U.S. Global Investors(GROW) - 2025 Q4 - Annual Report

Asset Management Performance - As of June 30, 2025, total Assets Under Management (AUM) decreased to $1.3 billion from $1.6 billion on June 30, 2024, representing a decline of $238.7 million or 15.3%[106] - Average AUM for fiscal year 2025 was $1.4 billion, down 23.9% from $1.9 billion in fiscal year 2024, primarily due to outflows from the Jets ETF[106] - The Company’s investment management services are significantly influenced by market fluctuations and investor sentiment, impacting asset levels and income[109] Revenue and Income - Total consolidated operating revenues decreased by $2.5 million, or 23.1%, to $8.5 million for the year ended June 30, 2025, primarily due to lower ETF advisory fees[125] - ETF advisory fees accounted for 78.6% of the Company's operating revenues, totaling $6.6 million in fiscal year 2025, down from $9.4 million in fiscal year 2024, a decrease of 29.5%[126][127] - The Company recorded advisory fees from ETF clients totaling $6.6 million in fiscal year 2025, a decrease from $9.4 million in fiscal year 2024[115] - Advisory and administrative services fees from U.S. Global Investors Funds totaled approximately $1.8 million in fiscal 2025, an increase of 15.8% compared to $1.6 million in fiscal 2024[109][110] - Net investment income for fiscal year 2025 was $2.4 million, compared to $2.1 million for fiscal year 2024, indicating a positive trend despite market volatility[118] - Total consolidated other income increased by $329,000, or 13.7%, to $2.7 million for the year ended June 30, 2025, primarily due to higher net investment income[132] Financial Position - The Company had net working capital of approximately $37.2 million and a current ratio of 20.9 to 1 as of June 30, 2025, indicating strong liquidity[134] - Cash and cash equivalents decreased by $2.8 million, primarily due to stock repurchases of $2.0 million and dividends paid of $1.2 million[135] - Management believes current cash reserves, investments, and financing will be sufficient to meet foreseeable cash needs for operating activities and contractual obligations[144] Loss and Expenses - The Company reported a net loss of $334,000 ($0.03 per share) for the year ended June 30, 2025, compared to a net income of $1.3 million ($0.09 per share) for the previous year, a change of approximately $1.7 million[124] - The average investment management fee for equity funds in fiscal year 2025 was 76 basis points, down from 81 basis points in fiscal year 2024[112] - The average investment management fee rate for total advisory fees, excluding performance fees, was 63 basis points in fiscal year 2025[112] Dividends and Obligations - A monthly dividend of $0.0075 per share has been authorized from July 2025 through September 2025, totaling approximately $296,000[142] - As of June 30, 2025, the Company had contractual obligations of $1.1 million for the fiscal years ending June 30, 2026, through 2030[143] Market Risks - Interest rate fluctuations represent a market risk factor affecting the Company's consolidated financial position, with debt securities decreasing in value when interest rates rise[165] - Adverse changes in foreign currency exchange rates may reduce the value of cash accounts and corporate investments denominated in foreign currencies[166] - The fair values of corporate investments with exposure to the cryptocurrency industry are subject to considerable volatility[159] Credit and Loss Models - The Company adopted the Current Expected Credit Losses (CECL) model on July 1, 2023, which requires significant judgment in estimating lifetime expected losses[147] - As of June 30, 2025, the estimated fair value of equity securities is $12,188 thousand, with a hypothetical 25% increase leading to a fair value of $15,235 thousand and a decrease to $9,141 thousand[163]