GROW 10-Q Quarterly Report Dec. 31, 2009

GROW 10-Q Quarter ended Dec. 31, 2009

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U S GLOBAL INVESTORS INC

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10-Q 1 d70890e10vq.htm FORM 10-Q e10vq

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q


þ		Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

for the quarterly period ended December 31, 2009


o		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		(IRS Employer Identification Number)
Incorporation or Organization)


7900 Callaghan Road		78229-1234
San Antonio, Texas		(Zip Code)
(Address of Principal Executive Offices)

(210) 308-1234
(Registrant’s Telephone Number, Including Area Code)

Not Applicable
(Former Name, Former Address, and Former Fiscal Year, if Changed since Last Report)

Indicate by check mark whether the registrant (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 þ NO o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

YES o NO o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):


Large accelerated filer o	Accelerated filer þ	Non-accelerated filer o	Smaller Reporting Company o
		(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

YES o NO þ

On January 30, 2010, there were 13,861,963 shares of Registrant’s class A nonvoting common stock issued and 13,275,933 shares of Registrant’s class A nonvoting common stock issued and outstanding, no shares of Registrant’s class B nonvoting common shares outstanding, and 2,073,585 shares of Registrant’s class C voting common stock issued and outstanding.

TABLE OF CONTENTS


PART I. FINANCIAL INFORMATION			1

ITEM 1. FINANCIAL STATEMENTS			1
Consolidated Balance Sheets			1
Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited)			3
Consolidated Statements of Cash Flows (Unaudited)			4
Notes to Consolidated Financial Statements (Unaudited)			5

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS			12

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK			17

ITEM 4. CONTROLS AND PROCEDURES			17

PART II. OTHER INFORMATION			18

ITEM 1A. RISK FACTORS			18

ITEM 6. EXHIBITS			18

SIGNATURES			19
EX-31
EX-32


U.S. Global Investors, Inc.
December 31, 2009, Quarterly Report on Form 10-Q		Page 1 of 23

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Consolidated Balance Sheets


	December 31,		June 30,
Assets	2009		2009
	(UNAUDITED)
Current Assets
Cash and cash equivalents	$	21,832,469	$	20,303,594
Trading securities, at fair value		5,068,680		4,511,497
Receivables
Mutual funds		3,479,127		2,629,351
Offshore clients		38,805		37,399
Income tax		—		1,051,288
Employees		13,547		5,434
Other		105,431		120,440
Prepaid expenses		793,163		584,214
Deferred tax asset		56,369		645,768

Total Current Assets		31,387,591		29,888,985


Net Property and Equipment		4,025,857		3,773,121


Other Assets
Deferred tax asset, long term		969,871		955,075
Investment securities available-for-sale, at fair value		3,068,500		2,536,665

Total Other Assets		4,038,371		3,491,740

Total Assets	$	39,451,819	$	37,153,846

The accompanying notes are an integral part of this statement.


U.S. Global Investors, Inc.
December 31, 2009, Quarterly Report on Form 10-Q		Page 2 of 23


	December 31,			June 30,
Liabilities and Shareholders’ Equity	2009			2009
	(UNAUDITED)
Current Liabilities
Accounts payable	$	38,130		$	137,428
Accrued compensation and related costs		1,604,878			1,168,199
Other accrued expenses		1,400,572			1,220,225

Total Current Liabilities		3,043,580			2,525,852


Commitments and Contingencies

Shareholders’ Equity
Common stock (class A) — $0.025 par value; nonvoting; authorized, 28,000,000 shares; issued, 13,861,963 shares and 13,819,673 shares at December 31, 2009, and June 30, 2009, respectively		346,549			345,492
Common stock (class B) — $0.025 par value; nonvoting; authorized, 4,500,000 shares; no shares issued		—			—
Common stock (class C) — $0.025 par value; voting; authorized, 3,500,000 shares; issued, 2,073,585 shares and 2,091,875 shares at December 31, 2009, and June 30, 2009, respectively		51,840			52,297
Additional paid-in-capital		15,002,252			14,628,431
Treasury stock, class A shares at cost; 590,590 and 618,920 shares at December 31, 2009, and June 30, 2009, respectively		(1,382,793	)		(1,449,124	)
Accumulated other comprehensive income, net of tax		626,187			352,334
Retained earnings		21,764,204			20,698,564

Total Shareholders’ Equity		36,408,239			34,627,994

Total Liabilities and Shareholders’ Equity	$	39,451,819		$	37,153,846

The accompanying notes are an integral part of this statement.


U.S. Global Investors, Inc.
December 31, 2009, Quarterly Report on Form 10-Q		Page 3 of 23

Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited)


	Six Months Ended December 31,					Three Months Ended December 31,
	2009		2008			2009		2008
Revenues
Mutual fund advisory fees	$	9,639,067	$	10,982,654		$	5,282,464	$	2,948,348
Transfer agent fees		2,780,472		3,544,263			1,455,622		1,329,861
Distribution fees		2,587,286		966,893			1,391,584		966,893
Administrative services fees		931,210		417,567			492,275		417,567
Other advisory fees		198,181		802,540			95,615		149,000
Investment income (loss)		896,194		(5,061,024	)		296,741		(2,992,670	)
Other		25,080		20,608			14,304		6,957

		17,057,490		11,673,501			9,028,605		2,825,956

Expenses
Employee compensation and benefits		5,966,786		5,129,140			3,257,898		2,313,177
General and administrative		2,879,928		6,144,093			1,469,892		1,527,542
Platform fees		2,668,115		3,017,327			1,426,161		831,896
Subadvisory fees		279,989		2,220,585			151,325		482,898
Advertising		412,728		237,242			314,187		89,296
Depreciation		163,252		146,772			100,089		73,965

		12,370,798		16,895,159			6,719,552		5,318,774

Income (Loss) Before Income Taxes		4,686,692		(5,221,658	)		2,309,053		(2,492,818	)
Provision for Federal Income Taxes
Tax expense (benefit)		1,782,133		(1,693,349	)		801,001		(809,658	)

Net Income (Loss)		2,904,559		(3,528,309	)		1,508,052		(1,683,160	)
Other comprehensive income (loss), net of tax:
Unrealized gains on available-for-sale securities arising during period		273,853		325,451			78,932		576,804

Comprehensive Income (Loss)	$	3,178,412	$	(3,202,858	)	$	1,586,984	$	(1,106,356	)

Basic Net Income (Loss) per Share	$	0.19	$	(0.23	)	$	0.10	$	(0.11	)

Diluted Net Income (Loss) per Share	$	0.19	$	(0.23	)	$	0.10	$	(0.11	)

Basic weighted average number of common shares outstanding		15,324,269		15,261,582			15,336,967		15,264,634
Diluted weighted average number of common shares outstanding		15,327,924		15,285,343			15,340,847		15,285,459

The accompanying notes are an integral part of this statement.


U.S. Global Investors, Inc.
December 31, 2009, Quarterly Report on Form 10-Q		Page 4 of 23

Consolidated Statements of Cash Flows (Unaudited)


	Six Months Ended December 31
	2009			2008
Cash Flows from Operating Activities
Net income (loss)	$	2,904,559		$	(3,528,309	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation		163,252			146,772
Net recognized loss on sale of fixed assets		—			2,075
Net recognized loss on securities		58,576			2,456,618
Provision for deferred taxes		433,527			(1,731,019	)
Stock bonuses		196,558			103,219
Stock-based compensation expense		34,477			162,917
Changes in assets and liabilities, impacting cash from operations:
Accounts receivable		207,002			4,503,587
Prepaid expenses		(208,949	)		(139,710	)
Trading securities		(615,780	)		2,835,546
Accounts payable and accrued expenses		517,728			(3,560,311	)

Total adjustments		786,391			4,779,694

Net Cash Provided by Operations		3,690,950			1,251,385

Cash Flows from Investing Activities
Purchase of property and equipment		(415,988	)		(1,177,505	)
Purchase of available-for-sale securities		(116,906	)		(1,237,024	)
Proceeds on sale of available-for-sale securities		22			—

Net Cash Used in Investing Activities		(532,872	)		(2,414,529	)

Cash Flow from Financing Activities
Issuance or exercise of stock and options		209,716			102,722
Dividends paid		(1,838,919	)		(1,839,188	)

Net Cash Used in Financing Activities		(1,629,203	)		(1,736,466	)

Net Increase (Decrease) in Cash and Cash Equivalents		1,528,875			(2,899,610	)
Beginning Cash and Cash Equivalents		20,303,594			25,135,075

Ending Cash and Cash Equivalents	$	21,832,469		$	22,235,465

The accompanying notes are an integral part of this statement.


U.S. Global Investors, Inc.
December 31, 2009, Quarterly Report on Form 10-Q		Page 5 of 23

Notes to Consolidated Financial Statements (Unaudited)

Note 1. Basis of Presentation

U.S. Global Investors, Inc. (the “Company” or “U.S. Global”) has prepared the consolidated financial statements pursuant to 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, 2009.

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, United Shareholder Services, Inc. (“USSI”), U.S. Global Investors (Guernsey) Limited, U.S. Global Brokerage, Inc., and U.S. Global Investors (Bermuda) Limited.

All significant intercompany balances and transactions have been eliminated in consolidation. Certain amounts have been reclassified for comparative purposes. The results of operations for the six months ended December 31, 2009, are not necessarily indicative of the results to be expected for the entire year.

The unaudited interim financial information in these condensed financial statements should be read in conjunction with the consolidated financial statements contained in the Company’s annual report.

Note 2. Dividend

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. A monthly dividend of $0.02 per share is authorized through March 2010, and will be reviewed by the board quarterly.

Note 3. Investments

As of December 31, 2009, the Company held investments with a market value of approximately $8.137 million and a cost basis of approximately $8.083 million. The market value of these investments is approximately 20.6 percent of the Company’s total assets. The Company currently has no investments in debt securities or mortgage-backed securities.

Investments in securities classified as trading are reflected as current assets on the consolidated balance sheet at their fair market value. Unrealized holding gains and losses on trading securities are included in earnings in the consolidated statements of operations and comprehensive income (loss).

Investments in securities classified as available-for-sale, which may not be readily marketable, are reflected as non-current assets on the consolidated balance sheet at their fair value. Unrealized holding gains and losses on available-for-sale securities are excluded from earnings and reported in other comprehensive income as a separate component of shareholders’ equity until realized.


U.S. Global Investors, Inc.
December 31, 2009, Quarterly Report on Form 10-Q		Page 6 of 23

The following summarizes the market value, cost, and unrealized gain or loss on investments as of December 31, 2009, and June 30, 2009.


								Unrealized holding
								losses on available-for-
					Unrealized Gain			sale securities, net of
Securities	Market Value		Cost		(Loss)			tax
Trading ¹	$	5,068,680	$	5,963,272	$	(894,592	)		N/A
Available-for-sale ²		3,068,500		2,119,732		948,768		$	626,187

Total at December 31, 2009	$	8,137,180	$	8,083,004	$	54,176


Trading ¹	$	4,511,497	$	6,276,578	$	(1,765,081	)		N/A
Available-for-sale ²		2,536,665		2,002,826		533,839		$	352,334

Total at June 30, 2009	$	7,048,162	$	8,279,404	$	(1,231,242	)


¹		Unrealized and realized gains and losses on trading securities are included in earnings in the statement of operations.

²		Unrealized gains and losses on available-for-sale securities are excluded from earnings and recorded in other comprehensive income as a separate component of shareholders’ equity until realized.

Investment income can be volatile and varies depending on market fluctuations, the Company’s ability to participate in investment opportunities, and timing of transactions. A significant portion of the unrealized gains and losses for the six months ended December 31, 2009, is concentrated in a small number of issuers. The Company expects that gains and losses will continue to fluctuate in the future.

Investment income (loss) from the Company’s investments includes:

	•		realized gains and losses on sales of securities;

	•		unrealized gains and losses on trading securities;

	•		realized foreign currency gains and losses;

	•		other-than-temporary impairments on available-for-sale securities; and

	•		dividend and interest income.

The following summarizes investment income (loss) reflected in earnings for the periods discussed:


	Six Months Ended December 31,
Investment Income (Loss)	2009			2008
Realized losses on sales of trading securities	$	(58,598	)	$	—
Realized gain on sales of available-for-sale securities		22			—
Unrealized gains (losses) on trading securities		870,489			(2,836,646	)
Realized foreign currency gains (losses)		3,112			(48,795	)
Other-than-temporary declines in available-for-sale securities		—			(2,456,618	)
Dividend and interest income		81,169			281,035

Total Investment Income (Loss)	$	896,194		$	(5,061,024	)


	Three Months Ended December 31,
Investment Income (Loss)	2009			2008
Realized losses on sales of trading securities	$	(58,598	)	$	—
Realized gain on sales of available-for-sale securities		22			—
Unrealized gains (losses) on trading securities		314,141			(596,890	)
Realized foreign currency gains (losses)		147			(46,992	)
Other-than-temporary declines in available-for-sale securities		—			(2,456,618	)
Dividend and interest income		41,029			107,830

Total Investment Income (Loss)	$	296,741		$	(2,992,670	)


U.S. Global Investors, Inc.
December 31, 2009, Quarterly Report on Form 10-Q		Page 7 of 23

Note 4. Fair Value Disclosures

In Accounting Standards Codification (ASC) 820 Fair Value Measurement and Disclosures (formerly Statement of Financial Accounting Standards (“SFAS”) No. 157 Fair Value Measurements ) the Financial Accounting Standards Board (“FASB”) defines fair value 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 standard establishes a hierarchy that prioritizes inputs to valuation techniques used to measure fair value and requires companies to disclose the fair value of their financial instruments according to a fair value hierarchy (i.e., Level 1, 2, and 3 inputs, as defined below). The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. Additionally, companies are required to provide enhanced disclosures regarding instruments in the Level 3 category (which have inputs to the valuation techniques that are unobservable and require significant management judgment), including a reconciliation of the beginning and ending values separately for each major category of assets or liabilities.

Financial instruments measured and reported at fair value are classified and disclosed in one of the following categories:

Level 1 — Valuations based on quoted prices in active markets for identical assets or liabilities at the reporting date. Since valuations are based on quoted prices that are readily and regularly available in an active market, value of these products does not entail a significant degree of judgment.

Level 2 — Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, directly or indirectly.

Level 3 — Valuations based on inputs that are unobservable and significant to the fair value measurement.

The 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.

For 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 actively traded, it is valued based on the last bid and/or ask quotation. Securities that are not traded on an exchange or market are generally valued at cost, monitored by management and fair value adjusted as considered necessary. The Company values the mutual funds and offshore funds at net asset value.

The following table presents fair value measurements, as of December 31, 2009, for the three major categories of U.S. Global’s investments measured at fair value on a recurring basis:


	Fair Value Measurement using (in thousands)
					Significant
	Quoted		Significant		Unobservable
	Prices		Other Inputs		Inputs
	(Level 1)		(Level 2)		(Level 3)		Total
Trading securities
Common stock	$	164	$	17	$	—	$	181
Mutual funds		3,934		—		—		3,934
Offshore fund		—		954		—		954

Total trading securities		4,098		971		—		5,069

Available-for-sale securities
Common stock		1,552		212		—		1,764
Mutual funds		1,304		—		—		1,304

Total available-for-sale securities		2,856		212		—		3,068

Total Investments	$	6,954	$	1,183	$	—	$	8,137

Approximately 85 percent of the Company’s financial assets measured at fair value are derived from Level 1 inputs including SEC-registered mutual funds and equity securities traded on an active market and the remaining 15 percent are Level 2 inputs, including an investment in an offshore fund.


U.S. Global Investors, Inc.
December 31, 2009, Quarterly Report on Form 10-Q		Page 8 of 23

U.S. Global held investments in three securities with a value of zero that were measured at fair value using significant unobservable inputs (Level 3) at December 31, 2009. There were no realized or unrealized gains or losses or transactions in these securities or any transfers in or out of Level 3 during the three-and six-month period ended December 31, 2009.

The Company has an investment in an offshore fund with a fair value of approximately $954,000 that invests in companies in the energy and natural resource sectors. The Company may redeem this investment on the first business day of each month after providing a redemption notice at least forty-five days.

Note 5. Investment Management, Transfer Agent and Other Fees

The Company serves as investment adviser to U.S. Global Investors Funds (“USGIF”) and receives a fee based on a specified percentage of net assets under management. Two of the funds within USGIF (Eastern European Fund and Global Emerging Markets Fund) were actively managed by a third-party adviser, Charlemagne Capital (IOM) Limited (“Charlemagne”), through November 6, 2008. Effective November 7, 2008, the Company assumed the day-to-day management of both funds. The subadvisory agreements with Charlemagne were amended, effective November 7, 2008, to reflect reduced subadvisory fees in light of restructured responsibilities.

USSI also serves as transfer agent to USGIF and receives fees based on the number of shareholder accounts as well as transaction-and activity-based fees. Additionally, the Company receives certain miscellaneous fees directly from USGIF shareholders. Fees for providing investment management, administrative, distribution and transfer agent services to USGIF continue to be the Company’s primary revenue source.

Investment advisory fees for the USGIF funds totaled $9,639,067 and $10,982,654 for the six months ended December 31, 2009, and December 31, 2008, respectively. Transfer agency fees totaled $2,780,472 and $3,544,263 for the six months ended December 31, 2009, and December 31, 2008, respectively.

A special meeting of shareholders of USGIF and U.S. Global Accolade Funds (“USGAF”) was held on September 23, 2008, to consider several proposals. The proposals were approved effective October 1, 2008, and included (i) a reorganization of the USGIF and USGAF funds from two separate Massachusetts business trusts into a single Delaware statutory trust under the name USGIF, (ii) a new advisory agreement for the USGIF funds, (iii) a new distribution plan for the nine equity USGIF funds under which U.S. Global Brokerage, Inc. is paid a fee at an annual rate of 0.25 percent of the average daily net assets of each fund and (iv) a new administrative services agreement for the USGIF funds. With respect to four equity funds, the new advisory agreement increased the base advisory fee and changed the advisory fee breakpoints. In addition, administrative services that were part of the previous advisory agreement were removed and became the subject of a separate agreement. Under the new administrative services agreement, the USGIF funds no longer reimburse the Company for certain legal and administrative services, but instead pay the Company compensation at an annual rate of 0.08 percent of the average daily net assets of each fund for administrative services provided by the Company to USGIF. A full discussion of the proposals is set forth in proxy materials filed with the SEC by USGIF and USGAF. The Company incurred a total of $3.7 million in merger-related costs, of which $3.5 million was recorded in the first quarter of fiscal 2009.

The new advisory agreement for the nine equity USGIF funds that went into effect October 1, 2008, provides for base advisory fees that, beginning in October 2009, were adjusted upwards or downwards by 0.25 percent if there was a performance difference of 5 percent or more between a fund’s performance and that of its designated benchmark index over the prior 12 months. For the quarter ended December 31, 2009, base advisory fees were adjusted downwards by $397,093.

Prior to October 1, 2008, the Company contractually waived or reduced its advisory fees and/or agreed to pay expenses on seven of thirteen funds. Effective October 1, 2008, the Company contractually agreed to cap the expenses of all thirteen funds through September 30, 2009. Thereafter, these caps will continue on a modified and voluntary basis at the Company’s discretion. The aggregate fees waived and expenses borne by the Company for the six months ended December 31, 2009, and December 31, 2008, were $1,879,199 and $2,214,127, respectively.

The above waived fees include amounts waived under an agreement whereby the Company has voluntarily agreed to waive fees and/or reimburse the U.S. Treasury Securities Cash Fund and the U.S. Government Securities Savings Fund to the extent necessary to maintain the respective fund’s yield at a certain level as determined by the Company (Minimum Yield). For the six months ended December 31, 2009, and December 31, 2008, fees waived and/or expenses reimbursed to maintain positive or zero net yields in the two money market funds totaled $665,204 and $170,642, respectively. The Company may recapture any fees waived and/or expenses reimbursed to support the Minimum Yield within three years after the end of the fund’s fiscal year of such waiver and/or reimbursement to the extent that such recapture would not cause the fund’s yield to fall below the Minimum Yield. Thus, $170,642 of these waivers are recoverable by the Company through December 31, 2011 and $1,047,980 through December 31, 2012. Management cannot predict the impact of the waivers due to the number of variables and the range of potential outcomes; however, increases in fee waivers could be significant and could negatively impact the Company’s revenues and net income. The Company expects to continue to waive fees and/or pay for fund expenses if market and economic conditions warrant. However, subject to the Company’s commitment to certain funds with respect to fee waivers and expense limitations, the Company may reduce the amount of fund


U.S. Global Investors, Inc.
December 31, 2009, Quarterly Report on Form 10-Q		Page 9 of 23

expenses it is bearing.

On November 6, 2008, effective immediately, the Company terminated its relationship with Endeavour Financial Corp. as the adviser to its equity portfolio. As investment adviser, the Company was paid a monthly advisory fee based on the net asset value of the portfolio and an annual performance fee, if any, based on a percentage of consolidated net income from operations in excess of a predetermined percentage return on equity. The Company recorded fees related to the Endeavour Financial Corp. contract totaling $0 and $661,262 for the six months ended December 31, 2009, and December 31, 2008, respectively.

The Company continues to provide advisory services for two offshore clients and receives a monthly advisory fee based on the net asset values of the clients and performance fees, if any, based on the overall increase in net asset values. The Company recorded fees from these clients totaling $198,181 and $141,278 for the six months ended December 31, 2009, and December 31, 2008, respectively. The performance fees for these clients are calculated and recorded quarterly in accordance with the terms of the advisory agreements. These fees may fluctuate significantly from year to year based on factors that may be out of the Company’s control. Frank Holmes, CEO, serves as a director of the offshore clients.

The Company receives additional revenue from several sources including custodial fee revenues, mailroom operations, and investment income.

Substantially all of the cash and cash equivalents included in the balance sheet at December 31, 2009, and June 30, 2009, is invested in USGIF money market funds.

Note 6. Borrowings

As of December 31, 2009, the Company has no long-term liabilities.

The Company has access to a $1 million credit facility with a one-year maturity for working capital purposes. The credit agreement requires the Company to maintain certain quarterly financial covenants to access the line of credit. As of December 31, 2009, this credit facility remained unutilized by the Company.

Note 7. Stock-Based Compensation

The Company accounts for stock-based compensation in accordance with ASC 718 Compensation — Stock Compensation (formerly SFAS No. 123 (revised 2004) Share-Based Payment ). Stock-based compensation expense is recorded for the cost of stock options. Stock-based compensation expense for the six months ended December 31, 2009, and December 31, 2008, respectively, was $34,478 and $162,917. As of December 31, 2009, and December 31, 2008, respectively, there was approximately $95,283 and $275,197 of total unrecognized share-based compensation cost related to share-based compensation granted under the plans that will be recognized over the remainder of their respective vesting periods.

Stock compensation plans

The Company’s stock option plans provide for the granting of class A shares as either incentive or nonqualified stock options to employees and non-employee directors. Options are subject to terms and conditions determined by the Compensation Committee of the Board of Directors.

The following table summarizes information about the Company’s stock option plans for the six months ended December 31, 2009.


				Weighted Average
	Number of Options			Exercise Price
Options outstanding, beginning of year		77,300		$	13.66
Granted		2,000			12.31
Exercised		(24,000	)		0.75
Forfeited		—			—

Options outstanding, end of period		55,300		$	19.21

Options exercisable, end of period		47,120		$	19.50


U.S. Global Investors, Inc.
December 31, 2009, Quarterly Report on Form 10-Q		Page 10 of 23

Note 8. Earnings Per Share

The 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.

The following table sets forth the computation for basic and diluted EPS:


	Six Month Ended December 31,
	2009		2008
Net income (loss)	$	2,904,559	$	(3,528,309	)

Weighted average number of outstanding shares
Basic		15,324,269		15,261,582

Effect of dilutive securities
Employee stock options		3,655		23,761

Diluted		15,327,924		15,285,343


Earnings (loss) per share
Basic	$	0.19	$	(0.23	)
Diluted	$	0.19	$	(0.23	)


	Three Months Ended December,
	2009		2008
Net income (loss)	$	1,508,052	$	(1,683,160	)

Weighted average number of outstanding shares
Basic		15,336,967		15,264,634

Effect of dilutive securities
Employee stock options		3,880		20,825

Diluted		15,340,847		15,285,459


Earnings (loss) per share
Basic	$	0.10	$	(0.11	)
Diluted	$	0.10	$	(0.11	)

The diluted EPS calculation excludes the effect of stock options when their exercise prices exceed the average market price for the period. For the three and six months ended December 31, 2009, 45,300 options were excluded from diluted EPS. For the three and six months ending December 31, 2008, no options were included in the computation of diluted earnings per share because they would be antidilutive due to the net loss.

The Company may repurchase stock from employees. The Company made no repurchases of shares of its class A, class B, or class C common stock during the quarter ended December 31, 2009. Upon repurchase, these shares are classified as treasury shares and are deducted from outstanding shares in the earnings per share calculation.

Note 9. Income Taxes

The Company and its subsidiaries file a consolidated federal income tax return. Provisions for income taxes include deferred taxes for temporary differences in the bases of assets and liabilities for financial and tax purposes, resulting from the use of the liability method of accounting for income taxes. The current deferred tax asset primarily consists of unrealized losses on trading securities as well as temporary differences in the deductibility of prepaid expenses and accrued liabilities. The long-term deferred tax asset is composed primarily of unrealized losses on available-for-sale securities and the difference in tax treatment of stock options.

A valuation allowance is provided when it is more likely than not that some portion of the deferred tax amount will not be realized. No valuation allowance was included or deemed necessary at December 31, 2009, or June 30, 2009.


U.S. Global Investors, Inc.
December 31, 2009, Quarterly Report on Form 10-Q		Page 11 of 23

Note 10. Financial Information by Business Segment

The Company operates principally in two business segments: providing investment management services to the funds it manages and investing for its own account in an effort to add growth and value to its cash position. The following schedule details total revenues and income by business segment:


	Investment
	Management		Corporate
	Services		Investments			Consolidated
Six months ended December 31, 2009
Net revenues	$	16,242,467	$	815,023		$	17,057,490

Net income before income taxes		3,879,201		807,491			4,686,692

Depreciation		163,252		—			163,252

Capital expenditures		415,988		—			415,988

Gross identifiable assets at December 31, 2009		30,273,103		8,152,476			38,425,579
Deferred tax asset							1,026,240

Consolidated total assets at December 31, 2009						$	39,451,819

Six months ended December 31, 2008
Net revenues	$	16,986,908	$	(5,313,407	)	$	11,673,501

Net income before income taxes		94,593		(5,316,251	)		(5,221,658	)

Depreciation		146,772		—			146,772

Capital expenditures		1,177,505		—			1,177,505

Three months ended December 31, 2009
Net revenues	$	8,772,892	$	255,713		$	9,028,605

Net income before income taxes		2,055,516		253,537			2,309,053

Depreciation		100,089		—			100,089

Capital expenditures		174,050		—			174,050

Three months ended December 31, 2008
Net revenues	$	5,903,190	$	(3,077,234	)	$	2,825,956

Net income before income taxes		587,169		(3,079,987	)		(2,492,818	)

Depreciation		73,965		—			73,965

Capital expenditures		575,321		—			575,321

Note 11. Contingencies and Commitments

The Company continuously reviews all 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 estimatable.

During the normal course of business, the Company may be subject to 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.

Note 12. Subsequent Events

The Company has evaluated subsequent events through February 4, 2010, the date of issuance of these financial statements, as required by ASC 855 Subsequent Events (formerly SFAS No. 165, Subsequent Events ).


U.S. Global Investors, Inc.
December 31, 2009, Quarterly Report on Form 10-Q		Page 12 of 23

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

U.S. Global has made forward-looking statements concerning the Company’s performance, financial condition, and operations in this report. The Company from time to time may also make forward-looking statements in its public filings and press releases. Such forward-looking statements are subject to various known and unknown risks and uncertainties and do not guarantee future performance. Actual results could differ materially from those anticipated in such forward-looking statements due to a number of factors, some of which are beyond the Company’s control, including: (i) the volatile and competitive nature of the investment management industry, (ii) changes in domestic and foreign economic conditions, (iii) the effect of government regulation on the Company’s business, and (iv) market, credit, and liquidity risks associated with the Company’s investment management activities. Due to such risks, uncertainties, and other factors, the Company cautions each person receiving such forward-looking information not to place undue reliance on such statements. All such forward-looking statements are current only as of the date on which such statements were made.

Recent Trends and Continuing Disruptions in Worldwide Financial Markets

Due to the consequences of the meltdown in the subprime mortgage market beginning in 2007, the worldwide financial markets have encountered intense volatility due to uncertainty and disruption within the credit markets. This disruption continued into 2008 and 2009 causing global equities to decline worldwide. The Company’s investment advisory fees and operating revenue primarily depend on the value of our assets under management (“AUM”), and continued global market fluctuations impact the funds’ asset levels, thereby affecting income and results of operations.

This global strain resulted in a seizing of the international credit markets resulting in unprecedented worldwide governmental actions. For instance, on September 7, 2008, the U.S. Government moved to guarantee the outstanding debt of Fannie Mae and Freddie Mac. On September 19, 2008, the U.S. Treasury Department announced a temporary guarantee program for publicly available money market funds which elected to participate in the program.

Furthermore, on October 3, 2008, the U.S. Congress enacted the Emergency Economic Stabilization Act of 2008, which authorized the Treasury Secretary to create the Troubled Assets Relief Program and authorize the purchase of up to $700 billion of troubled assets. Despite these aggressive governmental programs and actions, the global financial markets continue to remain extremely volatile.

What began as a sub-prime mortgage default concern has swelled to practically every aspect of the global financial market. The equity markets suffered from a pullback in consumer spending, which led to weak performance in the global markets, increased unemployment, and significant declines in the values of assets owned by financial institutions. This worldwide disruption has spread to tangential areas including currencies and commodities, which directly impact the Company and the assets it manages.

Although there have been signs of improving credit and market conditions, continued fluctuations may have a negative impact on the Company’s revenues and net income. This unsettled financial environment has had an impact on the Company’s assets under management. Average total assets under management for the year ending June 30, 2009, were $2.533 billion versus $5.437 billion for the year ending June 30, 2008, although average total assets under management for the three-month period ending December 31, 2009, climbed back to $2.657 billion versus $2.119 billion for the three-month period ending December 31, 2008.

Since January 1, 2009, the Dow Jones Industrial Average is up 18 percent and the Standard & Poor’s 500 Index increased 23 percent through December 31, 2009. Even with these market improvements, the economic outlook remains uncertain and the Company anticipates continued volatility in the financial markets.

BUSINESS SEGMENTS

The Company, with principal operations located in San Antonio, Texas, manages two business segments: (1) the Company offers a broad range of investment management products and services to meet the needs of individual and institutional investors; and (2) the Company invests for its own account in an effort to add growth and value to its cash position. Although the Company generates the majority of its revenues from its investment advisory segment, the Company holds a significant amount of its total assets in investments. The following is a brief discussion of the Company’s two business segments.

Investment Management Products and Services

The Company generates substantially all of its operating revenues from managing and servicing USGIF and other advisory clients. These revenues are largely dependent on the total value and composition of assets under its management. Fluctuations in the markets and investor sentiment directly impact the funds’ asset levels, thereby affecting income and results of operations.


U.S. Global Investors, Inc.
December 31, 2009, Quarterly Report on Form 10-Q		Page 13 of 23

On November 6, 2008, effective immediately, the Company terminated its relationship with Endeavour Financial Corp. as the adviser to its equity portfolio. As investment adviser, the Company was paid a monthly advisory fee based on the net asset value of the portfolio and an annual performance fee, if any, based on a percentage of consolidated net income from operations in excess of a predetermined percentage return on equity. The Company recorded fees totaling $0 and $661,262 for the six months ended December 31, 2009, and December 31, 2008, respectively.

The Company continues to provide advisory services for two offshore clients and receives monthly advisory fees based on the net asset values of the clients and performance fees, if any, based on the overall increase in net asset values. The Company recorded fees from these clients totaling $198,181 and $141,278 for the six months ended December 31, 2009, and December 31, 2008, respectively. The performance fees for these clients are calculated and recorded quarterly in accordance with the terms of the advisory agreements. These fees may fluctuate significantly from year to year based on factors that may be out of the Company’s control. Frank Holmes, CEO, serves as a director of the offshore clients.

At December 31, 2009, total assets under management as of period end, including both SEC-registered funds and offshore clients, were $2.669 billion versus $1.981 billion at December 31, 2008. During the six months ended December 31, 2009, average assets under management were $2.509 billion versus $3.105 billion for the same period ended December 31, 2008. This increase was primarily due to an increase in the natural resources and foreign equity funds under management. Total assets under management at June 30, 2009, were $2.222 billion versus $2.669 billion at December 31, 2009.

Investment Activities

Management believes it can more effectively manage the Company’s cash position by broadening the types of investments used in cash management and continues to believe that such activities are in the best interest of the Company. Company compliance and operational personnel review and monitor these activities, and various reports are provided to investment advisory clients.

Investment income (loss) from the Company’s investments includes:

	•		realized gains and losses on sales of securities;

	•		unrealized gains and losses on trading securities;

	•		realized foreign currency gains and losses;

	•		other-than-temporary impairments on available-for-sale securities; and

	•		dividend and interest income.

This source of revenue does not remain consistent and is dependent on market fluctuations, the Company’s ability to participate in investment opportunities, and timing of transactions.

The following summarizes investment income (loss) reflected in earnings for the periods discussed:


	Six Months Ended December 31,
Investment Income (Loss)	2009			2008
Realized losses on sales of trading securities	$	(58,598	)	$	—
Realized gain on sales of available-for-sale securities		22			—
Unrealized gains (losses) on trading securities		870,489			(2,836,646	)
Realized foreign currency gains (losses)		3,112			(48,795	)
Other-than-temporary declines in available-for-sale securities		—			(2,456,618	)
Dividend and interest income		81,169			281,035

Total Investment Income (Loss)	$	896,194		$	(5,061,024	)


	Three Months Ended December 31,
Investment Income (Loss)	2009			2008
Realized losses on sales of trading securities	$	(58,598	)	$	—
Realized gain on sales of available-for-sale securities		22			—
Unrealized gains (losses) on trading securities		314,141			(596,890	)
Realized foreign currency gains (losses)		147			(46,992	)
Other-than-temporary declines in available-for-sale securities		—			(2,456,618	)
Dividend and interest income		41,029			107,830

Total Investment Income (Loss)	$	296,741		$	(2,992,670	)


U.S. Global Investors, Inc.
December 31, 2009, Quarterly Report on Form 10-Q		Page 14 of 23

RESULTS OF OPERATIONS — THREE MONTHS ENDED DECEMBER 31, 2009, AND 2008

The Company posted net after-tax income of $1,508,052 ($0.10 income per share) for the three months ended December 31, 2009, compared with a net after-tax loss of $1,683,160 ($0.11 loss per share) for the three months ended December 31, 2008.

Revenues

Total consolidated revenues for the three months ended December 31, 2009, increased $6,202,649, or 219 percent, compared with the three months ended December 31, 2008. This increase was primarily attributable to the following:

	•		Investment income increased by $3,289,000, primarily as a result of a rebound from declines in the market value of trading securities as well as other-than-temporary impairments in the comparable quarter;

	•		Investment advisory fees increased by approximately $2,281,000 primarily as a result of increased assets under management in the natural resources and international equity funds; and

	•		Distribution and administrative fees increased by $499,000 due to increased assets under management.

Expenses

Total consolidated expenses for the three months ended December 31, 2009, increased $1,400,778, or 26 percent, compared with the three months ended December 31, 2008. This was largely attributable to the following:

	•		Employee compensation and benefits increased by $945,000 primarily as a result of higher performance-based bonuses;

	•		Platform fees increased by $594,000 as a result of increased assets under management; and

	•		Advertising fees increased $225,000 as a result of increased marketing activity.

RESULTS OF OPERATIONS — SIX MONTHS ENDED DECEMBER 31, 2009, AND 2008

The Company posted net after-tax income of $2,904,559 ($0.19 income per share) for the six months ended December 31, 2009, compared with a net after-tax loss of $3,528,309 ($0.23 loss per share) for the six months ended December 31, 2008.

Revenues

Total consolidated revenues for the six months ended December 31, 2009, increased $5,383,989, or 46 percent, compared with the six months ended December 31, 2008. This increase was primarily attributable to the following:

	•		Investment income increased by $5,957,000 primarily as a result of a rebound from declines in the market value of trading securities as well as other-than-temporary impairments in the comparable period;

	•		Distribution and administrative fees increased by $2,134,000. Prior year comparative figures include three months of fees, whereas current year numbers include six months; and

	•		Offsetting these increases were a decline in investment advisory fees of $1,948,000 as a result of lower average assets in the first quarter and a decline in transfer agent fees of $764,000 primarily due to a decline in the number of accounts and transactions in USGIF.

Expenses

Total consolidated expenses for the six months ended December 31, 2009, decreased $4,524,361, or 27 percent, compared with the six months ended December 31, 2008. This was largely attributable to the following:

	•		General and administrative expenses declined by $3,264,000 primarily due to prior period proxy-related costs associated with the merger of the USGIF and USGAF trusts;

	•		Subadvisory fees decreased by $1,941,000 due to a prior period change in the subadvisory contract; and

	•		Advertising fees increased $175,000 as a result of increased marketing activity.


U.S. Global Investors, Inc.
December 31, 2009, Quarterly Report on Form 10-Q		Page 15 of 23

LIQUIDITY AND CAPITAL RESOURCES

At December 31, 2009, the Company had net working capital (current assets minus current liabilities) of approximately $28.3 million and a current ratio (current assets divided by current liabilities) of 10.3 to 1. With approximately $21.8 million in cash and cash equivalents and $8.1 million in marketable securities, the Company has adequate liquidity to meet its current obligations. Total shareholders’ equity was approximately $36.4 million, with cash, cash equivalents, and marketable securities comprising 76 percent of total assets.

As of December 31, 2009, the Company has no long-term liabilities. The Company has access to a $1 million credit facility with a one-year maturity for working capital purposes. The credit agreement requires the Company to maintain certain quarterly financial covenants to access the line of credit. As of December 31, 2009, this credit facility remained unutilized by the Company.

Management believes current cash reserves, financing obtained and/or available, and potential cash flow from operations will be sufficient to meet foreseeable cash needs or capital necessary for the above-mentioned activities and allow the Company to take advantage of opportunities for growth whenever available.

Market volatility may cause the price of the Company’s publicly traded class A shares to fluctuate, which in turn may allow the Company an opportunity to buy back stock at favorable prices.

The investment advisory and related contracts between the Company and USGIF were renewed effective October 1, 2009. The Company provides advisory services to two offshore clients for which the Company receives a monthly advisory fee and a quarterly performance fee, if any, based on agreed-upon performance measurements. The contracts between the Company and these offshore clients expire periodically, and management anticipates that its offshore clients will renew the contracts.

The Company receives additional revenue from several sources including custodial fee revenues, mailroom operations, and investment income.


U.S. Global Investors, Inc.
December 31, 2009, Quarterly Report on Form 10-Q		Page 16 of 23

RECENT ACCOUNTING PRONOUNCEMENTS

The Company is subject to extensive and often complex and frequently changing governmental regulation and accounting oversight. Moreover, financial reporting requirements, such as those listed below, and the processes, controls and procedures that have been put in place to address them, are comprehensive and complex. While management has focused considerable attention and resources on meeting these reporting requirements, interpretations by regulatory or accounting agencies that differ from those of the Company could negatively impact financial results.

In June 2009, the FASB removed the concept of a qualifying special-purpose entity and removed the exception from applying in consolidation of variable interest entities to qualifying special-purpose entities in ASC 860 Transfers and Servicing (formerly SFAS No. 166, Accounting for Transfers of Financial Assets — an amendment of FASB Statement No. 140) . This standard is effective for both interim and annual periods as of the beginning of each reporting entity’s first annual reporting period that begins after November 15, 2009. Management is in the process of determining the effect the adoption of this standard will have on the Company’s Consolidated Financial Statements.

Effective for both interim and annual periods as of the beginning of each reporting entity’s first annual report period beginning after November 15, 2009, enterprises are required to perform an analysis to determine whether the enterprise’s variable interest or interests give it a controlling financial interest in a variable interest entity, in accordance with ASC 810 Consolidation (formerly SFAS No. 167, Amendments to FASB Interpretation No. 46(R)) . Management is in the process of determining the effect the adoption of this standard will have on the Company’s Consolidated Financial Statements.

In June 2009, the FASB established the Codification as the source of authoritative GAAP recognized by the FASB, to be applied by nongovernmental entities in the preparation of financial statements in conformity with GAAP. Rules and interpretive releases of the SEC under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. On the effective date, the Codification superseded all then-existing non-SEC accounting and reporting standards. All other non-grandfathered non-SEC accounting literature not included in the Codification became nonauthoritative. Codification is effective for financial statements issued for interim and annual periods ending after September 15, 2009. The adoption of Codification did not have a material affect our financial position or results of operations. Commencing with the Form 10-Q for the September 30, 2009 quarter end, future filings with the SEC will reference the Codification rather than prior accounting and reporting standards.

In January 2010, the FASB issued Accounting Standards Update (ASU) No. 2010-06, Improving Disclosures about Fair Value Measurements . This ASU will add new requirements for disclosures into and out of Levels 1 and 2 fair-value measurements and information on purchases, sales, issuances and settlements on a gross basis in the reconciliation of Level 3 fair-value measurements. It also clarifies existing fair value disclosures about the level of disaggregation, inputs and valuation techniques. Except for the detailed Level 3 reconciliation disclosures, the guidance in the ASU is effective for annual and interim reporting periods in fiscal years beginning after December 15, 2009. The new disclosures for Level 3 activity are effective for annual and interim reporting periods in fiscal years beginning after December 15, 2010. Management is in the process of determining the effect the adoption of this standard will have on the Company’s Consolidated Financial Statement disclosures.

CRITICAL ACCOUNTING POLICIES

For a discussion of critical accounting policies that the Company follows, please refer to the notes to the consolidated financial statements included in the Annual Report on Form 10-K for the year ended June 30, 2009.


U.S. Global Investors, Inc.
December 31, 2009, Quarterly Report on Form 10-Q		Page 17 of 23

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company’s balance sheet includes assets whose fair value is subject to market risks. Due to the Company’s investments in equity securities (foreign and domestic), equity price fluctuations represent a market risk factor affecting the Company’s consolidated financial position. The carrying values of investments subject to equity price risks are based on quoted market prices or, if not actively traded, management’s estimate of fair value as of the balance sheet date. Market prices fluctuate, and the amount realized in the subsequent sale of an investment may differ significantly from the reported market value.

Global financial markets continue to experience unprecedented volatility, and unpredictable business conditions remain foreseeable for the future. These market conditions have produced substantial reductions in the Company’s assets under management, which directly impact the Company’s revenues and net income. Continued market volatility and disruptions in the global financial markets could substantially impact the Company.

The Company’s investment activities are reviewed and monitored by Company compliance personnel, and various reports are provided to investment advisory clients. Written procedures are also in place to manage compliance with the code of ethics.

The table below summarizes the Company’s equity price risks as of December 31, 2009, and shows the effects of a hypothetical 25 percent increase and a 25 percent decrease in market prices.


				Estimated Fair
	Fair Value at		Hypothetical	Value After		Increase (Decrease)
	December 31,		Percentage	Hypothetical		in Shareholders’
	2009		Change	Price Change		Equity, Net of Tax
Trading securities ¹	$	5,068,680	25% increase	$	6,335,850	$	836,332
			25% decrease	$	3,801,510	$	(836,332	)

Available-for-sale ²	$	3,068,500	25% increase	$	3,835,625	$	506,303
			25% decrease	$	2,301,375	$	(506,303	)


¹		Unrealized and realized gains and losses on trading securities are included in earnings in the statement of operations.

²		Unrealized and realized gains and losses on available-for-sale securities are excluded from earnings and recorded in other comprehensive income as a component of shareholders’ equity until realized.

The selected hypothetical change does not reflect what could be considered best or worst-case scenarios. Results could be significantly worse due to both the nature of equity markets and the concentration of the Company’s investment portfolio.

ITEM 4. CONTROLS AND PROCEDURES

An evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of December 31, 2009, was conducted under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of December 31, 2009.

There has been no change in the Company’s internal control over financial reporting that occurred during the quarter ended December 31, 2009, that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.


U.S. Global Investors, Inc.
December 31, 2009, Quarterly Report on Form 10-Q		Page 18 of 23

PART II. OTHER INFORMATION

ITEM 1A. RISK FACTORS

For a discussion of risk factors which could affect the Company, please refer to Item 1A. “Risk Factors” in the Annual Report on Form 10-K for the year ended June 30, 2009. There has been no material changes since fiscal year end to the risk factors listed therein.

ITEM 6. EXHIBITS

1. Exhibits —


U.S. Global Investors, Inc.
December 31, 2009, Quarterly Report on Form 10-Q		Page 19 of 23

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereto duly authorized.


		U.S. GLOBAL INVESTORS, INC.
DATED: February 4, 2010	BY:	/s/ Frank E. Holmes
		Frank E. Holmes
		Chief Executive Officer


DATED: February 4, 2010	BY:	/s/ Catherine A. Rademacher
		Catherine A. Rademacher
		Chief Financial Officer

Certifications of Chief Executive Officer and Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act Of 2002

Certifications of Chief Executive Officer and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act Of 2002