U.S. Global Investors, Inc.

As you can see on slide number two, the presenter for today's program are Frank Holmes, US Global Investors CEO and Chief Investment Officer, Lisa Calicott, Chief Financial Officer, and myself. If we move on to slide number three. 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 10Q4. 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 the next slide. As always, we would love to offer anyone tuned in today one of our JETS, GOAU, or CEHATs Send us an email with your physical mailing address to info at us funds dot com. And now onto the next slide, I will briefly review our company. US 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 long standing history of global investing and launching first of their kind investment products, including the first no load gold fund. we're also well known for our expertise in gold and precious metals natural resources airlines and luxury goods now when we move to the next slide slide number six this is where i want to hand the presentation over to ceo frank holmes frank

Thank you, Holly. And thank you all the shareholders who are listening. This is one of the most important disclaimers I always like because it's colorful, but it's factual in a quant world is the DNA of volatility. And what's important here is that every asset class has its own DNA of volatility and it changes over time. They know well today that the DNA of the human body can change and external forces, imbalances between macro forces of monetary fiscal policies can all of a sudden impact capital markets and it can change the DNA of the volatility of an asset class. So let's take a look at the S&P 500. It basically says it's a non-event to go up or down 1%, almost 70% of the time. Over 10 days, it's 3%. And you can see that gold bullion is the same as the S&P 500. And if we go back 10 years ago, bullion was more volatile, two to one to what the S&P was. And the Dow Jones US Asset Manager Index, it's got a daily volatility close to the S&P, but over 10 days, it doubles basically to 5%. Grow definitely doubles over 10 days. It's a non-event. They go up or down 6% on a weekly basis. Some of our funds are known especially for gold and GoAU. You can see that it's plus or minus 7% over a 10-day period. Those changes in the assets of the airlines or gold, they do have an impact in our funds. and and this is how we earn fees and we earn fees on basis points on the total assets that we manage and they can change over a monthly basis a quarterly basis and that's what changes basically it's very simple business to calculate what our revenue is going to be next Well, the ETF world continues to beat down on the mutual fund world. As you can see, the ETF world continues to enjoy more product access and the fund flow is going out of the mutual fund world. It's interesting that the younger investors, the millennials, the generations, X, Y, Z, are much more keen to go and trade and invest, but predominantly trade an ETF to get exposure to a theme. Next, please. I want to thank our institutional shareholders, Vanguard, Royce Investment Partners, Parrot Capital, KWM, and BlackRock. A couple of these other lineups are into index funds, but still we thank them all that we qualify and show up in their product lineup. Next, please. So, as you know, I'm the CEO and chief investment officer, and I've been in this saddle for about 35 years. It's interesting to watch how U.S. Global has been through different cycles of global booms and busts. But during this period, you know, I've owned approximately 18% of the company and 99% of the voting control. That's a technical part of having 40-act rules. But what's important, I am the largest shareholder. Next. yields are important to look at and we track what happens with the two-year five-year and the 10-year and to share with you is that most the currency movement is off a two-year yield and that impacts gold so that's one reason why i follow the 50-day moving average on the yields and the on dividend-paying stocks, and the 10-year is for the infrastructure spending. If you're going to build a new pipeline, the financing is usually off a 10-year government bond. A new gold mine, expansion of a gold mine, it's off a 10-year government bond. So it's important to be able to track what is happening. over 10 weeks, which is 10 weeks of trading, which is a 50-day moving average, to get a feel for these swings and these short-term trades. And what you see here is the five-year yield when it crosses above the 50-day. That is usually bearish. And you can see last year when the five-year yield went above in May that we started seeing small cap stocks fall. micro-cap even more so, and we would be categorized, in fact, more of a micro-cap, until October, when rates seemed to have peaked, and as that was taking place, small-cap stocks started that. I'm trying to highlight that there's a very strong inverse relationship with the five-year yield and the dividends that you're paying on your stock. Next, please, is to try to, this sets into the motion here, shows you that the Russell 2000 looked like it had a breakout while rates were falling until the rates rising that the small cap stocks started selling off. it's sort of an important part and i think that we're pretty close to this cycle where rates are in a presidential election cycle in the fourth year going by fourth year of a presidential election cycle when you have a democratic president and a republican congress uh the market is is usually up eight percent when you have falling interest rates and not rising interest rates Odds are that it's 11, 12%. So even with all the negative news, the math suggests that this time last year, I forecasted that based on the presidential election cycle, the markets would be up when you have this sort of balance of power. And it was. but it ended up closing up on the year. So I do like looking at data and I do from a macro point of view and a micro point of view from stock picking the macro, and that is called quantum mental approach to investing. And that has led us down the journey to create smart beta 2.0. And so it doesn't matter if it's a macro factor or it's a micro. factors and i thought i'd highlight that when rates do start to tick down uh be they in april or may that i think that we will see money flows into this category which does impact uh companies like us global next please our capital strategy the allocation strategy yield and the shareholder yield is a model that looks like the cost dividends paid plus the net share repurchase net reduction divided by the market cap. That's another way of looking at it. And there's a fund manager, Mel Faber, that wrote a book on it, and he's picked stocks, and they seem to have a deep value approach of picking the stocks, and they've all performed. So we do follow that, and we do ask questions on a regular basis of where we're allocating capital. Two is we manage expectations for new product launches, what's necessary. And 3, we mentioned preserve cash for future growth opportunities and market corrections. We have been stockpiling cash. We have been buying back our stock and. For teachers, you can buy back the stock using an algorithm and flatten down days. And 5, we discussed a review with the board on a regular basis and keep in touch with our board. So they know what we're doing and why. So this is me being Faber, and he came up with this famous book and really pounded the table across America on the shareholder yield. A bit of looking at Warren Buffett's model of looking at companies that if they're not paying dividends, but they're decreasing their yield. their cash flow to be bought. If they're buying back stock, Warren Buffett's always believed that it's been better than paying out dividends. But he has this unique model, which we look at and respect. Next, please. This is the model. Shareholder yield is three parts. Cash dividends plus net purchase of your shares back and net debt reduction to cap. Next, please. So gross dividends, the company has paid monthly dividends since 2007. And it's interesting because that was the peak in gold and all the emerging markets really peaked. And we started that strategy of paying out dividends. But we've been able to do through down cycles and 2008 crisis, still be able to maintain paying dividends of how much. We manage our capital, but the yield right now is 3.17%. I'm going to show you that it's below the five-year, but that's okay because the buyback stock just takes the yield higher. The border, they can, anytime, they can always cut a dividend. They have that right if something comes up. Next, please. share grows total shareholder yield is approximately 7.9 percent next please and that adding back the dollars we've spent buying back the stock plus paying out dividends so you can see here that the growth dividend is below the five-year treasury yield now why do i show that is because lots of institutions make a decision that they will rather buy risk-free a five-year government bond than buy a stock with a dividend yield that's less than five percent unless the yield less than sorry five-year yield unless that dividend is increasing uh faster so therefore it will catch up and surpass the five-year treasury yield over the next five years so i as my first time as a money manager research analyst actually was in 1970 I'm aging myself, but it was on a dividend growth monitor. And you looked at stocks that had yields that were higher than the five-year-old. It's interesting that they did outperform. So you have to look at that model in the context of how much is being sold along with the dividend yield. Next, please. So you saw earlier that our total shareholder yield is twice what the dividend yield is. Our dividend yield is more than twice, and it's higher than the five-year government bond. So it is of great value, and it's another rational reason for buying the stock on down days. This is an important comparative analysis. We quite often get calls from institutions and comparing us to WisdomTree and to Invesco. The reason why I bring these two names up is WisdomTree is 100% ETFs. our operating revenue is as etfs and the best goes 40 because they have the biggest piece of them the qqq etf uh what you can see is that the price to book value for wisdom tree is substantially higher um almost four times higher uh three times higher than what ours is And so it says that on a price to book relative valuation, we're undervalued relative to a wisdom tree. Invesco looks a lot cheaper, but then there's other factors in that financial model as number one factor. The return on assets, as you can see, uh the return on assets by wisdom tree was greater uh than ours but we're greater both of us than Invesco and that's one reason why Invesco trades a lower price the book and then pre-tax margins uh for wisdom tree they're higher that would afford a higher pe ratio um we are much higher than say Invesco And then we look at dividend yield and compare. And as you can see that the lowest dividend yield is WisdomTree. And then we're in the middle between Invesco and our price to cash flow is about the same. WisdomTree is higher than Invesco, but it appears that Invesco has other losses that they're wrestling with. And this is sort of the gambit. These companies are bigger. We'd be a micro... Wisentrie be a mid-cap and Invesco be a mid-cap of, probably a mid-cap going into a big cap range. And I think it's just a helpful comparative analysis. It has some basic quantum mental approach that analysts would take a look at it, picking one stock versus another. Next, please. So why we buy back our shares. I have a tremendous respect for Bruce has always and I want to point out that the company stock is undervalued, therefore buys back shares of gross stock when the price is flattered down from the previous trading day. And as Warren Buffett highlights the value proposition of buying back one stock at value accreted prices, doing so, Buffett says, benefits all shares. And we agree. Next, please. So the current shareholder repurchase program for the quarter ended December 31st, 2023. The company repurchased a total of 196,295 shares. Class A shares... $160,000. We bought back about 1% of the outstanding shares since September 2023. And this may be suspended discontinued as... I think what's important is that you can only buy back a certain... of the volume so the volume picks up then we can pick up more uh there's always sort of regulatory borders uh in sports they call them and hockey blue line a red line so you have to sort of manage within the boundaries uh i've been asked why don't you buy back more uh because it's relative to this model what the volume is next please this is another illustration to show that uh we have increased our stock buying back you can see in the year of 23 substantially from 2021 and for 2022 from 21 just as COVID was ending you can see that it's it's quite a big number it's more like 12 times increase next please So let's look at a fiscal year 2024. The strengths, the company remains profitable despite challenging macro market conditions. I'm going to highlight, unless you were the magnificent seven, a few stocks were champions of the overall market. The company continues to buy back stock on flattened down days and pays a monthly dividend. The company has a strong balance sheet, which includes both cash and other investments. Next, please. With Nislin Nasdaq, we have about 2 billion in assets, 2.8 billion in quarterly operating revenue. Next, please. Earnings per share, a nice bump from the summer quarter end of September. From September to the end of December, the markets rallied as rates were coming off. and the assets uh and also certain uh write downs in that past quarter because we do have investments that go through a market market process of write downs and write ups and uh and so you can see that the increase in investment income is 1.9 million uh next please and by the way on more granularity at least it can always answer any questions and go into greater detail Income, as you can see, it went from $215,000. The decrease in operating revenue is due to a decrease in assets under management, partially offset by decrease in operating expenses. Next, please. Well, this whole idea of smart beta came to the realization that I love math and quantum or quant focus of how we look at stocks. And quantum mentals is a new word that comes out. Investopedia covers it. But it's an investment strategy. It combines both fundamental tools along with quant approach to picking stocks and building a diversified portfolio. So our quantum mental investment strategy combines both cutting edge technology and robust data analysis to help optimize returns and manage risk effectively for our shareholders. And we believe use of smart beta 2.0 factors in our thematic fund lineup sets us apart from the competition. It's really important that there are some factors that are great for picking stocks. Other factors are not, but they're good for screening stock. And then there's a magic about what portion of the portfolio is going to have mean reversion and what portion of the portfolio is going to have momentum of growth and revenue or income. And they're both laws of physics. So the portfolio construction is as critical as the factors for picking the stocks. Next, please. So the thematic lineup of smart beta 2.0. All ETFs, Jets was the first. It's done its thing. It's done what the bogey that we went out to beat, the index, and that quant approach has done a phenomenal job. It is deeply undervalued on a relative basis to trains and trucks. The Dow Jones transport includes a much bigger weighting in trains and trucks. And if you just had trains and trucks, the PE ratios, the cash flow ratios, etc. are much more attractive value proposition. But the concerns of a recession, the negative news that's out there has impacted the center. In particular, institutional investors out of Europe that we have been able to witness. For all the retail and the family offices and big RIAs in the U.S. are still actively involved in jets. GoAU, it's done its... So proud of it because it's all performed at GDXJ. It's done what the model suggested it would do, both... construction of 30% focused on gold royalties, and then stock factors for bottom-up stock picking and rebalancing each quarter. Our newest addition to the lineup is C, cargo shipping, heavily weighted towards shipping with a small portion of the portfolio into airline cargo-only shipping. And I think what's interesting is that last year, due to all the drama that's taken place in Russia, it impacted our Eastern European fund, even though we sold all of our Russian stocks before the war and before they became basically insolvent holdings, we were very fortunate for our shareholders that we went liquid very early, but it didn't matter. People, the sentiment, people would rather speculate in technology stocks. than be in the growth of Eastern Europe. And further, same thing with the great concerns out of China and its bullying tactics, it's impacted the China fund. And so we shut down those two funds, mutual funds in the summer. And I think it's been a wise decision for the shareholders and for us. But how do we play this emerging market thesis, which has been so important and relative to the world of gold and luxury goods, et cetera. So one of the things, in this journey of building jets and what we witness is that cargo is one of the best arteries to understand the whole economy the global economy and it has a strong correlation to pmi and uh and and they value relative uh cargo ships trade like jets do they box on p e ratios and cash flow and the dividend yields on the cargoes are much it i said okay how do we have a footprint for the global economy what's the best trade-off between any emerging country exporting products to a manufacturing hub and then selling them back um it was cargo airline cargo shipping and uh and that's what we created c next please so the shipping industry is a leading indicator to the health of the global economy and one way to play emerging markets next please And it's highly correlated to a great leading indicator index. And what did we see this last year was getting strong, a great contraction in PMI that was a foreteller warning of a slowdown in the global economy. And I think that every time this happens, governments panic and they start printing money. And this year, 40% of the world's population, over 70 countries, are going to go through an election. In addition to America, which is the biggest GDP in the world, it's going through its fourth year of a presidential election cycle. It's important to recognize that over 70 other countries are going through an election cycle. Usually is for the economy to get the votes and drop interest rates. So, I think an uptick in the PMI. It appears that his bottom, a sustaining run would be explosive to this category for the. the emerging markets. So again, another thing to recognize that war or bottlenecks, whatever it takes place in Panama Canal or the Red Sea, it gives tremendous pricing power to the cargo shipping companies. And they put on a great spot here, a run seven, no, probably about 14 weeks, a run drama that's taking place in the Red Sea. So I think it's interesting to show you that choke points The world continues to move blood through the arteries of the global economy. And these guys, all they do is have pricing power. Next, please. So this is an outline that JETS, the overall, as an ETF, we saw assets decline, redeem, and the bulk of those seem to be instituted. They use JETS as a proxy. Next, please. Chinese stocks significantly underperform Asian peers. As you can see here, Taiwan, because the semiconductor business has done well, but not Hong Kong and China. It's had a very rough year as China's very much more warlike rather than trade and economics against the technology sector. Now they're wrestling with excessive debt as a percentage of GDP and real estate implosion. around the leadership. So I think that shutting down the last early summer was a wise decision from a theme point of view. Next, please. Tech stocks distort performance of the S&P. The S&P Another S&P index, and it's the equally weighted. 500 names, equally weighted. And you can see it far underperformed, but the market cap weighted. Next, please. Magnificent seven. They're up 5.4 times as much as the equally weighted NASDAQ index since January of 2020. I mean, it's quite incredible to see what the, especially the growth of NVIDIA, what it's done, and everyone else jumping into AI. Next, please. So grows investment in Hive Digital. Hive also has infrastructure build-out in the AI business. There's been a very attractive investment, paying monthly principal down payments every quarter. The yield on it has been much higher than you would earn on a five-year or a 10-year government bond. So we've been very happy with that. And next, please. I'm going to turn it over. Lisa Caller, Caller CFO, to give you more granularity in the numbers.

Thank you, Frank. Good morning. First, I'll start with our financial highlights on the next slide. Average assets under management were $2 billion for the quarter ending December 31st, 2023. Operating revenues were $2.8 million, and our quarterly net income was $1.2 million, which was an increase of 45% over the prior year's same quarter. and our earnings were nine cents per share. The next slides will provide more detail of the results of operation for December 31st, 2023. So on slide 37, we see our total 2.8 million for the quarter, which was a decrease of 910,000 or 24% from the 3.7 million from the same quarter last year. The decrease is primarily due to decreases in assets under management, especially in our JETS ETF, as Frank discussed. the current quarter or 2.6 million a decrease of 194 000 or 7 primarily due to decreases in employee compensation benefits of 168 000 or 15 mainly due to decreases in bonuses on the next slide we see our operating income for the quarter ending december 31st 2023 is 192 increase of 716,000 compared to the same quarter for fiscal year 2023. And you can also see that our other income increased 1.3 million compared to the prior year. Unrealized gains on equity securities in the current quarter for 279,000 compared to unrealized losses in the prior year of 937,000. Net income after taxes for the quarter was 1.2 million per share, which was an increase of $382,000 compared to the net income of $847,000 or $0.06 per share. On the next slide, we see that we still have a strong balance sheet. It includes high levels of cash and securities. And on the following page, we see that we have a net working capital of $38.3 million, which is an increase of $840,000 or 30th, 2023, and our current ratio is 18.8 to 1. With that, I'll turn to discuss marketing and distribution initiatives.

Thank you, Lisa. All right, on the next slide, I want to briefly point out some of the upcoming events that U.S. Global will be attending or speaking at. ETF Exchange, where our head trader will be headed to next week in Miami, and then following that the week after frank holmes will be attending and speaking at the oxford clubs investment there he will be sharing his thought leadership on the various industries that we and how to gain exposure to these industries via our funds and then in march frank will head over to zurich for the swiss mining institute where he will be speaking alongside other industry leaders in the gold and precious metal space then on the next slide i want to point out a quick stat about our web side traffic during the quarter ended December 31st. We've had over half a million visitors from around the world visit us funds.com. A repeat visitors, but even more new visitors, many of whom came to read the award winning Frank talk blog or sign up for the investor alert newsletter. In tremendous growth and subscribers on for the last several months, then 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. As we wrap up today's presentation, I just want to remind everyone that we do share a majority of our new content as well as announcements about upcoming events across all of our social media platforms, which continue to grow across the board. Then on the next slide, I just encourage you to follow us on all of these platforms. So you stay up to date with what's going on with Grow, our funds, and our broader market insights. And then just as a friendly reminder to our audience as we wrap up today, if you do have any questions, please email those to info at usfunds.com. And we will gladly follow up with you to get anything clarified that you may need more information.