DAILY JOURNAL CORP 10-K

Item 8. Financial Statements and Supplementary Data Daily Journal Corporation Index to Consolidated Financial Statements Audited Consolidated Financial Statements Page Report of Independent Registered Public Accounting Firm (PCAOB ID: 23 ) 26 Consolidated Balance Sheets 28 Consolidated Statements of Operations and Comprehensive Loss 29 Consolidated Statements of Stockholders’ Equity 30 Consolidated Statements of Cash Flows 31 Notes to Consolidated Financial Statements 32 23 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the shareholders and the board of directors of Daily Journal Corporation: Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Daily Journal Corporation (the “Company”) as of September 30, 2025 and 2024, the related consolidated statements of comprehensive income, stockholders’ equity, and cash flows for each of the years then ended, and the related notes to the consolidated financial statements (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of September 30, 2025 and 2024, and the results of its operations and its cash flows for each of the years then ended, in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company's consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates. DETERMINATION OF PERFORMANCE OBLIGATIONS AND REVENUE RECOGNITION IN SOFTWARE REVENUE CONTRACTS Critical Audit Matter Description As discussed in Note 2 to the consolidated financial statements, the Journal Technologies segment generates revenues from contracts related to the sale of products and services including subscription software licenses, maintenance and support, implementation consulting services, and hosting services. The Company recognizes revenues for these services when or as the performance obligations are satisfied. 24 We identified the Company’s determination of distinct performance obligations in software revenue contracts and their effect on revenue recognition as a critical audit matter. Auditing the Company’s determination of distinct performance obligations related to its subscription software license products, maintenance and support services, implementation consulting services, and hosting services involved complex auditor judgment. In particular, significant judgment was required when assessing whether the promised products and services are separate performance obligations or inputs to a combined performance obligation, due to the evaluation of the interdependency or interrelation of the promised products and services within each contract. How We Addressed the Matter in Our Audit The primary procedures we performed to address this critical audit matter included: ● Obtaining an understanding of the Company’s revenue recognition policy and evaluated for appropriateness. ● Evaluating the design and implementation of internal controls related to the Company’s revenue recognition process. ● Evaluating whether services promised by the Company meet the criteria to be identified as separate or combined performance obligations, through a review of contracts, discussions with management, and inquiries of personnel outside the accounting function to corroborate our understanding of certain terms and conditions present in the contracts. More specifically, we evaluated the Company’s determination of whether the contract was to deliver (1) multiple promised products or services that constitute separate performance obligations or (2) a single performance obligation that is comprised of the combined products or services. ● Testing a sample of software revenue contracts for proper revenue recognition by inspecting the underlying customer agreements and supporting documentation, and evaluating for consistency with the Company’s revenue recognition policies. /s/ Baker Tilly US, LLP We have served as the Company’s auditor since 2016. Irvine, California December 29, 2025 25 DAILY JOURNAL CORPORATION CONSOLIDATED BALANCE SHEETS (In thousands except share amounts) September 30, 2025 September 30, 2024 ASSETS Current assets: Cash and cash equivalents $ 20,569 $ 12,986 Restricted cash 2,269 2,191 Non-qualified deferred compensation plan – trust account asset value 1,385 748 Marketable securities at fair value 492,995 358,691 Accounts receivable, net 21,011 19,219 Prepaid expenses and other current assets 959 660 Total current assets 539,188 394,495 Property and equipment, net 8,930 9,268 Total assets $ 548,118 $ 403,763 LIABILITIES AND STOCKHOLDERS ’ EQUITY Current liabilities: Accounts payable $ 7,071 $ 6,049 Accrued liabilities 12,518 8,517 Note payable collateralized by real estate 169 164 Income taxes 879 — Deferred subscriptions 2,474 2,558 Deferred consulting fees 1,747 2,031 Deferred maintenance agreements and others 13,948 19,124 Total current liabilities 38,806 38,443 Investment margin account borrowings 22,000 27,500 Long-term note payable collateralized by real estate 787 956 Long-term deferred maintenance agreements 994 883 Long-term accrued liabilities 5,547 3,772 Accrued non-qualified deferred compensation 1,590 784 Deferred income taxes 87,333 52,641 Total liabilities 157,057 124,979 Commitments and contingencies (Note 10) Stockholders’ Equity Common stock, $ .01 par value, 5,000,000 shares authorized; 1,805,053 shares issued and outstanding, and 427,627 treasury shares, as of September 30, 2025, and 2024, respectively 14 14 Additional paid-in capital 2,097 1,957 Retained earnings 388,950 276,813 Total stockholders’ equity 391,061 278,784 Total liabilities and stockholders’ equity $ 548,118 $ 403,763 The accompanying notes are an integral part of these consolidated financial statements. 26 DAILY JOURNAL CORPORATION CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (in thousands, except share and per share amounts) September 30, 2025 September 30, 2024 Revenues Advertising $ 10,081 $ 9,325 Circulation 4,269 4,462 Advertising service fees and other 3,412 3,039 Licensing and maintenance fees 31,720 28,265 Consulting fees 22,735 15,086 Other public service fees 15,483 9,754 Total revenues 87,700 69,931 Operating expenses: Salaries and employee benefits 55,551 47,178 Stock-based compensation 140 202 Increase (decrease) to the long-term supplemental compensation accrual 1,775 ( 495 ) Agency commissions 1,277 1,146 Outside services 8,087 7,151 Postage and delivery expenses 774 752 Newsprint and printing expenses 639 669 Equipment maintenance and software 1,542 1,574 Credit card merchant discount fees 2,308 2,237 Accounting and legal fees 1,392 1,026 Other general and administrative expenses 4,687 4,421 Total operating expenses 78,172 65,861 Income from operations 9,528 4,070 Other income (expenses) Dividends and interest income 7,459 7,102 Net realized and unrealized gains on marketable securities 134,304 96,142 Net unrealized (losses) gains on non-qualified compensation plan 64 47 Interest expense ( 1,381 ) ( 3,087 ) Other income 113 4 Income before taxes 150,087 104,278 Income tax provision ( 37,950 ) ( 26,165 ) Net income and comprehensive income $ 112,137 $ 78,113 Weighted average number of common shares outstanding – basic 1,377,426 1,377,026 Basic net income per share $ 81.41 $ 56.73 Weighted average number of common shares outstanding – diluted 1,377,503 1,377,026 Diluted net income per share $ 81.41 $ 56.73 The accompanying notes are an integral part of these consolidated financial statements. 27 DAILY JOURNAL CORPORATION CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (in thousands, except share amounts) Common Stock Treasury Stock Additional Retained Total Stockholders’ Share Amount Share Amount Paid-in Capital Earnings Equity Balance as of September 30, 2023 1,805,053 $ 18 $ ( 428,027 ) $ ( 4 ) $ 1,755 $ 198,700 $ 200,469 Issuance of treasury stock — — 400 — 202 — 202 Net income — — — — — 78,113 78,113 Balance as of September 30, 2024 1,805,053 18 ( 427,627 ) ( 4 ) 1,957 276,813 278,784 Stock-based compensation — — — — 140 — 140 Net income — — — — — 112,137 112,137 Balance as of September 30, 2025 1,805,053 $ 18 $ ( 427,627 ) $ ( 4 ) $ 2,097 $ 388,950 $ 391,061 The accompanying notes are an integral part of these consolidated financial statements. 28 DAILY JOURNAL CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) September 30, 2025 September 30, 2024 Cash flows from operating activities Net income $ 112,137 $ 78,113 Adjustments to reconcile net income to net cash provided by (used in) operating activities Stock-based compensation 140 202 Depreciation and amortization 257 267 Gains on sales of capital assets — ( 4 ) Net realized and unrealized gains on marketable securities ( 134,304 ) ( 96,142 ) Deferred income taxes 34,692 22,042 Changes in operating assets and liabilities; Accounts receivable, net ( 1,792 ) ( 532 ) Prepaid expenses and other assets ( 210 ) ( 239 ) Accounts payable 1,022 ( 594 ) Accrued liabilities, including non-qualified deferred compensation 5,945 ( 190 ) Income tax payable 879 ( 1,069 ) Deferred subscriptions ( 84 ) ( 120 ) Deferred consulting fees ( 284 ) ( 3,797 ) Deferred maintenance agreements and others ( 5,065 ) 1,974 Net cash provided by (used in) operating activities 13,333 ( 89 ) Cash flows from investing activities Proceeds from sales of marketable securities — 40,579 Proceeds on sales of capital assets — 4 Purchases of property, plant and equipment, net ( 8 ) ( 49 ) Net cash (used in) provided by investing activities ( 8 ) 40,534 Cash flows from financing activities Payments to margin loan borrowing ( 5,500 ) ( 47,500 ) Payments of real estate loan principal ( 164 ) ( 158 ) Net cash used in financing activities ( 5,664 ) ( 47,658 ) Net increase (decrease) in cash and cash equivalents and restricted cash 7,661 ( 7,213 ) Cash and cash equivalents and restricted cash at beginning of period Cash and cash equivalents 12,986 20,844 Restricted cash 2,191 2,294 Cash and cash equivalents at end of period $ 22,838 $ 15,731 Interest paid during year $ 1,381 $ 3,050 Income taxes paid during year 2,253 $ 5,128 The accompanying notes are an integral part of these consolidated financial statements. 29 DAILY JOURNAL CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In thousands, except share data) Note 1. The Corporation and Operations Daily Journal Corporation publishes newspapers and websites covering California and Arizona and produces several specialized information services. It also serves as a newspaper representative specializing in public notice advertising (the “Traditional Business”). The Daily Journal Corporation, along with its wholly owned subsidiaries, are referred to as the “Company” or “Daily Journal”. Journal Technologies, Inc. (“Journal Technologies”), a wholly owned subsidiary of Daily Journal, supplies case management software systems and related products to courts, prosecutor and public defender offices, probation departments and other justice agencies, including administrative law organizations, city and county governments and bar associations. These organizations use the Journal Technologies family of products to help manage cases and information electronically, to interface with other critical justice partners and to extend electronic services to the public, including e-filing and a website to pay traffic citations and fees online. These products are licensed or subscribed to in approximately 37 states and internationally. Essentially all of the Company’s U.S. operations are based in California and Utah. The Company also has a presence in Australia where Journal Technologies is working on four software installation projects and in British Columbia, Canada, where the Company has operated a wholly-owned subsidiary, Journal Technologies (Canada), Inc. since August 2022. Note 2. Significant Accounting Policies Basis of Presentation The consolidated financial statements include the accounts of Daily Journal and its wholly owned subsidiaries. All intercompany transactions have been eliminated in consolidation. Concentrations of Credit Risk Financial instruments that potentially subject the Company to concentration of credit risk consist of cash, cash equivalents, restricted cash, marketable securities and accounts receivable. The Company’s cash, cash equivalents and restricted cash are held at financial institutions where account balances may at times exceed federally insured limits. The Company limits its exposure by primarily placing its cash in interest-bearing deposit accounts with high credit quality financial institutions and marketable securities. Management believes the Company is not exposed to significant credit risk due to the financial strength of the depository institutions in which the cash, cash equivalents and restricted cash held. The Company has no financial instruments with off-balance sheet risk of loss. Use of Estimates The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Estimates and assumptions made by management include, but are not limited to, the estimated fair values of marketable securities, management incentive plans, equity awards, and the accounting for income taxes. Actual results could differ materially from those estimates. Cash Equivalents The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. Restricted Cash The Company considers cash to be restricted when withdrawal or general use is legally restricted. Restricted cash of $ 2.3 million and $ 2.2 million as of September 30, 2025 and 2024, respectively, represents cash held to secure two letters of credit issued by a bank for a software installation contract in Australia. 30 Accounts receivable, net The Company extends unsecured credit to most of its advertising customers. The Company recognizes that extending credit and setting appropriate reserves for receivables is largely a subjective decision based on knowledge of the customer and the industry. Credit limits, setting and maintaining credit standards, and managing the overall quality of the credit portfolio is largely centralized. The level of credit is influenced by the customer’s credit and payment history which the Company monitors when establishing a reserve. The change in accounts receivable, net, is as follows (in thousands): Description Accounts receivable, net Balance as of September 30, 2023 $ 18,687 Increase (decrease), net 532 Balance as of September 30, 2024 19,219 Increase (decrease), net 1,792 Balance as of September 30, 2025 $ 21,011 The Company maintains the reserve account for estimated losses resulting from the inability of its customers to make required payments. If the financial condition of its customers were to deteriorate or its judgments about their abilities to pay are incorrect, additional allowances might be required and its results of operations could be materially affected. The change in allowance for expected credit losses is as follows: Allowance for Credit Losses (in thousands) Description Balance at Beginning of Year Additions charged to Costs and Expenses Accounts charged off less Recoveries Balance at End of Year Fiscal 2025 Allowance for credit losses $ 250 $ 14 $ ( 14 ) $ 250 Fiscal 2024 Allowance for credit losses $ 250 $ 5 $ ( 5 ) $ 250 Property, plant and equipment, net Property, plant and equipment are carried on the cost basis, and depreciated using the straight-line method for financial statements and accelerated method for tax purposes. The useful lives of property, plant and equipment are as follows: Assets Useful life (years) Land Indefinite Buildings and improvements 5 - 39 Furniture, office equipment and computer software 3 - 5 Machinery and equipment 3 - 10 Leasehold improvements Shorter of estimated life or lease term Depreciation and amortization expenses were $ 0.3 million and $ 0.3 million for fiscal years 2025 and 2024, respectively. Significant expenditures which extend the useful lives of existing assets are capitalized. Maintenance and repair costs are expensed as incurred. Gains or losses on dispositions of assets are reflected in current earnings. Impairment of Long-Lived Assets The Company reviews its depreciable long-lived assets, such as property and equipment, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss may be recognized when the undiscounted cash flows expected to be generated by a long-lived asset (or asset group) are less than its carrying value. Any required impairment loss would be measured as the amount by which the asset’s (or asset group’s) carrying value exceeds its fair value and would be recorded as a reduction in the carrying value of the related asset and reflected in the consolidated statements of comprehensive income. No impairment charges were recorded on any long-lived assets during the years ended September 30, 2025 and 2024. Journal Technologies ’ Software Development Costs Development costs related to software products for sale or licensing are expensed as incurred until the technological feasibility of the product has been established. Thereafter, until the product is released for sale, software development costs are capitalized and reported at the lower of unamortized cost or net realizable value of the related product. The establishment of technological feasibility and the ongoing assessment of recoverability of costs require considerable judgment by the Company with respect to certain internal and external factors, including, but not limited to, anticipated future product revenue, estimated economic life and changes in hardware and software technology. 31 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. Under the Company’s software development life cycle policy and agile development methodology, technological feasibility is generally established when a working model has been completed and approved through internal quality assurance, which typically occurs late in the development cycle and near the time the software is ready for customer testing and release. As a result, the period between technological feasibility and general release is generally insignificant, and no software development costs have been capitalized to date. Research and development expenses related to software development were $2.5 million and $1.4 million for the years ended September 30, 2025 and 2024, and are included under Salaries and employee benefits on the consolidated statements of comprehensive income. Stock-based compensation The Company expenses the estimated fair value of employee restricted stock units. The compensation cost is based on the grant-date fair value of those awards and is recognized over the service period that the awards are expected to vest. The tax effects related to share-based payments are made through net earnings. See Note 7 for further discussion and related disclosures regarding stock-based compensation. Earnings per share Basic earnings per share is calculated using the Company’s weighted-average outstanding common shares. Diluted earnings per share is calculated using the Company’s weighted-average outstanding common shares including the dilutive effect of stock awards as determined under the treasury stock method. Income taxes The Company accounts for income taxes using an asset and liability approach which requires the recognition of deferred tax liabilities and assets for the expected future consequences of temporary differences between the carrying amounts for financial reporting purposes and the tax basis of the assets and liabilities. The Company accounts for uncertainty in income taxes under ASC 740-10 which prescribes a recognition threshold and measurement methodology to recognize and measure an income tax position taken, or expected to be taken, in a tax return. The evaluation of a tax position is based on a two-step approach. The first step requires an entity to evaluate whether the tax position would “more likely than not” be sustained upon examination by the appropriate taxing authority. The second step requires the tax position be measured at the largest amount of tax benefit that is greater than 50% likely of being realized upon ultimate settlement. In addition, previously recognized benefits from tax positions that no longer meet the new criteria would be derecognized. Leases The Company elected a practical expedient related to lease and non-lease components, as an accounting policy election for all asset classes, which allows a lessee to not separate non-lease from lease components and instead account for consideration paid in a contract as a single lease component. As such, base rent along with any additional fixed costs paid to the landlord are capitalized as part of the right of use (“ROU”) asset. The Company determines if an arrangement is a lease at inception. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most of the Company’s leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available at commencement date of the lease in determining the present value of future payments. The Company has made an accounting policy election not to recognize ROU assets and lease obligations for its short-term leases, which are defined as leases with an initial term of 12 months or less. However, the Company will recognize these lease payments in the consolidated statements of comprehensive income on a straight-line basis over the lease term and variable lease payments in the period in which the obligation is incurred. Lease payments for month-to-month leases are recognized as incurred. See Note 9 for further discussion and related disclosures regarding Leases. Revenue Recognition The Company recognizes revenues in accordance with the provisions of Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (ASC Topic 606). See note 3 for further discussion and related disclosures regarding revenue recognition. For the Traditional Business, proceeds from the sale of subscriptions for newspapers, court rule books and other publications and other services are recorded as deferred revenue and are included in earned revenue only when the services are provided, generally over the subscription term. Advertising service fees and other revenues, which represent primarily agency commissions received from outside newspapers in which the advertising is placed, are recognized when advertisements are published and are recorded on a net basis. 32 Journal Technologies contracts may include several products and services, which are generally distinct and include separate transaction pricing and performance obligations. These revenue contracts include (i) implementation consulting fees to configure the system to go-live, (ii) subscription software license, maintenance (including updates and upgrades) and support fees, and (iii) third-party hosting fees when used. For contracts containing multiple performance obligations, the Company allocates the transaction price on the basis of the relative standalone selling price of each distinct good or service, and utilizes the residual approach to estimate the standalone selling price of implementation consulting fees, whereby the standalone selling price is estimated by reference to the total transaction price less the sum of the observable standalone selling prices of its subscription software licenses, maintenance and support fees, and third-party hosting fees. These contracts include assurance-type warranty provisions for limited periods and do not include financing terms. For most contracts, the Company acts as a principal with respect to certain services, such as data conversion and interfaces. Hosting services are provided with support by third parties, and the company recognizes such revenues and related costs on a gross basis. The Company considers several factors to determine if it controls the good or service before it is transferred to the client and therefore is the principal. These factors include (1) if the Company has primary responsibility for fulfilling the promise and (2) if the Company has discretion in establishing price for the specified good or service. For legacy contracts with perpetual license arrangements, licenses and consulting services are recognized at point of delivery, and maintenance revenues are recognized ratably after the go-live. The Company issues invoices that have payment terms which require payment within 30 days. Amounts that have been invoiced are recorded in accounts receivable and in deferred revenue or revenue, depending on whether the required performance services have been completed. Proceeds from subscription-type revenues, including circulation revenue, license, maintenance and support services, and hosting services, are deferred at the time of sale and are recognized on a pro-rata basis over the terms of the subscriptions or service period, and unearned proceeds are recognized within deferred subscriptions and deferred maintenance agreements and others in the consolidated balance sheets. Proceeds from consulting fees are recognized at point of delivery upon service completion, and unearned consulting fee proceeds are recorded under deferred consulting fees on the consolidated balance sheets. 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 606 also requires the capitalization of certain costs of obtaining contracts, specifically sales commissions which are to be amortized over the expected term of the contracts. For its software contracts, the Company incurs an immaterial amount of sales commission costs which have no significant impact on the Company’s financial condition and results of operations. In addition, the Company’s implementation and fulfillment costs do not meet all criteria required for capitalization. As a result, there are no fulfillment costs that are capitalized for the software contracts. Since the Company recognizes revenues when it can invoice the customer pursuant to the contract for the value of completed performance, as a practical expedient and because reliable estimates cannot be made, it has elected not to include the transaction price allocated to unsatisfied performance obligations. These unallocated prices primarily relate to the eFile-it™ and ePay-it™ transactions for which service fees are collected and recognized when the Company processes credit card payments on behalf of the courts via its websites through which the public can e-file cases or pay traffic citations. Recent Accounting Pronouncements Accounting Pronouncements Not Yet Adopted In December 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures , which provides qualitative and quantitative updates to the rate reconciliation and income taxes paid disclosures, among others, in order to enhance the transparency of income tax disclosures, including consistent categories and greater disaggregation of information in the rate reconciliation and disaggregation by jurisdiction of income taxes paid. The amendments in ASU 2023-09 are effective for fiscal years beginning after December 15, 2024, or the Company’s fiscal year 2026, and subsequent interim periods, with early adoption permitted. The amendments should be applied prospectively; however, retrospective application is also permitted. The Company is currently in the process of reviewing the guidance and evaluating its impact on its consolidated financial statements. In March 2024, the FASB issued ASU 2024-01, Scope Application of Profits Interest and Similar Awards (“ASU 2024-01”). ASU 2024-01 clarifies how an entity determines whether a profits interest or similar award is (1) within the scope of ASC 718 or (2) not a share-based payment arrangement and therefore within the scope of other guidance. The guidance in ASU 2024-01 applies to all entities that issue profits interest or similar awards as compensation to employees or nonemployees in exchange for goods or services. The guidance is effective for public business entities for fiscal years beginning after December 15, 2024, or the Company’s fiscal year 2026. Early adoption is permitted and can be applied (1) retrospectively to all prior periods presented in the financial statements or (2) prospectively to profits interest and similar award. The Company is evaluating the disclosure requirements related to the new standard. In November 2024, FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – expense disaggregation Disclosures (Topic 220): disaggregation of Income Statement expenses , which requires additional disclosure of certain amounts included in the expense captions presented on the statement of operations, as well as disclosures about selling expenses. ASU 2024 - 03 is effective for fiscal years beginning after December 15, 2026 , or the Company’s fiscal year 2028 , and subsequent interim periods, with early adoption permitted. Early adoption is permitted for annual financial statements that have not yet been issued. The Company is evaluating the disclosure requirements related to the new standard. In September 2025, the FASB issued ASU No. 2025-06, Intangibles — Goodwill and Other — Internal-Use Software (Subtopic 350-40) , which modernizes the accounting guidance for internal-use software costs by eliminating the requirement to assess software development stages and introduces a new capitalization threshold. ASU 2025 - 06 is effective for fiscal years beginning after December 15, 2027 , or the Company’s fiscal year 2029 , and subsequent interim periods, with early adoption permitted. Early adoption is permitted for annual financial statements that have not yet been issued. The Company is currently in the process of reviewing the guidance and evaluating its impact on its consolidated financial statements. 33 New Accounting Pronouncements Adopted During November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures . ASU 2023-07 improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses on an annual and interim basis. The amendments are intended to enable investors to develop more decision-useful financial analyses. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company has adopted the new annual disclosures as required for fiscal year 2025, see Note 11 for the disclosures required by this ASU. Note 3. Revenue Recognition The change in total deferred revenues, including the long-term portion, is as follows (in thousands): Description Deferred Revenue (Current) Deferred Revenue (Non-current) Balance as of September 30, 2023 $ 25,539 $ 1,000 (Decrease) increase, net ( 1,826 ) ( 117 ) Balance as of September 30, 2024 23,713 883 (Decrease) increase, net ( 5,054 ) 111 Balance as of September 30, 2025 $ 18,659 $ 994 The decreases in deferred revenue during the years ended September 30, 2025 and 2024 were primarily driven by the recognition of revenue associated with performance obligations satisfied during the period, partially offset by amounts billed in advance for new and renewal contracts. During the years ending September 30, 2025 and 2024, $ 21.7 million and $ 18.8 million in revenue, respectively, were recognized from deferred revenue at the start of each year. Note 4. Fair value of Financial Instruments The Company’s financial instruments include marketable securities, cash equivalents are measured at fair value on a recurring basis. As of September 30, 2025, the Company’s holdings of marketable securities were concentrated in just six companies. These marketable securities consist solely of investments in publicly traded equity securities and do not include any debt securities. Fair value is based on the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement: ● Level 1 — defined as observable inputs based on unadjusted quoted prices for identical instruments in active markets; ● Level 2 — defined as inputs other than Level 1 that are either directly or indirectly observable in the marketplace for identical or similar instruments in markets that are not active; and ● Level 3 — defined as unobservable inputs in which little or no market data exists where valuations are derived from techniques in which one or more significant inputs are unobservable. The Company determines the level in the fair value hierarchy within which each fair value measurement falls in its entirety, based on the lowest level input that is significant to the fair value measurement in its entirety. In determining the appropriate levels, the Company performs an analysis of the assets and liabilities at each reporting period end. The carrying amounts of cash, restricted cash, accounts receivable, accrued liabilities and accounts payable approximate fair value because of the short maturity and high liquidity of these instruments. Marketable securities and cash equivalents, which consist of money market funds, are measured and recorded at fair value on the Company’s consolidated balance sheet using Level 1 inputs. The Company determined the fair value of its Level 1 financial instruments, which are traded in active markets, using quoted market prices for identical instruments. There were no transfers between Level 1 and Level 2 or transfers in or out of Level 3 during fiscal years 2025 and 2024. 34 The following table summarizes the fair value hierarchy of the Company’s financial assets measured at fair value as of September 30, 2025 (in thousands): Level 1 Level 2 Level 3 Total Assets: Money market funds (cash equivalent) $ 3,335 $ — $ — $ 3,335 Marketable securities 492,995 — — 492,995 Total Assets at fair value $ 496,330 $ — $ — $ 496,330 The following table summarizes the fair value hierarchy of financial assets measured at fair value as of September 30, 2024 (in thousands): Level 1 Level 2 Level 3 Total Money market funds (cash equivalent) $ 3,945 $ — $ — $ 3,945 Marketable securities 358,691 — — 358,691 Total Assets at fair value $ 362,636 $ — $ — $ 362,636 Marketable securities As of September 30, 2025 and 2024, there were accumulated pretax unrealized gains of marketable securities of $ 353.9 million and $ 219.6 million, respectively, recorded in the accompanying consolidated balance sheets. During the years ended September 30, 2025 and 2024 the Company recorded and included in its net income the net unrealized and realized gains on marketable securities of $ 134.3 million and $ 96.1 million, respectively. There were no purchases or sales of marketable securities during the fiscal year ending September 30, 2025. In fiscal year 2024, the Company sold part of its marketable securities for approximately $ 40.6 million, realizing net gains of $ 14.3 million. Investments in marketable securities as of September 30, 2025 and September 30, 2024 are summarized below (in thousands). September 30, 2025 September 30, 2024 Aggregate fair value Amortized/ Adjusted cost basis Pretax unrealized gains Aggregate fair value Amortized/ Adjusted cost basis Pretax unrealized gains Marketable securities: Common stocks $ 492,995 $ 139,094 $ 353,901 $ 358,691 $ 139,094 $ 219,597 35 Note 5. Property and Equipment, net The components of property and equipment, net are as follows (in thousands): September 30, 2025 September 30, 2024 Land, buildings and improvements 16,418 16,418 Furniture, office equipment and computer software 1,625 1,723 Machinery and equipment 1,521 1,521 Operating lease right-of-use assets 37 126 Total cost 19,601 19,788 Less accumulated depreciation ( 10,671 ) ( 10,520 ) Property and equipment, net $ 8,930 $ 9,268 Depreciation expense related to property and equipment was $ 0.3 million and $ 0.3 million for the years ended September 30, 2025 and 2024, respectively. Note 6. Income Taxes The provision from income taxes consists of the following (in thousands): 2025 2024 Current: Federal $ 2,337 $ 3,000 State 878 1,053 Foreign 45 70 Total current expense 3,260 4,123 Deferred: Federal 26,918 17,005 State 7,772 5,037 Foreign - - Total deferred expense 34,690 22,042 Total income tax provision $ 37,950 $ 26,165 36 The difference between the statutory federal income tax rate and the Company’s effective rate is summarized below: 2025 2024 Statutory federal income tax rate 21.0 % 21.0 % State franchise taxes (net of federal tax benefit) 4.8 5.0 Effect of state rate change on beginning balance of deferred tax liabilities ( 0.3 ) ( 0.4 ) Dividends received deduction ( 0.3 ) ( 0.5 ) Others 0.1 — Effective tax rate 25.3 % 25.1 % The Company’s deferred income tax assets and liabilities (in thousands) were comprised of the following: 2025 2024 Deferred tax assets attributable to: Accrued liabilities, including supplemental compensation and vacation pay accrual $ 2,422 $ 1,903 Impairment losses on marketable securities ( 277 ) ( 280 ) Bad debt reserves not yet deductible 55 55 Depreciation and amortization 1,283 1,730 Deferred revenues 184 517 Goodwill 190 265 Net operating losses 160 166 Credits and other — 103 Total deferred tax assets 4,017 4,459 Deferred tax liabilities attributable to: Unrealized gains on marketable securities ( 91,350 ) ( 57,100 ) Total deferred tax liabilities Net deferred income taxes $ ( 87,333 ) $ ( 52,641 ) 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 2021 with regard to federal income taxes and fiscal year 2020 for state income taxes. The Canadian subsidiary files a federal and provincial tax return in Canada. During fiscal year 2021, the Company utilized all of its federal and certain state net operating losses (NOL). During fiscal year 2024, the Company utilized the remaining $ 1.3 million of California NOLs. The Company also has NOLs in other states, expiring as follows: Fiscal Year ended (in million) Other State NOLs September 30, 2029 through September 30, 2036 $ 0.2 September 30, 2037 0.1 September 30, 2038 0.2 September 30, 2039 0.1 No expiration 2 Total $ 2.6 37 Note 7. Stock-Based Compensation The Company has implemented two equity incentive plans, one for key employees and one for non-employee directors, each providing for the grant of incentive stock options, non-qualified stock options, restricted stock units, and other equity-based awards. As of both September 30, 2025, and 2024, there were 2,920 shares available for future grants under the key employee’s equity incentive plan, which authorizes the issuance of up to 3,720 shares. Under the non-employee director plan, which was approved in February 2025 and authorizes issuance of 2,000 shares, there were 1,805 available for grants as of September 30, 2025. Restricted stock units generally vest ratably over two years of continuous service from the grant date and, upon vesting, are issued from the Company’s treasury shares. The Company accounts for share-based compensation utilizing the fair value recognition requirement pursuant to ASC 718. For restricted stock units, the Company uses the closed market price on the date of grant as the fair market value of the stock. The Company has not historically paid any cash dividends on its common stock and as a result does not reduce the grant-date fair value per share by the present value of dividends expected to be paid during the requisite service period for restricted stock units. Share based compensation awards are expensed on a straight-line basis over the requisite service periods, which are generally the vesting periods. The Company will recognize the effect of awards for which the requisite service period is not rendered when the award is forfeited. That is, the Company recognizes the effect of forfeitures in compensation cost when they occur. Previously recognized compensation cost for an award is reversed in the period the award is forfeited. The following table summarizes stock unit activity during the periods presented: Number of RSUs outstanding Weighted Average Grant Date Fair Value per Share Unvested as of September 30, 2023 — — Granted 800 $ 463.64 Vested ( 400 ) 463.64 Forfeited — — Unvested as of September 30, 2024 400 463.64 Granted 195 508.20 Vested ( 230 ) 453.93 Forfeited — — Unvested as of September 30, 2025 365 $ 494.43 As of September 30, 2025 and 2024, total fair value of shares vested during the year was $ 0.1 million and $ 0.2 million, respectively. For fiscal year 2025 and 2024, the Company recognized a total of compensation cost of $ 0.1 million and $ 0.2 million, respectively. For fiscal year 2025 and 2024, the Company had total unrecognized compensation cost of approximately $ 0.1 million and $ 0.2 million, respectively, related to unvested restricted stock units which is expected to be amortized over a weighted average amortization period of approximately 0.87 years. Note 8. Accrued Liabilities Current accrued liabilities consist of (in thousands): September 30, 2025 2024 Accrued vacation $ 3,115 $ 3,425 Accrued supplemental compensation 6,668 2,248 Accrued payroll 1,508 1,354 Accrued other 1,227 1,490 Total current accrued liabilities $ 12,518 $ 8,517 Long term accrued liabilities consist primarily of the Management Incentive Plan, which was $ 5.5 million and $ 3.8 million as of September 30, 2025 and 2024, respectively. 38 Note 9. Commitments and Contingencies From time to time, the Company is subject to litigation arising in the normal course of its business. While it is not possible to predict the results of such litigation, management does not believe the ultimate outcome of these matters will have a material adverse effect on the Company’s financial position, results of operations or cash flows. The following table represents the Company’s future obligations (in thousands): 2026 2027 2028 2029 2030 and after Total Long-term accrued liabilities* $ 1,707 $ 1,379 $ 1,106 $ 772 $ 583 $ 5,547 Non-qualified deferred compensation 409(A) plan 1,590 — — — — 1,590 Real estate loan 169 175 181 187 244 956 Lease 37 — — — — 37 $ 1,796 $ 3,041 $ 1,201 $ 880 $ 685 $ 7,603 * The long-term accrued liabilities for the Management Incentive Plan are discounted to the present value using a discount rate of 6%. Margin Loan During fiscal year 2013, the Company borrowed from its investment margin account the aggregate purchase price of $ 29.5 million for two acquisitions, in each case pledging its marketable securities as collateral. In addition, there were subsequent borrowings of $ 45.5 million to purchase additional marketable securities bringing the margin loan balance up to $ 75 million during fiscal year 2023. In March 2024, the Company sold a portion of its marketable securities for approximately $ 40.6 million and used these proceeds and excess cash from operations to pay down the margin loan balance to $ 27.5 million at last year-end. During the year ended September 30, 2025, the Company was able to use excess cash from operations to pay down an additional $ 5.5 million of this margin loan. As of September 30, 2025, the margin loan balance was $ 22.0 million. The interest rate for these investment margin account borrowings fluctuates based on the Federal Funds Rate plus 50 basis points with interest only payable monthly. The interest rate as of September 30, 2025 was 4.75 %. These investment margin account borrowings do not mature. Management Incentive Plan/New Profit-Sharing Incentive Program In fiscal 1987, the Company implemented a Management Incentive Plan (the “Legacy Incentive Plan”) that entitles a participant to participate in pretax earnings before adjustment for certain items of the Company for ten years. It was later expanded as a separate program for selected staff of Journal Technologies, based on the subsidiary’s results. This latter plan was expanded under previous leadership in February 2022 to include virtually all Journal Technologies employees. In 2023, management paused the program recognizing there would be an inadvertent future diluting effect on the shareholders’ interest when additional staff are hired as Journal Technologies grows. More generally, in order to reevaluate and ensure a sustainable long-term program and incentive model, the Company decided to suspend new grants under all Legacy Incentive Plans associated with the traditional business, Journal Technologies, and so-called consolidated units (based on employees driving corporate-wide results). The remaining Legacy Incentive Plan liability is included in the Company’s current and non-current accrued liabilities within the consolidated balance sheets (see Note 8). 39 Following a consultative and highly sensitive internal process at Journal Technologies, management successfully migrated all Journal Technologies employees to a new, replacement plan (the “New Plan”) effective May 9, 2025, whereby additional employees added to the program are dilutive relative to a specific percentage of profits allocated to the program, rather than being added to the program in an accretive way. This new discretionary profit-sharing incentive program still provides all eligible Journal Technologies employees with units as non-transferable, non-negotiable incentive units issued through certificates. The units do not represent equity or any ownership interest in the Company or Daily Journal Corporation. Under the New Plan, the Company is expected to approve a program percentage for the coming year at the outset of each new fiscal year. The amount available for distribution, if any, is based on this designated portion of the Company’s annual pretax profits adjusted for certain items, and amounts are allocated among eligible participants based primarily on the number of incentive units allocated to them on a prescriptive basis (predominately level of responsibility, but length of employment is also a factor). Key to enabling a transition of pre-existing entitlements, employee expectations are for an allocation of 20%, to provide approximate parity with the old program entitlements. However, to enable a roughly lateral transition for some senior employees, certain legacy units from the Legacy Incentive Plan needed to be converted into additional units under the New Plan; these converted legacy units generally retain their original expiration terms and are funded from a separate temporary allocation. The estimated Legacy Incentive Plan’s future commitment for certain Journal Technologies is based on inputs of an average of the past year and the current year pretax earnings before certain items, discounted to the present value at 6 % as each granted Certificate will expire over its remaining life term of up to 10 years. As of September 30, 2025, there were 644,000 remaining units with a weighted average remaining life of 2.53 years. Significant increases or decreases in these inputs would result in a significantly lower or higher fair value measurement. Real Estate Loan In November 2015, the Company purchased a 30,700 square foot office building constructed in 1998 on approximately 3.6 acres in Logan, Utah that had been previously leased for Journal Technologies. The Company paid $ 1.24 million and financed the balance with a real estate bank loan of $ 2.26 million which had a fixed interest rate of 4.66 %. This loan is secured by the Logan facility and can be paid off at any time without prepayment penalty. In October 2020, the Company executed an amendment to lower the interest rate of this loan to a fixed rate of 3.33 % for the remaining 10 years. This real estate loan had a balance of approximately $ 0.8 million as of September 30, 2025. Defined Contribution Plan Effective January 1, 2023, the Company began sponsoring a 401(k) retirement plan and a non-qualified deferred compensation plan for its employees. The 401(k) retirement plan is a defined contribution plan available to employees meeting minimum service requirements. Eligible employees can contribute up to 100 % of their current compensation to the plan subject to certain statutory limitations. The Company matches 50 % of the 401(k) contribution up to 4 % of total compensation. Employer contributions to the retirement plan were $ 0.5 million and $ 0.6 million for fiscal years 2025 and 2024, respectively. As of September 30, 2025, there were deferred compensation liabilities of approximately $ 1.6 million of which $ 1.4 million were held under a trust account for the non-qualified deferred compensation plan. As of September 30, 2024, there were deferred compensation liabilities of approximately $ 0.8 million of which all were held under a trust account for the 409(A) plan. Leases As of September 30, 2025, the Company had a right-of-use (“ROU”) asset and lease liability of approximately $ 37 thousand for its operating office and equipment leases. As of September 30, 2024, the Company had an ROU asset and lease liability of approximately $ 126 thousand for its operating office and equipment leases. Operating office and equipment leases are included in operating lease ROU assets, current accrued liabilities and long-term accrued liabilities in the Company’s accompanying Consolidated Balance Sheets. 40 Note 10. Net Income Per Share Basic net income per share is computed by dividing net income by the weighted average number of common shares outstanding during the period. Diluted net income per share is computed using the treasury stock method by dividing net income by the weighted average number of dilutive common shares outstanding during the period. Diluted shares outstanding is calculated by adding to the weighted average shares outstanding any potential dilutive securities outstanding for the period. Potential dilutive securities for the Company include only unvested restricted stock units. The Company’s basic and diluted net income per share was as follows (in thousands, except share and per share amounts): Years Ended September 30, 2025 2024 Numerator: Net income $ 112,137 $ 78,113 Denominator: Basic weighted-average common shares outstanding 1,377,426 1,377,026 Effect of dilutive securities 77 - Diluted weighted-average common shares outstanding 1,377,503 1,377,026 Basic EPS $ 81.41 $ 56.73 Diluted EPS $ 81.41 $ 56.73 Note 11. Segments Information The key factors used to identify the reportable segments are the organization of the Company’s businesses and alignment of its internal operations. Operating segments are defined as components of an enterprise for which discrete financial information is available and is evaluated regularly by the Chief Operating Decision Maker (“CODM”), in deciding how to allocate resources and assess performance. The Company’s Chief Executive Officer, serving as the CODM, reviews consolidated financial data to allocate resources and assess performance. The CODM focuses on consolidated net income (loss) from the statements of operations, comparing results with prior periods, forecasts, and relevant expenditure categories for each segment. 41 The Company identifies its reportable segments based on the nature of the products and services provided and the manner in which the CODM manages the business and allocates resources between (i) the Traditional Business, which consists of newspaper publishing, advertising, circulation, and related information services, and (ii) Journal Technologies, which provides case management software and related services to courts and other justice agencies. Accordingly, Traditional Business revenues are comprised of advertising, circulation, and advertising service fees and other, while Journal Technologies revenues are comprised of licensing and maintenance fees, consulting fees, and other public service fees. All inter-segment transactions were eliminated. Corporate is presented below as a non-operating segment to reconcile segment results to the Company’s consolidated financial statement line-item totals. Additional details about each of the reportable segments and its 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 Corporate Total 2025 2024 2025 2024 2025 2024 2025 2024 Revenues Advertising $ 10,081 $ 9,325 $ — $ — $ — $ — $ 10,081 $ 9,325 Circulation 4,269 4,462 — — — — 4,269 4,462 Advertising service fees and other 3,412 3,039 — — — — 3,412 3,039 Licensing and maintenance fees — — 31,720 28,265 — — 31,720 28,265 Consulting fees — — 22,735 15,086 — — 22,735 15,086 Other public service fees — — 15,483 9,754 — — 15,483 9,754 Total operating revenues 17,762 16,826 69,938 53,105 — — 87,700 69,931 Operating expenses Personnel 10,467 9,492 44,032 36,998 2,967 395 57,466 46,885 Other segment items* 7,460 5,360 13,246 13,616 — — 20,706 18,976 Total operating expenses 17,927 14,852 57,278 50,614 2,967 395 78,172 65,861 Income from operations ( 165 ) 1,974 12,660 2,491 (2,967 ) — 9,528 4,070 Dividends and interest income — — — — 7,459 7,102 7,459 7,102 Interest expense — — — — ( 1,381 ) ( 3,087 ) ( 1,381 ) ( 3,087 ) Net realized and unrealized gains on marketable securities — — — — 134,304 96,142 134,304 96,142 Other — — — — 177 51 177 51 Pretax income ( 165 ) 1,974 12,660 2,491 137,592 100,208 150,087 104,278 Income tax benefit (expense) 180 ( 395 ) ( 3,665 ) ( 735 ) ( 34,465 ) ( 25,035 ) ( 37,950 ) ( 26,165 ) Net income $ 15 $ 1,579 $ 8,995 $ 1,756 $ 103,127 $ 75,173 $ 112,137 $ 78,113 * Other segment items within net income (loss) 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. 42 During fiscal 2025, the Company’s revenues were primarily generated in the United States. Revenues from foreign countries and U.S. territories were approximately $ 11.9 million, or 13.5 % (approximately 14%) of total revenues, and were attributable to the Journal Technologies segment. The following table presents revenues by country and territory (in thousands): Country/ Territory Revenue As a % of total revenue Australia $ 10,067 11.5 % Canada 686 0.8 Guam 674 0.8 Commonwealth of the Northern Mariana Islands 428 0.5 Total $ 11,855 13.5 % The measure of segment assets reviewed by the CODM is the consolidated total assets, as reported on the consolidated balance sheet. The following table presents the measure of segment assets regularly provided to the CODM (in thousands): Traditional Business Journal Technologies Corporate Total 2025 2024 2025 2024 2025 2024 2025 2024 Total assets $ 22,701 $ 14,486 $ 32,422 $ 29,838 $ 492,995 $ 359,439 $ 548,118 $ 403,763 The Company’s long-lived assets, which consist primarily of property, plant and equipment, net, and operating lease right-of-use assets, are primarily located in the United States. As of September 30, 2025 and 2024, no individual country other than the U.S. accounted for 10% or more of these assets. Note 12. Subsequent Events On October 27, 2025, the Company’ announced that Tu To, the Company’s Chief Financial Officer and Principal Financial Officer, would retire effective January 15, 2026, following a planned transition period. In connection with her retirement, the Company entered into a separation agreement with Ms. To providing for certain post-employment compensation and benefits. Ms. To was expected to step down as the Company’s principal financial officer on December 31, 2025, or earlier in connection with the transition. On December 12, 2025, the Company appointed Erik Nakamura as Chief Financial Officer and Principal Financial Officer, effective immediately. Mr. Nakamura previously served as Chief Financial Officer of the Company’s Journal Technologies subsidiary. Management has evaluated these events and determined that they did not have a material impact on the Company’s consolidated financial statements as of and for the year ended September 30, 2025. 43 Item 9. Changes in and Disagreements with Accountants on Accounting, and Financial Disclosure None.