GROW 10-K & 10-Q changes, risk factors and insider trading
U S Global Investors Inc. · Nasdaq · Investment Advice · CIK 754811 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
Largest changes
As further described in Item 9A of this Annual Report on Form 10-K, management concluded that our internal control over financial reporting and disclosure controls and procedures were not effective as of June 30, 2026. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the financial statementssee in full comparisonwouldwill not be prevented or detected on a timely basis.AlthoughIfthewedeficiencyarehasunablebeentoaddressed,remediatetherethiscanmaterialbeweakness,noorassurance thatif additional material weaknesseswillarenot ariseidentified in thefuture. If we fail to maintain effective internal control over financial reporting or disclosure controls and procedures,future, we could be subject to regulatory scrutiny,litigation,civil orreputationalcriminalharm,penalties, or shareholder litigation. In addition, any such matters could result in the diversion of management’s attention, increased costs, andour abilitydamage toreportourfinancial results accuratelyreputation andtimelyrelationshipscouldwithbeinvestorsadverselyandaffected.other stakeholders.
Thesee in full comparisonCompany currently has a significant portion of its assets inCompany's corporateinvestments. Theseinvestments are subject toinvestmentmarketrisk,andinvestmentother investment-related risks. Investment incomecouldand asset values may be adversely affected bythe realization ofrealized lossesuponon the disposition ofinvestmentsinvestments,ordeclinestheinrecognitionfairofvalue,significantimpairments,unrealizedandlossesotherorunfavorableimpairments.marketThedevelopments.Company’sCertain investmentsinmaydebtalsosecuritiesbeareaffectedsubject to interest rate risk, and unfavorableby changes in interestratesrates,couldwhichnegativelycan adversely impacttheirinvestmentvaluevalues and related investment income.FluctuationsAs a result, fluctuations in investmentincomeperformanceareandexpectedmarkettoconditionscontinuemayinadversely affect thefuture.Company's financial position, results of operations, and cash flows.
“As further described in Item 9A of this Annual Report on Form 10-K, management identified a material weakness in our internal control over financial reporting that existed as of June 30, 2024. While this material weakness has been remediated as of June 30, 2025, and management has concluded that our internal control over financial reporting and disclosure controls and procedures were effective as of June 30, 2025, the material weakness impacted our internal control environment during the period covered by this Annual Report on Form 10-K.”see in full comparison
We are heavily dependent on technology infrastructure and rely upon certain critical information systems for the effective operation of our business. These information systems include data network and telecommunications, internet access and our websites, and various computer hardware equipment and software applications. These information systems are subject to damage or interruption from a number of potential sources including natural disasters, software viruses or other malware, power failures,see in full comparisoncyberattackscyberattacks, phishing, impersonation, social engineering, fraud attempts and other events. We have implemented measures, such as virus protection software, intrusion detection systems and emergency recovery processes to address the outlined risks. However, security measures for information systems cannot be guaranteed to befailsafe.failsafe, and evolving threat techniques, including AI-enabled fraud or cyberattack methods used by external actors, may increase risk that our systems, employees, vendors, or service providers could be targeted. Any compromise of our data security or our inability to use or access these information systems at critical points in time could unfavorably impact the timely and efficient operation of our business and subject us to additional costs and liabilities, which could adversely affect our results of operations. Finally, federal legislation relating to cybersecurity threats could impose additional requirements on our operations.
Wesee in full comparisonpreviouslyhave identified a material weakness in our internal control over financial reporting, whichhascouldsinceadverselybeenaffectremediated,ourbut may continueability toimpact perceptions ofreport ourcontrolsfinancial results accurately andexposeontheaCompanytimelyto potential risk.basis.
The Company’s business operations are concentrated in San Antonio, Texas. The Company has developed various backup systems and contingency plans but cannot be assured that those preparations will be adequate in all circumstances that could arise, or that material interruptions and disruptions will not occur. The Company also relies to varying degrees on outside vendorssee in full comparisonforand third-party servicedeliveryproviders,inincludingadditiontechnology,tocybersecurity,technologycloud-based services, banking, business continuity, anddisasterothercontingencyoutsourcedsupport,serviceandproviders.thereDisruptions,isfailures,acybersecurityriskincidents,thatdata integrity issues, regulatory noncompliance, or inadequate performance by thesevendorsproviderswillcouldnotimpairbetheableCompany'stooperations,performdelayinserviceandelivery,adequateexposeandconfidentialtimelyinformation,manner.increase costs, or adversely affect the Company's business, results of operation, or financial condition. If the Company loses the availability of employees, or if it is unable to respond adequately to such an event in a timely manner, revenues, expenses, and net income could be negatively impacted.
Full comparison: every changed paragraph (7)
The Company’s business operations are concentrated in San Antonio, Texas. The Company has developed various backup systems and contingency plans but cannot be assured that those preparations will be adequate in all circumstances that could arise, or that material interruptions and disruptions will not occur. The Company also relies to varying degrees on outside vendors forand third-party service deliveryproviders, inincluding additiontechnology, tocybersecurity, technologycloud-based services, banking, business continuity, and disasterother contingencyoutsourced support,service andproviders. thereDisruptions, isfailures, acybersecurity riskincidents, thatdata integrity issues, regulatory noncompliance, or inadequate performance by these vendorsproviders willcould notimpair bethe ableCompany's tooperations, performdelay inservice andelivery, adequateexpose andconfidential timelyinformation, manner.increase costs, or adversely affect the Company's business, results of operation, or financial condition. If the Company loses the availability of employees, or if it is unable to respond adequately to such an event in a timely manner, revenues, expenses, and net income could be negatively impacted.
We are heavily dependent on technology infrastructure and rely upon certain critical information systems for the effective operation of our business. These information systems include data network and telecommunications, internet access and our websites, and various computer hardware equipment and software applications. These information systems are subject to damage or interruption from a number of potential sources including natural disasters, software viruses or other malware, power failures, cyberattackscyberattacks, phishing, impersonation, social engineering, fraud attempts and other events. We have implemented measures, such as virus protection software, intrusion detection systems and emergency recovery processes to address the outlined risks. However, security measures for information systems cannot be guaranteed to be failsafe.failsafe, and evolving threat techniques, including AI-enabled fraud or cyberattack methods used by external actors, may increase risk that our systems, employees, vendors, or service providers could be targeted. Any compromise of our data security or our inability to use or access these information systems at critical points in time could unfavorably impact the timely and efficient operation of our business and subject us to additional costs and liabilities, which could adversely affect our results of operations. Finally, federal legislation relating to cybersecurity threats could impose additional requirements on our operations.
While U.S. Global carries insurance in amounts and under terms that it believes are appropriate, the Company cannot assure that its insurance will cover most liabilities and losses to which it may be exposed, or that our insurance policies will continue to be available at acceptable terms and fees. U.S. Global is subject to regulatory and governmental inquiries and civil litigation. An adverse outcome of any such proceeding could involve substantial financial penalties. From time to time, variousthe Company is involved in legal proceedings and claims against us arisearising in the ordinary course of business, including employment-related claims. Certain insurance coverage may not be available or may be prohibitively expensive in future periods. As U.S. Global’s insurance policies come up for renewal, the Company may need to assume higher deductibles or co-insurance liabilities, or pay higher premiums, which would increase the Company’s expenses and reduce net income.
We previouslyhave identified a material weakness in our internal control over financial reporting, which hascould sinceadversely beenaffect remediated,our but may continueability to impact perceptions ofreport our controlsfinancial results accurately and exposeon thea Companytimely to potential risk.basis.
As further described in Item 9A of this Annual Report on Form 10-K, management identified a material weakness in our internal control over financial reporting that existed as of June 30, 2024. While this material weakness has been remediated as of June 30, 2025, and management has concluded that our internal control over financial reporting and disclosure controls and procedures were effective as of June 30, 2025, the material weakness impacted our internal control environment during the period covered by this Annual Report on Form 10-K.
As further described in Item 9A of this Annual Report on Form 10-K, management concluded that our internal control over financial reporting and disclosure controls and procedures were not effective as of June 30, 2026. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the financial statements wouldwill not be prevented or detected on a timely basis. AlthoughIf thewe deficiencyare hasunable beento addressed,remediate therethis canmaterial beweakness, noor assurance thatif additional material weaknesses willare not ariseidentified in the future. If we fail to maintain effective internal control over financial reporting or disclosure controls and procedures,future, we could be subject to regulatory scrutiny, litigation,civil or reputationalcriminal harm,penalties, or shareholder litigation. In addition, any such matters could result in the diversion of management’s attention, increased costs, and our abilitydamage to reportour financial results accuratelyreputation and timelyrelationships couldwith beinvestors adverselyand affected.other stakeholders.
The Company currently has a significant portion of its assets inCompany's corporate investments. These investments are subject to investment market risk, and investmentother investment-related risks. Investment income couldand asset values may be adversely affected by the realization ofrealized losses uponon the disposition of investmentsinvestments, ordeclines thein recognitionfair ofvalue, significantimpairments, unrealizedand lossesother orunfavorable impairments.market Thedevelopments. Company’sCertain investments inmay debtalso securitiesbe areaffected subject to interest rate risk, and unfavorableby changes in interest ratesrates, couldwhich negativelycan adversely impact theirinvestment valuevalues and related investment income. FluctuationsAs a result, fluctuations in investment incomeperformance areand expectedmarket toconditions continuemay inadversely affect the future.Company's financial position, results of operations, and cash flows.
Management's Discussion & Analysis (MD&A)
Largest changes
“Over the last year, the persistence of tariffs and trade sanctions across several key nations— including ongoing tensions involving China, the Ukraine-Russia conflict, and geopolitical uncertainties surrounding India-Pakistan and Israel-Iran—have continued to influence global trade flows. Despite these challenges, we believe that certain asset classes, particularly those aligned with natural resources such as precious metals and mining, have generally benefited from these geopolitical and macroeconomic shifts. …”see in full comparison
“Throughout 2024 and into 2025, the U.S. Federal Reserve has maintained higher interest rates for an extended period, with expectations originally calling for rate cuts in the first half of 2025. While two rate cuts were anticipated, the Fed has signaled a cautious approach, citing inflation remaining above target and geopolitical uncertainties as factors that warrant vigilance. The U.S. economy has shown resilience, with moderate growth and continued elevated inflation, driven partly by ongoing consumer spending and supply chain adjustments stemming from global disruptions.”see in full comparison
“At the same time, global financial markets continued to be influenced by geopolitical tensions, trade policy uncertainty, and shifting monetary policy expectations. Conflicts in Eastern Europe and the Middle East, along with changing tariff policies among major economies, contributed to periods of market volatility. These conditions increased investor interest in safe-haven assets, particularly gold. Gold prices reached record highs during the period, benefiting precious metals mining and royalty companies and supporting investor demand for related investment strategies.”see in full comparison
“In broader market performance, the S&P 500 experienced a solid year, with a total return of approximately 13.6 percent for the trailing twelve months ended June 30, 2025. Notably, most sectors contributed positively, with Financials leading gains, reflecting ongoing deposit increases and digital transformation. Conversely, the Healthcare sector faced some headwinds due to elevated interest rates, inflationary pressures, and federal spending cuts which affected affordability and demand.”see in full comparison
“While several central banks began easing monetary policy during the year, inflation remained above long-term targets in many regions. Economic growth moderated but remained positive across most major economies, supported by healthy labor markets and consumer spending. These conditions created a range of opportunities across asset classes and encouraged investors to seek targeted investment exposure through exchange-traded funds (“ETFs”).”see in full comparison
“Investments Without Readily Determinable Fair Values. Certain investments are accounted for under the ASC 321 measurement alternative. Management applies significant judgment in assessing whether observable price changes exist and whether impairment indicators are present. Changes in these judgments could affect the carrying value of the investments and the related gains or losses recognized in earnings. Accordingly, management considers the accounting for these investments to be a critical accounting estimate.”see in full comparison
Full comparison: every changed paragraph (56)
The Company’s operating revenues are closely tied to assets under management (“AUM”), which are influenced by market performance, investor inflows and outflows, and the mix of managed investment products. As a result, changes in financial markets and investor sentiment can have a significant impact on revenues and operating results.
During the fiscal year ended June 30, 2026, U.S. equity markets delivered strong returns, supported by resilient economic growth and continued technological innovation. The S&P 500 gained approximately 20.9 percent for the twelve months ended June 30, 2026, led by the Information Technology sector, which advanced approximately 36.7 percent. Investor enthusiasm surrounding artificial intelligence (“AI”), cloud computing, and digital infrastructure fueled strong earnings growth among technology companies. Semiconductor manufacturers and related businesses benefited from growing demand for AI-related hardware and data center investment. This demand contributed significantly to overall market performance.
At the same time, global financial markets continued to be influenced by geopolitical tensions, trade policy uncertainty, and shifting monetary policy expectations. Conflicts in Eastern Europe and the Middle East, along with changing tariff policies among major economies, contributed to periods of market volatility. These conditions increased investor interest in safe-haven assets, particularly gold. Gold prices reached record highs during the period, benefiting precious metals mining and royalty companies and supporting investor demand for related investment strategies.
While several central banks began easing monetary policy during the year, inflation remained above long-term targets in many regions. Economic growth moderated but remained positive across most major economies, supported by healthy labor markets and consumer spending. These conditions created a range of opportunities across asset classes and encouraged investors to seek targeted investment exposure through exchange-traded funds (“ETFs”).
The travel and tourism industry remained resilient throughout the fiscal year. Strong demand for leisure travel, international tourism, cruises, and hospitality services supported revenue growth across many travel-related companies. These trends benefited the Company’s travel-focused products, including the U.S. Global Jets ETF (JETS) and the U.S. Global Travel UCITS ETF (TRIP), as investors continued to seek exposure to the long-term growth of global travel.
Investors’ preference for ETFs over traditional mutual funds remained a key industry trend. The ETF industry continued to attract net inflows due to its transparency, liquidity, and tax efficiency, while actively managed mutual funds generally experienced net outflows. This shift reflects growing demand for flexible, cost-effective investment vehicles.
Management remains focused on growing assets under management through differentiated investment strategies, expanding distribution opportunities, and prudently managing market and geopolitical risks. The Company believes its specialized exposure to travel, precious metals, technology, aerospace and defense provides attractive opportunities for long-term growth as investor demand continues to evolve.
The Company’s operating revenues are highly correlated to the level of assets under management (“AUM”) and fees associated with various investment products. While AUM is directly impacted by changes in the financial markets, it is also impacted by cash inflows or outflows due to shareholder activity. Various products may have different fees, so changes in our product mix may also affect revenues. For example, international equity products will generally have a higher fee than fixed income products, so changes in assets in those products will have a larger impact on revenues.
While products are offered for a wide variety of markets, the Company has traditionally focused on gold mining and exploration, natural resources, and emerging markets. More recently the airline industry has become more significant to our revenue. All these markets are volatile and subject to capital cycles.
Reflecting on the significant developments and challenges of the past year ending and as of June 30, 2025, our outlook acknowledges the ongoing impact of geopolitical tensions, monetary policy decisions, and market dynamics that have shaped the investment landscape.
Over the last year, the persistence of tariffs and trade sanctions across several key nations— including ongoing tensions involving China, the Ukraine-Russia conflict, and geopolitical uncertainties surrounding India-Pakistan and Israel-Iran—have continued to influence global trade flows. Despite these challenges, we believe that certain asset classes, particularly those aligned with natural resources such as precious metals and mining, have generally benefited from these geopolitical and macroeconomic shifts. The sustained demand for metals like gold and other commodities has supported our performance-driven assets within these sectors.
Throughout 2024 and into 2025, the U.S. Federal Reserve has maintained higher interest rates for an extended period, with expectations originally calling for rate cuts in the first half of 2025. While two rate cuts were anticipated, the Fed has signaled a cautious approach, citing inflation remaining above target and geopolitical uncertainties as factors that warrant vigilance. The U.S. economy has shown resilience, with moderate growth and continued elevated inflation, driven partly by ongoing consumer spending and supply chain adjustments stemming from global disruptions.
In the travel and tourism sector, robust demand persisted through the spring and summer months, supported by renewed leisure travel and business activity. This resilience has translated into strong investor interest, notably flowing into airline stocks and related industries, which has been a significant driver for our Jets ETF and airline-related revenues. This trend underscores the ongoing recovery in travel and transportation sectors, even amid macroeconomic headwinds.
In broader market performance, the S&P 500 experienced a solid year, with a total return of approximately 13.6 percent for the trailing twelve months ended June 30, 2025. Notably, most sectors contributed positively, with Financials leading gains, reflecting ongoing deposit increases and digital transformation. Conversely, the Healthcare sector faced some headwinds due to elevated interest rates, inflationary pressures, and federal spending cuts which affected affordability and demand.
Mutual funds continue to face outflows compared to ETFs and other alternative investments, as investors seek more flexible or tactical exposure amid ongoing market volatility. The Company has four ETF products listed on the New York Stock Exchange: the U.S. Global Jets ETF (ticker JETS), which concentrates on the U.S. and international airline industry, the U.S. Global GO GOLD and Precious Metal Miners ETF (ticker GOAU), which invests in companies engaged in the production of precious metals either through active (mining or production) or passive (owning royalties or production streams) means, the U.S. Global Sea to Sky Cargo ETF (ticker SEA), which concentrates on the global sea shipping and air freight industries, and the U.S. Global Technology and Aerospace & Defense ETF (ticker WAR), which invests in frontier sectors including emerging technologies, electronic warfare, aerospace, and defense. The Company has one European-based ETF product listed on certain exchanges in Europe, The Travel UCITS ETF (ticker TRIP), which concentrates on the travel industry. As we look ahead, our focus remains on sustainable growth, innovation, and maintaining a vigilant approach to geopolitical and macroeconomic risks. We remain committed to navigating these complexities, positioning ourselves for resilience and long-term value creation.
As of June 30, 2025,2026, total AUM was $1.3$1.7 billion compared to $1.6$1.3 billion on June 30, 2024,2025, aan decreaseincrease of $238.7$348.3 million, or 15.326.3 percent. DuringThe fiscalincrease year 2025, averagein AUM was $1.4driven billionprimarily comparedby to $1.9 billiongrowth in fiscalthe yearUSGIF 2024,and aETF decreaseclients offocused 23.9 percent. The decrease was primarily due to outflows fromon the Jetsgold ETF.and Thenatural resources sector, and Jets ETFETF, which invests in airline-related stocks, including global airline carriers, airport operators and aircraft manufacturers. During fiscal year 2026, average AUM was $1.5 billion compared to $1.4 billion in fiscal year 2025, an increase of 8.1 percent.
The Company generates operating revenues from providing investment management and related services to USGIF and ETF clients. These revenues are largely dependent on the value and composition of AUM. As a result, fluctuations in financial markets, investor sentiment and net cash flows directly affect AUM and, consequently, the Company's revenues and operating results.
Information regarding the mutual funds within USGIF, including prospectuses and performance information, is available on the Company's website, www.usfunds.com. Information regarding the Company's U.S.-Based ETFs, including prospectuses, performance and holdings, is available at www.usglobaletfs.com. Shareholders in USGIF are generally not required to provide advance notice prior to redeeming fund shares, and USGIF does not currently charge redemption fees. Similarly, the U.S.-based ETFs' authorized participants are generally not required to provide advance notice of share redemptions, and the U.S.-based ETFs do not charge redemption fees.
Investment advisory fees from USGIF are generally calculated as a percentage of average net assets, ranging from 0.375 percent to 1.00 percent, and are paid monthly. The Company also serves as investment advisor to four U.S.-based ETF clients.
The Company receives a management fee of 0.60 percent of average net assets for the U.S.-based ETFs. The Company also serves as investment adviser to one European-based ETF, The Travel UCITS ETF ("TRIP"), which pays a unitary management fee of 0.69 percent of average net assets. TRIP is not included in the AUM rollforward table below and is not available to U.S. investors.
The Company has agreed to bear all expenses of the U.S.-based ETFs, except the U.S. Global Sea to Sky Cargo ETF. The Company has agreed to contractually limit the expenses of the U.S. Global Sea to Sky Cargo ETF through April 2027. The Company has also agreed to bear all expenses of TRIP.
In fiscal year 2025, advisory fees on certain USGIF equity funds remained subject to a performance-based adjustment that could decrease fees based on investment performance. The performance adjustment began to be phased out during the fourth quarter of fiscal 2024 and was fully eliminated during the fourth quarter of fiscal 2025. During the phase-out period, the adjustment could only reduce advisory fees. As a result, advisory fees were reduced by $247,000 in fiscal year 2025. The elimination of the performance fee adjustment contributed to the increase in USGIF advisory fees during fiscal year 2026.
The Company generates operating revenues from managing and servicing the Funds. The Company recorded advisory and administrative services fees from USGIF totaling approximately $1.8 million and $1.6 million in fiscal 2025 and fiscal 2024, respectively. These revenues are largely dependent on the total value and composition of assets under its management. Fluctuations in the markets and investor sentiment have a direct impact on the Funds’ asset levels, thereby affecting income and results of operations. Detailed information regarding the Funds 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, and USGIF does not currently charge a redemption fee.
Investment base advisory fees from USGIF are calculated as a percentage of average net assets, ranging from 0.375 percent to 1.00 percent, and are paid monthly. The base advisory fees on the equity funds within USGIF were adjusted upward or downward based on performance. This performance adjustment began to be phased out during the fourth quarter of fiscal 2024 and ceased during the fourth quarter of fiscal 2025. During the phase-out period, the adjustment for the performance fee could only be adjusted downward. For the years ended June 30, 2025, and 2024, the Company adjusted its base advisory fees downward by $247,000 and $429,000, respectively. USGIF advisory fees in total, including performance adjustments, increased by approximately $230,000, or 15.8 percent, in fiscal year 2025 compared to fiscal year 2024. This was primarily a result of lower downward adjustments for performance fees.
Mutual fund investmentInvestment advisory feesrevenues are also affected by changes in assetsAUM, under management, which includeincluding:
The following tables summarize the changes in AUM for USGIF equity funds, USGIF fixed income funds and the Company's U.S.-based ETFs. The tables exclude TRIP, the Company's European-based ETF, which is not available to U.S. investors.
As of June 30, 2026, USGIF AUM was $467.5 million compared to $350.4 million as of June 30, 2025, an increase of $117.0 million, or 33.4 percent. Average net assets for USGIF were $489.1 million during fiscal year 2026 compared to $308.4 million during fiscal year 2025, an increase of 58.6 percent. The change in USGIF AUM was primarily attributable to market appreciation in equity funds.
As of June 30, 2026, AUM in the Company's U.S.-based ETFs was $1.2 billion compared to $953.0 million as of June 30, 2025, an increase of $229.8 million, or 24.1 percent. Average net assets for the Company's U.S.-based ETFs were $1.0 billion during fiscal year 2026 compared to $1.1 billion during fiscal year 2025, a decrease of 6.1 percent. The change in U.S.-based ETF AUM was primarily attributable to market appreciation, particularly within JETS. The Company also serves as investment adviser to TRIP, a European-based ETF that is not included in the table above. Average net assets for TRIP were $20.5 million and $20.4 million during fiscal years 2026 and 2025, respectively.
The following tables summarize the changes in assets under management for USGIF for fiscal years 2025 and 2024.
The average annualized investment management fee rate (total advisory fees, excluding performance fees, as a percentage of average assets under management) of USGIF was 6379 and 6563 basis points in fiscal year 20252026 and 2024.2025. The average investment management fee for equity funds in fiscal year 20252026 and 20242025 was 7688 basis points and 8176 basis points, respectively. The average investment management fee for the fixed income funds was nil for both fiscal years 20252026 and 20242025 due to fee waivers on these funds as discussed in Note 4, Investment Management and Other Fees, to the Consolidated Financial Statements of this Annual Report on Form 10-K.
During fiscal years 2026 and 2025, the Company recorded advisory fee revenue from USGIF of approximately $3.8 million and $1.7 million, respectively. Based on actual recorded amounts, total USGIF advisory fees increased by approximately $2.2 million, or 128.2 percent, in fiscal year 2026 compared to fiscal year 2025, primarily due to higher average AUM in the funds focused on the gold and natural resources sector. This increase was also attributable to the elimination of the performance fee adjustment, which reduced advisory fees in fiscal 2025 but did not impact advisory fees in 2026.
The average management fee rate for the Company's U.S.-based ETFs was 59 basis points and 60 basis points during fiscal years 2026 and 2025, respectively. Advisory fees from all ETF clients totaled $6.2 million and $6.6 million during fiscal years 2026 and 2025, respectively. Changes in ETF advisory fees during fiscal year 2026 were primarily attributable to lower average net assets in JETS.
The Company serves as investment advisor to four U.S.-based ETF clients: U.S. Global Jets ETF (ticker JETS), U.S. Global GO GOLD and Precious Metal Miners ETF (ticker GOAU), U.S. Global Sea to Sky Cargo ETF (ticker SEA), and U.S. Global Technology and Aerospace & Defense ETF (ticker WAR). The Company receives a unitary management fee of 0.60 percent of average net assets and has agreed to bear all expenses of the U.S.-based ETFs, except the U.S. Global Sea to Sky Cargo ETF. The Company has agreed to contractually limit the expenses of the U.S. Global Sea to Sky Cargo ETF through April 2026. The Company also serves as investment advisor to one European-based ETF, The Travel UCITS ETF (ticker TRIP). The Company receives a unitary management fee of 0.69 percent of average net assets and has agreed to bear all expenses of the ETF. The Company recorded advisory fees from the ETF clients totaling $6.6 million and $9.4 million in fiscal years 2025 and 2024, respectively. Average assets in the ETFs decreased in fiscal year 2025, primarily in the Jets ETF. Information on the U.S.-based ETFs can be found at www.usglobaletfs.com, including the prospectus, performance and holdings. 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 Travel UCITS ETF is not available to U.S. investors.
Management believes it can more effectively manage the Company’s cash position by maintaining certain types of investments utilized in cash management and continues to believe that such activities are in the best interest of the Company. As of June 30, 2026, investments measured at fair value on a recurring basis totaled $11.7 million, representing approximately 24.4 percent of the total assets.
The following table summarizes the cost, unrealized gaingains or loss,(losses), and fair value of investments carriedmeasured at fair value on a recurring basis as of June 30, 2025,2026, and 2024.2025.
Included in the amounts presented above are investments in funds advised by the Company, with fair values of $9.7 million and $10.6 million at June 30, 2025,2026, and $10.52025, million at June 30, 2024.respectively.
Investment income can be volatile and may vary depending on market fluctuations, the Company’s ability to participate in investment opportunities, and timing of transactions. A significant portion of the unrealized gains and losses is concentrated in a small number of issuers. For fiscal year 2025,2026, the Company had net investment income of $2.4$4.1 million, compared to $2.1$2.4 million for fiscal year 2024.2025. Due to market volatility, the Company expects that gains or losses will continue to fluctuate in the future.
AIncluded portion ofin the securities recorded at fair value in the table above table is inare investments in HIVE Digital Technologies Ltd. (“HIVE”), whichconsisting were convertible debentures andof common shares valued at $1.6$55,000, millionand at$27,000 as of June 30, 2026, and 2025, respectively, and convertible debentures valuedwith ata $4.4fair value of $1.6 million atas of June 30, 2024.2025. The investments in HIVE are discussed in more detail in Note 3, Investments, to the Consolidated Financial Statements of this Annual Report on Form 10-K. HIVE is a company that is headquartered in the United States with cryptocurrency mining facilities in Paraguay, Sweden, and Canada. Frank Holmes, CEO, is the executive chairman of HIVE.
Cryptocurrency markets and related stockssecurities have been, and are expected to continue to be, volatile,volatile and may be influenced by a wide variety of factors, including speculative activity.activity, Cryptocurrencytechnological miningdevelopments, companiesmarket sentiment, and regulatory changes. Companies operating in the cryptocurrency industry also face acybersecurity, varietyenvironmental, of risks, including, but not limited to, environmental concerns, regulatory factors,regulatory, and heightenedother risksoperational ofrisks. cybersecurity attacks for which there may be no source of recovery. There has been significant volatilityChanges in the market pricevalue of HIVE,the whichCompany's hasinvestments, impactedincluding investments in companies operating in the investment’scryptocurrency valueindustry, includedmay onaffect the investment values reported in the Company's Consolidated Balance Sheets,Sheets unrealizedand gainthe (loss)gains and losses recognized in netthe investmentCompany's incomeConsolidated (loss),Statements of Operations and unrealizedComprehensive gainIncome (loss) recognized in other comprehensive income (lossLoss).
In addition to the investmentssecurities at fair value presented above, as of June 30, 2025,2026, and 2024,2025, the Company owned other investments of approximately $1.3$4.7 million and $1.7$1.3 million, respectively, classified as securities without readily determinable fair values.values and held-to-maturity debt investments, net of allowance for credit losses, of $972,000 and $948,000, respectively.
The Company had a net loss,income, as shown in the Consolidated Statements of Operations, of $334,000$3.1 (million, or $ 0.24 per share, for the year ended June 30, 2026, compared with a net loss of $334,000, or $ (0.03) per share)share, for the year ended June 30, 2025, compared with net income of $1.3 million ($ 0.09 per share) for the year ended June 30, 2024, a change of approximately $1.7$3.4 million. The change is primarily due to lowerhigher operating revenues,revenues and net investment income, partially offset by higher net investment income and lower tax expenses, as discussed further below.
Total consolidated operating revenues for the year ended June 30, 2025,2026, decreasedincreased $2.5$1.8 million, or 23.121.3 percent, compared withto the year ended June 30, 2024.2025. ThisThe decreaseincrease was primarily attributable to higher advisory fees from the following:funds focused on the gold and natural resources sector.
Advisory fees increased $1.7 million, or 20.5 percent, in fiscal 2026 compared to fiscal 2025. The increase consisted of approximately $1.5 million of higher management fees, primarily due to higher average assets under management, and a favorable $247,000 change related to the elimination of performance fee adjustments. Management fees from USGIF increased due to higher average assets under management, primarily driven by market appreciation. ETF advisory fees decreased due to lower average assets under management, primarily in JETS.
The Company serves as investment advisor to four U.S.-based ETF clients: U.S. Global Jets ETF (ticker JETS), U.S. Global GO GOLD and Precious Metal Miners ETF (ticker GOAU), U.S. Global Sea to Sky Cargo ETF (ticker SEA), and U.S. Global Technology and Aerospace & Defense ETF (ticker WAR).clients. The Company receives a unitary management fee of 0.60 percent of average net assets and has agreed to bear all expenses of the U.S.-based ETFs, except the U.S. Global Sea to Sky Cargo ETF.ETF, Thefor which the Company has contractually agreed to contractually limit the expenses of the U.S. Global Sea to Sky Cargo ETF through April 2026.2027. The Company also serves as investment advisor to one European-based ETF, Thefor Travelwhich UCITS ETF (ticker TRIP). The Companyit receives a unitary management fee of 0.69 percent of average net assets and has agreed to bear all expenses of the ETF.expenses. The Company recorded advisory fees from the ETF clients of $6.6$6.2 million and $9.4$6.6 million in fiscal years 20252026 and 2024,2025, respectively.
Investment base advisory fees from USGIF are calculated as a percentage of average net assets, ranging from 0.375 percent to 1.00 percent, and are paid monthly. The Company has contractually agreed to limit fund expenses through April 2027, except for the U.S. Government Securities Ultra Short Bond Fund, for which fee waivers and expense reimbursements are voluntary and may be discontinued at the Company's discretion. The base advisory fees on the equity funds within USGIF were adjusted upward or downward based on performance. This performance adjustment began to be phased out during the fourth quarter of fiscal 2024 and ceased during the fourth quarter of fiscal 2025. During the phase-out period, the adjustment for the performance fee could only be adjusted downward. For the yearsyear ended June 30, 2025, and 2024, the Company adjusted its base advisory fees downward by $247,000 and $429,000, respectively.$247,000. USGIF advisory fees in total, including performance adjustments, decreasedincreased by approximately $230,000,$2.2 million, or 15.8128.2 percent, in fiscal year 20252026 compared to fiscal year 2024.2025.
Total consolidated other income increased to $4.5 million for fiscal 2026 from $2.7 million for fiscal 2025, primarily due to higher net investment income. Net investment income was $4.1 million in fiscal 2026, compared to $2.4 million in fiscal 2025, reflecting an increase in realized and unrealized results on equity securities. Realized and unrealized gains on equity securities were $2.6 million in fiscal 2026, compared to losses of $281,000 in fiscal 2025. The fiscal 2026 results included net realized and unrealized gains of $3.2 million from equity investments accounted for under the measurement alternative in fiscal 2026, compared to realized losses of $362,000 in fiscal 2025.
Partially offsetting the fiscal 2026 increases, dividend and interest income declined $723,000, or 33.0 percent, to $1.5 million, primarily due to lower interest income earned on the Company's HIVE convertible debentures as a result of principal repayments. In addition, realized gains on debt securities decreased $502,000 to $108,000 in fiscal 2026 from $610,000 in fiscal 2025, reflecting lower gains recognized on the Company's HIVE convertible debenture investment.
Total consolidated other income for the year ended June 30, 2025, was $2.7 million, compared to $2.4 million for the year ended June 30, 2024, an increase of $329,000, or 13.7 percent. The change was primarily due to the following components and factors:
AIncome tax expense of $72,000 was recorded$829,000 for thefiscal year ended June 30, 2025,2026, compared to $582,000$72,000 for thefiscal year2025, endedan June 30, 2024, a decreaseincrease of $510,000, or 87.6 percent.$757,000. The decreaseincrease canwas beprimarily mainly attributedattributable to a higher operatingearnings lossbefore income taxes, offset by changes in reserves for uncertain tax positions, and an increase in the currentvaluation yearallowance thanon incertain thedeferred priortax year, partially offset by return-to-provision adjustments in the current year.assets. See Note 12 to the Consolidated Financial Statements of this Annual Report on Form 10-K for additional disclosuresinformation onregarding income taxes.
At June 30, 2025,2026, the Company had net working capital (current assets minus current liabilities) of approximately $37.2$35.7 million and a current ratio (current assets divided by current liabilities) of 20.919.7 to 1. With approximately $24.6$24.3 million in cash and cash equivalents and $12.2$11.7 million in securities carried at fair value, excluding convertible securities, which together compriserepresented approximately 76.475.1 percent of total assets, the Company believes it has adequate liquidity to meet its current obligations. Total shareholders’ equity was approximately $45.2$45.1 million.
The decrease in cashCash and cash equivalents ofdecreased $2.8$222,000 million,during andfiscal accordingly, net working capital, was2026, primarily due to repurchases$2.0 million of common stock ofrepurchases, $2.0$1.1 million, dividends paidmillion of dividend payments, and $1.2 million, purchasesmillion of corporate investmentsinvestment purchases. These uses of $1.2cash million,were andpartially offset by $742,000 of net cash usedprovided inby operating activities and $2.3 million of $822,000, offset by proceeds from principal paydownsrepayments ofon $2.3investments. million. Consolidated shareholders’Shareholders' equity atdecreased $68,000, or 0.2 percent, from June 30, 2025, was $45.2 million, a decrease of $3.8 million, or 7.8 percent since June 30, 2024. The decrease was primarily duereflecting to$2.0 repurchasesmillion of common stock repurchases and $1.1 million of $2.0 million, dividends declareddeclared, partially offset by net income of $1.2$3.1 million, other comprehensive loss of $486,000, and a net loss of $334,000million for thefiscal year ended June 30, 2025.2026.
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. The stock repurchase plan is approved through December 31, 2025,2026, but may be suspended or discontinued. Cash and securities recorded at fair value, excluding convertible securities,value of approximately $36.7$36.1 million are available to fund current activities.
Contractual obligations primarily consist of agreements for services used in daily operations and for marketing and distribution. As of June 30, 2025,2026, the Company had contractual obligations of $1.1 million$755,000 for the fiscal years ending June 30, 2026,2027, through 2030. Other contractual obligations consist of agreements to waive or reduce fees and/or pay expenses on certain funds. Future obligations under these agreements are dependent upon future levels of fund assets.
Investments Without Readily Determinable Fair Values. Certain investments are accounted for under the ASC 321 measurement alternative. Management applies significant judgment in assessing whether observable price changes exist and whether impairment indicators are present. Changes in these judgments could affect the carrying value of the investments and the related gains or losses recognized in earnings. Accordingly, management considers the accounting for these investments to be a critical accounting estimate.
Fair Value of Financial Instruments. The financial instruments of the Company are reported on the Consolidated Balance Sheets at market or fair values or at carrying amounts that approximate fair values. The Company believes that the estimates related to fair values of financial instruments are critical accounting estimates because the assumptions used could significantly impact the unrealized gains or losses recorded in the Company’s Consolidated Financial Statements.
Allowance for Credit Losses. The Company’s allowance for credit losses requires significant judgment in estimating lifetime expected losses under the Current Expected Credit Losses (“CECL”) model, adopted on July 1, 2023. Management’s estimate incorporates historical experience, current conditions, and reasonable forecasts of future economic performance. Because these assumptions involve inherent uncertainty, changes in issuer performance or macroeconomic factors could cause actual losses to differ materially from current estimates. Adjustments to the allowance may therefore have a significant impact on the Company’s results of operations and financial condition.
What changed in the latest 10-Q
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, 2025. There have been no material changes since the fiscal year end to the risk factors listed therein.
No wording changes found in this section.
Full comparison: every changed paragraph (0)
Management's Discussion & Analysis (MD&A)
Largest changes
see in full comparisonIncomeThere was an income taxexpensebenefitwasof$1.4 million$844,000 for the three months endedDecemberMarch 31,2025,2026, compared with an income taxbenefitexpense of$30,000$137,000 for the same period in2024,2025, representing a change of$1.4approximatelymillion.$981,000. Theincrease in income tax expensechange was primarilyattributabledriventoby discrete taxadjustmentsitems,ofincluding$1.3amillion481(a) adjustment related to the federal income tax treatment of certain HIVE convertiblesecurities.securitiesInandconnectionawithdecreaseitsinevaluationthe valuation allowance. These discrete items reduced income tax expense for the three months ended March 31, 2026, and had the effect ofthe appropriateoffsetting taxtreatmentexpenseofrecognizedthese securities,in theCompanythreedeterminedmonthsthat a change in tax accounting method would be required and subsequently filed a tax accounting method change request on Form 3115 with the Internal Revenue Service. As ofending December 31,2025,2025.theAsmethodachange had not yet been filed and, in accordance with U.S. GAAP,result, the Company’sinterimeffective taxprovisionratedoesmay notreflectbetaxcomparableaccountingbetweenmethod change.periods.
“Income tax expense was $1.7 million for the six months ended December 31, 2025, compared with $91,000 for the same period in 2024, representing a change of $1.6 million. The increase in income tax expense was primarily attributable to $1.3 million tax adjustments related to the federal income tax treatment of certain HIVE convertible securities. In connection with its evaluation of the appropriate tax treatment of these securities, the Company determined that a change in tax accounting method would be required and subsequently filed a non-automatic Form 3115 with the Internal Revenue Service. …”see in full comparison
Atsee in full comparisonDecemberMarch 31,2025,2026, total assets under management (“AUM”), including ETF and USGIF clients, were approximately$1.5$1.4 billion, compared to approximately$1.5$1.2 billion atDecemberMarch 31,2024,2025, representing an increase of$72.1$239.1 million. Average AUM for the nine months ended March 31, 2026, was approximately $1.5 billion, compared with approximately $1.5 billion for the nine months ended March 31, 2025, representing a decrease of $36.8 million, despite similar rounded amounts.Average AUM for the six months ended December 31, 2025, was approximately $1.4 billion, compared with $1.5 billion for the six months ended December 31, 2024, representing a decrease of $49.3 million.Total AUM was approximately $1.3 billion at June 30, 2025, the Company’s prior fiscal year end, and increased by$221.6$105.7 million during thesixnine months endedDecemberMarch 31,2025.2026.
The increase in cash and cash equivalents was primarily due to proceeds from principal paydowns of $2.3 million, net cash provided by operating activities of $519,000, proceeds on the sale of corporate investments of $500,000, and return of capital distributions ofsee in full comparison$180,000, and net cash provided by operating activities of $224,000$174,000; partially offset by repurchases of the Company's common stock of$1.1$1.6 million, purchases of corporate investments of$918,000,$1.0 million, and dividends paid of$579,000.$862,000. Consolidated shareholders’ equity atDecemberMarch 31,2025,2026, was$44.2$46.0 million,aandecreaseincrease of$1.0 million,$841,000, or2.31.9 percent since June 30, 2025. Thedecreaseincrease was primarily driven by net income of $3.3 million, partially offset by repurchases of the Company's common stock (including excise tax) of$1.1$1.6million,million and$571,000$849,000 of dividendsdeclared, partially offset by net income of $661,000declared during thesixnine months endedDecemberMarch 31,2025.2026.
The Company recorded net income of $2.7 million ($0.23 per share) for the three months ended March 31, 2026, compared with net loss ofsee in full comparison$846,000$382,000 ($(0.070.03) per share) for the three months endedDecemberMarch 31, 2025,compared with net loss of $86,000 ($(0.01) per share) for the three months ended December 31, 2024,representing a change of approximately$760,000.$3.1 million. The change was primarily attributable to higher net investment income, a favorable change in income tax expense/benefit,in the current period, partially offset by increasedhigher operating revenues,higher net investment income,and lower operating expenses, as discussed further below.
“The decrease was primarily driven by a $143,000, or 11.1 percent, reduction in employee compensation and benefits, reflecting lower employee salaries, hiring costs, and profit sharing; a $138,000, or 56.8 percent, decline in advertising expenses, primarily attributable to elevated advertising spending in the prior-year period; and a $42,000, or 2.9 percent, decrease in general and administrative expenses, primarily due to lower ETF-related costs.”see in full comparison
Full comparison: every changed paragraph (32)
At DecemberMarch 31, 2025,2026, total assets under management (“AUM”), including ETF and USGIF clients, were approximately $1.5$1.4 billion, compared to approximately $1.5$1.2 billion at DecemberMarch 31, 2024,2025, representing an increase of $72.1$239.1 million. Average AUM for the nine months ended March 31, 2026, was approximately $1.5 billion, compared with approximately $1.5 billion for the nine months ended March 31, 2025, representing a decrease of $36.8 million, despite similar rounded amounts. Average AUM for the six months ended December 31, 2025, was approximately $1.4 billion, compared with $1.5 billion for the six months ended December 31, 2024, representing a decrease of $49.3 million. Total AUM was approximately $1.3 billion at June 30, 2025, the Company’s prior fiscal year end, and increased by $221.6$105.7 million during the sixnine months ended DecemberMarch 31, 2025.2026.
The following tables summarize the changes in AUM for USGIF for the three and sixnine months ended DecemberMarch 31, 2025,2026, and 2024.2025.
As shownreflected above, USGIF's period-end AUM at DecemberMarch 31, 2025,2026, was higher than at DecemberMarch 31, 2024.2025. Average net assets for both the three and sixnine months ended DecemberMarch 31, 2025,2026, were also higher than the corresponding periodsprior-year in 2024. The increases in period-end AUM for both periods were primarily driven by market appreciation in the equity funds.periods.
For both the three and sixnine months ended DecemberMarch 31, 2024,2026, USGIF'sthe period-endincrease in AUM decreased.was primarily attributable to market appreciation within the equity funds. The decreasenet shareholder purchases reflected in the table above for the three monththree-month period waswere primarily driven by market depreciation in the equity funds, while the decrease for the six month period was primarily driven byreinvested dividends and distributions.
AUM also increased for the three and nine months ended March 31, 2025, primarily driven by market appreciation within the equity funds.
The average annualized investment management fee rate (total advisory fees, excluding performance fees, as a percentage of average assets under management) was 7981 and 7578 basis points for the three and sixnine months ended DecemberMarch 31, 2025,2026, respectively, compared to 5665 and 5961 basis points for the corresponding periodsprior-year in 2024.periods.
For equity funds, the average investment management fee was 89 and 8687 basis points for the three and sixnine months ended DecemberMarch 31, 2025,2026, respectively, compared to 6879 and 7275 basis points for the samecorresponding periodsprior-year in 2024.periods. The Company has contractually and voluntarily agreed to limit fund expenses, which resulted in fee waivers and expense reimbursements. As a result, the average investment management fee for the fixed income funds was minimal.
As of DecemberMarch 31, 2025,2026, the Company held investments carried at fair value on a recurring basis of $12.9$12.4 million and a cost basis of $13.1$13.2 million. The fair value of these investments is approximately 27.425.4 percent of the Company’s total assets at DecemberMarch 31, 2025.2026. In addition, the Company held other investments of approximately $2.8$4.7 million, and held-to-maturity debt investments, net of allowance for credit losses, of $958,000.$961,000.
Investments recorded at fair value on a recurring basis were approximately $12.9$12.4 million at DecemberMarch 31, 2025,2026, compared to approximately $13.8 million at June 30, 2025, the Company’s prior fiscal year end, which is a decrease of approximately $847,000.$1.3 million. See Note 2, Investments, in the Notes to Consolidated Financial Statements of this Quarterly Report on Form 10-Q, for further information regarding investment activities.
RESULTS OF OPERATIONS – Three months ended DecemberMarch 31, 2025,2026, and 20242025
The Company recorded net income of $2.7 million ($0.23 per share) for the three months ended March 31, 2026, compared with net loss of $846,000$382,000 ($(0.070.03) per share) for the three months ended DecemberMarch 31, 2025, compared with net loss of $86,000 ($(0.01) per share) for the three months ended December 31, 2024, representing a change of approximately $760,000.$3.1 million. The change was primarily attributable to higher net investment income, a favorable change in income tax expense/benefit, in the current period, partially offset by increasedhigher operating revenues, higher net investment income, and lower operating expenses, as discussed further below.
Total consolidated operating revenues for the three months ended DecemberMarch 31, 2025,2026, increased $279,000,$659,000, or 12.531.3 percent, compared with the same period in 2024.2025. The increase was primarily attributable to the following factors:
Total consolidated operating expenses for the three months ended DecemberMarch 31, 2025,2026, decreased by $172,000,$322,000, or 6.210.7 percent, compared with the same period in 2024.2025.
The decrease was primarily driven by a $143,000, or 11.1 percent, reduction in employee compensation and benefits, reflecting lower employee salaries, hiring costs, and profit sharing; a $138,000, or 56.8 percent, decline in advertising expenses, primarily attributable to elevated advertising spending in the prior-year period; and a $42,000, or 2.9 percent, decrease in general and administrative expenses, primarily due to lower ETF-related costs.
The decrease was primarily attributable to a $207,000, or 14.9 percent, reduction in general and administrative expenses, primarily related to lower ETF-related costs, partially offset by a $45,000, or 3.7 percent, increase in employee compensation and benefits, reflecting higher bonus expense.
Total consolidated other income was $623,000$1.7 million for the three months ended DecemberMarch 31, 2025,2026, an increase of $200,000$1.1 million compared with $423,000$648,000 in the prior yearprior-year period. The increase was primarily driven by higher net investment income, reflecting a favorable change in unrealized gains on investment securities and favorable foreign currency movements,securities, partially offset by lower realized gains on debt securities and lower interest and dividend income.
Net investment income totaled $541,000$1.7 million in the current period, compared with $354,000$548,000 in the prior yearprior-year period. The changeincrease was driven by the following factors:
IncomeThere was an income tax expensebenefit wasof $1.4 million$844,000 for the three months ended DecemberMarch 31, 2025,2026, compared with an income tax benefitexpense of $30,000$137,000 for the same period in 2024,2025, representing a change of $1.4approximately million.$981,000. The increase in income tax expensechange was primarily attributabledriven toby discrete tax adjustmentsitems, ofincluding $1.3a million481(a) adjustment related to the federal income tax treatment of certain HIVE convertible securities.securities Inand connectiona withdecrease itsin evaluationthe valuation allowance. These discrete items reduced income tax expense for the three months ended March 31, 2026, and had the effect of the appropriateoffsetting tax treatmentexpense ofrecognized these securities,in the Companythree determinedmonths that a change in tax accounting method would be required and subsequently filed a tax accounting method change request on Form 3115 with the Internal Revenue Service. As ofending December 31, 2025,2025. theAs methoda change had not yet been filed and, in accordance with U.S. GAAP,result, the Company’s interimeffective tax provisionrate doesmay not reflectbe taxcomparable accountingbetween method change.periods.
The Company filed the non-automatic Form 3115 subsequent to December 31, 2025. The Company expects to record an offsetting $1.3 million tax benefit in the quarter ending March 31, 2026. As a result, comparability of the Company’s effective tax rate between periods will be affected.
RESULTS OF OPERATIONS – SixNine months ended DecemberMarch 31, 2025,2026, and 20242025
The Company recorded net income of $661,000$3.3 million ($0.05$0.27 per share) for the sixnine months ended DecemberMarch 31, 2025,2026, compared with $229,000a net loss of $153,000 ($0.02$(0.01) per share) for the same period in 2024,2025, representing ana increasechange of approximately $432,000.$3.5 million. The increase was primarily attributable to higher net investment income, increased operating revenues, and lower operating expenses, partially offset by higher income tax expense in the current period, as discussed further below.
Total consolidated operating revenues for the sixnine months ended DecemberMarch 31, 2025,2026, increased by $373,000,$1.0 million, or 8.515.9 percent, compared with the same period in 2024.2025. The increase was primarily attributable to the following factors:
Total consolidated operating expenses for the sixnine months ended DecemberMarch 31, 2025,2026, decreased by $122,000,$443,000, or 2.25.2 percent, compared with the same period in 2024.2025.
The decrease was primarily attributabledriven toby a $298,000,$339,000, or 10.37.8 percent, reduction in general and administrative expenses, primarily relateddue to lower ETF-related costs. This decrease was partially offset by a $146,000, or 6.3 percent, increase in employee compensation and benefits, reflecting higher bonus expense,costs; and a $44,000,$93,000, or 18.019.1 percent, increasedecline in advertising expensesexpenses, relatedprimarily attributable to expandedelevated ETFadvertising marketingspending efforts.in the prior-year period.
Total consolidated other income was $3.0$4.7 million for the sixnine months ended DecemberMarch 31, 2025,2026, an increase of $1.6$2.7 million compared with $1.4$2.1 million in the prior yearprior-year period. The increase was primarily driven by higher net investment income, reflecting a favorable change in unrealized gains on investment securities, partially offset by lower realized gains on debt securities and lower interest and dividend income.
Net investment income totaled $2.8$4.5 million in the current period, compared with $1.3$1.8 million in the prior yearprior-year period. The changeincrease was driven by the following factors:
Income tax expense was $874,000 for the nine months ended March 31, 2026, compared with $229,000 for the same period in 2025, representing an increase of $645,000. The increase was primarily attributable to an increase in pretax income.
Income tax expense was $1.7 million for the six months ended December 31, 2025, compared with $91,000 for the same period in 2024, representing a change of $1.6 million. The increase in income tax expense was primarily attributable to $1.3 million tax adjustments related to the federal income tax treatment of certain HIVE convertible securities. In connection with its evaluation of the appropriate tax treatment of these securities, the Company determined that a change in tax accounting method would be required and subsequently filed a non-automatic Form 3115 with the Internal Revenue Service. As of December 31, 2025, the method change had not yet been filed and, accordingly, the Company’s interim tax provision does not reflect the tax accounting method change.
The Company filed the non-automatic Form 3115 subsequent to December 31, 2025. The expects to record an offsetting $1.3 million benefit in the quarter ending March 31, 2026. As a result, comparability of the Company’s effective tax rate between periods will be affected.
At DecemberMarch 31, 2025,2026, the Company had net working capital (current assets minus current liabilities) of approximately $36.7$36.2 million, a decrease of $580,000,$1.0 million, or 1.62.7 percent, since June 30, 2025, and a current ratio (current assets divided by current liabilities) of 19.420.9 to 1. With approximately $25.2$24.6 million in cash and cash equivalents, an increase of $675,000,$23,000, or 2.70.1 percent since June 30, 2025, and $12.9$12.4 million in securities carried at fair value on a recurring basis, which together comprise approximately 80.875.6 percent of total assets, the Company has adequate liquidity to meet its current obligations.
The increase in cash and cash equivalents was primarily due to proceeds from principal paydowns of $2.3 million, net cash provided by operating activities of $519,000, proceeds on the sale of corporate investments of $500,000, and return of capital distributions of $180,000, and net cash provided by operating activities of $224,000$174,000; partially offset by repurchases of the Company's common stock of $1.1$1.6 million, purchases of corporate investments of $918,000,$1.0 million, and dividends paid of $579,000.$862,000. Consolidated shareholders’ equity at DecemberMarch 31, 2025,2026, was $44.2$46.0 million, aan decreaseincrease of $1.0 million,$841,000, or 2.31.9 percent since June 30, 2025. The decreaseincrease was primarily driven by net income of $3.3 million, partially offset by repurchases of the Company's common stock (including excise tax) of $1.1$1.6 million,million and $571,000$849,000 of dividends declared, partially offset by net income of $661,000declared during the sixnine months ended DecemberMarch 31, 2025.2026.
The Company also has access to a $1.0 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, 2026, and the Company intends to renew it biennially. The credit facility is collateralized by approximately $1.0 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 DecemberMarch 31, 2025,2026, this credit facility remained unutilized by the Company.
GROW insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 4 Form 4 filings (2 insiders, 11 trade dates, 118,238 shares, about $304.6K) and open-market sales in 0 filings. Net open-market shares: 118,238 (purchases minus sales); net value about $304.6K.Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-09-30 | Holmes Frank E |
Other | 829 | $2.88 | $2.4K |
| 2026-09-30 | Callicotte Lisa |
Other | 328 | $2.88 | $945 |
| 2026-08-31 | Holmes Frank E |
Other | 729 | $3.27 | $2.4K |
| 2026-08-31 | Callicotte Lisa |
Other | 289 | $3.27 | $945 |
| 2026-07-31 | Holmes Frank E |
Other | 835 | $2.86 | $2.4K |
| 2026-07-31 | Callicotte Lisa |
Other | 331 | $2.86 | $947 |
| 2026-06-30 | Holmes Frank E |
Other | 764 | $3.12 | $2.4K |
| 2026-06-30 | Callicotte Lisa |
Other | 303 | $3.12 | $945 |
| 2026-06-03 | Pilecki Derek Steven |
Open-market purchase | 330 | $2.60 | $858 |
| 2026-06-03 | Gator Capital Management, Llc |
Open-market purchase | 330 | $2.60 | $858 |
| 2026-06-02 | Pilecki Derek Steven |
Open-market purchase | 20,496 | $2.59 | $53.1K |
| 2026-06-02 | Gator Capital Management, Llc |
Open-market purchase | 20,496 | $2.59 | $53.1K |
| 2026-05-29 | Holmes Frank E |
Other | 904 | $2.64 | $2.4K |
| 2026-05-29 | Callicotte Lisa |
Other | 359 | $2.64 | $948 |
| 2026-05-28 | Gator Capital Management, Llc |
Open-market purchase | 1,376 | $2.60 | $3.6K |
| 2026-05-28 | Pilecki Derek Steven |
Open-market purchase | 1,376 | $2.60 | $3.6K |
| 2026-05-21 | Gator Capital Management, Llc |
Open-market purchase | 23,910 | $2.55 | $61.0K |
| 2026-05-21 | Pilecki Derek Steven |
Open-market purchase | 23,910 | $2.55 | $61.0K |
| 2026-05-13 | Gator Capital Management, Llc |
Open-market purchase | 3,601 | $2.55 | $9.2K |
| 2026-05-13 | Pilecki Derek Steven |
Open-market purchase | 3,601 | $2.55 | $9.2K |
| 2026-05-12 | Gator Capital Management, Llc |
Open-market purchase | 404 | $2.55 | $1.0K |
| 2026-05-12 | Pilecki Derek Steven |
Open-market purchase | 404 | $2.55 | $1.0K |
| 2026-05-11 | Gator Capital Management, Llc |
Open-market purchase | 5,354 | $2.62 | $14.0K |
| 2026-05-11 | Pilecki Derek Steven |
Open-market purchase | 5,354 | $2.62 | $14.0K |
| 2026-05-08 | Gator Capital Management, Llc |
Open-market purchase | 208 | $2.62 | $545 |
| 2026-05-08 | Pilecki Derek Steven |
Open-market purchase | 208 | $2.62 | $545 |
| 2026-05-07 | Gator Capital Management, Llc |
Open-market purchase | 2,976 | $2.62 | $7.8K |
| 2026-05-07 | Pilecki Derek Steven |
Open-market purchase | 2,976 | $2.62 | $7.8K |
| 2026-05-06 | Gator Capital Management, Llc |
Open-market purchase | 259 | $2.61 | $676 |
| 2026-05-06 | Pilecki Derek Steven |
Open-market purchase | 259 | $2.61 | $676 |
| 2026-05-01 | Gator Capital Management, Llc |
Open-market purchase | 205 | $2.63 | $539 |
| 2026-05-01 | Pilecki Derek Steven |
Open-market purchase | 205 | $2.63 | $539 |
| 2026-04-30 | Holmes Frank E |
Other | 907 | $2.63 | $2.4K |
| 2026-04-30 | Callicotte Lisa |
Other | 359 | $2.63 | $944 |
Well-known investors holding GROW (13F)
None of the 59 investors we track reported a position in their latest 13F.