INVESTMENT MANAGEMENT AND OTHER FEES

3 Months Ended

Sep. 30, 2016

Investment Management And Other Fees [Abstract]

Investment Management And Other Fees [Text Block]

NOTE 3. INVESTMENT MANAGEMENT AND OTHER FEES

The Company serves as investment adviser to USGIF and receives a fee based on a specified percentage of net assets under management. The Company recorded base advisory fees from USGIF totaling $1.5 million and $885,000 for the three months ended September 30, 2016, and 2015, respectively.

The advisory agreement for the equity funds within USGIF provides for a base advisory fee that is adjusted upwards or downwards by 0.25 percent when there is a performance difference of 5 percent or more between a fund’s performance and that of its designated benchmark index over the prior rolling 12 months. For the three months ended September 30, 2016, the Company realized an increase in its base advisory fees from USGIF of $39,000. For the three months ended September 30, 2015, the Company realized a decrease in its base advisory fees of $168,000.

The Company has agreed to contractually limit the expenses of the Near-Term Tax Free Fund through April 2017. The Company has voluntarily waived or reduced its fees and/or agreed to pay expenses on the remaining funds. These caps will continue on a voluntary basis at the Company’s discretion. The aggregate fees waived and expenses borne by the Company for USGIF for the three months ended September 30, 2016, were $234,000 compared with $378,000 for the corresponding period in the prior fiscal year.

Prior to the U.S. Government Securities Ultra-Short Bond Fund (“Government Fund”) conversion in December 2013 to a non-money market fund, the Company voluntarily agreed to waive fees and/or reimburse the Government Fund to the extent necessary to maintain the fund’s yield at a certain level as determined by the Company (“Minimum Yield”). The Company may recapture any fees waived and/or expenses reimbursed to maintain the Minimum Yield within three years after the end of the fund’s fiscal year of such waiver and/or reimbursement. Thus, $498,000 of the waiver for the Government Fund is recoverable by the Company through December 31, 2016.

The Company receives administrative service fees from USGIF based on the average daily net assets. However, effective December 10, 2015, upon amending the agreement and reducing the administrative services performed, the fees paid to the Company by USGIF changed from an annual rate, based on average daily net assets, of 0.10 percent to 0.05 percent per investor class and from 0.08 percent to 0.04 percent per institutional class of each fund, and a base fee of $7,000 per fund was eliminated.

As of September 30, 2016, the Company had $673,000 in receivables from fund clients, of which $517,000 was from USGIF.

The Company also serves as investment adviser to an exchange traded fund (“ETF’) client, U.S. Global Jets ETF, which commenced operations in April 2015. The Company receives a unitary management fee of 0.60 percent of average net assets and has agreed to bear all expenses of the ETF. The Company recorded ETF advisory fees totaling $66,000 and $70,000 for the three months ended September 30, 2016, and 2015, respectively.

The Company provides advisory services for offshore clients and receives advisory fees based on the net asset values of the clients and performance fees, if any, based on the overall increase in net asset values. The Company recorded advisory fees from these clients of $36,000 and $22,000 for the three months ended September 30, 2016, and 2015, respectively. The Company recorded no performance fees from these clients for the three months ended September 30, 2016, and 2015. Frank Holmes, CEO, serves as a director of the offshore clients.

Galileo provides advisory services for clients in Canada and receives advisory fees based on the net asset values of the clients. Galileo recorded advisory fees from these clients totaling $299,000 and $330,000 for the three months ended September 30, 2016, and 2015, respectively.