Good morning, and thank you, for joining us today for our webcast announcing U.S. Global Investors’ results for the First Quarter of Fiscal Year 2019. I’m Holly Schoenfeldt. If you have any questions during the webcast, you can enter them in the questions area of the control panel side bar, which is normally to the right of your screen. Also, you may download a PDF of today’s slides by clicking on the red handout button. The presenters for today’s program are Frank Holmes, U.S. Global Investors CEO and Chief Investment Officer; Lisa Callicotte, Chief Financial Officer; and myself, Holly Schoenfeldt, Marketing and Public Relations Manager. 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 the corresponding Form 10-Q filing for more detail on factors that could cause actual results to differ materially from any described today in forward-looking statements. Any such statements are made as of today, and U.S. Global Investors accepts no obligation to update them in the future. Now, let’s go to Frank Holmes, CEO and CIO, for an overview of the period. But really briefly let me go over about GROW before I pass it on. U.S. Global Investors is a innovative investment manager with vast experience in global markets and specialized sectors. We are founded as an Investment club, the company became a registered investor adviser in 1968 and has had a long-standing history of global investing and launching first-of-their-kind investment products, including the first no-load gold fund. U.S. Global is well-known for expertise in gold and precious metals, natural resources, and emerging markets. Frank?

Well, thank you, Holly. I’ll give you an interesting history that’s taken place in San Antonio, Texas, is USAA, which is a fantastic company, had sold their fund business, their mutual fund business. And I think what’s interesting is that they started a gold fund because they had so many military people call them and ask them about our gold fund. Because our goal fund, the first-no load gold fund was created by a colonel from the air force, who fought in World War II, Colonel Clark Aylsworth, and he had built this investment club that became a mutual fund as a big believer in gold. And I think that’s so interesting that now we’re still in here and USA is getting over the fund business. But it’s been a tough goal. I’m going to try to talk through some of our strengths and challenges we’re all dealing within the fund industry as a whole. But the big strengths for our survivorship is strive to be the go-to stock for exposure in emerging markets and resources and then expanded that into digital currencies, which has become – as gold is always a form of money, the fourth most liquid asset class in the world, digital currencies has grown, still owning a dwarf and then compare it to the gold markets or the cash markets, but growing. We’re debt free. We have a strong balance sheet and we have this reflexive cost structure and we have a monthly dividend return on equity discipline. I want to think our top institutional holders, in particular Royce Funds have been up and down and they themselves have experienced the contraction in active fund management that’s taken place and I’m going to comment about cheaper is not better. And Financial & Investment Management Group out…

Thank you, Frank. Good morning. Before I summarize, our results of operations, I’d like to discuss, the investment accounting pronouncement that we adopted this quarter. Slide 34 notes, changes in the accounting role related to our investments. And that are expected to cause our earnings to be more volatile. We adopted accounting standard, update ASU 2016-01, recognition and measurement of financial assets and financial liabilities effective July 1, 2018. ASU 2016-01 updating accounting standards codification, subtopic A-25 or ASC A-25. This amended the guidance on the classification and measurement of investments in equity securities and certain disclosures. So starting in this fiscal year, some of our corporate investments were accounted for differently than in the past. As part of the adoption of the new standard, we made required cumulative effective adjustment and reclassified $3.1 million of unrealized net gains and a million of related deferred tax expense out of accumulated comprehensive income and into retained earnings. There no longer is an available for sale security or – I’m sorry. They’re no longer is an available for sale classification for equity securities with readily determinable fair value. Effective July 1, 2018, changes in fair value of these investments formally classified as available for sale are reported through earnings rather than comprehensive income. This includes any changes in market value in our investment in high. The impact to earnings for this change for the quarter ending September 30, 2018 with an investment loss of $954,000. This loss related to declines and unrealized gains of securities formally classified as available for sale and previously would have been recorded in other comprehensive income rather than investment income, of that amount $987,000 related to a decline in market value in our investment in HIVE. And then we had an investment laws related to HIVE for…

Thank you, Lisa. As you can see a majority of our mutual fund assets are in emerging markets and natural resources, while 35% are in domestic equities and fixed income. As for distribution, more than three quarters of assets come from retail investors and the other quarter from institutional investors. Our sales and marketing efforts have continued to focus on our mutual funds, including those concentrated on gold, natural resources and emerging markets, as well as our exchange traded funds. The company and our funds continue to receive an invaluable amount of viral publicity gained through media interviews. Frank Holmes often shares his insights with financial outlets like CNBC Asia, Bloomberg Radio and Kitco News just to name a few. We continue to receive recommendations by influential financial newsletter writers as well, along with sharing and syndication of our award-winning original content by third-party publishers. The newsletters have a loyal following and receive millions of visitors each month. Frank Holmes’ CEO blog, Frank Talk continues to grow in popularity as well. His commentary is often featured by prominent publications including Forbes, Seeking Alpha, The Crest and Business Insider with millions of monthly visitors. We like to call Frank Holmes our globetrotter because he along with others on our investment team travel around the world to share our thought leadership. We also interact frequently with our loyal followers through Facebook, Twitter, LinkedIn, Instagram, YouTube and Pinterest. Last December, we launched a new video series to supplement our award-winning Frank Talk Blog. Frank Talk Live features Frank Holmes as he dives into market moving events of the week and shares his thoughts on trending financial topics. We feature other members of our investment team as well in similar video short clips. Since implementing these new videos, we’ve already witnessed syndication to several…

No, I just add to that Holly is the 43,000, it’s in 180 countries. And a lot of them are accredited – most of them accredited investors and hedge funds. I know when I’m traveling abroad, this hedge fund managers come up and talk to me, their subscribers.

Yes, exactly. Investors can sign up for any of these that usfunds.com and join these subscribers to receive our award winning investor alert e-newsletter as well as print tasks. And as we are about to wrap up today’s presentation, we just want to offer attendees of the live webcast the opportunity to drop us a line. We love hearing from our shareholders and our subscribers. So, if you’d like a Free Enjoy Capitalism T-shirt, please shoot us a quick note to info@usfunds.com after today’s presentation. And now we would like to open it up to questions and as a reminder, you can enter the questions into the control panel on your screen and I have a few to start-off with, Lisa, I think you might like to answer this one. It says, you explained that the New Accounting Standard now requires due to include changes in fair value of investment in the income statement starting this quarter, where are the gains/losses as of the implementation date included? Well, the accounting rule change required companies to implement this change by wherever they were as of the transition date and for us that was July 1st, and moved – move any unrealized gains and losses into retained earnings. And then going forward, record that through our income statement. So we reclassified $3.1 million in unrealized gains in a million and related deferred tax expense from accumulated other comprehensive income into retained earnings as of July 1. So we moved that unrealized gain from one equity account to another equity account. But what is important to note is that those unrealized gains, the $3.1 million as of 6/30/2018, will never run through our income statement, but we are going to have to record any changes from that point on through our income statement quarterly.

I think the big part was this came out two quarters ago, these changes with Berkshire Hathaway that they had a $1 billion charge for – something volatile to this according to this?

Yes. So most companies, they would be implementing it in their first quarter. This just so happened to be our first quarter for fiscal year 2019 which is why it’s happening to us now.

Just started showing up and I believe and I talk with the others, they said that many of the financial companies and particularly the insurance companies were making long-term and short-term investments, its caused by the disruption and to increase the volatility.

Definitely.

Of the earnings, the short-term earnings. The biggest risk and all of that long-term is we’ll let deter people from making long-term investments, you’ve all of a sudden has to create in short term volatility to your earnings, and that’s hopefully investment take place.

Great. Frank, maybe you can answer this question. It says, it seems like the crypto currency market has been in a low. Do you think the price range right now, is the new normal or do you see more upside potential moving forward?

We saw it in July. It was anticipated that G20 were coming up with the regs and we had a big surge, 10% a day, and hive and roll, pop, pop, pop, and then all of a sudden new announcement that lay into October and everything rolling over. So, I think that once we get some clarity on the regulatory world, then I think if the reset button, it’s going to be like gold, it’s kind of just search and it is the complete different ecosystem and that ecosystem is a trade 24/7. And so how people look at it, it’s the millennial world is very different in my research and going around it that decent, a lot of these young kids, it was calculated that there was 10,000 lineal millionaires from Ethereum. And many of them had their knapsacks on. They go on to travel the world and they don’t want to pay taxes. So find, it’s the weirdest part of us as a group of people, but they have a global ecosystem. I know for three mellowness $30,000. So there’s a – that our coders that are involved, they have conferences. These conferences are packed every week. I just – if this was in gold and gold fell from $1,300 to $200 like Ethereum, there’d be no one in the world having a gold conference. But there are conferences everywhere and they’re spending thousands of dollars that I’ve attended and spoken at several in the past three months. So I know think that energy is gone away. I think we’re groping with this fair market and I think it’s nice that it’s been going sideways. The big headaches that you have – during the mining business, the challenges you have is these hash rates, the cost of mining…

All right. This concludes U.S. Global Investors webcast for the first quarter of 2019. The presentation will be available on our website at usfunds.com. Thank you all for your participation today.