US Global Investors Inc (GROW) 2021 Q1 法說會逐字稿

Good morning, and thank you for joining us today for our webcast announcing U.S. Global Investors results for first quarter 2021. I'm Holly Schoenfeldt. (Operator Instructions). 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 the 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-Q filing for more details on factors that could cause actual results to differ materially from any described today and in forward-looking statements. Any such statements are made as of today, U.S. Global accept no obligation to update them in the future.

Real quick as you're watching today, we are pleased to offer you a jester go what you had. All you have to do is send an e-mail to info@usfunds.com and we are happy to get those out to you and just include your mailing address.

On Slide 5, you'll see a quick overview of U.S. Global Investors. We are an innovative investment manager with vast experience in global markets and specialized sectors. Founded as an investment club, the company became a registered investment adviser in 1968 and has 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.

GROW strength, we strive to be the go-to stock for exposure to emerging markets, resources, gold, airlines and digital currencies. We have a strong balance sheet with a reflective cost structure and a monthly dividend and return on equity discipline.

Now let's go to Frank Holmes for an overview of the period. Frank?

Thank you, Holly, and thank you, Sarah, for helping out in this today. And then we're going to have Lisa. Lisa Callicotte, our CFO, will also be speaking in addressing financial questions. But I really wanted to say here, thank you, everyone, in particular, a very loyal shareholders at Perritt Capital Management to have a wonderful microcap fund. The Royce Funds who have been long term, both of them long term, loyal shareholders. And same thing with Bill Nascobal and his team at Heartland Advisors, who have recently come in and taken a substantial position in our company. They have the confidence of our vision and BlackRock and Bandar, which are in the more index funds related, but in particular, the other fund managers.

So as you see here, the dividends are paid monthly. We've been doing this since 2007. The current yield is 1.13%, a little better than which you're going to get in a money fund. We do have maintained the share repurchase program in motion. The Board has approved to purchase up to 2.75 million shares of the outstanding common stock in the open market, through December this year of 2020.

During 3 months ended September 30, the company repurchased 1,000 Class A shares using cash of approximately $2,000. And this may be suspended. And what's important for investors, it's an algorithm that buys whenever gold, it seems gold whenever GROWs had a big correction, which has been correlated to gold. So that volatility on those big down days, the model, the algorithm kicks in and buy step back shares. Who's been fortunate is that most of the process today is that we're seeing in this sort of secular bull market. Now we've entered into, in particular, for many of our asset classes, we're benefiting from.

As you can see here, the NASDAQ GROW, we had a little higher than 266 as we surged yesterday. But I think what's really important for investors is the operating revenue and how correlated it is to the assets in particularly the ETF assets, which continue to surge our operating revenues increased Q-over-Q, 73%; year-over-year, 300%. And our net income increased by 32% Q-over-Q and year-over-year, 150%. We have $2 billion in average assets, and that's 61% Q-over-Q growth and a 290% year-over-year. I think it's just really important that investors recognize, as we said in our press release, that we not have these assets this level since almost going back 2011, '12 era.

And at that time, we had 3x the number of employees. And so we are very lean. We have a very lean structure. And so a lot of those functions that we had before have been outsourced. So now we predominantly have the accounting and financial aspect, the investment team and the marketing team to run this business. All the operations have been outsourced. So we are able to see profit margin expansion with this growth in assets. As you can see here, the assets have exploded on a relative basis. This visual does not go back at 2011, '12, when we were at that level.

And I think the stock was also substantially higher. But back then, we had higher -- more employees, but we had higher funds off short funds, which had higher fees today, that these are structures is very simple to calculate with the ETF business and the other mutual funds. But we're very happy with what we're be able to do. And now we're busy rebuilding our balance sheet and income statement and starting to pile the cash.

So this is another nice visual to show you the turnaround and grow 10% -- $0.10 growth, and then we had $0.13 growth in some back-to-back quarters. And I just think the future looks very, very promising for that. There's been some demographic studies that I've talked about that's changed the -- what's taking place for our company but what's important is that we have definitely, in my eyes, seen the term of the corner.

We still want to go through a few more quarters of showing that growth of cash and building that book value back up again. And with that, then we can consider -- people have always been sending me and asking me, will you buy back more stock? Will you increase the dividend? And I think that we have weathered just a horrible, horrible long winter in resources. And they return, and we spent 5 years of building the brand and ETF business before it exploded.

So it costs a lot of money, and we lost money during that period, building out and investing in the building of the brand of jets. But as you can see here, it's a blow-up quarter for GROW revenue. And the next visual is how we've done against our peers. The orange is growth and against other fund groups, such as T roll price, Franklin. Franklin is a lot of emerging market funds like ourselves. WisdomTree is focused on ETFs superior. And Invesco's biggest fund is the QQQ to ETF. But we ourselves have been able to turn and actually be more reflexive and participate in the surge has taken place.

And what shock me was to sort of the sell-off we've experienced the past couple of months, well, the assets have continued to grow. I think it's more of a function of a lot of small-cap stocks seem to -- and small-cap funds start to lag and there's sort of a negative sentiment going into the election. But after yesterday, see how much gold was up and some of the other assets, the airlines ETF. They were up substantial. It's a big, big swing for us in overall assets.

The next visual is highlighting just ETF since total asset is higher. It truly is it's the only airlines ETF we spent a lot of time building this, not only the brand, but we spend a lot of time in building that model. And it's very much, I share with you a unique quant model. It's not just factors for picking stocks. They are factors of how the portfolio recalibrates and rebalances every quarter. So it's a dynamic process. Demands for the airline ETF continues. And what we've seen is the daily -- when you look at the daily volatility of the airlines ETF, it's very much like the airlines industry, like gold stocks. They have a big daily volatility.

And what we've attracted, which I think is so key for price discovery is tens of thousands of young millennial traders. They love the airline industry. They follow the airline industry, and they trade it. They're looking for the next big surge a vaccine comes out, this real bounce in COVID will sort of slow it down in Europe, but the U.S. continues to chug along in a positive way.

So I think positive news of Delta coming out and saying that there -- they expect by the first quarter that they'd probably turned the corner in along with Southwest Airlines. These are very positive statements. The fundamentals of the airlines, they're still losing money, but a lot less freight. And I'm trying to explain some of the factors that I try to monitor -- to try to monitor the health of the revenue line of the airlines it's best to follow the TSA daily report that shows you how many people they cleared.

But demand continues to improve, and as you can see here, for anyone that doesn't understand how to calculate this, it's -- we generate 60 basis points of revenue. And as the funds grow, 60 basis points equates into 12, as you can see, $12 million. The revenue from Jets basis has gone from $0.5 million to $12 million in revenue. It's a very simple model to understand, and we see the daily trading volume moving with gold and also moving more now with airlines.

Next is a visual showing you the Seeking Alpha. The following investors describing the Jets updates on Seeking Alpha. This continues to grow, which is very positive and constructive. Here's the magic visual. This year is what quant funds use, and quant funds are no doubt in the hedge funds that are short airlines or long airlines. They want to be repositioned. So they go longer short Jets.

We've seen big trading volume in our options on Jets. So it's becoming a very liquid vehicle. Basically for simple math going from 35,000 shares a day traded to 3.5 million. And that is very important, attracting a bigger, broader ecosystem from hedge funds, institutions to day traders. And so what we're seeing is that they track this data, the number of travelers, and it went to 1 million, and that's been a game changer, and that's when companies started coming out, the airlines companies are saying that they believe that the wind at the tunnel is much brighter by -- in the next 6 months.

If you recall, a year ago, the TSA was clearing about 2.7 million people. And then by mid-April, it had fallen to less than 90,000 people a day. As the U.S. shut down, the biggest -- the busiest airport in the world was anchorage, moving metal equipment from Asia over to North America and Europe. This has all changed, especially domestically, what we're seeing in the U.S.

And the airlines, the business travel hasn't picked up, but tourism has and you're seeing the airlines use quant models, and it reminds me a lot of what Apple has been doing. If a COVID area has a significant breakout, Apple will shut down a store and wait and sell things online. And then all of a sudden when things slow down, they'll go back and open up that store.

The airlines are recognizing that tourists -- tourism is big, so EV United Airlines is flying from small cities in America in Pennsylvania, New York and Michigan, Illinois to destinations like Fort Myers, inexpensive fast path. At the beginning of October, Southwest Airlines, they certainly started flying from Phoenix to Cabo San Lucas in Mexico, and this is all -- to me, amazing to see that tourism is an important part of that travel, and the airlines are able to adapt quickly.

Previously, airlines flew predominantly through their hubs throughout America, and then they went on to their second path. Today, they're doing direct flights from these smaller areas and they pivot, they move much more quickly.

The next visual is CEO, Ed Bastian, of Delta, and he said they feel they'll be breaking even by the spring of 2021. And very positive for the industry, Southwest Airlines has also articulated that. What happens in these new ETFs that you come out with it's you really can't get on platforms until you get through $50 million. And then once you get to $100 million, it expands greatly to how many platforms you get on to. And then the next threshold is $500 million, and then it's $1 billion.

So you're seeing that some of these big wirehouses that they're very slow to move, to put you on their system and the due diligence. But what we've seen is a big breakthrough in particular, UBS, which has a much higher book of business. They're showing up as a major player in the space, Raymond James, and no doubt the minas, the E trade, the interactive brokers in Robinhood, they're very important for the ecosystem. As day traders are increasing the volume, it makes hedge funds much more interested in going shorter along the ETF itself, productively going along and shorting airline stocks.

And what happens is when they want to unwind a position because there's so much liquidity, they don't redeem to the degree they used to. They just sell into the marketplace on their hedge -- they call pairs trading. So we're very happy about this broad distribution. And I want to thank everyone at those firms and all those gatekeepers that help caters get a fast track that we get sort of wholesaler to get on those platforms and making sure that they have access to our research and what we're covering.

And the other part that's importantly shown in previous visuals is that the day traders exploded when they went to 0 commissions, and particularly Robinhood and Acorn, but this expanded with TD Waterhouse and now Schwab. So you're seeing that the more the groups are doing it, and they make the money from deposits, cash deposits and then doing margin lending and they make their money from securities lending. Or to me, it's really interesting on how different paths you can go to make money in this industry and commissions become a de minimis number.

But before you want to come and trade this, or invest in this sector or grow, I highly recommend that you respect the DNA volatility of different asset classes. Gold bullion and the S&P 500 have almost the same DNA of volatility over 10 days and over 1 day. It's 1% on a daily basis, it's a nonevent, 7% of the time they go up or down 1%. And as you can see, gold stocks are much higher than gold, and you can see Bitcoin is massively greater over 5 days or 10 days. And oil, no doubt, you can see here that oil is very volatile.

The 1-day volatility is shocking years at 10%. And that impacts the airlines because the cost of energy is their second biggest line item. And so you get a whole community of traders that as oil is trending higher, they're out of jets as oil starts to correct and fall, they start buying jets. And so that, to me, just adds to that ecosystem that we just don't want to have a bunch of whales owning the ETF or any of our products, we want to have tunas, dolphins, barracudas, sharks, minerals, groupers. We want it all. We want this this robust ecosystem and just clearly showing that, and GOAU is getting that traction to where its volume is up dramatically and it's gone through the $100 million level.

And we're seeing family offices come into it because of GOAU. When we talk about that specifically because of its orientation towards royalty companies. Here is something that shocks, and I go on the media and in particular, New York decease always to have this propensity, a high probability of being negative gold. Gold is bit up greatly, well, it's gone too much. Gold starts to crack, that I told you it's going to go lower. It's not recognizing in this century, that gold has outperformed the S&P 500 threefold, that's 300% difference. And it's a 26% over this year, it will perform the S&P.

So gold is a significant and critical asset class, and that's why the largest hedge around the world has a waiting in gold, quite often, it would be over 10%. And you recalibrate, that's Ray Dalio or Bridgewater.

The next visual is YouTube. This production we've been putting out is educational pieces, there are 2 minutes, is CPI fake news? What does it mean for gold? And I highly recommend that you click-through and you subscribe to U.S. Global's information that we're putting out in research. And what we tried to show on that 2-minute clip, was inflation is closer to 8% than reported 1%. If you use the algorithm that determines what CPI is, that was used in 1980 when gold had 850, inflation went over 12% as CPI was over 12%, and silver had $50 an ounce.

That if you use that algorithm today, inflation is running more like 8%. So that's published by John Williams Shadow statistics. And I think that people have to realize is that the reported CPI, it's amazing, housing is up 10% to 15% across America and some places, like I said, 15%, that's big inflation. Gas pump inflation is up. Everyone driving to work during the day. It's surged by inflation of 1.3%, I don't think so. So I think that it's important for investors to be educated, and that's a key value driver for gold and smart hedge fund managers like Ray Dalio.

Gold has benefit from excessive money printing. And I've written about this. If you're not a subscriber, Frank Talk, a highly recommended. The market team puts together great information. The investment team helps right the investor alert every week. And clearly, the marketing team and the editorial board that we have there puts lipstick on everything we do and checks for compliance, et cetera. But we really try to be faster than what brokerage firms publish and right now, what you've seen with the success of regulations come out of Europe for the past 15 years.

Now this MiFID 2 really hurts investors getting information that they used to be able to get even from major firms like Deutsche Bank, you had to be MiFID compliant for me to go listen to a webinar. So this is a new world. So we try to be a provider, a timely, insightful, informative provider and what this visual is showing you that there's a correlationship between the amount of money printing and money supply year-over-year and the gold prices. And if you go back and you can see this sort of trend, the other part of that is negative real interest rates. So when you add money printing and negative real interest rates, it's a great barometer and tool for navigating gold markets.

Let's come back about the products that generate the revenue and to pay the salaries and allow us to pay dividends and buy back our stock. GOAU, it's expands availability with assets over $100 million. We're tickled by this. We're excited about it, and we'll continue to tell that story like we did this week, and we had a huge response, I think, almost a record number signed up to listen to the world of gold.

And the next visual is our investments. We couldn't launch an ETF in the space of Bitcoin. Still, many people have tried, spent a lot of money, nothing has happened. U.S. global investors. I went out and co-invested and launched high blockchain technology. We own 10 million shares. We mine Ethereum and Bitcoin using green energy. We're mining Ethereum in Iceland and Sweden, and we mine Bitcoin in Québec. So it's been an incredible roller coaster ride that HIVE itself is an investment from our seed of $0.30 to $6 and back down to $0.10 and then back up. It's just really it's important for investors to rectus.

It correlates with the price of Ethereum. And this year is about the major events, moving the price of Bitcoin. The winter of Bitcoin and Ethereum digital money, it bottomed in the winter, what they call the winter season, it was about 18 months -- just 14 months. And it bottomed when JPMorgan stopped trash talking the digital world, and they launched their own stable coin that exploded when Facebook announced the Libra, then the world back last against Libra, it's sold off and now it's pivoting up on its own. Today, it's hit $16,000.

So I think the Bitcoin and the Ethereum of the space is turned, and the Ethereum has been on a huge run, but what really had a big impact in the past 10 days is the press release that PayPal will allow cryptocurrency buying and selling and shopping on its network. That came out, and that was -- that tacked on $1,000 a Bitcoin.

So I think certain news is driving us as it goes more mainstream. And any theory, as you can see in the next visual, this picture of myself with Shawn Malden of Malden Economics, I went to visit the icelandic facilities. This was almost 2 years ago, but the theralite are gaining big traction with a huge movement and decentralized finance is so often they use Ethereum algorithm as their backbone. And so therefore, they need Ethereum. And we've seen Ethereum prices explode on the upside.

And this year, HIVE increases next-generation Bitcoin mining powered at Green Energy in Québec. In September, we reported record theory of mining production, driven by the DFI demand. And then in October, we reported the first quarter financial results. And the next one is the exciting part. That added to our earnings this quarter is the rebound since HIVE got control of its destiny. We've had a great move in our stock. We're the most liquid name of all these companies, and you can see year-to-date, we're still the best performer.

The correlation is extremely high with Ethereum. It's more than 70% correlation. On a daily basis, it's -- if you do the taping on it, it's more like 90%. Our -- we also made an investment several years ago, which we're really thrilled about is in Thunderbird entertainment, and that's a company that Tim Gamble and Frank Giustra had created. And if you recall, you to know the history for Lionsgate entertainment that was created basically by those two individuals.

And this is a company that's exploding in success of the animation, and they just recently won an any for the last kids on Earth. Their revenue is surged above $100 million. They have free cash flow, they have rising cash flow, rising revenue per share growth. This is just a sweep undervalued company. They're producing a lot of content for Amazon, for Netflix or even though Walt Disney, their animation team will be contracted out.

So this is an investment and itself has had a great run because of COVID, the need for content, the need for new content. They have more people working from home and staying from home, entertainment has come from home. So we know what our funds, one of the things we bought early was the Home Depot because Home Depot stayed open during the whole lockdown. And everyone was busy stuck in homes to start repairing their houses. And parking lots for Home Depot were packed where everyone else's was empty.

So it's interesting to see that certain companies have truly benefited from COVID just like we have. We've been the recipients. And one of the biggest and most important part is the unleashing of the millennials. And I haven't seen this until the '90s, I recall, when all of a sudden, baby boomers discovered mutual funds and tech stocks. And we had a super cycle, the unleashing by President Clinton of the Internet to the capital markets. He had tax reform. He had reform on telecom and media and technology industry.

And all of that, basically, any time you deregulate, streamline regulations, you get massive job creation. It's fiscal policy 101. And with that, that time, the baby boomers, my age, were just jumping all over this space for 401 (k)s, that came off the rock for ira and there's a huge growth. Well, today is ETFs, and today, it's millennials. And we're going to witness the largest well transfer from baby boomers to millennials is good numbers are benching around like $10 trillion.

And so now they just covered, and they're predominantly using YouTube and podcast to get their information because it's harder and harder to get research from the brokerage firms and the coverage and they're very caught up in the speculation of microcap stocks. So I think that I remain very bullish and constructive on overall the economy and the stock market. And stay tuned for the second leg of the airlines industry.

Vaccine is discovered or is implemented, that works, you're going to see a huge explosion in travel again in the airline industry. Now I want to turn it over to hardworker, Lisa Callicotte, who has been busy throughout this whole bare winter cycle that GROW has experienced until the recent take off of our ETFs. She's been managing the process, and I thank her. And so now we're going to talk about the results and growth.

Thank you, Frank. Good morning. First, I'll start with our financial highlights. We had a very strong quarter. And as we noted previously, we felt that this quarter would really demonstrate the results of the inflows into our jets ETF. And this is reflected in the fact that our quarterly average assets under management and our operating revenues increased approximately 300% compared to the same quarter last year, and our quarterly net income was $1.9 million.

Quarterly operating revenues are the highest they've been in 6 years, and quarterly net income is the highest it's been in the last 9 years. And now I will review more details of our financial statements for the quarter ending September 30, 2020. Beginning on Page 40, we see we recorded total operating revenues of $3.2 million for the quarter, which is an increase of $2.4 million or 304% from the $804,000 in the same quarter last year.

The increase is primarily due to the increase in our average assets under management related to our smart beta jets ETF. And this is while operating expenses only increased 57%, and that was mainly due to higher EPS fund expenses and higher bonuses due to fund performance. We see our operating income for the quarter ending September 30, 2020, is $937,000 compared to an operating loss the same time last year.

On Slide 41, we see other income for the quarter is $1 million, and this is mainly related to unrealized gains on our investments compared to unrealized losses for the quarter ending September 30, 2019. the net income attributable to USGI after taxes for the quarter is $1.9 million or $0.13 per share, which is an improvement of $5.5 million compared to the net loss of $3.6 million or a loss of $0.24 per share in the same quarter for fiscal year 2020.

Moving to Page 43. We see we still have a strong balance sheet, includes a high level of cash and marketable securities that make up 73% of our total assets.

Slide 44 notes our liabilities, which are relatively consistent with June 30, 2020. And Slide 45, you can see our stockholders' equity detail. Our company has a net working capital of $9.3 million and a current ratio of 4.5 -- 5.41. With that, I'll turn it over to Holly.

Thank you, Lisa. All right. As you can see on this slide, a majority of our mutual fund assets are in emerging markets and natural resources, while 28% are in domestic equities and fixed income. And as for distribution, more than 3/4 of assets come from retail investors, with 18% coming 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. Bring homes often shares his insights with financial outlets like Fox Business television, 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 loyal followings 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, Kitco and equities.com. Each with millions of monthly visitors.

Kitco News, the biggest gold website in the world with an audience of over 30 million monthly visitors in partnership with The Street continues to feature the gold game film Show with Frank Holmes' gold market analysis. And since the show the beginning, 193 episodes have aired. You can watch Frank's interviews with Kitco on our YouTube channel or on kitco.com.

At quarter end, we like to look into the most visited Frank Talk blog posts published over the past year. And on this slide, you will see that the most visited articles, so far, in 2020 are as follows: number one, the top 10 countries with the largest gold reserves; number two, the top 10 gold producing countries; and number three, explore the world's 10 busiest airports. You can sign up for the blog for free on our homepage usfunds.com. All of this coverage helps us leverage our brand by reaching millions of readers, viewers and potential investors.

Our website, usfunds.com, was visited over 770,000 times from September 2019 to September 2020 by curious investors from all over the world. U.S. Global is well-known for timely, balanced and positive market insights and our thought leadership. The company has been awarded numerous Star awards by the investment management education alliance over the years, for excellence in investor education. Our total now stands at 90 awards as we received 2 more just last month. Our subscriber base continues to grow organically as well, and we currently have over 50,000 curious investors subscribed to our investment newsletters and the Frank Talk blog. Investors can sign up once again at usfunds.com, enjoys the subscribers who receive the award-winning Investor Alert e newsletter as well as Frank Talk.

We also continue to see a large following across all of our social media platform. I encourage you to check us out not only on Facebook and Instagram, but also Pinterest, Twitter and of course, YouTube. And as I mentioned at the beginning, please shoot us an e-mail at info@usfunds.com with your mailing address, and we are happy to send you a GOAU or Jet Pad or both. So just a quick reminder on that.

And finally, as we wrap up today's presentation, we'd like to open it up to questions. (Operator Instructions)

So with that, I'll have a few questions here. I'm going to start with you, Lisa. I know you just finished your section, but can you please briefly re summarize how the increase in AUM will impact cash flow and profit margin?

Yes. We're very excited about the quarter and about the vast improvement in both profit margin and cash flows. Our operating profit margin for the quarter was approximately 29%, and we had positive cash flow through operations, and our total cash increased approximately $660,000 from the June 30 quarter. We really feel like this shows that the quarter ending June 30 was a turning point for us, and we're very happy that we're seeing more complete results of that this quarter.

Thanks, Lisa. Frank, I have a question for you. Are there any new products in the pipeline?

I think what's important is the streamlining. I mean come back on these financials, one of the things that impact us during this bar cycle was also the lag in performance because we have a fulcrum fee. And a year ago, a lot of the funds were just really not doing well. But today, 80% -- 90% of the funds are plus or there -- it's just great to see. So that's not -- that's a real positive note is what the fund performance of the mutual funds. And what we did do is to launch the first luxury only dedicated fund and I remember people questioning me, are you crazy, COVID, but it's interesting that the discretionary products have done exceptionally well.

Costco has done well. Netflix has done well. But Tesla is a discretionary stock, Amazon. So to me, it's just important to see what that -- how that luxury industry has done remarkably been resilient and from the lows, they've had a wonderful run. So we have the only mutual fund that has luxury focused investments. And so I'm thrilled about that.

The biggest thing we're working on, Holly, that you're seeing in the industry is more and more, how do you converting your mutual funds and the ETFs. And I think that we've all been listening to presentations. We've been talking people that are in the process now of doing it. We've been talking to counsel. So we do think that it's just a better product delivery for investors and traders out there, the ETF. So we're going to be really focusing on that. And at the same time, we are drilling down of looking at other products.

Great. Lisa, I have another one for you. Are you planning to continue your stock buyback and dividend distribution?

Well, our Board reviews our stock repurchase program and our dividend distributions regularly. Currently, as Frank had mentioned earlier, we are repurchasing shares based on an algorithm when our stock trades down or is below a certain threshold. And this program can be adjusted.

Typically, I would say the Board considers the company's financial position and cash flow when determining to continue or change these programs. And though I can't predict the future. As the company's financial metrics strengthens the possibility of increasing the stock buyback and/or the dividend is more likely.

Great. And Frank, you briefly touched on this when you're talking about any new products in the pipeline. But can you go back to discussing how the investment team is working to improve performance of the mutual funds?

It's really the disciplined quantamental approach, dynamic rules-based thinking. And so that's how. But global resources was underperforming its index. And today, it's crushing it. And the GA -- it's called the GNR ETF. Well, we are so much further ahead of that performance of the GNR from is going to top-down industry allocation to a stock-picking allocation. And it's just doing phenomenally well. So I'm very thrilled about global resources that we show that we can go beat an ETF, an index like the GNR. And so I think that's the biggest difference.

Yes. Great. Another question that came in, Lisa, maybe you can touch on this. How is the investment in Galileo doing?

Well, actually, we sold our investment in Galileo in March 2020. Galileo was having the same struggles with a lot of companies in the mutual fund industry. We did have some really good years with them and very grateful for that. But we both decided to go head and part ways. They had been losing money recently. And so therefore, they are actually considered -- included in our discontinued operations in our financial statements. So we no longer are with them.

What I think what's important there is that we did leave them with a technology fund and we're major investors or not. And their focus is on that they're going to take that product, and this should have also just great numbers. So we are still invested indirectly in the company and through specialty fund.

Okay. Another question I have, either one of you can take this. Can you speak to your building tenants and are any leases rolling off? Or is there any update about that because of the pandemic?

Actually, we just have a couple of tenants, and they'll be rolling off in the next couple of years. But we've also seen a little bit of interest because we do have some smaller areas in our office space that we can lease out and that we're willing to. So we are getting a little bit more interest lately into possible increases in that.

Okay. Great. Frank, do you have any closing comments for the shareholders tuning in today?

Well, I want to just thank them for their patience as we as go in this ETF business, and that it took a lot longer than you think. It took 3 years for GOAU to get above $100 million. It took 5 years for just all of a sudden to be discovered and set unprecedented records. These ideas, and when you come up with them, they take a lot of late work and marketing those very well. The educational and the market apartment, so they won 90 educational marketing awards for that. But it just takes time.

And thank everyone for their patience with us as we build-out. I am working on some exciting new ideas going in for the new year, new products. But I would look forward to a mechanism where mutual funds can be converted easily for the shareholders into EPS. I think that will be a great boom for us and for overall capital markets.

Wonderful. Thank you for the questions, everyone. And of course, for tuning in. Just as a reminder, if we didn't get to your question, we would have -- we'd be happy to answer it afterwards, just shoot us an e-mail at info@usfunds.com. This concludes U.S. global investors webcast for the first quarter of 2021. Thank you all for your participation.