Business
U.S. Global Investors Announces Non-Cash Adjustments to Its Financial Statements for Periods Ended March 31, 2021
San Antonio, TX, Oct. 18, 2021 (GLOBE NEWSWIRE) -- U.S. Global Investors, Inc. (Nasdaq: GROW) (the “Company”), a registered investment advisory firm that
About this update from U.s. Global Investors, Inc.
[{"type":"text","content":"San Antonio, TX, Oct. 18, 2021 (GLOBE NEWSWIRE) -- U.S. Global Investors, Inc. (Nasdaq: GROW) (the “Company”), a registered investment advisory firm that focuses on specialized markets around the world, announces that it will be restating the consolidated financial statements and related disclosures for non-cash adjustments for the three and nine months ended March 31, 2021. The restatement of financials is due to adjustments to the fair value of certain securities held as corporate investments. The adjusted corporate investments were purchased in January 2021 and consist of unsecured convertible debentures and stock purchase warrants issued by HIVE Blockchain Technologies (Nasdaq: HIVE) (TSX.V:HIVE) (“HIVE”). The adjustments to the total fair value of the securities will increase the value of the securities by approximately $5.8 million. The Company wishes to stress that its quarterly operating revenues and cash flow provided by operating activities have not changed. Operating revenue of $6.4 million for the three months ended March 31, 2021, as reported in May 2021, remains the same. “This adjustment has had no impact on the Company’s cash for the period,” says Frank Holmes, the Company’s CEO and Chief Investment Officer. “In fact, we’re so comfortable in the Company’s cash flow and growth opportunities that we recently raised the dividend by 50%. “It’s important for investors to be aware that a company’s net income is divided into operating income and other income, which includes investment income. For the quarter, U.S. Global Investors’ operating revenue and cash flow have not changed. The investment income that is being adjusted and the potential gains and losses in the value of warrants and convertibles is a lot more complicated than most people realize,” Mr. Holmes explains. “To value the various components of the Company’s corporate investment in HIVE, we initially used the Black-Scholes model, discounted cash flow (DFC) method and intrinsic value. Due to the complexity of the debenture, we are now using the binomial options pricing model, which is a lattice-based model. The net result is a decrease in the income statement and increase in the equity of the balance sheet of approximately $6 million. ‘Other Comprehensive Income’ is not a top-line revenue figure. Changes in ‘Other Comprehensive Income’ impact the equity fig...