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PRELIMINARY COPY
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U.S. GLOBAL INVESTORS FUNDS
7900 Callaghan Road
San Antonio, Texas 78229
INFORMATION STATEMENT
FOR SPECIAL MEETING OF SHAREHOLDERS OF
UNITED SERVICES INTERMEDIATE TREASURY FUND
WE ARE NOT ASKING YOU FOR A PROXY AND
YOU ARE REQUESTED NOT TO SEND US A PROXY
INTRODUCTION
This Information Statement is furnished to shareholders of the United Services
Intermediate Treasury Fund (the "Fund"), a series of U. S. Global Investors
Funds, a Massachusetts business trust (the "Trust"), in connection with a
Special Meeting of Shareholders to be held Monday, May 12, 1997, at 10:00 a.m.,
local time, in the executive offices of U.S. Global Investors, Inc., 7900
Callaghan Road, San Antonio, Texas, for the following purposes:
1. to consider and vote upon approval of liquidation of the United Services
Intermediate Treasury Fund, which liquidation is to occur as soon as
practicable following shareholder approval; and
2. to consider and act upon any other matters that may properly come before
the meeting or any adjournments thereof.
This Information Statement was mailed to shareholders on or about April 22,
1997. Shareholders of record at the close of business on April 16, 1997 (the
"Record Date"), will be entitled to vote at the Special Meeting of Shareholders
even if such shareholders no longer hold shares of the Fund as of the date of
the Special Meeting of Shareholders.
The Trust is presently composed of twelve separate funds: U.S. Gold Shares Fund,
U.S. Income Fund, U.S. Global Resources Fund, U.S. Treasury Securities Cash
Fund, U.S. All American Equity Fund, U.S. Tax Free Fund, United Services
Near-Term Tax Free Fund, U.S. World Gold Fund, U.S. Government Securities
Savings Fund, U.S. Real Estate Fund, China Region Opportunity Fund, and United
Services Intermediate Treasury Fund.
On the Record Date there were _________ shares of the Fund outstanding. Each
full share of the Fund outstanding at the close of business on the Record Date
is entitled to one full vote, and each fractional share outstanding on that date
is entitled to a proportionate share of one vote.
On the Record Date U.S. Global Investors, Inc. (the "Advisor") owned more than
50% of the outstanding voting shares of the Fund. The Advisor purchased its
shares with the intention of becoming the majority shareholder on the Record
Date and voting those shares in favor of Proposal 1
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to liquidate the Fund. The Advisor has indicated its intention to redeem its
shares prior to the Special Meeting of Shareholders.
DESCRIPTION OF BUSINESS AND FINANCIAL STATEMENTS
A description of the business of the Fund and its property is contained in the
Fund's prospectus, Statement of Additional Information ("SAI") and the Trust's
annual report to shareholders, additional copies of which will be provided upon
request.
LEGAL PROCEEDINGS
The Fund is not a party to any pending litigation nor does management know of
any threatened litigation.
NET ASSET VALUE OF THE FUND'S SHARES
The net asset value per share of the Fund's shares at the close of business on
the Record Date was $x.xx. Dividends are payable as described in the prospectus.
Upon liquidation of the Fund, all assets will be distributed, leaving no funds
for further dividend distributions.
PRINCIPAL SHAREHOLDERS OF THE FUND
On the Record Date, the officers and Trustees of the Trust owned less than 1% of
the outstanding shares of the Fund. The Trust is aware of the following persons
who own of record, or beneficially, more than 5% of the outstanding shares of
the Fund as of the Record Date:
NAME AND ADDRESS OF SHAREHOLDER PERCENTAGE OWNERSHIP
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U.S. Global Investors, Inc. 51%
7900 Callaghan Road
San Antonio, Texas 78229
Carolyn F. Bailey xx%
3530 Vaughn Road
Montgomery, Alabama 26106
Betty Jo Crites xx%
Alan F. Crites
15203 Wayside Oaks Street
San Antonio, Texas 78232
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NAME AND ADDRESS OF SHAREHOLDER PERCENTAGE OWNERSHIP
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Douglas L. Foreman xx%
104 Clay Street
Warner Robins, Georgia 31088
Raymond M. Hrin xx%
227 Franklin Street, Suite 220
Johnstown, PA 15901-1916
James J. Querriera xx%
1666 East Colver Place
Covina, California 91724
Marcia J. Wood
Walter D. Wood
7132 Historic Court
Dayton, OH 45414-2176 xx%
THE ADVISOR
U.S. Global Investors, Inc. is a Texas corporation with its principal executive
offices at 7900 Callaghan Road, San Antonio, Texas 78229. The Advisor's
relationship to the Fund is discussed in the prospectus and SAI.
LIQUIDATION OF THE FUND
The Fund commenced operations on May 8, 1992, and as of the date of this
Information Statement has total net assets of approximately $_______. The Fund
has not attracted the shareholder following that was originally anticipated.
Moreover, the Advisor believes that there is no reasonable prospect for
increased investor interest in the foreseeable future. The Fund's small asset
base results in a high per share expense ratio for the Fund, which adversely
affects the Fund's performance. In addition, the size of the Fund impairs the
ability of the Fund to participate in many attractive investments. For these
reasons, the Advisor determined that the continued operation of the Fund would
not be in the best interests of shareholders, and at a meeting of the Board of
Trustees held on January 31, 1997, the Advisor recommended that the Trustees
consider liquidating the Fund. The Trustees considered such information as they
deemed reasonably necessary to evaluate the Advisor's recommendation. Based upon
this information, the Trustees determined that it would be in the best interests
of shareholders to liquidate the Fund, and they voted unanimously to recommend
that shareholders approve a proposal to liquidate the Fund.
Section 4.2(d) of the Amended and Restated Master Trust Agreement ("Master Trust
Agreement") requires approval of a majority of the outstanding voting shares of
the Fund as defined under the
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Investment Company Act of 1940, as amended. Therefore, approval of Proposal 1
will require an affirmative vote of the lesser of (i) more than 50% of the
outstanding shares of the Fund or (2) 67% or more of the shares of the Fund
represented at the Special Meeting of Shareholders at which more than 50% of the
outstanding shares of the Fund are present.
A majority of the shares of the Fund entitled to vote at the Special Meeting of
Shareholders present in person will constitute a quorum of the Fund. For
purposes of determining the presence or absence of a quorum and for determining
whether sufficient votes have been received for approval of any matter to be
acted upon at the Special Meeting of Shareholders, abstentions and broker
non-votes will be treated as shares of the Fund that are present at the Special
Meeting of shareholders but which have not been voted. For this reason,
abstentions and broker non-votes will assist the Fund in obtaining a quorum but
will have the practical effect of a "No" vote for purposes of obtaining the
requisite vote for approval of Proposal 1.
If shareholders approve the liquidation, Fund assets will be sold in an orderly
manner as soon as practicable following shareholder approval and, after payment
of expenses, the remaining cash and other assets will thereafter be distributed
to shareholders. Each share of the Fund will entitle the holder to receive its
pro rata share of any cash or other assets distributed. For tax purposes, a
shareholder will recognize gain or loss on the liquidating distribution equal to
the difference between (i) the amount of the liquidating distribution and (ii)
the shareholder's adjusted tax basis in shares of the Fund. Such gain or loss
will be treated as a long-term or short-term capital gain or loss depending on
the period of time the shares were held prior to the liquidation. Distributions
on shares held for more than one year will result in a long-term capital gain or
loss, and distributions on shares held for one year or less will result in a
short-term capital gain or loss. Liquidating distributions received by an IRA or
qualified retirement plan will ordinarily not be subject to taxation. All
shareholders are urged to seek independent advice regarding the possible federal
income tax consequences of the proposed liquidation as applied to the
shareholder's own special circumstances.
This Information Statement is sent by order of the Board of Trustees. Proxies
are not being solicited in connection with the Special Meeting of Shareholders,
and this Information Statement is being sent solely for information purposes.
Susan B. McGee
Secretary of the Trust
Dated: May 12, 1997
