{"url_path":"/sec/grow/10-q/2026/item-1","section_key":"item-1","section_title":"Item 1 FINANCIAL STATEMENTS**","topic":"sec","document":{"doc_type":"10-Q","doc_date":"2026-05-13","source_url":"https://www.sec.gov/Archives/edgar/data/754811/0001437749-26-016734-index.html","accession_number":"0001437749-26-016734","cik":"0000754811","ticker":"GROW","issuer_name":"U S GLOBAL INVESTORS INC","edgar_url":"https://www.sec.gov/Archives/edgar/data/754811/0001437749-26-016734-index.html","primary_entity_key":"0000754811","primary_entity_name":"U S GLOBAL INVESTORS INC"},"word_count":12033,"has_tables":true,"body_markdown":"**ITEM 1. FINANCIAL STATEMENTS**\n\n \n\n**U.S. GLOBAL INVESTORS, INC.**\n\n**CONSOLIDATED BALANCE SHEETS**\n\n \n\n  \n**March 31, 2026**\n  \n**June 30, 2025**\n \n\n*(dollars in thousands)*\n \n**(unaudited)**\n    ** **\n\n**Assets**\n   ** **   ** **\n\n**Current Assets**\n   ** **   ** **\n\nCash and cash equivalents\n $24,575  $24,552 \n\nRestricted cash\n  1,000   1,000 \n\nInvestments in trading securities at fair value, current\n  9,197   9,692 \n\nInvestments in held-to-maturity debt securities at amortized cost, current\n  1,000   - \n\nLess: Allowance for credit losses\n  (39)  - \n\nInvestments in held-to-maturity debt securities, net of allowance for credit losses, current\n  961   - \n\nAccounts and other receivables (net of allowance for credit losses of $0, and $0, respectively)\n  1,119   1,036 \n\nReceivable for investment principal repayments (net of allowance for credit losses of $0, and $0, respectively)\n  -   750 \n\nTax receivable\n  537   1,540 \n\nPrepaid expenses\n  663   549 \n\n**Total Current Assets**\n  38,052   39,119 \n\n         \n\n**Net Property and Equipment**\n  1,109   1,101 \n\n         \n\n**Other Assets**\n   ** **   ** **\n\nDeferred tax asset\n  1,479   1,268 \n\nInvestments in trading securities at fair value, non-current\n  3,231   2,496 \n\nInvestments in available-for-sale debt securities at fair value (amortized cost: $0, and $3,993, respectively) (net of allowance for credit losses of $0, and $0, respectively)\n  -   1,576 \n\nInvestments in held-to-maturity debt securities at amortized cost, non-current\n  -   1,000 \n\nLess: Allowance for credit losses\n  -   (52)\n\nInvestments in held-to-maturity debt securities, net of allowance for credit losses, non-current\n  -   948 \n\nOther investments\n  4,730   1,349 \n\nFinancing lease, right of use assets\n  71   8 \n\nOther assets, non-current\n  249   199 \n\n**Total Other Assets**\n  9,760   7,844 \n\n**Total Assets**\n $48,921  $48,064 \n\n**Liabilities and Shareholders’ Equity**\n   ** **   ** **\n\n**Current Liabilities**\n   ** **   ** **\n\nAccounts payable\n $6  $10 \n\nAccrued compensation and related costs\n  294   469 \n\nDividends payable\n  282   296 \n\nFinancing lease liability, short-term\n  27   8 \n\nOther accrued expenses\n  1,211   1,091 \n\n**Total Current Liabilities**\n  1,820   1,874 \n\n         \n\n**Long-Term Liabilities**\n   ** **   ** **\n\nDeferred tax liability\n  81   17 \n\nReserve for uncertain tax positions\n  845   891 \n\nNotes payable\n  75   75 \n\nFinancing lease liability, long-term\n  52   - \n\n**Total Long-Term Liabilities**\n  1,053   983 \n\n**Total Liabilities**\n  2,873   2,857 \n\n**Commitments and Contingencies (Note 13)**\n    ** **    ** **\n\n         \n\n**Shareholders’ Equity**\n   ** **   ** **\n\nCommon stock (class A) - $0.025 par value; nonvoting; 28,000,000 shares authorized; 13,866,999 shares issued at March 31, 2026, and June 30, 2025; 10,405,542 and 10,982,687 shares outstanding at March 31, 2026, and June 30, 2025, respectively\n  347   347 \n\nCommon stock (class B) - $0.025 par value; nonvoting; 4,500,000 shares authorized; no shares issued\n  -   - \n\nConvertible common stock (class C) - $0.025 par value; voting; 3,500,000 shares authorized; 2,068,549 shares issued and outstanding at March 31, 2026, and June 30, 2025\n  52   52 \n\nAdditional paid-in-capital\n  16,563   16,556 \n\nTreasury stock, class A shares at cost; 3,461,457 and 2,884,312 shares at March 31, 2026, and June 30, 2025, respectively\n  (9,338)  (7,781)\n\nAccumulated other comprehensive income (loss), net of tax\n  -   98 \n\nRetained earnings\n  38,424   35,935 \n\n**Total Shareholders’ Equity**\n  46,048   45,207 \n\n**Total Liabilities and Shareholders’ Equity**\n $48,921  $48,064 \n\n \n\n*The accompanying notes are an integral part of these Consolidated Financial Statements.*\n\n \n\n \n\nPage 1\n\n[Table of Contents](#toc)\n\n  \n\n \n\n**U.S. GLOBAL INVESTORS, INC.**\n\n**CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)**\n\n \n\n  \n**Nine Months Ended**\n  \n**Three Months Ended**\n \n\n  \n**March 31,**\n  \n**March 31,**\n \n\n*(dollars in thousands, except per share data)*\n \n**2026**\n  \n**2025**\n  \n**2026**\n  \n**2025**\n \n\n**Operating Revenues**\n   ** **   ** **   ** **   ** **\n\nAdvisory fees\n $7,364  $6,400  $2,697  $2,072 \n\nAdministrative services fees\n  160   92   65   31 \n\n**Total Operating Revenues**\n  7,524   6,492   2,762   2,103 \n\n**Operating Expenses**\n   ** **   ** **   ** **   ** **\n\nEmployee compensation and benefits\n  3,600   3,597   1,147   1,290 \n\nGeneral and administrative\n  4,008   4,347   1,410   1,452 \n\nAdvertising\n  394   487   105   243 \n\nDepreciation\n  32   50   10   11 \n\nInterest\n  5   1   2   - \n\n**Total Operating Expenses**\n  8,039   8,482   2,674   2,996 \n\n**Operating Income (Loss)**\n  (515)  (1,990)  88   (893)\n\n**Other Income (Loss)**\n   ** **   ** **   ** **   ** **\n\nNet investment income (loss)\n  4,482   1,819   1,665   548 \n\nOther income (loss)\n  245   247   80   100 \n\n**Total Other Income (Loss)**\n  4,727   2,066   1,745   648 \n\n**Income (Loss) Before Income Taxes**\n  4,212   76   1,833   (245)\n\n**Provision for Income Taxes**\n   ** **   ** **   ** **   ** **\n\nTax expense (benefit)\n  874   229   (844)  137 \n\n**Net Income (Loss)**\n $3,338  $(153) $2,677  $(382)\n\n                 \n\n**Earnings (Loss) Per Share**\n   ** **   ** **   ** **   ** **\n\n**Basic Net Income (Loss) per share**\n $0.27  $(0.01) $0.23  $(0.03)\n\n**Diluted Net Income (Loss) per share**\n $0.27  $(0.01) $0.23  $(0.03)\n\n                 \n\n**Basic weighted average number of common shares outstanding**\n  12,535,652   13,414,873   11,858,724   13,023,636 \n\n**Diluted weighted average number of common shares outstanding**\n  12,546,628   13,418,041   11,883,102   13,024,441 \n\n \n\n*The accompanying notes are an integral part of these Consolidated Financial Statements.*\n\n \n\nPage 2\n\n[Table of Contents](#toc)\n\n  \n\n \n\n**U.S. GLOBAL INVESTORS, INC.**\n\n**CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)**\n\n \n\n  \n**Nine Months Ended**\n  \n**Three Months Ended**\n \n\n  \n**March 31,**\n  \n**March 31,**\n \n\n*(dollars in thousands)*\n \n**2026**\n  \n**2025**\n  \n**2026**\n  \n**2025**\n \n\n**Net Income (Loss)**\n $3,338  $(153) $2,677  $(382)\n\n**Other Comprehensive Income (Loss)**\n   ** **   ** **   ** **   ** **\n\nUnrealized gains (losses) on available-for-sale securities arising during period, net of tax\n  (13)  1   -   (18)\n\nLess: reclassification adjustment for gains included in net income (loss), net of tax\n  (85)  (401)  -   (106)\n\nNet change from available-for-sale securities\n  (98)  (400)  -   (124)\n\nOther Comprehensive Income (Loss)\n  (98)  (400)  -   (124)\n\n**Total Comprehensive Income (Loss)**\n $3,240  $(553) $2,677  $(506)\n\n \n\n*The accompanying notes are an integral part of these Consolidated Financial Statements.*\n\n \n\nPage 3\n\n[Table of Contents](#toc)\n\n  \n\n \n\n**U.S. GLOBAL INVESTORS, INC.**\n\n**CONSOLIDATED STATEMENTS OF SHAREHOLDERS**’**EQUITY (UNAUDITED)**\n\n \n\n  \n**Common Stock**\n  \n**Convertible Common Stock**\n   * *** ** \n**Treasury Stock**\n  \n**Accumulated**\n   * *** **  * *** **\n\n  \n**(class A)**\n  \n**(class C)**\n  \n**Additional**\n   * *** **  * *** ** \n**Other**\n   * *** **  * *** **\n\n   * *** **  * *** **  * *** **  * *** ** \n**Paid-in**\n   * *** **  * *** ** \n**Comprehensive**\n  \n**Retained**\n   * *** **\n\n*(dollars in thousands)*\n \n**Shares**\n  \n**Par Value**\n  \n**Shares**\n  \n**Par Value**\n  \n**Capital**\n  \n**Shares**\n  \n**Cost**\n  \n**Income (Loss)**\n  \n**Earnings**\n  \n**Total**\n \n\n**Balance at June 30, 2025**\n  13,866,999  $347   2,068,549  $52  $16,556   2,884,312  $(7,781) $98  $35,935  $45,207 \n\nRepurchases of shares of Common Stock (class A), including excise tax\n  *-*   -   *-*   -   -   159,074   (404)  -   -   (404)\n\nIssuance of stock under ESPP of shares of Common Stock (class A)\n  -   -   -   -   (2)  (7,299)  20   -   -   18 \n\nShare-based compensation, net of tax\n  *-*   -   *-*   -   9   *-*   -   -   -   9 \n\nDividends declared\n  *-*   -   *-*   -   -   *-*   -   -   (287)  (287)\n\nOther comprehensive income (loss), net of tax\n  *-*   -   *-*   -   -   *-*   -   (59)  -   (59)\n\nNet income (loss)\n  *-*   -   *-*   -   -   *-*   -   -   1,507   1,507 \n\n**Balance at September 30, 2025**\n  13,866,999  $347   2,068,549  $52  $16,563   3,036,087  $(8,165) $39  $37,155  $45,991 \n\nRepurchases of shares of Common Stock (class A), including excise tax\n  *-*   -   *-*   -   -   262,195   (670)  -   -   (670)\n\nIssuance of stock under ESPP of shares of Common Stock (class A)\n  -   -   -   -   (2)  (7,439)  20   -   -   18 \n\nDividends declared\n  *-*   -   *-*   -   -   *-*   -   -   (284)  (284)\n\nOther comprehensive income (loss), net of tax\n  *-*   -   *-*   -   -   *-*   -   (39)  -   (39)\n\nNet income (loss)\n  *-*   -   *-*   -   -   *-*   -   -   (846)  (846)\n\n**Balance at December 31, 2025**\n  13,866,999  $347   2,068,549  $52  $16,561   3,290,843  $(8,815) $-  $36,025  $44,170 \n\nRepurchases of shares of Common Stock (class A), including excise tax\n  *-*   -   *-*   -   -   176,592   (539)  -   -   (539)\n\nIssuance of stock under ESPP of shares of Common Stock (class A)\n  -   -   -   -   2   (5,978)  16   -   -   18 \n\nDividends declared\n  *-*   -   *-*   -   -   *-*   -   -   (278)  (278)\n\nNet income (loss)\n  *-*   -   *-*   -   -   *-*   -   -   2,677   2,677 \n\n**Balance at March 31, 2026**\n  13,866,999  $347   2,068,549  $52  $16,563   3,461,457  $(9,338) $-  $38,424  $46,048 \n\n \n\n \n\nPage 4\n\n[Table of Contents](#toc)\n\n \n\n**U.S. GLOBAL INVESTORS, INC.**\n\n**CONSOLIDATED STATEMENTS OF SHAREHOLDERS**’**EQUITY (UNAUDITED) (CONTINUED)**\n\n \n\n  \n**Common Stock**\n  \n**Convertible Common Stock**\n   * *** ** \n**Treasury Stock**\n  \n**Accumulated**\n   * *** **  * *** **\n\n  \n**(class A)**\n  \n**(class C)**\n  \n**Additional**\n   * *** **  * *** ** \n**Other**\n   * *** **  * *** **\n\n   * *** **  * *** **  * *** **  * *** ** \n**Paid-in**\n   * *** **  * *** ** \n**Comprehensive**\n  \n**Retained**\n   * *** **\n\n*(dollars in thousands)*\n \n**Shares**\n  \n**Par Value**\n  \n**Shares**\n  \n**Par Value**\n  \n**Capital**\n  \n**Shares**\n  \n**Cost**\n  \n**Income (Loss)**\n  \n**Earnings**\n  \n**Total**\n \n\n**Balance at June 30, 2024**\n  13,866,999  $347   2,068,549  $52  $16,443   2,113,516  $(5,880) $584  $37,460  $49,006 \n\nRepurchases of shares of Common Stock (class A), including excise tax\n  *-*   -   *-*   -   -   197,887   (525)  -   -   (525)\n\nIssuance of stock under ESPP of shares of Common Stock (class A)\n  -   -   -   -   (1)  (6,665)  18   -   -   17 \n\nDividends declared\n  *-*   -   *-*   -   -   *-*   -   -   (304)  (304)\n\nOther comprehensive income (loss), net of tax\n  *-*   -   *-*   -   -   *-*   -   (142)  -   (142)\n\nNet income (loss)\n  *-*   -   *-*   -   -   *-*   -   -   315   315 \n\n**Balance at September 30, 2024**\n  13,866,999  $347   2,068,549  $52  $16,442   2,304,738  $(6,387) $442  $37,471  $48,367 \n\nRepurchases of shares of Common Stock (class A), including excise tax\n  *-*   -   *-*   -   -   236,731   (592)  -   -   (592)\n\nIssuance of stock under ESPP of shares of Common Stock (class A)\n  -   -   -   -   (3)  (7,794)  22   -   -   19 \n\nShare-based compensation, net of tax\n  *-*   -   *-*   -   11   *-*   -   -   -   11 \n\nShare-based compensation, adjustment for forfeitures, net of tax\n  *-*   -   *-*   -   (1)  *-*   -   -   -   (1)\n\nDividends declared\n  *-*   -   *-*   -   -   *-*   -   -   (299)  (299)\n\nOther comprehensive income (loss), net of tax\n  *-*   -   *-*   -   -   *-*   -   (134)  -   (134)\n\nNet income (loss)\n  *-*   -   *-*   -   -   *-*   -   -   (86)  (86)\n\n**Balance at December 31, 2024**\n  13,866,999  $347   2,068,549  $52  $16,449   2,533,675  $(6,957) $308  $37,086  $47,285 \n\nRepurchases of shares of Common Stock (class A), including excise tax\n  *-*   -   *-*   -   -   187,987   (459)  -   -   (459)\n\nIssuance of stock under ESPP of shares of Common Stock (class A)\n  -   -   -   -   (3)  (7,856)  22   -   -   19 \n\nShare-based compensation, net of tax\n  *-*   -   *-*   -   58   *-*   -   -   -   58 \n\nDividends declared\n  *-*   -   *-*   -   -   *-*   -   -   (297)  (297)\n\nOther comprehensive income (loss), net of tax\n  *-*   -   *-*   -   -   *-*   -   (124)  -   (124)\n\nNet income (loss)\n  *-*   -   *-*   -   -   *-*   -   -   (382)  (382)\n\n**Balance at March 31, 2025**\n  13,866,999  $347   2,068,549  $52  $16,504   2,713,806  $(7,394) $184  $36,407  $46,100 \n\n \n\n*The accompanying notes are an integral part of these Consolidated Financial Statements.*\n\n \n\nPage 5\n\n[Table of Contents](#toc)\n\n  \n\n \n\n**U.S. GLOBAL INVESTORS, INC.**\n\n**CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)**\n\n \n\n  \n**Nine Months Ended March 31,**\n \n\n*(dollars in thousands)*\n \n**2026**\n  \n**2025**\n \n\n**Cash Flows from Operating Activities:**\n   ** **   ** **\n\nNet income (loss)\n $3,338  $(153)\n\nAdjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:\n        \n\nDepreciation, amortization and accretion\n  (1)  (100)\n\nNet realized (gains) losses on securities\n  2,436   (507)\n\nNet unrealized (gains) losses on securities\n  (5,822)  219 \n\nProvision for deferred taxes\n  (120)  44 \n\nReserve for uncertain tax positions\n  (46)  53 \n\nShare-based compensation expense\n  9   68 \n\nAllowance for credit losses\n  (13)  (61)\n\nChanges in operating assets and liabilities:\n        \n\nAccounts and other receivables\n  920   81 \n\nPrepaid expenses and other assets\n  (136)  (127)\n\nAccounts payable and other accrued liabilities\n  (46)  (325)\n\nTotal adjustments\n  (2,819)  (655)\n\nNet cash provided by (used in) operating activities\n  519   (808)\n\n**Cash Flows from Investing Activities:**\n   ** **   ** **\n\nPurchase of property and equipment\n  (40)  (6)\n\nPurchase of other investments\n  (109)  - \n\nPurchase of trading securities at fair value, non-current\n  (907)  (118)\n\nProceeds on sale of trading securities at fair value, current\n  500   - \n\nProceeds from principal paydowns of available-for-sale debt securities at fair value\n  2,342   2,250 \n\nReturn of capital on non-current investments\n  174   - \n\nNet cash provided by (used in) investing activities\n  1,960   2,126 \n\n**Cash Flows from Financing Activities:**\n   ** **   ** **\n\nPrincipal payments on financing lease\n  (21)  (24)\n\nIssuance of common stock\n  54   55 \n\nRepurchases of common stock\n  (1,608)  (1,574)\n\nExcise taxes paid on repurchases of common stock\n  (19)  - \n\nDividends paid\n  (862)  (912)\n\nNet cash provided by (used in) financing activities\n  (2,456)  (2,455)\n\nNet increase (decrease) in cash, cash equivalents, and restricted cash\n  23   (1,137)\n\nBeginning cash, cash equivalents, and restricted cash\n  25,552   28,399 \n\nEnding cash, cash equivalents, and restricted cash\n $25,575  $27,262 \n\n         \n\n**Supplemental Disclosures of Non-Cash Investing and Financing Activities**\n   ** **   ** **\n\nDividends declared but not paid\n $282  $300 \n\nExcise tax liability accrued on stock repurchases\n $15  $15 \n\nLease liabilities obtained from new ROU assets - financing\n $92  $- \n\nUnsettled class A common stock repurchases\n $-  $1 \n\n         \n\n**Supplemental Disclosures of Cash Flow Information**\n        \n\nCash paid for income taxes\n $20  $128 \n\nCash paid for interest\n $3  $1 \n\n \n\n*The accompanying notes are an integral part of these Consolidated Financial Statements.*\n\n \n\nPage 6\n\n[Table of Contents](#toc)\n\n  \n\n**U.S. GLOBAL INVESTORS, INC.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)**\n\n \n\n**NOTE 1. BASIS OF PRESENTATION AND CONSOLIDATION**\n\n \n\nU.S. Global Investors, Inc. (the “Company” or “U.S. Global”) has prepared the Consolidated Financial Statements in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the rules and regulations of the United States Securities and Exchange Commission (“SEC”) that permit reduced disclosure for interim periods. The financial information included herein reflects all adjustments (consisting solely of normal recurring adjustments), which are, in management’s opinion, necessary for a fair presentation of results for the interim periods presented. The Company has consistently followed the accounting policies set forth in the notes to the Consolidated Financial Statements in the Company’s Form *10*-K for the fiscal year ended *June 30, 2025* (\"Form *10*-K\").\n\n \n\nThe Consolidated Financial Statements include the accounts of the Company and its wholly-owned subsidiaries, U.S. Global Investors (Bermuda) Limited, U.S. Global Investors (Canada) Limited (“USCAN”), and U.S. Global Indices, LLC.\n\n \n\nThere are *two* primary consolidation models in U.S. GAAP, the variable interest entity (“VIE”) and voting interest entity models. The Company’s evaluation for consolidation includes whether entities in which it has an interest or from which it receives fees are VIEs and whether the Company is the primary beneficiary of any VIEs identified in its analysis. A VIE is an entity in which either (a) the equity investment at risk is *not* sufficient to permit the entity to finance its own activities without additional financial support or (b) the group of holders of the equity investment at risk lack certain characteristics of a controlling financial interest. The primary beneficiary is the entity that has the obligation to absorb a majority of the expected losses or the right to receive the majority of the residual returns and consolidates the VIE on the basis of having a controlling financial interest.\n\n \n\nThe Company has variable interests in certain funds it advises, specifically, certain funds within U.S. Global Investors Funds (“USGIF” or the “Funds”) and certain U.S Global exchange-traded fund (\"ETF\") clients. However, is *not* deemed to be the primary beneficiary of these funds. The Company’s interests in these VIEs consist of the Company’s direct ownership therein and any fees earned but uncollected. See further information about these funds in Notes *2* and *3*. In the ordinary course of business, the Company *may*choose to waive certain fees or assume operating expenses of the funds it advises for competitive, regulatory or contractual reasons (see Note *3* for information regarding fee waivers). The Company has *not* provided financial support to any of these entities outside the ordinary course of business. The Company’s risk of loss with respect to these VIEs is limited to the carrying value of its investments in, and fees receivable from, the entities. The Company is *not* deemed to be the primary beneficiary because it does *not* have the obligation to absorb a majority of the expected losses or the right to receive the majority of the residual returns. The Company does *not* consolidate these VIEs because it is *not* the primary beneficiary. The Company’s total exposure to unconsolidated VIEs, consisting of the Company's investments in these entities (as reflected in the carrying value of investments in securities) and receivables for fees, was $10.4 million at *March 31, 2026*, and $11.0 million at *June 30, 2025*.\n\n \n\nThe carrying amount of assets and liabilities recognized in the Consolidated Balance Sheets related to the Company's interests in these non-consolidated VIEs were as follows:\n\n \n\n  \n**Carrying Value and Maximum Exposure to Loss**\n \n\n*(dollars in thousands)*\n \n**March 31, 2026**\n  \n**June 30, 2025**\n \n\nInvestments in trading securities at fair value, current\n $9,197  $9,692 \n\nInvestments in trading securities at fair value, non-current\n  808   872 \n\nAccounts and other receivables\n  409   439 \n\nTotal VIE assets, maximum exposure to loss\n $10,414  $11,003 \n\n \n\nSince the Company is *not* the primary beneficiary of the above funds it advises, the Company evaluated if it should consolidate under the voting interest entity model. Under the voting interest model, for legal entities other than partnerships, the usual condition for control is ownership, directly or indirectly, of more than *50* percent of the outstanding voting shares over an entity. The Company does *not* have control of any of the above funds it advises; therefore, the Company does *not* consolidate any of these funds.\n\n \n\nAll significant intercompany balances and transactions have been eliminated in consolidation. Certain amounts have been reclassified for comparative purposes. Due to rounding, the year-to-date amount *may**not* be the exact sum of the quarterly amounts. The results of operations for the interim periods disclosed herein are *not* necessarily indicative of the results the Company *may*expect for the fiscal year ending *June 30,**2026* (“fiscal *2026*”).\n\n \n\nThe unaudited interim financial information in these Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements contained in the Company’s annual report on Form *10*-K; interim disclosures generally do *not* repeat those in the annual statements.\n\n \n\n****\n\n**Use of Estimates**\n\n \n\nPreparation of the Consolidated Financial Statements in accordance with GAAP requires management to make estimates and assumptions that affect amounts reported in the Consolidated Financial Statements and accompanying notes. Actual results *may*materially differ from those estimates.\n\n    \n\n****\n\n**Recent Accounting Pronouncements**\n\n \n\nIn *June 2022,*the FASB issued ASU *2022*-*03,* *Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions* (“ASU *2022*-*03”*) to clarify the guidance in Topic *820,* Fair Value Measurement, when measuring the fair value of an equity security subject to contractual restrictions that prohibit the sale of an equity security, and to introduce new disclosure requirements for equity securities subject to contractual sale restrictions that are measured at fair value. The standard became effective for the Company on *July 1, 2024.*The adoption of the standard did *not* have a material impact on the Company's Consolidated Financial Statements.\n\n \n\nIn *November 2023,*the FASB issued Accounting Standards Update *No.* *2023*-*07,* *Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures* (“ASU *2023*-*07”*), which enhances annual and interim disclosure requirements for reportable segments. The amendments require additional, more detailed disclosures about significant segment expenses and other segment items. The Company adopted ASU *2023*-*07* retrospectively for its fiscal year *2025* annual Consolidated Financial Statements. While the adoption of ASU *2023*-*07* did *not* have a material impact on the Company’s Consolidated Financial Statements, it resulted in enhanced segment disclosures.\n\n \n\nPage\n*7*\n\n[Table of Contents](#toc)\n\n \n\nIn *December 2023,*the FASB issued ASU *2023*-*09,* *Income Taxes (Topic 740): Improvements to Income Tax Disclosures* (“ASU *2023*-*09”*), which enhances the transparency and decision usefulness of annual income tax disclosures. ASU *2023*-*09* will be effective for fiscal years beginning after *December 15, 2024,*and will be effective for the Company's fiscal *2026* annual disclosures. Early adoption is permitted for annual financial statements that have *not* yet been issued or made available for issuance. The Company expects the adoption of ASU *2023*-*09* to result in enhanced income tax disclosures, including expanded rate reconciliation detail and disaggregated information regarding income taxes paid, in its annual consolidated financial statements. The adoption is *not* expected to have a material impact on the Company's consolidated financial position, results of operations or cash flows.\n\n \n\nIn *November 2024,*the FASB issued ASU *2024*-*03,* *Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses* (“ASU *2024*-*03”*), which requires public business entities to disclose specified information about certain costs and expenses. ASU *2024*-*03* will be effective for annual reporting periods beginning after *December 15, 2026,*and interim reporting periods with annual reporting periods beginning after *December 15, 2027.*Early adoption is permitted. The Company is currently evaluating the impact of ASU *2024*-*03* on its Consolidated Financial Statement disclosures.\n\n \n\nIn *December 2025,*the FASB issued ASU *2025*-*11,**Interim Reporting (Topic 270): Narrow-Scope Improvements (“ASU 2025-11”)*, which clarifies the applicability, form and content, and required disclosures of interim financial statements. The amendments are *not* intended to change the fundamental nature of interim reporting, but instead improve the clarity and navigability of the existing guidance. The amendments create a comprehensive list of required interim disclosures and introduce a disclosure principle requiring entities to disclose, in interim periods, any event or change since the previous year-end that has a material effect on the entity. ASU *2025*-*11* will be effective for interim reporting periods within annual reporting periods beginning after *December 15, 2027.*Early adoption is permitted. The Company is currently evaluating the impact of ASU *2025*-*11* on its interim reporting disclosures.\n\n \n\n \n\n**NOTE 2. INVESTMENTS**\n\n \n\nAs of *March 31, 2026*, the Company held investments carried at fair value on a recurring basis of $12.4 million and a cost basis of $13.2 million. The fair value of these investments is approximately 25.4 percent of the Company’s total assets at *March 31, 2026*. In addition, the Company held other investments of approximately $4.7 million, and held-to-maturity debt investments, net of allowance for credit losses, of $961,000.\n\n \n\nThe cost basis of investments is adjusted for amortization of premium or accretion of discount on debt securities held and the recharacterization of distributions from investments in partnerships, if applicable.\n\n \n\n**Concentrations of Credit Risk**\n\n \n\nA significant portion of the Company’s investments carried at fair value on a recurring basis included investments in USGIF valued at $10.0 million as of *March 31, 2026*, and $10.5 million at *June 30, 2025*.\n\n \n\n**Fair Value Hierarchy**\n\n \n\nFair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The valuation techniques described below maximize the use of observable inputs and minimize the use of unobservable inputs in determining fair value.\n\n \n\nThe inputs used for measuring financial instruments at fair value are summarized in the *three* broad levels listed below:\n\n \n\nLevel *1* – Inputs represent unadjusted quoted prices for identical assets exchanged in active markets.\n\n \n\nLevel *2* – Inputs include directly or indirectly observable inputs (other than Level *1* inputs) such as quoted prices for similar assets exchanged in active or inactive markets; quoted prices for identical assets exchanged in inactive markets; other inputs that *may*be considered in fair value determinations of the assets, such as interest rates and yield curves; and inputs that are derived principally from or corroborated by observable market data by correlation or other means.\n\n \n\nLevel *3* – Inputs include unobservable inputs used in the measurement of assets. The Company is required to use its own assumptions regarding unobservable inputs because there is little, if any, market activity in the assets and it *may*be unable to corroborate the related observable inputs. Unobservable inputs require management to make certain projections and assumptions about the information that would be used by market participants in valuing assets.\n\n \n\nThe Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the financial instrument. The inputs or methodology used for valuing securities are *not* necessarily an indication of the risk associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected *may*materially differ from the values received upon actual sale of those investments.\n\n \n\nThe Company has established a Proprietary Valuation Committee (the “Committee”) to administer and oversee the Company’s valuation policies and procedures, which are approved by the Board of Directors, and to perform a periodic review of valuations provided by independent pricing services.\n\n \n\nFor actively traded securities, the Company values investments using the closing price of the securities on the exchange or market on which the securities principally trade. If the security is *not* traded on the last business day of the quarter, it is generally valued at the mean between the last bid and ask quotation. The fair value of a security that has a restriction greater than *one* year is based on the quoted price for an otherwise identical unrestricted instrument that trades in a public market, adjusted for the estimated effect of the restriction. Contractual restrictions on the sale of an equity security are *not* considered in measuring the security's fair value. Mutual funds, which include open- and closed-end funds and exchange-traded funds, are valued at net asset value or closing price, as applicable.\n\n \n\nFor common share purchase warrants *not* traded on an exchange, the estimated fair value is determined using the Black-Scholes option-pricing model. This sophisticated model utilizes a number of assumptions in arriving at its results, including the estimated life, the risk-free interest rate, and historical volatility of the underlying common stock. The Company *may*change the assumption of the risk-free interest rate and utilize the yield curve for instruments with similar characteristics, such as credit ratings and jurisdiction, or change the expected volatility. The effects of changing any of the assumptions or factors employed by the Black-Scholes model *may*result in a significantly different valuation.\n\n \n\nPage\n*8*\n\n[Table of Contents](#toc)\n\n \n\nCertain convertible debt securities *not* traded on an exchange are valued by an independent *third* party. The *third* party *may*use a binomial lattice model based on factors such as yield, quality, maturity, coupon rate, type of issuance, individual trading characteristics of the underlying common shares and other market data. A binomial lattice model utilizes a number of assumptions in arriving at its results. The effects of changing any of the assumptions or factors utilized in a binomial lattice model, including expected volatility, credit adjusted discount rates, and discounts for lack of marketability, *may*result in a significantly different valuation for the securities.\n\n \n\nFor other securities included in the fair value hierarchy with unobservable inputs, the Committee considers a number of factors in determining a security’s fair value, including the security’s trading volume, market values of similar class issuances, investment personnel’s judgment regarding the market experience of the issuer, financial status of the issuer, the issuer’s management, and back testing, as appropriate. The fair values *may*differ from what *may*have been used had a broader market for these securities existed. The Committee reviews inputs and assumptions and reports material items to the Board of Directors. Securities which do *not* have readily determinable fair values are also periodically reviewed by the Committee.\n\n \n\nThe following tables summarize the major categories of investments with fair values adjusted on a recurring basis as of *March 31, 2026*, and *June 30, 2025*, and other investments with fair values adjusted on a nonrecurring basis, with fair values shown according to the fair value hierarchy.\n\n \n\n  \n**March 31, 2026**\n \n\n   * *** ** \n**Significant**\n  \n**Significant**\n   * *** **\n\n  **Quoted**  **Other**  **Unobservable**   * * \n\n  \n**Prices**\n  \n**Inputs**\n  \n**Inputs**\n   * *** **\n\n*(dollars in thousands)*\n \n**(Level 1)**\n  \n**(Level 2)**\n  \n**(Level 3)**\n  \n**Total**\n \n\n**Investments carried at fair value on a recurring basis:**\n   ** **   ** **   ** **   ** **\n\nInvestments in trading securities:\n                \n\nEquity securities:\n                \n\nEquities - Domestic\n $29  $-  $-  $29 \n\nEquities - International\n  1,194   -   -   1,194 \n\nExchange Traded Funds - Crypto & digital asset\n  1,013   -   -   1,013 \n\nExchange Traded Funds - Global equity\n  33   -   -   33 \n\nExchange Traded Funds - Option strategy & income\n  187   -   -   187 \n\nMutual funds - Fixed income\n  9,197   -   -   9,197 \n\nMutual funds - Global equity\n  775   -   -   775 \n\nTotal equity securities\n  12,428   -   -   12,428 \n\nTotal investments carried at fair value on a recurring basis:\n $12,428  $-  $-  $12,428 \n\n**Investments carried at fair value on a nonrecurring basis:**\n   ** **   ** **   ** **   ** **\n\nOther investments (1)\n $-  $-  $3,772  $3,772 \n\n \n\n*1.***\n*Other investments include equity securities without readily determinable fair values that were adjusted under the measurement alternative during the nine months ended March 31, 2026. These securities are classified within level 3 due to the infrequency of the observable price changes and, in certain cases, restrictions on the transferability of the shares.*\n\n \n\n  \n**June 30, 2025**\n \n\n   * *** ** \n**Significant**\n  \n**Significant**\n   * *** **\n\n  **Quoted**  **Other**  **Unobservable**   * * \n\n  \n**Prices**\n  \n**Inputs**\n  \n**Inputs**\n   * *** **\n\n*(dollars in thousands)*\n \n**(Level 1)**\n  \n**(Level 2)**\n  \n**(Level 3)**\n  \n**Total**\n \n\n**Investments carried at fair value on a recurring basis:**\n   ** **   ** **   ** **   ** **\n\nInvestments in trading securities:\n                \n\nEquity securities:\n                \n\nEquities - Domestic\n $27  $-  $-  $27 \n\nEquities - International\n  426   -   -   426 \n\nExchange Traded Funds - Crypto & digital asset\n  997   -   -   997 \n\nExchange Traded Funds - Global equity\n  32   -   -   32 \n\nExchange Traded Funds - Option strategy & income\n  111   -   -   111 \n\nMutual funds - Fixed income\n  9,692   -   -   9,692 \n\nMutual funds - Global equity\n  841   -   -   841 \n\nTotal equity securities\n  12,126   -   -   12,126 \n\nDebt securities:\n                \n\nCorporate debt securities\n  62   -   -   62 \n\nTotal investments in trading securities:\n  12,188   -   -   12,188 \n\nInvestments in available-for-sale debt securities:\n                \n\nCorporate debt securities - Convertible debentures\n  -   -   1,576   1,576 \n\nTotal investments carried at fair value on a recurring basis:\n $12,188  $-  $1,576  $13,764 \n\n**Investments carried at fair value on a nonrecurring basis:**\n   ** **   ** **   ** **   ** **\n\nOther investments (1)\n $-  $-  $189  $189 \n\n \n\n*1.***\n\n*Other investments include equity securities without readily determinable fair values that were adjusted under the measurement alternative during the fiscal year ended June 30, 2025. These securities are classified within level 3 due to the infrequency of the observable price changes and, in certain cases, restrictions on the transferability of the shares.*\n\n \n\nPage\n*9*\n\n[Table of Contents](#toc)\n\n \n\nThe Company holds 15,000 common shares of HIVE, a company headquartered in the United States with cryptocurrency mining facilities in Paraguay, Sweden, and Canada, at a cost of $41,000. The investment had a fair value of $29,000 and $27,000 as of *March 31, 2026*, and *June 30, 2025*, respectively, and was classified within Level *1* in the preceding tables. The common shares represent ownership in HIVE of less than 0.1 percent as of *March 31, 2026*. Frank Holmes serves on the board as executive chairman of HIVE and held options and restricted stock units at *March 31, 2026*. From *August 2018*through *January 2023,*Mr. Holmes was Interim CEO of HIVE. \n\n \n\nThe available-for-sale security carried at fair value on a recurring basis in the preceding table as of *June 30, 2025*, consisted of an investment in convertible debentures of HIVE. The Company purchased the convertible securities for $15.0 million in *January 2021.*The investment comprised 8.0% interest-bearing unsecured convertible debentures, payable in quarterly installments with a *five*-year term, and 5.0 million common share purchase warrants of HIVE. Under the original terms, the principal amount of each debenture was convertible into common shares of HIVE at a conversion price of $2.34 per share, and each warrant, which expired in *January 2024,*entitled the Company to purchase *one* common share at an exercise price of $3.00 (Canadian). Following a reverse stock split, the conversion price of the debentures was adjusted to $11.70 per share. At *June 30, 2025*, the convertible securities did *not* represent an ownership interest in HIVE. The securities were subject to Canadian securities regulations.\n\n \n\nUpon acquisition, the Company recorded the convertible debentures at an estimated fair value of $16.0 million. An unrealized gain of $6.9 million was initially recognized in other comprehensive income (loss) and was subsequently realized in net investment income (loss) over time using the effective interest method.\n\n \n\nAt *June 30, 2025,*the Company utilized an independent *third*-party valuation specialist to estimate the fair value of the HIVE convertible debentures. The Company determined that the fair value measurements utilized significant unobservable inputs and were therefore classified within Level *3* of the fair value hierarchy. The fair value of the convertible debentures was $1.6 million at *June 30, 2025*. In *December 2025,*the remaining principal amount of the convertible debentures was paid in full. The following table presents a reconciliation of investments measured at fair value using Level *3* inputs.\n\n \n\n**Changes in Level 3 Assets Measured at Fair Value on a Recurring Basis**\n\n \n\n  \n**Nine Months Ended March 31, 2026**\n \n\n  \n**Investments in**\n \n\n*(dollars in thousands)*\n \n**debt securities**\n \n\nBeginning Balance\n $1,576 \n\nPrincipal maturities\n  (1,592)\n\nAmortization of day one premium\n  (16)\n\nAccretion of bifurcation discount\n  49 \n\nTotal gains or losses included in:\n    \n\nNet Investment Income (Loss)\n  108 \n\nOther Comprehensive Income (Loss)\n  (125)\n\nEnding Balance\n $- \n\n \n\nThe following is quantitative information with respect to the securities measured and carried at fair value on a recurring basis with the use of significant unobservable inputs (Level *3*) as of *June 30, 2025*.\n\n \n\n  \n**June 30, 2025**\n \n\n*(dollars in thousands)*\n \n**Fair Value**\n \n**Principal Valuation Techniques**\n \n**Unobservable Inputs**\n \n\nInvestments in available-for-sale debt securities:\n           \n\nCorporate debt securities - convertible debentures\n $1,576 \n*Binomial lattice model*\n \n*Volatility*\n  85.0%\n\n   * * * * \n*Credit Spread*\n  6.4%\n\n   * * * * \n*Risk-Free Rate*\n  2.6%\n\n \n\nPage\n*10*\n\n[Table of Contents](#toc)\n\n \n\n**Investments in Trading Securities at Fair Value**\n\n \n\nInvestments in trading securities with readily determinable fair values are carried at fair value, and changes in unrealized gains or losses are reported within net investment income (loss). The following details the components of the Company’s trading securities carried at fair value as of *March 31, 2026*, and *June 30, 2025*.\n\n \n\n  \n**March 31, 2026**\n \n\n*(dollars in thousands)*\n \n**Cost**\n  \n**Unrealized Gains (Losses)**\n  \n**Fair Value**\n \n\n**Trading securities at fair value**\n   ** **   ** **   ** **\n\nEquity securities:\n            \n\nEquities - Domestic\n $87  $(58) $29 \n\nEquities - International\n  976   218   1,194 \n\nExchange Traded Funds - Crypto & digital asset\n  1,548   (535)  1,013 \n\nExchange Traded Funds - Global equity\n  30   3   33 \n\nExchange Traded Funds - Option strategy & income\n  257   (70)  187 \n\nMutual funds - Fixed income\n  9,367   (170)  9,197 \n\nMutual funds - Global equity\n  929   (154)  775 \n\nTotal equity securities at fair value\n  13,194   (766)  12,428 \n\n**Total trading securities at fair value**\n $13,194  $(766) $12,428 \n\n \n\n  \n**June 30, 2025**\n \n\n*(dollars in thousands)*\n \n**Cost**\n  \n**Unrealized Gains (Losses)**\n  \n**Fair Value**\n \n\n**Trading securities at fair value**\n   ** **   ** **   ** **\n\nEquity securities:\n            \n\nEquities - Domestic\n $87  $(60) $27 \n\nEquities - International\n  761   (335)  426 \n\nExchange Traded Funds - Crypto & digital asset\n  967   30   997 \n\nExchange Traded Funds - Global equity\n  30   2   32 \n\nExchange Traded Funds - Option strategy & income\n  105   6   111 \n\nMutual funds - Fixed income\n  9,869   (177)  9,692 \n\nMutual funds - Global equity\n  929   (88)  841 \n\nTotal equity securities at fair value\n  12,748   (622)  12,126 \n\nDebt securities:\n            \n\nCorporate debt securities\n  215   (153)  62 \n\n**Total trading securities at fair value**\n $12,963  $(775) $12,188 \n\n \n\n \n\n**Debt Investments**\n\n \n\nInvestments in debt securities are classified on the acquisition dates and at each balance sheet date. Securities classified as held-to-maturity are carried at amortized cost, net of allowance for credit losses, reflecting the ability and intent to hold the securities to maturity. Debt securities classified as trading are acquired with the intent to sell in the near term and are carried at fair value with changes reported in earnings. All other debt securities are classified as available-for-sale and are carried at fair value.\n\n \n\nInvestment gains and losses on available-for-sale debt securities are recorded when the securities are sold, as determined on a specific identification basis, and recognized in current period earnings. Changes in unrealized gains on available-for-sale debt securities are reported net of tax in accumulated other comprehensive income (loss). For debt securities in an unrealized loss position, a loss in earnings is recognized for the excess of amortized cost over fair value if the Company intends to sell before the price recovers. Otherwise, the Company evaluates as of the balance sheet date whether the unrealized losses are attributable to credit losses or other factors. The severity of the decline in value, creditworthiness of the issuer and other relevant factors are considered. The portion of unrealized loss the Company believes is related to a credit loss is recognized in earnings, and the portion of unrealized loss the Company believes is *not* related to a credit loss is recognized in other comprehensive income (loss).\n\n \n\nCertain derivatives embedded in other financial instruments, such as the conversion option in a convertible bond, are reported at fair value, and changes in fair value are recorded through earnings within net investment income (loss). The host contract continues to be accounted for in accordance with the appropriate accounting standard. The embedded derivative and the related host contract represent *one* legal contract and are combined on the Consolidated Balance Sheets and the table that follows.\n\n \n\nThe Company held *one* financial instrument classified as available-for-sale containing an embedded derivative, representing an investment in HIVE, at *June 30, 2025*. At that date, the fair value of the embedded derivative was zero. During the prior fiscal years, the Company recognized unrealized losses related to this embedded derivative through earnings. In *December 2025,*the remaining principal amount of the Company’s investment in available-for-sale debt securities containing a conversion option was paid in full, resulting in the realization of a loss of $2.5 million on the expired embedded derivative. As this loss had been previously recognized as unrealized in prior years, the realization had *no* net impact on net investment income (loss) for the current fiscal year.\n\n \n\nPage\n*11*\n\n[Table of Contents](#toc)\n\n \n\nThe following details the components of the Company’s available-for-sale debt investments as of *June 30, 2025*. There were no available-for-sale debt investments as of *March 31, 2026*.\n\n \n\n \n\n  \n**June 30, 2025**\n** **\n\n*(dollars in thousands)*\n \n**Amortized Cost**\n  \n**Unrealized Gains in Other Comprehensive Income (Loss)**\n  \n**Unrealized Losses in Other Comprehensive Income (Loss)**\n  \n**Unrealized Losses in Net Investment Income (Loss) (1)**\n  \n**Fair Value**\n  \n**Allowance for Credit Losses**\n \n\n**Available-for-sale debt securities:**\n                        \n\nCorporate debt securities - Convertible debentures\n $3,993  $125  $-  $(2,542) $1,576  $- \n\n \n\n*1.*\n\n*Represents changes in unrealized gains and losses related to embedded derivatives included within net investment income (loss) on the Consolidated Statements of Operations. *\n\n \n\nThe following table presents the effect of embedded derivatives on the Consolidated Statements of Operations, categorized by risk exposure, for the *three* and *nine* months ended *March 31, 2026,*and *2025*.\n\n \n\n  \n**Nine Months Ended**\n  \n**Three Months Ended**\n \n\n  \n**March 31,**\n  \n**March 31,**\n \n\n  \n**2026**\n  \n**2025**\n  \n**2026**\n  \n**2025**\n \n\n  \n**Other Income (Loss)**\n  \n**Other Income (Loss)**\n  \n**Other Income (Loss)**\n  \n**Other Income (Loss)**\n \n\n*(dollars in thousands)*\n \n**Net Investment Income (Loss)**\n  \n**Net Investment Income (Loss)**\n  \n**Net Investment Income (Loss)**\n  \n**Net Investment Income (Loss)**\n \n\n**Embedded Derivatives:**\n   ** **   ** **   ** **   ** **\n\nEquity price risk exposure\n $-  $(12) $-  $(1)\n\n   \n\nAt *March 31, 2026*, and *June 30, 2025*, the Company held *one* debt security classified as held-to-maturity. The following details are the components of the Company’s held-to-maturity debt investments as of *March 31, 2026*, and *June 30, 2025*.\n\n \n\n  \n**March 31, 2026**\n \n\n*(dollars in thousands)*\n \n**Amortized Cost**\n  \n**Allowance for Credit Losses**\n  \n**Net Carrying Amount**\n  \n**Gross Unrecognized Holding Gains**\n  \n**Gross Unrecognized Holding Losses**\n  \n**Fair Value**\n \n\n**Held-to-maturity debt securities(1):**\n   ** **   ** **   ** **   ** **   ** **   ** **\n\nCorporate debt securities\n $1,000  $(39) $961  $-  $-  $961 \n\n \n\n  \n**June 30, 2025**\n \n\n*(dollars in thousands)*\n \n**Amortized Cost**\n  \n**Allowance for Credit Losses**\n  \n**Net Carrying Amount**\n  \n**Gross Unrecognized Holding Gains**\n  \n**Gross Unrecognized Holding Losses**\n  \n**Fair Value**\n \n\n**Held-to-maturity debt securities(1):**\n   ** **   ** **   ** **   ** **   ** **   ** **\n\nCorporate debt securities\n $1,000  $(52) $948  $-  $-  $948 \n\n \n\n*1.*\n\n*Held-to-maturity debt investments are carried at amortized cost, net of allowance for credit losses, and the fair value is classified as Level 2 according to the fair value hierarchy.*\n\n \n\nPage\n*12*\n\n[Table of Contents](#toc)\n\n \n\nThe Company applies the Current Expected Credit Losses (“CECL”) model to held-to-maturity debt securities. The allowance, which requires significant judgment, reflects lifetime expected credit losses and is deducted from amortized cost to present the net amount expected to be collected. Securities, or portions thereof, are charged against the allowance when deemed uncollectible, and the balance *may*change as economic conditions or issuer prospects evolve.\n\n \n\nThe Company monitors the credit quality of debt securities through credit ratings from various rating agencies. Credit ratings express opinions about the credit quality of a security and are utilized by the Company to make informed decisions. Investment grade securities are rated BBB-*/Baa3* or higher and generally considered by the rating agencies and market participants to be of low credit risk. Conversely, securities rated below investment grade are considered to have distinctively higher credit risk than investment grade securities. For securities without credit ratings, the Company utilizes other financial information indicating the financial health of the underlying organization. As of *March 31, 2026*, and *June 30, 2025*, the held-to-maturity debt investment held by the Company did *not* have a credit rating.\n\n \n\nSince the held-to-maturity debt security does *not* have a credit rating, management has determined that the discounted cash flow method provides the best basis for its assessment and determination of expected credit losses. The Company has elected to reflect the change in the allowance solely attributable to the passage of time in interest income. Changes attributable to the passage of time are those solely due to changes in the present value of the expected cash flows as the instrument approaches maturity rather than expectations of cash flow timing or amounts. The change in allowance for credit losses attributable to the passage of time, included as an increase in interest income within net investment income (loss) on the Consolidated Statements of Operations, was $2,000 and $13,000 for the *three* and *nine* months ended *March 31, 2026*, respectively, and $3,000 and $61,000 for the *three* and *nine* months ended *March 31, 2025*, respectively.\n\n \n\nThe following table presents the activity in the allowance for credit losses for the held-to-maturity debt investment for the *nine* months ended *March 31, 2026*, and *2025*.\n\n \n\n  \n**Nine Months Ended**\n \n\n  \n**March 31,**\n \n\n*(dollars in thousands)*\n \n**2026**\n  \n**2025**\n \n\nBeginning Balance\n $52  $132 \n\nProvision for credit losses - reversal (1)\n  (13)  (61)\n\nEnding Balance\n $39  $71 \n\n \n\n*1.**Represents the change in present value attributable to the passage of time included in interest income.*\n\n \n\nThe following summarizes the net carrying amount and estimated fair value of held-to-maturity debt securities at *March 31, 2026*, by contractual maturity dates. \n\n \n\n  \n**March 31, 2026**\n \n\n  \n**Held-to-maturity**\n \n\n  \n**debt securities**\n \n\n  \n**Due in less than**\n \n\n*(dollars in thousands)*\n \n**one year**\n \n\nAmortized Cost\n $1,000 \n\nFair Value\n $961 \n\n \n\n  \n\nAs of *March 31, 2026*, and *June 30, 2025*, *none* of the Company’s investments in debt securities classified as held-to-maturity or available-for-sale were delinquent or in a non-accrual status. Accrued interest receivable of $25,000 and $40,000 is included in accounts and other receivables on the Consolidated Balance Sheets as of *March 31, 2026*, and *June 30, 2025*, respectively. The accrued interest receivable as of *June 30, 2025*, includes amounts related to the Company's available-for-sale debt security, which was *not* held as of *March 31, 2026*.\n\n \n\n**Other Investments**\n\n \n\nOther investments consist of equity investments in entities over which the Company does *not* exercise significant influence and that do *not* have readily determinable fair values. These investments are accounted for under the measurement alternative in accordance with ASC *321,* whereby securities are measured at cost, less impairment, if any, and adjusted for observable price changes in orderly transactions for identical or similar securities of the same issuer. When observable price changes are identified, the carrying value of the related equity security is adjusted to reflect the observable transaction price as of the transaction date, with the resulting gains or losses recognized in net investment income (loss). The Company does *not* perform recurring fair value remeasurements of these equity securities absent such observable transactions or indicators of impairment.\n\n \n\nThe carrying value of equity securities without readily determinable fair values was approximately $1.3 million as of *June 30, 2025*. The following table presents the carrying value of equity securities without readily determinable fair values held as of *March 31, 2026,*and *2025*, that are measured under the measurement alternative, as well as the related adjustments recorded during the periods presented for those securities with observable price changes or impairments. These securities are included in the nonrecurring fair value hierarchy tables when observable price changes occur or when impairments are recognized.\n\n  \n\n  \n**Nine Months Ended**\n  \n**Three Months Ended**\n \n\n  \n**March 31,**\n  \n**March 31,**\n \n\n*(dollars in thousands)*\n \n**2026**\n  \n**2025**\n  \n**2026**\n  \n**2025**\n \n\n**Other Investments**\n   ** **   ** **   ** **   ** **\n\nCarrying value\n $4,730  $1,687  $4,730  $1,687 \n\nUpward carrying value changes\n $3,272  $-  $1,944  $- \n\nDownward carrying value changes/impairment\n $-  $-  $-  $- \n\n \n\nThe period-end carrying values reflect cumulative purchases and sales, as well as upward and downward carrying adjustments resulting from observable price changes and impairment assessments. Through *March 31, 2026*, the cumulative amount of upward adjustments to all equity securities without readily determinable fair values totaled $5.8 million since their respective acquisition dates. These upward adjustments were recorded solely in connection with observable price changes in orderly transactions and *not* as a result of recurring fair value measurements. The most recent upward adjustment was based on an observable transaction involving an issuance of similar equity securities by the issuer during the period. The Company considered the transaction price in that issuance and concluded that it represented an observable price change under ASC *321.* Accordingly, the carrying value of the investment was adjusted under the measurement alternative.\n\n \n\nPage\n*13*\n\n[Table of Contents](#toc)\n\n \n\nThe cumulative amount of impairments and other downward adjustments to all equity securities without readily determinable fair values totaled $5.4 million through *March 31, 2026*. Downward adjustments include impairments identified based on qualitative assessments, return-of-capital distributions, and decreases in carrying value resulting from observable price changes.\n\n \n\n**Net Investment Income (Loss)**\n\n \n\nNet investment income (loss) from the Company’s investments includes:\n\n \n●\n\nrealized gains and losses on sales of securities;\n\n \n●\n\nrealized gains and losses on principal payment proceeds;\n\n \n●\n\nunrealized gains and losses on securities at fair value;\n\n \n●\n\nimpairments and observable price changes on equity investments without readily determinable fair values;\n\n \n●\n\ndividend and interest income; and\n\n \n●\n\nrealized foreign currency gains and losses.\n\n \n\nThe following summarizes net investment income (loss) reflected in earnings for the periods presented.\n\n \n\n  \n**Nine Months Ended**\n  \n**Three Months Ended**\n \n\n*(dollars in thousands)*\n \n**March 31,**\n  \n**March 31,**\n \n\n**Net Investment Income (Loss)**\n \n**2026**\n  \n**2025**\n  \n**2026**\n  \n**2025**\n \n\nNet realized gains (losses) on equity securities\n $(2) $-  $-  $- \n\nNet realized gains (losses) on debt securities\n  108   507   -   134 \n\nNet realized gains (losses) on embedded derivatives\n  (2,542)  -   -   - \n\nNet unrealized gains (losses) on equity securities\n  3,128   (149)  1,349   (50)\n\nNet unrealized gains (losses) on debt securities\n  152   (58)  -   (9)\n\nNet unrealized gains (losses) on embedded derivatives\n  2,542   (12)  -   (1)\n\nNet unrealized gains (losses) on cash equivalents\n  5   9   6   9 \n\nDividend and interest income\n  1,183   1,715   364   466 \n\nNet realized foreign currency gains (losses)\n  (92)  (193)  (54)  (1)\n\n**Total Net Investment Income (Loss)**\n $4,482  $1,819  $1,665  $548 \n\n \n\nRealized gains on debt securities reclassified from other comprehensive income (loss) related to the Company's investment in HIVE debentures were $108,000 for the *nine* months ended *March 31, 2026*, with no reclassifications in the *three*-month period, compared with $134,000 and $507,000 for the *three* and *nine* months ended *March 31, 2025*, respectively.\n\n \n\nThe following table presents net unrealized gains (losses) recognized in net investment income (loss) during the *three* and *nine* months ended *March 31, 2026,*and *2025*, related to equity securities and debt securities classified as trading that were held as of the respective period-end dates. \n\n \n\n  \n**Nine Months Ended**\n  \n**Three Months Ended**\n \n\n  \n**March 31,**\n  \n**March 31,**\n \n\n*(dollars in thousands)*\n \n**2026**\n  \n**2025**\n  \n**2026**\n  \n**2025**\n \n\n**Net unrealized gains (losses) for securities held at the reporting date:**\n   ** **   ** **   ** **   ** **\n\n**Equity securities:**\n   ** **   ** **   ** **   ** **\n\nNet gains (losses) recognized during the period\n $3,126  $(149) $1,349  $(50)\n\nLess: Net gains (losses) recognized during the period on securities sold during the period\n  (2)  -   -   - \n\nNet unrealized gains (losses) recognized during the reporting period on securities still held at the reporting date (1)\n $3,128  $(149) $1,349  $(50)\n\n**Debt securities classified as trading:**\n   ** **   ** **   ** **   ** **\n\nNet gains (losses) recognized during the period\n $152  $(58) $-  $(9)\n\nLess: Net gains (losses) recognized during the period on securities sold during the period\n  152   -   -   - \n\nNet unrealized gains (losses) recognized during the reporting period on securities still held at the reporting date (2)\n $-  $(58) $-  $(9)\n\n \n\n*1.***\n\n*Includes net unrealized gains of $1.9 million and $3.3 million recognized under the measurement alternative for the three and nine months ended March 31, 2026, respectively. No amounts were recognized under the measurement alternative for the three and nine months ended March 31, 2025.*\n\n*2.***\n\n*In December 2025, senior notes were mandatorily exchanged for equity securities of the issuer pursuant to a court-approved restructuring. Accordingly, the investment is presented within equity securities at the reporting date, and prior-period amounts are reflected within debt securities classified as trading. The exchange was a non-cash, nonrecognition transaction. *\n\n \n\nNet investment income (loss) can be volatile and vary depending on market fluctuations, the Company’s ability to participate in investment opportunities, and the timing of transactions. The Company expects that gains and losses will continue to fluctuate in the future.\n\n \n\nPage\n*14*\n\n[Table of Contents](#toc)\n\n \n\n \n\n \n\n**NOTE 3. INVESTMENT MANAGEMENT AND OTHER FEES**\n\n \n\nThe following table presents operating revenues disaggregated by performance obligation.\n\n \n\n  \n**Nine Months Ended**\n  \n**Three Months Ended**\n \n\n  \n**March 31,**\n  \n**March 31,**\n \n\n*(dollars in thousands)*\n \n**2026**\n  \n**2025**\n  \n**2026**\n  \n**2025**\n \n\nETF advisory fees\n $4,584  $5,251  $1,546  $1,657 \n\nUSGIF advisory fees\n  2,780   1,378   1,151   484 \n\nUSGIF performance fees received (paid)\n  -   (229)  -   (69)\n\nTotal Advisory Fees\n  7,364   6,400   2,697   2,072 \n\nUSGIF administrative services fees\n  160   92   65   31 \n\nTotal Operating Revenue\n $7,524  $6,492  $2,762  $2,103 \n\n \n\nThe 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 the 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 (\"SEA\"). The Company has agreed to contractually limit the expenses of SEA through *April 2027*. For the *three* and *nine* months ended *March 31, 2026*, aggregate fees waived and expenses borne by the Company for SEA were $33,000 and $105,000, respectively, including waived fees of $20,000 and $47,000, respectively. For the *three* and *nine* months ended *March 31, 2025*, aggregate fees waived and expenses borne by the Company for SEA were $33,000 and $111,000, respectively, including waived fees of $9,000 and $28,000, respectively. The Company also serves as an 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 European-based ETF.\n\n \n\nThe Company serves as investment adviser to USGIF and earns a base management fee calculated as a specified percentage of average net assets under management. During fiscal year *2025,* the Company also received performance fees, which were fulcrum fees consisting of a 0.25 percent upwards or downwards adjustment of the base management fee when there was a 5 percent or more performance difference between a fund’s performance and that of its designated benchmark index over the prior rolling *12* months. 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.\n\n \n\nThe Company has agreed to contractually limit the expenses of the Funds except the U.S. Government Securities Ultra-Short Bond Fund through *April 2027*. The Company has voluntarily waived or reduced its fees and/or agreed to pay expenses on the U.S. Government Securities Ultra-Short Bond Fund. This cap will continue on a voluntary basis at the Company’s discretion. For the *three* and *nine* months ended *March 31, 2026*, aggregate fees waived and expenses borne by the Company for USGIF were $172,000 and $588,000, respectively, including waived fees of $125,000 and $417,000, respectively. For the *three* and *nine* months ended *March 31, 2025*, aggregate fees waived and expenses borne by the Company for USGIF were $211,000 and $743,000, respectively, including waived fees of $167,000 and $587,000, respectively. USGIF revenue included on the Consolidated Statements of Operations is net of fee waivers. Management cannot predict the impact of future waivers due to the number of variables and the range of potential outcomes.\n\n \n\nThe Company receives administrative service fees from USGIF based on an annual rate of 0.05 percent on the average daily net assets of each fund.\n\n \n\nAs of *March 31, 2026*, the Company had $872,000 in receivables from fund clients, of which $483,000 was from the ETFs and $389,000 was from USGIF. As of *June 30, 2025*, the Company had $683,000 in receivables from fund clients, of which $494,000 was from the ETFs and $189,000 was from USGIF. There was no allowance for credit losses related to receivables as of *March 31, 2026*, or *June 30, 2025*.\n\n  \n\nPage\n*15*\n\n[Table of Contents](#toc)\n\n \n\n \n\n**NOTE 4. RESTRICTED AND UNRESTRICTED CASH**\n\n \n\nThe Company maintains its cash deposits with established commercial banks. At times, balances *may*exceed federally insured limits. We have *not* experienced any losses in such accounts and do *not* believe that we are exposed to any significant credit risk associated with our cash deposits. Restricted cash represents cash invested in a money market account as collateral for credit facilities that is *not* available for general corporate use.\n\n \n\nA reconciliation of cash, cash equivalents, and restricted cash reported from the Consolidated Balance Sheets to the Consolidated Statements of Cash Flows is shown below.\n\n \n\n*(dollars in thousands)*\n \n**March 31, 2026**\n  \n**June 30, 2025**\n \n\nCash and cash equivalents\n $24,575  $24,552 \n\nRestricted cash\n  1,000   1,000 \n\nTotal cash, cash equivalents, and restricted cash\n $25,575  $25,552 \n\n  \n\n \n\n**NOTE 5. LEASES**\n\n \n\nThe Company has lease agreements for office equipment that expire in fiscal year *2029*. Lease expenses included in general and administrative expense on the Consolidated Statements of Operations totaled $24,000 and $80,000 for the *three* and *nine* months ended *March 31, 2026*, respectively, and $25,000 and $75,000 for the *three* and *nine* months ended *March 31, 2025*, respectively.\n\n \n\nThe following table presents the components of lease cost.\n\n \n\n  \n**Nine Months Ended**\n  \n**Three Months Ended**\n \n\n  \n**March 31,**\n  \n**March 31,**\n \n\n*(dollars in thousands)*\n \n**2026**\n  \n**2025**\n  \n**2026**\n  \n**2025**\n \n\nFinance lease cost:\n                \n\nAmortization of right-of-use assets\n $27  $24  $6  $8 \n\nInterest on lease liabilities\n  5   1   2   - \n\nTotal finance lease cost\n  32   25   8   8 \n\nShort-term lease cost\n  53   51   18   17 \n\nTotal lease cost\n $85  $76  $26  $25 \n\n   \n\nSupplemental information related to the Company's leases follows.\n\n \n\n  \n**Nine Months Ended**\n  \n**Three Months Ended**\n \n\n  \n**March 31,**\n  \n**March 31,**\n \n\n*(dollars in thousands)*\n \n**2026**\n  \n**2025**\n  \n**2026**\n  \n**2025**\n \n\nOperating cash flows from financing leases included in lease liabilities\n $3  $1  $2  $- \n\nFinancing cash flows from financing leases included in lease liabilities\n $21  $24  $6  $8 \n\nLease liabilities obtained from new ROU assets - financing (1)\n $92  $-  $-  $- \n\n \n\n*1.***\n\n*During the nine months ended March 31, 2026, non-cash changes in lease liabilities included $92,000 of new right-of-use assets recognized in exchange for new lease liabilities and $6,000 of amortization of lease liabilities during rent-free periods. There were no non-cash changes in lease liabilities during the three months ended March 31, 2026, or during the three and nine months ended March 31, 2025.*\n\n \n\nAdditional qualitative information concerning the Company’s leases follows.\n\n \n\n  \n**March 31, 2026**\n  \n**June 30, 2025**\n \n\nWeighted-average remaining lease term - financing leases (years)\n  2.75   0.25 \n\nWeighted-average discount rate - financing leases\n  7.50%  4.75%\n\n \n\nThe following table presents the maturities of lease liabilities as of *March 31, 2026*.\n\n \n\n*(dollars in thousands)*\n   * *\n\n**Fiscal Year**\n \n**Finance Leases**\n \n\n2026 (excluding the nine months ended March 31, 2026)\n $8 \n\n2027\n  32 \n\n2028\n  32 \n\n2029\n  16 \n\nTotal lease payments\n  88 \n\nLess imputed interest\n  (9)\n\nTotal\n $79 \n\n \n\nThe Company is the lessor of certain areas of its owned office building under operating leases expiring in various months through fiscal year *2028*. At the commencement of an operating lease, *no* income is recognized; subsequently, lease payments received are recognized on a straight-line basis. Lease income included in other income on the Consolidated Statements of Operations was $30,000 and $88,000 for the *three* and *nine* months ended *March 31, 2026*, respectively, and $28,000 and $75,000 for the *three* and *nine* months ended *March 31, 2025*, respectively. The Company is party to a lease agreement with HIVE, a related party, for certain areas of the Company’s office building. The terms of the lease were determined to be consistent with market rates.\n\n \n\nPage\n*16*\n\n[Table of Contents](#toc)\n\n \n\nThe following is a summary analysis of annual undiscounted cash flows to be received on leases as of *March 31, 2026*.\n\n \n\n*(dollars in thousands)*\n   * *\n\n**Fiscal Year**\n \n**Operating Leases**\n \n\n2026 (excluding the nine months ended March 31, 2026)\n $14 \n\n2027\n  58 \n\n2028\n  34 \n\nTotal lease payments\n $106 \n\n \n\nThe Company *may*terminate the building leases with *one hundred eighty* days written notice if it sells the property. If the Company terminates the lease, the Company will pay the tenant a termination fee of the lesser of *six* months of the base monthly rent or the base monthly rent times the number of months remaining in the initial term.\n\n \n\n \n\n**NOTE 6. OTHER ACCRUED EXPENSES**\n\n \n\nOther accrued expenses consist of the following:\n\n      \n\n*(dollars in thousands)*\n \n**March 31, 2026**\n  \n**June 30, 2025**\n \n\nProfessional fees\n $537  $455 \n\nVendors payable\n  269   143 \n\nETF operating and distribution expenses\n  343   411 \n\nOther taxes payable\n  52   72 \n\nOther accrued items\n  10   10 \n\nOther accrued expenses\n $1,211  $1,091 \n\n     \n\nA portion of other accrued expenses relates to out-of-pocket expenses incurred by the Company are reimbursable by HIVE. Receivables from HIVE for these reimbursable out-of-pocket expenses amounted to $134,000 and $239,000 as of *March 31, 2026*, and *June 30, 2025*, respectively, are included within accounts and other receivables on the Consolidated Balance Sheets.\n\n \n\n \n\n**NOTE 7. DEBT**\n\n \n\nThe Company has access to a $1.0 million credit facility 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 at *March 31, 2026*, 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 *March 31, 2026*, the credit facility remains unutilized by the Company.\n\n \n\nDuring fiscal *2025,* the Company received loan proceeds of $75,000 from an entity in which it holds an equity investment. The loan is non-interest bearing, non-recourse, and will be repaid through an offset against amounts due upon the entity's final liquidation. Because the timing of liquidation is uncertain, the loan is classified as non-current within notes payable on the Consolidated Balance Sheets.\n\n  \n\n \n\n**NOTE 8. STOCKHOLDERS**’**EQUITY**\n\n \n\nPayment of cash dividends is within the discretion of the Company’s Board of Directors and is dependent on earnings, operations, capital requirements, general financial condition of the Company, and general business conditions. The dividend rate per share was $0.0075 per month for fiscal year *2025* and through *March 2026*.\n\n \n\nIn *March 2026*, the Board authorized the continuance of the monthly dividend of $0.0075 per share from *April* through *June 2026*, at which time it will be considered for continuation by the Board.\n\n \n\nThe Company has 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, as market and business conditions warrant, on the open market in compliance with Rule *10b*-*18* and Rule *10b5*-*1* of the Securities Exchange Act of *1934.* The repurchase program has been in place since *December 2012,*and the Board of Directors has annually renewed the repurchase program each calendar year. The Company announced on *February 25, 2022,*that the Board of Directors of the Company approved an increase to the limit of its annual share buyback program from $2.75 million to $5.0 million. The Company announced on *September 19, 2024,*that the Board of Directors of the Company approved an update authorizing the Company to repurchase up to $5.0 million of its outstanding common shares between *September 13, 2024,*and *December 31, 2024.*As a result, the total amount of shares that *may*be repurchased under the program was $6.5 million in *2024* and $5.0 million in each of *2025* and *2026*. The acquired shares *may*be used for corporate purposes, including shares issued to employees in the Company’s stock-based compensation programs. During the *three* and *nine* months ended *March 31, 2026*, the Company repurchased 176,592 and 597,861 class A shares for $534,000 and $1.6 million, respectively. During the *three* and *nine* months ended *March 31, 2025*, the Company repurchased 187,987 and 622,605 class A shares for $454,000, and $1.6 million, respectively.\n\n \n\nThe Inflation Reduction Act of *2022* imposes a *1%* excise tax on stock buybacks by publicly traded corporations. Any excise tax incurred is recognized as part of the cost basis of the shares acquired in the Consolidated Statements of Shareholders' Equity. The impact of these provisions was $5,000 and $15,000 for the *three* and *nine* months ended *March 31, 2026*, respectively, and $5,000 and $15,000 for the *three* and *nine* months ended *March 31, 2025*, respectively. All amounts presented in this report related to the Company's share repurchases and the Company's share repurchase authorization exclude such excise taxes, to the extent applicable, unless otherwise indicated.\n\n \n\nPage\n*17*\n\n[Table of Contents](#toc)\n\n \n\n**Stock Option Plans**\n\n \n\nThe Company’s stock option plans allow for the granting of class A shares as either incentive or non-qualified stock options to employees and non-employee directors. The terms and conditions of these options, including exercise price, vesting schedule, and expiration, are determined by the Compensation Committee of the Board of Directors.\n\n \n\nUnder the *1989* Plan, there were 352,000 and 228,000 stock options outstanding and exercisable as of *March 31, 2026*, and *2025*, respectively. The weighted average exercise prices of these options were $4.76 and $6.05, respectively. There were no nonvested stock options outstanding as of *March 31, 2026*, and 125,100 nonvested stock options outstanding as of *March 31, 2025*, with a weighted average exercise of $2.41.\n\n \n\nUnder the *1997* Plan, there were 2,000 stock options outstanding and exercisable as of both *March 31, 2026,*and *March 31, 2025*, with a weighted average exercise price of $2.74.\n\n \n\n**Stock Option Activity**\n\n \n\nDuring the *three* and *nine* months ended *March 31, 2026*, no stock options were granted or exercised, and 200 options were forfeited. During the *three* and *nine* months ended *March 31, 2025*, the Company granted 25,000 and 125,100 stock options, respectively, with weighted‑average grant‑date fair values of $0.99 and $1.06 and a six‑month vesting period. No stock options were exercised in either period in fiscal *2025*, and forfeitures of 1,000 options occurred only during the *nine*-month period in fiscal *2025*.\n\n \n\n**Share-Based Compensation Expense**\n\n \n\nThe Company measures share-based compensation expense at the grant date, based on the fair value of the awards. This expense is recognized ratably over the awards’ vesting period. No share-based compensation expense was recognized for the *three* months ended *March 31, 2026*. Share-based compensation expense of $9,000 was recognized for the *nine* months ended *March 31, 2026*, and $58,000 and $68,000 was recognized for the *three* and *nine* months ended *March 31, 2025*, respectively. As of *March 31, 2026*, there were no unrecognized share-based compensation costs related to share-based awards under the plans. As of *March 31, 2025*, unrecognized share-based compensation costs totaled $65,000.\n\n  \n\n \n\n**NOTE 9. EARNINGS PER SHARE**\n\n \n\nThe basic earnings per share (“EPS”) calculation excludes dilution and is computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution of EPS that could occur if options to issue common stock were exercised.\n\n \n\nThe following table sets forth the computation for basic and diluted EPS.\n\n \n\n  \n**Nine Months Ended**\n  \n**Three Months Ended**\n \n\n  \n**March 31,**\n  \n**March 31,**\n \n\n*(dollars in thousands, except per share data)*\n \n**2026**\n  \n**2025**\n  \n**2026**\n  \n**2025**\n \n\nNet Income (Loss)\n $3,338  $(153) $2,677  $(382)\n\n                 \n\n**Weighted average number of outstanding shares**\n   ** **   ** **   ** **   ** **\n\nBasic\n  12,535,652   13,414,873   11,858,724   13,023,636 \n\nEffect of dilutive securities\n                \n\nStock options\n  10,976   3,168   24,378   805 \n\nDiluted\n  12,546,628   13,418,041   11,883,102   13,024,441 \n\n                 \n\n**Earnings (Loss) Per Share**\n   ** **   ** **   ** **   ** **\n\n**Basic Net Income (Loss) per share**\n $0.27  $(0.01) $0.23  $(0.03)\n\n**Diluted Net Income (Loss) per share**\n $0.27  $(0.01) $0.23  $(0.03)\n\n \n\nThe diluted EPS calculation excludes the effect of stock options when their exercise prices exceed the average market price for the period, as their inclusion would be anti-dilutive. For the *three* and *nine* months ended *March 31, 2026*, employee stock options of 227,000 and 229,000, respectively, were excluded from diluted EPS. For the *three* and *nine* months ended *March 31, 2025*, employee stock options of 330,100 and 230,000, respectively, were excluded from diluted EPS. \n\n \n\nDuring the *three* and *nine* months ended *March 31, 2026*, and *2025*, the Company repurchased class A shares on the open market. Upon repurchase, these shares are classified as treasury shares and are deducted from outstanding shares in the earnings per share calculation.\n\n  \n\nPage\n*18*\n\n[Table of Contents](#toc)\n\n \n\n \n\n**NOTE 10. INCOME TAXES**\n\n \n\nThe Company and its non-Canadian subsidiaries file a consolidated U.S. federal income tax return. USCAN files a separate tax return in Canada. Provisions for income taxes include deferred taxes for temporary differences between the financial reporting and tax basis of assets and liabilities, resulting from the use of the liability method of accounting for income taxes.\n\n \n\nIncome tax expense for the quarter is based upon the estimated annual ordinary income in each jurisdiction in which the Company operates. The tax effects of discrete items are recognized in the tax provision in the period they occur in accordance with U.S. GAAP. Due to various factors, such as the item’s significance in relation to total ordinary income and the rate of tax, discrete items in any quarter can materially impact the reported effective tax rate (\"ETR\"). A valuation allowance is provided when it is more likely than *not* that some portion of the deferred tax amount will *not* be realized. There was no valuation allowance recorded at *June 30, 2025*.\n\n \n\nAs of *March 31, 2026*, the Company recorded a valuation allowance of $26,000 against deferred tax assets, primarily capital loss carryforwards. The realization of capital loss carryforwards is dependent upon future capital gains. The Company concluded that it was more-likely-than-*not* that a portion of these deferred tax assets would *not* be realized.\n\n \n\nIn addition, income tax expense for the *three* months ending *March 31, 2026,*was reduced by discrete items, primarily a *481*(a) adjustment related to the federal income tax treatment of certain HIVE securities and a decrease in the valuation allowance. As a result, the Company's effective tax rate *may**not* be comparable between periods. The effective tax rate was (46.0) and 20.8 percent for the *three* and *nine* months ended *March 31, 2026*, respectively, and (55.9) and 301.3 percent for the *three* and *nine* months ended *March 31, 2025*, respectively. \n \n\nThe Company maintains a reserve for uncertain tax positions for income tax matters. As of *March 31, 2026*, and *June 30, 2025*, the total reserve for uncertain tax positions, including $387,000 and $421,000 of accrued interest and penalties, respectively, and net of federal benefits, was $845,000 and $891,000, respectively. These amounts are included within long-term liabilities on the Consolidated Balance Sheets. The Company believes the reserve balance as of *March 31, 2026*, including interest and penalties and net of federal benefits, adequately covers open tax years and uncertain tax positions for major taxing jurisdictions. If recognized, the entire $845,000 of unrecognized tax benefits would impact the Company's effective income tax rate. \n\n \n\nOn *July 4, 2025,*President Trump signed into law Public Law *119*-*21,* commonly known as the One Big Beautiful Bill Act (the “Act”), which contained several tax reform proposals. A Company is required to adjust current and deferred tax liabilities and assets for the effects of changes in tax laws or rates in income from continuing operations in the interim period that includes the enactment date. The impact of the Act is reflected in the Company’s interim results for the *three* and *nine* months ended *March 31, 2026*, and is immaterial.\n\n  \n\n \n\n**NOTE 11. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)**\n\n \n\nThe following table presents the change in accumulated other comprehensive income (loss) (“AOCI”) by component.\n\n \n\n*(dollars in thousands)*\n \n**Unrealized gains (losses) on available-for-sale investments**\n \n\n**Nine Months Ended March 31, 2026**\n   ** **\n\n**Balance at June 30, 2025**\n $98 \n\nOther comprehensive income (loss) before reclassifications\n  (17)\n\nTax effect\n  4 \n\nAmount reclassified from AOCI\n  (108)\n\nTax effect\n  23 \n\nNet other comprehensive income (loss)\n  (98)\n\n**Balance at March 31, 2026**\n $- \n\n     \n\n**Nine Months Ended March 31, 2025**\n   ** **\n\n**Balance at June 30, 2024**\n $584 \n\nOther comprehensive income (loss) before reclassifications\n  1 \n\nTax effect\n  - \n\nAmount reclassified from AOCI\n  (507)\n\nTax effect\n  106 \n\nNet other comprehensive income (loss)\n  (400)\n\n**Balance at March 31, 2025**\n $184 \n\n \n\nPage\n*19*\n\n[Table of Contents](#toc)\n\n \n\n \n\n**NOTE 12. FINANCIAL INFORMATION BY BUSINESS SEGMENT**\n\n \n\nThe Company manages the following business segments: \n\n*1.*Investment management services, by which the Company offers, to USGIF and ETF clients, a range of investment management products and services to meet the needs of individual and institutional investors; and\n\n*2.*Corporate investments, through which the Company invests for its own account in an effort to add growth and value to its cash position.\n\nThese segments are managed separately. The Company’s segment information is prepared on the same basis that management uses to review the financial information for operational and investment decision-making purposes. All segment accounting policies are the same as those described in the summary of significant accounting policies.\n \nThe Company's Chief Executive Officer, serving as the Chief Operating Decision Maker (\"CODM\"), evaluates the performance of the Company’s Corporate Investments segment separately from the Investment Management Services segment based on net investment income (loss), and the Corporate Investments segment does *not* include any allocated company expenses. All significant expenses are disclosed on the Consolidated Statements of Operations. The CODM evaluates the performance of the Company’s Investment Management Services segment based on operating income (loss) before depreciation, interest, and income taxes.\n\n \n\nThe following schedule details total revenues, income, and gross identifiable assets by business segment:\n \n\n*(dollars in thousands)*\n \n**Investment Management Services**\n  \n**Corporate Investments**\n  \n**Consolidated**\n \n\n**Nine Months Ended March 31, 2026**\n            \n\nOperating revenues\n $7,524  $-  $7,524 \n\nNet investment income (loss)\n $-  $4,482  $4,482 \n\nOther income (loss)\n $245  $-  $245 \n\nIncome (loss) before income taxes\n $(270) $4,482  $4,212 \n\nOperating income (loss)\n $(515) $-  $(515)\n\nAdd back: Depreciation\n $32  $-  $32 \n\nAdd back: Interest\n $5  $-  $5 \n\nOperating income (loss), as adjusted\n $(478) $-  $(478)\n\n             \n\nGross identifiable assets at March 31, 2026\n $24,795  $22,647  $47,442 \n\nDeferred tax asset\n  * *   * *  $1,479 \n\nConsolidated total assets at March 31, 2026\n  * *   * *  $48,921 \n\n             \n\n**Nine Months Ended March 31, 2025**\n            \n\nOperating revenues\n $6,492  $-  $6,492 \n\nNet investment income (loss)\n $-  $1,819  $1,819 \n\nOther income (loss)\n $247  $-  $247 \n\nIncome (loss) before income taxes\n $(1,743) $1,819  $76 \n\nOperating income (loss)\n $(1,990) $-  $(1,990)\n\nAdd back: Depreciation\n $50  $-  $50 \n\nAdd back: Interest\n $1  $-  $1 \n\nOperating income (loss), as adjusted\n $(1,939) $-  $(1,939)\n\n             \n\nGross identifiable assets at March 31, 2025\n $26,531  $20,325  $46,856 \n\nDeferred tax asset\n  * *   * *  $1,902 \n\nConsolidated total assets at March 31, 2025\n  * *   * *  $48,758 \n\n**Three Months Ended March 31, 2026**\n            \n\nOperating revenues\n $2,762  $-  $2,762 \n\nNet investment income (loss)\n $-  $1,665  $1,665 \n\nOther income (loss)\n $80  $-  $80 \n\nIncome (loss) before income taxes\n $168  $1,665  $1,833 \n\nOperating income (loss)\n $88  $-  $88 \n\nAdd back: Depreciation\n $10  $-  $10 \n\nAdd back: Interest\n $2  $-  $2 \n\nOperating income (loss), as adjusted\n $100  $-  $100 \n\n**Three Months Ended March 31, 2025**\n            \n\nOperating revenues\n $2,103  $-  $2,103 \n\nNet investment income (loss)\n $-  $548  $548 \n\nOther income (loss)\n $100  $-  $100 \n\nIncome (loss) before income taxes\n $(793) $548  $(245)\n\nOperating income (loss)\n $(893) $-  $(893)\n\nAdd back: Depreciation\n $11  $-  $11 \n\nAdd back: Interest\n $-  $-  $- \n\nOperating income (loss), as adjusted\n $(882) $-  $(882)\n\n \n\nPage\n*20*\n\n[Table of Contents](#toc)\n\n \n\nOperating revenues from investment management services include revenues from ETF clients of $1.5 million and $4.6 million for the *three* and *nine* months ended *March 31, 2026*, respectively, and $1.7 million and $5.3 million for the *three* and *nine* months ended *March 31, 2025*, respectively. Operating revenues from investment management services also include revenues from USGIF of $1.2 million and $2.9 million for the *three* and *nine* months ended *March 31, 2026*, respectively, and $446,000 and $1.2 million for the *three* and *nine* months ended *March 31, 2025*, respectively. \n\n \n\n \n\n**NOTE 13. CONTINGENCIES AND COMMITMENTS**\n\n \n\nThe Company continuously reviews investor, employee and vendor complaints, and pending or threatened litigation. The likelihood that a loss contingency exists is evaluated through consultation with legal counsel, and a loss contingency is recorded if probable and reasonably estimable.\n\n \n\nDuring the normal course of business, the Company *may*be subject to various claims, legal proceedings, and other contingencies. These matters are subject to various uncertainties, and it is possible that some of these matters *may*be resolved unfavorably. The Company establishes accruals for matters for which the outcome is probable and can be reasonably estimated. Management believes that any liability in excess of these accruals upon the ultimate resolution of these matters will *not* have a material adverse effect on the Consolidated Financial Statements of the Company. Excluding reserves for uncertain tax positions, the Company recorded *no* accruals for contingencies as of *March 31, 2026*, or *June 30, 2025*.\n\n \n\nThe Board has authorized a monthly dividend of $0.0075 per share through *June 2026*, at which time it will be considered for continuation by the Board. Payment of cash dividends is within the discretion of the Company’s Board of Directors and is dependent on earnings, operations, capital requirements, general financial condition of the Company, and general business conditions. The total amount of cash dividends expected to be paid to class A and class C shareholders from *April* to *June 2026* is approximately $282,000.\n\n \n\n \n\n**Note 14. Subsequent EventS**\n\n \n\nThe Company evaluated subsequent events through the filing date of this Quarterly Report on Form *10*-Q and determined that there were *no* subsequent events requiring recognition or disclosure in the accompanying Consolidated Financial Statements.\n\n \n\n \n\nPage\n*21*\n\n[Table of Contents](#toc)"}