U S Global Investors (GROW) risk factors, FY2024 10-K

Other

1. 01The investment management business is intensely competitive
2. 02Level of fees charged for services
3. 03Failure to comply with government regulations could result in fines, which could cause the Company’s earnings and stock price to decline
4. 04Our business is subject to substantial risk from litigation, regulatory investigations and potential securities laws liability
5. 05Increased regulatory and legislative actions and reforms could increase costs and negatively impact the Company’s profitability and future financial results
6. 06New tax legislation or changes to existing tax laws, our failure to adequately comply with tax laws, or the outcome of any audits or regulatory disputes with respect to our compliance with tax law could adversely affect us
7. 07Investment Company Act - Certain changes in control of the Company would automatically terminate our investment management agreements with our client unless the funds' boards of directors and shareholders vote to continue the agreements

Risks Related to Our Common Stock

1. 08One person beneficially owns substantially all of our voting stock and controls the outcome of all matters requiring a vote of stockholders, which may influence the value of our publicly traded non-voting stock
2. 09The market price and trading volume of the Company’s class A common stock may be volatile, which could result in rapid and substantial losses for the Company’s stockholders
3. 10General market and economic conditions
4. 11The market price of the Company’s class A common stock could decline due to the large number of shares of the Company’s class C common stock eligible for future sale upon conversion to class A shares
5. 12The Company intends to pay regular dividends to its stockholders, but the ability to do so is subject to the discretion of the Board of Directors
6. 13Acquisitions involve inherent risks that could compromise the success of the combined business and dilute the holdings of current stockholders

Risks Related to Our Operations

1. 14Natural disasters, epidemics, pandemics and other unpredictable events could adversely affect our operations
2. 15requiring substantial capital expenditures and operating expenses to remediate damage, replace our facilities, and restore our operations
3. 16The loss of key personnel could negatively affect the Company’s financial performance
4. 17The Company could be subject to losses if it fails to properly safeguard sensitive and confidential information
5. 18We rely upon certain critical information systems for the operation of our business, and the failure of any critical information system, including a cyber-security breach, may result in harm to our business
6. 19Higher insurance premiums and related insurance coverage risks could increase costs and reduce profitability
7. 20We have identified a material weakness in our internal control over financial reporting. The material weakness could continue to adversely affect our ability to report the results of operations and financial condition accurately and in a timely manner

Risks Related to Assets Under Management

1. 21Poor investment performance could lead to a decline in revenues
2. 22The Company’s clients can terminate their agreements with the Company on short notice, which may lead to unexpected declines in revenue and profitability
3. 23The Company derives a substantial portion of revenue from one fund under management
4. 24Difficult market conditions can adversely affect the Company by reducing the market value of the assets we manage or causing shareholders to make significant redemptions
5. 25Market-specific risks may negatively impact the Company’s earnings

Risks Related to Our Corporate Investments

1. 26Investment income and assets may be negatively impacted by fluctuations in the Company’s corporate investments
2. 27The Company has indirect exposure to the cryptocurrency markets through its investments
3. 28Adverse changes in foreign currencies could negatively impact financial results