U.S. Global Investors, Inc. (NASDAQ:GROW) Q1 2025 Earnings Call Transcript

U.S. Global Investors, Inc. (NASDAQ:GROW) Q1 2025 Earnings Call Transcript November 8, 2024

Holly Schoenfeldt: [Starts Abruptly] Officer; Lisa Callicotte, Chief Financial Officer; and myself, Holly Schoenfeldt, Director of Marketing. On slide number 3, during this webcast, we may make forward-looking statements about our relative business outlook. Any forward-looking statements and all other statements made during this webcast that don’t pertain to historical facts are subject to risks and uncertainties that may materially affect actual results. Please refer to our press release and corresponding Form 10-Q filing for more detail on factors that could cause actual results to differ materially from any described today in forward-looking statements. Any such statements are made as of today and US Global Investors accepts no obligation to update them in the future.

On slide number 4, this is another slide we like to highlight that kind of goes along with our disclosure or our safe harbor slide. I’ll speak about it briefly and if, Frank, you want to jump in, please feel free. But this is what we call the DNA of volatility graphic. What it does is allows investors to manage their expectations of various asset classes. So if you see, what it’s showing is the standard deviation over here for our various industries, from large caps to gold airlines and then, of course, the growth stocks. And so, what’s most important is to realize that over a one day and a 10 day period, it’s essentially a non-event for our GROW stock to go up or down 2% and then subsequently up or down 4%. But then, if you look at more volatile assets, for example, if you look like at a company like Hive, which deals directly with Bitcoin, that fluctuation has historically seen bigger swings.

Frank, I don’t know if you want to add any other color on this slide.

Frank Holmes: No, I think it’s very helpful. And the derivative of this is that we’re in the fund business and a lot of our funds are in the gold business. So as you can see from this visual, our biggest fund is airlines. And so, it’s a non-event for those assets to go up or down 6% over a 10 day rolling period. And gold is plus or minus 6%. We are less than that over a 10 day period, but it’s just helpful to put that in context, that each asset class has its own unique DNA of volatility. And to manage those expectations, as Holly said, it’s important to understand them. We update this on a regular basis because government policies over time can change an industry or category. And so it’s helpful. I’d further like to point out to investors is that we used to trade.

And when I first bought U.S. Global, moved here off of money market funds, rates were very, very high and we had big growth in our government agency fund. And it went from basically nothing to a billion dollars in assets. And that was the sort of the correlation, but we were known for gold. And then our gold assets took off and we started to trade as a stock highly correlated around what gold was doing and what the fund flows were in and out of our gold funds. And then it became predominantly off of Bitcoin and Hive when we made the initial investment in Hive in 2017 because we realized they weren’t going to allow an ETF in the crypto industry. And it was only this year that it was allowed. And now this week we’ve elected a future president who is pro the Bitcoin ecosystem.

Q&A Session

So I think we were way ahead of our times. But with that, Hive was at one time a unique investment. We were early and we caught that wave and we were having this tremendous volatility around Bitcoin. That’s not happened today because we have a Hive structured note. And so, that is a very different composition of our key investments. And I’m happy to see that all these other ETFs have enjoyed success and grown, but it’s taken them something like seven years before this event took place. I think that the industry now follows what the airline index is doing, what the fund flows are, which is moving around. And I hope during this presentation to give you some color on the airline industry and gold because gold is making all-time highs also. Next please.

Holly Schoenfeldt: I can take it back briefly. On this slide, as always to our loyal shareholders that are tuning in, we invite you to email us at info@usfunds.com and we would love to send you one of our hats seen here and we actually have some new go gold hats on the way. So, like I said, shoot us a message with your mailing address. We’re happy to get you some USGI swag. On the next slide, before I hand this over to Frank, I will briefly review our company. U.S. Global Investors is an innovative investment manager specializing in smart beta 2.0 thematic products. We have vast experience in global markets and specialized sectors, and we use a quantimental strategy to create these smart beta 2.0 funds. The company was originally founded as an investment club, becoming a registered investment advisor in 1968.

The company has a longstanding history of global investing and launching first of their kind investment products, including the first no load gold fund. We’re well known for our thematic investing in gold and precious metals, natural resources, airlines and luxury goods. Now slide number 7. I would like to hand the presentation over to CEO, Frank Holmes. Frank?

Frank Holmes : Thank you, Holly. We have over 30 years’ experience, unique global footprint, particularly that grew out of gold – in the world of gold and looking for gold mining assets and the big growth in the past 30 years has been in Africa and Latin America and in certain little regions of North America, particularly Canada. The two states was Nevada and we saw success in pockets from Quebec and Ontario and British Columbia, but the big growth in the gold mining industry was in emerging countries. And with the rise of GDP per capita, with China embracing capitalism and having a cultural affinity for gold, it led to a new world, especially this century, year 2000. And we look after the great tech bubble, commodities, in particular gold, started to get this, I call, the love trade.

And that led us to open up a China region fund, which we had incredible success with. And then there’s this sort of anti-China concerns, and rightly so. So we’ve shut that down. There’s just no interest. And it led us into other emerging countries. And with that, in that journey, we have created three ETFs, because that’s the new technology in the Mutual Fund 40 Act industry. And they’ve been related to our global travels. But as always, as Holly said, a smart beta 2.0, which means that you have very quantitative regressional work. That’s a minimum of 10,000 hours of studies going back over a decade to look at what is the ideal portfolio construction for up and down cycles in the economy and what are the industry specific factors that are best for stock picking and you try to create a portfolio that recalibrates every quarter.

And so, we’ve been very successful in creating sustainable products. And with that, we have 100,000 readers in 80 countries. We’ve won many award-winning financial bloggers as we’ve grown this sort of footprint of sharing our global knowledge and trade with our weekly Investor Alert. Next, please. So we want to thank those shareholders, in particular the Vanguard Group, that we show up in their index, they own 5.32%. Franklin Investments, which is interesting, have bought 5.21%. And Parrot Capital has been a loyal investor in the microcap and small cap sector. And so, I’d like to thank them all for continue to be strategic investors with us. Next, please. So this is a nice visual, because I want to go from a macro point of view for shareholders to recognize that micro caps struggle to keep pace with large caps.

And this is a classic example of looking since 2020, just before, I guess, COVID onset, you can see, as the S&P has far outperformed iShares microcap stocks. Next, please. And then when you go and look at the big cap stocks, something else is really quite interesting is the difference between market cap weighted S&P 500 versus equally weighted S&P 500. And you can see here that the market cap only of the S&P 500 is up almost 12% more than the equally weighted. So then it lends itself to what stocks are leading that charge. And you can see that Tesla and Google and Microsoft and Apple and Facebook and Tesla, they’ve been the big seven stocks that have skewed the overall – in particular, the technology of the S&P 500. And so, it’s not just the micro caps, it’s also the big caps.

And there you have seven stocks dominating the overall performance. Next, please. And then we want to go back and look at how we’ve done over five years. And there’s the Russell microcap index. So we have all performed it. And there are times in this journey where we far outperformed it. You can see that huge spike that happened going into COVID. And that was a combination of the Jets ETF going from $40 million to $4 billion in assets. And since then, that sort of decline has been people taking their profits off of Jets. And even though Jets as a stock price has not returned to its pre-COVID, even though more people are flying today than pre-COVID. And I’ll explain that more in detail. So try to understand that. We’ve had this big run. And that big run, as you can see here, was a combination of Bitcoin and our investment in Hive exploding during this period, along with assets coming into the complex.

So the real important part is relative to having a great product that is sustainable and is thematic enough that it attracts a lot of investors. Next, please. So often when you’re my age, you get this question and sort of good corporate governance is succession planning. And I always like to say that Warren Buffett’s my hero for many reasons, but that 94 year old Warren Buffett is now sitting on more than $325 billion in cash and he is still blowing and going. And so, I often like to run in the morning 5 kilometers which is about three miles. So staying healthy is important and I want to keep my brain and my body as robust as possible. So there’s no immediate succession that’s necessary or planned for me today. So next please. Another sort of sage advice out of Warren Buffett is that stock buybacks, they benefit all shareholders, not just the biggest shareholders.

Increasing dividends benefits the biggest shareholders on that income distribution. Whereas the thought process is that when you’re buying shares and you’re stricken the market cap that all shareholders benefit. And it’s a combination, which I’ll explain in a few seconds, but I think that we’re going to demonstrate to you that we’ve been very strong at buying the stock back because we’ve lived through these cycles before. We’ve lived where you have a hot product or you get a theme so correct, such as creating the first Eastern European fund that went from $4 million to $1.4 billion. And that fund has had such difficulty with Putin first invading Crimea and then going back and then coming back again and invading Ukraine. American appetite for anything in Eastern Europe or that region as close to Putin is really not happening.

And they would rather speculate in technology stocks like Nvidia and keep that risk domestic. So that is something that I’ve witnessed on. And I think there’s a wonderful book by John Surowiecki on the Wisdom of Crowds. It’s important to be able to capture that. But I would share with you that, the other unique ETF products we’ve created are Sea to Sky. It really captures emerging markets and global trade. As global trade picks up, global GDP picks up, shipping explodes because 80% of everything is shipping. So we’ve consolidated our exposure to Asia and to Eastern Europe by having a unique smart beta 2.0 for cargo, for cargo airplanes and predominantly for shipping higher end products across oceans. And the other part is to recognize that all our cash makes us undervalued.

So we are just going to be in our sort of consistent basis, no extreme big moves except for working and analyzing our products and looking to come up with new exciting products. Next please. So, often you’re asked, like, why do you buy back your stock besides Warren Buffett’s sage advice? Well, we believe that the U.S. Global is deeply undervalued. We believe that by buying stock back, it’s going to enhance shareholder value. And we believe that during this sort of lull that’s taken place in particular, coming into this very challenged election cycle with so much negativity – thank God, it’s behind us – that we offer to the shareholders a very strong shareholder yield of 9.34%. And that is a combination of stock buyback and dividends. Next please.

So the number of shares repurchased over the past three period, as you can see, that as GROW has gone down in overall stock price, it’s made up for it as a long-term vision, just prudent to increase our stock buybacks because we believe it’s deeply undervalued. But we’re not going to go do something that is to pay out all the cash and as some shareholders have tried to take our cash from us and pay some big one-time price or a big dividend, which would really only enrich me, not enrich the company and being able to deal with these sort of negative cycles that you can have when you have cyclical thematic products. So we believe we’re undervalued and we’re showing that conviction by a very pragmatic and thoughtful way of buying back more stock.

Next, please. So dividends, it’s interesting that dividends quite often in the quant world that there’s a model that looks at the five-year government treasuries. And what is that yield that’s a safe yield for five years against what the dividend yield is today or can your dividend grow faster than what the five-year yield is? So stocks – and this was my first time in 1978 when I got hired and went into this business and graduated from university, was to have a very simple – today would be laughed at, but it was a quant model using old technology, but it was looking at five-year government yields and stocks that had this capacity to grow and had a yield that was higher and they all performed. So that’s why I bring this to your attention, that the negativity is – and the fund flows of negativity towards the airline industry, which is predominantly sentiment, has impacted the valuation of the stock.

So the yield today is higher than the 5-year treasury yield. And that it makes it a very attractive proposition and another rational reason for us buying back our stock. Next please. So we’re going to take a look at the first quarter of 2025. Some of the strengths is that we have a strong balance sheet including cash and other investments. Shareholder value, the company continues to buy back stock, as I’ve just mentioned, and pay its monthly dividend. And gold’s record performance, so gold reaching all-time highs and the company’s gold focus as funds have grown modestly year-over-year on total assets. We’re not seeing the big flows that you would normally see in gold and gold stocks. But I believe that when we look at global debt structures and the [indiscernible] of printing money, and many of the countries in the G20 still believe in Modern Monetary Theory as a way to stimulate the economy, that gold and other alternative asset classes will continue to be an important part of a diversified portfolio.

So that’s why we think that we’re rightfully position for the world of gold. Next, please. So, Go Gold theme, we write about it every week. It’s always been this sort of idea of having 10% allocated towards gold and nice, beautiful gold jewelry as gifts for love. And the other 5% in our gold funds to be able to capture this run. But you can see the total assets have modestly grown. Next, please. You put that in context, in 2007, those assets were too big. So that’s the potential leverage, is almost a tenfold bagger going back to 2007 levels for gold stock. So if gold continues with this march, it was up to seven deviations over 60 trading days. And yesterday it corrected, and I think it’s just a wonderful buying opportunity as the dollar surged with the election results.

It’s just normal for the short-term mean reversion. But gold as an asset class, I believe, will continue as it has this century outperforming S&P 500. And gold royalty companies, which I’ve always loved like Franco Nevada, have outperformed Berkshire Hathaway since it went public in 2008. And other funds and stocks that we own in our funds like Triple Flag, it’s also all performed and it went public like just after 2019, in that timeframe area. And it’s one of the newer royalty companies that was the [indiscernible] Elliott Management as a hedge fund. And they wanted to create their own royalty company and because it’s unique model. And you can see that it too has been very successful outperforming majority of gold stocks since it’s gone public.

Rule of three strategy and tactics, create sustainable thematic products using the smart beta 2.0 strategy back testing up to 10,000 hours and then continuously testing every quarter, manage and preserve cash for future growth opportunities and market corrections and M&A activity to acquire other funds. We look at deals, we get deals sent to us. And still, we see this sort of a lot of land valuations and other companies that own mutual funds of what they think they’re really worth. And when sometimes I get the question and I said, well, then why don’t you buy our assets if you think that’s what your funds are worth. And it’s just what it is in the industry that people are still holding on to old valuation metrics for mutual funds. Mutual funds will slowly over time be replaced with ETFs. That’s just an ongoing evolution.

They do provide a less expensive, but you need more assets to breakeven. And you have seen that originally it was more index ETFs. And now we’ve seen active ETFs explode in valuations. Smart beta 2.0 is in between both. It is a rules-based discipline of looking at an industry that recalibrates every quarter versus just buying market cap index of an industry. And what we have witnessed, which is very positive in this sort of the adoption of ETFs, has been the sort of idea that having active ETFs and the seeding of them and the funding of them, it’s evolved. It’s evolved just like Bitcoin ETFs evolved and finally got off the launching pad this year. Next, please. So the shareholder value is a simple algorithm. Dividends plus buybacks and debt reduction divided by market cap gives you what the shareholder value is.

We don’t have a debt issue, so we have lots of cash. So we’re buying back stock and we’re maintaining that dividend. And when you take a look at the relative valuation, it is a very attractive shareholder yield. And I say that because it’s 9.34%. Next, please. U.S. Global Investors committed to returning value to shareholders when compared to treasury yields. Ten-year treasury yield is 3.81%, five-year is 3.58%. Our dividend itself is higher than the five-year, and the overall stock buyback, when you combine it, there is a better value proposition buying GROW over the long term. So I like to look at some basic comps and give you a quick idea that WisdomTree – they have over $100 billion in assets and they’ve had some significant growth in new products in this past year.

And sometimes it’s like having a hot technology or a hot car design. It’s like having a hot thematic ETF that sort of garners the interest of investors. And it’s recognizing that. But WisdomTree is 100% ETFs and their price to book trades at a higher multiple versus Invesco, which 40% of their assets are QQQ, which is a monster of an ETF that covers basic NASDAQ stocks. And you can see that they’ve had their challenges with their other fund and asset groups and the return on their assets have been negative. We’ve been slightly higher and that goes up and down. Going back a couple of years back, U.S. Global had the highest return on the assets. Pre-tax margins, they’ve shrunk because the funds are shrunk and it’s a pretty simple math of how many funds do you need to breakeven.

And the dividend yield, as you can see, Invesco stock is more significantly down. So therefore their yield is higher. There, you take a look at WisdomTree that they trade at a higher price to book. So when you look as a GARP investor, price to book is important. So automatically it would show up as Invesco and U.S. Global. And then when you look at return on assets, then it would be U.S. Global and it’d be WisdomTree. If you’re looking at pre-tax margins, then you’re back to WisdomTree. If you’re looking for dividend yield, you’d be Invesco. So it’s the magic of the matrix that you create, what’s your long-term vision, what’s your faith in the company, how they function and what they do. I think that’s what makes that determination. If you’re just a pure buy the cheapest price to book, then you’re going to look at Invesco.

If you’re looking for who has the highest return on assets, you’re going to like a WisdomTree. If you’re looking for dividend yield, you’re going to look at Invesco. I think the value proposition is right along the middle, and that’s U.S. Global. Next, please. So when we look at the recent purchase, we made $520,000. I think it represents the [indiscernible] market cap. Now what that really means is that the board has approved for us to be able to buy up to approximately 14% of the shares. Lisa, you can correct me on that when she speaks, et cetera, but roughly it’s capital which we have on our balance sheet to consistently buy back the stock without any overreaching on one day or one week to stay consistent as it’s undervalued to be buying back the stock.

Next, please. So quarterly webcasts on our thematic products, gold and interest rates, understanding the interest rate influence on mining stocks. We did a presentation recently on that. And we also did one on why now is a time to consider airline stocks. And just after that, what’s interesting for me to share with you is that Spirit jumped 68%. Well, it’s after Spirit had fallen over the past year, especially with not being able to merge with JetBlue and all of its problems, it had fallen over 80% and then had this big pop. What we see with that is that people were long hedge funds, our Jets ETF and short the stock. And all of a sudden, they got an extension on their debt refinancing, and there was massive short covering. And we see that. We see the fund flows.

And so what I’m trying to share with you is that when you look at the ecosystem of investors in Jets, it’s retail, it’s people that trade off the oil price, it’s people that use hedge funds to go long, Jets the short. There is airlines. There are GARP investors that are doing asset allocation because the airline industry is a growth industry at a very reasonable price. So you have a very robust trading around Jets as a proxy. We have further launched it in Colombia and we’re expanding that and the marketing in Latin America, so that we have a broader interest in our product lineup. What we did this past six months was to merge our Jets, which was listed in London, with another group and created TRIP. And TRIP basically has an expanded universe that has more tourism involved with it.

But it’s really the backbone is the Jets. And so that has more of a critical mass listed over there that we become the global experts in the airline industry, like we are in the world of gold. Next, please. So the TSA numbers hit all time high. They’re roughly running or clearing 2.5 million people. Before COVID, fell down to 80,000 people in a day. And what you see, I don’t think that’s right. It was in December 2019. That was in March of 2019 and it grew and Warren Buffett got out. He was worried. He was turning 90 years old and there was such a negative aspect of it, but the millennials and generation Z seem to be the big speculators. And we had tremendous fund flows coming in and Jets went from about $11 up to $28. And then it started getting these redemptions, which was really interesting because the TSA numbers had not reached even close to 3 million people.

So you’re seeing that the stock still, I believe, has another close to $10 on the upside to go to pre-COVID numbers. And the airline industry remains at – in the summer had incredible traffic. So it’s a very positive, inexpensive industry that’s critical for global economic activity. Next, please. And we are the go-to people. We have that unique product. And it is outperformed the benchmark, which we first started with was to beat the New York Stock Exchange Global Airline Index. There’s been one or two other ones that try to come out, but they do not have the smart beta 2.0. And I believe that that’s a very important discipline of stock selection to outperform the index. And so, what have we seen this quarter since we did our presentation?

United also announces a buyback, $1.5 billion buyback, Jets all of a sudden pops, 10% of Jets was in United Airlines, and United Airlines now is up 36%. And so, I keep reiterating, like for the webcast, but going into the election, the sentiment was so pervasively negative. That’s just a headwind. And we just continue to be positive and constructive and balanced in how we tell this Jets story. Next, please. Airline stocks this century have outperformed the S&P from September to November. So we really try to highlight that at the beginning of October, that the math suggests that there’s a higher probability of the airlines outperforming. They have. In fact, what’s really interesting is that the best time to buy is late spring, early summer when it lags the overall S&P because six months later, the math is so much in your favor that it trades higher.

And it’s just interesting for the traders that we have that come in and out. Like I mentioned, there’s oil traders that oil prices are rising, they’re out of Jets, oil prices falling, they’re in the Jets. Then you have individual hedge fund managers that are going long or short individual names and they want to what’s called a pair’s trade and just becomes the proxy. Next, please. So the smart beta 2.0 ETF versus the New York Arca global airline index, it’s outperformed by 26% since we launched this. And you’ve got to remember that there’s no fees for the global Arca index, there’s fees with us, but we still all performed. And I think that that’s really a compelling story of the smart beta 2.0 than just buying market cap. You can see here that it’s outperformed this year by 13% after fees.

So it does work. And that’s what I try to highlight to investors that the number I showed you just earlier with United Airlines was a shorter time frame. This is year to date. And so there’s been during the summer such negative news, but the oil prices were falling and the world has come into an end and all this negative narrative. And the airlines are trading at 6 times and 5 times earnings. It just didn’t make sense when the market’s trading at 22 to 25 times. Next please. So go gold theme. We’re positioned for the go gold theme. And I think it’s this idea I mentioned earlier is modern monetary theory. Please subscribe to Investor Alert. You can get more information and insightful – and on YouTube, we have insightful explanation of what’s going on.

That go gold will continue to be a unique asset class. Next, please. The big wind behind it. It’s not a headwind. It’s a tailwind and that is the global debt climbs. It just continues to be a currency debasement and this visual is one of the most shared documents out there for the Bitcoin ecosystem. The Bitcoiners and the crypto around the world just say that there’s no pulling back MMT and the global debt continues to climb. So, one country versus another just debases currency faster than the other. And you can sort of see that when you take a look at the next visual please. So when we look at CPI, the US is 3.9, but when you look at global nominal GDP, it’s a 7.8. Gold is slightly ahead of global nominal GDP, which is basically being fueled by all this debt.

And then you ought to take a look at how well gold is done in some of these big countries’ currencies. Next, please. It’s also the sort of deficit. US deficit spending continues to make alternative assets like gold attractive. That’s called the fear trade. The love trade, which is 60% of gold demand, is more correlated to rising GDP per capita. India is surging. China is on the ropes. But they turn in that corner of that GDP per capita. In India and China, when you combine them, or 40% of the world’s population, you throw in Southeast Asia, the Middle East, and now we’re pushing more than – you’re pushing about 60% of the world’s population. And I think it’s important to recognize that there’s a cultural affinity. Gold is given – 24 karat gold jewelry for birthdays, for wedding season.

There’s two big wedding seasons in India. We have the season of lights, Diwali season, very, very significant consumption of 24 karat gold jewelry. Next, please. This is the visual I wanted to share with you. So the go gold theme, gold’s historic rise as a global phenomena, who’s had the biggest debt spending as a percentage of GDP? It’s Japan. And look how strong gold has done for Japanese investors. And if you look at the euro – you can see India. Why do Indian women basically have six times the amount of gold that’s in Fort Knox? Because they trust gold more than they trust government policies for money printing. And that’s just as a hedge against currency debasement. The US is 32%. You can see China, interestingly enough, is similar. And a lot has to do with China’s – as currencies come down – and I think that number is interesting because it’s probably going to change after the election cycle here of a strong dollar, but they’re doing everything in China to try to manage their currency against the US dollar for trade and against the euro.

And there’s a transition taking place. So what is the theme? Go gold. BRIC countries want to attack the US dollar and the only way they can get credibility is by buying gold. And so, we’re seeing central banks around the world continue to be buying gold. So gold, we believe, is going to continue to be a unique and special asset. Next please. So now we have what GROW is trading at. Assets of $1.5 billion. Lisa is going to give you what our earnings were. Our operating income is down. We’ve lost money. We’ve made money from an earnings point of view, following all the GAAP rules. But from an operating point of view, we’ve been through these lulls before. And we think that what’s behind this is the election cycle and sentiment and I think we’ve seen the airlines have a big pop like financials did yesterday.

And so, the capital markets are going to open up for capital formation and private sector job creation and innovation. So, I think going forward, it’s a very, very positive for capital markets. And we are a deep value proposition for that sector. And now I’d like to turn it over to Lisa, please, our CFO.

Lisa Callicotte : Thank you, Frank. Good morning. First off, start with our financial highlights on the next slide. Our quarterly average assets under management were $1.5 billion and our operating revenues were $2.16 million and net income $315,000. The next slide shows a breakout of our earnings. We have operating earnings that consist of our advisory fees and services, and we have other earnings, which mainly consist of both realized and unrealized gains and losses on our investment holdings. So both our advisory earnings and our investment earnings fluctuate based on stock market forces. On the next slide, we see how these two components impact our earnings per share. Our operating earnings are based on average assets under management for the period, and our investment earnings are based on the change in the market value of our investments.

So both can fluctuate based on market forces, including investor sentiment, and our earnings per share also fluctuates. Next, we see the effect of the decrease of our average assets under management. That decreased revenue had an impact on our operating income. Our challenge is to raise our average assets under management, which Frank discussed, and how he is positive that we’ll be able to work on that going forward. But at our current expenses, we estimate that at about $1.9 billion in average assets, our operating income would be positive. The next slide show more information about our quarter ending September 30th, 2024. We see that our quarterly operating revenues were $2.2 million for the quarter, which was a decrease of $976,000 or 31% from the $3.1 million in the same quarter last year.

The decrease is primarily due to a decrease in our average assets under management in our Jets ETF. And our operating decreased $202,000 or 7%, mainly due to a decrease in employee compensation of $193,000 or 15%. And this was primarily due to decreases in bonus accruals, and it was somewhat offset by increases in salaries. On the next slide, we see operating loss for the quarter ending September 30th, 2024 is $559,000 compared to operating income of $215,000 for the same quarter last year. Our other income for the quarter was $995,000 compared to a loss of $456,000 in the prior year. This was a change of $1.5 million. It was primarily due to net investment income for the current period versus net investment loss for the prior period. Net income after taxes for the quarter was $315,000 or $0.02 per share, which is a favorable change of $491,000 compared to a net loss of $176,000 or a loss of $0.01 per share for the same quarter in fiscal year 2024.

Moving to the next page, we see that we still have a strong balance sheet, which includes high levels of cash and investments that will allow us to weather through this period where we have lower AUM. Cash and cash equivalents was $2.7 million at September 30th, 2024 and our current investments were $9.7 million. On the next slide is a detail of our other assets. And the total of all of our investments in other assets is approximately another $7.8 million. The next slide shows our liabilities. And they have decreased from June 30th, 2024 by approximately $240,000, and we have no long-term debt. The next slide you see shows our stockholder equity detail. And at September 30th, 2024, the company had a net working capital of $38.2 million and a current ratio of 21 to 1.

With that, I’ll turn it over to Holly.

Holly Schoenfeldt : Thank you, Lisa. All right, on the first slide of my section, I want to point out a quick stat about our website traffic during the first quarter of 2025, which is actually quarter ending September 30th of 2024. So as you can see on this map, we had over 407,000 readers from around the world visit usfunds.com on a year-over-year basis. Many repeat visitors, but even more new visitors, which is great, who find our content from third party syndication. On the next slide, we’re proud to report that we continue to provide original, timely market insight through our YouTube channel. We know one of the best ways to reach new and existing shareholders is through education, and we find this as one of the best ways to do so.

So if you haven’t had a chance to watch some of these, I invite you to find our YouTube channel, check them out and be sure to hit subscribe. On the next slide, I want to highlight some of our most popular Frank Talk blogs so far in the quarter ending September 30th. As you can see here, the topics of gold and commodities, as well as anything having to do with the global markets and the recent election were some of the most popular topics. And as a reminder, and something we are very proud of, the Frank Talk blog is actually one of the very first financial blogs out there. And this year, it celebrated its 17th year in publication. All right, on the next slide, this was another one of the topics of a recent Frank Talk blog that we put out, which you may have read.

And the topic had to do with hedge fund manager, Paul Tudor Jones’ recent comment about decentralized assets. So he actually told CNBC that he is long both gold and Bitcoin. And this is one of the things that Frank has been writing about for several years now in the Frank Talk blog. So we wrote a special piece about it and we’re happy to see Frank’s thoughts as well as our complexes’ thoughts on these assets be validated by another big name in the industry. So I just wanted to point that out. As we move to the next slide, in October, the marketing team is happy to report that it’s been awarded another star award from the Investment Management Education Alliance, bringing our total to 94 now. This award was presented for excellence in education for investors and was specifically for our Jets ETF marketing campaign throughout the year.

So we’re very humbled and excited to receive that. Finally, on the next slide. This is just a quick snapshot of our total subscriber growth over 12 months. As you can see, not only are our major social platforms growing consistently, so is the Frank Talk blog and the Investor Alert subscriber list. So this is something we’re also very proud of and they serve as an excellent way to communicate to our shareholders and potential shareholders. And finally, on the last slide in my section, I encourage you as always to follow us on these platforms, so you’re up to date with what’s going on not only with GROW, but our funds and, of course, the broader market. As a reminder to everyone today, if you have questions about what we just presented, please feel free to email those to info@usfunds.com and we will gladly follow up with you to get anything clarified that you may need more information on.

So thank you so much for tuning in today. That concludes our webcast summarizing the first quarter of fiscal year 2025.

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