U.S. Global Investors, Inc.

Good morning and thank you for joining us today for our webcast announcing U.S. Global Investors results for the first quarter of fiscal year 2020. I'm Holly Schoenfeldt. If you have any questions during the webcast, you can enter them in the questions area of the control panel sidebar, which is normally to the right of your screen. Also, you may download a PDF of today's slides by clicking on the red handout button. The presenters for today's program are Frank Holmes, U.S. Global Investors CEO and Chief Investment Officer, Lisa Callicotte, Chief Financial Officer, and myself, Holly Schoenfeldt, Marketing and Public Relations Manager During this webcast, we may make forward-looking statements about our relative business outlook Any forward-looking statements and all other statements made during this webcast that don't pertain to historical facts are subject to risks and uncertainties that may materially affect actual results Please refer to our press release in corresponding form 10-Q filing for more detail on factors that could cause actual results to differ materially from any described today and forward-looking statements. Any such statements are made as of today, and U.S. Global accepts no obligation to update them in the future. On slide 4, you'll see a quick overview of U.S. Global. We are an innovative investment manager with vast experience in global markets and specialized sectors. Founded as an investment club, the company became a registered investment advisor in 1968 and has a long-standing history of global investing and launching first-of-their-kind investment products, including the first no-load gold fund. U.S. Global is well-known for expertise in gold and precious metals, natural resources, and emerging markets. And now on slide five, I'm going to pass it over to Frank Holmes, CEO and CIO, for an overview of the period. Frank?

Thank you, Holly. I'm just flown in red-eye from Lima, thinking of a mining conference, institutional mining conference in Miami, so you hear any noise, I'm flying again, so hopefully that helps the JETS ETF. So the growth strengths are a stride to go-to stock, exposure to emerging markets, resources, gold, and digital currencies. We're debt-free with a strong balance sheet that reflects a cost structure. and I'll talk about that as we continue to streamline our team cost structure later in the presentation and the monthly dividend return on equity discipline. I want to thank all the top institutional holders of GROW, the Royce & Associates, the Farrick Capital Management, FIM, Paul Sutherland and his team, BlackRock Institutional Trust Company and Toroso Investments. When we take a look at it, we've consistently paid dividends for the past 10 years with a modest yield. The board has approved the repurchase of up to $2.75 million of outstanding common stock. And for this past period, we've proxied very little of it because we use a quant model that basically buys on down days. It's the volatility. It's only when it's on very volatile down days that it automatically triggers a buy. I'd like to hop on to slide number nine. You see the balance sheet here. remain strong with no debt, and Lisa can talk a little bit more about that. And earnings, for sure, quarterly, we'll talk a little bit more how we're being impacted by the volatility of long-term investments, which was really the worst quarter I've ever seen, where we've made two strategic investments, and we've been subject to different reasons, but seeing early investors in both those companies. Good morning, Michael. How are you? Sorry about that. And so they've had liquidity events. One had a liquidity crisis and they had to blow all their stock out and knocked it down. That impacted us. But the company continues to be a leader in AI machine learning and growing your revenue and the cash flow. And the other one is the saga of Genesis Mining. The company has been able to move away from Genesis Mining, particularly now taking control of the Swedish assets, and the fundamentals are doing quite well. But Genesis Mining was a big seller of stock. They actually didn't even disclose and then six weeks later they disclosed that they sold a lot of stock and they had suppressed it. But that's just the way they function, in my opinion, that behavior is unstable for capital markets and we'll just push through because the company's doing well with liquid assets. Now I'd like to hop into the next slide, 11, and talk about the quarterly average assets under management. They're relatively stable. We're starting to get some good flows in our ATF, GoAU, but still there's flows into the gold funds, but still really no growth, whereas the industry as a whole, Holly's going to talk about, is still going through a big contraction. What's really important for all our shareholders is to recognize we're very volatile because underlying funds that we have, such as gold stocks, they have a greater volatility than the S&P 500. Even though bullion is not so volatile in a 12-month period, gold stocks are, emerging markets are, and Bitcoin and Ethereum are. So we're sort of subject to these emerging markets and commodity bases, and it shows up in our stocks. So that's just important for investors to recognize. Some real positive developments is that GoAU ETF is listed on the LPL Financial and Stifel platforms. This is a national footprint across the platforms. Stifel has over $263 billion. and 2,500 advisors and LPL has over 700 billion and 6,000 advisors. So we're doing more marketing. We had our biggest success last week with a webcast, a record number of people listened to it regarding gold. Next visual is showing the growth in GoAU. Assets under management year over year continue to grow. $38 million, we're getting to that break-even level, but assets pretty well surge close to 300%. and I just think it's a shock by the fact that it's just so difficult marketing the benefits and the whole process of telling that story that's a superior product and that's just none of the gold funds or ETFs so far really caught up to its numbers in that quant approach. But then I take a look at the next visual just to remind you I showed you the Europe trading what happens but short term volatility over 10 days as you can see Bitcoin, Ethereum are just Very, very volatile, and that impacts high blockchain, one of the major investments, which we have 10 million shares on. And next visual, I'll try to highlight the investors, the major events moving the price of Bitcoin. A lot recently is sentiment. Sentiment, sentiment, sentiment. Meeting of Facebook going in front of the Senate and Congress and the financial sector just automatically sells off. And then once that meeting is over, it bounces back up. So we're experiencing just a lot of sentiment driven But to me, most interesting on slide number 17 is that the number of cryptocurrency wallet users keep rising. So over 36 million crypto wallets have created so far. And then on the next visual, it was a year ago that I announced that I would go on as the interim CEO. And now I'm still now actually able to focus on looking for another CEO. I've done some interviews. The highest latest updates is on slide number 19. If you've not read them, I highly recommend it. An incredible year. We were able to only have two employees. We've now attracted a great director, a YPO CEO that's an expert, which we've never had on the corporation board in building data centers. So Dave Perel is a big addition. We're liquid. We have lots of cash. It's just the stock does not reflect the great fundamentals that's taking place in this company. And looking ahead, we're a big believer that AI and machine learning, they're going to need these GPU chips that we have in Sweden. So we were very bullish on the use of this. The next list will just give you a highlight of what took place with this with this unfortunate proxy battle where the Genesis Mining said I was just too old, but not too old to turn around a company and get a position for growth and getting complete transparency. So you can see that the stock used to trade a very high correlation to Ethereum and it bifurcated and the biggest seller has been in particular in the month of July that was reported in August for selling. There were big sellers all through the month of July. But hopefully soon, whoever's been selling is out because the company's fundamentals remain robust and strong. The other major investment made is a macro forces and technology we'd like to talk about is AI and the machine learning and that's GoldSpot. I'd like to turn it over to Lisa.

Thank you, Frank. Good morning. Now I'll discuss the results of operations for the quarter ending September 30th, 2019. Beginning on page 24, we recorded total operating revenues of $904,000 for the quarter, which is a decrease of $319,000, or 26%, from the $1.2 million in the same quarter last year. This decrease is primarily due to decreases in asset center management related to shareholder redemptions. Operating expenses for the current quarter were $1.7 million, a decrease of $187,000 or 10%, primarily due to the following reasons. Employee compensation and benefits decreased $58,000 or 7%, mainly due to decreases in salary expense, and general and administrative expenses decreased $107,000 or 11%, primarily due to decreases in fund expenses. We see our operating loss for the quarter ending September 30, 2019 is $815,000. On slide 25... We see that other income and loss for the quarter was a loss of $3 million. It was mainly related to unrealized losses on investments. And non-operating losses increased $2.1 million from the same quarter in the prior year. Net loss attributable to USGI after taxes for the quarter was $3.6 million, a loss of $0.24 per share, which is a decrease of $2.4 million compared to the net loss of $1.1 or $0.08 per share from the same quarter in the prior fiscal year. Moving to page 26, we see we still have a strong balance sheet. It includes high levels of cash and unrestricted marketable securities that combine to make up 67% of our total assets. And on page 27, we see we still have no long-term debt, and our only long-term liabilities are lease obligations. The company had a net working capital of $10.7 million and a current ratio of 8.9 to 1. With that, I'll turn it over to Holly.