☒ Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the Fiscal Year Ended June 30, 2022
--06-30FY2021
or
☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
for the transition period from _____ to _____
Commission File Number 0-13928
U.S. GLOBAL INVESTORS, INC.
(Exact name of registrant as specified in its charter)
Texas
74-1598370
(State or other jurisdiction of
incorporation or organization)
(IRS Employer
Identification No.)
7900 Callaghan Road
San Antonio, Texas
78229
(Address of principal executive offices)
(Zip Code)
(210) 308-1234
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading symbol(s)
Name of each exchange on which registered
Class A common stock,
$0.025 par value per share
GROW
NASDAQ Capital Market
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes ☐ No ☒
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act.
Yes ☐ No ☒
Indicate by check mark whether the Company (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulations S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☐
Accelerated filer ☐
Non-accelerated filer ☒
Smaller reporting company ☒
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
Yes ☐ No ☒
The aggregate market value of the 11,689,467 shares of nonvoting class A common stock held by nonaffiliates of the registrant was $51,433,655, based on the last sale price quoted on NASDAQ as of December 31, 2021, the last business day of the registrant’s most recently completed second fiscal quarter. Registrant’s only voting stock is its class C common stock, par value of $0.025 per share, for which there is no active market. The aggregate value of the 4,075 shares of the class C common stock held by nonaffiliates of the registrant on December 31, 2021 (based on the last sale price of the class C common stock in a private transaction) was $1,019. For purposes of this disclosure only, the registrant has assumed that its directors, executive officers, and beneficial owners of 5 percent or more of the registrant’s common stock are affiliates of the registrant.
On August 19, 2022, there were 13,866,999 shares of Registrant’s class A nonvoting common stock issued and 12,884,169 shares of Registrant’s class A nonvoting common stock outstanding, no shares of Registrant’s class B nonvoting common stock outstanding, and 2,068,549 shares of Registrant’s class C voting common stock issued and outstanding.
Auditor Information: BDO USA, LLP; Dallas, Texas; PCAOB ID# 243
Documents incorporated by reference: None
Explanatory Note
We are filing this Amendment No. 1 (this “Amendment”) to our Annual Report on Form 10-K for the year ended June 30, 2022, as filed with the Securities and Exchange Commission on September 1, 2022 (the “Original Form 10-K”). The purpose of this Amendment is to correct the shares of registrant's class A nonvoting common stock issued and outstanding and the shares of registrant's class C voting common stock issued and outstanding number as of August 19, 2022, on the cover page and within Item 12.
In accordance with Rule 12b-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), Item 9A of Part II, Item 12 of Part III, and Item 15(a)3 of Part IV of the Original Form 10-K is hereby amended and restated in its entirety. In addition, as required by the Exchange Act, new certifications by our principal executive officer and principal financial officer are filed herewith as exhibits to this Amendment pursuant to Rule 13a-14(a) of the Exchange Act.
Except as described above, no other changes have been made to the Original Form 10-K, and this Amendment does not amend, update, or change any other items or disclosures in the Original Form 10-K. This Amendment does not reflect subsequent events occurring after the filing date of the Original Form 10-K or modify or update in any way disclosures in the Original Form 10-K.
This Amended Annual Report on Form 10-K/A reflects amendments to the following items:
•
Cover Page
•
Part II, Item 9A — Controls and Procedures
•
Part III, Item 12 — Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
•
Part IV, Item 15 (a) 3 — Exhibits
The Company's Chief Executive Officer and Chief Financial Officer are providing currently dated certifications in connection with this Amended Annual Report on Form 10-K/A. See Exhibit 31.2.
Part II
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures. Disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports that the Company files or submits under the Exchange Act is: (1) recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms; and (2) accumulated and communicated to management, including the principal executive and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. An evaluation was conducted under the supervision and with the participation of the Company’s management, including the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of June 30, 2022. Based on that evaluation, the CEO and CFO concluded that the Company’s disclosure controls and procedures were not effective as of June 30, 2022. Management determined the Company’s document management system was not effectively structured to contain the risk of inaccurate share information being disclosed as of August 19, 2022, in the reports that the Company filed or submitted under the Exchange Act. Notwithstanding the aforementioned with respect to its disclosure controls and procedures, management has concluded that the consolidated financial statements included in the Original Form 10-K present fairly, in all material respects, the Company’s financial position, results of operations, and cash flows as of the dates, and for the periods presented, in accordance with generally accepted accounting principles in the United States of America (“GAAP”).
Management’s Report on Internal Control over Financial Reporting. The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting as defined by Rules 13a-15(f) and 15d-15(f) under the Exchange Act. The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
Because of inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
The Company’s management assessed the effectiveness of its internal control over financial reporting as of June 30, 2022. In making this assessment, the Company’s management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control-Integrated Framework (2013). Based on the Company’s assessment, management believes that the Company’s management has maintained effective internal control over financial reporting as of June 30, 2022.
Changes in Internal Control over Financial Reporting. Other than as described below, there have not been any changes in the Company’s internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f)) during the fourth quarter ended June 30, 2022, that have materially affected or are reasonably likely to materially affect the Company’s internal control over financial reporting.
Management identified a deficiency in the design and operating effectiveness of the Company’s internal controls as of September 30, 2021, that represented a material weakness in our internal control over financial reporting. The deficiency was the result of an existing control failing to operate effectively. Management disclosed in the Form 10-Q (“quarterly reports”) during the fiscal year ended June 30, 2022, that the Company’s control involving the review of tax-related journal entries were not adequately performed. Management evaluated its existing controls, noting the multiple attributes within the tax provision review control. Management determined that all existing attributes were performed. Management determined the control involving the review of tax-related journal entries did not include an attribute to ensure inclusion of the deferred assets/liabilities in the quarterly estimated tax rate ("ETR") journal entry adjustment. Management designed and implemented a remediation plan to address the material weakness, which included 1) adding an attribute to the tax provision review control to ensure the changes in deferred tax asset/liabilities accounts are included in the ETR journal entry adjustment, and 2) management’s completion of additional professional education for tax accounting essentials. The additional control attribute and professional education led to a more precise review of the tax provision. Thus, management has concluded that the material weakness was remediated as of June 30, 2022.
Inherent Limitation of the Effectiveness of Internal Control. A control system, no matter how well conceived, implemented and operated, can provide only reasonable, not absolute, assurance that the objectives of the internal control system are met. Limitations inherent in any control system include the following:
● Judgments in decision-making can be faulty, and control and process breakdowns can occur because of simple errors or mistakes.
● Controls can be circumvented by individuals, acting alone or in collusion with others, or by management override.
● The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
● Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with associated policies or procedures.
● The design of a control system must reflect the fact that resources are constrained, and the benefits of controls must be considered relative to their costs.
Because of such inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company or any division of a company have been detected.
Part III
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Security Ownership of Certain Beneficial Owners
Class C Common Stock (Voting Stock)
On August 19, 2022, there were 2,068,549 shares of the Company’s class C common stock outstanding. The following table sets forth, as of such date, information regarding the beneficial ownership of the Company’s class C common stock by each person known by the Company to own 5 percent or more of the outstanding shares of class C common stock.
Name and Address of Beneficial Owner
Class C Common Shares Beneficially Owned
Percent of Class (%)
Frank Holmes
2,064,560
99.81
%
7900 Callaghan Road
San Antonio, TX 78229
Class A Common Stock (Nonvoting Stock)
On August 19, 2022, there were 12,884,169 shares of the Company’s class A common stock outstanding. There were no persons known by the Company to own 5 percent or more of the outstanding shares of class A common stock.
Security Ownership of Management
The following table sets forth, as of August 19, 2022, information regarding the beneficial ownership of the Company’s class A and class C common stock by each director and named executive officer and by all directors and executive officers as a group. Except as otherwise indicated in the notes below, each person owns directly the number of shares indicated in the table and has sole voting power and investment power with respect to all such shares.
Class C
Class A
Beneficial Owner
Common Stock
Common Stock
Number of Shares
%
Number of Shares
%
Frank E. Holmes, CEO, Director
2,064,560
99.81
%
509,024
3.95
%
Lisa C. Callicotte, CFO
-
-
22,381
0.17
%
Jerold H. Rubinstein, Director
-
-
2,800
0.02
%
Roy D. Terracina, Director
-
-
63,800
0.50
%
Thomas F. Lydon, Jr., Director
-
-
17,500
0.14
%
All directors and executive officers as a group (five persons)
2,064,560
99.81
%
615,505
4.78
%
Equity Compensation Plan Information
Number of securities to be issued upon exercise of outstanding options, warrants and rights
Weighted-average exercise price of outstanding options, warrants and rights
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
Plan Category
(a)
(b)
(c )
Equity compensation plans approved by security holders
N/A
N/A
N/A
Equity compensation plans not approved by security holders
1989 Stock Option Plan 1
231,000
$
6.05
486,000
1997 Non-Qualified Stock Option Plan 2
2,000
$
2.74
141,000
Employee Stock Purchase Plan 3
N/A
N/A
102,778
2010 Stock Incentive Plan 4
N/A
N/A
-
Total
233,000
729,778
1.
Stock options under this plan may be granted to directors, officers, and employees of the Company from authorized but unissued shares or treasury shares.
2.
Stock options under this plan may be granted to directors, executives, and key salaried employees of the Company from authorized but unissued shares or treasury shares. The term of the option periods must be less than ten years.
3.
The Company has adopted a stock purchase plan to provide eligible employees of the Company an opportunity to purchase common stock of the Company. There are authorized shares of treasury stock reserved for issuance under the plan for which a registration statement has not been filed.
4.
The Company adopted a stock incentive plan to provide eligible persons in the Company’s service an opportunity to acquire common stock of the Company. There were authorized shares of treasury stock reserved for issuance under the plan for which a registration statement has not been filed. This plan expired in October 2020.
Part IV
Item 15. Exhibits, Financial Statement Schedules
(a)
The following documents are filed as part of this report:
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
*Filed herewith.
**Filed with Original Form 10-K.
Signatures
Pursuant to the requirements of Section 13 of 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
U.S. Global Investors, Inc.
By: /s/ Frank E. Holmes
Frank E. Holmes
Date: September 13, 2022
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
