What changed in this filing

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Item 7. Management’s Discussion and Analysis

2025-12-29 compared with 2024-12-31 · 94 added, 81 removed, 65 unchanged (73% of the section changed)

10 unchanged sentences

All inter-segment transactions were eliminated.

Additional detail about each of the reportable segments and the Company’s corporate income and expenses is set forth below:

Overall Financial Results (000)

Additional details about each of the reportable segments and the Company’s corporate income and expenses are set forth below:

Overall Financial Results (in thousands)

For the twelve months ended September 30

Reportable Segments

Traditional Business

Journal Technologies

Advertising service fees and other

4 unchanged sentences

Operating expenses

Salaries and employee benefits

Stock-based compensation

(Decrease) increase to the long-term Supplemental compensation accrual

Other segment items*

Total operating expenses

1 unchanged sentence

Dividends and interest income

Interest expenses on note payable collateralized by real estate and other

Interest expense on margin loans

Gains on sales of capital assets

Interest expense

Net realized and unrealized gains on marketable securities

Net unrealized gains (losses) on non-qualified deferred compensation plan

Pretax income

Income tax expense

Capital expenditures

Fiscal 2024 compared with fiscal 2023

Consolidated Financial Comparison

Consolidated revenues were $69,931,000 and $67,709,000 for fiscal 2024 and 2023, respectively.

This increase of $2,222,000 (3%) was primarily from increases in (i) Journal Technologies’ license and maintenance fees of $4,762,000, and other public service fees of $1,577,000, partially offset by decreased consulting fees of $4,690,000, and (ii) the Traditional Business’ advertising revenues of $370,000 and advertising service fees and other of $144,000.

Approximately 76% of the Company’s revenues during fiscal 2024 and 2023 were derived from Journal Technologies.

In addition, the Company’s revenues during fiscal 2024 were primarily from the United States, with approximately $6,153,000 (9%) from foreign countries.

Income tax benefit (expense)

* Other segment items within net income include rental income, net unrealized gains on non-qualified compensation plan, interest expense on note payable collateralized by real estate, decrease in fair value of derivative asset, agency commissions, outside services, postage and delivery expenses, newsprint and printing expenses, depreciation and amortization, equipment maintenance and software, credit card merchant discount fees, rent expenses, accounting and legal fees, and other general and administrative expenses.

Comparison of the fiscal year ended September 30, 2025 to the fiscal year ended September 30, 2024

Consolidated Financials Comparison

Consolidated revenues were $87.7 million and $69.9 million for fiscal years 2025 and 2024, respectively.

This increase of $17.8 million (25%) was primarily from increases in (i) Journal Technologies’ consulting fees of $7.6 million, other public service fees of $5.7 million, and license and maintenance fees of $3.5 million, and (ii) the Traditional Business’ advertising revenues of $0.7 million.

Approximately 80% of our revenues during fiscal years 2025 and 2024 were derived from Journal Technologies.

In addition, our revenues during fiscal year 2025 were primarily from the United States, with approximately $10.0 million (11%) from foreign countries.

Almost all of Journal Technologies’ revenues are from governmental agencies.

Consolidated operating expenses increased by $4,804,000 (8%) to $65,861,000 from $61,057,000.

Total salaries and employee benefits increased by $3,728,000 (9%) to $47,178,000 from $43,450,000 primarily due to the annual salary adjustments and the hiring of additional staff members to strengthen operational efficiencies, conduct product development and address technical debt, and bolster teams working on the Company’s installation projects.

Outside services increased by $383,000 (6%) to $7,151,000 from $6,768,000 mainly because of additional contractor services and increased third-party hosting fees which were billed to clients.

Equipment and maintenance and software went up by $259,000 (20%) to $1,574,000 from $1,315,000 primarily because of purchases of additional equipment for new hires.

Accounting and legal fees increased by $86,000 (9%) to $1,026,000 from $940,000 primarily resulting from increased legal fees.

Other general and administrative expenses decreased slightly by $25,000 (2%) to $3,851,000 from $3,876,000 mainly because there were decreased business travel expenses as compared to the prior fiscal year, partially offset by the purchase of directors and officers insurance and additional accruals for the directors’ stipends.

The Company’s non-operating income, net of expenses, increased by $78,758,000 (367%) to $100,208,000 from $21,450,000 in the prior fiscal year primarily because of the recording of net realized and unrealized gains on marketable securities of $96,142,000 as compared with $17,446,000 in the prior fiscal year.

These increases were partially offset by a decrease in dividends and interest income of $1,238,000 (15%) to $7,102,000 from $8,340,000.

During fiscal 2024, the Company’s consolidated pretax income was $104,278,000, as compared to $28,102,000 in the prior fiscal year.

There was consolidated net income of $78,113,000 ($56.73 per share) for fiscal 2024, as compared with $21,452,000 ($15.58 per share) in the prior fiscal year.

At September 30, 2024, the aggregate fair market value of the Company’s marketable securities was $358,691,000.

These securities had approximately $219,597,000 of net unrealized gains before taxes of $57,100,000.

Consolidated operating expenses increased by $12.3 million (19%) to $78.1 million from $65.9 million.

Total salaries and employee benefits increased by $3.4 million (7%) to $50.6 million from $47.2 million primarily due to annual salary adjustments and the hiring of additional staff members to strengthen operational efficiencies, conduct product development and address technical debt, and bolster teams working on our installation projects.

Outside services increased by $0.9 million (13%) to $8.1 million from $7.2 million mainly because of additional contractor services and increased third-party hosting fees which were billed to clients.

Accounting and legal fees increased by $0.4 million (36%) to $1.4 million from $1.0 million primarily resulting from increased accounting advisory and legal fees primarily associated with the remediation of material weaknesses in our internal controls.

Our other income, net of expenses, rose by $40.4 million (40%) to $140.6 million from $100.2 million in the previous fiscal year.

This increase was primarily driven by unrealized gains on marketable securities, totaling $134.3 million compared to $96.1 million, which included realized gains of $14.3 million, as well as a reduction in interest expense by $1.7 million (55%) to $1.4 million from $3.1 million, after our repayment of $5.5 million against the outstanding balance during the fiscal year ended September 30, 2025.

During fiscal year 2025, our consolidated pretax income was $150.1 million, as compared to $104.3 million in the prior fiscal year.

Consolidated net income was $112.1 million ($81.41 per both basic and diluted shares, respectively) for fiscal year 2025, as compared with $78.1 million ($56.73 per share) in the prior fiscal year.

As of September 30, 2025, the aggregate fair market value of the Company’s marketable securities was $493.0 million.

These securities had approximately $353.9 million of cumulative unrealized gains before taxes of $91.4 million.

Most of the unrealized gains were in the common stocks of three U.S.

financial institutions and one foreign manufacturer.

During fiscal 2024, the Company recorded an income tax provision of $26,165,000 on pretax income of $104,278,000.

The income tax provision consisted of tax expenses of $24,534,000 on the realized and unrealized gains on marketable securities, and $2,175,000 on operating income, partially offset by a tax benefit of $544,000 for the dividends received deduction and other permanent differences.

Consequently, the overall effective tax rate for fiscal 2024 was 25.1%, after including the taxes on the realized and unrealized gains on marketable securities.

During fiscal 2023, the Company recorded an income tax provision of $6,650,000 on pretax income of $28,102,000.

The income tax provision consisted of tax provisions of $4,250,000 on the realized and unrealized gains on marketable securities, and $2,803,000 on operating income, partially offset by a tax benefit of $403,000 for the dividends received deduction and other permanent differences.

Consequently, the overall effective tax rate for fiscal 2023 was 23.7%, after including the taxes on the realized and unrealized gains on marketable securities.

The Company files consolidated federal income tax returns, with its domestic subsidiary, in the United States and with various state jurisdictions and is no longer subject to examinations for fiscal years before fiscal 2020 with regard to federal income taxes and fiscal 2019 for state income taxes.

During fiscal year 2025, the Company recorded an income tax provision of $38.0 million on pretax income of $150.1 million.

The income tax provision consisted of tax expense of $34.3 million on unrealized gains on marketable securities, and $4.2 million on operating income, partially offset by a tax benefit of $0.5 million for the dividends received deduction and other permanent differences.

Consequently, the overall effective tax rate for fiscal year 2025 was 25.3%, after including the taxes on the unrealized gains on marketable securities.

During fiscal year 2024, the Company recorded an income tax provision of $26.2 million on pretax income of $104.3 million.

The income tax provision consisted of tax expense of $24.5 million on the realized and unrealized gains on marketable securities, and $2.2 million on operating income, partially offset by a tax benefit of $0.5 million for the dividends received deduction and other permanent differences.

Consequently, the overall effective tax rate for fiscal year 2024 was 25.1%, after including the taxes on the realized and unrealized gains on marketable securities.

The Company files consolidated federal income tax returns, with its domestic subsidiary, in the United States and with various state jurisdictions and is no longer subject to examinations for fiscal years before fiscal year 2020 with regard to federal income taxes and fiscal year 2019 for state income taxes.

The Canadian subsidiary files a federal and provincial tax return in Canada.

The Traditional Business

The Traditional Business’ pretax income decreased by $102,000 (6%) to $1,579,000 from $1,681,000 in the prior fiscal year.

This decrease was primarily resulting from increased merchant discount fees, additional promotional expenses, postage, and press repairs and maintenance.

During fiscal 2024, the Traditional Business had total operating revenues of $16,826,000, as compared with $16,253,000 in the prior fiscal year.

Advertising revenues increased by $370,000 (4%) to $9,325,000 from $8,955,000, primarily resulting from increased commercial advertising revenues of $286,000, legal notice advertising revenues of $45,000, and trustee sale notice advertising revenues of $86,000, partially offset by decreased government notice advertising revenues of $47,000.

Trustee sale notices are very much dependent on the number of California and Arizona foreclosures for which public notice advertising is required by law.

The number of foreclosure notices published by the Company decreased slightly by 1% during fiscal 2024 as compared to the prior fiscal year.

The Company’s smaller newspapers, those other than the Los Angeles and San Francisco Daily Journals (“The Daily Journals”), accounted for about 86% of the total public notice advertising revenues during the fiscal 2024.

Public notice advertising revenues and related advertising and other service fees, including trustee sales legal advertising revenues, constituted about 14% of the Company's total operating revenues for both fiscal 2024 and fiscal 2023.

The Daily Journals accounted for about 94% of the Traditional Business’ total circulation revenues, which increased by $59,000 (1%) to $4,462,000 from $4,403,000.

The court rule and judicial profile services generated about 4% of the total circulation revenues, with the other newspapers and services accounting for the balance.

Advertising service fees and other are Traditional Business segment revenues, which include primarily (i) agency commissions received from outside newspapers in which the advertising is placed, and (ii) fees generated when filing notices with government agencies.

The Traditional Business segment operating expenses, excluding the adjustments to the long-term supplemental compensation accrual, increased by $700,000 (5%) to $15,742,000 from $15,042,000, primarily resulting from increased merchant discount fees, additional promotional expenses, postage, and press repairs and maintenance.

Journal Technologies

During fiscal 2024, Journal Technologies’ business segment pretax income decreased by $2,480,000 (50%) to $2,491,000 from $4,971,000 in the prior fiscal year primarily resulting from increased operating expenses of $4,129,000, which were partially offset by increased operating revenues of $1,649,000.

Revenues increased by $1,649,000 (3%) to $53,105,000 from $51,456,000 in the prior fiscal year.

Licensing and maintenance fees increased by $4,762,000 (20%) to $28,265,000 from $23,503,000.

Consulting fees decreased by $4,690,000 (24%) to $15,086,000 from $19,776,000 mainly due to fewer project go-lives.

Other public service fees increased by $1,577,000 (19%) to $9,754,000 from $8,177,000 primarily because of increased e-filing fee revenues.

During fiscal year 2025, Journal Technologies’ business segment pretax income increased by $10.2 million (408%) to $12.7 million from $2.5 million in the prior fiscal year primarily resulting from increased revenue of $16.8 million, which were partially offset by increased operating expenses of $6.7 million.

Revenues increased by $16.8 million (32%) to $69.9 million from $53.1 million in the prior fiscal year.

Licensing and maintenance fees increased by $3.5 million (12%) to $31.7 million from $28.3 million.

Consulting fees increased by $7.6 million (51%) to $22.7 million from $15.1 million mainly due to timing of deferred revenue recognition and more project go-lives.

Other public service fees increased by $5.7 million (59%) to $15.5 million from $9.8 million primarily because of increased e-filing fee revenues.

Deferred consulting fees primarily represent advances from customers of Journal Technologies for installation services and are recognized upon final project go-lives.

Deferred revenues on license and maintenance contracts represent prepayments of annual license and maintenance fees and are recognized ratably over the maintenance periods.

Operating expenses increased by $4,129,000 (9%) to $50,614,000 from $46,485,000 primarily because of (i) increased personnel costs because of annual salary adjustments, (ii) additional contractor services and the hiring of additional staff members to strengthen operational efficiencies, conduct product development and address technical debt, and bolster teams working on the Company’s installation projects, and (iii) increased third-party hosting fees which were billed to clients.

Journal Technologies continues to update and upgrade its software products, which includes work deemed necessary by management to strengthen and update aspects like user experience, documentation, and ease of ongoing customer upgrades (which should correspondingly reduce costs for Journal Technologies over the longer term).

These costs are expensed as incurred and will impact earnings at least through the foreseeable future.

Impact of the COVID-19 Pandemic

Although the World Health Organization has declared an end to the COVID-19 emergency, enduring changes in society and the ability to perform project work resulting from efforts to contain the COVID-19 pandemic may have continuing effects on the Company’s business and margins until projects from this era are completed and invoiced.

For example, for Journal Technologies, although we were able to complete many existing projects remotely, we were delayed in finishing certain implementations and trainings because of our inability to work with clients in-person.

Given that we are typically paid for implementation services upon “go-live” of a system, recognition of those revenues has been delayed and in some cases costs have increased.

This can also create a risk of contract cancellations for in-progress projects.

Operating expenses increased by $6.7 million (13%) to $57.3 million from $50.6 million primarily due to:

(i) increased personnel costs because of annual salary adjustments, (ii) additional contractor services and the hiring of additional staff members to strengthen operational efficiencies, conduct product development and address technical debt, and bolster teams working on the Company’s installation projects, and (iii) increased third-party hosting fees which were billed to clients.

Traditional Business

The Traditional Business’ pretax income decreased by $2.1 million (108%) to a pretax loss of $0.2 million from pretax income of $2.0 million in the prior fiscal year.

This decrease was primarily resulting from an increase in long-term supplemental compensation accrual, increased personnel costs, additional merchant discount fees, and promotional expenses.

During fiscal year 2025, the Traditional Business had total revenues of $17.8 million, up from $16.8 million in the prior fiscal year.

Advertising revenues increased by $0.8 million (8%) to $10.1 million from $9.3 million, primarily resulting from increased commercial advertising revenues of $0.5 million, legal notice advertising revenues of $0.2 million, and trustee sale notice advertising revenues of $0.1 million.

Trustee sale notices are very much dependent on the number of California and Arizona foreclosures for which public notice advertising is required by law.

The number of foreclosure notices published by the Company during fiscal year 2025 remained consistent as compared to the prior fiscal year.

The Company’s smaller newspapers, those other than the Los Angeles and San Francisco Daily Journals (“The Daily Journals”), accounted for approximately 84% of the total public notice advertising revenues during fiscal year 2025.

The Daily Journals accounted for approximately 94% of the Traditional Business’ total circulation revenues, which decreased by $0.2 million (4%) to $4.3 million from $4.5 million.

The court rule and judicial profile services generated approximately 4% of the total circulation revenues, with the other newspapers and services accounting for the balance.

The Traditional Business segment operating expenses increased by $3.0 million (21%) to $17.9 million from $14.9 million, primarily resulting from increased personnel costs, merchant discount fees, additional promotional expenses, and accounting advisory fees primarily associated with the remediation of material weaknesses in our internal controls.

Liquidity and Capital Resources

During fiscal 2024, the Company’s cash and cash equivalents, restricted cash, and marketable security positions increased by $47,796,000 after the recording of net pretax unrealized gains on marketable securities of $81,881,000.

In March 2024, the Company sold a portion of its marketable securities for approximately $40,579,000.

Cash and cash equivalents as well as proceeds from this sale were primarily used to pay down the margin loan balance by $47,500,000.

The investments in marketable securities, which had an adjusted cost basis of approximately $139,094,000 and a market value of about $358,691,000 at September 30, 2024, generated approximately $7,102,000 in dividends and interest income during fiscal 2024.

These securities had approximately $219,597,000 of net unrealized gains before estimated taxes of $57,100,000 which will become due only when we sell securities in which there is unrealized appreciation.

The balance on the Company’s margin loan secured by the securities portfolio was $27,500,000 and $75,000,000 at September 30, 2024, and September 30, 2023, respectively.

Cash flows from operating activities decreased by $15,173,000 during fiscal 2024, as compared to the prior fiscal year, primarily due to (i) increases in the Company’s income tax receivable of $1,052,000, (ii) decreases in accounts payable of $2,175,000, income taxable payable of $2,138,000, deferred revenues of $6,767,000, accrued liabilities of $1,840,000, including non-qualified deferred compensation, and net income of $18,855,000, excluding the increases in realized and unrealized gains on marketable securities of $78,696,000, and a decrease in stock dividends of $2,978,000.

This was partially offset by decreases in the Company’s accounts receivable of $1,224,000 and increases in deferred income tax payable of $16,716,000.

As of September 30, 2024, the Company had working capital of $356,052,000, including the liabilities for deferred subscriptions, deferred consulting fees and deferred maintenance agreements and others of $23,713,000.

The Company believes that it will be able to fund its operations for the foreseeable future through its cash flows from operations and its current working capital and expects that any such cash flows will be invested in its businesses.

The Company may or may not have the ability to borrow additional amounts against its marketable securities and, among other possibilities, it may be required to consider selling additional securities to generate cash if needed to fund ongoing operations.

The amount available for borrowing is based on the market value of the Company’s investment portfolio and fluctuates depending on the value of the underlying securities.

In addition, the Company could be subject to margin calls should the balance of the investment decrease significantly.

The Company is not a smaller version of Berkshire Hathaway Inc.

The Company’s goal is simply to continue to develop a successful and profitable software business, while continuing to enjoy the benefit of its Traditional Business for as long as possible.

During fiscal year 2025, the Company's cash and cash equivalents, restricted cash, and marketable securities increased by $142.0 million, reflecting net pretax unrealized gains on marketable securities of $134.3 million.

The investments in marketable securities, which had an adjusted cost basis of approximately $139.1 million and a market value of approximately $493.0 million as of September 30, 2025, generated approximately $7.4 million in dividends and interest income during fiscal year 2025.

These securities had approximately $353.9 million of cumulative unrealized gains before estimated taxes of $91.4 million which will become due only when we sell securities in which there is unrealized appreciation.

No marketable securities were sold during fiscal year 2025.

The margin loan principal balance was paid down by $5.5 million using excess cash from operations.

In fiscal year 2024, marketable securities totaling approximately $40.6 million were sold to pay down the margin loan balance by $47.5 million.

The loan balance was $22 million and $27.5 million as of September 30, 2025, and 2024, respectively.

As of September 30, 2025, we had working capital of $500.4 million, including the liabilities for deferred subscriptions, deferred consulting fees and deferred maintenance agreements and others of $18.7 million.

We believe that we will be able to fund our operations for the foreseeable future through our cash flows from operations and our current working capital, and we expect that any such cash flows will be invested in our businesses.

We may or may not have the ability to borrow additional amounts against our marketable securities and, among other possibilities, we may be required to consider selling securities to generate cash if needed to fund ongoing operations.

The amount available for borrowing is based on the market value of our investment portfolio and fluctuates depending on the value of the underlying securities.

In addition, we could be subject to margin calls should the value of the investments decrease significantly.

The following table sets forth the primary sources and uses of cash and cash equivalents for each of the periods presented below (in thousands):

September 30, 2025

September 30, 2024

Net cash provided by (used in):

Operating activities

Investing activities

Financing activities

Net increase (decrease) in cash and cash equivalents

Operating Activities

In fiscal year 2025, net cash provided by operating activities consisted of net income of $112.1 million, less non-cash items of $99.2 million and cash used for working capital of $0.4 million.

Adjustments for non-cash items consist primarily of $134.3 million in unrealized gains on our marketable securities, $34.7 million change in our deferred tax provision, $0.3 million of depreciation and amortization expense, and $0.1 million of stock-based compensation expense.

The decrease in cash from changes in working capital is primarily due to a $1.8 million increase in accounts receivable, a $0.2 million increase in prepaid expenses and other assets, a $0.9 million increase in income tax payable, and a $5.4 million decrease in deferred revenue, including deferred subscription, consulting fees, and maintenance agreements, partially offset by a $1.0 million increase in accounts payable and a $5.9 million increase in accrued liabilities, including non-qualified deferred compensation.

In fiscal year 2024, net cash used in operating activities totaled $0.1 million, consisting of net income of $78.1 million, less non-cash items of $73.6 million and cash used for working capital of $4.6 million.

Adjustments for non-cash items consist primarily of $96.1 million in net realized and unrealized gains on our marketable securities, a $22.0 million change in our deferred tax provision, $0.3 million of depreciation and amortization expense, and a $0.2 million of stock-based compensation expense.

The decrease in cash from changes in working capital is primarily due to a $0.5 million increase in accounts receivable, a $0.2 million increase in prepaid expenses and other assets, a $0.6 million decrease in accounts payable, a $0.2 million decrease in accrued liabilities, a $1.1 million decrease in income tax payable, and a $2.0 million decrease in deferred revenue, including deferred subscription, consulting fees, and maintenance agreements.

Investing Activities

In fiscal year 2025, net cash used for investing activities was negligible.

In fiscal year 2024, net cash provided by investing activities was $40.5 million, primarily related to $40.6 million in proceeds from sales of marketable securities, partially offset by $0.1 million in purchases of property and equipment purchases and capital asset sales.

Financing Activities

During fiscal year 2025, net cash used in financing activities totaled $5.7 million, which primarily consisted of a $5.5 million repayment on the outstanding principal of the investment margin loan and a $0.2 million principal payment on the real estate loan.

During fiscal year 2024, net cash used in financing activities totaled $47.7 million, which primarily consisted of a $47.5 million repayment on the outstanding principal of the investment margin loan and a $0.2 million principal payment on the real estate loan.

Critical Accounting Policies and Estimates

3 unchanged sentences

These estimates and assumptions are affected by management’s application of accounting policies.

Management believes that revenue recognition, accounting for software costs, fair value measurement and disclosures (including the long-term Incentive Plan liabilities) and income taxes are critical accounting policies and estimates.

Management believes that revenue recognition, accounting for software costs, fair value and income taxes are critical accounting policies.

Critical accounting estimates include fair value measurements and the long-term supplemental compensation accrual.

The Company recognizes revenues in accordance with the provisions of ASU No.

10 unchanged sentences

Other public service fees are earned and recognized as revenues when the Company processes credit card payments on behalf of the courts via its websites through which the public can e-file cases and pay traffic citations and other fees.

ASC 985-20, Accounting for the Costs of Computer Software to be Sold, Leased, or Otherwise Marketed , provides that costs related to the research and development of a new software product are to be expensed as incurred until the technological feasibility of the product is established.

Accordingly, costs related to the development of new software products are expensed as incurred until technological feasibility has been established, at which time such costs are capitalized, subject to expected recoverability.

In general, “technological feasibility” is achieved when the developer has established the necessary skills, hardware and technology to produce a product and a detailed program design has been (i) completed, (ii) traced to the product specifications and (iii) reviewed for high-risk development issues.

If there is no program design completed, technological feasibility is reached upon the completion of a working model.

Capitalization of software development costs ceases and amortization of capitalized software development costs (if any) commences when the products are available for general release.

The Company believes its process for developing software is essentially completed concurrent with the establishment of technological feasibility, and accordingly, no software development costs have been capitalized to date.

3 unchanged sentences

During that time, all of the Company’s investments have been quoted on public markets and, therefore, all fair value calculations have been based on Level 1 measurements.

The estimated Incentive Plan’s future commitment is calculated using Level 3 inputs, based on an average of the prior fiscal year (fiscal 2023) and the current year’s pretax earnings before certain items, discounted to the present value at 6% since each granted Incentive Plan Unit will expire over its remaining life term of up to 10 years.

ASC 710, Compensation—General , requires the Company to recognize compensation cost for its Management Incentive Plan over the requisite service period based on the estimated obligation attributable to services rendered to date.

The estimated future commitment under the Incentive Plan is calculated using management’s best estimates, which include assumptions related to future pretax earnings before certain items, based on an average of the prior fiscal year and the current year.

The resulting estimated obligation is discounted to present value at a rate of 6%, reflecting the time value of money, as each granted Management Incentive Plan award may remain outstanding over a remaining life of up to 10 years.

Changes in estimates of the expected payout or timing of payments are recognized prospectively as adjustments to compensation expense in the period of change.

ASC 740, Income Taxes , establishes financial accounting and reporting standards for the effect of income taxes.

8 unchanged sentences

The above discussion and analysis should be read in conjunction with the consolidated financial statements and the notes thereto included in this report.

Quantitative and Qualitative Disclosures About Market Risk.

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as amended, or the Exchange Act, and are not required to provide the information required under this item.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis