U.S. Global Investors, Inc.

Good morning, everyone. Thank you for joining us today for our webcast announcing U.S. Global Investors results for the quarter ended March 31st, 2022. I'm Holly Schoenfeld. As seen on slide number two, as you can see on slide number two, the presenters for today's program are Frank Holmes, U.S. Global Investors CEO and Chief Investment Officer, Lisa Calicott, Chief Financial Officer, and myself, Holly Schoenfeld, Director of Marketing. On slide three, as always, we would love to offer anyone tuned in today one of our Jets, GoAU, Hive, or Sea hats. In addition, we have Jets luggage tags available. All you have to do is send us an email with your physical mailing address to info at usfunds.com. Moving on to slide number four, 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 and corresponding form 10-Q filing for more detail on factors that could cause actual results to differ materially from any described today in forward-looking statements. Any such statements are made as of today and U.S. Global accepts no obligation to update them in the future. Moving on to slide number five, I will briefly review our company. U.S. Global Investors is an innovative investment manager with vast experience in global markets and specialized sectors. It was originally founded as an investment club, becoming a registered investment advisor in 1968. The company has a longstanding history of global investing and launching first-of-their-kind investment products, including the first no-load Gold Fund. We are well known for expertise in gold and precious metals, natural resources, airlines, emerging markets, and cryptocurrencies. Moving on to slide number six, I would like to hand the presentation over to Frank Holmes to review what we believe is one of our most helpful visuals when it comes to investing, not only in grow, but in any asset class. Frank.

Thank you, Holly. The DNA of volatility is another way of looking at capital markets. and risk and volatility are all intertwined. And this is a visual updated statistically of looking at what one day volatility is 70% of the time. And for the S&P it's 1%. So whenever it's up more than that or down, uh like three percent in a day that mathematically odds favor for a bounce the next day uh the other part is the 10-day volatility whenever it's plus or minus three percent as you notice that gold and the stock market are actually the same which shocks a lot of people whereas asset managers index it's minus or plus two percent on a daily basis and five percent over ten days The airlines, which we have a huge asset class in our portfolio, New York, listed on the New York Stock Exchange, are ETF jets. But this is to compare to the ARCA airline global index. And it's non-event for it to go up or down 2% a day and 7% over a 10-day period. What influences this index the most is the rotation in oil. And oil has a greater volatility on a daily basis of 10-day And oil is the largest cost to the airlines industry. Bitcoin is plus or minus 3%. It's having a rough day. And we took the 10-day for it. It's plus or minus 11%. And Tesla is the same as Bitcoin. And Ethereum is even more volatile. And Bro is basically as volatile as Ethereum. When you look at over one day or over a 10-day period, it's because of our investments in high blockchain, in the gold space, and also in the airlines, and airlines representing the largest component of our overall assets today. What's driving Grow? Growing assets under management. And this every day you can download and get this information from Yahoo Finance or Bloomberg in particular. And I'm going to walk you through how most people calculate what our potential operating revenue is going to be. And gold is an inflation hedge because of our gold funds and the airline recovery because of our substantial investment in the airlines industry and having JETS ETF listed not only in the New York Stock Exchange, but it is listed in Mexico City. It is also listed in Lima, Peru, which means institutions can buy in these other jurisdictions. And it's also in partnership with High End ETF in London. The Jets ETF was listed in the London Stock Exchange. And then the key investment in the crypto space has been high blockchain, which is exceedingly volatile, which has impacted our overall performance of our stock and sometimes creates a sort of more of an interest in what's happening with crypto than our underlying operating cash flow. But nevertheless, and more important, is I really want to thank our top institutional shareholders, In particular, those at Royce Funds have been long-term partners in our company. And Parrot Capital Management is a specialist firm in small micro-cap stocks and also alternative asset classes like gold. And then there's the Heartland Funds, also a small-cap value specialist with a phenomenal track record. And then we have the BlackRock Institutional Trust and the Vanguard Index, where they're basically having a good percentage. But the real, I say the active investors here are Royce and Parrot and Heartland Advisors. And I want to thank all of you, anyone that's invested in U.S. Global. I myself own approximately 17% of the company. So when we look back, we've increased our dividends by 200% in 2021. The company's paid a monthly dividend since 2007. Current yield at a share price of 532 as of April the 22nd was 1.69%. Stock goes down, that dividend yield is rising. The monthly dividend payment is 0.0075. It's been approved through June of 22. It's reviewed by the board quarterly. The other thing that we've done is had a share repurchase program in motion. And on February 25th of this year, 2022, the board directors of the company approved over an 80 increase the limit of its annual share buyback program from 2.75 million to 5 million and for the quarter end of march 31st 2022 the company repurchased 19 487 shares of its class a shares using cash or approximately 97 000 and the board may suspend or discontinue this at any time but i think what's important for investors is elisa will go on to later in the presentation, more granular detail on the stock buyback. And really this number for the past quarter is predominantly when the new program was implemented in the month of March. Next, please. Is Grow as a ticker, 4.1 billion in assets as of the end of March and 6.2 million in quarterly operating revenue. The stock price had a heck of a run last year because of investment in high blockchain and the whole crypto space uh when it ran to twelve dollars and traded its whole float um and go came elon musk uh with negative concerns on crypto mining and even though hive has the strongest esg footprint and green only energy it tumbled down with all the other crypto mining stocks uh and uh as bitcoin as it shows you here hit $60,000. Hive hit $7. Grow went to $12. The quarterly average assets under management, and that's something I want to focus on this presentation today for shareholders. Even with Omicron coming along and the fears and the shutdowns and opening up again, And now we have China with another continued lockdown. The assets of jets remain pretty stable, and there's lots of trading activity with the price of oil. The price of oil falls, then jets goes up. The price of oil rises, jets goes down. People are shorting, going long. Tremendous two-way traffic trading because of its liquidity. And I think it's important because it also then attracts larger institutional investors. The big news this past quarter was the removal of masks for flying domestic flights, and that had a big surge in fund flows into the JETS ETF. Now, something else that's in the financials that are filed is how mark-to-market of investments impacts non-realized earnings. This is in detail, and Lisa can at any time go into detail if people need it down the road. But it's basically showing you a 25% increase or a 25% decrease in the equity securities at fair value and the embedded derivatives of fair value in particular are the warrants that we own on high blockchain. those warrants value beyond intrinsic value have to do with black shoals. So it has a bigger valuation and therefore has a greater volatility to it in dollar terms. So what this is really to help you to understand is that each quarter, this mark to market of long-term investments unrealized gains and losses do impact your quarter over quarter results and your annual results. This is just a hypothetical case study to show you what happens when it's 25%. And that we know can happen very quickly with capital markets, in particular, the asset classes, which we are known for. Gold, it's nothing for it to go up or down 25% in a quarter, the airlines, and also when it comes to the crypto space. But we're really happy that we got all our financials out and we saw that building our cash and what our numbers were, growth versus a small cap asset managers, we far outperformed for the quarter. And I think that's what's important for investors. And I'm going to walk you through some financial granularity, but we're thrilled that we've been able to sort of maintain our positioning and outperforming. And even with the meltdown the past day, we still on a relative basis have far outperformed this year, the Russell 2000, the Dow Jones US Asset Managers Index. So looking at the quarter, this is actually the end of Uh, December, but when we look at those numbers and we'll get them updated, uh, for this quarter end is all the numbers come in, but you can see here that our PE ratio is the lowest. Um, and it is, uh, compared to Invesco and wisdom tree, uh, 40% of Invesco assets. So the QQQ, uh, and wisdom tree, which is predominantly. It's only ETFs. They have a higher PE ratio and ours is 80%. So I would expect that we would have a bigger PE ratio. And I think that that's what's going to happen as we go through and continue to build cash on our balance sheet and launch new products. Now, for investors to understand, I mentioned earlier, it's easy to take a look at our performance of our assets each day. Fund flow is coming in and out. And the total asset picture is easy to download, which fund managers I know do. And if we have $100 million in assets and it's a 60 basis points is the expense ratio, then the advisor's revenue is $600,000 per $100 million. And as you can see at $4 billion, it's $24 million in revenue. Deduct your costs and you basically have what your free cash flow is. So our goal is to get back and actually surpass September of 2011 when our balance sheet was flush with cash. It had $28 million in cash and cash equivalents. And you can see in March of 2020, and this excludes the investments we had in other companies such as Hive and Thunderbird, et cetera. But just as our cash and cash equivalents, at the bottom, basically of the capital markets due to COVID, we had 2.1 million in cash. A year later, we had 9.5 million, and now we have $26 million in cash, which is great. But our goal is to get the $30 million, and then the board can make decisions with the additional free cash flow to buy back more stock or to increase the dividend. So earnings, earnings come from two factors. Operation earnings basically are cashflow. Investment earnings are realized and unrealized. And that's the mark to market phenomenon that we talked about earlier that you must be reporting to be in compliance with GAAP. And so when you add those together, you get earnings. So what's important for US Global is that our operating earnings are very, healthy, robust, and strong, even with the big capital meltdown that took place in the first quarter of 2022. Our capital structure and our capital strategy is quite simple. Manage expectations for new product launches. This requires cash. Manage and preserve cash for future growth opportunities and market corrections like we're experiencing today. And strategically buy back stock using an algorithm on down days. Discussed and reviewed with the board on a regular basis. This is what our strategy is and we're sticking to it. Now, this to me is an important visual to give you a history of buying back growth stock. If you take a look at September of 2021, we purchased back to about $81,000 worth of stock, 13,000 shares. And then it fell during December and it was less downgrades, but you can see we bought back only 54,000. So the more volatile growth is, the more we're gonna buy back. That's basically what the algorithm is saying. And what the board has done is increase that commitment to buy back even more on the down days. And when we come to March 2022, as you can see, we've bought back $97,000 worth, which is 19,000 shares. But in the January, February, the new plan had not been able to launch until we had the financials up. And that basically is the month of March. So going forward, we expect to be purchasing back much more stock on these down days. This is another simple visualization of looking at the numbers. As you can see here, in 2021, we bought back $181,000 worth of stock. And in 2022, it's $233,000 worth of stock. And with an 80% increase in the amount of stock being bought back, then I think we're going to see substantially more stock based on the algorithm. And based on the volatility, if we do not have high volatility, it does impact the algorithm. Understanding compensation structure. Employees' day salaries historically have been modest. However, employee bonuses are tied directly to the individual's accomplishments and hard work and focused work ethic. We have seven core values that tie to the individual. And then there's team results and team efforts. So leaders can definitely, with further education, earn bonuses in addition to stock options and cash bonuses. Myself, the CEO, I receive bonuses based on realized earnings and based on free bonuses. on free cash flow and earnings and realize gains from investments not from unrealized only when something's going to follow the bottom line This is something in talking to some of the new, relatively new institutional investors that understand what's going on in capital markets, that mutual funds continue to see net redemptions and declines, and ETFs continue to have fund flows. And thank God we pivoted in 2015 to go and launch Jets. As I've mentioned before, we tried in the interim to launch a Bitcoin ETF, but realize it wasn't going to happen. So we launched the first crypto mining company, a high blockchain, which has been a significant, important investment for our company. And it's our proxy in the blockchain crypto build out in that ecosystem of the world. The next visual is just showing the epic growth in ETFs. As you can see, since 2011, the last time we had this abundance of cash over in the direction of 26 million, we had 28 million back then. We've seen over a five-fold increase in the number of ETFs. So ETFs are definitely for tax efficiency and for many other reasons. or less expensive to operate are garnering more and more assets for funds for saving. And also institutional money is much more rapidly is using ETFs as a way to participate in capital markets. And I thought it was most fascinating during COVID March of 2020 that the head of the Federal Reserve Powell came in and was using ETFs in the debt market, in the muni bond market to get interest rates down for tax-free states and for rolling over debt, and also corporate bonds to basically influence the yields. Even though Fed funds had gone to zero, there were still relatively high yields, but it was ETFs. So you're seeing the Federal Reserve and other central banks and particular countries like Japan and Sweden, 15% of the stock market is actually owned by the central bank and predominantly done through ETF format. So building a brand, JetCTF, basically I'm sharing with you, it took up five years to build a strong brand and product. And just the back of the envelope, these are minimum numbers, 25 webcasts, 215 media interviews, 20 conferences to travel to and sponsorships. and participating in, and over 60 one-on-one meetings with virtual calls from retail to institutional to brokers and RAs. That's what it takes place. It's a big build-out. It takes many years to build that brand name. And we had a whole theory of how we were going to cater to a different story for millennials to hedge funds. Hedge funds wanted pairs trading. So some hedge funds wanted to short American Airlines because the price of oil is going up. but they want to de-risk that risk. So they went along Jeff's ETF. Then there's the value investors like the Bill Millers of the world. that were along the airlines because it was a great GARP investment, also a great deep value for him. Oil traders traded back and forth, the opposite to which way oil is going. There's a growth at a reasonable price. And when you compare trains and trucks, jets are always a lot less expensive than trains and trucks. And then you have the day trader because of its DNA and volatility. It has options. There's covered writing on it. It's an incredible product. how it's caught the imagination from institutional to retail investors. And we've also expanded it into Mexico City, as I mentioned earlier, in Peru and London. We have ambitions for other places to be launching to really build a moat around the just ETF product. Other big thing is go gold. And this is something you see by the crypto world of really trying to explain to people that the magnitude of US public debt outstanding, that if we go back to just before 2008, 8.1 trillion, it's now 30 trillion. And if you go back even further, We're going to hundreds of billions to now 30 trillion. So the idea of fiat and not having some form of a hedge against it like gold, and now it's become Bitcoin, Ethereum, or other asset classes that are decentralized asset classes. And I think the operative word is very important. I wrote about a couple of weeks ago about understanding that Brexit was part of being decentralized away from the EU. We're seeing where people are really upset about Putin's Russia invading Ukraine, which is centralization, which is making the trying to recoup the USSR. China was doing into Hong Kong. This is all centralization, and there is a global trend that's anti-globalization, and it's all about being disruptive by being decentralized, depending upon your own nation for its own products and services. So hopefully we can see we're trying to ride that wave out, but it means there's still a tremendous amount of money printing out. And GoldGold is just an incredible product to really appreciate the quantum mental approach, which we build jets on, that GoldGold is outperforming its peers. Well, we were early in selling Russia from this evildoer. We sold over our Russian list of stocks, leaving only positions in oil producer Lukoil in a small position and a coal producer. Our withdrawal came early and well-timed, because of a quant-driven disciplines and a unique insight from our Polish portfolio analysts that the weekend before the invasion, we had sold 99 point some odd percent of our holdings. Whereas BlackRock lost 17 billion in just a few weeks following the attack, they were slower to move due to the passive indexing investment process. So this is a real tip off the hat for the power and importance of active asset management. and be able to monitor crisis. And as you see in our perspectives of our mutual funds, that we believe that government policies are a precursor to change. Thus, we track and monitor both monetary and fiscal policies. And we definitely saw the invasion coming early and enough to get out of all of our Russian stocks. Mass mandates and air travel demand has already been seen increasing. What's really important for the sentiment is the TSA data comes out every day. It started in March of 2020. It's been a phenomenal trending indicator. People apply 50-day moving average, and when it's above the 50-day, they go long jets. When it falls below, they're out. So you can see there's been tremendous volatility of last year trades in and out and up to March of this year. That sort of weekly volatility has slowed down. But this is one of the best indicators to look at the growth of the airlines. And what we're seeing now globally is binge travel, binge binge, like when we were stuck at home with COVID watching Netflix, binge Netflix and binge eating potato chips. Well, now it's binge travel and many people are reported paying outrageous prices to travel. and they don't care because they don't know if they're going to be locked down again next year. So it's really quite fascinating to see that even with rising fuel prices and even with a fear of a slowing economy, that the airlines industry remains very strong. In fact, there's a shortage of pilots, and that's because for many reasons, but a lot of them are older and mature, and they brought in new guidelines that a pilot Just couldn't come from the Air Force, immediately start flying unless they had more than thousands of hours of experience, that passive knowledge. And that comes back from the great example that you can get your driver's license. It doesn't mean you're a good driver. And the same thing they found for pilots. You can get your pilot's license. It doesn't mean you're a great pilot. And so they want more and more hours and thousands of hours before they'll let you fly a passenger plane. A jet, however, there's just not enough of them. So this is creating pricing power for the airlines. And that's what's also happening with cargo. But what we're really happy is not only the distribution globally for the brand name is just recently the Jet CTF approved on Ameriprise. And for those who are not aware, that's one of the largest independent firms with a national footprint, managing over a trillion dollars with 12,000 advisors. we launched our a recent uh see the sky cargo which is 70 cargo ships and 30 uh cargo jets um uh because we believe that there's there's a systemic uh risk that's happening in supply exchange that's not going away and it's given tremendous pricing power to anything that's cargo related And these companies are reporting incredible earnings and it's not going away with people that think it's just a short term phenomena. I strongly disagree. And so the full year demand for air freight increased 18% compared to 2020. That would share with you that we know from my sending equipment from China over to Sweden and Norway for high blockchain. It was going at 5% a month every time we're sending over equipment. So we're now seeing the other airlines converting some of their older planes into cargo because it's so profitable. So I believe that this sort of binge demand around the world but the ability to move products that 80 percent of all of our products come from cargo ships and anything that's disruptive in china uh coming across automatically gives these companies tremendous pricing power so the c etf is a big win for us and in fact the market unravels and it went up uh then slightly dipped below and now it's back was that back up then these cargo ships and airlines are going to see a wonderful future. And did you know that 80% of the volume of the world's trade in goods is carried by sea? And for developing countries, that percentage can even be higher. And with the supply line disruptions not going away and the invasion of Ukraine, that only gave them more pricing power. So this is a classic example for the quarter, how well you can see here that CETF did versus the overall markets. Normal disclosures. So Hive announced a supply agreement with Intel, which is the first for Intel that only deal with a company with a strong ESG green footprint and Hive has the strongest. So it's agreed to purchase high-performing ASIC chips, which are about 40% less expensive than Chinese chips and 40% more efficient that will incorporate in the state-of-the-art mining equipment that's custom built for Hive. Now the Hive convertible debentures, one of the, it was such a complex analysis for the auditors, which was really, you know, frustrating for all shareholders and for management, but we did get it done. But it was an interesting structure because it protected growing the downside. It allowed us to replenish our cash position. And this is showing you that that note has been paying us interest on a monthly basis and we take a look at has paid us over a million three and the principal paybacks are pushing what 3.6 million so the total cash return is 4.9 million in the past 12 months so anything below its convertible price immediately we get our money back cash And so it gives us the options on the upside, which we convert into stock, and we also have 5 million warrants for that. But in the down periods and down drafts, it gives us the ability to pile cash on our balance sheet. This is important because Hive is still a strategic investment I share with the growth shareholders. High provides April 2022 production update. Two exahash means we're mining about 9.2 Bitcoin a day, which is about 1% of the global hash rate. We're 6.1 terahash of Ethereum mining. So when you add our BT coin production on a monthly basis in our Ethereum, we're basically been putting Bitcoin on the balance sheet for a cost of $4,000. Robert Bedeski, M.D.: : High reported record revenue of 68 million up 400% from last year that income 64 million gross money margins of 90% mind over 697 beat bitcoin and over 7100 ether and digital assets on the balance sheet were 168 million. Now I'm going to turn it over because I've been very long-winded with lots of important content to share with you. So Lisa Calicott has been hardworking and getting these financials out to you on a timely basis.

Thank you, Frank. Good morning, everyone. First, I'd like to start with just a couple of highlights on the next slide. Our average assets under management were $4.1 billion for March 31st, 2022 quarter, and this was consistent with our prior quarter and slightly up from a year ago. Also, we had total operating revenues of $6.2 million and an operating margin of 41%. Now I'll go into more details about our results of operations for the quarter ending March 31st, 2022. On the next slide, we recorded operating revenues of 6.2 million for the quarter, which is a decrease of 180,000 or 3% from the 6.4 million the same quarter last year. The decrease is primarily due to paying performance fees in the current period and receiving performance fees in the prior period. Operating expenses for the current quarter were 3.7 million, an increase of 595,000 or 19% over the same period last year, primarily due to the following reasons. General administrative expenses increased 612,000 or 40%, primarily due to higher fund expenses and higher consulting professional fees. Advertising cost increased 94,000, primarily due to the launch of the new ETF. But these increases were somewhat offset by a decrease of employee compensation and benefits of 123,000. the next slide we see our operating income for the quarter ended march 31st 2022 is 2.5 million or a decrease of 775 000 compared to the same period for fiscal year 2021 we see that our other income decreased 12 million compared to prior year and that is because in the current period reported unrealized losses on investments of 4.5 million compared to unrealized gains and investments of 7.5 one million in the same quarter last year. And this is what Frank was discussing earlier related to the volatility of our investments and how that affects our income statement. Net loss after taxes for the quarter was 846,000 or a loss of six cents per share. Moving on to the next couple of slides, we see that our balance sheet is still strong. It includes high levels of cash and securities. And then on the following, slide, we see that we still have no long-term debt, and the only long-term liabilities we have are deferred taxes. On the next slide, you can see that we had change in cash over the last few years. Before our JETS ETF took off, cash was at much lower levels. But in December 2020, our cash increased significantly due to the sale of Hive Common Stock. Then in the following quarter, ending March 30th, 2021, cash decreased due to the purchase of the Hyde DaVenture. But since then, we have been increasing our cash position due to the net income, cash proceeds from sales of investments, and the payments received from the Hyde DaVenture. At March 31st, 2020, the company had net working capital of 31.8 million, which was an increase at 10.2 million, or 47% since June 30th, 2021, and a current ratio of 7.6 to one. The increase in cash and accordingly net working capital was primarily due to net cash provided by operating activities of 9.1M proceeds from sales of investments of 2.9M and proceeds from the principal pay downs of 2.3M. With that, I'd like to turn it over to Holly to discuss marketing and distribution.

Thank you, Lisa. On this slide, we always like to do a breakdown of our mutual fund assets. So as you can see here, a majority of those assets are in emerging markets and natural resources, while 26% are in domestic equity and fixed income. Similarly, if you look at assets by distribution channel, you can see that 82% come from retail, while 18% are from institutional. And on this slide, I would like to invite all of our Grow shareholders to an upcoming webcast. We will be hosting in conjunction with ETF Trends on gold and gold mining stocks with the discussion around our GoAU ETF as well. And this will be taking place on May 23rd at 1 p.m. Central Time. And you can sign up either by visiting ETFtrends.com or sending us an email at info at usfunds.com. Moving on to the next slide. Don't forget that our educational content does not only come in the form of the Frank Talk blog or the Investor Alert newsletter. We love educating our shareholders through video content as well. So make sure you're subscribed to our YouTube page to get video updates on everything from gold to airlines and the shipping industry. And lastly, as we wrap up today's presentation, I do want to remind everyone that we share a majority of our new content as well as announcements about upcoming events across all of our social media platforms. So make sure to check those out when you get a chance. And just as a reminder to our audience, if you have any follow-up questions today, please email those to info at usfunds.com. I now want to hand the presentation back to Frank for any closing comments. Frank?

Thank you, Holly. And thank you all your shareholders for staying with us and any new ones have come and joined us. Thank you.