DISCONTINUED OPERATIONS

12 Months Ended

Jun. 30, 2016

Discontinued Operations and Disposal Groups [Abstract]

Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]

NOTE 3. DISCONTINUED OPERATIONS

Distributor

In December 2015, USGIF elected a new slate of trustees to the Board of Trustees of the Funds. The Company proposed the election of new trustees and the transition of certain functions to third-party service providers with the intention of streamlining the Company’s responsibilities so it can better focus on strategic activities. The new Board of Trustees of USGIF adopted several new service agreements. As anticipated, effective December 10, 2015, the Company, through its wholly-owned subsidiary, U.S. Global Brokerage, Inc., ceased to be the distributor for USGIF and no longer receives distribution fees and shareholder services fees from USGIF. The Company’s portion of one-time transition expenses, recorded in the quarter ended December 31, 2015, was approximately $290,000. Due to this transition, the Company is no longer responsible for paying certain distribution and shareholder servicing related expenses and is reimbursed for certain distribution expenses from the new distributor for USGIF. As a result of this change, the Company filed Form BDW, the Uniform Request Withdrawal From Broker-Dealer Registration, with FINRA, which was approved in February 2016. This constitutes a strategic shift that has started to have, and will continue to have, a major effect on the Company’s operating revenues and expenses.

The distribution and shareholder services revenues and the expenses associated with certain distribution operations for USGIF are reflected as discontinued operations in the statement of operations and are, therefore, excluded from continuing operations results. Comparative periods shown in the Statement of Operations have been adjusted to conform with this presentation. These revenues and expenses were included in the investment management services segment in previous reporting periods.

The discontinued operations did not have depreciation, amortization, capital expenditures or significant non-cash operating and investing items.

The assets and liabilities related to distribution discontinued operations are as follows at June 30, 2016, and June 30, 2015:

(dollars in thousands)	June 30, 2016		June 30, 2015
Assets
Receivables	$	-	$	184
Total assets held related to discontinued operations	$	-	$	184
Liabilities
Accounts payable	$	-	$	5
Other accrued expenses		-		129
Total liabilities held related to discontinued operations	$	-	$	134

The components of loss from discontinued operations of the distributor were as follows:

	Year Ended June 30,
(dollars in thousands)	2016			2015			2014
Revenues
Distribution fees	$	425		$	1,408		$	1,974
Shareholder services fees		183			630			931
		608			2,038			2,905
Expenses
Employee compensation and benefits		188			491			493
General and administrative		77			152			291
Platform fees		347			1,201			1,687
Advertising		14			275			559
		626			2,119			3,030
Loss from discontinued operations of distributor before income taxes		(18	)		(81	)		(125	)
Tax benefit		-			-			(42	)
Loss from discontinued operations	$	(18	)	$	(81	)	$	(83	)

Through December 9, 2015, USGIF paid the Company a distribution fee at an annual rate of 0.25 percent of the average daily net assets of the investor class of each of the equity funds. Effective December 10, 2015, the Company, through U.S. Global Brokerage, Inc., ceased to be the distributor for USGIF and no longer receives distribution fees directly from the Funds.

In addition, through December 9, 2015, the Company received shareholder servicing fees from USGIF based on the value of Fund assets held through broker-dealer platforms. Effective December 10, 2015, the Company ceased to be the distributor for USGIF and no longer receives shareholder services fees from the Funds.

Due to this transition, the Company is no longer responsible for paying the platform fees for the USGIF equity funds and is reimbursed for certain distribution expenses from the new distributor for USGIF.

Transfer Agent

The Company’s Board of Directors formally agreed on August 23, 2013, to exit the transfer agency business so that the Company could focus more on its core strength of investment management. USSI served as transfer agent until conversion to a third-party transfer agent on December 9, 2013.

The transfer agency results, together with expenses associated with discontinuing transfer agency operations, are reflected as “discontinued operations” in the Consolidated Statements of Operations and are therefore, excluded from continuing operations results. These expenses include approximately $65,000 of expenses in fiscal 2014 related to leased equipment that will not be utilized. Comparative periods shown in the Consolidated Financial Statements have been adjusted to conform to this presentation.

As of June 30, 2016, and 2015, there were no material remaining assets or liabilities related to the transfer agency business.

The components of loss from discontinued operations of the transfer agent were as follows:

	Year Ended June 30,
(dollars in thousands)	2016		2015		2014
Operating revenue	$	-	$	-	$	529
Operating expenses		-		-		897
Loss from discontinued operations of transfer agent before income taxes		-		-		(368	)
Tax benefit		-		-		(125	)
Loss from discontinued operations	$	-	$	-	$	(243	)