U.S. Global Investors, Inc. operates in the highly competitive investment management industry, offering a range of investment management products and services to individual and institutional investors through its two business segments: Investment Management Services and Corporate Investments ¹. The mutual fund industry is highly competitive, with approximately 8,000 domestically registered open-end investment companies and approximately 4,800 exchange-traded funds offered to the public in the U.S. at the end of 2025 ². The Company competes with a large number of investment management firms, commercial banks, broker-dealers, insurance companies, and other financial institutions ³. Competition is based on investment performance, investor perception, quality of service, business reputation, and level of fees charged ⁴. The Company is known for its expertise in gold mining and exploration, natural resources, and airlines ⁵.

The Company's competitive positioning is supported by its specialized expertise in gold mining and exploration, natural resources, and airlines, which it believes provides it with the resources, products, and personnel to compete effectively within the investment advisory industry ⁶. However, the Company faces the same obstacles many advisers face, including uncovering undervalued investment opportunities amid market uncertainty and increased volatility ⁷. The growing number of alternative investments, especially in specialized areas, has created pressure on profit margins and increased competition for available investment opportunities ⁸. The Company's operating results are particularly dependent on the performance of one fund, the U.S. Global Jets ETF, which represented 53 percent and 69 percent of average net assets for fiscal years 2026 and 2025, respectively, and 47 percent and 69 percent of total operating revenues for the same periods ⁹.

The Company generates revenue primarily through investment advisory services and administrative services provided to mutual funds and ETFs, as well as investment income from its corporate investments ¹⁰. 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 ¹¹. The Company receives a management fee of 0.60 percent of average net assets for its U.S.-based ETFs ¹². The Company also serves as investment adviser to one European-based ETF, The Travel UCITS ETF, which pays a unitary management fee of 0.69 percent of average net assets ¹³. The Company has agreed to bear all expenses of the U.S.-based ETFs, except the U.S. Global Sea to Sky Cargo ETF, and has contractually agreed to limit the expenses of the U.S. Global Sea to Sky Cargo ETF through April 2027 ¹⁴. The Company has also agreed to bear all expenses of TRIP ¹⁵.

The Company's Investment Management Services segment offers investment management products and services to U.S. Global Investors Funds and ETF clients ¹⁶. As of June 30, 2026, total AUM was $1.7 billion, compared to $1.3 billion on June 30, 2025, an increase of $348.3 million, or 26.3 percent ¹⁷. The increase was driven primarily by growth in the USGIF and ETF clients focused on the gold and natural resources sector, and the Jets ETF ¹⁸. 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 ¹⁹. The Company's U.S.-based ETFs include the U.S. Global Jets ETF, U.S. Global Sea to Sky ETF, U.S. Global GO GOLD and Precious Metal Miners ETF, and U.S. Global Technology and Aerospace & Defense ETF ²⁰. The Company also serves as investment advisor to one European-based ETF, The Travel UCITS ETF ²¹.

The Company's USGIF funds include gold and natural resources funds, international equity funds, and bond funds ²². 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 ²³. 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 ²⁴. The average annualized investment management fee rate for USGIF was 79 basis points in fiscal year 2026 and 63 basis points in fiscal year 2025 ²⁵. The average investment management fee for equity funds was 88 basis points and 76 basis points in fiscal years 2026 and 2025, respectively ²⁶. The average investment management fee for the fixed income funds was nil for both fiscal years due to fee waivers ²⁷. During fiscal years 2026 and 2025, the Company recorded advisory fee revenue from USGIF of approximately $3.8 million and $1.7 million, respectively ²⁸.

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 ²⁹. 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 ³⁰. During the phase-out period, the adjustment could only reduce advisory fees, and as a result, advisory fees were reduced by $247,000 in fiscal year 2025 ³¹. The elimination of the performance fee adjustment contributed to the increase in USGIF advisory fees during fiscal year 2026 ³². The Company also recorded USGIF administrative services fees of $219,000 in fiscal year 2026, compared to $127,000 in fiscal year 2025, an increase of 72.4 percent ³³.

The Company had net income of $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, for the year ended June 30, 2025, a change of approximately $3.4 million ³⁴. Total consolidated operating revenues increased $1.8 million, or 21.3 percent, to $10.3 million in fiscal 2026, compared to $8.5 million in fiscal 2025 ³⁵. Total consolidated operating expenses decreased $584,000, or 5.1 percent, to $10.9 million in fiscal 2026, compared to $11.4 million in fiscal 2025 ³⁶. Net investment income was $4.1 million in fiscal 2026, compared to $2.4 million in fiscal 2025, an increase of 73.3 percent ³⁷. Income tax expense was $829,000 for fiscal 2026, compared to $72,000 for fiscal 2025, an increase of $757,000 ³⁸.

Management anticipates that the advisory agreement with USGIF will be renewed, as the Board of Trustees of USGIF approved the annual renewal in September 2025 ³⁹. The advisory agreements for the U.S.-based ETFs have been renewed through July 2027 ⁴⁰. The investment advisory and related contracts between the Company and USGIF have been renewed through September 2026 ⁴¹. 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 ⁴².

Management remains focused on growing assets under management through differentiated investment strategies, expanding distribution opportunities, and prudently managing market and geopolitical risks ⁴³. 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 ⁴⁴. The Company's growth is supported by the continued investor preference for ETFs over traditional mutual funds, as the ETF industry continued to attract net inflows due to its transparency, liquidity, and tax efficiency ⁴⁵. The travel and tourism industry remained resilient throughout the fiscal year, benefiting the Company's travel-focused products, including the U.S. Global Jets ETF and the U.S. Global Travel UCITS ETF ⁴⁶.

The Company's growth is also driven by the strong performance of the gold and natural resources sector, as gold prices reached record highs during the period, benefiting precious metals mining and royalty companies and supporting investor demand for related investment strategies ⁴⁷. The Company's corporate investments segment is actively engaged in investing for its own account in an effort to add growth and value to its cash position ⁴⁸. Management believes it can more effectively manage the Company's cash position by maintaining certain types of investments utilized in cash management ⁴⁹.

The Company's margin and cost outlook is influenced by the costs of distribution and compliance, which continue to put pressure on profit margins for the investment advisory industry ⁵⁰. Regulatory pronouncements and oversight have significantly increased the burden of compliance infrastructure with respect to the investment advisory industry and the capital markets, contributing significantly to the costs of managing and administering mutual funds ⁵¹. The Company's operating expenses decreased 5.1 percent in fiscal 2026, primarily due to a decrease in general and administrative expenses of $454,000, or 7.8 percent ⁵².

The Company's operational outlook includes its reliance on technology infrastructure and third-party service providers for its business operations ⁵³. The Company has implemented a comprehensive technology and cybersecurity program as part of its overall risk management strategy, emphasizing defense, rapid detection, and swift remediation of cybersecurity threats and incidents ⁵⁴. The Company's Director of Information Technology leads its cybersecurity program and reports directly to the CEO, supported by a Senior Systems Administrator, bringing over 65 years of combined information technology experience ⁵⁵. The Company leverages external partners to provide expanded monitoring coverage and triage of events, offering 24/7/365 coverage and initial mitigation through continuous monitoring and security alerts ⁵⁶.

The Company's capital allocation strategy includes 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 through December 31, 2026 ⁵⁷. The repurchase program has been in place since December 2012, and the Board of Directors has annually renewed the repurchase program each calendar year ⁵⁸. On February 25, 2022, the Company announced that its Board of Directors had approved an increase in the annual share repurchase authorization from $2.75 million to $5.0 million ⁵⁹. The Board of Directors subsequently approved annual share repurchase authorizations of $5.0 million for each calendar year from 2023 through 2026 ⁶⁰. As of June 30, 2026, the Board of Directors has authorized a monthly dividend of $0.0075 per share from July 2026 through September 2026 ⁶¹. The total amount of cash dividends to be paid to class A and class C shareholders from July 2026 to September 2026 will be approximately $279,000 ⁶².

The Company faces headwinds from the intense competition in the investment management business, which could reduce revenues and earnings if the Company is unable to compete effectively ⁶³. The Company's clients can terminate their agreements on short notice, which may lead to unexpected declines in revenue and profitability ⁶⁴. The Company's operating results are particularly dependent upon the performance of one fund, the U.S. Global Jets ETF, and its ability to maintain and grow assets under management in that fund ⁶⁵. If this fund were to experience a significant decrease in market value or redemptions, the Company's assets under management would be reduced, adversely affecting revenues ⁶⁶.

The Company also faces constraints from the volatility of cryptocurrency markets, as it has indirect exposure to cryptocurrencies by investing in securities of issuers with operations in the cryptocurrency industry, such as mining companies, as well as in ETFs that hold cryptocurrency-related assets ⁶⁷. Cryptocurrency markets and related stocks have been, and are expected to continue to be, volatile, which may have a material impact on the Company's financial statements and thus affect the Company's common stock market price ⁶⁸. Additionally, the Company is subject to regulatory developments such as the GENIUS Act, enacted in July 2025, which imposes a new federal regulatory framework on payment stablecoin issuers, and while the Company's operations are not directly affected, certain companies in which it invests may be subject to these requirements, which could adversely affect the value of its investments ⁶⁹.

Management's message to shareholders emphasizes the Company's focus on growing assets under management through differentiated investment strategies, expanding distribution opportunities, and prudently managing market and geopolitical risks ⁷⁷. 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 ⁷⁸. Management anticipates that the advisory agreement with USGIF will be renewed, and the advisory agreements for the U.S.-based ETFs have been renewed through July 2027 ⁷⁹. The Company's strategic priorities include maintaining its expertise in gold mining and exploration, natural resources, and airlines, while also capitalizing on the continued investor preference for ETFs over traditional mutual funds ⁸⁰.

Total consolidated operating revenues for the year ended June 30, 2026, increased $1.8 million, or 21.3 percent, to $10.3 million, compared to $8.5 million for the year ended June 30, 2025 ⁸¹. Net income for fiscal 2026 was $3.1 million, or $0.24 per share, compared with a net loss of $334,000, or $(0.03) per share, for fiscal 2025 ⁸². Total consolidated operating expenses decreased $584,000, or 5.1 percent, to $10.9 million in fiscal 2026, compared to $11.4 million in fiscal 2025 ⁸³. Net investment income was $4.1 million in fiscal 2026, compared to $2.4 million in fiscal 2025, an increase of 73.3 percent ⁸⁴. Income tax expense was $829,000 for fiscal 2026, compared to $72,000 for fiscal 2025, an increase of $757,000 ⁸⁵. At June 30, 2026, the Company had net working capital of approximately $35.7 million and a current ratio of 19.7 to 1 ⁸⁶. Total shareholders' equity was approximately $45.1 million ⁸⁷. Cash and cash equivalents decreased $222,000 during fiscal 2026, primarily due to $2.0 million of common stock repurchases, $1.1 million of dividend payments, and $1.2 million of corporate investment purchases, partially offset by $742,000 of net cash provided by operating activities and $2.3 million of proceeds from principal repayments on investments ⁸⁸. Shareholders' equity decreased $68,000, or 0.2 percent, from June 30, 2025, primarily reflecting $2.0 million of common stock repurchases and $1.1 million of dividends declared, partially offset by net income of $3.1 million for fiscal 2026 ⁸⁹. The Company also has access to a $1.0 million credit facility, which can be utilized for working capital purposes, and as of June 30, 2026, this credit facility remained unutilized ⁹⁰. The credit agreement will expire on May 31, 2028, and the Company intends to renew it biennially ⁹¹. The credit facility is collateralized by approximately $1.0 million, included in restricted cash, held in deposit in a money market account ⁹². As of June 30, 2026, investments measured at fair value on a recurring basis totaled $11.7 million, representing approximately 24.4 percent of total assets ⁹³. The Company also owned other investments of approximately $4.7 million classified as securities without readily determinable fair values and held-to-maturity debt investments, net of allowance for credit losses, of $972,000 ⁹⁴. In fiscal year 2026, the Company recorded advisory fee revenue from USGIF of approximately $3.8 million, compared to $1.7 million in fiscal year 2025, an increase of approximately $2.2 million, or 128.2 percent ⁹⁵. Advisory fees from all ETF clients totaled $6.2 million and $6.6 million during fiscal years 2026 and 2025, respectively ⁹⁶. The Company recorded USGIF administrative services fees of $219,000 in fiscal year 2026, compared to $127,000 in fiscal year 2025, an increase of 72.4 percent ⁹⁷. The fiscal 2026 results included net realized and unrealized gains of $3.2 million from equity investments accounted for under the measurement alternative, compared to realized losses of $362,000 in fiscal 2025 ⁹⁸. 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 ⁹⁹. Realized gains on debt securities decreased $502,000 to $108,000 in fiscal 2026 from $610,000 in fiscal 2025 ¹⁰⁰.

The Company's operating results are particularly dependent upon the performance of one fund, the U.S. Global Jets ETF, which represented 53 percent and 69 percent of average net assets for fiscal years 2026 and 2025, respectively, and 47 percent and 69 percent of total operating revenues for the same periods ⁷⁰. A significant decrease in market value or redemptions in this fund would reduce assets under management and adversely affect revenues ⁷¹. The Company has indirect exposure to the cryptocurrency markets through its investments in securities of issuers with operations in the cryptocurrency industry, such as mining companies, and in ETFs that hold cryptocurrency-related assets ⁷². Cryptocurrency markets have been subject to significant fluctuations in value, and the value of a cryptocurrency may significantly fluctuate precipitously, including declining to zero, and unpredictably ⁷³. The Company has identified a material weakness in its internal control over financial reporting, which could adversely affect its ability to report financial results accurately and on a timely basis ⁷⁴. The Company's clients can terminate their agreements on short notice, and the investment advisory agreements are generally terminable on short notice and subject to annual renewal ⁷⁵. If the Company's investment advisory agreements are terminated, the Company may experience a decline in revenues and profitability ⁷⁶.