NEW YORK, NY / ACCESSWIRE / June 27, 2022 / Earlier today Echo Lake Capital and Deerhaven Capital issued a letter to the Board of Directors of U.S. Global Investors, Inc. (NASDAQ:GROW). The letter described a proposal to acquire all of the Company's class A shares for $5.30 per share.

A full copy of the letter can be found below:

CONTACT:
Ephraim Fields
ef@echolakecapital.com

June 27, 2022

To:

Frank E. Holmes - c/o U.S. Global Investors, Inc.

Thomas F. Lydon, Jr. - c/o ETFtrends.com

Jerold H. Rubinstein - c/o Christine Martinez

Roy D. Terracina - c/o The Najim Family Foundation

Echo Lake Capital and Deerhaven Capital are pleased to submit this proposal (our 'Proposal') under which we would acquire all the outstanding class A shares of U.S. Global Investors, Inc. ('GROW' or the 'Company') we do not own for a price of $5.30 per share. Our Proposal represents a premium of 20% to Company's closing price as June 24, 2022, which we believe offers a very compelling value to shareholders. Our Proposal also includes acquiring all the Company's outstanding class C shares for consideration described below.

We recognize the inherent difficulties of creating value for shareholders as a public, micro-cap company. Like many other micro-caps, GROW suffers from a lack of sell-side analyst coverage, limited trading volume and limited demand from institutional investors. Our proposed transaction would allow the Company's stockholders to immediately realize an attractive value for their investment and provides stockholders certainty of value for their shares, especially when viewed against the operational risks inherent in the Company's business and the market risks inherent in remaining as a public company.

Under our Proposal class A stockholders would receive $5.30 per share in total consideration consisting of $2.65 per share in cash and $2.65 per share in newly issued 8.5% Preferred Stock in the Company.

Under our Proposal class C stockholders would receive all of (i) the Company's 8% Hive debentures, (ii) the Company's Investments in held-to-maturity debt securities (valued at $1.0 million as per the Company's latest Form 10-Q) and (iii) the Company's Other investments (valued at $4.2 million as per the Company's latest Form 10-Q).

Our Proposal is not contingent on any outside financing. However, the Proposal is contingent upon: (i) the Company redeeming for cash proceeds of at least $6.7 million the $7.0 million of investments GROW had in US Global Investors Funds as per the Company's latest Form 10-Q, and (ii) no material deterioration in the Company's finances and operations relative to the results reported in the latest Form 10-Q.

Given our familiarity with the Company and significant experience executing going-private transactions, we believe we can complete customary business, accounting, and legal due diligence and negotiate definitive documentation within 60 days.

We would have preferred to engage with you in private but our efforts to discuss our proposal were rebuffed by one of the Company's board directors. We hope you will be responsive to our Proposal which we believe would be overwhelming supported by a majority of your shareholders. However, if we do not hear back from you by July 8, 2022, we will assume you are not interested in engaging with us and our Proposal will automatically terminate.

Please be aware that this Proposal is an expression of interest only, and we reserve the right to withdraw or modify our Proposal in any manner. No legal obligation with respect to a transaction shall arise unless and until execution of mutually acceptable definitive documentation.

In closing, we would like to express our commitment to working together to bring this proposed Transaction to a successful and timely conclusion. Should you have any questions regarding this proposal, please do not hesitate to contact us. We look forward to hearing from you.

Sincerely,

Ephraim Fields
Echo Lake Capital
ef@echolakecapital.com

Glenn Tongue
Deerhaven Capital

SOURCE: Echo Lake Capital