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US Global Investors Announces Non-Cash Adjustments to Financial Statements for Periods … | Your money

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San Antonio, Texas, October 18, 2021 (GLOBE NEWSWIRE) – US Global Investors, Inc. (Nasdaq: TO GROW ) (the “Company”), a registered investment advisory firm that focuses on specialty markets around the world, announces that it will restate the consolidated financial statements and related information for non-cash adjustments for the three and nine months ended March 31, 2021.

The restatement of the financial statements is due to adjustments to the fair value of certain securities held as business investments. The adjusted corporate investments were purchased in January 2021 and consist of convertible unsecured debentures and share purchase warrants issued by HIVE Blockchain Technologies (Nasdaq: HIVE) (TSX.V: HIVE) (“HIVE”). Adjustments to the total fair value of the securities will increase the value of the securities by approximately $ 5.8 million.

The Company would like to point out that its quarterly operating revenues and cash flows generated by operating activities have not changed. Operating revenue of $ 6.4 million for the quarter ended March 31, 2021, as reported in May 2021, remains the same.

“This adjustment had no impact on the Company’s cash flow for the period,” said Frank Holmes, CEO and Chief Investment Officer of the Company. “In fact, we are so comfortable with the cash flow and growth opportunities of the Company that we recently increased the dividend by 50%.

“It is important for investors to know that a company’s net income is divided into operating income and other income, which includes investment income. For the quarter, US Global Investors operating revenue and cash flow were unchanged. The investment income that is adjusted and the potential gains and losses in the value of warrants and convertibles are much more complicated than most people realize, ”says Holmes. “To assess the different components of the company’s investment in HIVE, we initially used the Black-Scholes model, the discounted cash flow (DFC) method and intrinsic value. Due to the complexity of the debenture, we now use the binomial option pricing model, which is a lattice model. The net result is a decrease in the income statement and an increase in balance sheet equity of approximately $ 6 million. The “other elements of the comprehensive income” do not constitute top-level sales. Changes in “other comprehensive income” have an impact on the equity figure on the balance sheet. “

The net impact of these adjustments on the previously published financial statements is an increase in the Company’s assets of approximately $ 5.8 million and a decrease in its net income of approximately $ 5.6 million. The change in bond valuation method increased the unrealized capital gain on the balance sheet, and the change in the valuation method of warrants had an impact on the income statement.

The Company intends to restate the consolidated financial statements for the periods ended March 31, 2021, on Form 10-Q / A as soon as possible. The restatement will include the final impact of the adjustments described above.

Insignificant review of loan forgiveness classification

The restatement will include a non-material review involving a short-term government sponsored loan during the pandemic, for which the Company obtained a discount during the quarter ended December 31, 2020. The discount, which the Company recorded as other income operating in both The financial statements as at December 31, 2020 and March 31, 2021 are now included in other income.

The Company also intends to file the annual report on Form 10-K for the fiscal year ended June 30, 2021, as soon as possible. The Company has not filed its annual report by the prescribed due date. The delay is due to the additional time required for the Company to fully assess the fair value calculations made by a third party on certain investments of the company. This process is almost complete and the Company is working diligently to file the annual report on a timely basis.

Receipt of the Nasdaq default letter

The Company has received a standard notification letter dated October 18, 2021 (the “Nasdaq Notification”) from the Nasdaq Listing Qualifications Department of Nasdaq advising the Company that it is no longer in compliance with Nasdaq Listing Rule 5250 (c) ( 1), which requires the timely filing of all required financial reports with the United States Securities and Exchange Commission.

The Nasdaq notice has no immediate impact on the listing or trading of the Company’s common shares on the Nasdaq Capital Market. The notice provides that the company has until December 17, 2021 (i.e. 60 calendar days from the date of the Nasdaq notice) to submit a plan to Nasdaq (the “Compliance Plan” ) aimed at restoring compliance with the Nasdaq listing rules. If the Nasdaq accepts the compliance plan, the Nasdaq may grant the Company an exception to extend an additional 180 calendar days from the extended due date of the Form 10-K filing date, or April 11, 2022. , to restore compliance. The Company is working diligently to file its Form 10-K.

This announcement is made in accordance with Nasdaq Listing Rule 5810 (b), which requires prompt disclosure of receipt of a notice of deficiency.

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About US Global Investors, Inc.

The history of US Global Investors dates back over 50 years, to its beginnings as an investment club. Today, US Global Investors, Inc. is a registered investment advisor who focuses on niche markets around the world. Based in San Antonio, Texas, the company provides fund management and other services to US global investor funds and US global ETFs.

Follow US Global Investors on Twitter in clicking here.

Subscribe to the US Global Investors YouTube channel in clicking here.

This press release may include certain “forward-looking statements” including statements relating to income, expenses and expectations regarding market conditions. These statements involve certain risks and uncertainties. There can be no assurance that such statements will prove accurate and actual results and future events could differ materially from those anticipated in such statements.

Holly Schoenfeldt US Global Investors, Inc. 210.308.1268 [email protected]

Copyright 2021 GlobeNewswire, Inc.


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