023
Sep. 30, 2023
Mar. 31, 2023
Dec. 31, 2022
Sep. 30, 2022
Dividends, Common Stock, Cash   $ 312,000 $ 320,000 $ 322,000 $ 329,000 $ 335,000 $ 335,000
Monthly Dividend [Member] | Forecast [Member]              
Common Stock, Dividends, Per Share, Declared (in dollars per share) $ 0.0075            
Dividends, Common Stock, Cash $ 317,000            
v3.24.1.u1
Note 15 - Subsequent Event (Details Textual) - U S Global Investors Funds [Member]
Mar. 31, 2024
Investment Advisory Fees, Fee Adjustment Base Percentage Adjustment When Fund Performance is Not Within Limits to Benchmark Index 0.25%
Investment Advisory Fees, Fee Adjustment Percent, Minimum Performance to Designed Benchmark Over Prior Rolling 12 Months 5.00%
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