What changed in this filing

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Item 1. Financial Statements

2023-08-10 compared with 2023-02-10 · 264 added, 267 removed, 166 unchanged (76% of the section changed)

3 unchanged sentences

Current assets

Cash and cash equivalents

Cash and cash

Accounts receivable:

Oil and natural gas sales

Prepaid costs and expenses

Prepaid drilling

costs and expenses

Total current assets

Property and equipment, at cost

Oil and gas properties, using the full cost method

Accumulated depreciation, depletion and amortization

Oil and gas properties,

using the full cost method

depreciation, depletion and amortization

( 32,701,280 )

( 32,215,095 )

Property and equipment, net

Investment – cost basis

Operating lease, right-of-use asset

Other noncurrent assets

LIABILITIES AND STOCKHOLDERS’ EQUITY

Property and equipment,

Investments – cost

Operating lease, right-of-use

noncurrent assets

LIABILITIES AND STOCKHOLDERS’

Current liabilities

Accounts payable and accrued expenses

Operating lease liability, current

Accounts payable and accrued

lease liability, current

Total current liabilities

Long-term liabilities

Operating lease liability, long-term

Operating lease liability,

Asset retirement obligations

Total long-term liabilities

income tax liabilities

long-term liabilities

Total liabilities

1 unchanged sentence

Stockholders’ equity

Preferred stock - $ 1.00 par value;

Preferred stock - $ 1.00

10,000,000 shares authorized;

3 unchanged sentences

2,221,916 and 2,221,416 shares issued;

2,142,000 and

2,149,416 shares outstanding as of December 31, 2022 and March 31, 2022, respectively

and, 2,136,500 and 2,136,000 shares outstanding as of June 30,

2023 and March 31, 2023, respectively

Additional paid-in capital

Retained earnings

Treasury stock, at cost ( 79,416 and 67,000 shares, respectively)

Total stockholders’ equity

Total liabilities and stockholders’ equity

stock, at cost ( 85,416 shares)

Total stockholders’

liabilities and stockholders’ equity

accompanying notes are an integral part of the consolidated financial statements.

1 unchanged sentence

STATEMENTS OF OPERATIONS

Three Months Ended

Nine Months Ended

Operating revenue:

the Three Months Ended June 30,

Operating revenues:

Natural gas sales

1 unchanged sentence

Operating expenses:

Accretion of asset retirement obligation

Depreciation, depletion, and amortization

General and administrative

Total operating expenses

Accretion of asset retirement

Depreciation, depletion

and amortization

and administrative

operating expenses

Operating income

Other income (expenses):

Other income (expense):

Interest income

Interest expense

Net other expense

Net income before income taxes

State income tax expense

other income (expense)

Income before provision for income taxes

Income tax expense:

Total income tax expense

Income per common share:

Weighted average common shares outstanding:

accompanying notes are an integral part of the consolidated financial statements.

accompanying notes are an integral part of

consolidated financial statements.

Energy Corporation and Subsidiaries

STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

the three and nine months ended December 31, 2022 and 2021:

Stock Par Value

Paid-In Capital

Stockholders’

1 unchanged sentence

$ ( 590,495 )

Stock based compensation

Dividends paid

Issuance of stock through

options exercised

based compensation

Balance at June 30, 2023

$ ( 590,495 )

Profit from purchase of stock by insider

Stock based compensation

Balance at September 30, 2022

$ ( 346,001 )

Issuance of stock through options exercised

Stock based compensation

Purchase of stock

Balance at December 31, 2022

$ ( 514,261 )

Stock Par Value

Paid-In Capital

Stockholders’

1 unchanged sentence

$ ( 346,001 )

Issuance of stock through options exercised

Stock based compensation

based compensation

Balance at June 30, 2022

$ ( 346,001 )

Issuance of stock through options exercised

Stock based compensation

Balance at September 30, 2021

$ ( 346,001 )

Issuance of stock through options exercised

Stock based compensation

Balance at December 31, 2021

$ ( 346,001 )

SHARE ACTIVITY

1 unchanged sentence

Balance at April 1, 2023

Balance at Dec.

Balance at June 30, 2023

Common stock shares, held in treasury:

Balance at April 1, 2023

Balance at Dec.

Common stock shares, outstanding at December 31, 2022

accompanying notes are an integral part of the consolidated financial statements.

Balance at June 30,

Common stock shares, outstanding at June

accompanying notes are an integral part of

consolidated financial statements.

Energy Corporation and Subsidiaries

STATEMENTS OF CASH FLOWS

the Nine Months Ended December 31,

Cash flows from operating activities:

Adjustments to reconcile net income to net cash provided by operating activities:

the Three Months Ended June 30,

Cash flows from operating

Adjustments to reconcile

net income to net cash provided by operating activities:

Deferred income tax

Stock-based compensation

Depreciation, depletion and amortization

Accretion of asset retirement obligations

Amortization of debt issuance costs

Changes in operating assets and liabilities:

Increase in accounts receivable

Decrease in right-of-use asset

Decrease in prepaid expenses

(Decrease) increase in accounts payable and accrued expenses

Settlement of asset retirement obligations

Decrease in operating lease liability

Net cash provided by operating activities

Cash flows from investing activities:

Additions to oil and gas properties

( 4,760,880 )

( 1,213,618 )

Additions to other property and equipment

Drilling refunds

Investment – cost basis

Proceeds from sale of oil and gas properties and equipment

Net cash used in investing activities

( 4,969,269 )

Depreciation, depletion

and amortization

Accretion of asset retirement

Amortization of debt

issuance costs

Changes in operating

assets and liabilities

Decrease (increase)

in accounts receivable

Decrease in prepaid

Decrease in right-of-use

Increase (decrease)

in accounts payable and accrued expenses

Settlement of asset

retirement obligations

in operating lease liability

Net cash provided by

operating activities

Cash flows from investing

Additions to oil and

gas properties

( 2,320,974 )

Cash flows from financing activities:

Proceeds from exercise of stock options

Profits from purchase of stock by insider

Proceeds from long-term debt

Reduction of long-term debt

Additions to other property

and equipment

Investments in limited

liability companies at cost

Drilling refund

from sale of oil and gas properties and equipment

Net cash used in investing

( 2,329,363 )

Acquisition of treasury stock

Net cash used in financing activities

Net (decrease) increase in cash and cash equivalents

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

Supplemental disclosure of cash flow information:

Cash paid for interest

Cash flows from financing

Proceeds from exercise

of stock options

Dividends paid

issuance costs

cash used in financing activities

Net increase (decrease) in cash and cash

Cash and cash equivalents

at beginning of period

Cash and cash equivalents

at end of period

Non-cash investing and financing activities:

Asset retirement obligations

Operating lease – right of use asset and associated liabilities

accompanying notes are an integral part of the consolidated financial statements.

accompanying notes are an integral part of

consolidated financial statements.

Energy Corporation and Subsidiaries

3 unchanged sentences

Texas Disposal Corporation (a Texas corporation) and TBO Oil & Gas, LLC (a Texas limited liability company) (collectively, the “Company”)

are engaged in the exploration, development and production of natural gas, crude oil, condensate and natural gas liquids (“NGLs”).

are engaged in the acquisition, exploration, development and production of crude oil, natural gas, condensate and natural gas liquids

Most of the Company’s oil and gas interests are centered in West Texas and Southeastern New Mexico;

however, the Company owns producing

properties and undeveloped acreage in fourteen states.

All of the Company’s oil and gas interests are operated by others.

the Company owns producing properties and undeveloped acreage in fourteen states.

All of Company’s oil and gas interests are operated

Basis of Presentation and Significant Accounting Policies

5 unchanged sentences

of America (“GAAP”), management is required to make informed judgments, estimates and assumptions that affect the reported

amounts of assets and liabilities as of the date of the financial statements and affect the reported amounts of revenues and expenses

during the reporting period.

amounts of assets and liabilities as of the date of the consolidated financial statements and affect the reported amounts of revenues

and expenses during the reporting period.

In addition, significant estimates are used in determining proved oil and gas reserves.

Although management

believes its estimates and assumptions are reasonable, actual results may differ materially from those estimates.

The estimate of the

Company’s oil and natural gas reserves, which is used to compute depreciation, depletion, amortization and impairment of oil and

gas properties, is the most significant of the estimates and assumptions that affect these reported results.

management believes its estimates and assumptions are reasonable, actual results may differ materially from those estimates.

of the Company’s oil and natural gas reserves, which is used to compute depreciation, depletion, amortization and impairment of

oil and gas properties, is the most significant of the estimates and assumptions that affect these reported results.

Financial Statements .

In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments

(consisting only of normal recurring accruals) necessary to present fairly the financial position of the Company as of December 31, 2022,

and the results of its operations and cash flows for the interim periods ended December 31, 2022 and 2021.

The consolidated financial

statements as of December 31, 2022 and for the three and nine month periods ended December 31, 2022 and 2021 are unaudited.

The consolidated

balance sheet as of March 31, 2022 was derived from the audited balance sheet filed in the Company’s 2022 annual report on Form

10-K filed with the Securities and Exchange Commission (“SEC”).

The results of operations for the periods presented are not

necessarily indicative of the results to be expected for a full year.

The accounting policies followed by the Company are set forth in

more detail in Note 2 of the “Notes to Consolidated Financial Statements” in the Form 10-K.

Certain information and footnote

disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United

States of America have been condensed or omitted in this Form 10-Q pursuant to the rules and regulations of the SEC.

However, the disclosures

herein are adequate to make the information presented not misleading.

It is suggested that these financial statements be read in conjunction

with the financial statements and notes thereto included in the Form 10-K.

(consisting only of normal recurring accruals) necessary to present fairly the financial position of the Company as of June 30, 2023,

and the results of its operations and cash flows for the interim periods ended June 30, 2023 and 2022.

The consolidated financial statements

as of June 30, 2023 and for the three-month periods ended June 30, 2023 and 2022 are unaudited.

The consolidated balance sheet as of

March 31, 2023 was derived from the audited balance sheet filed in the Company’s 2023 annual report on Form 10-K filed with the

Securities and Exchange Commission (“SEC”).

The results of operations for the periods presented are not necessarily indicative

of the results to be expected for a full year.

The accounting policies followed by the Company are set forth in more detail in Note 2

of the “Notes to Consolidated Financial Statements” in the Form 10-K.

Certain information and footnote disclosures normally

included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America

have been condensed or omitted in this Form 10-Q pursuant to the rules and regulations of the SEC.

However, the disclosures herein are

adequate to make the information presented not misleading.

It is suggested that these consolidated financial statements be read in conjunction

with the consolidated financial statements and notes thereto included in the Form 10-K.

Investments .

The Company accounts for investments of less than 3% of any limited liability companies at cost .

The Company has no control or significant

influence of the limited liability companies.

The cost of the investment is recorded as an asset on the consolidated balance sheets and

when income from the investment is received, it is immediately recognized on the consolidated statements of operations.

The Company has no control of the

limited liability companies.

The cost of the investment is recorded as an asset on the consolidated balance sheets and when income from

the investment is received, it is immediately recognized on the consolidated statements of operations.

Reclassifications .

12 unchanged sentences

oil and natural gas properties.

The ARO is included in the consolidated balance sheets with the current portion being included in the

The ARO is included on the consolidated balance sheets with the current portion being included in the

accounts payable and other accrued expenses.

following table provides a rollforward of the AROs for the first nine months of fiscal 2022:

following table provides a rollforward of the AROs for the first three months of fiscal 2024:

of Rollforward of Asset Retirement Obligations

Carrying amount of asset retirement obligations as of April 1, 2022

Carrying amount of asset retirement obligations as

of April 1, 2023

Liabilities incurred

1 unchanged sentence

Accretion expense

Carrying amount of asset retirement obligations as of December 31, 2022

Carrying amount of asset retirement obligations as of June 30, 2023

Current portion

Non-Current asset retirement obligation

Stock-based Compensation

Company recognized stock-based compensation expense of $ 41,460 and $ 25,570 in general and administrative expense in the Consolidated

Statements of Operations for the three months ended December 31, 2022 and 2021, respectively.

Stock-based compensation expense recognized

for the nine months ended December 31, 2022 and 2021 was $ 101,462 and $ 62,003 , respectively.

The total cost related to non-vested awards

not yet recognized at December 31, 2022 totals approximately $ 498,285 which is expected to be recognized over a weighted average of 2.63

the nine months ended December 31, 2022, the Compensation Committee of the Board of Directors approved and the Company granted 31,000

stock options exercisable at $ 18.05 per share with an estimated fair value of $ 385,640 .

During the nine months ended December 31, 2021,

the Compensation Committee of the Board of Directors approved and the Company granted 31,000 stock options exercisable at $ 8.51 per share

with an estimated fair value of $ 187,550 .

These options are exercisable at a price not less than the fair market value of the stock at

the date of grant, have an exercise period of ten years and generally vest over four years .

in the following table is a summary of the grant-date fair value of stock options granted and the related assumptions used in the Binomial

models for stock options granted during the nine months ended December 31, 2022 and 2021.

All such amounts represent the weighted average

of Grant-date Fair Value of Stock Options Granted and Assumptions Used Binominal Models

NIne Months Ended

Grant-date fair value

Volatility factor

Dividend yield

Risk-free interest rate

Expected term (in years)

following table is a summary of activity of stock options for the nine months ended December 31, 2021:

of Activity of Stock Options

Exercise Price

Weighted Average

Contract Life in

Outstanding at April 1, 2022

Forfeited or Expired

Outstanding at December 31, 2022

Vested at December 31, 2022

Exercisable at December 31, 2022

the nine months ended December 31, 2022, stock options covering 5,000 shares were exercised with a total intrinsic value of $ 47,575 .

The Company received proceeds of $ 16,700 from these exercises.

During the nine months ended December 31, 2021, stock options covering

45,000 shares were exercised with a total intrinsic value of $ 241,226 .

The Company received proceeds of $ 295,640 from these exercises.

were no stock options forfeited or expired during the nine months ended December 31, 2022 and 2021.

No forfeiture rate is assumed for

stock options granted to directors or employees due to the forfeiture rate history of these types of awards.

options at December 31, 2022 expire between August 2024 and August 2032 and have exercise prices ranging from $ 3.34 to $ 18.05 .

Non-Current asset retirement

Long Term Debt

5 unchanged sentences

and increase the borrowing base to $ 1,500,000 .

the Agreement, interest on the credit facility accrues at a rate equal to the prime rate as quoted in the Wall Street Journal plus one-half

On March 28, 2023, the Agreement was amended to extend the maturity date to March 28,

the Agreement, interest on the facility accrues at a rate equal to the prime rate as quoted in the Wall Street Journal plus one-half

of one percent ( 0.5 % ) floating daily.

4 unchanged sentences

The unused commitment fee is payable quarterly in arrears on the last day of each calendar quarter.

As of December

As of June 30,

2023, there was $ 1,500,000 available for borrowing by the Company on the facility.

principal payments are anticipated to be required through the maturity date of the credit facility, March 28, 2026 .

Upon closing with

WTNB on the original Agreement, the Company paid a .5 % loan origination fee in the amount of $ 5,000 plus legal and recording expenses

totaling $ 34,532 , which were deferred over the original life of the credit facility.

Upon closing the amendment to the Agreement, the

Company paid a .1 % loan origination fee of $ 2,500 and an extension fee of $ 3,125 plus legal and recording expenses totaling $ 12,266 ,

Upon closing the

second amendment to the Agreement, the Company paid a loan origination fee of $ 9,000 plus legal and recording expenses totaling $ 12,950 ,

which were also deferred over the life of the credit facility.

7 unchanged sentences

Expense) of 2.00 to 1.00 for each quarter .

addition, this Agreement prohibits the Company from paying cash dividends on its common stock without written permission of WTNB.

Agreement does not permit the Company to enter into hedge agreements covering crude oil and natural gas prices without prior WTNB approval.

was no balance outstanding on the line of credit as of December 31, 2022.

The following table is a summary of activity on the WTNB line

of credit for the nine months ended December 31, 2022:

of Line of Credit Activity

Balance at April 1, 2022:

Balance at December 31, 2022:

Company leases approximately 4,160 rentable square feet of office space from an unaffiliated third party for the corporate office located

addition, this Agreement prohibits the Company from paying cash dividends on its common stock without prior written permission of WTNB.

The Company obtained written permission from WTNB prior to declaring the special dividend on April 10, 2023 as discussed in Note 10.

The Agreement does not permit the Company to enter into hedge agreements covering crude oil and natural gas prices without prior WTNB

was no balance outstanding on the credit facility as of June 30, 2023.

Stock-based Compensation

Company recognized compensation expense of $ 54,975 and $ 25,571 related to vesting stock options in general and administrative expense

in the Consolidated Statements of Operations for the first quarter of fiscal 2024 and 2023, respectively.

The total cost related to non-vested

awards not yet recognized at June 30, 2023 totals $ 677,185 , which is expected to be recognized over a weighted average of 2.85 years.

the three months ended June 30, 2023, the Compensation Committee of the Board of Directors approved and the Company granted 32,000 stock

options exercisable at $ 12.68 per share with an estimated fair value of $ 279,360 .

These options are exercisable at a price not less than

the fair market value of the stock at the date of grant, have an exercise period of ten years and generally vest over four years.

the three months ended June 30, 2022, no stock options were granted.

in the following table is a summary of the grant-date fair value of stock options granted and the related assumptions used in the Binomial

models for stock options granted during the three months ended June 30, 2023 and 2022.

All such amounts represent the weighted average

of Grant-date Fair Value of Stock Options Granted and Assumptions Used Binominal Models

Three Months Ended

Grant-date fair value

Volatility factor

Dividend yield

Risk-free interest rate

Expected term (in years)

following table is a summary of stock options activity for the three months ended June 30, 2023:

of Activity of Stock Options

Average Exercise Price Per Share

Aggregate Average Remaining Contract Life

Outstanding at April 1, 2023

Outstanding at June

Vested at June 30, 2023

Exercisable at June 30, 2023

the three months ended June 30, 2023, stock options covering 500 shares were exercised with a total intrinsic value of $ 2,416 .

received proceeds of $ 2,962 from these exercises.

During the three months ended June 30, 2022, no stock options were exercised.

forfeiture rate is assumed for stock options granted to directors or employees due to the forfeiture rate history for these types of

During the three months ended June 30, 2023 and 2022, there were no stock options forfeited or expired.

options at June 30, 2023 expire between August 2024 and April 2033 and have exercise prices ranging from $ 3.34 to $ 18.05 .

Company leases approximately 4,160 rentable square feet of office space from an unaffiliated third party for our corporate office located

in Midland, Texas.

This includes 1,112 square feet of office space shared with and reimbursed by the majority shareholder.

This includes 1,112 square feet of office space shared with and reimbursed by our majority shareholder.

does not include an option to renew and is a 36 -month lease that was to expire in May 2021.

21 unchanged sentences

of Operating Lease Assets and Liabilities

December 31, 2022

Operating lease right-of-use asset, beginning balance

Operating lease

right-of-use asset, beginning balance

Current period amortization

Total operating lease right-of-use asset

Operating lease liability, current

Operating lease liability, long term

Total lease liabilities

minimum lease payments as of December 31, 2022 under non-cancellable operating leases are as follows:

operating lease right-of-use asset

Operating lease liability,

lease liability, long term

lease liabilities

minimum lease payments as of June 30, 2023 under non-cancellable operating leases are as follows:

of Future Minimum Lease Payments

Lease Obligation

Fiscal Year Ended March 31, 2024

Fiscal Year Ended March 31, 2025

Total lease payments

1 unchanged sentence

Operating lease liability

operating lease liability, current

Operating lease liability, long term

cash paid for our operating lease for the nine months ended December 31, 2022 and 2021 was $ 32,001 and $ 31,570 , respectively.

Rent expense,

less sublease income of $ 11,679 and $ 14,662 , respectively, is included in general and administrative expenses.

valuation allowance for deferred tax assets, including net operating losses, is recognized when it is more likely than not that some

or all of the benefit from the deferred tax asset will not be realized.

To assess that likelihood, we use estimates and judgment regarding

our future taxable income, and we consider the tax consequences in the jurisdiction where such taxable income is generated, to determine

whether a valuation allowance is required.

Such evidence can include our current financial position, our results of operations, both

actual and forecasted, the reversal of deferred tax liabilities, and tax planning strategies as well as the current and forecasted business

economics of our industry.

on the material write-downs of the carrying value of our oil and natural gas properties during fiscal 2016, we are in a net deferred

tax asset position as of December 31, 2022.

Our deferred tax asset for federal income tax purposes is $ 202,543 as of December 31, 2022

with a valuation amount of $ 202,543 .

We believe it is more likely than not that these deferred tax assets will not be realized.

considers the likelihood that the Company’s net operating losses and other deferred tax attributes will be utilized prior to their

expiration, if applicable.

The determination to record a valuation allowance was based on management’s assessment of all available

evidence, both positive and negative, supporting realizability of the Company deferred tax asset as required by applicable accounting

In light of those criteria for recognizing the tax benefit of deferred tax assets, the Company’s assessment resulted

in application of a valuation allowance against the deferred tax asset as of December 31, 2022.

operating lease

liability, current

Operating lease liability,

cash paid for our operating lease for the three months ended June 30, 2023 and 2022 was $ 10,667 .

Rent expense, less sublease income of

$ 3,893 is included in general and administrative expenses.

August 16, 2022, President Biden signed into law the Inflation Reduction Act of 2022 (“IRA 2022”).

The IRA 2022, among other

tax provisions, imposes a 15% corporate alternative minimum tax on corporations with book financial statement income in excess of $1.0

billion, effective for tax years beginning after December 31, 2022.

The IRA 2022 also establishes a 1% excise tax on stock repurchases

made by publicly traded U.S.

corporations, effective for stock repurchases in excess of an annual limit of $1.0 million after December

The IRA 2022 did not impact the Company’s current year tax provision or the Company’s financial statements.

income tax provision consists of the following for the three months ended June 30, 2023 and 2022:

of Income Tax Provision

Three Months Ended

Current income tax expense:

Total current income tax

Deferred income tax expense:

deferred income tax expense

Total income tax expense:

Federal income tax for the three months ended June 30, 2023 was $ 88,683 .

There was no federal income tax expense for the three

months ended June 30, 2022 because the Company was in a net deferred tax asset position.

reconciliation of the provision for income taxes to income taxes computed using the federal statutory rate for the three months ended

June 30 follows:

of Reconciliation of Provision for Income Taxes

Tax expense at federal statutory

Statutory depletion carryforward

Change in valuation allowance

tax reform, corporate rate reduction

Permanent differences

State income expense

Effective income tax rate

The federal statutory rate was 21 % for three

months ended June 30, 2023 and 2022.

Related Party Transactions

party transactions for the Company relate to shared office expenditures in addition to administrative and operating expenses paid on

behalf of the principal stockholder.

The total billed to and reimbursed by the stockholder for the three months ended December 31, 2022

and 2021 was $ 11,598 and $ 12,276 , respectively.

The total billed to and reimbursed by the stockholder for the nine months ended December

party transactions for the Company primarily relate to shared office expenditures in addition to administrative and operating expenses

paid on behalf of the principal stockholder.

The total billed to and reimbursed by the stockholder for the quarters ended June 30, 2023

and 2022 was $ 9,382 and $ 10,085 , respectively.

The principal stockholder pays for his share of the lease amount for the shared

office space directly to the lessor.

Amounts paid by the principal stockholder directly to the lessor for the three months ending December

The principal stockholder pays for his share of the lease amount for the shared office

space directly to the lessor.

Amounts paid by the principal stockholder directly to the lessor for the three months ending June 30, 2023

and 2022 were $ 3,893 .

Amounts paid by the principal stockholder directly to the lessor for the nine months ending December 31,

2022 and 2021 were $ 11,679 and $ 11,882 , respectively.

Income Per Common Share

following is a reconciliation of the number of shares used in the calculation of basic and diluted net income per share for the three

and nine month periods ended December 31, 2022 and 2021:

following is a reconciliation of the number of shares used in the calculation of basic and diluted net income per share for the three-month

periods ended June 30, 2023 and 2022.

of Reconciliation of Basic and Diluted Net Income (loss) Per Share

Three Months Ended

Nine Months Ended

Shares outstanding:

Weighted avg.

shares outstanding – basic

Effect of assumed exercise of dilutive stock options

Weighted avg.

Weighted average common shares outstanding

of the assumed exercise of dilutive stock options

Weighted average common

shares outstanding – dilutive

Income per common share:

the three months ended December 31, 2022, 31,000 shares relating to stock options were excluded from the computation of diluted net income

the three months ended June 30, 2023, 63,000 shares relating to stock options were excluded from the computation of diluted net income

because their inclusion would be anti-dilutive.

Anti-dilutive stock options have a weighted average exercise price of $ 18.05 at December

the three and nine months ended December 31, 2021, 31,000 shares relating to stock options were excluded from the computation of diluted

net income because their inclusion would be anti-dilutive.

Anti-dilutive stock options have a weighted average exercise price of $ 8.51

at December 31, 2021.

Anti-dilutive stock options have a weighted average exercise price of $ 15.32 at June

For the three months ended June 30, 2022, no anti-dilutive shares relating to stock options were excluded from the computation

of diluted net income.

Stockholders’ Equity

June 2022, the Board of Directors authorized the use of up to $ 250,000 to repurchase shares of the Company’s common stock for the

treasury account.

This program does not have an expiration date and may be modified, suspended or terminated at any time by the board

of directors.

Under the repurchase program, shares of common stock may be purchased from time to time through open market purchases or

other transactions.

The amount and timing of repurchases will be subject to the availability of stock, prevailing market conditions,

the trading price of the stock, our financial performance and other conditions.

Repurchases may also be made from time-to-time in connection

with the settlement our share-based compensation awards.

June 2023, the Board of Directors authorized the use of up to $ 1,000,000 to repurchase shares of the Company’s common stock, par

value $ 0.50 , for the treasury account.

This program does not have an expiration date and may be modified, suspended or terminated at

any time by the board of directors.

Under the repurchase program, shares of common stock may be purchased from time to time through open

market purchases or other transactions.

The amount and timing of repurchases will be subject to the availability of stock, prevailing

market conditions, the trading price of the stock, our financial performance and other conditions.

Repurchases may also be made from

time-to-time in connection with the settlement our share-based compensation awards.

Repurchases will be funded from cash flow from operations.

the three months ended December 31, 2022, the Company repurchased 12,416 shares for the treasury at an aggregate cost of $ 168,260 .

were no shares of common stock repurchased for the treasury account during the three months ended December 31, 2021.

Subsequently, in

January 2023, the Company repurchased 1,300 shares for the treasury at an aggregate cost of $ 16,359 .

September 6, 2022, one of the Company’s directors paid the Company $ 30,179 , representing profit on Company stock purchased within

the six-month window of a previous Company stock sale.

Such payment was made in accordance with Section 16(b) of the Securities Exchange

August 16, 2022, President Biden signed into law the Inflation Reduction Act of 2022 (“IRA 2022”).

The IRA 2022, among other

tax provisions, establishes a 1 % excise tax on stock repurchases made by publicly traded U.S.

corporations, effective for stock repurchases

in excess of an annual limit of $ 1,000,000 after December 31, 2022.

the three months ended June 30, 2023 and 2022 there were no shares of common stock repurchased for the treasury account.

Subsequently,

in July 2023, the Company repurchased 9,500 shares for the treasury at an aggregate cost of $ 116,707 .

April 10, 2023, the Board of Directors declared a special dividend of $ 0.10 per common share.

The Company paid the special dividend of

$ 213,600 on May 15, 2023 to the stockholders of record at the close of business on May 1, 2023.

The Company can provide no assurance

that dividends will be declared in the future or as to the amount of any future dividend.

declared by the Board and stock repurchased during the period are presented in the Company’s consolidated statements of changes

in stockholders’ equity as dividends paid and purchases of treasury stock, respectively.

Dividends paid and stock repurchased during

the period are presented as cash used in financing activities in the Company’s consolidated statements of cash flows.

Stock repurchases

are included as treasury stock in the consolidated balance sheets.

Subsequent Events

2 unchanged sentences

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-Q

Item 1. Financial Statements