Frank Holmes - CEO and CIO Susan McGee - President and General Counsel Lisa Callicotte - CFO

Good morning. Thank you for joining us for our webcast announcing U.S. Global Investors' Results for the Fiscal Year 2016. I'm Lisa Aston. If you have any questions during the webcast, you can enter them in the questions area of the control panel sidebar, which is normally to the right of your screen. Also, we will send a copy of the slides to attendees after the completion of today's event. The presenters for today's program are Frank Holmes, U.S. Global Investors' CEO and Chief Investment Officer; Susan McGee, President and General Counsel; and Lisa Callicotte, Chief Financial Officer. 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-K filings 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 U.S. Global Investors accept no obligation to update them in the future. Now let's go to Frank Holmes, CEO and CIO, for an overview of the period. Frank?

Thank you, Lisa. So, let's go to Slide number 5. We continue to strive to as a go-to stock for exposure to emerging markets and resources. We remain debt-free. Strong balance sheet with a reflexive cost structure; Lisa Callicotte, our CFO, will go into more detail on. And we've been able to maintain that monthly dividend return on equity discipline even through these challenging times, which we believe that the light at the end of the tunnel is sunshine and it's not a train still coming at us. It seems that we've had a balance in the assets and we will talk more about that, which is positive in particular going into the summer quarter after Brexit. I want to thank on Slide number 6, our top shareholders. FIM Group, for being loyal through this whole process; The Royce Funds; The Vanguard was an index; and Sentry, which is much more of an active mindset. So the largest shareholders are very active and the newest addition to the group is the Newberg Family Trust, which acquired 5% and we thank them all for being loyal and inside information questions that they have asked us, so thank you all. Slide number 7, GROW Dividends - paid monthly, consistently paid for more than nine years. The current yield is 1.71% and so the monthly dividend is a modest $0.025 (sic) $0.0025, but it's paid monthly for that discipline. The share repurchase program remains in motion. The Board has approved to repurchase up to $2.75 million of its outstanding common stock in the open market through the calendar year 2016. And during the fourth quarter of 2016, the company repurchased 25,493 Class A shares using a cash of $44,000. And during the fiscal 2016, the company repurchased 177,998 Class A shares using cash of $313,000, which is slightly over 1% of the shares outstanding. We use an algorithm to buy back shares on down days, only on down days, and, of course, with all the applicable rules and regulations that restrict the amounts and times of repurchases. This may be suspended or discontinued any time. And as evidenced by regulatory filings, myself, Frank Holmes is purchasing shares of GROW pursuant to a regulation 10b-18 plan. Balance sheet strength, as I mentioned earlier, there is no debt. Cash has been in a decline as we wrestled with the restructuring cost and we've gone through this in previous presentation in detail, but it's just not as which you'd think as fast and readily to say shutdown a product, get rid of a product. The process is very long and arduous and much more expensive from that 40-F mutual fund arena. So I will try to comment on later. And the difference between separate account business and the ETFs and mutual funds, the barriers and the ability to open and close a product and move around, they are very, very different in the overall cost structure and timelines. On Slide number10, I try to highlight the transition. The peak in gold at 1,900 was in September of 2011, but the stocks themselves has already peaked and were declining and that affects our asset base. We still correlate very strongly with the gold stock indexes. As you can see in this visual here, we shut down -- closed the money market funds. We did that because zero interest rates, the cost of maintaining $1 NAV and the cost of regulations are continuing to grow and every year with something new. It's just unending, this process, so we found that we had to get rid of our money funds because it was going to cost us millions of dollars a year. So we show that hit of getting rid of them and partnering with the U.S. Bancorp and that transition. And then the assets and resources in the emerging markets continued another great decline in 2014 and 2015. And it appears in December 2015 when we had our transition to Atlantic Fund Services [Technical Difficulty] also for the gold market and gold performances start to put on a spectacular move, which we've commented in our weekly Investor Alert. So this is sort of a good recap of where the transitions were, just the cost of closing money funds and transition, they always cost much more, and with that you lose great employees. People who have been loyal to the company long period of time, but you no longer need their services, so there is that cost of severance. That's an additional cost that impacts when you finally close and go through those transitions. As you can see, the quarterly average assets under management, they've had a modest uptick, which is most important because it takes us above where we are no longer losing money like we were doing on a daily basis. It's very modest, but we feel better that we finally started to climb out of that deep hole that was impacting resources in emerging markets. The asset breakdown, we're very fortunate that we still have a very loyal shareholder base that deal directly with us. And that's the significance of the Investor Alert and communicating with those investors. Slide number13 is a great risk management. It's a tool for the quant issues. I was recently at the ETF Conference of Morningstar and it was interesting hearing how the quants that are behind a lot of the smart-beta ETFs, et cetera, use this volatility factor and looking -- if you want to forecast the next four years or next five years or next two years, you look back and say what is the sigma over a one year, two years, three years, four years for an asset class and the worst it's been than the probability for the next time period, it's favored that they will rally. So I was thrilled to see that this thought process, that different securities have different sigmas or different volatility, and they come back just tell investors and remind them it's a risk management tool in addition to an opportunity, but GROW's rolling one-year volatility is plus or minus 100%. That's really difficult to recognize, but that's what this stock can do. And the daily volatility is plus or minus 4%. The New York Stock Exchange Gold Miners Index is plus or minus 3% and the rolling is 35%. That is 70% of the time approximately that the gold stocks go up or down 35%. Bullion is a lot less and more comparable to the S&P 500, whereas oil is substantially greater than the price of gold in its volatility, both in a daily basis and on an annual basis. I think it's just really important for investors to recognize another data point that came out of that six of the top eight hedge funds were quants. And the bulk of the money went to the data world that follows data like understanding the volatility of an asset class. Three key drivers on Slide number 14 for Fund Regulatory Expenses. In this the continual pressure is on fund expenses, but the creep with regulatory cost, the legal bills that go up with them, the cost for an audit. When I go back from 25 years ago that audit bill for GROW is up 500% even though we have less assets, less employees -- substantially less employees and complexity, but the overall cost. So when you have a small fund family, or you have small shareholder accounts and small funds, you will have higher fund expenses. And that's something that's important in communicating that to our shareholders to recognize us especially with the new rules coming out of fiduciary, which says it's the cheapest, not the best that supersedes decision-making is what I hear when I go around in investment conferences is the concern. But, we'll see how it unravels and unfolds, but it's another one of those very expensive regulatory costs that are impacting the financial industry and we're navigating with it. The best part is we're quickly adapting, we have this adaptive process. And our approach to building performance and managing costs is continuous, on Slide number 15, I think it's important as -- I just wish we could do it faster, but it is a very thoughtful and meticulous process we have to go through. Now, I'd like to turn over to Susan McGee, our President and General Counsel, on Slide number 16.

I guess, starting in December of last year, the shareholders of U.S. Global Investors Funds held a special meeting and approved the election of a new slate of trustees for the fund. This action resulted in the fund becoming a part of the family of funds that receive administrative fund accounting and transfer agency services from Atlantic Fund Services. The primary reason for this initiative was to streamline cost that would positively impact both the mutual fund shareholders and the GROW shareholders. When this transition is completed in December of 2017, we believe the fund shareholders and GROW shareholder should fully realize the economies of scale [Technical Difficulty] as a result of this transition to a larger fund complex. Atlantic Fund Services provides a full range of services to various investment vehicles and we do believe that this transition will continue to be beneficial to the fund shareholders and GROW shareholders.

Anything else, Susan? You'd like to comment on Slides 17 and 18?

No.

Okay. Slide number 20 is building for future growth. GROW has 65% ownership in Galileo Global Equity Advisors, a Canadian asset management. We were earning a valuable brand awareness in over 170 countries through publishing of our financial commentary and other original content. And we continue to develop an innovative and dynamic ETF, it's been filed that we're working on one particular smart beta gold equity. And one of the things I just share with investors, when you launch this you really have to make sure you've put in thousands and thousands of hours of regression analysis because once it goes out in the marketplace, it has to be able to show its resiliency both in rising gold prices/fall in gold prices, rising currency/fall in currency, changes around the world. So, we feel that we've done the -- probably pushing 4,000 hours of quantitative research and making sure that when we get this product launched through the regulatory process, it will have tremendous survivorship and exceptionally competitive versus the other gold ETFs that are out there, particularly the gold equity ETFs. The next visual 21, it will show you that we continue to see this growth at ETF products. And probably more important is Slide number 22 as U.S. domestic active managed funds are seeing -- are witnessing a decline and assets are being stripped away. It's not so much buy one mutual fund, sell this one or buy another mutual fund, it's slowly being stripped away with ETFs and so it's just going to continue. I do think there is some tremendous benefits where ETFs can't deal with and they can't deal with where we've been able to generate alpha in particular near-term. That ability to manage cash levels, not have to react, every day the fund flows, how you built your cash and how you look for odd lots, et cetera, I think that will continue to be important venue for active managers. And the ability to hedge a country's currency and take off a country's currency, when ETFs go to hedge a country's currency, it's always -- that's basically standardized in that system. It's a great system, but it doesn't have the dynamics. So I think the active mutual fund is going to have to become much more quantitative driven. The other thing as I’ve noticed, we've always had macro themes at U.S. Global. They show up every week in our Investor Alert and every morning our investment team meets at 7:30 to go through what impact to the fund holdings and talk about macro issues around the world. We publish why we look at PMI as a precursor to change both positive and negative impact resource, et cetera. More active managers now listening to Bloomberg in the morning are using macro themes. I recently went on a trip from Vancouver to Toronto and New York visiting all the sell-side gold analysts from independent brokers and bankers and what was interesting is who's been buying all these gold stocks. And most of them think it's the normal gold fund. And what's really come out is that in that space the average mutual fund or the average pension fund that is domestic is not buying the gold stock, they are way underway. Canada is about 8% as overall stock exchange and the common fund is probably only about 2% weighted in gold. And so, one asks how did they grow up 150%, what's been driving that? And some of the quant shops out of CIBC were able to articulate to me that it's macro funds. It's the large macro funds that have been players on gold when you've gone to a negative interest rate scenario. And it's the quant funds that see rising gross returns on capital, they see rising profit margins. We wrote about it last week, the comment that the best performing stocks are the AVA gold producers, we look at globally, but we selected out only those with more than 200 million market cap. While stocks with the biggest search had a lowest G&A to revenue. But if you ask any gold analyst on the sell-side, they would never recommend a stock because of that, but they were the best performing stocks. So it's a world that’s changed, and the significance of quantitative approach into the thesis of the mosaic of the CFA is so critical to be competitive. And we're doing that and I just wish we are able to do it faster and attract more assets for that. But I think that this is going to be a key growth sector. Now, we take a look at JETS ETF, which is another class example where we went back and looked over 40 quarters -- 10 years of data and looked at rolling 12-month periods, rolling 36-month periods. We want to know how robust our factors were in catching up cycles and down cycles and bankruptcies, et cetera, that took place in the airlines and launched our product and we're happy with it. It's interesting to see that we had a big run up in the assets and it curtailed since March. But the average trading volume is around 50,000 shares and I think to a point 49,000 to be explicit, but that's a very short time period. At times, it’s run up to 100,000 when it creates. We were able to get stock options because of the daily volume is great enough and the asset size is great enough. So it’s been able to garner tremendous amount of media attention to this particular asset. So we're happy with it and hope that the success of our gold equity ETF just as great and even much greater. Now, let's go on to U.S. Bancorp, successful first year of ETF strategy. Ongoing relation with U.S. Bancorp Fund Services ETF Series Solutions, of which JETS is a member. One-year anniversary of our first smart beta ETF, focused on the global airlines industry and leverage expertise. So it's coming back, this importance of looking at that quant world. There is another visual reminiscent of a year ago of launching our JETS ETF, a big part of that success has been the media and the journalists that we have and the people with strong writing skills and analytical skills that attend our morning meetings and our research meetings, so they are very caught up with understanding upper markets and what are the drivers. So media coverage of JETS is over 100 million views through earned media exposure, which is a lot less expensive than buying advertising. It's becoming a fact that we can provide knowledge, we can have insight, we can have an opinion and as always, we are balanced and that's smart approach of talking about both the good and the bad of what’s driving that industry. And last before I end with it, is it interesting it still has been a challenged industry even though when you run these quant models, it has the lowest cash flow multiples in the marketplace and highest free cash flow, so therefore the lowest free cash flow multiples and the industry continues to buy back their stock and increase their dividend at a rate substantially greater than the S&P 500. So the industry is robust and healthy and strong, but the stock prices are not demonstrating that certain negative sentiment. But I think that will turn and when it turns, JETS can go to $1 billion as a smart beta ETF. Now, I'd like to turn it over to the brains known as the LeBron and then the brain is Lisa Callicotte, our CFO.

Thank you, Frank. Good morning. Before I summarize our results of operations, I wanted to note that 2016 was another transition year for us. During the year, the company endorsed the proposal for USGIF to elect new trustees and become a part of the family of funds that receives services from Atlantic Fund Services as discussed earlier. And the proposal was approved and as anticipated, effective December 2015, the company ceased to be the distributor of USGIF and no longer receives distribution fees and shareholder servicing fees from USGIF. The company's sponsored change also resulted in the company no longer being responsible for paying certain distribution and shareholder servicing related expenses and is now reimbursed for certain distribution expenses from the new distributor, USGIF. The operations associated with providing these services are considered discontinued operations. And the revenues and expenses have been reclassified as discontinued operations in the current and prior years. Now I will summarize the results of operations for fiscal year June 30, 2016. Beginning on page 28, we recorded total operating revenues of $5.5 million for the year. This is down $1.8 million or 25% from the $7.3 million in 2015, primarily due to lower assets under management related to market appreciation and shareholder redemption. Moving on to Page 29, operating expense for the year were $9.6 million, a decrease of $1.2 million or 11%. Primarily for the following reasons; Employee compensation and benefits decreased $481,000 or 9% as a result of fewer employees and lower performance-based bonuses. General and administrative expenses decreased $396,000 or 10% mainly due to strategic cost-cutting measures that would also somewhat offset by costs related to the transition of USGIF to third-party service providers. Platform fees decreased $348,000 or 41% due to a decrease in assets held through broker-dealer platforms. On Page 30, we see our operating loss for the fiscal year 2016 was $4.2 million. And this was slightly offset by our other income, which is income related to our investments. Other income was $485,000. And this is an increase from prior year of $51,000 or 12%. And the increase was attributable to lower unrealized losses on trading securities somewhat offset by the increase in other than temporary impairment losses and decreases in dividend and interest income. Loss attributable to discontinued operations for the distributor for the year ending June 30, 2016, declined $63,000 or 78%, compared to the year ended June 30, 2015. The prior-year loss reflects a full-year distribution operations while the current year reflects operations until the transition to the new distributor in December 2015. Net loss attributable to USGIF after taxes for the year was $3.7 million or a loss of $0.24 per share. Moving on to Page 32, we see that we still have a strong balance sheet, it includes a high level of cash and security that combined to make up 67% of our total assets. And as you see on Page 33, we still have no long-term debt. The company has a net working capital of $16.9 million and a current ratio of 14 to 1. With that, I'd like to turn it over to Susan McGee.

Thank you, Lisa. The majority of our sales and marketing efforts over the past few months have been focused of our gold equity funds. Our long-standing top performer the near-term tax free fund and our newest product the U.S. Global JETS ETF, which is the only airline ETF on the market at this point. As Frank mentioned earlier, JETS celebrated its 12-month anniversary in May and it has received extensive financial media coverage and interest from the investment community. JETS utilizes a dynamic rules-based index strategy and it provides investors with a diversified exposure to the global airline industry. We believe performance-based results are important to our investors and we share with investors that it's actually easier, the odds are better to become a professional NBA player than for a fund to deliver 21 consecutive years of positive performance. We are proud that our near-term tax-free fund is one of only 39 equity and bond mutual funds out of more than 31,000 funds that have delivered a consecutive positive annual returns for the past 21 years. We find this remarkable. Our near-term tax-free fund continues to provide investors a calming solution because it has consistent positive performance and we find investors appreciate the monthly tax-free income that the fund can provide. The funds strategy uses a portfolio of high-quality municipal bonds with relatively short maturities. When investors look at NEARX against the S&P 500 index, over the past 15 years, you can see that the fund's history has no drama. Also the company's gold equity mutual funds have benefited from the strong gold market in 2016. In particular, the World Precious Minerals Fund has been beating its benchmark by a very significant amount for both the one-year and three-year periods. Investor's Business Daily recently featured both the gold and precious metals fund and the World Precious Minerals Fund earlier in September. NEARX has earned the Morningstar four-star rating for overall performance in the municipal national short-term funds category and our [Technical Difficulty] metals fund has earned the four-star rating in the Equity Precious Metals Fund category. The World Precious Minerals Fund has earned a five-star rating in the three-year period. And we're also pleased that two of our mutual funds hold the top Lipper Leader rating. This rating is based on investor-centered criteria and on a scale of one to five, Lipper Leader funds that rate a five are in the top 20% of their category. The near-term tax-free fund and U.S. government securities ultra-short bond fund both rate a five for preservation. The company and our funds continue to receive an invaluable amount of viral publicity gained through media interviews, as Frank mentioned earlier. We have recommendations by influential financial newsletter writers and the sharing and syndication of our award-winning original content by third-party publishers. For example, our articles on the top 10 gold producing lines in the world was featured by Business Insider and it received over 86,000 views. And Frank Holmes commentary is often featured by prominent publications, including Forbes, SeekingAlpha, ValueWalk, Business Insider, and all of these sites have millions of monthly visitors. We call Frank our globetrotter, because he along with others on our investment team, travel around the world to share our thought leadership. We interact frequently with loyal followers through Facebook, Twitter, LinkedIn, Instagram, the financial newsletter community also features recommendations for our funds. All of this coverage helps us leverage our brand because we can reach millions of readers, viewers and potential investors throughout these relationships. Kitco News, the biggest gold Web site in the world that has an audience of over 2 million monthly visitors, features the Gold Game Film Show with Frank Holmes weekly gold market analysis. Kitco's partnership with The Street has broadened the show's exposure and viewership. Since the shows beginning in 2014, over 110 video episodes of Gold Game Film have aired. U.S. Global is known for timely and balanced market insights and thought leadership. The company has earned a total of 69 STAR Awards from The Mutual Fund Education Alliance recognizing excellence in investor education. Investors can sign up at usfunds.com and join over 30,000 subscribers who receive our award-winning Investor Alert and Advisor Alert weekly eNewsletters, and the CEO blog, Frank Talk. And now I'd like to turn it back over to Frank, who will share some of our recent insights.

Thank you, Susan. You can see on Slide 54, read more about this topic, Frank Talk. This is a periodic table of commodity returns and what we try to show earlier is that every asset class will revert back to the mean and it shows you basically no one commodity stays at the very top forever. And usually they've been down at the bottom for a year or two, then they rise to the top, which is basically the dynamics for supply and demand. If there's additional supply, they go to the bottom until either supply is restricted or the demand picks up dramatically. And usually what happens is, there is a lag, supply gets cut, demand picks up, it takes a while in the commodity world for supply to come back on-stream and you have these commodities go through these incredible runs. And that's why that you need active management when it comes to resources. So this is the most popular page on our Web site for people downloading and sharing. We see it showing up in many different publications and newsletter writers use that and talking about the theme of terms in the commodity world. The next slide is the rise of the middle class and I think it's just so important to recognize the significance of this. It's not just myself, but it's also McKinsey consultants have commented on it. We've written extensively on the GDP per capita shift on the importance of Chindia, which is 40% of the world's population. That the GDP per capita of China last year surpassed the U.S., but only because of sheer size. When you have 1.4 billion people and you have that 8% of them -- not 50%, but 8% are now making what 50% of American middle class makes. And that is a big tipping point because of the rise of middle class that drives discretionary good sales, that drives tourism. Last week I was driving up to Austin and I stopped at the outlet mall and there was once again photos of two different credit card providers in Chinese for all the Chinese tourists that are going there. Whereas 10 years ago, it was predominantly in Spanish for the Mexicans, multinationals that were coming up to San Antonio, do shopping at the premium outlet mall. This is the transition and you see the same thing if you go to the Grand Canyon. You'll see the signage now is also in Chinese. For a while it was Japanese, but the big travel DNA is the Chinese and they all want to come to America. They all love America. They all would love American products. And America a couple years back past a visa -- a tourist visa that allowed the Chinese to come for 10 years, it's the most liberal of all of visa even stronger than Europe and that was to attract these tourist dollars. So I think it's important to follow this theme otherwise the middle class, which then also drives sales for Apple and it drives success of fast food companies, et cetera, and Starbucks has talked about their tremendous growth taking place. So if you visit our Web site, Investor Alert, you sign up, you'll see on a regular basis, you can go back and read pervious articles, we've highlighted the significance of the rise of the middle class. And then we get more micro and we talk about the life cycle of gold, every year there's a seasonal pattern to gold, it goes through this transition and a lot of -- we've commented on this, the Fear Trade and Love Trade. And whenever the Fear Trade and Love Trade show up at the door at the same time, you get a tremendous surge in the price of gold, like we had in September 2011 when gold hit $1,900. We had the Indian wedding season at that time and we also had negative interest rates, the 10-year government was minus 3%, as it went to by 2015 and with the plus 2% even though we're are full because Fed funds remain basically zero, real interest rate that is the CPI number takeaway is deducted from whatever the government is going to pay you on a 5-year or 10-year government bond gives you the real rate of return. So if inflation is running at 3% and the government is only paying you 1% for a 5-year government bond, you're losing money by buying that bond. And what we saw is that the CPI number fell and that impacts, so that the government all of a sudden paying you positive growth rates because rates slightly went up, but inflation went down, the dollar soared, gold fell. It's an inverse relationship, we've written about it so often. And it's so important that it drives the DNA of the volatility of the asset class. But in that other component of fear is love. And love is so important because it relates to the rise of the middle class of Chindia. And why do I say that's because of the cultural affinity -- we're working on a book that's coming out on the great love trade -- it's juts recognizing the importance culturally of these countries of giving gold an event that something happens. We have life insurance, they have gold. They have -- if there's a currency crisis, they have gold. If government have for policies, they have gold. If the government would try to confiscate the assets like they did in Cyprus because of mismanagement for Greece. the hold that last summer, most people forget, the equity markets were -- for seven or eight weeks, your bank accounts were frozen. The only those that had access, they couldn't use their ATM machine, so if you didn't have cash and didn't have gold, you are in tough, tough, straits on feeding your family and doing things. These other countries, they've seen a lot of these tragedies coming back and going forth. So they give their families and their loved ones gold and it's very important. And the same thing when it comes to India for the Indian wedding season and the concept of the dowry. This goes back thousands of years of protecting the family and protecting the woman, the mother of the family with the gift of gold. So I think it's important to recognize that and it always drives the price of gold. Now a factor that can drive even more so are monsoon rains because monsoon rains impact the agriculture society of India, who are the big gold buyers. So from that end, it's important that we write about it, you can learn more this at the Web site. Those who prefer most asset classes, as this visual is trying to show you, as you can see, it had a massive surge so is the price of oil had a bounce this year as the dollar came off. A big move in gold, really started to have two big legs to it. The first took place in January when we started seeing the rest of the world going to negative interest rates when all of a sudden with this $5 trillion, $7 trillion, $8 trillion, over $10 trillion of government bonds will offer you negative interest rates. And an amazing part is the monetization of debt. Just recently EU announced $80 billion a month and they're going to by a third of it. And what are they going to do with that money? So in Europe, you will find that -- in Switzerland, places like that, they are buying their own stock market. South Korea, they are buying the stock market. Japan, they are buying shares, in fact, they own close to 15% of the public companies in their country because they can dividends that have higher yields. So the Swiss are buying Nestle because the yield is higher than what they are offering. The 50-year Swiss government bond after Brexit this summer went negative. 50-years went negative. This created a big surge in the price of gold. Now short-term, every time there is a sentiment talk that rates are going to rise in the U.S. and rates should rise, then we see this back-up, the price of gold comes off because the 5-year and 10-year government bond yields here start to go up. I've written about this, we saw a 2% decline in the price of Bullion, with an 8% rise in 5-year government bonds. So it's just inverse relationship and mostly today we're dealing with negative rates. The G20 get together, it's not about fiscal trade, it’s not about deregulation, it's about synchronized global taxation on regulation. And I think that's sounds a real key part because it relies on the monetary, these two levers that driver economies, its fiscal policies, which is tax and regulations and regulations are always an informal taxation, either it's when you streamline regulations, you open up a spigot of capital and you increase regulations and slow down the movement of money. And where there is no abatement in regulations, so you have to have low interest rates and you have to have negative interest rates otherwise you'll have a global recession. So this makes gold even more attractive. And I think the other rhetoric, which is picking up is getting rid of credit cards – I mean, getting rid of cash -- that cash component, so that therefore every time that comes up we see gold sales and silver sales talking to dealers surge. People are buying safes in Germany and stocking with cash, and stocking with silver and gold coins. These are other factors that drive the idea that only credit cards and only ATM is their only place, those countries have gone to that, they've also pushed the tax of every transaction every time you spend money. So you need to spend $3 to buy a cup of coffee at Starbucks, they want to have -- I mean on your tax after-tax dollars, there wants to be a transaction tax. This has been pushed around. So these things really help gold. They just help. It's amazing to see and try to understand it. But there's been many articles written regarding -- in Germany people buying their own safes and then stacking them with cash. The next is talking about average income tax by state. And as you can see, the state of Texas is extremely attractive. The state of Texas is much more organized, I think, when it comes to tax and regulation. Classic would be the road tax. We have the best roads, I think, in the country and I travel by car all over. I've driven back and forth to Toronto many times especially with my sons, who are studying up there. And we use to do these road trips together. And you could really tell the difference as you drove up to Illinois and Michigan how bad the roads became. Why? It's because you're supposed to pay at the gas pump X penny to go towards the service of the state roads. What was happened in these other northern states is that it serve for other social benefits especially in election cycles and it doesn't go back to maintaining the roads. Whereas Texas is very linear, it creates jobs and we have the best roads. And I think it's important -- I've written a book the -- the growth -- many reasons that Texas is so attractive, in talking to our Chairman, who is the Chairman of Carl's Jr. and they were coming and when they looked at Texas is just the bureaucracy and [payment] [ph] for opening up food chains here and workman's comp and all the regs is so much more attractive in the state of Texas than California. And so Texas is seeing this resurgence and even with the price of oil coming off, the economy is so big and resilient. And the things that shocked me was that we have twice the number of roads as California. That really shocked me – my data mind besides winning 60% of the gold medals that we highlighted. So I take a look at this and see where the flow are, and people will flow to where business will flow, people will flow where it's the best taxes for them, where they have a lifestyle and they have an after tax income unlike the state of Illinois. I mentioned earlier I was Michigan at the ETF Conference for Morningstar and talking to locals there and they say they are taxing their cell phones. They're taxing everything. And I said, but why? And they say it's all because of government pension plans that they basically are underfunded for what was obligated and it's bankrupting them. The state and the city in particular just like Detroit. So I think that you'll see that migration of people and you see that globally what is taking place, where money is respected and there's better transparency by governments and where they spend the money and people feel they're getting a bang for their buck. So it's not just a global event, it also happens in our great nation. And I think it's helping because it's create competition and that's what you need for near-term is actually looking at these states. When we look at a state, it’s not just a short-term muni, we are looking at overall state structure with the issues are and when you have an imbalance of fiscal monetary policies within that state and you have excessive taxation then you chase people, the economic base, then those short-term munis become unattractive and we overly that with our quant models. Susan mentioned earlier, you get 21 years of performance, it's a quant approach of looking at the volatility of government bonds over various time periods versus feds. Now I want to hop back to the macro theme. I've gone from micro back to macro. This is a very important theme. This little visual showing you China and India. Chindia is important to recognize. It's actually know as China and India is 40% of the world's population and when you include Southeast Asia where the recent meetings were taken place for the G20 and also ASEAN nations, you have more than 50% of the population of the world is in that area. And what's really important to recognize is that that area a lot of is embracing America. American concepts. So you have two city states there, Hong Kong and Singapore with flat taxes. Incredible infrastructure to grow Singapore, it's reclaiming from the ocean and building incredible infrastructure, subway systems, et cetera, reclaiming from the ocean. How do they do that with a low flat tax and how are they dealing with modernization of all that whole area? So they're all looking to send their best brains to American schools, watching Bloomberg in the morning, you will see more and more Indian professors that would come over here and earn their PhD and they are talking about economics, they are talking about healthcare, there is a interesting trade between the intellectual capital of this area and America. We are exporting individuality that's taking place. And there's a wonderful book that's written years ago by John Nesbitt on Asia's megatrend, he wrote one about China, but more importance is what he wrote in the 1990s on the Asia's megatrends. And what he wrote about in the 1990s -- early 1990s is really unfolding in front of us today. So I think we have to really -- it's important for investors to look at this and focus on this as an important theme for our great companies like Apple, et cetera. So now connect with us for Q&A.

Thank you, Frank. So we're ready for some questions. Again you can enter them in the questions area of the control panel. We do have a couple of questions that have come in. First, has U.S. Global Investors turned the corner to profitability?

Well, it's so easy in this world today to track what our assets are every day. And I know a couple of investors download and they create their own financial model. So in the event that there is no major new expenses that we would incur and the asset levels back to where they were in September 2014, so in September 2014 two years ago with our assets at these level, we are losing about $4,000 a day. And I would share with you with all the restructuring and dropping costs that we're modestly making money, that's what's really important. There has been a swing and it's really simple line, you should take look at how the expenses dropped in the past quarter, where the assets are today. So I think as we have turned, we show you the visual, we will know more at quarter exactly and we will report those. But it is as you can see rising assets in particular when they are gold, global resources, emerging Europe or China have a significant impact in both revenue and profit margin in our complex.

Thank you. Another question. One of the slides noted that assets under management increased in the third and fourth quarters. But the loss per share was $0.02 per share for both periods. Can you explain why loss per share was consistent when AUM and revenues increased?

Yes. It is difficult sometimes to actually see kind of improvement and movement in a per-share number just mainly due to rounding. But if you look in our 10-K and quarterly information, we had a net loss in the third quarter of approximately $350,000. And in the fourth quarter that improved and was $245,000. So that's approximately $100,000 improvement, about 30%. But when you are calculating the per share, kind of due to rounding in the third quarter was a bit above $0.02 loss per share and then the fourth quarter was approximately, like, I guess, I think, it's $0.17 per share, which rounds to $0.02. So we are seeing the improvement as AUM goes up, we are seeing that hit our net income line.

And we've kept to maintain the same discipline. I think it's important for investors on expenses and bonuses until we are able to show profits, we cut out bonuses dramatically for all employees how we function and have a great team of 23 people here that our amazing. It's like now we've gone through Navy SEALs' wind sight, everyone is doing two to three duties. And we do outsource with Atlantic a lot of other sort of bureaucratic work and stay focused on the core issues we have to deal money management. And the money management did improve. I think there is another important factor is the swing on that fulcrum fee. The fulcrum fee allows us that when any fund beats its benchmark by more than 5% over a rolling 12-month period, we get a bonus of 2 basis point for that month. However, if it lags by 5%, we have to give back. And so some of the part of that restructuring with Atlantic et cetera was also restructuring the money managers and duties and processes that we have internally and applying a much more rich and data quantitative approach overlay and that improve the fund performance. So we have seen bonuses and it's a wonderful to see that our World Precious Minerals Fund is killing it. I mean [Technical Difficulty] there is a regulatory world we can't share with you only if you are an RIA, how we perform GDX and GDXJ for one-three years. And they have garnered most of the assets. One of the biggest more spooky things I've seen in this fund business is that I've never had such great fund performance in the gold space. And seen such little fund flows. The last time we ripped it open with these types of numbers actively beating every category, we had millions of dollars a day coming in, millions. And so now we're talking about $50,000, $100,000 rather than millions. So I think at one time, they went up to for a couple of days, it was $50 million a day was coming into the complex. And so what we're seeing is that people really have not woken up to the significance of active management and what we are happy about with our gold funds is their sharp ratio is much better than buying the GDX or GDXJ. The volatility is a lot less and in this rising market particularly gold shares as well perform the GDXJ and [indiscernible]. So that's important, but the fund close when you look at the calculations and other funds that were beating us a couple of years back before we improved this discipline of quant, we are only beating them by 70% -- not 7%, but 70% -- other active gold funds. And that's the rotation. And it's even more difficult now from a marketing point of view is to market them. The regulatory scrub it takes place on articulating that if you're a four or five star, if you have -- you are number one in your category, all of these statements are basically being dominated with disclaimers that you really -- it's more difficult to articulate and the cost of placing an ad or doing the stuff to get noticed is just more challenging. But I'm really pleased with our marketing team of how they are able to educate investors and articulate this and how we do our webcast, communicate with our shareholders, how are using technology rather having a bunch of wholesalers on the road that we try and drive traffic to, our own webcast have been a very successful one, early this year on gold where we had the CEO of the World Gold Council participate, which was a great traction around the world. We had people listen to this, hundreds of people. So that's going to be the new marketing theme of how creative we are using webcast that we're doing right now. And the cost of this webcast right now has been dropping. So the cost of doing press releases is also dropping while finding new venues of distributing that information. So that's what we are challenged with and I'm really proud of our marketing department and legal compliance department is thinking this way and driving it down. Being innovative and try to connect with the public.

Thank you, Frank. And thank you to our attendees for listening this morning. And thank you for your questions. This concludes the U.S. Global Investors webcast for the fiscal year of 2016 and this presentation will be available on our Web site www.usfunds.com. Thank you.